Many industries particularly in the world of commodities go on the supply and demand charts. When prices rise more of the commodity is found or recycled, when the prices fall, minerals stay in the ground. If you are in the industry, the ideal is for demand to be slightly more than supply which keeps prices up.

In an article from Reuters, the International Energy Agency released a report that it believes global oil supply will not meet total demand this year as the Iran war wreaks havoc on Middle East oil production.

The US and Israel’s war with Iran, caused subsequent damage to Iran and its Gulf’s neighbor’s oil infrastructure and effective closure of the Strait of Hormuz have caused the largest oil supply in history, sending oil prices skyrocketing.

The report says in the Middle East, effectively 14 million barrels a day of oil are shut in or not being put into the marketplace.

The IEA forecasts imply that supply will come in 1.78 million barrels a day below total demand in 2026, erasing a 410,000 barrel a day surplus projected in April’s report and a 4 million barrel a day surplus in the December report.

The IEA expects the supply and demand will remain severely undersupplied through the end of Q3, even if the Strait of Hormuz opens up sooner than later.

The 32 members of the IEA coordinated the largest release of 400 million barrels of oil from strategic reserves and to date about 164 million barrels have been released.

Linking to dividend paying stocks, all commodities have agencies and companies that monitor supply and demand for the commodity. When the demand is higher than the supply, prices rise and those companies make extra profits as the price goes up. The issue to consider is when will extra supply come on or are there alternatives to the commodity. If no, then the commodity price should be elevated for sometime as investors to reap extra returns. For your investments. learn which agency releases the monthly supply and demand. (if you ever seen the movie Trading Places, it was the US Government’s crop report).

There are more questions than answers, till the next time – to raising questions.