Think Tanks
Here's a look at documents from think tanks
Featured Stories
Ifo Institute President Fuest Issues Statement on Business Climate Index
MUNICH, Germany, April 25 -- ifo Institute issued the following statement on April 24, 2026, by President Clemens Fuest on the Business Climate Index:
* * *
ifo Business Climate Index Down (April 2026)
Sentiment among companies in Germany has significantly deteriorated. The ifo Business Climate Index fell in April to 84.4 points, down from 86.3 in March. This is the lowest level since May 2020. Companies are considerably more pessimistic about the coming months. They also assessed their current situation as worse. The German economy is being hit hard by the Iran crisis.
In manufacturing, the
... Show Full Article
MUNICH, Germany, April 25 -- ifo Institute issued the following statement on April 24, 2026, by President Clemens Fuest on the Business Climate Index:
* * *
ifo Business Climate Index Down (April 2026)
Sentiment among companies in Germany has significantly deteriorated. The ifo Business Climate Index fell in April to 84.4 points, down from 86.3 in March. This is the lowest level since May 2020. Companies are considerably more pessimistic about the coming months. They also assessed their current situation as worse. The German economy is being hit hard by the Iran crisis.
In manufacturing, thebusiness climate deteriorated. This was due to significantly more pessimistic expectations, especially in the chemical industry. By contrast, companies assessed their current situation as somewhat better. They did, however, increasingly report supply bottlenecks.
In the service sector, the index fell considerably. Expectations continued to deteriorate. Assessments of the current situation were also worse. The logistics industry in particular is under pressure. The outlook there is grim.
In trade, the business climate dropped significantly. Companies noticeably adjusted their assessments both for expectations and the current situation downward. Retailers are worried in particular that consumers will be more reticent due to rising inflation.
In construction, the business climate plummeted. Expectations fell by almost 10 points. Companies were considerably less satisfied with current business. Hopes for an upswing have been dashed for now.
* * *
Survey
25 April 2026
ifo Business Climate Index for Germany
ifo Business Climate Index Down (April 2026)
Sentiment among companies in Germany has significantly deteriorated. The ifo Business Climate Index fell in April to 84.4 points, down from 86.3 in March . This is the lowest level since May 2020. Companies are considerably more pessimistic about the coming months. They also assessed their current situation as worse. The German economy is being hit hard by the Iran crisis.
Learn more (https://www.ifo.de/en/facts/2026-04-25/ifo-business-climate-index-down-april-2026)
* * *
Original text here: https://www.ifo.de/en/press-release/2026-04-24/ifo-business-climate-index-down-april-2026
[Category: ThinkTank]
Center of the American Experiment Issues Commentary: When Grades and Test Scores Conflict, What Should Parents Rely On?
GOLDEN VALLEY, Minnesota, April 25 -- The Center of the American Experiment, a civic and educational organization that says it creates and advocates policies, issued the following commentary on April 24, 2026, by policy fellow Catrin Wigfall:
* * *
When grades and test scores conflict, what should parents rely on?
There are many different measures used to determine how a student is doing academically -- teacher observations, in-class assignments, quizzes, report cards, benchmark exams, and standardized tests, to name a few. But when those measures send conflicting signals, what should parents
... Show Full Article
GOLDEN VALLEY, Minnesota, April 25 -- The Center of the American Experiment, a civic and educational organization that says it creates and advocates policies, issued the following commentary on April 24, 2026, by policy fellow Catrin Wigfall:
* * *
When grades and test scores conflict, what should parents rely on?
There are many different measures used to determine how a student is doing academically -- teacher observations, in-class assignments, quizzes, report cards, benchmark exams, and standardized tests, to name a few. But when those measures send conflicting signals, what should parentsrely on to understand their child's academic progress (or lack thereof)?
A new study from the University of Chicago and Oregon State University suggests many parents have already made up their minds. Seventy-one percent said that grades are more important than standardized test scores when making decisions about their children's education.
But with grade inflation continuing to rise, report cards are making it difficult for parents to know how their child is performing. Standardized tests, while far from perfect, are less susceptible to local inflation. Ignoring them may mean "there's skills that we're leaving on the table," said Oregon State University Assistant Economics Professor Derek Rury, co-author of the study, in an interview with The 74. The study elaborates:
"When test scores are high but grades are low, parents invest: they treat the low grade as actionable, recommending additional time and money for academic support. When grades are high but test scores are low, parents do not invest... High grades crowd out the investment response that low test scores would otherwise trigger. This pattern implies that parents receiving inflated grades will fail to make remedial investments that their children's actual achievement levels warrant."
"...
"...[O]ur finding that test scores trigger investment when grades are concordantly low suggests that maintaining standardized testing preserves a valuable information channel -- one whose influence depends on the quality of grade information parents already possess."
If parents place more confidence in grades than test scores, "that has very big implications for the economy and the growth of skills [in students]," Rury told The 74.
Why do parents prioritize grades?
The study (https://bfi.uchicago.edu/wp-content/uploads/2026/02/BFI_WP_2026-20.pdf) explored a few possible reasons for why parents value grades more, including that grades are familiar, frequent, and easier to interpret than standardized tests. Some parents also worry that the tests are "unfair, culturally biased, or reflect family background more than actual ability."
However, the authors concluded, "none of these self-reported beliefs fully explain why parents prefer grades." Whatever the reason, the result is the same: Parents discount information from standardized test scores, "even though those scores often provide a more objective measure of skills than grades. This pattern reveals an informational failure in the education market."
And it is a pattern that should be concerning to all who care about educational outcomes. For years, teachers' unions have pushed back against standardized testing, arguing that it's too rigid or unfair. But scaling back these assessments without fixing the problem of grade inflation doesn't help students.
New research (https://www.americanexperiment.org/grade-inflation-and-its-impacts-on-students/) from the University of Texas found that grade inflation can not only reduce a student's future test scores but the probability of graduating high school and enrolling in college, and lifetime earnings.
At the end of the day, the issue is whether or not parents are getting an honest picture of their child's academic progress. If that picture is distorted, the consequences can follow students long after they leave the classroom.
* * *
Catrin Wigfall is a Policy Fellow at Center of the American Experiment.
catrin.wigfall@americanexperiment.org
* * *
Original text here: https://www.americanexperiment.org/when-grades-and-test-scores-conflict-what-should-parents-rely-on/
[Category: ThinkTank]
Center of the American Experiment Issues Commentary: Louisiana's Early Literacy Reform Includes Strong New Tutoring Voucher Program
GOLDEN VALLEY, Minnesota, April 25 -- The Center of the American Experiment, a civic and educational organization that says it creates and advocates policies, issued the following commentary by policy fellow Josiah Padley:
* * *
Louisiana's early literacy reform includes strong new tutoring voucher program
The ed-reform conversation has been abuzz with talk about the Southern Surge, a thrilling run at the top of the educational achievement charts by states like Mississippi, Louisiana, and Alabama. As my colleague Catrin Wigfall wrote, "Using demographically-weighted results, Louisiana fourth
... Show Full Article
GOLDEN VALLEY, Minnesota, April 25 -- The Center of the American Experiment, a civic and educational organization that says it creates and advocates policies, issued the following commentary by policy fellow Josiah Padley:
* * *
Louisiana's early literacy reform includes strong new tutoring voucher program
The ed-reform conversation has been abuzz with talk about the Southern Surge, a thrilling run at the top of the educational achievement charts by states like Mississippi, Louisiana, and Alabama. As my colleague Catrin Wigfall wrote, "Using demographically-weighted results, Louisiana fourthgraders now rank second highest in reading scores nationwide, right behind Mississippi." The Southern Surge states have achieved results through a holistic package of reform pieces, including science of literacy reform in early grades, third grade retention policies, legal teacher protections, and an aggressive focus on academic achievement.
Over the past five years, Louisiana has enacted another small reform experiment: state-funded vouchers for afterschool tutoring sessions. While tutoring can be a highly effective academic tool, high quality tutoring sessions are often expensive and remain out of reach for many families. Louisiana decided to expand accessibility.
Originally passed in 2021 and expanded in 2024, the state now yearly spends $5 million in state funds and $5 million in federal grants on the Steve Carter Tutoring Program. (Louisiana spent $4.7 billion in 2025 on their education system. For context, Minnesota spent $25.73 billion.) The program, part of the larger Louisiana Tutoring Initiative, provides $1500 vouchers to qualifying K-12 students for afterschool tutoring.
The Louisiana Tutoring Initiative also provides "high-dosage" tutoring to students below grade level proficiency in grades K-5 during the school day. Currently, the program utilizes $30 million in state funds to serve around 178,000 students. Due to a widespread perception of the program's success, lawmakers are pushing to expand the program to higher grades in the future.
The Pelican State has seen positive effects from both programs, including the afterschool Steve Carter Tutoring Program. This success is likely due in part to the gold standard construction of the tutoring programs themselves.
Recipients of the Steve Carter tutoring vouchers must be approved through the state's Department of Education. Louisiana requires that all tutoring program curricula must be fully aligned with the state's standards, with the science of literacy, with numeracy foundational skills, and with locally adopted curricula. This ensures that students are gaining direct support for the concepts and skills that are being learned in their own local classroom.
Additionally, Louisiana requires that tutoring class sizes are small. Groups cannot exceed more than 4 students at a time. Tutoring programs can charge up to $60 for a one-on-one session and up to $40 for a group session.
The tutors themselves are required to receive state-approved numeracy and literacy training. Tutors are required to either be current teachers, paraprofessionals, college students, or hold an associate's or bachelor's degree. Providers are required to regularly supervise and assess tutors. All providers must serve all learners, including students with disabilities and English learners.
The state's largest tutoring provider, Canopy, hires teachers directly. Teachers are paid $30-$60 per hour to tutor after school at the same school where they work during the day.
According to The 74, nearly 2,000 Louisiana students received tutoring last year through Canopy across 298 schools. Schedules are flexible and depend on each family's needs. The afterschool timing means that parents don't have to drive their students to and from a tutoring session, expanding accessibility.
To qualify, students have to score below grade level proficiency in reading and mathematics. Last year, demand for the program was so high that acceptance eligibility was limited to only the lowest performing students. School districts notify families when their students are eligible for the program.
The results have been strong, especially for a state that has struggled with academics for a long time.
On average, a Canopy student participates in tutoring for less than six months and achieves 11 months of academic growth. East Baton Rouge Parish students receiving afterschool tutoring from Studyville, another tutoring provider, had similar gains. Almost four in ten struggling kindergarteners reached proficiency by the end of the year, and 40 percent of upper elementary students moved up at least one achievement level. The State Superintendent of Education Cade Brumley has pointed to the state's high-dosage tutoring program as a major reason why the state has seen so much educational progress across the board.
High-impact tutoring programs have grown in popularity nationwide post-COVID as an attempt to assuage learning loss. They offer flexibility to school days that can occasionally feel stuffed, and ensure personalized connection to students who may be struggling. Additionally, they can create teacher pipelines to classrooms by bringing in college students as tutors. Experts note that gold standard tutoring programs (like Louisiana's) can have impressive academic results because they help to create a stronger community system.
States that have opted into the new federal tax credit scholarship will allow students to use the money donated to scholarship-granting organizations to attend more afterschool tutoring. Minnesota has not yet opted into the program.
As a former Louisiana teacher and a family member to another former Louisiana teacher, I'm overjoyed to see the success of this program. Geaux Tigers!
* * *
Josiah Padley is a Policy Fellow at Center of the American Experiment.
josiah.padley@americanexperiment.org
* * *
Original text here: https://www.americanexperiment.org/louisianas-early-literacy-reform-includes-strong-new-tutoring-voucher-program/
[Category: ThinkTank]
Capital Research Center Issues InfluenceWatch Wrapup on April 24, 2026
WASHINGTON, April 25 -- The Capital Research Center issued the following InfluenceWatch wrapup on April 24, 2026, by Jonathan Harsh:
* * *
InfluenceWatch, a project of Capital Research Center, is a comprehensive and ever-evolving compilation of our research into the numerous advocacy groups, foundations, and donors working to influence the public policy process. The website offers transparency into these influencers' funding, motives, and connections while providing insight often neglected by other watchdog groups.
The information compiled in InfluenceWatch gives news outlets and other interested
... Show Full Article
WASHINGTON, April 25 -- The Capital Research Center issued the following InfluenceWatch wrapup on April 24, 2026, by Jonathan Harsh:
* * *
InfluenceWatch, a project of Capital Research Center, is a comprehensive and ever-evolving compilation of our research into the numerous advocacy groups, foundations, and donors working to influence the public policy process. The website offers transparency into these influencers' funding, motives, and connections while providing insight often neglected by other watchdog groups.
The information compiled in InfluenceWatch gives news outlets and other interestedparties research to use in reporting on significant topics that are often overlooked by the American public.
CRC is pleased to present some of the most significant additions to InfluenceWatch in the past week:
* Allied Climate Partners (ACP) is an investment organization that uses capital from foundations and other nonprofits to fund climate projects and other environmental initiatives in developing countries. ACP was launched at the United Nations' COP28 climate conference in Dubai in 2023, and its initial funders included Arnold Ventures, the Ballmer Group, the Bezos Earth Fund, the Children's Investment Fund Foundation (CIFF), the Sea Change Foundation International, and the Soros Economic Development Fund (SEDF).
* Media in the Public Interest (MPI) is a nonprofit media training organization that provides journalists and other nonprofits with programs aimed at creating "more influential progressive leaders" by improving communication and messaging. MPI is affiliated with the for-profit Public News Service. Its listed funders include the Ben and Jerry's Foundation, the Ford Foundation, the George Gund Foundation, the Needmor Fund, and the Park Foundation.
* Bristol Bay Regional Seafood Development Association is a business association that advocates on behalf of fisheries and fishermen in Alaska's Bristol Bay watershed region. It opposes large-scale industrial extraction activities in the area, and assists the local fishing industry through advocacy campaigns, social media, and apprenticeship programs. The group has previously made grants to recipients that include the New Venture Fund, the University of Washington, and the United Tribes of Bristol Bay.
* Center for Immigrant and Refugee Advancement (CIRA) is a Nebraska-based nonprofit that provides legal representation and resettlement services for migrants and refugees within the state. Services include pro bono legal services for unaccompanied children and survivors of domestic violence as well as administering federal refugee resettlement contracts. CIRA has received funding from the Sherwood Foundation and the Hawks Foundation.
* Business for Social Responsibility is a member-based nonprofit consultancy that helps corporations develop environmental, social, and governance (ESG) business strategies and solutions. Its members include the Coca-Cola Company, Microsoft, Amazon, Google, Meta, Pfizer, Target, Uber, and the Walt Disney Company. It has received funding from DAFGiving360, the We Mean Business Coalition, the VF Foundation, and the Gates Foundation.
* * *
Jonathan Harsh holds a master's degree in political science from James Madison University and a bachelor's degree in political science from Beloit College.
* * *
Original text here: https://capitalresearch.org/article/influencewatch-friday-04-24-2026/
[Category: ThinkTank]
Capital Research Center Issues Commentary: 2026 Proxy Preview Reports Far Fewer ESG Resolutions
WASHINGTON, April 25 (TNSrep) -- The Capital Research Center issued the following commentary on April 24, 2026, by senior research analyst Robert Stilson:
* * *
2026 Proxy Preview reports far fewer ESG resolutions
The annual compilation of ESG shareholder activism registered a notable drop in resolutions this year.
*
The 2026 Proxy Preview report (https://www.proxypreview.org/2026-proxy-season-preview-webinar) was released last week, detailing environmental, social, and governance (ESG) shareholder resolutions which have been filed with public companies this year. Such resolutions have traditionally
... Show Full Article
WASHINGTON, April 25 (TNSrep) -- The Capital Research Center issued the following commentary on April 24, 2026, by senior research analyst Robert Stilson:
* * *
2026 Proxy Preview reports far fewer ESG resolutions
The annual compilation of ESG shareholder activism registered a notable drop in resolutions this year.
*
The 2026 Proxy Preview report (https://www.proxypreview.org/2026-proxy-season-preview-webinar) was released last week, detailing environmental, social, and governance (ESG) shareholder resolutions which have been filed with public companies this year. Such resolutions have traditionallybeen a core component of ESG activism, and their purpose is generally to pressure corporations into taking actions that are aligned with the left-of-center sociopolitical objectives of those activists.
The Proxy Preview is an annual report that is jointly produced by the 501(c)(3) nonprofit As You Sow and the ESG consulting firm Proxy Impact. In 2024, As You Sow reported total revenues of $4.15 million. Funders which made six-figure grants to As You Sow in their respective fiscal years ending in 2024 included the Ford Foundation ($325,000), the Sunrise Project ($250,000), the Fidelity Investments Charitable Gift Fund ($162,200), the Park Foundation ($150,000), the Flora L. Thornton Foundation ($100,000), Rockefeller Philanthropy Advisors ($100,000), and the Wallace Global Fund ($100,000).
Major Trends
Continuing a trend that was evident in 2025--and in keeping with an ongoing backlash against ESG more broadly--there was a steep decline in the number of activist resolutions profiled in the report. The 2026 Proxy Preview recorded just 184 resolutions that had been filed as of the report's March 17 cutoff. This was down markedly from 355 as of February 2025 and 527 as of February 2024. Significant categorical drops from years past were also evident: the 2026 report detailed just 39 climate change resolutions, while in 2023 that number was 122. Similarly, there were just 15 workplace diversity resolutions in 2026, while the 2021 Proxy Preview (reflecting the aftermath of the previous year's Black Lives Matter protests) recorded 69 of them.
The Proxy Preview attributed this falloff in part to recent changes in the U.S. Securities and Exchange Commission's proxy review process, but it also claimed that "the landscape is shifting from voting on proxies at annual general meetings to direct private engagement" with ESG activists. Additionally, the report noted a relatively higher rate of withdrawn resolutions, which can be the product of negotiations with companies. The introductory letter to this year's Proxy Preview acknowledged that "many shareholders are feeling a chill," but argued that it represented "a period of turbulence" while ESG shareholder activists act "as the midwives of [a] transformation" from "a Milton Friedman model of extraction to a Joseph Stiglitz vision of a regenerative, inclusive [economic] system."
Major Proponents
A total of 114 different companies were listed in the 2026 Proxy Preview's index as having received at least one ESG shareholder resolution. Amazon, Alphabet (Google), and Meta (Facebook) received the most with five each, while Home Depot, PepsiCo, and Walmart each received four. Though approximately 40 different proponents were identified as having filed at least one shareholder resolution, a disproportionate share of the 152 individually listed resolutions were filed by just a handful of them. As You Sow, Chevedden Corporate Governance, Amalgamated Bank, and Green Century Capital Management together accounted for over half of all resolutions profiled in the report.
In addition to publishing the Proxy Preview, As You Sow was also the report's most prolific proponent. It was listed as either the sole filer or a co-filer of 34 different resolutions--more than 22 percent of the total. Even so, this undercounts the group's influence. As You Sow also helped file resolutions on behalf of other proponents, and on its website the group lists a total of 48 resolutions on which it "represents investors" in 2026.
Though As You Sow submitted a handful of "racial equity audit" proposals, asking Coca-Cola, PulteGroup, Pilgrim's Pride, and Royal Gold to publicly report on their diversity, equity and inclusion (DEI) efforts, most of the group's resolutions were focused on the environmental prong of ESG. For example, a resolution filed with Berkshire Hathaway requested a public report "disclosing the greenhouse gas emissions associated with the Company's underwriting and insuring activities." A resolution filed with Adobe asked for a report "disclosing if and how the Company is protecting retirement plan beneficiaries...from increased future portfolio risk created by present-day investments in high-carbon companies." A pair of resolutions at Home Depot and Lowe's asked the retailers to report on how they could reduce their use of plastic packaging.
One notable resolution submitted by As You Sow to Wells Fargo claimed that since banks might supposedly "be held accountable for their contributions to climate-related damages," the company should issue a public report "that evaluates and describes the range of climate-related litigation risks associated with its financing of high-carbon activities." Wells Fargo responded, quite reasonably, that it already evaluates litigation risks as a matter of course, and that such a report "would not yield useful information to our shareholders, and could instead increase risks for Wells Fargo without providing value to the Company or our shareholders." Indeed, it is hard to imagine it benefiting anyone other than those who might seek to sue the bank (and by extension, its shareholders) on ideologically-motivated grounds.
The publicly traded financial institution Amalgamated Bank was listed as a proponent of 10 resolutions in the 2026 Proxy Preview, which appear to have been filed by As You Sow on the bank's behalf. About 38 percent of Amalgamated Bank's equity is owned by Workers United--a labor union affiliated with the Service Employees International Union (SEIU)--and this is reflected in the bank's ESG priorities. Amalgamated filed a pair of resolutions at Kroger and SkyWest designed to bolster employee unionization efforts by asking those companies to publicly report on their alignment with the International Labour Organization's Declaration on Fundamental Principles and Rights at Work.
Approximately 15 percent of the resolutions listed in the Proxy Preview (24 total) were filed by "corporate gadfly" John Chevedden. Each dealt with corporate political or lobbying expenditure disclosures. An example is the resolution submitted by Chevedden at Huntington Ingalls Industries, requesting an annual report on the company's election-related spending. The proposal argued that absent such a report, "directors and shareholders cannot sufficiently assess whether our company's election-related spending aligns with or conflicts with its policies on climate change and sustainability and other areas of concern."
Finally, the ESG-focused investment firm Green Century Capital Management had 12 resolutions listed in the 2026 Proxy Preview. Examples include a resolution at Harley-Davidson requesting "a climate transition plan, above and beyond existing disclosure, describing if and how the company intends to achieve its climate-related goals," and a resolution at Verizon requesting a board report describing "whether and how Verizon is bringing operational and supply chain emissions into alignment with its existing climate-related goals."
Artificial Intelligence and Other Topics
Some other resolutions worth noting:
A union-affiliated ESG shareholder activist organization called SOC Investment Group filed resolutions at Alphabet (Google), Amazon and Walmart, requesting details regarding how the Trump Administration's immigration policies were impacting their operations. A similar resolution filed at Tyson Foods by the Sisters of St. Francis Charitable Trust garnered 3 percent of the vote at the company's February annual meeting, according to the Proxy Preview.
The 2026 Proxy Preview included a category for artificial intelligence (AI) shareholder resolutions, and anticipated that this topic would be an area of increasing interest for activists going forward. The report slotted this category under the "social" prong of ESG, although AI resolutions also involve environmental and governance issues. One example is a resolution filed at Walmart by the activist group United for Respect, asking the company to report on how it will "address and measure the social implications on its workforce of the growing adoption of advanced technologies, including artificial intelligence and automation."
Multiple shareholder resolutions dealt with emissions from electricity generation to power new data centers. Amazon received a resolution from Mercy Investment Services, asking for a report on how the company planned to meet the "climate change-related commitments it has made on greenhouse gas emissions, given the massively growing energy demand from artificial intelligence and data centers that Amazon is planning to build." Nearly identical resolutions were filed at Alphabet (Google) and Meta (Facebook) by Trillium Asset Management and the Presbyterian Church USA/As You Sow, respectively.
Finally, NVIDIA received a remarkable resolution from an activist group called Open MIC, asking the company to explain its "strategic rationale for engaging in military sales and contracts," including with respect to AI. Among other things, the proposal claimed that "these relationships may expose the company to reputational risks, particularly in regions where military activities are controversial or subject to heightened scrutiny." It is difficult to imagine a better illustration of the ultimate purpose of ESG activism--advancing ideological objectives on divisive sociopolitical issues, instead of creating value for shareholders--than a resolution asking the largest company in the world to explain why it seeks to sell its products to customers.
* * *
Robert Stilson, Senior Research Analyst
Robert runs several of CRC's specialized projects. Originally from Indiana, he has a B.A. from Hanover College and a J.D. from University of Richmond School of Law, where he graduated magna cum laude.
* * *
Original text here: https://capitalresearch.org/article/2026-proxy-preview-reports-far-fewer-esg-resolutions/
[Category: ThinkTank]
CSIS Issues Critical Questions Q&A: How to Interpret Wartime Oil Prices
WASHINGTON, April 25 -- The Center for Strategic and International Studies issued the following Critical Questions Q&A on April 24, 2026, involving non-resident senior associate Adi Imsirovic and senior fellow Clayton Seigle, both of the Energy Security and Climate Change Program.
Seigle is also the James R. Schlesinger Chair in Energy and Geopolitics.
* * *
How to Interpret Wartime Oil Prices
Since the war in Iran started on February 28, oil prices have moved considerably higher as the market has been forced to cope with an unprecedented supply disruption--more than 10 million barrels per
... Show Full Article
WASHINGTON, April 25 -- The Center for Strategic and International Studies issued the following Critical Questions Q&A on April 24, 2026, involving non-resident senior associate Adi Imsirovic and senior fellow Clayton Seigle, both of the Energy Security and Climate Change Program.
Seigle is also the James R. Schlesinger Chair in Energy and Geopolitics.
* * *
How to Interpret Wartime Oil Prices
Since the war in Iran started on February 28, oil prices have moved considerably higher as the market has been forced to cope with an unprecedented supply disruption--more than 10 million barrels perday (mb/d) missing from global markets for more than 50 days. Oil prices have exhibited high volatility during this period, surging on reports of damage to infrastructure and shipping, and receding with news about diplomatic progress toward ending the war. From the outside, it appears that there are two distinct oil markets with separate but related pricing dynamics: the physical oil market and the financial, or "paper," market. This Critical Questions explains the differences and the relationship between them, and suggest that the former is the better gauge of changing supply-demand balances during these extraordinary circumstances.
Q1: What is the difference between "physical" and "paper" oil prices?
A1: Physical oil prices are paid by parties making and taking delivery of real barrels of oil within the next two to four weeks. Those include oil sellers, such as U.S. oil producers and the national oil companies of the Organization of the Petroleum Exporting Countries (OPEC) states, and their consumers, which, for crude oil, are refiners. The most important physical oil price is Dated Brent, which represents the price of North Sea crude oil. Many other types of crude oil, such as Iraq's Basra oil (delivered to Europe) and Russia's Urals crude, are priced with a premium or discount to Dated Brent.
For example, Nigeria's Forcados crude oil recently transacted at around Dated Brent plus $6.5 per barrel, reflecting the specific composition and refinery yield of Forcados as well as its availability, shipping cost, and other factors.
"Paper" oil prices are usually those of financial contracts that reference oil to be delivered in some future month. The two most important "paper" prices are the futures contracts for Brent and for West Texas Intermediate (WTI) that are offered on the Intercontinental Exchange (ICE) and the Chicago Mercantile Exchange (CME). Other types of contracts in the "paper" oil markets are oil options--also offered on the commodity exchanges--and oil swaps, which are largely private bilateral transactions on the "over-the-counter" (OTC) market.
Q2: Who are the participants in these two markets, and how do they use them?
A2: Oil producers, refiners, and middlemen traders are the physical market participants, setting the prices for physical oil transactions. Paper markets, on the other hand, are used for hedging (price risk management) and for proprietary speculative trading. The key difference is that paper market trading rarely involves receiving or delivering physical oil; its financial market participants usually cancel obligations with offsetting contracts prior to expiry, obviating the need for making or taking delivery.
Hedging utilizes paper market contracts to manage risk, which is done by both sellers and buyers. For example, an oil seller faces downside price risk--if oil prices decline in the future, its revenue will too. It can lock in today's prices by selling oil futures as a hedge against that potential price decline. A refiner, on the other hand, faces risk with higher crude prices, so it hedges by buying crude futures contracts.
For refined oil products like gasoline, diesel, and jet fuel, the refiner is the seller, so it hedges against price declines in those fuels while its customers, for example, airlines, face upside price risk and so would hedge against fuel price increases.
Proprietary or speculative trading is akin to betting on price moves based on an investment thesis, usually around an in-house view about oil supply-demand fundamentals.
Q3: What is the typical variance between the two oil prices, and what is unusual about the spread during this crisis?
A3: Physical and futures market prices move in tandem, with typical differences measured in just cents per barrel, converging as futures contracts approach expiry (see Figure 1)
However, under exceptional circumstances such as the current Middle East Gulf export disruption, which has halted more than 10 mb/d, the two prices can diverge substantially. One reason is that refineries are desperate to acquire sufficient crude feedstocks to keep their units running and avoid expensive run cuts or plant shutdowns. Another reason is that many noncommercial traders in the futures markets are wary of downside "headline" risk that can cause financial losses from a single social media post and prefer to stay more neutral than physical traders who require oil on hand. This has likely left traders with a downside price bias with significant influence in paper markets.
In times like these, oil for delivery soon can trade much higher than the futures markets, such as the extraordinary $30 differential recorded in early April.
* * *
Figure 1: Physical (Dated Brent) vs. Paper (ICE Brent Futures)
* * *
Q4: What is this historic variance telling us about the market impact of this crisis?
A4: Unlike the 2007-2008 price escalation, caused by an explosion of demand led by China, the United States is now experiencing a classic 1970s-style supply shock that is poised to leave global inventories depleted, with refineries unable to source enough affordable crude oil and certain regions running short of fuels for transportation and--in some Asian markets--cooking.
Physical and paper markets are both reflecting the historic nature of the current supply disruption--over half a billion barrels so far withheld from world markets--for which no policy response can fully offset. Neither supply-side measures like drawdowns of strategic reserves and the waiver of the U.S. Jones Act regulations, nor demand-side changes to taxes and subsidies, can completely mitigate the economic damage from this disruption.
Market observers are anticipating that oil prices could reach "demand destruction" levels--so high as to cause consumers and businesses to pull back on oil consumption--to rebalance supply and demand. This will occur in the physical oil market, not the futures market. And initial signs indicate this may already be happening, as physical crude prices recently near $150, and prices for jet fuel in Asia above $200, could already be curtailing oil demand relative to prewar patterns.
Q5: What additional policy measures are being undertaken to protect consumers and businesses?
A5: Dozens of governments have announced market interventions, many of them price caps and fuel subsidies, to shield their constituents from runaway energy prices caused by the war. Broad price interventions (rather than steps focused on especially vulnerable cohorts) run the risk of "moral hazard," shielding buyers from market signals needed to change behaviors, thus ultimately exacerbating the crisis. Other steps, like governmental initiatives to reduce electricity use for air conditioning and lighting, are underway in some Asian nations.
Q6: What are the risks for market observers in referencing paper prices at a time like this?
A6: Because physical and paper oil markets usually trade at very similar levels, and because futures prices are published by the exchanges in near real time, affording universal access in news media and online, financial markets and investors have come to believe that futures prices (like front-month Brent and WTI) are the price of oil. But in times like these, paper markets can send a false signal that oil markets are less tight than they really are. Looking at the $98 average front-month Brent futures price since March 1, one might conclude that the price spike has not been too bad, especially since Brent futures hit $139 as recently as March 2022. But the moderate futures prices are masking the much higher prices being paid for physical oil, with Dated Brent having averaged $111 since March 1, and some grades of oil trading more than $20 higher than that.
Q7: Under what conditions will the physical vs. paper price differential resolve, and what will that mean for retail prices of gasoline and diesel, and for jet aviation fuel?
A7: Both physical and paper oil market prices will fluctuate with expectations for Gulf exports to resume, and an eventual restoration of regional supply flows will reduce prices in both categories. But paper markets are likely to sell off harder than physical markets, which will be stuck with disrupted supply chains (shut-in oil wells, insufficient empty tankers to resume prewar volumes) for months after the war ends. As a result, the prices of gasoline, diesel, and jet fuel will stay higher for longer than oil futures.
* * *
Adi Imsirovic, Senior Associate (Non-resident), Energy Security and Climate Change Program
Clayton Seigle is a senior fellow in the Energy Security and Climate Change Program and holds the James R. Schlesinger Chair in Energy and Geopolitics at CSIS.
* * *
Original text here: https://www.csis.org/analysis/how-interpret-wartime-oil-prices
[Category: ThinkTank]
American Action Forum Issues Commentary: Tracker - The Federal Reserve's Balance Sheet Assets
WASHINGTON, April 25 -- The American Action Forum issued the following commentary on April 24, 2026, by Financial Services Policy Director Thomas Kingsley:
* * *
Tracker: The Federal Reserve's Balance Sheet Assets
Introduction
This tracker follows the Federal Reserve's (Fed) total consolidated assets, held on its balance sheet, as the best indicator of the Fed's direct intervention in the economy.
Context
The Fed's dual mandate requires it to ensure both stable prices and maximum employment. The traditional tool the Fed uses to accomplish these goals is the adjustment of the federal funds
... Show Full Article
WASHINGTON, April 25 -- The American Action Forum issued the following commentary on April 24, 2026, by Financial Services Policy Director Thomas Kingsley:
* * *
Tracker: The Federal Reserve's Balance Sheet Assets
Introduction
This tracker follows the Federal Reserve's (Fed) total consolidated assets, held on its balance sheet, as the best indicator of the Fed's direct intervention in the economy.
Context
The Fed's dual mandate requires it to ensure both stable prices and maximum employment. The traditional tool the Fed uses to accomplish these goals is the adjustment of the federal fundsrate, the short-term interest rate that determines how much it costs for banks to lend to each other overnight. The 2007-2008 financial crisis, however, demonstrated that even lowering the interest rate to zero was considered insufficient to shore up economies in freefall, and the Fed turned to more unusual tactics. One of these measures was what the Fed refers to as "large-scale asset purchases," which is more commonly known as "quantitative easing." Under this process, the Fed enters the market to buy securities, typically mortgage-backed securities (MBS) and Treasuries, injecting both capital and liquidity into the market. This approach is not without risks - for the first time in its history, the Fed is regulator, supervisor, and now participant in the economy.
The development of quantitative easing as a go-to tool for the Fed in times of crisis has led to an unprecedented focus on one of its traditionally unremarkable aspects - the Fed total assets. Just as with any other firm, securities that the Fed purchases are considered assets and therefore are represented on the Fed's balance sheet. This therefore is the most reflective guide of the state of quantitative easing and, by extension, the degree to which the Fed has deemed it necessary to intervene in the economy.
Each week, the Federal Reserve publishes its balance sheet, typically on Wednesday afternoon around 4:30 p.m.
As of April 22, the Fed's assets stand at $6.7 trillion, up nearly $2 billion from the prior week but down over $19 billion from a year ago.
Sources:
https://fred.stlouisfed.org/series/WALCL
https://fred.stlouisfed.org/series/TREAST
https://fred.stlouisfed.org/series/WSHOMCB
* * *
Thomas Kingsley is the Director of Financial Services Policy at the American Action Forum.
* * *
Original text here: https://www.americanactionforum.org/insight/tracker-the-federal-reserves-balance-sheet/
[Category: Think Tank]
