Middle East Conflict Rattles Markets, Challenges Global Assumptions

Mar 11, 2026

• An escalating Middle East conflict has closed the Strait of Hormuz and struck critical oil and gas infrastructure.
• These events are driving energy prices towards historic highs, with Brent and WTI oil nearing $120 a barrel.
• The Strait of Hormuz, now effectively shut down, controls roughly 20% of the world's liquid petroleum products.
• The shutdown of the Strait of Hormuz is expected to have severe downstream impacts on every market and drive inflation.
• Marty Bent argued the market has not fully digested the gravity of infrastructure hits, especially to refineries, despite actual hits occurring.
• Bent compared the current situation to 2022 fears over Russian oil infrastructure, which caused WTI to spike above $130.
• Despite actual infrastructure hits occurring, market futures currently imply a short-term reversal in energy prices.
• China relies on the Strait of Hormuz for 45% of its oil, making the conflict a significant geopolitical factor.

Oil Hits $200, Gas Hits $6

Mar 9, 2026

• Oil analyst Rory Johnston describes scenes from Tehran as apocalyptic, with oil raining from black clouds, acid rain risks, and burning storm drains.
• Johnston says the oil market's primary concern is the duration of the disruption through the Strait of Hormuz.
• Johnston argues that a leader framing the disruption as a short-term issue suggests they believe the conflict can be managed indefinitely, meaning the Strait of Hormuz closure could persist far longer than anticipated.
• The Strait of Hormuz closure represents the largest oil supply shock since the 1970s, dwarfing disruptions from the Ukraine war and COVID pandemic.
• The loss of 20 million barrels per day from the Gulf system is roughly the same size of demand destruction seen at the absolute peak of COVID lockdowns in March and April 2020.
• To balance the loss of supply, oil prices must rise enough to crush demand across air travel, freight, and consumer consumption globally.
• Oil analyst Rory Johnston says $200 per barrel prices are 'brutal physics', not clickbait, needed to force global demand destruction equivalent to peak lockdowns.
• The crisis will manifest first as diesel and jet fuel shortages.
• Gasoline in the U.S. is already projected to breach $4 per gallon and head toward $6.
• The price spike will be asymmetric, with wealthy nations like the U.S. paying much higher prices, while the developing world faces outright shortages and gas lines.
• Asia's jet fuel prices have already jumped to levels equivalent to over $200 per barrel.
• Refineries in Asia, terrified of losing feedstock, have preemptively slashed operations from 90% to 65%, instantly cutting diesel and jet fuel supplies.
• Johnston states this isn't a prediction but a physical constraint, as tankers loaded a week ago are still sailing, so the full crude supply loss won't hit global refining for a month or two.
• Johnston says the downstream panic, and the demand destruction it requires, is already here.
• Johnston describes this as the largest scale disruption of energy systems at least since the 1970s.
• Johnston warns that if the Strait of Hormuz closure goes on much longer, it could potentially be the longest energy disruption in history.

Trump's Iran Strike Was a Targeted Hit on China's Economy

Mar 9, 2026

• Prior to the strike, China was buying 90% of Iran's sanctioned oil exports at a steep discount.
• Iran, Venezuela, and Russia together provided 40% of China's oil imports, giving its manufacturing sector a critical cost advantage.
• By removing Iran and Venezuela as sources of cheap oil, the US forces China to bid for more expensive Russian supply.
• Knocking out Iran and Venezuela, two major non-dollar oil exporters, fits this petrodollar defense pattern.
• The geopolitical chess match is now centered on energy and currency, with China losing its discount oil supply.
• The US action may trigger a global scramble for oil supply among major economies.