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AI equity rally distracts markets from record oil shock

Monday, May 4, 2026 · from 5 podcasts, 8 episodes
No PriorsBreaking PointsBanklessMacro VoicesThe Economist
  • Brent crude hit $120 as the Strait of Hormuz blockade creates a 13 million barrel daily supply deficit.
  • Surging AI stock valuations mask the oil shock's lagging impact on jobs, inflation, and corporate margins.
  • The Pentagon admits its munitions stockpile is critically depleted after a five-week war of attrition.

Markets are ignoring the largest oil supply shock in history. Six weeks into the U.S. naval blockade of the Strait of Hormuz, the physical reality of a 13 million barrel per day deficit has divorced from financial logic. Brent crude breached $120 a barrel, but the S&P 500 just posted its best month since 2020, fueled by AI-driven earnings from giants like Nvidia and Google.

The Intelligence notes this deficit is four times larger than the shock following Russia’s invasion of Ukraine. Analyst Matthieu Favas argues that wealthy nations draining strategic reserves and shadow tanker traffic are creating a dangerous illusion of normalcy. Even if the Strait reopened today, normalization would take three to four months for production and shipping to resume.

"Markets are underpricing oil despite the largest supply disruption in history."

- The Intelligence from The Economist

The disconnect is wearing thin on the ground. Goldman Sachs forecasts the U.S. could lose 10,000 jobs per month this year due to energy costs. In the Northeast, gasoline demand fell 4.3% in March, a clear signal of consumer demand destruction. On Breaking Points, Krystal Ball highlighted a New York Times focus group where Trump voters described feeling 'betrayed' as national gas prices hit $4.50.

The war has hollowed out U.S. military readiness. Saagar Enjeti cited reports that the U.S. has burned through 40% of its long-range stealth cruise missile stockpile and over 1,200 Patriot interceptors. Replenishment could take six years, compromising plans to defend Taiwan. Defense Secretary Pete Hegseth dismissed cost concerns as 'defeatist' while the Pentagon's assessments are privately questioned by officials like Vice President JD Vance.

Daniel Lacalle on Macro Voices argues record money supply growth is propping up equities as investors flee currency debasement, not because they expect real growth. This liquidity masks an existential energy crisis, particularly for Europe. Lacalle warns that industries there face jet fuel costs five times higher than normal, which will soon obliterate corporate margins.

"Investors are buying stocks not because they expect growth, but because they are fleeing debasement."

- Daniel Lacalle, Macro Voices

The geopolitical order is fracturing. The UAE announced it will leave OPEC, a move Erik Townsend interprets as eliminating future spare capacity. Iran is reportedly allowing vessels through the blockade in exchange for tolls paid in cryptocurrency or yuan, teaching the world to trade around the American financial system. As the U.S. seeks total victory, the rest of the world is learning to keep the lights on without it.

#Markets#Energy#Regulation
New York TimesNvidiaUAEWorldcoinGoogleIranRussiaStrait of Hormuz

Source Intelligence

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No Priors: Artificial Intelligence | Technology | Startups
No Priors: Artificial Intelligence | Technology | Startups

Baseten CEO Tuhin Srivastava on the AI Inference Crunch, Custom Models, and Building the Inference Cloud • May 1

Also from this episode: (15)

AI & Tech (12)

  • Alad notes that Baseten has grown 30x in the last year and expects to exceed $1 billion in revenue, reflecting the rapid expansion of the AI inference market.
  • Tuhin Srivastava attributes the growth to mainstream adoption of open-source models, which have crossed a capability chasm, and widespread use of post-training techniques for specialized models.
  • Tuhin Srivastava believes an independent application layer will exist because companies leverage unique user signals encoded in workflows, making it difficult for frontier model companies to replicate.
  • Abridge, an ambient scribe used by physicians, exemplifies an application layer company with deep integration into hospital workflows and access to unique user signal for post-training models.
  • The majority of the AI market today, approximately 99% by inference count, represents enterprise adoption that is yet to come online, indicating significant future growth potential.
  • Tuhin Srivastava states that over 95% of tokens served on Baseten are from custom models where customers modify open-source models with their own data or for performance.
  • Baseten acquired a research team specializing in post-training to accelerate market support and integrate post-training expertise with inference, recognizing their interconnectedness.
  • Tuhin Srivastava believes Chinese open-source models are fantastic with no real evidence of embedded agendas, but emphasizes the U.S. needs to develop its own competitive models.
  • Running models like DeepSeek can be 20% of the cost of proprietary alternatives, offering comparable latency and reliability, making access to such intelligence crucial for national innovation.
  • The AI compute market faces a severe supply crunch with very little slack compute, forcing Baseten to run large clusters at mid-90s utilization across 18 clouds globally.
  • Jevons Paradox applies to AI inference: decreasing the cost of intelligence leads developers to embed more intelligence into applications, driving greater consumption and better user experiences.
  • Tuhin Srivastava envisions a future where AI provides personalized concierge services for everyone, making everything smarter and leading to the creation of even more software.

AI Infrastructure (3)

  • Tuhin Srivastava explains that securing 1,024 B-200 GPUs today demands a three to five-year contract with a 20-30% total contract value prepay, highlighting capital requirements for capacity acquisition.
  • Baseten maintains high customer stickiness, achieving 400% annual Net Dollar Retention (NDR) due to its comprehensive software layer, which differentiates it from non-sticky 'GPUs as a service'.
  • Tuhin Srivastava acknowledges NVIDIA's strong supply chain, CUDA ecosystem, and developer support make them difficult to surpass in the short term, despite the desirability of a multi-chip world.
#AI Infrastructure#Models#Startups#Enterprise#Chips
Breaking Points with Krystal and Saagar
Breaking Points with Krystal and Saagar

5/1/26: New Iran Strikes Imminent?, Platner Beats Mills, AI UnderClass, JPMorgan MeToo • May 1

  • Ryan Grimm argues the U.S. is in a weaker position for renewed conflict, with oil prices over $100 a barrel and key regional bases destroyed, unlike at the war's start.
  • Every U.S. state has higher gas prices compared to a week ago, with Indiana up eighty-four cents, Michigan seventy-two cents, and Ohio sixty cents.
  • Krystal Ball argues a market logic where companies announcing AI-driven layoffs get stock bumps is front-running AI's actual capability, accelerating job displacement.
  • Ryan Grimm warns the Daily Mail's reporting on the JP Morgan case, based on unsealed court documents without verification, could chip away at legal protections for press reporting on court filings.
Also from this episode: (17)

Diplomacy (4)

  • A Barockravied report indicates Iran delivered a new response on a draft peace deal, signaling diplomacy is not entirely frozen despite Trump considering new military action.
  • Iranian Foreign Ministry spokesman Esmail Bagey said Pakistan has shown good capability in mediation and will remain the mediator, indicating a continued openness to talks.
  • Iran's stated strategic goal is to reach a point where 'the danger of war does not exist,' a direct response to Trump's threats to annihilate their civilization.
  • Iran currently holds under one thousand pounds of sixty percent enriched uranium, compared to the twenty-five thousand pounds removed to Russia in the 2015 deal.

War (4)

  • Trump claims Iran's drone factories are eighty-two percent destroyed and missile factories almost ninety percent destroyed, framing the conflict as a successful military operation.
  • The U.S. shipped sixty-five hundred tons of munitions and equipment to Israel in twenty-four hours, indicating preparations for potential new strikes on Iran.
  • Republican Senator Ron Johnson reportedly referred to the Iran conflict as a 'two week bombing run,' reflecting initial administration expectations of a quick victory.
  • Krystal Ball notes polling shows the Iran war is already as unpopular as the Vietnam War was at its worst, but it took six years for Vietnam to reach that level.

Elections (5)

  • Graham Platner defeated sitting Governor Janet Mills to become the presumptive Democratic Senate nominee in Maine, a victory for a first-time candidate against an established figure.
  • Krystal Ball argues Platner's strength against Susan Collins and his focus on Israel and oligarchs reflects where the normie Democratic base is, not just the activist left.
  • Ryan Grimm notes Schumer's camp claimed they couldn't spend heavily against Platner because it would be politically toxic, given his majority support among Maine Democrats.
  • Zora Mom Donnie said the DNC establishment never reached out to him despite polling forty points ahead, highlighting a disconnect between party leadership and insurgent candidates.
  • DNC Chair Ken Martin refused to release the party's 2024 election autopsy, claiming focus should be on future lessons, not 'navel gazing' or placing blame.

Politics (1)

  • Ryan Grimm speculates the DNC may hide the report to obscure how a billion dollars was spent by specific consultants and firms during the short 2024 campaign.

AI & Tech (3)

  • Emily Jashinsky cites a New York Times piece arguing AI companies' core business model relies on disruption, creating a painful transition that will disempower millions into an underclass.
  • Ryan Grimm points out the absurdity of the AI doom loop: if AI puts everyone out of work, no one has income to buy the products AI companies sell.
  • An AI agent allegedly deleted a company's entire database and backups in nine seconds, showcasing the risks of implementing AI without proper safeguards.
#War#Elections#Diplomacy#Macro#Corruption

4/30/26: Trump Orders Indefinite Blockade, US Tries To Collapse Iran Economy, Trump Delusional Oil Bet • Apr 30

  • Krystal cites Treasury interventions to suppress oil prices but says they have a limited shelf life. She references Ryan reporting next week on the direct market manipulation.
  • Saagar cites a University of Michigan survey showing consumer sentiment at 49.8, the lowest in over 50 years, lower than when gas was $5/gallon under Biden.
  • Saagar explains the S&P 500 is up because Amazon, Google, Meta, and Microsoft are spending $1.3 trillion on AI over two years - more than the Manhattan Project each month.
  • Krystal says the bond market is collapsing with the 10-year yield back above 4.4% and the 30-year at 5%, a level Trump has intervened at before, signaling rising US debt financing costs.
  • Guest Rory Johnson says the Strait of Hormuz closure has already caused a 600 million barrel supply hit, guaranteeing at least a 1 billion barrel shortfall for the year.
  • Rory Johnson notes US commercial petroleum inventories fell by a headline 17 million barrels plus a 7.1 million barrel SPR draw, a massive 24 million total draw versus a normal ±5 million range.
  • Rory Johnson argues Iran has 10-30 days of onshore and floating tanker storage before having to shut in wells, a timeline mismatched with the Gulf's two-month production shutdown.
  • Rory Johnson's fair value models show oil could reach $180-$200 per barrel by end of June if Hormuz remains closed, absent major policy actions like SPR releases.
Also from this episode: (7)

Politics (5)

  • Saagar argues the US faces three dire options in Iran: withdrawing and accepting a historic strategic defeat, continuing the indefinite blockade, or resuming limited strikes which would restart hot war and destroy Gulf oil assets.
  • Krystal cites Iranian claims that 52 ships breached the US blockade, highlighting its porous nature. She notes Iran can also move goods over land and has secured new deals with Pakistan.
  • Saagar claims the US lost 50% of its interceptor capacity in the 38-day war. Krystal says the world now sees a breakdown of the US global empire.
  • Krystal points out Pete Hegseth's contradictory testimony: he justified the war to stop an imminent nuclear threat, then claimed Iran's nuclear facilities were already 'obliterated'.
  • Saagar says Iran offered a five-year enrichment moratorium with IAEA inspections and downblending uranium to Russia, but the US rejected it because it resembled the JCPOA.

Trade (1)

  • Saagar says Japanese Airlines now charges a $350 surcharge per ticket for North America/Europe flights, more than double the pre-war rate, with South Korean airlines following suit.

War (1)

  • Krystal and Saagar criticize Pete Hegseth for refusing to acknowledge war costs. Ro Khanna stated the blockade will cost the average household $5,000 extra for gas and food this year.
#War#Macro#Trade#Diplomacy

4/28/26: Trump Lashes Out At Iran, UAE Ditches OPEC, JD Thinks Hegseth Lying About War • Apr 28

  • Saagar reports Brent crude oil has returned to its pre-ceasefire price, indicating Iran's economic strategy is working. He notes Iran may soon fill its oil storage, forcing a critical decision to shut down production.
  • Saagar cites a Wall Street Journal report that last week saw the lowest-ever traffic through the Strait of Hormuz due to the U.S. blockade. Only one LNG tanker transited yesterday compared to the usual hundreds.
  • Krystal details a U.S. seizure of the tanker NT Majestic carrying 1.9 million barrels of Iranian oil. An Iranian official condemned the act as piracy and warned of retaliatory strikes on regional oil facilities.
  • Saagar references Jeremy Scahill's report that Iran's strategy rests on three points of leverage: munitions, markets, and the U.S. midterm elections. Iran aims to deny Trump a victory and prolong the conflict.
  • Saagar reports the UAE announced it will leave OPEC and OPEC+ on May 1st. The move, driven by financial pressure and frustration with Saudi quotas, removes 10-13% of the cartel's total production capacity.
Also from this episode: (8)

War (5)

  • Saagar notes the current U.S. red line against Iran focuses solely on keeping the Strait of Hormuz open, a demand detached from prior nuclear or proxy issues. The strait was fully open before the war started on February 27th.
  • Krystal cites an Axios report stating Trump told an advisor the only thing Iranians understand is bombs. She argues Trump undermined ceasefire talks by expanding the naval blockade and canceling negotiations in Islamabad.
  • Krystal highlights Secretary Marco Rubio's Fox News interview, where he rejected Iran's new proposal to negotiate only on the Strait of Hormuz while setting aside nuclear talks, calling it unacceptable.
  • Krystal notes key U.S. allies are breaking ranks. A Japanese tanker secured transit through the Strait, and Germany's chancellor called the war a humiliating disaster for the U.S. with no exit in sight.
  • Krystal cites an Atlantic report that Vice President JD Vance suspects Defense Secretary Pete Hegseth is misleading Trump about U.S. weapons stockpiles and the war's progress. Vance has raised concerns in closed-door meetings.

Politics (3)

  • Saagar details a New York Times report on depleted U.S. munitions: 1,100 long-range stealth cruise missiles, over 1,000 Tomahawks, and 1,200 Patriot interceptors were used. Replenishing stocks could take six years, compromising plans to defend Taiwan.
  • Krystal reports that Secretary Pete Hegseth took Kid Rock on a joyride in Apache helicopters at Fort Belvoir. She frames it as a sign of the administration's misplaced priorities during an ongoing war.
  • Saagar notes the House is voting on a War Powers resolution from Josh Gottheimer to end military action against Iran within 30 days. The only Democratic co-sponsor, Jared Golden, now faces pressure to vote for his own measure.
#Macro#Energy#Markets#Diplomacy#War

4/27/26: Iran Threatens Massive Barrage, Germany Says Trump Humiliated By Iran, Oil Shock Officially Here • Apr 27

  • Krystal notes Pakistan was interested in mediation due to its reliance on Qatar for 99% of its natural gas, requiring open Strait of Hormuz access.
  • Krystal cites a Bloomberg report indicating a "billion barrel" oil supply loss is guaranteed due to the Strait of Hormuz closure, more than double the emergency inventories released in February.
  • Rory Johnston believes traders are underestimating the oil shock's impact, as the reality is "too awful to price in," leading to demand destruction spreading globally.
  • Saagar notes national gas prices are around $4.11 per gallon, reaching $6.79 in Los Angeles and nearly $6 across California, with the cheapest at $3.50 in Oklahoma.
  • A Financial Times report indicated average petrol sales in the northeastern US fell 4.3% in March, contrasting with a 0.6% growth during the same period last year, signaling significant demand destruction.
  • Goldman Sachs forecasts the US economy could lose 10,000 jobs per month this year due to the oil shock, with unemployment rising to 4.6% by the third quarter.
Also from this episode: (15)

Diplomacy (3)

  • Krystal reports that US-Iran talks in Islamabad collapsed after Trump canceled his negotiating team's trip, citing Iran's unmet demands and internal leadership confusion.
  • An Iranian advisor accused Pakistan of lacking credibility as a mediator, asserting it consistently sided with US interests and failed to challenge American positions.
  • Iranian Foreign Minister Arachi embarked on a diplomatic tour including Islamabad, Musket (Oman), and Moscow, which Saagar interprets as a direct message challenging Washington.

War (9)

  • Krystal notes Israel sent Iron Dome systems and troops to the UAE during the Iran War, indicating the UAE's direct involvement in the conflict.
  • US intelligence suggests Iran laid additional mines in the Strait of Hormuz, with the Washington Post estimating six months to clear them for normal traffic, granting Iran negotiation leverage.
  • An Iranian account warned of launching "the largest missile barrage in history" against Israel and US-allied Arab nations if attacked, highlighting their maintained ballistic missile and drone capabilities.
  • Krystal cites an NBC News report detailing billions of dollars in damage to eleven US military bases, stating the extent was far worse than publicly acknowledged.
  • Saagar reports an Iranian F-5 fighter jet bombed US Camp Buring in Kuwait on February 28, bypassing air defenses, marking the first enemy fixed-wing aircraft strike on a US base since the Vietnam War.
  • Saagar believes the US military is "profoundly less prepared" for conflict after a five-week war, noting low munition stocks and 50% of advanced weapons gone, requiring five to eight years for replacement.
  • Krystal notes a planned IAEA disclosure meeting with Iran on June 13, 2025, which might have revealed a new enrichment site, was pre-empted by US bombings.
  • A Harvard nuclear specialist stated that Iran's nuclear knowledge cannot be bombed away, and new enrichment sites the size of a grocery store can be hidden in mountainous terrain.
  • Saagar notes that Israel continues to bomb Lebanon, having killed 14 people and injured 37 civilians across southern Lebanon.

Politics (3)

  • Saagar states the US Treasury is defending "US dollar swap lines," which he describes as a bailout for Persian Gulf allies whose economies are being impacted by the war.
  • Krystal notes that Iranian parliamentary speaker Golliboff interpreted these swap lines as preventing disorderly sales of US treasuries and warding off threats of oil transactions being denominated in Chinese yuan.
  • Krystal reports the German Chancellor criticized the US, stating there's no exit strategy for the conflict and that US leadership is being "humiliated" by Iran's skillful negotiation and strength.
#War#Energy#Macro#Diplomacy
Bankless
Bankless

ROLLUP: $120 Oil vs New Highs | AI Boom Masks War | IPO Top Signal | DeFi Bailout • May 1

  • Brent Crude oil prices breached $120 a barrel, reaching wartime highs due to the Hormuz blockade. Analyst Roy Johnson expects prices to exceed $150, citing a 13 million barrel per day supply shock.
  • U.S. national average gas prices hit $4.23 a gallon, the highest since August 2024. Rising oil prices are driving up costs for food, fertilizer, jet fuel, and diesel by double-digit percentages.
  • The S&P 500 gained 13.5% in April, its best month since November 2020, driven by AI-driven earnings from companies like Google and Nvidia despite Middle East turmoil.
  • The Fed held rates at 3.5-3.75% but saw its most divided vote since 1992, with four dissenters. The FOMC changed its inflation description from 'somewhat elevated' to just 'elevated' as CPI ticked up to 3.2%.
  • Outgoing Fed Chair Jerome Powell will remain as a governor while under investigation, a move seen as denying Trump a majority of appointees on the board.
  • Eric Trump claimed the U.S. government holds 300,000 Bitcoin and will not sell it. Paul Tudor Jones called Bitcoin the unequivocal best inflation hedge, superior to gold due to its finite supply.
  • The MegaETH token launched with a $1.7 billion market cap. 40% of recipients sold all their tokens, while 50% held and 10% partially sold.
  • DeFi United raised $311 million in 11 days to backstop the $76,000 ETH hole from the KelpDAO hack, with contributions from Aave, Mantle, Consensys, and others. Some funds were loans with attached governance rights.
  • DeFi suffered 630 million in exploits during April 2026, with an attack occurring roughly every 27 hours, marking the worst month on record.
  • A U.S. soldier was arrested for turning $34,000 into $410,000 on Polymarket using classified intel about a Venezuela invasion. The CFTC prosecuted the case, highlighting on-chain transparency.
  • Acting Attorney General Todd Blanche told the Bitcoin Conference 'code is not a crime' for non-custodial developers, but the DOJ's Southern District continues prosecuting Tornado Cash developer Roman Storm.
Also from this episode: (7)

Protocol (2)

  • SecDef Pete Hegseth affirmed Bitcoin is a national security tool, claiming the Defense Department has both classified efforts to enable and thwart its use by adversaries.
  • A U.S. Congressman claimed Iran demands Bitcoin for Strait of Hormuz transit, North Korea uses it in ransomware, and China is stockpiling it as a strategic reserve.

Politics (3)

  • President Trump directed the military to prepare for an indefinite naval blockade of the Strait of Hormuz, demanding Iran agree to a nuclear deal before lifting it.
  • Iran's currency is experiencing hyperinflation and its economy is devastated, threatening the regime's ability to pay IRGC salaries and maintain internal stability.
  • The U.S. Treasury's Economic Fury operation froze $344 million in USDT on the Tron network belonging to Iran, the largest such freeze in history.

AI & Tech (1)

  • Anthropic reached a $1 trillion valuation in three months, overtaking OpenAI's $24 billion revenue. Historic IPOs for SpaceX, OpenAI, and Anthropic could drain systemic liquidity and mark a market top.

Big Tech (1)

  • Meta now pays Instagram creators in USDC stablecoins via Stripe on Solana and Polygon, simplifying global payouts. Visa's stablecoin payment volume hit a $7 billion annual run rate, growing 50% quarter-over-quarter.
#Macro#Energy#Markets#BTC Markets#Nation-State
Macro Voices
Macro Voices

MacroVoices #530 Daniel Lacalle: China and The Us Will Decide The Outcome of The Iran War • Apr 30

  • Daniel Lacalle attributes the stock market rally amid the Iran crisis to soaring global money supply growth, which inflates asset prices even as money velocity declines.
  • Europe faces severe energy security risks from the Strait of Hormuz closure, with only weeks of jet fuel left and potential for prices to quintuple. Consumer sentiment there is at its lowest since the pandemic.
  • Iran’s economy was already in crisis before the war, with 60% inflation and protests in 2025. Lacalle notes 25% of its GDP and 60% of government revenue flow through the Strait of Hormuz.
  • Lacalle sees a consensus against price controls in Europe, but a greater risk of populist-driven windfall profit taxes on energy companies that could deter investment in supply security.
  • He believes oil prices have likely peaked but the geopolitical risk premium will keep a floor under them. The forward curve discounts oil prices remaining $15 above January levels by year-end.
  • Lacalle cites the US shift from largest oil importer to largest producer as turning it from a shock amplifier to a shock absorber in energy crises, a key structural change from 1973 and 2008.
  • He explains gold’s recent inverse relationship to oil and geopolitics was driven by unwinding of leveraged long-gold/short-dollar trades and central bank selling to support local currencies.
  • He warns of lagged economic damage in Europe, particularly margin erosion and credit deterioration in financials, aviation, automotive, and tourism, which equity markets have yet to price.
  • Erik Townsend argues the market is in denial about the inevitable global energy crunch, drawing a parallel to the early COVID pandemic where economic reality took weeks to be priced in.
  • Townsend interprets the UAE’s exit from OPEC as a signal that spare capacity will be eliminated post-crisis, making markets more vulnerable to future price spikes despite a near-term production surge.
Also from this episode: (4)

Trade (1)

  • Lacalle argues the US and China have superior staying power in the conflict. The US is a net exporter of 2.8 million barrels of oil per day, and China has massive commodity stockpiles plus a strategic supply agreement with Russia.

Politics (1)

  • European political sentiment is polarized regarding the conflict. A majority view holds it is a US-Israel issue, with support limited to logistical or diplomatic efforts, not active military participation.

Inflation (1)

  • Lacalle argues for a regime of persistent inflation, driven by high government spending, soaring money supply, and policies aimed at sustaining aggregate demand. He notes food and shelter costs in the EU and UK have risen twice as much as official CPI over seven years.

Business (1)

  • Lacalle identifies fertilizer availability and price as a critical inflation vector, a bigger problem for Europe due to eroded farm margins, while the US faces only a price issue.
#Macro#Energy#Inflation#Fed
The Intelligence from The Economist
The Intelligence from The Economist

Drill pickle: oil prices still misjudge shock • Apr 30

  • The current oil supply shock is the largest in history, with a 13 million barrel per day deficit from the Strait of Hormuz closure, far exceeding the 3 million barrel per day disruption feared from the Russia-Ukraine war.
  • Oil prices around $125 per barrel are misleadingly low because buffers absorbed the initial shock. These included a pre-war market surplus, increased Gulf exports before conflict, and the release of rich countries' strategic petroleum reserves.
  • Hidden demand destruction in developing nations is masking the true deficit. Cooking oil and petrochemical feedstock shortages in Asia and Africa have already rationed consumption outside major tracked markets.
  • Mathieu Favas argues oil prices must rise further to ration consumption in rich countries as buffers deplete, forcing a contraction in demand for gasoline, diesel, and jet fuel.
  • Financial markets react asymmetrically to oil news. Prices fell $10 on a false reopening announcement but rose only $5 when it was retracted, partly due to algorithmic traders reacting to headlines over fundamentals.
  • Reopening the Strait of Hormuz would not provide immediate relief. Restarting production, repositioning tankers, and refining crude would take three to four months before markets normalize.
  • The UAE's departure from OPEC matters for the future. It could export more post-crisis and may encourage other members to leave, potentially leaving Saudi Arabia alone to manage production cuts.
Also from this episode: (7)

Politics (3)

  • Polls indicate the French populist right, the National Rally, is the only certainty for the 2027 presidential runoff, with Marine Le Pen or Jordan Bardella as its candidate.
  • Sophie Pedder says the French centre and left are fragmented with no clear frontrunner to oppose the National Rally, risking a final choice between political extremes.
  • Succession for Macron's centre hinges on a rivalry between former prime ministers Édouard Philippe, currently leading in polls, and Gabriel Attal, who leads Macron's Renaissance party.

Elections (2)

  • A July 7th court appeal ruling will determine if Marine Le Pen can run for president; if banned, Jordan Bardella will lead the National Rally ticket.
  • Sophie Pedder notes French presidential polls 12 months out are historically unreliable, with half of the last six elections failing to predict the final runoff candidates.

Sports (2)

  • Brazil's football team qualified fifth in South America for the expanded 48-team World Cup, winning only eight of its 18 qualification matches.
  • Brazil holds the best men's World Cup record with 76 victories in 114 matches and is the only country to have played in all 22 tournaments.
#Macro#Energy#Markets#Elections#Europe