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Well….that escalated quickly. The whole world has not gone bananas…but there is a tariff on bananas. No one really knows what kind of quilt we will end up with when this tangled tariff sewing kit is put to sleep. What we do know is that it has cast a cloak of uncertainty upon markets, businesses and consumers alike. The uncertainty surrounding trade policies can deter investment and hinder long-term planning. This slowdown puts a damper on economic activity and curtails overall demand. People may not be buying the GI Joe with the Kung Fu Grip for Christmas. No….it’s not good for business but it’s just a fact of life we’ll all have to deal with, at least for now. Short term pain for long term gain? Let’s hope.
Tariffs on imported raw materials and intermediates directly raise production expenses for chemical manufacturers. As a result, companies may shift their sourcing to avoid tariffs, potentially impacting other regions. We all know you need tank storage to move chemicals from A to B. For now, The White House has excluded many products from the new duties, including many major chemicals (e.g. polyethylene, polypropylene, phenols and ethylene). The list also has exclusions for pharmaceutical products, semiconductors, and energy products. Of course, all of this is subject to change. Until that time, the global chemical industry overall will have a headwind to overcome. Hopefully not a hurricane.
The energy markets also had fun going pillar to post. While gunslinging oil traders certainly love volatility, when it comes to uncertainty they switch from whiskey to White Claw. Sitting on hands while the coast gets clearer seems to be the flavor of the week. Fears of a global recession are creeping into market sentiment and folks are jumping on the bandwagon of declining oil demand. Of course, all of this leads to price capitulation and WTI crude was snapchatted visiting the 50’s last week. Unfortunately, Fonzie wasn’t at Arnolds to thump the jukebox and change the tune. Saudi Arabia has increased production to make a market share grab and to spank the OPEC+ members who were exceeding their production quotas. Goldman Sachs lowered its oil price forecast for 2026 twice in less than a week, assessing Brent at $58 per barrel next year. WTI crude oil posted a low of $56.70 a barrel last week and Brent traded at $60 a barrel – prices are at their lowest level since 2021. There cannot be a better time to be looking at crude oil storage. There is no better place to find it than here at The Tank Tiger. Don’t be the kid left standing during musical chairs when the music stops. The backwardation DJ is still scratching those records, but Captain Contango is about to pull the plug on him. LFG.
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Tank Talk
