Strait of Hormuz closure keeps oil elevated
The guest argued that the Strait of Hormuz will remain closed for an extended period, keeping oil and commodity prices structurally elevated.
The argument
The guest argued that the market is underestimating the Iranian regime's tolerance for economic pain from blockades, meaning a quick resolution is unlikely. This is reflected in the December Brent fuel oil futures contract making new highs, signaling sustained high prices.
The thesis, stress-tested
✓ What validates it
- ✓December Brent crude futures contract sustaining levels above $90
- ✓Strait of Hormuz remaining closed past near-term expectations
▸ Risks discussed
- ▸A sudden diplomatic resolution or end to the war
- ▸Increased global oil production offsetting the blockade
Hear it yourself
"I've been arguing, actually, for years that the group think at the Fed and everybody waits for the chairman to tell them what to do, and we all parse every word that the chairman says has produced more problems than it is than than issues that it has solved. We are getting away from that right now. Now if chairman Powell says he doesn't like that and he wants to see the Fed be more in independent, He said he's gonna be in the background, and he doesn't wanna be disruptive. So here's my question for you. We're already at eight four. That's not that far from six six. What happens if we get to six six or seven"
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