Bloomberg reports:

The biggest oil supply shock in history has reached the one-month mark. Prices have surged, growth forecasts are being cut worldwide, and shortages are emerging across Asia, from Thailand to Pakistan.

But the energy industry is warning that the crisis is only beginning.

In conversations with more than three dozen oil and gas traders, executives, brokers, shippers and advisers over the last week, one message was repeated over and over: The world still hasn’t grasped the severity of the situation. Many drew parallels with the 1970s oil shock, warning the closure of the Strait of Hormuz is threatening an even bigger crisis. Fuel crunches hitting Asia will soon start spreading west, they said. Europe is likely to face surging prices to secure cargoes and is at risk of diesel shortages in the coming weeks.

If the strait stays closed, the world will have to significantly reduce its oil and gas consumption — but not before prices spike to a level that forces consumers and businesses to fly, drive and spend much less. Already, demand has begun to drop, and some countries in Asia are hoarding and rationing fuel. US government officials and Wall Street analysts are starting to consider the prospect that oil prices might surge to an unprecedented $200 a barrel.

“It’s clear to me if this crisis lasts more than three or four months it becomes a systemic problem for the world,” Patrick Pouyanne, chief executive officer of TotalEnergies SE said at the CERAWeek conference in Houston. “We cannot have 20% of the crude oil, which is exported globally, stranded in the Gulf and 20% of the LNG capacity stranded, without any consequence.” [Continue reading…]