Lack of refined oil could mean diesel shortages, says global strategist | The Business | ABC NEWS

More attacks on the key southern Red Sea shipping route by Houthi rebels have put further pressure on the oil price, which reached $US110 a barrel overnight, and Rabobank's global strategist says it could go a lot higher.

Michael Every says the issue is no longer about simply securing oil, it's increasingly about how to refine it.

"We can still get crude out from (the Strait of) Hormuz at a much higher price because of the security premium of effectively smuggling it out at night with transponders off with the US Navy helping ... But we don't have enough refineries because many of them are located in the Middle East and they can't operate as usual." He said.

As a consequence, he says markets have begun to price in a protracted war.

Mr Every says US bond yields passed the psychological barrier of 5 per cent, and that saw 10-year US treasuries hit a three-year high.
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