Amos Hochstein Talks Oil Markets, Iran War

Summary

Bloomberg Talks: Amos Hochstein Talks Oil Markets, Iran War

Date: May 5, 2026
Host: Joe Mattey, Carol Massar (Bloomberg)
Guest: Amos Hochstein (Former Middle East Senior Adviser, U.S. Diplomat, Energy Markets Expert)
Location: Milken Global Conference, Beverly Hills

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Episode Overview

This episode features an in-depth conversation with Amos Hochstein about the ongoing turmoil in global oil markets amid the Iranian war, the disconnect between paper and physical oil prices, concerns about long-term supply security, and how governments and industries should adapt to structural changes in global energy flows. Hochstein draws on decades of diplomatic and market experience to provide a candid, sometimes sobering perspective on current crises and future challenges, highlighting both the immediate market mechanics and the broader geopolitical shifts driving rapid changes.

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Key Discussion Points & Insights

The Oil Market Disconnect: Paper vs. Physical Reality

[00:43 – 02:09]

• Oil Prices Are Deceptively High:

  • Despite talk of "lower" oil, prices are at historically high levels.
    • “Nobody thinks of 110 ever as a low oil price.” (Amos, 01:08)
    • Brent oil at $110 (on paper), while physical barrels trading much higher, sometimes up to $170.
  • The Wall Street “paper market” is disconnected from the actual “physical market”.
    • “The physical market and the stock market are divergent at the moment.” (Amos, 01:26)
    • Real, delivered oil is scarce; the price you see on Bloomberg is merely notional.
    • “That barrel of Brent oil is selling for 150. 145 some days. 155 even. 170.” (Amos, 01:56)

• Supply Crisis:

  • Not enough oil moving due to war and risk along tanker routes.
    • “There is not enough oil. We're in a demand destruction in certain countries, but they're poor countries first. So stock market doesn't care.” (Amos, 02:09)
    • Disruption in shipping—no tankers moving to Asia or Europe, despite official claims.
    • “Tankers are not moving despite the fact that we have government officials say they are moving. They're not. So that means that there is no tankers on the water… None. Zero.” (Amos, 02:43)

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Long-Term Geopolitical & Economic Shifts

[03:00 – 05:29]

• Permanent Changes Ahead:

  • Global economy and supply security “changed forever.”
    • “It feels like it's a very different global economy going forward.” (Carol, 03:18)
  • Drawing historical parallels:
    • 1970s oil crisis led to strategic reserves, the creation of the International Energy Agency.
    • COVID changed global attitudes about supply chain resilience.

• Iranian Control of the Strait of Hormuz:

  • “For the foreseeable future” Iran controls a critical oil chokepoint.
    • “The Strait of Hormuz is under Iranian control for basically for the foreseeable future… Regardless of what the deal says eventually…” (Amos, 03:50)
    • Western officials may deny it, but regional actors “know the Iranians are now going to control this.”

• Infrastructure & Stockpiles Needed:

  • Countries must invest to bypass the Strait and expand strategic oil and jet fuel storage.
    • “You got to build out infrastructure that does two things. One, bypasses the Strait of Hormuz. … The redundancy is important. Second, build out more storage facilities in destination countries.” (Amos, 04:08)
    • More storage suggested in Tokyo, Delhi, China—and expanded jet fuel storage at airports globally.

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Consumer Impact & Summer Projections

[05:10 – 05:29]

• Expensive Summer Travel:
  • Skyrocketing costs for flights, driving, and RVs due to fuel shortages.
    • “If you're an American listening… plan for a very, very expensive [vacation]… Driving is going to be very expensive and so will RVs. RVs will be even more expensive because diesel is through the roof and jet fuel is.” (Amos, 05:11)

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Iran, Sanctions, and War Rationale

[05:29 – 09:01]

• How Did We Get Here?

  • Hochstein says U.S. attempts to pressure or reform Iran were not new and not unique to current administration.
    • “If we're going to war against every country that hates America, then there's a list…” (Amos, 05:54)
    • Reference to the abandoned 2015 JCPOA nuclear deal as a missed opportunity to avoid today’s conflict.

• No Clear American Rationale:

  • Skepticism about official U.S. explanations for war.
    • “Nobody really knows why we're in this war. No American really knows why we're in this war.” (Amos, 07:05)
  • The Biden administration had pushed for diplomatic solutions, war was not inevitable or necessary.

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Iranian Oil Logistics Under Fire

[07:13 – 08:58]

• Iran Managing Under Sanctions & War:

  • Iran’s expertise allows them to keep some oil flowing or shut down fields in rotation, even under duress.
    • “They have remarkable engineering talent. … There is a way… do wartime economizing. … Shut down one field, do some maintenance… You can do a rotation.” (Amos, 07:46)
    • Unlike predictions of “underground infrastructure blowing up,” Iran can avoid catastrophic shutdowns.

• Economic Strain Real but Sustainable (For Now):

  • Iran faces “devastating economic pain”—but can endure, for now.

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Global Shockwaves: Who Suffers First?

[09:01 – 09:41]

• Shortages Start in Poorer Countries:

  • Physical shortages already occurring in less wealthy nations.
    • “We have physical shortage already, but it just in countries we don't care about. … But then it'll go to middle income countries … and then it comes here.” (Amos, 09:01)
  • Eventually, shortages and costs “come home” to developed economies.

• Airlines & Travel: Unavoidable Global Impact:

  • Even if the U.S. has oil/jet fuel, refueling abroad will be an issue.
    • “You want to fly out of the United States, you can say we have oil, we have jet fuel. Right? Okay. Can't take it with you.” (Amos, 09:38)

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Notable Quotes & Memorable Moments

• On Market Mistakes:

  • “$110 of Brent oil is only available on a Bloomberg terminal… You can't buy that barrel…” (Amos, 01:54)

• On the “Ceasefire” Narrative:

  • “We're not really in a ceasefire because missiles are flying. That's usually the definition of a ceasefire. Those missiles don't fly two days in a row.” (Amos, 02:15)

• On Strategic Change:

  • “Nobody in the Gulf will believe [the deal]… They know the Iranians are now going to control this.” (Amos, 03:58)

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Key Segment Timestamps

• Paper vs. Physical Oil Discrepancy: 00:43–02:09
• Strait of Hormuz Under Iranian Control: 03:31–04:40
• Rising Travel Costs for Consumers: 05:10–05:29
• War Rationale and JCPOA: 05:39–07:14
• Iranian Oil Handling / Sanctions: 07:13–08:58
• Shortages and Global Ripple Effects: 09:01–09:41

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Conclusion: What Listeners Need to Know

Amos Hochstein paints a sobering picture of a world where geopolitical shocks have permanently altered energy markets. Expect higher costs, supply chain reconfiguration, and a long-term strategic scramble for both oil and security. Physical shortages are already hitting the most vulnerable countries and are poised to ripple up the economic ladder.

Bottom Line: The gap between financial headlines and physical market reality grows daily. Global infrastructure and storage must adapt—and so must travelers and consumers. As Hochstein bridges history, markets, and policy, he urges both humility and preparation for a much tougher energy era ahead.

Transcript

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[Joe Mattey]

Amos Hochstein is with us here at Milken. We should remind everybody we're in Beverly Hills today, which is a bit different at the Milke Global Conference. And of course, former Middle east senior adviser to President Biden and a lifelong diplomat with a real sense of nuance when it comes to the energy markets. Almost. It's great to see you. Welcome back to Bloomberg.

[Amos Hochstein]

Thank you. It's always good to be here.

[Joe Mattey]

Many questions about how we rationalize what we're seeing right now. The fact that oil is lower by simply. Even though Iran is shooting at ships. But one statement from the government that the cease fire remains in place and we're selling oil today. Is that the move?

[Amos Hochstein]

Well, two things. One, remember that we're saying that oil is lower. Yes. Oil's at 110.

[Joe Mattey]

Well, that's right. We're still in so digits.

[Amos Hochstein]

So one, we're at 100.

[Carol Massar]

At the start of the year it's 60.

[Amos Hochstein]

60. So we're basically almost double where we were. And we're talking about. Nobody thinks of 110 ever as a low oil price.

[Joe Mattey]

Well, that's fair.

[Amos Hochstein]

That is a very high.

[Joe Mattey]

Directionally speaking though.

[Amos Hochstein]

But, but here's what's happening. The market really wants to rally. They don't like bad news.

[Carol Massar]

The stock market.

[Amos Hochstein]

The stock market, totally. The stock market. The physical market and the stock market are divergent at the moment. We may get convergence at some point. We probably will be. We don't know if the convergence will be when the stock market realizes where the real physical market actually is or that the war actually ends. We have an opening and then the physical market will go to where the stock market is. But they are not in the same place. $110 of Brent oil is only available on a Bloomberg terminal.

[Joe Mattey]

I know where you're going.

[Amos Hochstein]

You can't buy that barrel. That barrel of Brent oil is selling for 150. 145 some days. 155 even. 170.

[Carol Massar]

Right.

[Amos Hochstein]

Because it's only paper. It's people on Wall Street.

[Joe Mattey]

The real market.

[Amos Hochstein]

The real market right now is that there is no, not enough oil. We're in a demand destruction in certain countries, but they're poor countries first. So stock market doesn't care. So we are in a place where every day that goes by now with fake headlines and what happened today at the Pentagon is fake headlines. We're not really in a ceasefire because missiles are flying. That's usually the definition of a ceasefire. Those missiles don't fly two days in a row. We don't have a ceasefire in Lebanon because we still have fighting in Lebanon despite the fact that we say it's a ceasefire. And tankers are not moving despite the fact that we have government officials say they are moving. They're not. So that means that there is no tankers on the water going to Asia, going to Europe, none, zero. And so that is going to. That that bite will have will deepen every day.

[Carol Massar]

Okay. So I guess I don't know how do you then look at things longer term? Because I think what most folks are also thinking off of this war, the things are going to be changed forever. In terms of people thinking about. We talked about this yesterday about countries access to strategic commodities, whether it's oil, whether it's, you know, really ensuring that their supply chains are solid, that they can't be disrupt. And that means a lot of domestic production. That means probably higher costs around the world. It feels like it's a very different global economy going forward.

[Amos Hochstein]

So I think that should we prepare for that? I think we will prepare for that. And in fact some of it is already happening.

[Carol Massar]

Yeah.

[Amos Hochstein]

So this is similar to two other events. One is the 1970s which led us to build a strategic reserve created the iea, the International Energy Agency. Structures of the energy market were different moving Forward after the 1970s. They were very different before changed forever. Covid changed how we think about supply chains. Recently got shocked by the supply chains which is why we started stockpiling. We started thinking about making sure that we didn't live on, you know, one supplier, etc. And now what's going to happen is the Strait of Hormuz is under Iranian control for basically for the foreseeable future regardless of nobody in the market should look at what the deal says eventually and believe it on straits. Iran will control the straits. Everybody in Washington may will believe it. Nobody in the Gulf, no one in the Gulf will believe they know the Iranians are now going to control this. What does that mean? It means you got to change Carol. What you said you got to build out infrastructure that does two things. One, bypasses the Strait of Hormuz. It's possible to do. Yeah, it's not even that expensive. A few billion dollars, but a few billion dollars in what we're talking about doesn't cost very much. The redundancy is important. Second, build out more storage facilities in destination countries. So we already have some storage in places like Singapore, but build them, build them out in Tokyo, in Delhi and China already has. Not just of oil but of jet fuel. Airports should probably hold a little bit more jet fuel capacity as Cliffthansa canceling

[Carol Massar]

flights for the summer.

[Amos Hochstein]

Exactly. Not just them. I think everybody, if you're, if you're, if you're an American listening to this and you think you're going on vacation this summer, plan for a very, very expensive one. Driving is going to be very expensive and so will RVs. RVs will be even more expensive because diesel is through the roof and jet fuel is.

[Carol Massar]

Can I ask you why this is happening right now? If it was President Biden and you were advising him, you know, were you guys pushing to do something to this effect in Iran?

[Amos Hochstein]

No.

[Carol Massar]

They have been a threat for how many decades? Right.

[Amos Hochstein]

Look, we used to joke whenever people come and say, oh, my God, we're.

[Carol Massar]

But we've had, we've had people come on and say, listen, this was long overdue. It was time to do something. We knew this was a country that hated America.

[Amos Hochstein]

Yes. By the way, they're not alone. If we're going to war against every country that hates America, then there's a list that we may have to go to war for a few more months, a few more years. North Korea. Funny.

[Carol Massar]

Not funny.

[Amos Hochstein]

Actually, North Korea is doing a lot on nuclear. They hate America. We're not going to war there. Iran is a place where we, first of all, we had a deal with Iran to not go to a nuclear weapon called the JCPOA in 2015. President Trump got out of that in 2019. Probably should have stayed in because the deal we're talking about now that we will get is going to be very similar to that. There'll be some cosmetic changes. Be very similar. We didn't have to do this war. I understood some of the rationale of the June war several months ago. They were cheating on the nuclear side. If they're not going to go back into a deal, a limited strike. And the Iranians didn't strike back and the proxies didn't strike back. They didn't close the straits. It was limited in scope, it was limited in time. And so I understood that this war was a moment of opportunity. There were a lot of protests that were rising up and President Trump said, help's on the way, and all of a sudden got painted into the corner and.

[Joe Mattey]

Yeah.

[Amos Hochstein]

And then started coming up with reasons why we're in this war. Nobody really knows why we're in this war. No American really knows why we're in this war.

[Carol Massar]

I don't even think.

[Amos Hochstein]

Yeah, but here, that doesn't matter from the administration. But they changed storage, though.

[Joe Mattey]

I want to ask you about what's about to happen in Iran when it comes to their own oil storage, because there's nowhere to put the oil at this point. They're loading tankers almost. They're putting oil supposedly on trains to China. The president says the whole underground infrastructure is going to blow up, which I'm not sure is true. But if they have to start shutting wells, that's going to be a pretty major moment and something that could happen in days or weeks. Do you.

[Amos Hochstein]

Well, first of all, it was supposed to happen already several days ago.

[Joe Mattey]

So that's.

[Amos Hochstein]

So it didn't happen. Here's the why not? Because I've dealt with. There is real economies of oil. Where you look at the Baker Hughes manual. What do you do in this situation? And there's wartime and stress time. They're very different. I was spent. I spent a lot of time in southern Iraq trying to help them refix and so on. And if you went down there, no manual told you to do it, they were. They should have been shut in. There is a way. Iran is a very good engineering country. They have remarkable engineering talent. They've been in the oil business 100 years. They know what they're doing. When we did them, I was in charge of the sanctions 15 years ago, so 2012. And we took them down to like 900,000 barrels of. Of exports. And instead of doing all of what President Trump suggests, you know, things blowing up and just shutting everything down, there are ways for them to do wartime economizing. Right. So you shut down one field, do some maintenance on it, then you bring it back, you shut down the next one. You can do a rotation, you can put. You could set fields on fire, which is a by design, which doesn't put any pressure on the pipes below ground. Wow. I don't expect to see any explosions. They are hurting economically, they are devastating economic pain in Iran.

[Carol Massar]

And yet here we are still at war with them. This is.

[Amos Hochstein]

I mean, they can handle the pain. I'm just saying they can handle the pain. And their view is, how long can you handle the pain? And I'll tell you this, we're going towards a cliff on oil and oil products by the end of this month. Physical shortages. We have physical shortage already, but it just in countries we don't care about. So then they, they will, right, because they're poor.

[Joe Mattey]

Yeah.

[Amos Hochstein]

But then it'll go to middle income countries like Vietnam and Thailand. Then it goes to Japan and Korea and then it comes here. And here's the thing. You want to fly out of the United States, you can say we have oil, we have jet fuel. Right? Okay. Can't take it with you.

[Joe Mattey]

Wow.

[Amos Hochstein]

When you fly out, you got to be able to refill somewhere else.

[Carol Massar]

It's already making its way through manufacturing supply chain like you are feeling it.

[Joe Mattey]

And that's the airlines, when it comes

[Amos Hochstein]

to jet spends a lot of money, hundreds of billions of dollars which is not dependent on. But they're not dependent on consumer. What happens when consumers say I can't spend this, I have no money. Almost.

[Joe Mattey]

Thank you. Great to have you on Bloomberg. I hope Milken treats you well. Optimism alongside Carol Massar, I'm Joe Matthew. This is Balance of Power live from L. A only on Bloomberg.

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