Letter from the US: Oil’s tin problem

The history of tin production and prices offers a preview of the future oil market. If correct, $35/bl could become the new normal for crude for several years without further OPEC+ intervention

Tin producers were cosseted for decades through the International Tin Agreement (ITA) between them and consumers. The ITA was one of the commodity price stabilisation programmes that grew out of the 1944 Bretton Woods pact that established the International Monetary Fund and the World Bank. The agreement included the creation of the International Tin Council to oversee the stabilisation effort. Funds were provided to the council to build buffer stocks that could then be added to or sold off to keep prices stable. The ITA failed spectacularly in 1985 when the ITC did not meet margin calls to cover its positions on the London Metal Exchange as tin prices plummeted by 60%. The oil industr