04-10-2026Price:

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Iran blockade threatens to collapse US Treasury market

Friday, April 10, 2026 · from 3 podcasts
Macro VoicesForward GuidanceBTC Sessions
  • Iran’s cheap drone blockade drains US military assets, leaving the Strait effectively closed.
  • Fertilizer shortages will slash crop yields and trigger political unrest by autumn.
  • Japan must sell Treasuries to pay for $200 oil, forcing Fed debt monetization.

Iran’s drone blockade of the Strait of Hormuz is a financial weapon aimed at the US Treasury market. Analyst Luke Gromen argues the resulting energy shock will gut federal tax revenue, forcing the Fed to monetize debt as the only alternative to defaulting on Social Security.

Gromen notes that through the first five months of the fiscal year, interest and entitlements already exceeded 100% of tax receipts. A Hormuz-induced recession would crater that revenue further. The math forces a binary choice: print or default.

"The US Treasury is already underwater. If the Strait of Hormuz stays closed, the resulting recession will gut tax revenue further. This forces a binary choice: default on social security or print the difference."

- Luke Gromen, BTC Sessions

The physical supply chain fracture is immediate. Jacob Shapiro warns that while traders fixate on crude prices, the real fuse is fertilizer and plastic polymers - sectors with no strategic reserves. Missing the annual application window now guarantees lower yields and higher food prices by autumn.

Adam Rozencwajg adds that fertilizer shipments through Hormuz threaten yields for years, creating an inflationary lag the Fed hasn't priced. We've spent fifteen years on a 'razor's edge' where record demand was met only by record-breaking yields bolstered by cheap inputs.

"A lack of nutrients today translates into smaller crop yields next year. Rozencwajg warns that we have spent fifteen years on a 'razor's edge' where record demand was met only by record-breaking yields."

- Adam Rozencwajg, Macro Voices

The domino is Japan. As an energy-importing nation holding a massive piggy bank of US debt, Japan sells Treasuries to stay liquid when oil spikes and the Yen weakens. Gromen and Lyn Alden observe Japan is already trading like an emerging market, creating a feedback loop: selling Treasuries pushes yields higher, strengthening the dollar and making oil more expensive for Japan.

When the two biggest debtor nations hit a wall simultaneously, the Treasury market loses its last reliable buyer. The Fed becomes the buyer of last resort because it has no other choice.

MacroEnergyFedMarketsWar

By the Numbers

  • April 9th, 2026Episode production datemetric
  • 527Episode numbermetric
  • April 8th, 2026Market close datemetric
  • 315 basis pointsS&P 500 increasemetric
  • 6782S&P 500 indexmetric
  • 570 basis pointsMay WTI crude oil decreasemetric

Entities Mentioned

BitcoinProtocol
Chinacountry
Federal Reserveinstitution
Irancountry
Israelcountry
Jacob ShapiroPerson
Japancountry
Russiacountry
Strait of Hormuzlocation
TrumpConcept
Ukrainecountry

Source Intelligence

What each podcast actually said

Macro Voices
Macro Voices

MacroVoices #527 Adam Rozencwajg: What Comes Next After The Iran Crisis • Apr 9

  • Erik Townsend notes MacroVoices episode 527 was produced on April 9th, 2026, covering crude oil, food, fertilizer, uranium, and gold after the Iran conflict.
  • Patrick Ceresna reports that as of April 8th, 2026, the S&P 500 index was up 315 basis points to 6782, while May WTI crude oil fell 570 basis points to 9441, dropping over 20% peak to trough in 24 hours.
  • Adam Rozencwajg states that the current physical dislocation in global energy markets, particularly around the Strait of Hormuz, is the largest ever seen, impacting 10-15 million barrels per day of oil and 20% of global LNG trade.
  • Rozencwajg highlights that despite initial market bearishness and record short positions, the oil market was balanced, not in a surplus as the IEA claimed, explaining why inventories did not surge in 2025.
  • Rozencwajg argues that while renewables are inefficient energy converters due to high material and backup requirements, nuclear energy, especially small modular reactors (SMRs), could offer long-term solutions, though not before the early 2030s.
  • Rozencwajg recommends investing in oil equities, noting they have only moved 30-50% compared to spot oil prices doubling from $50 to $120, because the forward curve for oil has not fully priced in a sustained tight market.
  • Rozencwajg believes oil inventories will be significantly lower, by 300-400 million barrels, after the crisis, forcing countries to rebuild strategic petroleum reserves, which will keep the market tight and drive longer-term oil prices higher.
  • Rozencwajg highlights significant inflation risk due to disrupted fertilizer supplies through the Strait of Hormuz, threatening agricultural yields that have relied on perfection to meet rising global protein demand.
  • Rozencwajg asserts that nuclear energy's future is bright, citing advancements in SMR permitting, particularly under the Trump administration, and the NRC's shift towards timely decisions on new reactor designs like TerraPower's.
  • Rozencwajg states the uranium market is already in deficit between current mine supply and reactor demand, a situation obfuscated by now-depleted Japanese stockpiles, making it a bullish story until 2030.
  • Rozencwajg projects a long-term uranium price target of $150 per pound U3O8 to incentivize new mine development, as current demand destruction is minimal given nuclear power's low fuel cost and regulated pass-through to consumers.
  • Rozencwajg distinguishes between a typical Fed rate hike cycle (negative for gold) and a collapse of Treasury markets (positive for gold), suggesting gold could sell off if the Fed surprises with rate hikes to control inflation.
  • Rozencwajg indicates speculative money, primarily from Western investors, entered gold in late 2025 and Q1 2026, making it vulnerable to sell-offs, though central bank buying provides more stable, price-agnostic demand.
  • Jim Bianco observes that despite a declared ceasefire, there's no evidence of a real deal between the US and Iran, with no ships moving through the Strait of Hormuz and Iranian attacks on neighbors continuing.
  • Bianco asserts that financial markets believe a deal exists, leading to a sharp stock market rebound and a significant fall in nearby crude oil prices, as they prioritize the flow of critical commodities like oil and LNG.
  • Bianco projects that even with a deal, markets will embed higher risk premiums due to the re-emergence of geopolitical tensions, preventing a return to pre-February 28th market levels for interest rates, volatility, or crude oil prices.
  • Bianco explains that if a deal fails, the immediate challenge is reopening the Strait of Hormuz against decentralized Iranian drone threats; traditional offensive tactics are insufficient, requiring a defensive shield akin to Ukraine's.
  • Bianco cites Javier Blas's assessment that crude oil prices could rise $3 a day if the Strait of Hormuz remains closed and negotiations fail, reflecting a stalemate with persistent supply constriction.
  • Bianco notes that Russia has received a monetary boost from higher oil prices, but Ukraine is gaining an advantage through asymmetric drone warfare, causing 30,000-35,000 Russian casualties per month this year.
  • Bianco highlights the Fed's confusion regarding the Iran conflict, with some members arguing for rate cuts if it slows the economy and others for rate hikes if it increases inflation, reflecting independent opinions among voters.
  • Bianco expects inflation to remain elevated, around 3%, for a long time, driven by geopolitical instability, deglobalization, and potential 'tolls' on open sea commerce, suggesting higher interest rates and mortgage levels.
  • Patrick Ceresna details a June 2026 NYMEX crude oil bull call spread strategy: buy the $100 strike call for $6.10 and sell the $120 strike call for $3.05, risking $3 for a potential $17 payoff if crude rallies past $120.
  • Erik Townsend outlines his September WTI 100-130 bull call spread, purchased for $1.85, anticipating the conflict's longer duration will cause later-dated contracts to rally and provide a 15:1 maximum payout if oil reaches $130+ by August.
  • Patrick Ceresna states the S&P 500's impressive 8% bounce from its lows, retracing 500 points, positions it close to previous highs, but underlying turbulence like higher oil prices, inflation, and credit stresses remain.
  • Erik Townsend notes that the dollar index (Dixie) gapped down post-ceasefire, confirming his view that its recent rally was due to the Iran conflict, and predicting a resumption of its secular downtrend when the conflict truly ends.
  • Patrick Ceresna observes the US dollar index paused at its 50-day moving average, holding support between 98.5 and 99, with no structural change in its trade range despite the short-term ceasefire giving cross-currencies relief.
  • Erik Townsend believes that the market's muted oil price reaction, despite the Strait of Hormuz remaining closed, is due to a perception that President Trump is seeking de-escalation rather than further conflict, despite Iran's untenable ceasefire terms.
  • Patrick Ceresna considers the gold market has broken its 2-year bull market advance, with a month below the 50-day moving average and other precious metals showing corrective patterns, suggesting the next bull advance might be a Q3/Q4 story.
  • Erik Townsend affirms that uranium fundamentals are extremely bullish, with the current crisis strengthening the nuclear renaissance; however, tail risks like nuclear weapon use or attacks on reactors remain concerns that could derail the market.
MacroEnergyBankingWarMining
Forward Guidance
Forward Guidance

The Iran War is Accelerating the End of Globalism | Jacob Shapiro • Apr 7

  • Jacob Shapiro initially predicted the US-Iran conflict would last less than four weeks, citing Iran's asymmetric advantages in geography and cheap weaponry that overwhelm US high-tech military assets.
  • The immediate macro impact hinges on ship traffic through the Strait of Hormuz, which recently dropped to near zero but has risen to about 20% of normal levels.
  • Shapiro argues LNG and fertilizer shortages pose greater risks than oil, as Europe's post-Russia energy plan relied on new Gulf capacity and farmers have already missed annual application windows.

Also from this episode:

Business (3)
  • The Iran conflict accelerates existing trends of deglobalization and supply chain multipolarity, forcing investors to identify regions resilient to energy and food disruptions.
  • Mid-tier petrochemicals like plastics face severe shortages with no strategic reserves, while critical inputs like helium have stockpiles that mitigate immediate semiconductor risks.
  • Shapiro warns that if the conflict persists into May, global economic damage will intensify, with political instability likely following food price spikes in emerging markets.
Politics (3)
  • The US shale revolution removes its direct energy dependence on the Gulf, but Trump's political vulnerability stems from consumer price sensitivity, mirroring Biden's 2022 midterm pressures.
  • China's strategy toward Taiwan focuses on economic isolation and political erosion, not military invasion, a lesson reinforced by watching US and Russian failures in Iran and Ukraine.
  • The Philippines declared an energy emergency due to the Strait disruption, then immediately reopened energy talks with China, signaling how the war pressures US allies toward pragmatic realignment.
History (1)
  • Shapiro frames the current era as analogous to the 1890s, a period of great power shifts, energy transition, and technological revolution, not the 1930s path to world war.
AI & Tech (1)
  • He remains optimistic about long-term growth driven by AI, robotics, and a diversified energy transition, arguing investors should develop macro scenarios beyond daily headline noise.
MacroEnergyTradeChinaWar
BTC Sessions
BTC Sessions

The Real War Isn’t in Iran — It’s in the US Treasury Market | Luke Gromen & Lyn Alden • Apr 7

  • Luke Gromen argues the US Treasury market, not the military, is Iran's primary target. He states a prolonged Strait of Hormuz closure risks systemic collapse by disrupting the global energy and financial system.
  • Gromen and Lyn Alden agree a swift resolution to the Strait crisis is unlikely. They state even a best-case reopening would cause supply chain disruptions and inflation for three to five months.
  • Alden cites Egypt as a leading indicator of crisis impacts, where a tripled natural gas bill forced 9 PM curfews on businesses, devalued the currency by roughly 10%, and curtailed economic activity.
  • Gromen warns of nonlinear supply chain breaks from the energy shock. He argues gross self-sufficiency metrics are misleading, as missing minor components from affected regions can halt entire production lines globally.
  • Alden explains manufacturing's network effect, using a consumer products company example. They found US manufacturers could not replicate Chinese-made parts at any reasonable cost, requiring product simplification.
  • Gromen states military action risks starvation for hundreds of millions by Christmas. He and Alden warn the crisis will cause severe food shortfalls in the global south, as fertilizer prices rise and wealthier nations outbid others.
  • Alden distinguishes between temporary price inflation from supply shocks and permanent inflation from monetary stimulus. She notes initial demand destruction in discretionary spending can precede a debt-driven monetary response.
  • Gromen argues the US faces a fiscal death spiral. With interest and entitlements consuming over 100% of receipts, a recession-induced drop in tax revenue will force a choice between default and monetizing debt.
  • Gromen points to a record $15 billion Treasury buyback and Fed reserve management as evidence of soft yield curve control, aimed at preventing the 10-year yield from breaking above 4.4%.
  • Alden outlines the monetization sequence: breaking funding markets lead to Fed liquidity facilities, then balance sheet expansion, and finally Treasury buybacks. She notes the Fed will act to prevent a failed Treasury auction.
  • Gromen highlights Japan's emerging market behavior, where rising JGB yields relative to Treasuries weaken the yen instead of strengthening it. He monitors the dollar-yen times oil metric as pressure on US yields.
  • Alden explains the global piggy bank mechanism. Energy-importing nations like Japan must sell dollar assets, primarily Treasuries, to pay for oil when the dollar and oil price both rise, transmitting stress to US markets.
  • Gromen's base case for the conflict is administrative hubris, comparing it to kicking a beehive. He cites a credible source suggesting a US strategy to let Iran and Israel mutually degrade, as both threaten dollar hegemony.
  • Alden sides with Occam's razor, stating the administration underestimated Iran after the Venezuela operation. She criticizes a lack of strategic thinking, citing failed Dogecoin policies and tariff overreach.
  • Gromen defines a US 'Suez moment' as the best-case outcome: walking away, allowing a yuan-for-gold-for-oil system, leading to dollar devaluation, high inflation, yield curve control, and capital controls in the US.
  • Alden argues the dollar system has entrenched longevity due to tens of trillions in dollar-denominated debt. She sees a gradual shift to a multi-polar reserve system, accelerated but not caused by this crisis.
  • Gromen sees gold as the escape hatch from dollar debt. A revaluation of global gold collateral via an oil-linked price surge could allow the world to redenominate claims without a catastrophic financial crisis.
  • Both analysts are cautious on Bitcoin in the near term, correlating it with software stocks. They expect risk asset declines if the crisis prolongs, but see sharp sell-offs from liquidity events as buying opportunities.
MacroFedEnergyBanking

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