{"id":4511,"date":"2026-05-28T12:39:45","date_gmt":"2026-05-28T12:39:45","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=4511"},"modified":"2026-05-28T12:39:45","modified_gmt":"2026-05-28T12:39:45","slug":"dallas-fed-president-drops-bombshell-on-oil-markets","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=4511","title":{"rendered":"Dallas Fed president drops bombshell on oil markets"},"content":{"rendered":"<p><\/p>\n<p>The president of the Federal Reserve Bank of Dallas has some advice for all trying to stop the Iran War: Get the Strait of Hormuz opened. Soonest.<\/p>\n<p>Otherwise, global oil supplies will get severely constrained, Lorie Logan told attendees at the Bank of Japan Institute for Monetary and Economic Studies Conference.<\/p>\n<p> And, she said, fuel consumption might need to fall more than it already has since Israel and the United States attacked Iran starting on Feb. 2.<\/p>\n<p>Before the war erupted, about 20% of the world&#8217;s crude oil passed through the strait every day, Logan noted. <\/p>\n<p>The war has reduced global oil supply by nearly\u00a013 million barrels per day, or more than 10%. Oil-reserve drawdowns by nations around the world have filled much of that shortfall so far. U.S. crude-oil exports have helped, too, she said.<\/p>\n<p>Then, she added, &#8220;However, inventories are finite.&#8221;<\/p>\n<p>Oil production can&#8217;t be easily expanded, she said. The Dallas Fed&#8217;s most recent survey of oil executives suggests U.S. oil output might only be able to add 250,000 barrels a day of oil to the global supply by the end of the year and perhaps 500,000 barrels a day in 2027. <\/p>\n<p>Holding production back will be three realities: <\/p>\n<ul>\n<li>Producers, she said, &#8220;exercise strict capital discipline.&#8221; Meaning, they don&#8217;t invest in new wells and exploration without a clear path to positive returns. <\/li>\n<li>Producers, from giants like Exxon Mobil and Chevron to smaller companies &#8220;face tight supplies of labor and other inputs.&#8221;<\/li>\n<li>Many wells produce both oil and natural gas, but, Logan said, &#8220;There is little pipeline capacity to move more gas out of the fields in West Texas.&#8221;<\/li>\n<\/ul>\n<p>Plus, the facilities to export crude or natural gas are limited. <\/p>\n<p>So, that brought Logan to her most blunt point. &#8220;If shipping through the strait does not soon return to prewar levels, world oil and natural gas consumption could need to fall more meaningfully than it has so far.&#8221;<\/p>\n<p>The consequences would depend on how easily end users can &#8220;switch to other energy sources or use energy more efficiently.&#8221;<\/p>\n<p>She did offer a thought of cheer: &#8220;One way or another, I expect energy markets to come into rough balance before too long. If the molecules aren\u2019t available, the world can\u2019t consume them.&#8221;<\/p>\n<h2>Traders push oil prices down on peace hopes<\/h2>\n<p>Logan&#8217;s comments were made long before markets opened in the United States.<\/p>\n<p>Traders were behaving on May 27 as if a peace deal is close. <\/p>\n<p>Light sweet crude, the U.S. benchmark, was down 4.6% to $88.69, per 42-gallon barrel, the lowest level since a brief price decline in late April. Brent crude  was off 4.6% to $92.24 a barrel. <\/p>\n<p>Light sweet crude peaked at about $104 a barrel on May 4, according to data from OilPrice.com. Brent hit a 52-week high of $114.40 a barrel on May 4, OilPrice.com data showed.<\/p>\n<p>U.S. motorists were paying lower prices to fill up. GasBuddy put the U.S. national average at $4.419 a gallon on May 27, down nearly four cents from a day earlier and off 2.3% from May 22. <\/p>\n<p><strong>More Oil and Gas:<\/strong><\/p>\n<ul>\n<li><strong>Early Chevron stock investors now earn 12.1% dividend yield<\/strong><\/li>\n<li><strong>Chevron, Shell ink more surprising Venezuela deals<\/strong><\/li>\n<li><strong>AAA gas prices reveal a new trend for Americans<\/strong><\/li>\n<\/ul>\n<h2>Current realities are unsettled<\/h2>\n<p>But the geopolitical situation remains unsettled, to say the least. Getting oil out of the Persian Gulf region is tricky at best.<\/p>\n<p>Traffic through the Strait is highly limited, though some tankers have delivered oil cargoes to clients in Asia. <\/p>\n<figure>\n<p>                        <img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.thestreet.com\/.image\/NDA6MDAwMDAwMDAzMDU2NzM5\/photo-3056739.jpg?profile=rss\" height=\"675\" width=\"1010\"><figcaption>If shipping through the strait doesn&#8217;t get back to prewar levels, consumption worldwide will be forced down. <\/p>\n<p>Shin Yong-ju &amp;sol; AFP &amp;sol; Getty Images<\/p>\n<\/figcaption><\/figure>\n<p>Meanwhile, May 26, the United States attacked two Iranian two boats laying mines in the Strait of Hormuz. The ships belonged to Iran\u2019s Islamic Revolutionary Guard Corps. <\/p>\n<p>Meanwhile,  CNN reported that Iranian state TV said a proposed memorandum of understanding calls for US military forces to withdraw from the vicinity of Iran and lift the blockade of Iranian ports.<\/p>\n<p>&#8220;In return, Iran has committed to restoring the number of commercial ships transiting the Strait of Hormuz to pre-war levels within one month,&#8221; the report said.<\/p>\n<p>The White House called the report &#8220;a complete fabrication.&#8221;<\/p>\n<p align=\"center\"><strong>Related: Exxon Mobil&#8217;s future rests on massive play (it isn&#8217;t Venezuela)<\/strong><\/p>\n<p>#Dallas #Fed #president #drops #bombshell #oil #markets<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The president of the Federal Reserve Bank of Dallas has some advice for all trying to stop the Iran War: Get the Strait of Hormuz opened. Soonest. Otherwise, global oil&hellip; <\/p>\n","protected":false},"author":1,"featured_media":4512,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[6897,6896,647,674,166,280,2149],"class_list":["post-4511","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-bombshell","tag-dallas","tag-drops","tag-fed","tag-markets","tag-oil","tag-president"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/4511","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4511"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/4511\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/4512"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}