Oil Has Hit $100.00 Each Again - Is This a Global Fuel Crisis?
This morning there Have been increases in the price of oil greater than $100.00/barrel and as a consequence global/economic disruptions occurred. The primary source for this price hike has resulted from geopolitical disruption occurring around the world & by a U.S. President directive trapping the release of OPEC Oil through the Contra de Hormuz (one of its major routes to globally distributing oil).
1 Reasons How We Are Here? - After the collapse of Peace negotiations between the U.S. & Iran - the United States implemented a naval blockade to stop the Iranians from exporting oil while also further placing economic pressure into the on-going conflict.
2 What Are We Seeing? - Brent Crude Oil saw barrel prices add to rise slow between $101 - $104 & WTI crude barrel prices added on between $104 & $105. Average Daily Percentage Increase around 7-9%! (Mercury News - Will Trump Follow Iranians with Blockade?)
The rapid response demonstrated by the markets supported by international tensions showed that Oil Market will quickly react to global international tensions!
→ Why is the Sirat de Homruz Important? • i.e. Incr/Decr of $100.00 Oil Price is directly linked to the volume of shipment through the Sirat de Hormuz.
The current economic conditions could have widespread implications for society as . It has the potential to change our understanding of what is ‘normal’ and give insight into what individuals can do to create the future they desire.
💔 Transport With the increase in gas prices, many people are already feeling the pressures of financial hardship and this is making it hard for individuals to be able to have a means of getting back and forth to work. This has put individuals who have been laid off out of business into a difficult situation whereby they no longer have any way to provide for their families.
⚠️ Groceries The rising prices of gas are being reflected in all areas of transportation, and therefore food prices are expected to rise sharply as well.
💼 Layoffs Due to inflation and increased costs of doing business, companies will be forced to pass the costs of these things onto consumers through price increases which will result in reductions (and eventual elimination) of employee positions.
👉🏻 Employment As a direct result of inflationary pressures, people will find themselves unable to afford the basic necessities associated with maintaining their job status.
🔥 Economic Recession All of the above factors create the conditions for an increase in the likelihood that an economic recession will occur.
📉 Increased Cost of Living The simultaneous increases in the prices of everything will create a reduction in the amount of disposable income available for people to spend on goods and services.
🚨 Sudden General Unrest Increased prices of goods and services, in conjunction with the inability for consumers to meet their basic financial obligations, will most likely lead to a state of unrest within society.
🪙 Crypto Market Effects
This is a big moment for all of us as investors.
Rising Oil Prices → Higher Inflation → Devaluation of Fiat
As a result, people will now search for new investments (like Bitcoin/altcoins) as a hedge against inflation, and this isn't new:
Historically, people searching for an alternative to mainstream assets, will act as a major driving force behind crypto/digital asset adoption.
If inflation continues to be a dominant theme in the media, we could potentially see an increase in demand for crypto as a hedge.
💡 My Opinion
I see this environment as providing further opportunities for the adoption of crypto.
As inflation persists and there is greater unstable economies, the attractiveness of decentralized finance systems increases.
We in the crypto markets may have an opportunity.
Stay tuned for updates; find out what's going on in the crypto markets; position yourself to take advantage of these opportunities.
All crises create opportunities for new ideas, and what do you think? Are these rising price of oil going to create more momentum toward crypto? We should have a chat!