Your gas tank is full. That’s a problem for OPEC+

This is Bloomberg Opinion Today, a projected balance of supply and demand for Bloomberg Opinion’s opinions. On Sundays, we look at the major [Bloomberg]( This is Bloomberg Opinion Today, a projected balance of supply and demand for Bloomberg Opinion’s opinions. On Sundays, we look at the major themes of the week past and how they will define the week ahead. Sign up for the daily newsletter [here](. [It’s a Gas]( When was the last time you had full service at a gas station? If you live in New Jersey, it was probably yesterday. If you live anywhere else, you are probably scratching your head and searching your memory. But for me, it was last weekend on New York’s Long Island Expressway, and I found myself in a tizzy. Why does this nice man want to know what octane I want? What’s octane? Why does he want my credit card? Why does he want to know my ZIP code? Should I worry about that? Can’t he just find out from Google anyway? Can I tip with my iPhone? Oh no, then how do I tip? Where are my one-dollar bills? I think they’re back in 2019. Does this car have a change compartment? Is it filled with anything other than old gum wrappers? Will he accept Sacajawea dollars? Euros? Why in G*d’s name are there euros in my change compartment???  Until 1964 — when whoever writes state fire codes realized we weren’t all going to spontaneously combust if we dared grab the pump handle — every American driver would have known what to do in this situation. But as of a year ago, when Oregon [came to its senses]( only Garden Staters are forbidden from exercising their right of petroleum self-determination. Well, them and people whose car computer reminds them they are very, extremely, impossibly close to running out of gas at exit 48 on the LIE. You know who else is having a bit of a panic at the pump? OPEC+. Liam Denning is full up on the details. “This summer, Americans got back to driving about as much as they did before the pandemic,” he [writes](. “Yet gasoline demand is down so far this year, and remains about 4% below the peak level of 2018. More miles equating to fewer gallons is not a good equation for the oil industry and this heralds a profound development: that US gasoline demand, the world’s single largest pool of oil consumption, has almost certainly peaked for good.” Hmm. But aren’t EV sales slowing? Wouldn’t another Donald Trump administration try to, in Liam’s phrase, “make tailpipes great again”? Couldn’t that could curb our remarkable fuel-efficiency gains? “Given the economic and demographic headwinds, however, they would have to slow to a stop or even reverse in order to get back to 2018 demand levels sometime this decade,” Liam explains. “And while legacy automakers in the US have scaled back targets for battery electric vehicles, [enthusiasm for plug-in hybrids has risen]( which is still bullish for efficiency and bearish for gasoline.” Also bearish for gasoline: AI. “[Artificial intelligence]( will ultimately help drive down oil prices over the next decade as improved US shale output outweighs better oil demand, according to Goldman Sachs,” [reports]( Bloomberg’s David Wethe. “The bank forecasts a 30% cut to shale costs thanks to AI during the period while delivering a modest boost to long-run oil demand, analysts including Callum Bruce wrote this week in a note to investors. The bottom-line impact could lower oil prices by $5 a barrel through increased supply.” What is a pitiable Middle Eastern monarch, or a beggared [butcher]( from Moscow, supposed to do? Tamp down the tap, apparently. “Saudi Arabia, Russia and other oil-producing nations have now [agreed to delay by two months]( a planned output hike that was scheduled to start in October. The delay came after Brent, the petroleum benchmark, fell to one-year low below $75 a barrel,” Javier Blas [writes](. “In the short term, postponing the output hikes until December [should support oil prices](. ... But looking at the projected balance of supply and demand, OPEC+ is simply kicking the can down a very uphill road.” Javier thinks the delay sends the “worst possible message to the market” at a time when messages out of the Middle East are pretty much all the worst anyway. It shows that OPEC+ unity is weak. It doesn’t address upcoming surpluses. “It’s a belated admission the market doesn’t need the oil [the group had anticipated]( Javier adds. “The Saudis are reputed to have superior information about the market — this time, they failed.” What’s strange is that all the recent bad news should have been good for the princes of petroleum. “The litany of scary international situations is well known. The far right enjoyed its best election results in Germany since the fall of Hitler (largely expected), while Hamas’s execution of Israeli hostages and Russia’s missile attacks in Ukraine signaled further horrifying escalations in conflicts that could disrupt the flow of oil,” John Authers [writes](. “[When oil prices perform like this]( despite heightened geopolitical risks, that implies that global demand is very weak.”  “The silver lining in oil’s fall is the additional confidence added to expectations of monetary easing by the Fed,” John adds. “For consumers, the joy is almost instant, with gasoline futures in New York falling even faster than crude, and likely to translate into lower pump prices. Overall, cheaper gasoline, one of the most visible measures of inflation for voters, might just deliver a timely election boost for Vice President Kamala Harris. ” Her opponent, who the other day [postulated]( that energy prices have something or other to do with Americans cutting back on pork belly, is thinking even [biglier](. Trump’s [economic speech]( on Thursday “was low energy in more ways than one,” Liam [reports](. “He intoned to the audience at the Economic Club of New York that his plan would ‘cut energy prices in half, or more than that, within 12 months of taking office.’ If history is any guide, that would portend a cataclysm in 2025 for either the US consumer or its oil industry. Most likely both.” Here’s why: “Presidents, relatively powerless to shape energy prices, are best to concern themselves with ensuring that Americans have options to limit their exposure to volatile energy costs,” suggests Liam. “That includes things like fostering efficiency or alternative technologies such as electric vehicles and heat pumps. Somehow, I suspect Trump will instead stick with his 50% pledge, however detached from reality or economic wellbeing.” Save up on your Sacajaweas, folks. Bonus [Crude Bomb]( Reading - California’s Crushing Power Bills [Challenge Its Climate Goals]( — Liam Denning - You Could [Power America]( With China’s Wasted Energy — David Fickling - The [UK’s Wind Goal]( Looks Increasingly Like a Moonshot — Lara Williams [What’s the World Got in Store]( - iPhone 16 unveiling, Sept. 9:  AI Culture [Will Be Weirder]( Than You Can Imagine — Tyler Cowen - Harris-Trump debate, Sept. 10: Trump’s Biggest Failure Was Covid. Harris [Should Talk]( About It. — Nia-Malika Henderson - ECB rate decision, Sept. 12: Why [German Angst]( Is a Worry for the World — Chris Bryant [Oil on Water]( As I plot out potential scuba diving vacations for 2025, there are plenty of warm waters looking cool: Bonaire, Cozumel, Nauru. Definitely not on the list, however, is the Red Sea. Here’s why: Source: Ansar Allah Media Office That’s the MV Sounion, a tanker carrying 1 million barrels of crude that was attacked by Yemen’s Houthi rebels last month. So far, the hull is mostly holding, but the ship remains aflame and efforts to tow it to port were abandoned last week. Is it a burning symbol of an empire in decay? “A radical, quasi-state actor most Americans had never heard of, the Houthis of Yemen, have mounted the gravest challenge to freedom of the seas in decades — and arguably beaten a weary superpower along the way,” [writes]( Hal Brands. “Russia’s war in Ukraine is simultaneously stressing another bedrock principle, the norm against forcible conquest. Revisionist actors are challenging the global rules that underpin the relative affluence, security and stability of our post-1945 world.” Okay, we get the importance of this conflict to the global economy — the waterway facilitates 15% of maritime trade — and even to the US-led global order. But the Red Sea is also the only place in the world you can see a masked butterfly fish, a Springer’s dottyback or a powder-blue soapfish in situ. And as David Fickling reminds us, the threat posed by the Sounion pales in comparison to damage the rest of us are doing every day to every octopus’s garden on earth. “The biggest threat to marine ecosystems, by far, isn’t the 100,000 barrels of oil spilled from tankers each year, nor even the tens of millions that enter the ocean in smaller-scale spillages and runoff from the land,” David [explains]( “Instead, it’s the 30 billion barrels we refine and burn, contributing about a third of fossil carbon dioxide emissions and slowly cooking the world.” At mid-summer, sea surface temperatures had posted [record highs for 15 consecutive months](. “That’s doing critical damage to coral reefs, which bleach and die when the water gets too warm. Coral cover has [declined by half since the 1950s]( and as much as 90% of the remainder will vanish [even at a modest 1.5 Celsius]( of warming,” David writes “That’s the most profound risk of an oil spill off the coast of Yemen. The world is counting on the health of the region’s corals as a refuge when climate change ravages less resilient parts of the ocean. Damage to them isn’t merely a local issue. It will effect the entire planet.” Even New Jersey. Notes: Please send Springer’s dottybacks and feedback to Tobin Harshaw at tharshaw@bloomberg.net. Follow Us Stay updated by saving our new email address Our email address is changing, which means you’ll be receiving this newsletter from noreply@news.bloomberg.com. 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