UPDATE ON OIL, NEWS ABOUT FRANCE

The Middle East is the largest oil producing region in the world. The reason I started the post with this statistic is when the oil futures opened Sunday at 6PM many components of the oil market reached prices near $118 per barrel but the market closed down. In the next paragraph, I will state why people should expect the oil market to be crazy (at least in the near future) and why people should not rely on what the market currently says as an indication of stability.


The main reason for the current instability is the lack of oil getting through the Strait of Hormuz. In a previous post I described the importance of the Strait, which has been unofficially closed for about a week. The war against Iran is the reason for the "stop" as Iran, (the Strait of Hormuz is off their coast) is essentially keeping the Strait closed with their attacks on tankers, and threats of further attacks.


In response to the situation described above, France has deployed the Charles De Gaulle Carrier Strike Group, along with other naval assets to the Middle East, primarily to ensure other key waterways in the region remain secure.

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