Steve McKnight

But remember, there's got to be some time from when the Strait opens to when all of the ships start being in the right place at the right time.

You know, at the point when the Strait closed, there would have been all of these ships that are still stuck within the Persian Gulf.

But there would be a lot of ships outside the Strait as well that usually would have gone in, come out, gone in, come out.

So we've got to get all of those ships are off doing some other stuff.

hopefully being used somewhere in the global supply chain.

It's going to take some time for it all to get into the right place at the right time, get the oil out.

Remember, meanwhile, there's only so much oil you can store, so it's unlikely that all the oil fields will be at full capacity.

So just like with all of the COVID lockdowns, it takes time for the ships to get in the right place at the right time and then get back to a more normal state.

Yeah, that's where the markets are trying to guess where the price of oil might be in the future.

And that's done by some pretty complex contracts.

It's probably not even worth going through exactly how it works.

But from that, we can infer what the market thinks the price will be in the future.

And so that's what the Reserve Bank will be basing their forecasts on.

Now one thing that I want to really get across though is this is very different from the last time inflation shot up.

That was back in 2022.

Remember that was when Vladimir Putin decided it was a good idea to invade the Ukraine.

We saw the price of oil shoot up and that led to some pretty high inflation all around the world.

Back then we got to 7.3%.

We're not expecting to get there.

The Reserve Bank's forecast, as I said, is expected to go up to