Julian Lee

Lee reports that shipping traffic in the Strait of Hormuz has "virtually" stopped. 20 million barrels/day usually pass through; now almost nothing is moving. Kuwait is cutting production because storage is full. This is a physical supply shock, not just speculation. While the US is energy independent, oil is a global commodity. The removal of Middle Eastern supply forces Asian buyers to bid up global prices. $100/barrel is explicitly forecast "within days." Long. The physical constraint on egress routes forces prices higher regardless of US production. US releasing SPR (Strategic Petroleum Reserve) aggressively; demand destruction from recession fears.

The US is issuing waivers allowing India to buy Russian oil to keep global prices stable. Lee states Russia is the "only clear winner" and this allows India to boost purchases. While the rest of the world pays a war premium for energy, India is securing discounted energy inputs. This structural cost advantage boosts Indian industrial margins and economic stability relative to peers. Long. India benefits from the geopolitical arbitrage. Secondary sanctions if the US changes its mind; global risk-off sentiment hurting Emerging Markets generally.