April 21, 2026 | Energy Crisis Risks Global Recession

Most countries maintain fuel inventories that they can draw down in the event of an interruption. But those inventories are finite, and as the Iran war drags on, they are, in many cases, running out.

The result: Sectors like fishing, mining, and farming in many places are shutting down. Local economies are tipping into recession, and as they spread, the downturn risks going global. The following video (forwarded by subscriber James Judson) explains the dynamic. Scroll down for a partial transcript.

Partial Transcript:

Maybe everything will be fine for the US, right? Because we’re told that the US is a net exporter of oil. But the reality is that the United States actually imports more crude oil than it exports. And here’s the math. We bring in about 6.3 million barrels a day and send out about 4.1 million. That makes us a net importer, aka consumer, of 2.2 million barrels a day. You can’t be a net importer of something and also be the world’s supplier of it. That math just doesn’t make sense. And all of this confusion about how much we actually have or don’t have is exactly why the price of oil is two completely different numbers depending on where you look.

One of those numbers is the paper price. The other is the price oil actually costs in the real world if a country needs a barrel delivered to it today. And the gap between those two numbers is about $35, which is the biggest spread ever recorded in history. When we talk about commodities, there is a huge difference between what you see in the screen and how much you pay to get that commodity. So you see the screen $90 a barrel. Good luck if you get an oil barrel for $90. It’s $120 130 140 150 160 even.

The reason the gap exists is because people who need actual oil right now are paying whatever it takes to get it. But the paper market is still pretending everything is fine. How come? The theory is that it’s because the paper markets are being used as a mechanism to suppress the price of oil psychologically to calm the markets down.

Oil is the plumbing system of the whole economy. And so the question is, how much oil is now missing? And how much does the world need? Turns out the world uses about 100 million barrels of oil every single day. That’s at full capacity. What’s missing right now [with the closure of the Strait of Hormuz] is somewhere between 8 and 13 million barrels per day. That doesn’t sound like much, but it’s a lot. For context, the United States uses about 20 million barrels a day. So, we’re talking about losing the equivalent of half of America’s daily oil usage. This is every day for weeks now.

Now obviously countries have prepared for stuff like this but they still won’t have enough to cover what was lost without paying those higher prices. For example, US spare capacity is at about 1 million barrels a day. Venezuela under 1 million. Canada via Pacific routes under 1 million. And if you add every alternative together, you’ll get about 2.8 million barrels per day from all the temporary emergency stockpiles. 2.8 8 million barrels against a whole of 8 to 13 million which means reserves will eventually run out and there will be a shortage.

When will the world start feeling the effects of this missing oil? Most likely, those global oil supplies will run out sometime in mid to late April. We are in mid-April right now. So the next question is which countries are going to start to feel the effects of all of this first?

Asia, for example, got hit first and the hardest. Deliveries to Asia basically stopped on April 1st and Asia sources roughly 80% of its oil from the Persian Gulf. What’s getting through right now is only about 6% of pre-war volumes. The Philippines was also one of the first countries to declare their national emergency after their gas prices more than doubled almost overnight. Indonesia and Vietnam told people to work from home to conserve fuel. In Thailand, their fishing industry, which is about 1% of their whole economy, is shutting down because marine fuel costs have gone up by 250%. In Japan, bus and ferry services are slowing down because of fuel shortages. In India, the government stopped LPG supplies for commercial use to protect household cooking fuel. In Mumbai, roughly 20% of hotels and restaurants had already been shut down by early March. In Africa, the last deliveries ended on April 10th. Countries like Ethiopia, Zimbabwe, South Sudan, they’re now literally diluting their petrol. They’re mixing it with other chemicals to stretch what’s left. And they’re also restricting electricity. Australia’s last fuel shipment is expected to arrive April 19th. They’ve already released their national reserves. They’ve cut fuel taxes and they put together a national security plan. And then there’s Europe. Their deliveries stopped around April 10th as well, which is why they’re doing everything in their power to reduce demand.

Time is Running Short

The markets are pricing in a quick return to normal.

Here’s hoping they’re right.

John Rubino April 21st, 2026

Posted In: John Rubino Substack

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