Dennis Kissler: The Biggest Oil Price Risk Is to the Downside

Oil prices are soaring, diesel markets are facing historic shortages, and geopolitical conflict is disrupting global energy flows. But could crude oil prices fall sharply once Middle Eastern supply returns?On this episode of Oil Ground Up, host Rory Johnston welcomes Dennis Kissler, Senior Vice President and Head of Trading at BOK Financial, for an in-depth discussion of crude oil markets, producer hedging strategies, the global diesel shortage, and the risks facing energy markets as the conflict with Iran continues.With four decades of experience in energy futures and derivatives, Kissler offers a perspective from the trading desk, where he helps U.S. oil and natural gas producers protect their revenue through futures, swaps, and options.Kissler argues that today's oil crisis is fundamentally different from previous supply shocks. Rather than a permanent shortage of crude oil, he sees a transportation and geopolitical disruption that could eventually be resolved much faster than markets anticipate. With global oil supplies already running in surplus before the conflict, he warns that restoring Middle Eastern exports could send crude prices sharply lower.The conversation also examines why U.S. producers are increasingly hedging future production, how elevated freight and insurance costs have fractured global oil pricing, and why diesel—not crude oil—may be the most important commodity to watch.Rory and Dennis explore the widening disconnect between WTI and Brent crude, historically elevated diesel refining margins, the effects of disrupted Russian and Middle Eastern fuel exports, and the growing risk that sustained diesel shortages could fuel inflation, higher interest rates, and an economic slowdown.Finally, they discuss whether China and India can help relieve the refined products shortage, what a diplomatic resolution could mean for oil prices, and the key indicators investors should monitor over the coming months.