Will policymakers panic before the oil market?

Risks of shortages in oil products may cause world leaders to panic and make mistakes instead of letting the market do what it does best

The oil market is witnessing one of the most dramatic conflicts in the Middle East in decades, raising the possibility of a prolonged disruption to the Strait of Hormuz—the most critical chokepoint in the global oil trade. Processing facilities, refineries, ports and ships have already been damaged or destroyed. Tanker movements outside the Gulf have slowed sharply, forcing some producers to shut in production as storage fills. With no clear end to the conflict in sight, the physical oil market is tightening rapidly. Yet the futures market appears almost calm by comparison. Brent has traded well above $100/bl, but many observers argue prices still fail to reflect the scale of potential short