Iran War: Kuwait, Bahrain Hit by Iran Strikes As Optimism Fades | The Opening Trade 3/24/2026
Speakers
Summary
- The core market focus is the war in Iran, with risk sentiment described as "fragile." Market optimism is fragile, and trading is volatile as investors grapple with contradictory signals.
- President Trump gave a five-day reprieve from strikes on Iranian energy infrastructure, which initially sent oil prices tumbling (Brent dropped ~11% on Monday). However, prices have recovered above $100/barrel on reports that Gulf nations may join the war and Iran's denial of negotiations.
- A key uncertainty is control of the Strait of Hormuz. Its closure has removed 10-12 million barrels per day of oil supply and 20% of LNG supply from the market. Reopening is complex and contingent on Iran.
- Analysts stress the physical market is tighter than futures suggest. Even if hostilities end, rebuilding damaged infrastructure and clearing the shipping backlog would take months, providing long-term support for energy prices.
- Market psychology is challenged: "The hardest part is not predicting the war, it is predicting the communication from the White House." Investors are advised to stay invested but avoid big, out-sized bets and focus on position sizing.
- Geopolitically, the situation is seen as worsening. Iran controls the off-ramp (Strait of Hormuz), and no viable de-escalation path is clear. The contrarian view is to remain bearish despite a recent bounce.
- In private credit, Apollo Global Management is capping withdrawals from a large retail fund (clients wanted 11% back, are being given 5%), highlighting liquidity mismatches and transparency issues in the space.
- For AI in Europe, a report warns of a "founder flight" risk. Key adoption challenges are a skills shortage, fragmented/uncertain regulation, and high compliance costs (42% of IT budgets).
- Long-term, speakers see a structural shift to higher inflation and less trust, driving a need for resilient supply chains and more diversified portfolios, including commodities and alternatives.
Trade Ideas
Apollo Global Management capped client redemptions at 5% in a private credit fund after clients sought 11%. This highlights a liquidity mismatch and lack of transparency in private credit valuations. The action raises the same questions asked weeks ago about stress in the private credit space. It suggests underlying asset illiquidity and potential complacency among investors about risks. AVOID the private credit space due to concerns over transparency, liquidity mismatches, and potential for hidden stress as redemption requests rise. A stabilization in markets and interest rates that reduces redemption pressure and allows funds to manage liquidity smoothly.
The speaker detailed that the Strait of Hormuz closure has removed 10-12M bpd of oil supply. Reopening is complex, contingent on Iran, and would take significant time even after a ceasefire. Physical damage to facilities will take months/years to repair. The physical supply outage is massive and not fully priced into futures curves. The market requires "COVID-style behavioral change" in demand to rebalance, which implies much higher prices are needed to trigger that destruction. WATCH due to extreme near-term volatility driven by headlines, but with a clear, structurally bullish medium-term setup based on physical scarcity and slow recovery. A swift, unexpected diplomatic resolution leading to a rapid reopening of the Strait and minimal infrastructure damage.
The speaker stated that in a scenario where the war drags on, he would increase exposure to gold. He also cited gold's hedging properties against geopolitical risk, negative real rates, and "pain in the U.S." The current environment features high geopolitical uncertainty, structurally higher inflation, and central banks potentially cutting rates, which supports gold as a long-term portfolio hedge. LONG as a strategic, medium-to-long-term hedge within a diversified portfolio, not a tactical short-term trade. A rapid de-escalation and return to a disinflationary, low-volatility macro regime where haven assets underperform.
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