Macro Mondays – March 9, 2026

Episode: How High Will Oil Prices Go?

Hosts:
Andreas Steno Larsen & Mikkel Rosenvold

Overview

This episode centers on the extraordinary surge in oil prices due to escalating conflict in Iran and the resulting closure of the Strait of Hormuz. Andreas and Mikkel break down the mechanics of the oil market emergency, the macroeconomic and geopolitical knock-on effects, and the (lack of) market havens in a crisis. The episode is packed with actionable content and transparent reflections on how the hosts are navigating the rapidly changing landscape, with their trademark blend of seriousness and humor.

Key Discussion Points & Insights

1. Live Geopolitical Crisis Update

• Escalation in Iran:
  The conflict has entered its second week, with violence continuing but attacks becoming somewhat less intense than the initial outbreak ([05:20]).

  • The volume of daily attacks has stabilized, suggesting both sides are preparing for a longer conflict.

• Missed Off-Ramps for Peace:

  • Attempts at de-escalation, including a strange peace overture by Iran’s President Pishan, were rebuffed by both the US and Israel ([07:30]).
  • “We had sort of an opportunity, sort of an opening, which was flat out rejected. So that entire base case I had is killed. That’s the way it is.” – Mikkel ([06:50]).

• Regime Instability:

  • Power struggles continue in Iran: the religious (Revolutionary Guard) and secular factions diverge sharply, making diplomatic solutions harder ([08:40]).
  • A new Ayatollah has taken power, with personal reasons to be hostile to the US and Israel.

2. Market Mechanics: Oil, Shipping, and Strategic Reserves

• Supply Clogging, Not Shortage:

  • “We don’t have a lack of supply of oil. We have a lack of supply of shipping getting oil from A to B.” – Andreas ([09:36]).
  • Aramco’s production is paused in fields dependent on the Strait of Hormuz; storage and alternative pipeline options are limited.

• Strategic Reserve Releases:

  • G7 countries are considering (and disputing) an oil reserve release, but logistical barriers make immediate impact questionable ([12:49]).
  • Countries like Japan, South Korea, and India have 40–50 days of oil supply if the Strait stays closed; the situation will get critical by late March/early April ([11:19]).

• Winners and Losers:

  • Russia stands to benefit by selling oil from its "shadow fleet" of tankers, as Western and Asian buyers turn to alternative suppliers ([13:02]).
  • Potential sanction easing on Russian crude discussed to alleviate shortages ([14:06]).

3. US Policy & Military Response

• US Military Movements:

  • Trump has promised more naval assets to the Gulf, but reinforcements would take weeks to arrive ([15:18]).
  • Securing the Strait is daunting given the threat from drones and missiles.

• Lack of De-escalation Incentives:

  • Iran is not incentivized to reopen the Strait unless the US makes a significant move.
  • “I'm having a hard time seeing the off ramps for President Trump with all the posturing that’s been going on about unconditional surrender or fighting this to the end.” – Mikkel ([16:12]).

4. Macro Implications: Inflation, Growth, and the Business Cycle

• Pain Concentrated in Asia & Europe:

  • “The only country that can actually sustain this for a long time, it's the US from an economic perspective.” – Andreas ([11:50]).
  • Gas shortages will soon bite in South Korea and Japan; the Eurozone will suffer from imported high prices.

• Business Cycle Risk:

  • If the Strait remains closed past April 1st, the business cycle is at risk: “I'm tempted to say that the business cycle is over for this time. That's how important it is.” – Andreas ([14:30]).
  • Even a short conflict means a 0.5–1% GDP hit for major economies ([18:06]).

• Inflation Effects:

  • Immediate price passthroughs in the Eurozone, Japan, and South Korea; US remains more insulated ([17:30]).

5. Positioning & Trade Ideas

• Energy Stocks Underperforming:

  • Despite oil’s spike, energy stocks aren’t rallying. “We’ve seen no returns on those energy stocks since Monday last week… I don’t even think you’re able to seek shelter in energy stocks if this continues.” – Andreas ([23:26]).

• Commodities & ‘Hated’ Assets:

  • Gold is too crowded; best performance in the hosts’ portfolios has actually come from software and “hated” assets due to mechanical risk reduction by funds ([25:00]).

• Surprising Winner: Bitcoin

  • Bitcoin rallied sharply as short positions were unwound.

• Strategic Reserve Releases: Temporary Relief

  • Proposed G7 reserve releases would only alleviate shortages for a few weeks ([14:26]).

Notable Quotes & Memorable Moments

• On Market Forecasts Gone Wrong:
  “Maybe the spike that we saw in oil prices on Monday would prove to be the peak. I guess that’s the worst take since Napoleon decided to invade Russia, more or less.” – Andreas ([04:17])

• On Regime Dynamics in Iran:
  “So this is what really killed my hopes for a quick peace. Andreas, my analysis on Trump still stands… But on the other side of the aisle in Iran, you now have a new ayatollah. He lost his entire family last weekend. Is he going to be easier to negotiate with than [President] Pishan? I really doubt it.” – Mikkel ([08:23])

• On Reality for Import-Dependent Nations:
  “Japan, South Korea, India—they have 40, 50 days of supplies left if the Strait [of Hormuz] is closed... by mid-April, we’ll have big countries in trouble.” – Andreas ([11:19])

• On the Russian Oil Windfall:
  “We could very, very well be in a situation soon where there are lots of buyers of that oil. So the entire situation that President Trump worked so hard to create... now he’s creating buyers for that left and right.” – Mikkel ([13:02])

• Advice on Crisis Portfolio Construction:
  “If you really want to protect yourself against this de-risking, you need to buy the most hated stuff out there because you’ll get some mechanical tailwind from repositioning of these levered funds.” – Andreas ([25:35])

• Summing Up the Dilemma:
  “No shelter, no business cycle, no reasoning.” – Mikkel ([30:19])

• Moment of Humor:
  “What I'll promise is this. I will not shave my beard or cut my hair until there's an end to this conflict. So we'll have to see whether I'll turn into a madman over the coming weeks. Maybe it will be Macro Mondays with Michael Horseman and Chewbacca in a few weeks from now.” – Andreas ([31:08])

Listener Q&A Highlights

Q: How can the US or Israel de-escalate without enduring a hostile regime in Iran?
A: It’s unlikely in the near term; total regime change or revolution hasn't occurred, and the new leadership may be even less friendly. Trump may still attempt a bold reversal, but off-ramps are scarce ([20:30]).

Q: Would special forces targeting nuclear sites work?
A: It could happen, but it’s extremely risky and would not destabilize the regime fundamentally, just escalate hostilities further ([22:25]).

Q: Should investors buy Energy ETFs focused on non-Hormuz sources?
A: ETF performance has lagged. Even US/Europe-focused energy names have not provided shelter; near-term volatility could harm both underlying and stocks ([23:26]).

Key Timestamps

• Conflict Escalation and Missed Off-Ramp – [05:20] to [09:07]
• Market Mechanics, Oil, Shipping Bottleneck – [09:07] to [12:49]
• Winners: Russia, Floating Stockpiles – [13:02] to [14:26]
• Macro Risks & Energy Reserve Window – [14:26] to [17:14]
• Global Economic Impact & New Business Cycle Threats – [17:14] to [19:49]
• Q&A on Positioning & Macro Strategies – [19:49] to [28:32]
• Crisis Portfolio Construction & Humor Wrap – [30:09] to [31:26]

Takeaways

• The current oil market shock is more about logistics and geopolitics than a true lack of supply.
• Energy importer countries face a ticking clock—supplies and floating reserves may run critically low in weeks.
• Investors have found little refuge in traditional oil plays; surprises in software and digital assets are a result of forced de-risking.
• Unless the Strait of Hormuz reopens soon, a global business cycle downturn is likely.
• No clear macro playbook exists—buying “hated” assets may be the best short-term hedge, but all bets are off if the conflict drags on.

Macro Mondays continues to track the situation, promising rapid updates and actionable (even if sometimes “maybe good, sometimes maybe shit”) ideas for listeners.