Publications: Notes at the Margin

The Failure of Traditional Metrics (August 24, 2026)

 

This report covers two related issues. We begin by noting that forecasters' usual view of global oil use masks the heterogeneous composition of non-OPEC consumption, which we show comprises use by oil-producing nations, China, and other non-OECD nations. China's actions following the start of the Iran war threaten to limit or even halt aggregate non-OECD consumption, which could create a crude oil surplus and bring prices down.

 

In the second section, we examine the United States’ continuing trade policy failures. Canada has refused to be bullied by the US despite the imposition of 50% tariffs. In a press conference on August 22, Canada’s prime minister eloquently declared that his country was “at war” with us and would retaliate, not by limiting oil exports but by restricting access to Canadian rare earth minerals and accelerating the construction of energy export facilities to divert Canadian oil and gas to markets offering higher returns.

 

Meanwhile, US Secretary of the Treasury Scott Bessent is set to announce new economic sanctions on Iran, ones that will not, in his words, affect oil prices. Given his past inability to stop the Japanese Yen from declining and interest rates on the US 30-year bond from rising, we suggest buyers prepare for higher oil prices.

 

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