Former Goldman Sachs CEO Lloyd Blankfein: Iran war won't last very long 'because it can't'

"Because a lot of this stuff goes to Asia, in the Far East. And so my best guess is that this won't last very long because it can't." A military conflict with Iran immediately threatens the Strait of Hormuz, injecting a massive geopolitical fear premium into crude oil prices. However, because the global economy—especially major Asian importers—cannot sustain a prolonged supply shock, international pressure will force a rapid diplomatic or military resolution. Therefore, the initial spike in oil prices will be a temporary emotional overreaction rather than a structural long-term shift. SHORT USO into the initial conflict-driven price spike to fade the temporary geopolitical premium. The conflict spirals out of control, leading to permanent structural damage to Middle Eastern oil infrastructure (e.g., refineries or pipelines) that cannot be quickly repaired.

"The market is going to be a governor on our president, because... the president is going to look at what's happening... of oil and say, we can't have this." Equity markets traditionally sell off sharply at the onset of a Middle Eastern war due to fears of an oil-driven inflation shock. If the stock market acts as a "governor" on policy, it means the administration will actively pivot its military or diplomatic strategy to rescue asset prices and stabilize the economy. This dynamic creates a highly asymmetric "buy the invasion" setup, where the initial panic drawdown serves as the ultimate bottom before policy intervention forces a rebound. LONG broad market equities to capitalize on the panic-selling, anticipating that policy shifts will quickly backstop the market. The administration ignores market signals in favor of prolonged geopolitical objectives, or the oil shock triggers a rapid recession before de-escalation can take effect.