Marketplace - What's the new normal for global oil?

Episode Date: September 10, 2026

Oil industry analysts were hopeful earlier this year that Trump’s war in the Middle East would be short-lived. But it’s become clear that an open flow of oil through the Strait of Hormuz will require sustained cooperation between the U.S. and Iran. S&P Global now expects dampered production and choppy prices to continue into 2027. Also in this episode: Trucking costs are pushed up by record-breaking diesel prices and a shortage of English-speaking drivers. And, is it a good idea to use AI to develop pharmaceutical drugs?Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.Read the stories in today’s episode:The oil roller coaster reaches new heights — and it's a bumpy ride aheadTrucking costs are rising fast. That could mean even more inflation for consumersThis audio affects business is still waiting on tariff refundsHow this Georgia factory is surviving America's solar policy whiplashIf AI helps speed up drug development, can the FDA keep up?The construction manager who quit his 9-to-5 to build something for himself

Today on the show, the abnormal, new normal of oil. From American public media, this is Marketplace. In New York, I'm Sabree Benishore in for Kai Rizdahl. It is Thursday, September 10th. We are glad to have you with us. Usually the U.S. oil market for oil produced here is a lot more chill than international oil markets. We drill a lot here. Our market's a little insulated, prices are lower.

Well, today, American oil lost its chill. West Texas Intermediate, that's U.S. oil, went over $100 a barrel. It's almost 104 now. Not a good sign. Brent Crude, that's oil in the rest of the world, basically is at 107. All of the oils have been going up for a month now because escalation in the Middle East. Oil shipments out of the Middle East are now down 65% from one year ago. And it looks like this is going to be.

be just how it is for a while. Marketplace's Mitchell Hartman reports. Before all the disruptions from the Iran War, the Persian Gulf accounted for about 20% of global oil supply. And the price of crude hovered around $70 a barrel, says analyst Bouchin Bahrir at S&P Global Energy. We're projecting prices at about $80 to $100 range through next year. The basic rationale, says Bari, there's no longer an expectation the U.S. Iran war will end anytime soon. Sometimes it's a hot conflict. Sometimes it's cooler.

Some ships are getting through. Sometimes in the dark. Sometimes they're not. They're being bombed. The U.S. and Iran can both restrict or entirely cut off oil coming through the Strait of Hormuz. Neither alone can fully reopen it. The flows of oil are going to be very uneven, but overall, they're going to be

less than you can't count on it. If anything, S&P Global Energy's year-ahead projection for crude oil is on the conservative side. Columbia Business School climate economist Gernard Wagner's model predicts the price per barrel going forward. Around 100, never below 90. It's not that the new normal is a stable higher price. It is essentially pricing in volatility, pricing in uncertainty. Samantha Gross at the Brookings Institution also calls this a new normal for the world oil market.

We're not going back. She says after repeated announcements from the White House that the Strait of Hormuz was opening soon or the war was about to end, which would temporarily drive crude prices lower. I don't think the market's believing those proclamations anymore because they haven't held true. The Strait of Hormuz won't be what it was before. Now we understand that Iran can and will block it. Because it turns out it's neither very difficult. nor very expensive for them to do so. I'm Mitchell Hartman for Marketplace. Wall Street today, Moody, we'll have the details when we do the numbers.

Those new normal higher oil prices showed right on up this morning in the latest measure of inflation, the producer price index. It was up four-tenths of a percent in August, most of that energy, and that in turn is fueling inflation in transportation and warehousing. You know, the things that literally everything we buy ever depend on. Marketplaces Justin Ho has that. The cost of trucking is up more than 14% from the same time a year ago, according to the Labor Department. Jason Miller is a professor of supply chain management at Michigan State University. The price the trucking companies receive, which is what the PPI is picking up, that is going to rise.

It really is almost a linear function of how those diesel prices are changing. Miller says the trucking industry is also losing workers. The Trump administration has been cracking down on drivers who aren't proficient in English. As a result, there are fewer trucks on the road. That drop has been so much that it's given carriers a little bit more pricing power. And so we've seen freight rates increase beyond just the price of the diesel fuel. Some companies have been waiting until the last minute to ship things in case rates come down, says Zach Rogers, a professor of supply chain management at Colorado State University.

But so far, they haven't. And now we're getting close to what would be the last second, at least ahead of Q4 and peak season. So companies can't wait anymore. They have to pay for trucking regardless of how expensive it is. The calculation they're doing is, well, we would rather pay a little bit more, and maybe we can pass some of that extra costs down to consumers than to be out of stock and miss out on the sales altogether. But passing along those extra costs isn't always that easy.

Sometimes you can and sometimes you can't. That's Peter Firth. He's a CEO of FFFF Associates, which imports fig paste. Sometimes you lose business because the total cost to deliver a product to the customer is just too high and they just can't absorb it. Firth says even though he's been paying more to truck in products, a lot of his customers, which make fig bars using fig paste they buy from him, have been pushing back against price hikes, in large part because grocery shoppers might not buy fig bars if they're too expensive. So our customers who make the fig bars are very, very careful to try to try. to hold their costs down because they don't want to lose sales. Seferth says that means his company has to eat the cost instead. I'm Justin Howe for Marketplace.

Whilst the U.S. and Canada fight an all-out trade war, it might be easy to forget. We still have tariffs on pretty much everybody else in the world. The average tax U.S. companies and importers are now paying on goods they bring in is 11% according to the Yale Budget Lab. And it's kind of crazy all the nooks and crannies. of this economy, those tariffs find their way into. Example, death by audio. It's a business in Queens, New York, that makes equipment for adding special effects

to musical instruments. Heather Bickford is the chief operating officer and joins us. Heather, hi. So nice to talk to you. Thank you for having me. Yeah. So the last time we talked, which was like a year ago. Yeah, it's been a minute.

Yeah, you were so stressed out. You know, you had the tariffs coming. You were going to possibly take out a little. You were thinking about not launching a new product. How are you doing right now? I'm actually, I'm doing a lot better. I think I've just had to like really not focus on tariffs as much, which has really helped. I think I was like checked out last time, but I'm more just kind of just not paying attention as much.

Can you do that? I mean, not totally, but you know, I just try not to focus as much time on it because there's nothing I can really do about it, you know. Mm-hmm. How is business itself? How is business this summer? It's actually been doing really well. We just released a new product and it sold way more than we anticipated and it's sold out. Wow. Yeah, we're taking pre-orders for more of them now. And yeah, it's surprisingly going really well. And usually summer is dead. So. Oh, well, that's great. Have you gotten any, are you getting any tariff refunds? Oh, my gosh. We have gotten two.

and those were from DHS, but I still cannot even log in to the ACE portal. I don't know if you've ever tried to log in. It's diabolical. Yeah, I've been trying since even before the tariffs were repealed to get our account situated with that website. And it's still like I sit on hold for hours and finally talk to someone. They'll tell me to do something. I'll do that. and then you have to usually wait like 45 to 60 days to hear back from them. Oh, my God.

Oh, yeah. And then you'll hear back and they'll say, no, that wasn't what you were supposed to do. You need to do this. So then I'm like, okay. So I'll do that and then have to wait again. And then they'll tell me, oh, no, that's not right. So basically you're just running in circles. You have no idea what's going on.

And then it's like by the time you hear back, you don't even remember what had happened. So you have to like, so I have to take all these extensive notes. It's just, it's crazy. How much? Do you have any idea how much you're owed, theoretically speaking? It's a little less than $100,000. Oh, that is so much. Yeah. Yeah, it's a lot. But I'm honestly, I'm kind of just like, I don't even know if I'll ever see that money. I really don't. Wow. Yeah.

Right now, the labor market in general is it's kind of like okay but not great and it's not a good time for anyone looking for a job. So we have you, a business owner. How are you thinking about hiring right now? I mean, probably not hiring. Yeah, we just have everyone just kind of doing a lot of different roles. You know, if I were to get that money back from the refunds, that would be cool. I could probably hire like two part-time employees. But, yeah, I'm not looking.

I'm not looking like that's going to happen. Yeah, well, you and a lot of other business owners. Yeah. Obviously, everyone is in a whirlwind about AI right now. Yeah. Is that, how are you thinking about that for your business? I mean, that is definitely a concern. You know, in general, too, like, are people going to stop using, like, effects in general,

like something they can use, like, with their hands and, you know, create something. And it's a little, it's hard to say. Everything is very kind of scary. And I just try to stay positive as much as you can. Yeah. Yeah. Yeah. Being a business owner is no joke.

Heather Bickford is the chief operating officer of Death by Audio. Thank you so much. It was good to catch up. Yes, for sure. Thank you so much. As much as blanket tariffs hurt consumers and businesses, like we literally just talked about with Heather Bickford to Death by Audio, targeted tariffs can protect some businesses. Now, history shows protected industries usually stagnate and fall further behind, but occasionally they get stronger.

And that is the hope for the U.S. solar industry. The Trump administration plans to impose new tariffs on polysilicon. That's a key ingredient in solar panels beginning later this year. The idea is to bring that part of the solar supply chain here and help solar equipment manufacturers here. That includes Q-cells, a Korea-based company that recently expanded production at its two giant factories in Georgia. Emily Jones of Grist and W.A.B.E. reports. Inside the vast Q-Cells factory in Cartersville, Georgia, northwest of Atlanta, workers and a bevy of robots move ultra-thin slices of blue-gray crystal through machines and chemical baths to turn what are known as wafers into cells.

They're rinsing and etching and etching and etching going just all the way down this line to create the absolutely perfect surface. Scott Bell with Q-cells says the perfect surface is one that's really good at soaking up sunlight. It's just a giant chemistry class where we're trying to create this unique circumstance where an electron pops off of light. Bell says making it here in Georgia is a big deal. Beginning in 2023, Korea-based Q cells made a huge investment to bring this whole supply chain to the U.S. The $2.5 billion, the $3.5 million gallons of water, the 90 megawatts of power, the 60 tons of chemicals on site, and all of the football fields worth of infrastructure you've seen is to arrive at this.

It's the basic building block of a solar panel. For years, solar manufacturing in the U.S. has mostly been assembling panels using cells made overseas. But as of this June, this factory has moved the whole process under one roof. Having the full supply chain is critical. Ben Damiani is a solar manufacturing expert with solar developer Cherry Street Energy. He says China has dominated solar panel manufacturing since the 2010s, flooding the global market with far cheaper panels than anyone else can make. For a host of reasons, national security, labor practices, job creation, the U.S.

is trying to bring back domestic production. But Damiani says that hasn't been a smooth road. Probably the biggest hindrance has been the constant change of our own policies. The Biden administration took a carrot approach with tax credits that favored U.S. made panels. Q-Cels has said those incentives were a major role. reason they started building their Cartersville plant. The Trump administration is taking a stick approach, imposing new tariffs, and blocking Chinese solar panels from what tax credits remain. Koko Zhang of ING says the goal is the same, but it's been whiplash for companies.

For any business, including the clean energy industry, they like consistency, they like predictability. Q-cells is likely able to comply with the new rules, Zhang says, because it has vertically integrated its supply chain within the U.S., instead of relying on partners and suppliers with ties to China. And I think that could actually be a good model for other companies to replicate as well. But that model required a multi-billion dollar investment in a brand-new facility that took more than three years to come online. That can be a tough sell when solar policy could completely,

change yet again. In Cartersville, Georgia, I'm Emily Jones for Marketplace. Coming up. Why am I going to pay somebody to have all the fun? That end, if you want something done right. But first, let's do the numbers. The Dow Jones Industrial average sank 316 points at 6 tenths of a percent to finish at 52,064. The NASDAQ dropped a little more than 6 tenths percent. The S&P 500 dropped a little less than 6 tenths percent. Macy's reported earnings that B.C.'s of a percent. Macy's reported earnings that estimates and its sales were up 2.7% in the quarter and yet Macy's shares disrobed 4.7%. It's not a Macy's thing though. Rival Coles also went down a size by 4%. We just heard from Justin Ho about rising transportation and warehousing costs. Let's check in with some of those guys.

Trucking and rail shipping company J.B. Hunt based in Lowell, Arkansas was flat-ish. Old Dominion Freight Line headquartered in Thomasville, North Carolina, lost seven-tenths of a percent. Bond prices fell. The yield on the 10-year T-note rose to 4.95%. You're listening to Marketplace. This is Marketplace. I'm Sabree Benishore. In June, AI company Anthropic, maker of Claude, launched a new tool for scientific research called Claude Science, that it says, can help uncover and develop new drugs much more quickly. It could mark a major leap for science, but there are some catches. Wendy Netter-Ebstein is a professor of law at DePaul University. she wrote about the challenge of using AI in new drug development. Professor Epstein, welcome. Thanks for having me on.

Can I ask just how exactly does AI discover new drugs exactly like what is it doing? Well, it could be doing a variety of things. So it helps researchers identify promising biological targets. It can design molecules. It can sift through possibilities just in general much faster than humans traditionally could. If we start getting a bunch of AI-generated drug ideas, is that not going to create kind of like a bottleneck of processing, right? If we have all these ideas and then we still have to go through this clinical trials and approval that takes forever? Well, that's the concern, right?

Is that, you know, if you have a lot of additional candidates that we're discovering at the front end, but we have this relatively long process to actually. get to FDA approval, does FDA become a bottleneck? And, you know, I think the truth is that it could. So that's, you know, one of the things that we want to think about is how do we make sure that we have a smarter regulatory system so that if we do have this great speed up in drug development at the front ends, that we don't have a bottleneck that's created by the testing and the FDA approval it needs to come later. Yeah, so what does that look like? Like, is there a way to use AI to make the, testing go faster, or what do we do? Well, that's a good question.

And I don't think that there's just a yes or no answer on that. It really depends. And this is one of the things that the FDA is starting to look at and that we think is really important, is to better cater the FDA approval process to what evidence we actually need to resolve uncertainty. So in some circumstances, we're still going to need those sort of long and expensive clinical trials because we can't get the information that we need just from the AI models. But in other situations, we could be using AI more strategically. So it's really just about differentiating between when do we still need the trials and when can we move faster.

Well, when can we move faster? Like, what's an example of something where we could, like, hurry the trial along or, like, skip it or... One that comes to mind is biosimilars. So I think most people are probably familiar with generic drugs. So for a traditional small molecule drug, something like aspirin or Lipitor, a generic manufacturer can essentially just make the same chemical molecule as the original drug. And the FDA doesn't require that you, you know, do entirely new clinical trials because chemically they're the same, right? The generics are the same as the brand name. Biologics are this different category of drugs.

They're much larger. They're more complex. They're made using living cells. things like, you know, Humira or many modern cancer drugs. And because they're so complex, the follow-on isn't called a generic. It's called a biosimilar. So in this case, FDA used to require new trials for biosimilars because, you know, they weren't chemically identical.

But what we have found, and to give credit to my co-author, Dr. Niazzi, who's done a lot of work in this area, is that we do know with very high confidence based on modern, based on modeling, that biosimilars are going to behave like the original. And so we don't need those clinical trials. And so that's an instance where FDA has actually, you know, been modernizing and adapting and is requiring those trials, you know, less frequently. Overall, AI and new drugs. Optimistic or concerned? optimistic, but with a note of caution and with that optimism. So for all of the optimism about how quickly we're going to be able to identify new drug

candidates, we still have to think about the risk that folks are going to face without sufficient testing. So faster discovery is enormously exciting, but finding a drug and proving that it works are still not the same thing. Wendy Netter-Eptstein, professor of law at DePaul University, Thank you so much. Thank you. Existing home sales. That is sales of used homes, homes that are already built. They fell in August.

Sales are the lowest they have been this whole year. That's according to date out today from the National Association of Realtors. There's plenty of homes out there on the market. It's just they're expensive. And mortgage rates are expensive back above 6.7%. And just the actual buying of a house itself can be a full-time job. Here's the next installment of our series, clocked out. My name is Brennan Waldron. I live in Dayton, Ohio, with my family of five,

and we are currently renovating a 100-year-old house that we hope to move into here at the end of this year. I've been working in construction for quite a while. I worked as a carpenter in the field, and over the past five years after COVID moved into construction management, very good work, very steady income, but I honestly kind of got burnt out on it. And the house that we currently live in, we just, quite frankly, outgrew. We're a family of five. So we were on the lookout for our next place. We didn't think it was going to be a full-on gut renovation, but a house came up online.

Perfect location, perfect spot that we've always wanted to see ourselves living in. and based on the photos, we knew it was going to be a project house. Once I started getting quotes put together from contractors, I was kind of looking at the numbers and I was like, I kind of feel like I'm going to be missing out on this. Like, why am I going to pay somebody to have all the fun? We saved up all this money. We're very diligent about the types of renovation that we want to do,

the types of materials. So why do I want to pay somebody to do it? I want to do it myself. Ultimately, I decided that I was going to leave my full-time job so I could just focus on renovating this house at least for the summer, at least for as long as it would take. I do foresee myself going back into the workforce. I just love getting to see a project from start to finish. But I also see and know that I have a lot of value in construction management.

So I'm kind of open to whatever the job market gives me at that point in time. The goal is to be in here by Christmas time. Being able to eat breakfast in the morning out in the sunroom and just be able to see nature is something we are really excited about. That was Brennan Waldron in Dayton, Ohio. If you have quit your 9-25, maybe to build something else or just to take a break, You can tell us about it at Marketplace.org slash clocked out. This final note on the way out today, you've heard of shrinkflation, now get ready, for refund

flation. The percentage of retailers who now charge a fee for returns is 68 percent, up from 43 percent five years ago. This is in the Wall Street Journal. And return windows, getting shorter. Our daily production team includes Andy Corbyn, Mika Ellison, Maria Hollenhorse, Sarah Lieson, Sean McHenry and Sophia Torenzio. Will Story is the supervising senior producer.

And I'm Sabri Benishore. We will see you tomorrow, everybody. This is APM.