Episode summary
Rory Johnston: $60 Oil Is Possible in 2027 | with Mikkel Rosenvold
Summary
Rory Johnston argued that Brent never reached $200 this year because China’s crude import collapse absorbed far more supply shock than markets expected. He said the biggest swing was not rerouting or SPR releases, but what he called the “Beijing swing,” with China cutting roughly 5.5 million barrels a day of crude imports and allowing Asia to recover faster than anticipated.
He also said the core inflation problem is now refined products, not crude. In his view, diesel has become the epicenter of the crisis because refinery damage in the Gulf, attacks on Russian infrastructure, and reduced Russian exports have left diesel supply far tighter than oil itself. He estimated the diesel crack spread has exploded far above normal levels and said the market is suffering from a structural refining shortage.
On geopolitics, Rory Johnston said Trump’s dealings with Russia are mostly political theater unless Ukraine stops striking refineries and those facilities are repaired. He argued the Iranian war remains the larger structural driver of the crisis, while Chinese EV adoption and fuel switching are quietly depressing long-run oil demand. Even so, he said the world could still see Brent in the $60s by late 2027 if the war ends, while diesel stays painfully expensive.
Key takeaways
- Rory Johnston said Brent missed $200 because China cut roughly 5.5 million barrels a day of crude imports, far more than expected from reroutes or SPR releases.
- Rory Johnston said the real inflation shock is diesel: he cited a crack spread near $99.30 a barrel and briefly above $120, far above a normal roughly $20.
- He estimated Ukraine’s refinery attacks account for about a third to half of the diesel crisis, with the Iran war responsible for the rest.
- Rory Johnston said Trump’s Russia diesel deal is too small to matter materially, since Russia’s pledged 500,000 tons in November is only about 125,000 barrels a day.
- He said China’s EVs and fuel switching are a long-term bearish force for oil, even if they do not eliminate near-term demand.
- Rory Johnston expects Brent could drift back to the $60s by the end of 2027 if the war ends, while diesel could still trade at crisis-like levels.
Notable quotes
“I think we're probably going to end the year above $100 a barrel on Brent at least”
“China's collapse of about 5 and 1/2 million barrels a day, roughly 45% of their pre-war crude imports just dropped out of the market entirely”
“Diesel is that kind of epicenter of this crisis”
“Currently at my screen, it is $99.30 a barrel. Recently hit above $120 a barrel”
“I think probably we're going to see a little bit more Russian diesel, but I would say virtually none of that is because of Trump's deal”
How the episode opens
Hello all there. Welcome to Real Vision. Welcome to another show on oil, war, geopolitics, and everything in between. My name is Miguel Wema. I'm joined today by oil market researcher and founder of commoditycontext.com, Rory Johnston. Welcome to the show, Rory.
Thanks for having me back. — I want to put you on the spot right away here. The number everyone wants to hear. Where does Brent close out the year, Rory?
Close out the year? I mean, at this stage we're we're we're getting really close. I think my initial bias would have been that we would have ended the year lower given that we are seeing more flow to Hormuz and everything else.
But, I think at this stage, given the chaos in the Middle East, given the mounting kind of strikes, and I think given China's seemingly resurgent import appetite, I think I think we're probably going to end the year above $100 a barrel on Brent at least.
Very interesting. We'll dive much more into that, both the situation in Ukraine, the Middle East, Hormuz, everything in this show. We are taking questions live on realvision.com.
We are posting this to our audience there first, and then subsequently on on YouTube. So, if you're on realvision.com, please post your questions for for me or Rory, and we will get around to as many of them as possible. Before we dive more into it, I just wanted to remind people that we are running a great campaign at Real Vision right at the moment.
We have opened the Real Vision Trading League, which has come off to a great start. You can pick three trades. You can win up to 80 80K in cash prizes.
So, head on over to realvision.com to check that out.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- oil price outlook
- iran strait of hormuz
- diesel supply crisis
- china crude demand shift
- energy inflation and refining constraints
Companies and tickers mentioned
- Commodity Context
Watch the episode
Watch “Rory Johnston: $60 Oil Is Possible in 2027 | with Mikkel Rosenvold” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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