US Blockade Shift Signals War De‑Escalation, Not Market Overreach
The most common comment I hear from policy makers at this week's IMF/WB meetings is that markets are way too early in pricing de-escalation. Disagree. It's clear the US wants wants to end this war, hence the shift to a blockade, a non-military measure... https://t.co/l2co2Yx2DO https://t.co/5lmtHPsCTu
US‑Iran Talks Lift Latin American Commodity Exporters
Now that Iran and the US are negotiating, fear that war may escalate out of control is leaving markets. That's lifting EM oil and commodity exporters, especially across LatAm. Good news for Colombia, Argentina and Brazil. A replay of 2022...
Blockade Targets Iran's Oil Lifeline, Forces Negotiation
Great piece by @PatcohenNYT in today’s @nytimes on what the blockade means for Iran’s economy. Oil exports are the life blood of Iran’s economy, so choking those off is a good inducement for the mullahs to negotiate in earnest and...
IMF Growth Forecasts Too Pessimistic, Revised Upward After Conflict
One year ago, the IMF put out its growth forecasts (blue) right after Liberation Day. Those forecasts were far too pessimistic and were revised up 6 months later (red). It's the same with this week's forecasts if the war -...
Blockade Iran: Safer Than War, No Oil Spike
If you're interested in the rationale for blockading Iran and why this won't spike oil prices, watch my discussion on this from a month ago with @paulkrugman. Economic warfare like a blockade isn't perfect, but it's infinitely preferable to actual...
Blockade Shift Signals Market Relief Amid De‑escalation
Big thanks to @johnauthers for including me in today's @business write-up. The shift to a blockade is good news for markets because it signals a shift away from war and possible catastrophic escalation to economic countermeasures. That's good news... https://t.co/hh4YxAnK3P
US Blockade on Iran Oil Shows Strategic Restraint
It takes courage to do a blockade and the US administration deserves credit for doing it. The key argument in favor of a blockade is that Iran is a relatively small oil exporter, so it doesn't have the power to...
Oil Doom Forecasts Wrong: Blockade Didn’t Spike Prices
One month ago, I wrote that oil price forecasts of $150 or $200 were fear-mongering and that a blockade was the way to go. We now have a blockade - an important and courageous step - and oil prices aren't...
War Blockade Deepens Iran's Rial Freefall, Sparks Capital Flight
The Iranian Rial was in freefall before the war, due to chronic economic mismanagement. The blockade will now amplify that by causing financial panic and capital flight. The parallel exchange rate will be falling as people try to convert savings...
Blockades Spark Panic and Capital Flight, Not Just Trade Halt
A successful blockade isn't just about stopping oil exports. It's about instilling panic in the population and causing capital flight. That's what happened in Russia, when fear of an embargo caused capital flight in 2022. The US has lots of...
Drone Threat to Hormuz Could Force Iran’s Oil Embargo
If Iran can stop Western ships through the Strait of Hormuz with a few drones, the mighty US Navy can embargo Iran's oil. Goal is to bring the mullahs to the negotiating table in good faith. Iran is a gas...
Front‑month Brent Under $100; Peace Deal Could Drop to $90
The oil price that matters is the front-month Brent futures contract (orange), which is now just below $100 per barrel. This is what people trade and where a peace deal will get priced if and when we get a deal....
Gold's Rise Shows It's No Longer Safe Haven
Gold is recovering but that's cold comfort for anyone who thinks of it as a safe haven. Gold is rising because the US and Iran are negotiating, which means it's trading like a high-beta asset, not a safe haven. All...
Blockade Aims to Crush Iran’s Economy, Force Negotiations
The goal of the blockade is to collapse Iran's export revenues and make it impossible for the regime to import anything. That should lead to deep recession, devaluation and hyperinflation. Ultimate goal is to bring the mullahs to the negotiating...
IMF/WB Summit Likely Triggers Further Oil Price Drop
The IMF/WB meetings are happening this week in DC. My best guess is that they'll be a catalyst for oil prices to fall further. A lot of people are coming to DC from across the world and will realize the...
