The investment community watching the Strait of Hormuz is treating a possible armistice, freer tanker traffic and pressure from Washington as if they could settle the oil market’s bigger question.
They may calm spot prices, but they cannot manufacture barrels that haven’t been funded. That is the distinction Rick Rule, a veteran natural-resource investor, made in a recent interview.
A durable Gulf settlement could send oil lower, he said, but today’s disruption offers "a foretaste" of 2029 and 2030, when he expects a supply shortage "that can’t be ended by an armistice."
The reason, in his view, is capital. Rule’s research shows that the global oil and gas industry (including state-owned producers) has underinvested in sustaining capital by more than $1 billion a day.
The Depletion Treadmill and a $95 Floor
