We live in the era of the AI revolution. To develop AI, stable and cheap natural gas energy is needed. The EU used to get it from Russia, but after Merkel left power, EU gave this energy to the Chinese. Now, in terms of AI adoption, the EU is at the level of Congo, not counting French toys as serious. The Americans do not allow the EU to use their achievements, except for the temporary use of infrastructure. The Chinese allow the use of their open source models and infrastructure for now, but the EU's ambition is getting in the way. The AI revolution is not happening in the EU. Soon we will not be able to sell anything of good quality in the world. Death.
While the U.S.-Iran framework agreement has provided immediate, short-term relief to European energy markets, structural vulnerabilities suggest high gas costs will linger. The closure of the Strait of Hormuz strangled global Liquefied Natural Gas (LNG) supplies, and economists warn that resolving this bottleneck will be slow. For the European economy, this means persistently elevated costs and suppressed economic growth or an outright collapse, though recovery is expected to stretch out over multiple years. According to well-known observation economy collapses “gradually and then suddenly”. This famous line comes from Ernest Hemingway's 1926 novel The Sun Also Rises.
The primary factors keeping energy and consumer prices high include:
• Logistical Lags: Clearing trapped tankers in the Persian Gulf and reestablishing insurance and clearance approvals means liquefied natural gas (LNG) cannot instantly return to historical flow levels.
• Structural Vulnerability: Europe’s energy vulnerability is systemic rather than purely cyclical. With Russian supply pipelines shut off from the onset of previous geopolitical crises and stupid EU sanctions on Russia, replacing the lost 20% of global LNG capacity relies heavily on highly competitive global markets.
• Lagging Economic Impact: European Central Bank and EU officials note that, even if the conflict has ended, the lagged effects of these supply-chain disruptions will keep inflation and energy bills elevated well into 2027.
• Wholesale vs. Consumer Relief: Wholesale Dutch TTF gas futures dropped to roughly €44/MWh following the peace pact. However, these remain approximately 50% higher than pre-conflict levels, meaning households and industrial sectors will continue to experience squeezed margins and higher overheads.
Who is there asleep? German leader Merz.
Gasoline prices are not user friendly too:
“The preliminary agreement may not have an immediate effect on prices at the pump. Damaged infrastructure and risky transport could keep costs up.
Drivers hopeful that the U.S.-Iran framework deal will translate to lower gasoline prices will probably have to wait weeks, or longer, to see meaningful improvement.
Energy analysts refer to the swing of prices as “up like a rocket, down like a feather” — a phenomenon that means gasoline costs quickly rise alongside the price of crude oil but are slow to follow its descent.
One of the main reasons is that gas station owners tend to lose money or make only small profits when prices are shooting up because they are not able to raise prices fast enough to make up for soaring costs. So when wholesale prices start to go down, station owners are slow to bring retail prices down to make up for their poor financial performance on the way up.
The average price of regular gasoline in the United States went up roughly 50 percent between Feb. 28, when the United States and Israel attacked Iran, and the middle of May. It has receded since then and was $4.07 a gallon on Monday, according to the AAA motor club.
The price spiked as most oil shipments were blocked from traveling through the Strait of Hormuz, a vital waterway along Iran’s southern coast.
President Trump last month broached the idea of pausing the federal gasoline tax, which adds 18.4 cents to every gallon of regular pumped at a station. “It’s a small percentage, but it’s, you know, it’s still money,” he told reporters in the Oval Office.
Some research suggests that driver behavior is also to blame for the slower decline, said Christopher Knittel, a professor of energy economics at M.I.T.
“When prices are going up, consumers are very adamant about checking the prices of multiple gas stations,” Mr. Knittel said. “But when prices start to fall, they do that less, so gas stations can kind of get away with not lowering prices one for one with oil.”
When crude oil prices fall, economists say, it typically takes at least several weeks for gasoline to meaningfully follow. But the war in Iran has complicated the outlook for supplies, and it could take months for retail fuel costs return to prewar levels, analysts said.
There are two reasons that prices could linger on the higher end, Mr. Knittel said. One is the large amount of infrastructure in the Middle East that has been damaged or destroyed, some of which will take years to rebuild. The second is an increase in the cost of oil because of uncertainty about whether sailing through the Strait of Hormuz is safe.
“Basic economics tells us the riskier business is, the higher profits you have to earn to want to enter into that business,” Mr. Knittel said.
“Oil and gasoline and natural gas has gotten more risky.”
“That might actually keep us from ever getting back to prewar levels for gasoline,” he added.
The last time gasoline prices rose to current levels was in 2022 after start of Ukraine events. Then, investors reacted to potential supply losses, but now the effects are more tangible. Before the war with Iran, about 20 percent of the world’s oil traveled through the Strait of Hormuz.
Energy companies have incentives to keep prices higher for as long as they can, but the lag is also explained because of how long it takes to transport oil to refineries, turn it into fuel and distribute that fuel to where it is used. The gasoline being sold today was refined from expensive crude.
The price of oil, no matter where it comes from, is determined by global supply and demand. Prices can change quickly when supply is cut off, or if demand rises or falls.
The United States is a net exporter of petroleum products, but its refineries use a lot of imported oil to make gasoline, diesel and other fuels.
Future energy costs may also remain high because investors and oil companies will be wary that Iran will block the strait whenever Tehran sees fit.
“We’ve now opened a Pandora’s box,” said Bernard Yaros, the lead U.S. economist at Oxford Economics. “Iran knows that it can wield this geopolitical weapon of closing down the strait and exacting economic pain.”
The cost of fuel has worsened an economic divide in the United States, as households with lower incomes have struggled to pay more for gasoline. But the behavior of those with higher incomes has remained largely unchanged. With demand still relatively high, prices at the pump are unlikely to go down much.
“Upper-middle, higher-income households, they’re still able to spend through this shock,” Mr. Yaros said. “Without that demand destruction and with supply still constrained, it’s tough to see prices really falling like a rock anytime soon.”” [1]
1. High Gas Costs May Linger After U.S.-Iran Deal. Lindner, Emmett. New York Times (Online) New York Times Company. Jun 16, 2026.
Komentarų nėra:
Rašyti komentarą