Washington is fighting the oil market’s verdict on its Iran war. Brent crude trades near $115 a barrel, a price Ryan Grim on Breaking Points argues reflects the physical reality of the Strait of Hormuz blockade. To counter it, the U.S. Treasury is intervening directly, taking short positions on oil futures to artificially suppress prices.
"The Treasury is shorting oil futures to hide inflation while taxpayers fund the regional war causing it."
- Breaking Points with Krystal and Saagar
The tactic creates a financial feedback loop: taxpayers fund losing trades to mask the cost of the conflict driving prices up. Meanwhile, the underlying supply math guarantees a crisis. Analyst Rory Johnston, speaking on Bankless, notes the blockade has already locked in a loss of one billion barrels - roughly 40% of visible commercial stocks in advanced economies. If it persists into June, his model suggests Brent could approach $200 a barrel.
The White House narrative is diverging from on‑the‑ground reports. Donald Trump claimed on Truth Social that Iran is in a “state of collapse” and begged the U.S. to open the strait. Grim notes the post was timed one minute before markets opened, a pattern of attempted volatility manipulation. Diplomatic reporting describes a hardened stalemate, with Iran demanding the blockade be lifted before any discussion of its nuclear program.
Markets are screaming for immediate barrels through record backwardation, paying massive premiums for spot delivery. The system isn’t built for draws this deep. Johnston argues $200 oil isn’t hyperbole but the logical outcome of a stockout - the price needed to force demand destruction when inventories hit zero.
The Treasury’s short positions are a temporary mask. If it loses its grip, the price correction will be violent.
