How To Position During an Oil Price Shock
Speakers
Avi Felman -- Co-host
— 1000x Podcast co-host, Radhan Road partner
Jonah Van Bourg -- Co-host
— 1000x Podcast co-host, ex-Cumberland/Goldman trader
Summary
- The primary discussion centers on positioning during the Iran conflict-induced oil price shock, with the base case being a transient crisis resolving within weeks, leading to a sharp decline in oil prices and a resumption of the bull market in risk assets.
- The current extreme volatility in oil (~$6.50 implied daily move vs. ~$1 normally) is attributed to a consensus "fade the war" trade getting blown out, combined with physical traders being forced to unwind hedges due to force majeure declarations on shipments choked by the Strait of Hormuz closure.
- A key disagreement emerges: Avi, drawing on past trading experience, views fading oil spikes as historically correct but currently dangerous due to volatility and force majeure; he advocates avoiding direct oil shorts. Jonah is more focused on the macro outcome probabilities.
- The main portfolio construction framework presented is probabilistic: a high (90%) probability scenario where the war ends, oil crashes, and tech stocks rip; and a low (10%) stagflation scenario where gold surges. The portfolio is weighted towards the former.
- Gold is characterized as having shifted from a risk-off to a risk-on asset, behaving reflexively like Bitcoin, with central banks currently selling to shore up balance sheets rather than buying the dip, reducing its immediate crisis hedge appeal.
- The market's intense focus on short-term oil volatility is creating a distraction, providing an opportunity to invest in overlooked long-term mega-trends that are temporarily discounted.
- One identified mega-trend is the exponential growth in compute/AI spending, with companies like Micron and Intel cited as potential ways to gain exposure.
- Another mega-trend is the integration of stablecoins and on-chain value transfer into the global payments stack, with Stripe positioned as a primary potential beneficiary due to its dominance in API-based payments and strategic crypto acquisitions (Tempo, Bridge).
- Crypto (broadly) is highlighted as a beaten-down asset class showing resilience (e.g., Bitcoin not falling sharply on war news), suggesting weak-handed sellers are exhausted and positioning it for a potential resurgence once the immediate crisis abates.
- A critical risk to the base case is a prolonged closure of the Strait of Hormuz, which would likely cause stagflation ($200 oil) and force a Fed policy dilemma.
Trade Ideas
The speaker stated that historically, fading oil price spikes during conflicts has been the correct trade (e.g., Ukraine, Iran-Israel 2024). However, he notes this event is different due to force majeure clauses crippling the physical trading community's ability to act as a volatility dampener. Physical traders are being stopped out of hedges, amplifying volatility. The extreme daily moves (~6x normal) mean the market can "remain irrational longer than you can remain solvent." Therefore, direct short positioning in oil futures is excessively risky and should be avoided, despite the fundamental belief that the crisis is transient. The Strait of Hormuz remains shut for a prolonged period, invalidating the mean-reversion thesis and leading to sustained high prices.
The speaker stated he is "watching gold and silver for another massive rally" and would want to be "as deep in gold as possible" in a specific scenario: if oil stays high but the Fed is forced to cut rates due to poor employment/manufacturing data. This scenario represents a stagflationary outcome (the lower-probability 10% case). In such an environment, with inflation rising and growth faltering, gold would act as a hedge against dollar pressure and policy confusion. Gold is not a core holding in the base case, but is a conditional hedge worth monitoring closely for a shift in macroeconomic data. The high-probability scenario (war ends, oil crashes, tech rallies) plays out, making gold a poor performer. Or, central banks continue selling gold reserves.
The speaker stated he is "dip buying" SPY, viewing it as a better-hedged, less volatile version of the Magnificent 7. His core macro view is a 90% probability that the Iran conflict resolves quickly, oil prices collapse, and risk assets rally. SPY provides broad exposure to this anticipated market rebound. The current market downturn caused by war fears is a transient buying opportunity for a core equity holding. The conflict escalates into a prolonged oil supply crisis, causing stagflation and broader market decline.
The speaker stated he keeps "coming back to crypto" as an overlooked area, noting Bitcoin's resilience (not falling sharply on war news) and that "nobody is paying attention." Market focus is entirely on short-term oil volatility, capital has fled the asset class, and resilience suggests weak sellers are exhausted. This creates a potential setup for a resurgence once the immediate geopolitical crisis passes. The current distraction provides an opportunity to accumulate exposure to the long-term crypto mega-trend at depressed prices and low attention. A prolonged macro crisis drives a broad-based sell-off in all risk assets, including crypto.
The speaker identified Stripe as a prime way to gain exposure to the mega-trend of stablecoin/on-chain payments, comparing its potential to Amazon's role in the early growth of e-commerce. He argues Stripe owns a dominant share of the API-based payment space (the "efficient" segment), which is poised to grow significantly as more commerce moves on-chain. Stripe has already made key crypto acquisitions (Tempo, Bridge). Stripe is uniquely positioned to capture the value from the convergence of traditional and on-chain payments, making it a compelling long-term investment available on secondary markets. The adoption of stablecoins for mainstream commerce is slower than anticipated, or competitors capture more of the value stack.
Up Next
This 1000x Podcast video, published April 07, 2026, features Avi Felman, Jonah Van Bourg discussing WTI, GOLD, SPY, BTC, STRIPE. 5 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Avi Felman, Jonah Van Bourg · Tickers: WTI, GOLD, SPY, BTC, STRIPE