The HC Commodities Podcast
Episode Title: Molecule Contagion with Jeff Currie
Date: March 18, 2026
Host: Paul Chapman, HC Group
Guest: Jeff Currie Carlisle
Overview
In this urgent "emergency" episode, host Paul Chapman is joined by renowned commodities expert Jeff Currie Carlisle to analyze the fallout from the escalating crisis in the Gulf, particularly the severe disruption of energy flows through the Strait of Hormuz. The discussion centers on the unprecedented physical damage to oil infrastructure, the schism between physical and financial oil markets, implications for global supply chains, and the prospects for lasting geopolitical, economic, and commodity market shifts. The concept of "molecule contagion"—the spread of supply-side shocks throughout the world—anchors much of their conversation.
Key Discussion Points & Insights
1. The Situation in the Strait of Hormuz
[01:16 – 06:07]
- Extent of the Disruption: The Straits are not entirely closed; Chinese and increasingly Indian barrels are moving but Western flows are highly restricted.
- Comparison to Red Sea Crisis: US military efforts failed to fully restore flows after Houthi attacks in the Red Sea. Expecting a swift military solution in Hormuz is unrealistic.
- Severity & Duration: Inventories, previously swollen, are rapidly depleting. If disruption persists even a few weeks more, global oil markets face a perilous crunch.
- Physical Damage: Wells and critical infrastructure across the Gulf have been shut-in or hit, like the Pars gas field, portending lasting sectoral damage.
Notable quote:
“SPR is a drop in the bucket. It's not going to do anything... Even if you had a ceasefire tomorrow, you've shut in wells all over the Gulf and the damage is substantial.” — Jeff Currie Carlisle [04:03]
2. The Physical–Financial Disconnect
[06:07 – 09:24]
- Complacency in Financial Markets: Financial oil prices and equity markets lag reality; the impact of the crisis is underrecognized.
- Denial Phenomenon: Investors regularly dismiss the scale of disruptions (“so bad they can't believe it could happen”), as seen with COVID.
- Imminent Convergence: The misalignment between fiscal (i.e., physical barrel) and financial markets is becoming unsustainable, with convergence expected in “days, weeks.”
Notable quote:
“You can print money, you can print bonds, but molecules you can't. Central banks have unlimited liquidity... Once your storage is gone, that's it, you're done with your liquidity. It's game over.” — Jeff Currie Carlisle [08:39]
3. Comparing to Past Shocks: COVID & Historical Oil Crises
[07:24 – 13:05]
- Mirror-Image Shock: The current shock is as large as COVID but on the supply side. COVID required crushing supply; today, demand will be forcibly reduced to meet shrunken supply.
- No Policy Fix: Only restoring physical supply can solve the problem—unlike financial market crises, you “can’t print molecules.”
Notable quote:
“The size of this shock is about the same size as the COVID shock, but it's a supply shock as opposed to a demand shock... It's just a physical reality. You cannot print molecules.” — Jeff Currie Carlisle [07:53]
4. Contagion and Cascading Effects
[13:05 – 15:08]
- “Molecule Contagion”: The disruption is spreading globally, moving through global supply chains and impacting diverse sectors (plastics, fertilizers, jet fuel, etc.).
- Vulnerability of Developed Markets: In the 1970s, substitutions were possible (cars, trains, switching fuels); today’s economy is less flexible, more reliant on petrochemical products.
Notable quote:
“It's more painful to have supply come down than demand come down... The impact on global supply chains is going to be significant and it's going to be much more painful this way.” — Jeff Currie Carlisle [12:32]
5. Medium and Long-Term Geopolitical Shifts
[15:08 – 19:42]
- Deglobalization and Bloc Formation: The crisis accelerates the shift toward “blockatization” — China and the US forming competing spheres.
- Europe’s Predicament: Squeezed by sanctions and incentives to de-dollarize, facing a crisis over energy sourcing.
- Currency and Gold Flows: Flight from dollar-denominated assets into gold as a hedge and symbol for regaining control of national destiny.
- Energy Security Over Green: Renewables, nuclear, and North Sea production gain urgency—not for climate reasons, but for energy security.
Notable quote:
“What you saw in gold was: take your own destiny into your own hands by owning gold and not being exposed to anybody's central bank.” — Jeff Currie Carlisle [17:45]
6. China’s Strategic Position
[19:42 – 22:11]
- China’s Energy Insulation: China now draws enough oil from aligned states (Russia, Iran, Venezuela, Africa) to be near energy independence, with ample inventories.
- Renewables Leadership: China dominates clean-tech manufacturing, enhancing its position in a world hit by oil shortages.
- Strategic Reserves: China’s reluctance to deploy its SPR signals its readiness to weather extended turmoil.
Notable quote:
“China is pretty close to being energy independent when you take in all of its satellites... They can ride it out.” — Jeff Currie Carlisle [20:13]
7. Risks of Export Bans and Dollar Dominance
[22:54 – 25:48]
- US Policy Dilemmas: Potential for US export bans (oil, natural gas) in response to political pressure—could backfire spectacularly, sending Brent prices soaring.
- End of Dollar Hegemony: Perceived decline in US military and economic dominance; proliferation of settlement in non-dollar currencies (yuan, gold).
Notable quote:
“I'd be very cautious about shutting the exports because... Brent will just explode under that scenario. And then you got to think about the ramifications to the US...” — Jeff Currie Carlisle [23:27]
8. Asset Rotation and the New Supercycle
[25:48 – 31:21]
- Historical Precedents: Major geopolitical shocks prompt surges in “real” (asset-heavy) sectors—e.g., post–9/11 shift from tech to commodities, enabled by China’s WTO entry.
- Energy & AI: Modern AI/data centers are only as durable as energy supplies; true “AI dominance” requires energy security.
- Commodity Trading Boom: The shift to physical asset hedging and reliance on robust supply chains will intensify, rewarding commodity traders with physical footprints.
Notable quote:
“AI dominance is essentially energy dominance. You can't have one without the other... If you can’t turn on the data centers, it’s meaningless.” — Jeff Currie Carlisle [27:06]
9. Market Complacency & The Coming Reckoning
[31:21 – 34:23]
- Denial Persists: Equity and paper markets have yet to price in the true scale and duration of the disruption.
- Cost to Rebuild: Even if hostilities cease, the cost and time to restore Gulf infrastructure is enormous.
- Lessons from History: Past crises (2000 tech bust, 2008 financial crisis, COVID) saw stock markets bounce back; this time could be different, with a “lost decade” for certain sectors.
Notable quote:
“I think the mistake... in the equity market is that it always comes back... But this time it's going to be the big producers of heavy assets. Halo—heavy asset, low obsolescence.” — Jeff Currie Carlisle [32:10]
10. What to Watch: The “Air Pocket” in Global Supply Chains
[37:35 – 40:41]
- Physical–Paper Market Convergence: The key near-term indicator is when paper benchmarks (futures) catch up to sky-high physical (Platts) markets.
- Supply Chain Turmoil: Dislocated ships, broken supply chains, and “air pockets” will transmit shocks from Asia and the Middle East into Europe and the US.
- Investor Implications: Urges listeners to watch physical prices and market stress points as leading indicators of broader market pain.
Notable quote:
“The molecule contagion is occurring at the physical level regardless of what's happening at the paper level... It's an air pocket in global supply chains and it's coming your direction.” — Jeff Currie Carlisle [38:49]
11. Private Credit and Market Structure
[40:41 – 42:31]
- Credit Markets: Boom in private credit (non-bank) markets is less systemic than 2008, but highlights broader risks of “being short volume” in this environment.
- Physical Over Financial Risks: The gravest dangers now stem from physical shortages, not financial contagion.
Notable quote:
“I think the key point here is focus on what's happening in the physical markets because that's the one I think that is more concerning.” — Jeff Currie Carlisle [42:10]
Memorable Quotes & Moments (with Timestamps)
- “You cannot print molecules. The point I was saying is yes, you can print money, you can print bonds, but molecules you can't.” — Jeff Currie Carlisle [08:39]
- “We're in a different world... We're not going back to $60–65 [oil].” — Jeff Currie Carlisle [29:31]
- “You want to own ‘halo’—heavy asset, low obsolescence.” — Jeff Currie Carlisle [33:00]
- “Every crisis... there's a belief deep down this cannot really be happening.” — Jeff Currie Carlisle [32:10]
Conclusion
The episode closes with a stark warning: the world is still underpricing the scale, scope, and durability of the current molecule (supply-side) shock. The repercussions—supply chain unraveling, asset rotations, block formation—will intensify, regardless of near-term military or political developments. Investors and companies are urged to pay close attention to physical markets (“molecule contagion”) as the true reality, as commodity volatility and “revenge of the old economy” era unfolds.
For more from the HC Group and Paul Chapman, visit hcgroup.global