When will oil markets recover?

ends from American public media, this is Marketplace.

“In Los Angeles, I'm Kai Rizdahl, it is Thursday, today this one is the second of April”

look at us always, have you along, everybody?

Well, among the many, many words the president spoke in his 19-minute speech last night, were words that indicated this war is going to go on for another two to three weeks. So mid to late April, before we see some semblance of a resolution, whatever that might look like. What it definitely is not going to look like is the global oil market rubber banding back

to normal overnight. So we asked Marketplace's Elizabeth Troval to play out our short-term economic future. Imagine it's mid-April, military actions against Iran have stopped. Now, the bigger question facing the global economy is what will the status of the straight be?

Gregory Brue with Eurasia Group says the next milestone is opening up the straight

of Hormuz, which Iran now controls. And there's a lot of TBD on how and when that might happen. Bill volumes recover to such an extent that goods can come and go the way that they were before. What kinds of risks will still exist?

The future of the straight looks messy, says Joe Deloro with Robo Bank. The straight will still take months to clear if Iran even wants it to be open. And then on top of that, you have our final redamage pipeline damage and production shut-ins.

All that oil production that is turned off during wartime can't get turned back on overnight,

even in an optimistic scenario, says Cloud Eugullumberty with right-ed energy. Nothing in terms of production is going to happen until May.

“So how long will it take to get to pre-war production?”

The general rule is... It's going to take as much time as the outage duration. If it's out two and a half months, it will take another two and a half months to get back to normal. All of this means that for prices, we won't see barrels in the 60s anytime soon.

Gregory Brugan. It's very unlikely that the price of crude drops below $80 a barrel at any point in 2026. Both due to the size of the physical disruption that's taken place and the ongoing risk Crimea stemming from the uncertainty.

And since every day this goes on, we have less physical oil out in the world. There's also the question of building back up reserves and inventories. And pickering is with pickering energy partners. The timing it takes to get back to normal and to rebuild those drawn down inventories. And to get all the oil where it needs to be is really challenging.

So we're going to be dealing with this through the summer driving season into the fall. For Americans, he expects gas prices will be well above $3 a gallon through the rest of the year. I'm Elizabeth Troval from Marketplace.

“Wall Street today, honestly, I don't know what to tell you.”

The major indices opened deep in the red after the president's speech last night. And then finished within either side of spit and distance of even. We will have the details when we do the numbers. Oil traders do seem to have a more firm grip on the risk environment now than stock traders do.

Crewed prices, that is both benchmarks, solidly back over $100 a barrel today. And yet producers in the Permian Basin, the pumping heart, if you will, of the American oil sector. They seem disinterested, according to a survey by the Federal Reserve Bank of Dallas that was fielded in mid-March, just 21% of oil executives in Texas and surrounding states say

they are planning to significantly increase the number of wells they're going to drill this year. Half of them say they're not planning to drill more at all. Then you'll have to make some calls out to West Texas to see what's going on. Usually, rising oil prices have a predictable impact on oil producers.

But Car Ingum, president of the Texas Alliance of Energy Producers says drillers in the Permian Basin don't seem to be ramping up production right now.

The war has been going on for just over a month.

“It's just virtually impossible to have any kind of meaningful increase in production or supply”

in that period of time. The system just doesn't work that way. There's not a spigot. There's not a valve. Instead, there's identifying prospects and lining up permits, says Mark Finley of Rice University.

Then they have to go out and line up a rig and a crew. All before they even start drilling. Finley says with past oil price swings. Typically, we stay the rig count begin to react within a few months and then we begin to see production react in other, you know, a couple of months after that.

He says it's not clear if Middle East oil supply will be restricted for long enough to justify that investment. Garrett Golding of the Dallas Fed says domestic producers have gotten more disciplined in reacting to market swings.

“Ten years ago, 15 years ago, they were more prone to chase higher prices with more activity.”

And we have a large graveyard of bankruptcies that are the result of that. Golding says some small producers are considering boosting rig count, but the biggest producers with the most ability to impact oil prices aren't quite as nimble and are going to take a little more time. Even if producers do choose to increase drilling, Golding says it would be just a few hundred

thousand barrels a day extra.

When this is a five million barrel a day disruption, at a minimum.

It's likely much more, so Golding says the solution to high oil prices probably isn't coming from the Permian. I'm Daniel Akerman from Marketplace. Until a month and five days ago, tariffs had as you know, been the story of this economy. So as we sit here a year to the day after President Trump rolled out his plan to tax

imports from the entire planet, little introspection seems to be in order. The Yale Budget Lab, a frequent source of ours, has done just that Natasha Seren is the president and co-founder. Welcome to the program. Thanks so much for having me.

So I have this paper that you all put out the budget lab today. The title is one year of tariff analysis, what we got right, what changed and what we learned. Let's start with what we got right part, you know, we all did some analysis when President

Trump had his tariff thing on the second of April last year.

What did you guys get right? Yeah, you know, at the time it feels like now a hundred years ago, but what we got right at the time was that the volatility associated with these type of rapid swings in our trade policy was going to have very significant economic consequences. And these are in fact the most inflationary policies that have been pursued in our lifetimes

and that is what is showing up on the data. Let's talk about that volatility and, of course, the uncertainty that gets passed down to businesses and also consumers as a great chart in here, tariff policy, tariff rates have been changed like 50 times or something in the past 12 months. More than 50 times in the past 12 months, and we've all kind of like lived through it,

you know, you see tariff pauses go into place, you see new rate announcements, you see a commercial at the president doesn't like in Canada and the response is new punitive tariff rates.

“And part of what is so important for economic analysts is that it's not just the level”

of the tariffs is so much higher now than it was before this second Trump term.

It is also that it is incredibly difficult for businesses or to be able to plan or other countries to be able to understand what U.S. trade policies are going to look like when these swings are so dramatic and they're happening with such frequency. Let's talk about what you and by you, I mean, all of us because we in the business and economic press, a lot of observers and analysts and folks at the budget lab, we expected this

was going to be really, really, really bad for this economy and it has only been kind of bad. Because a bit as bad as we thought, I guess, is the just here and why we had projected at the time that tariff rates should they stay in place permanently at the levels that were effectuated on liberation day would likely lead to price increases in the two to three

percent range over the course of a one year period. We've actually seen price increases that have been about half that. And so the question is like, what is driving the difference between those two, the estimates and what you've seen in practice? One big piece of it it turns out is what we've already been talking about, Kai, which is that you've seen much lower tariff rates in part because

of these pauses that have been instituted and the various negotiations, but essentially our effective tariff rate right now is about half of what it was in April of last year.

to be different in different sectors of the economy and we're getting in real time more information about the ways in which those prices are passing through, but I anticipate that as these tariff regimes start to take hold over a longer horizon, you're going to see more and more pass through to prices and more and more adjustment by importers and firms alike.

That's a key point that these companies are getting sick and tired of absorbing these costs

and we've talked about that a little bit. Last thing and then I'll let you go. And it comes with the acknowledgement that you are a professor of law and a budget person and not a professor of international politics and trade policy, but there is an international aspect to this.

What we have done in this country, what the president has done, not only affects the U.S. domestic economy, but the global economy has been affected as well and international partners who used to look to us for maximum trade benefits are now looking to each other.

“I think that's absolutely true and there was one concept of liberation day that really”

what it was about trying to be sure from a national security perspective that we shore up our relationships with our allies vis-a-vis China and adversary. What you have seen over the course of the last year is if anything, the opposite of that. You have seen us push our allies into China's hands and the economic consequences of those types of disruptions.

I think are actually understated by the types of estimates that we're doing at budget lab. Natasha Serrin is a professor of law at the Law School as I just said also for our purposes, the president and one of the co-founders of the Yale Budget Lab. Natasha, thanks a lot for your time and I really appreciate it.

Thanks so much for having me. According to the US drought monitor, that's a map and a data resource run by the University of Nebraska Lincoln, 83% of the American West is in some form of drought, a spectrum that runs from abnormally dry to exceptional drought, which is a step beyond extreme drought. One of the clearest manifestations of that is that the Colorado River is drying up.

So across parts of this country, cities, farms and tribes, are of necessity, coming back on how much water they use. Doing that though gets expensive, but as Alex Hager from KJZ and Phoenix reports, there is some new money helping to pay for that conservation. It's a cool morning in the desert and water is rushing through a canal next to a field

of crops. This water is used by the Healer River Indian Community, South of Phoenix, David De Young manages irrigation here and he's watching the water spill out onto a field of alfalfa through a system of high-tech motorized gates. So as the water advances, that sensors, picking up where the water is at, the young says

that used to run water across this field for eight to twelve hours to get it fully soaked, but with the new tech, it only takes about one.

“The key here is to get the water across the field as quickly as possible.”

The Healer River Indian community has spent the past few years accepting big checks from the federal government to make its water systems more efficient, leaving the water it's not using in-lake meat, the nation's largest reservoir. But now it's not just the feds helping foot the bill. Shannon Quinn leads water conservation at Proctor and Gamble.

Water is essential to our business.

We need it to make our product and everyone needs it to use our product. PNG, along with Google, paid for more than half of this new irrigation system, which cost a little more than one and a half million dollars. Using your hair with panty and or doing your laundry with tide, we need water and good quality water for consumers to be able to use our products.

Companies are stepping up their investments in water conservation for two big reasons. Todd Reeve knows them well. He's the CEO of Bonneville Environmental Foundation, which connects companies with money, like PNG, to people who can put it to work in conservation, like the Healer River Indian community. For a while, he says corporations were too focused on the short-term, and he couldn't

convince them that water shortages would hurt their business. But then, all of a sudden, there was a sort of an awakening that all these places that companies thought, "Hey, we have no water risk at all. They've realized, like, we've got exposure, we've got risk and we need to pay attention."

The second reason Reeve says is about reputation.

“As the West gets drier, do you want people thinking your company is making it worse?”

Or trying to help? And we're facing long-term drought, we're facing water cutbacks, et cetera. Instead of people pointing fingers, which is usually what happens right away, is people will say, "You know, this company has been a partner here for 10 years, helping Arizona do more with less water."

The Biden administration spent billions on water infrastructure in the West, but that spending

Reeve says corporate money won't replace that spending, but it can help.

“There's a huge opportunity to use corporate money in very flexible ways to fill some of”

these critical gaps that are not being met by federal funding in prison.

Nate Reece agrees with that. He's the Arizona Director for the Conservation Group, Trout Unlimited. It's brought in the pool of funding for sure, and just diversified it. Reece's group is working on restoring a big meta in eastern Arizona. It's trying to improve wildlife habitat and make the space more resilient to drought.

Trout Unlimited got federal money for the behind-the-scenes parts of the project. Then a foundation, and two companies, including Microsoft, kicked in about 40% of the total $1.8 million cost to get it across the finish line. Federal dollars cover, at least in my case, have covered planning portions of these projects, and the corporate's come in for implementation on the landscape.

Reece says he's hoping corporations see how this project goes and get more involved in the future, and because the Colorado River is poised to stay dry, the need for water conservation

“and the money to pay for it is likely to keep going up.”

The Phoenix, I'm Alex Hager for Marketplace. Coming up, it's been predictably unpredictable, because tariffs seem to go away and then they come back. Oh yes, they do first though. Let's do the numbers. Down Dusty was down 61 points today, one tenth, one percent, forty six thousand, five hundred, and four.

Then as that grew 38 points, about two tenths, percent twenty one thousand, eight hundred and seventy nine. The S&P five hundred added seven points, a tenth percent, sixty five and eighty two. Believe me when I tell you, that was kind of a miraculous recovery. Oh oil, you say? Exxon mobile essentially flat today, Chevron increased eight tenth percent shell, which

is traded on the London Stock Exchange, gained a 2.9 percent Saudi Ramco traded on that

countries. Stock Exchange rose two tenths, a one percent. High oil means higher prices for things derived from oil say, plastics, dow, makes everything from vapor barriers used in construction to plastic bottles for pills, added one and seven tenths percent.

Bond's rose yield on the ten year t-note down 4.30 percent, you're listening to marketplace.

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This is Marketplace, I'm Kai Rizdahl. You want to go on to eat, you've got broadly speaking, two choices. You can go to your local place, it's a one-off probably independent, maybe you even know the owner, or you can't get one of the chains in town. Maybe it's a fast casual or something a bit higher end.

There is, though, a stealthier third option, somewhere in between.

Marketplace is, of course, then Schwab has more now on the growth of restaurants that seem independent, but aren't. It's almost dinner time at Kittleum. The lights are low, the beats are bumping, and the tables are set up to face a brightly lit open kitchen.

But it should almost look like a show, like a theater. That's Samir Rajpal, co-founder of the restaurant Group Hungry Trio, which owns this South Indian spot. He says the sort of performance happening here is what diners want to experience if they're paying $45 for Krab Curry.

But putting on a show is expensive. Everything is more expensive these days. The rising cost of people, the rising cost of ingredients, the rising cost of real estate. It's just that when you're at a group, it's much easier to manage that cost. The restaurant Group's range from something small, like Hungry Trio, which has nine establishments,

to something bigger, like Geronimo Hospitality Group, which owns more than 20 restaurants.

Jeff Whiteman is COO. We do everything in-house.

“We have interior design in-house, we have architecture in-house.”

We have somebody that runs our purchasing for us. It's about economies of scale. At one-off restaurants, one person does the job of many. At restaurant groups, someone's sole job is, for example, to negotiate the best price for cooking oil.

Let's say you're in a restaurant and the napkin that the silverware rolled in for somebody with the single restaurant is 11 or 12 cents a piece, and if I'm paying 7, it's pennies, but pennies matter. Whiteman says hospitality groups also see less worker turnover. Geronimo employs 1,500 people who receive benefits like health insurance.

They can pick up shifts at different restaurants and grow into different roles.

Because the company is always thinking about its next move.

“In a single word, what do we want this concept to look and to feel like?”

And from that, we try to establish, if this is a celebrity, who is it? The method sounds a bit startup-corpority, but the goal is to create something unique. The ideal is if a consumer, a guest, walks in, and thinks that they're going to meet the owner any time walking around the corner or walking out of the kitchen. I would think that by and large people coming to our concepts have no idea that there's

a larger thing behind what they're experiencing. Turns out, your neighborhood watering hole isn't a cool dive. It's owned by a company that's slinging PBR is at four other bars down the street. These hospitality groups are operating all over, from Omaha to Tucson to Sacramento. You think it is a little bit more common than people might understand?

Lily Jan is a lecturer of Food and Beverage Management at Cornell. She says restaurant groups can make eating out feel a little homogenous, one smash burger after another.

“People want to take fewer risks when it comes into developing these concepts in these areas,”

and so you're not going to have as many mom and pop cafe shops. In a lot of ways, though, Jan says restaurant groups are just giving diners what they want. And when consumers are very spend cautious, there is a consistency and a dependability and reliability about a well-established brand that can be very comforting because every dollar really counts.

That means every bite of food and interaction with the server counts too, says Samir Rajpal at the Indian restaurant, Kittleum. From the way the music was said, from the way the ambience was, from the way the lighting was, every single thing is going to come up together to create that experience, and it's

ultimately going to be that experience that's going to define in the customer's mind whether

the price that they paid was worthy or not. Rajpal and Hungry Trio are launching a cocktail bar in your buy soon. The goal is to open a new concept each year. In New York, I'm Kristen Schwab from Marketplace. Our last gas bond president Trump and what his tariffs have done to this economy over the past

year last gasp of course until something else happens. Comes to us from Wesley Rul. He and his wife own Knoxville fine violins, they are in Knoxville, Tennessee. I guess it's been predictably unpredictable because tariffs seem to go away and then they come back.

It's really hard to keep up with and as a small business, we just kind of have to keep extra money in the account to make sure that we can pay for any tariffs that may or may not occur. One of my distributors was doing a kind of a tariff add-on fee so that the additional charges were reflected in whatever the tariff was that they had to pay for it and so that distributor has been really nice about it and the prices are fluctuating.

All of my other distributors' prices rose, I don't think they're ever going to go back down. We're having to sort of prepare for gas prices going up which is going to affect shipping. One of my distributors' actually recently lost money shipping me cellos from California because they quoted me the normal price for shipping and then it turns out all of the shipping

prices have changed dramatically and they're shipping went up at 300 percent and so fortunately

they didn't charge me that extra cost but they had to warn me that next time we ordered it would be potentially almost as much as one of the cellos. I've been slowly preparing my customers for price hikes. Lorna and I have both been hesitant to raise prices unless we have to. We're trying to be thoughtful about that but I've been telling customers about, "Hey,

you know, just expect small price hikes in the future because they're unavoidable.

Wesley Rull, you know, is Knoxville fine-violins with his wife, Lorna?

They are in Knoxville, Tennessee. This final note on the way out today in which astronauts, they're just like us.

And I also see that I have two Microsoft Outlooks and neither one of those are working.

“If you want to re-boat in and check the optimal for those two outlooks, that would be awesome.”

All right, we will join in on your PCD and we'll let you know when we're done.

Art of this Commander Readwiseman, calling mission control about seven hours after launch yesterday

looking for a little text of board.

“Also they take out look to the moon, man.”

Our daily production team, let me put out Andy Corbin, Maria Hall, and Horace, Sarah Lee, and Sean McHenry, Michaela, and Sophia Terenzio, we'll story, runs things.

“I'm Kyra Rizdal, we'll see you tomorrow, everybody.”

This is APM. Hi, I'm Maggie Smith, poet and host of the Slowdown. Each weekday I share a poem and a moment of reflection, helping you turn listening into a daily ritual. It's five minutes to slow down, pay attention, and begin the day with intention.

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