Spot Oil Outpaces Futures as War‑end Expectations Rise
Lots of people say the disconnect between spot and futures prices in oil means markets are broken. No! Spot Brent at $140 (white) is above the June future (yellow) because markets think the war ends soon and tanker traffic comes back. That's reasonable... https://t.co/v9BliK22Ha https://t.co/OCKJJLZGIi
Turkey's $40bn Lira Defense Mirrors 2025 Intervention
Factoring in gold, I estimate Turkey has intervened to the tune of $40 bn in March 2026 to defend the Lira. That's the same as in March and April 2025 after the arrest of Ekrem İmamoğlu, an episode that ended...
Embargo Preferred Over Military to Stabilize Oil Prices
Taking Kharg Island or bombing powerplants takes Iran's oil off global markets for a long time. That spikes oil by a lot more and is what markets fear most. Better to do an embargo and take Iran's oil off the...
US Election Clock Forces Push to End War, Brent Slides
Brent has fallen sharply as the US sounds increasingly like it just wants to declare "mission accomplished" and end this war. I do think the midterm elections later this year mean the US is on a very tight timeline and...
Industry Lobbying Inflates Oil Forecasts, Not Reality
When the G7 price cap was being negotiated in 2022, one US bank had an oil forecast of $380. That was the oil sector talking. It hates interference in its business. It's the same now. $150 or $200 forecasts...
Turkey's Overheated Growth Fuels Deficits, Risks Shock
The danger for Turkey is always the same. The current government pushes growth way above the speed limit, which leads to a large current account deficit. Then a shock like high oil prices hits and things run out of control....
Turkey's Reserves Plunge, Echoing 2025 Devaluation After Mayor's Arrest
Turkey's reserve losses rival March 2025 after the arrest of Ekrem İmamoğlu. They're up in the most recent data point only because the central bank used its gold to get access to more foreign exchange. In March 2025 this ended...
Oil Upside Limited Even With Iranian Embargo, Brent at $115
I'm starting a new weekly video every Saturday morning on markets and macro. The first episode was yesterday. I discussed why upside to oil is limited even if we embargo Iranian oil. Brent at $115 already prices significant disruption. You...
Embargo Iranian Oil; Cut Funding to War‑fueling Regimes
I support an embargo of Iranian oil. The reason is Russia. We never embargoed Russia. If we had, there's a good chance it wouldn't still be wreaking havoc in Ukraine. You just can't allow the life blood of these regimes...
Dollar Weakness Paused; Brazil Set to Surge Post‑war
The Dollar downtrend has now been meaningfully disrupted. But that doesn't mean it's over. As soon as this war ends - and it must because of the midterms - Dollar weakness will reassert itself. EM commodity exporters like Brazil will...
Saudi Oil Revenues Rise, No Gold‑selling Crisis
There's lots of misinformation at the moment, including the idea that big Gulf countries like Saudi Arabia are having to sell gold. Saudi Arabia's revenues from oil exports are actually up, because the rise in oil prices more than offsets...
Turkey Alone Sells Gold Amid Fragile Currency Peg
A recurrent theme since war began is that central banks are selling gold. That's mostly not true, but there is one central bank that did. Turkey's gold holdings have fallen 50 tons in recent weeks. But Turkey is an outlier...
War Risks Renew Bond Market Crises Across Europe
The last time we had a supply shock and oil prices rose - in 2022 - Italy and Spain got the ECB to cap their yields to survive and the UK bond market blew up in the LDI crisis. If...
U.S. Gas Prices Up 30%, Still Below $5
Not all oil prices are created equal. There's only one that matters: what Americans pay at the pump. That price is up 30% from before the war (bottom right). That's up, but - at $4 a gallon - we're nowhere...
US Financial Markets Expose Vulnerability in Global Conflicts
The US' Achilles heel in this conflict - much as in the tariff confrontation with China a year ago - is financial markets. Those are flashing red as uncertainty mounts. We have lots of skeletons in the closet in private...
Rising Nominal Rates, Falling Real Rates Boost Gold
Many are attributing the fall in precious metals to rising real interest rates. That's wrong. Real rates (red) have fallen. The rise in nominal interest rates (black) is all about break-even inflation (blue) rising. That's fundamentally good for gold... https://t.co/5amZtGPz0B https://t.co/t11fMQc7JV
War Spikes Oil, Gold Falls, Bonds Surge Globally
Many things are happening simultaneously. War in the Middle East is spiking oil prices, gold has fallen and all the uncertainty is pushing up long bond yields, like in Japan where they're back to the highs. I'll talk about all...
Weekly Live Show Launches: Oil, Gold, Yields Explored
I'm going to start doing a weekly livestream on Saturday mornings at 9 am (ET). Tomorrow will kick things off with a discussion of: (i) impact of an Iran embargo on oil prices; (ii) what's going on with gold and...
Iran Oil Embargo Threatens US Treasury Basis Trade
We need to embargo Iranian oil to end this war. Biggest risk from that isn't catastrophically higher oil prices, but vulnerabilities in US financial markets due to the basis trade in the Treasury market and private credit. Those are our...
Ukraine's Baltic Embargo Shows EU Missed 2022 Opportunity
While everyone is focused on an Iran oil embargo, Ukraine is embargoing Russian oil in the Baltic. If Iran can close the Strait with drones, then Ukraine can certainly shut down Russia's ports in the Baltic. If only the EU...
Krugman Explains Economic Impact of Iran Oil Embargo
If you're interested in what an Iran oil embargo means, how it would work, how it would be enforced, how high oil prices might rise as a result, what would happen to Iran's economy, I discussed all this with @paulkrugman...
Skipping Oil Embargo Prolonged Ukraine War, Says Analyst
Key mistake the West made after Putin's invasion of Ukraine was not to embargo Russian oil. The result is that - more than 4 years later - Russia is still waging war with appalling loss of life. A short, sharp...
Blockade Risks Spike Prices, Yet Market Already Priced In
Key pushback to a blockade is that it might spike oil prices. Iran's 2 million barrels per day could spike oil prices by 20% if they go offline, but - with Brent already up 60% from before the war -...
Saudi Lobbying US to Prolong War for Oil Profits
The Saudis are lobbying the US for war to continue. On the surface, they want Iran to be properly defeated, but there's another reason. They're making lots more money now than before the war, even with somewhat lower export volumes...
Retail Influx and Hedge Fund Margin Calls Drove Gold Slump
Why has gold tumbled? Two reasons: (i) the big rally pre-war sucked in lots of retail investors who're more skittish than the previous buyer base; (ii) volatility meant hedge funds had margin calls, so sold profitable positions like gold to...
Iran's Strait Fees Prompt Calls for Counter-Embargo
We go to war and end up getting embargoed by Iran, which is now charging protection fees for oil tankers to go through the Strait of Hormuz. That's nuts. If Iran can embargo us with a couple of drones, we...
Oil Prices Stay High Amid Ongoing Iran Conflict
I talked to @kairyssdal on @Marketplace yesterday about the latest developments in oil and what to make of the latest switcheroo in the conflict with Iran. I don't think this conflict is over by a long shot, so I doubt...
Oil Prices Fueled More by Conflict Expectations Than Supply
The oil price is a combination of two things: (i) a physical shortage of oil in the here and now; and (ii) expectations for how long this conflict lasts. The latter channel is by far the more important one in...
Trump’s Self‑negotiation Lost; China Won 2025 Standoff
At the height of the tariff stand-off with China in April 2025, Trump was essentially negotiating with himself - threatening escalation and then pulling back - while China stayed silent. We're at that stage now on Iran. China won the...
Brent at $100 Relieves Political Fear of High Oil
Brent is down to $100. The latest de-escalation signal is worth about as much as the escalation signal Saturday night, but - underneath all that - it's clear that high oil prices scare this administration as much as they scared...
Oil Prices Near Peak Due to Hormuz Risk Premium
In this podcast conversation with @paulkrugman from last week, we debate my view that oil prices are near their peak because large risk premia are priced into oil that embed substantially reduced tanker traffic through the Strait of Hormuz. Watch...
Both Administrations Fear High Oil, Keep Prices Low
One thing the Trump and Biden administrations share is a fear of high oil prices. That means we can't get $150 or $200, as evidenced by Trump's latest about-turn today. Important to look through the alarmist hype and remember the...
Oil Prices Have Peaked, Shock Explained
People had lots of questions about the oil shock after this weekend's podcast with @paulkrugman, including on all the different types of oil and which one is most important. I've been pounding the table that oil prices have peaked, so...
US‑backed Iranian Oil Flow Dampens Price Spike
After all the hype over the weekend about escalation, you'd have thought oil prices would spike on tonight's open. But no sign of that. What matters are actions, not words. And those are that Iranian oil is flowing through SoH...
Oil Price Panic Scenarios Need Impossible Export Collapse
Of course you can paint all kinds of horror scenarios for oil prices. But they require two things: (i) a collapse in oil export volumes out of the Gulf from current levels near 10 mmb/d; (ii) a price elasticity of...
US‑backed Tankers Keep Loading at Kharg Despite Tensions
Threats are flying between the US and Iran, but what matters for oil prices isn't words but deeds. Those deeds are that big oil tankers with capacity of 2 million barrels keep docking at Kharg Island to fill up. This...
Bombing Iran's Plants Equals De Facto Embargo, Says Analyst
If the US bombs Iran's power plants, there's no power to fill up oil tankers, so it's an embargo. Same with taking Kharg Island by force. Iran will stop exporting oil, so it's an embargo. Much better to do an...
Rising Short‑term Rates Threaten High‑debt Nations
Short-term rates (black) are rising as markets settle in for a long war. That pushes up long-term yields, a problem for any high-debt country out there. The last time we saw this in 2022, Italy and Spain needed ECB bailouts...
Markets Tighten on Trump Amid Bond, Credit Strain
Markets have been the ultimate constraint on Trump and they're starting to look very iffy, especially where the US bond market (bottom left) and private credit (bottom right) are concerned. If the US escalates the war with Iran, markets will...
Brent’s $110 Price Already Reflects Hefty Risk Premium
There's so many people talking about oil going to $150 or $200, but those numbers are a stretch because Brent around $110 already embeds a big risk premium. Big thanks to @paulkrugman for having me on his podcast to talk...
Markets Restrict Trump's Aggressive Moves Amid Distressed Conditions
Markets have been the ultimate constraint on Trump. It was like that in April 2025 when China tariffs went to almost 150% and arguably also in January 2026 over Greenland. Markets are now very distressed. Trying to take Kharg Island...
Nobel Laureate Simon Shaped G7 Russia Price Cap
This @ProSyn column by @baselinescene is a must-read. Before he won the Nobel for economics in 2024, Simon was deeply involved in design and execution of the G7 price cap on Russia. Few other voices carry as much authority now...
Supply Shock History Warns High‑Debt Nations of Crisis
Last time the world faced a big supply shock - after COVID in 2022 - the Yen went into a depreciation spiral, Italy and Spain needed ECB bailouts and the Gilt market blew up in the UK. This environment is...
Embargo Iranian Oil, Not Seize Kharg, to Open Strait
Headlines that the US is thinking about taking Kharg island are pushing up Brent (lhs) and causing stocks to tank (rhs). Taking Kharg doesn't reopen the Strait and could turn into a fiasco. Better to embargo Iranian oil and force...
Waiting for Italy, France to Trigger EU Debt Relief
Feeling listless and irritable as I wait for Italy (lhs) to call for the ECB to activate its TPI tool because markets are being anti-Italian and France (rhs) to call for joint EU debt issuance on account of "force majeure"...
Rising 10y10y Yield Shows Cost of Fiscal Recklessness
The 10y10y forward Treasury yield (red) is rising towards its historical highs. If only we'd brought our deficit under control after COVID, then we'd now have more gas in the tank for emergency spending. But we didn't. Reckless fiscal policy...
G10 Hawkish Policies Weigh on Dollar Strength
The reason the Dollar isn't stronger is because markets price a much more hawkish policy shift by central banks in the G10 compared to the Fed. That's moving rate differentials against the Dollar and tempering what otherwise would be an...
Oil Embargo, Not Escalation, Is War’s Off‑ramp
This war needs an off-ramp. That isn't military escalation or just declaring "mission accomplished." Instead, it's an embargo of Iran's oil. That'll throw Iran into chaos and the upside for oil prices is limited given how much they've already risen... https://t.co/t20Z7S85OZ...
Oil $200 Price Unrealistic; Even $150 Doubtful
Of course it's possible that oil goes to $200. But that kind of price level basically assumes a return to full shut down for all oil coming out of the Persian Gulf and a very low price elasticity of demand....
US Waivers De‑Stigmatize Russian Oil, Boosting Putin
Big thanks to @Aaron_Krolik for including me in this great @nytimes story on how Russia is a major beneficiary from the sharp rise in oil prices. Temporary US waivers of Russia sanctions are de-stigmatizing Russian oil and giving Putin a...
