为什么美国即将赢得这场战争.. (jvb_xyz)

Mr. Jonah, what's up, man? How are you?

I'm great. Thank you for having me on the show.

And how was your move to the East Coast?

The move has been awesome, man, and I appreciate you coming on.

I'll tell you my rationale for why I felt like we had to do this right now. I'm relatively new to monitoring geopolitical situations, and I've realized it's very difficult. One of the strategies I have found is to find a topic, listen to coverage from a super pro-American and a super anti-American outlet, and then land somewhere in the middle.

As it relates to oil, we had Calvin on yesterday, who was probably the most doomer: the world is ending, price controls, the U.S. is the Soviet Union, and you'll be lined up outside to fill up your tank for weeks at a time. Then there's you on the other side. You don't have the infamous “oil is a fade” tweet, but I would say you're rather optimistic on where we are right now.

I wanted to bring you on to talk about everything that's happening, so I appreciate you coming on right now. I guess a good place to start is: how are you positioned right now on oil and everything that's happening with the situation in the Middle East and Iran?

When I said this is a fade, I didn't say, “Go short prompt oil futures naked,” right? George Soros says that trade expression is the ultimate way to win. You can be dead right and lose money, or you can be dead wrong and make money. It's all about how you express the trade.

I thought this was a fade. Oil went up way higher than I thought it would. However, it's right back down. The way that I expressed this was by buying equities and buying Hyperliquid into the dip, because I thought, “All right, I've got my cycle bags. I've got the things that I want to own for a long time. This is a ridiculous sell-off that's just going to mean-revert. Let me use this as a chance to enter them, basically add risk at better levels.”

Now, what I would have done if I were in my old oil-trading seat at Vitol, I probably still wouldn't have shorted oil futures. It's like, okay, it's traded up to $80 or $85. You think it's going to go down. Fundamentally, the oil market is so oversupplied that you're staring down a COVID-like glut were it not for this geopolitical risk. I think fair value for crude oil is around $50.

Let's say that I shorted at $80, trying to make 20% on my dollar by doing so in the midst of a geopolitical crisis. You're exposed to literally unbounded downside. I would not express the trade by taking that risk. I expressed the trade by buying other stuff that I like when it's selling off for what I consider to be ridiculous, stupid, transient reasons.

Well, congratulations on the Hyperliquid one. Nasty. That's a nice snipe. Why specifically, if you could pinpoint to one thing, allowed oil to rip as aggressively as it did to the upside?

The Strait of Hormuz. The world consumes about 105 million barrels a day of oil. A barrel is 42 gallons. It's a little more than waist-high. Basically, you can visualize it. This is commodities trading we're talking about. It's real.

About 30% of that, give or take, goes through the Strait of Hormuz. Even if there's a 2 million-barrel-a-day supply glut with the Strait of Hormuz functioning as it's supposed to, there's a 30 million-barrel-a-day deficit if it's not.

Saudi Arabia has that East-West pipeline, so they can pump oil west to the Red Sea, but that only does so much work. There are still tens of millions of barrels trapped in what the Saudis call the Arabian Gulf and the Iranians call the Persian Gulf. Oil from Iraq, Saudi Arabia, and a bunch of other Gulf countries is critical supply.

Basically, if that doesn't get through, we're talking about $500 oil, a global recession, and the entire economy grinding to a halt. Humanity simply cannot function without that much oil.

My view this whole time has been: if the strait is closed for a week, whatever. If the strait is closed for a month, it's an economic apocalypse. To conclude the thought, the reason why I'm not worried about this is that the people who started this war can do two things.

They can ensure the security of the strait militarily. They've got aircraft carriers and millions of tons of American might floating around. The second is that even if it's financially closed—which is what's really going on—insurance companies will not insure boats going through the strait right now.

I tweeted about this. Oil is trading at whatever it's trading at, $90.85 right now. Tack on another $50 or $100 of insurance per barrel, and no refiner is going to pay that. No shipper is going to pay that. All the oil is financially trapped.

The United States has the military might to keep the strait open and secure. The United States also has plenty of billions of dollars sitting in the Treasury to insure those cargoes. Since my thinking was that Trump has those two options on the table, why would he sit idly by while the globe—while Rome—burns, the economy crashes, and he doesn't exercise those options? I think the thesis makes a lot of sense.

My question for you on this topic—you’re obviously more knowledgeable about it than I am—is why isn't the U.S. actively supporting and insuring these tankers going through? Why is nothing going through?

Stuff's going through now, right? They may well be doing it behind the scenes. I'm not in a position to know exactly what they're doing.

I can send you something. Colin Rug just tweeted that maritime traffic is going through again. You can see it on AIS. Basically, AIS is like a satellite transponder that every ship has. The traffic has started to move through, so I don't know exactly what's going on.

You can read about it in the major newspapers, too. Today, traffic has resumed. Some of the ships are going through.

Are these Chinese-Iranian ships that are going through, or U.S. ships?

What makes what happened today so significant? The headline yesterday was that the G7 economies said, “Okay, we've got 400 million barrels of cumulative SPR, strategic petroleum reserve. We could just release it to dampen oil prices if there are any temporary shocks.” That calmed the market's nerves.

Then Donald Trump said that the strait is open. He said there's some sort of guarantee. I didn't look exactly into what he was saying, but my oil-trader funny bone says that the U.S. is now indeed insuring cargoes going through.

Why was this headline so significant today, when Chris Wright or Craig Wright made this announcement that a ship had made it through with a U.S. escort and then deleted the tweet immediately afterward? Oil dumped—like, dumped 10% in a 5-minute candle. He deleted the tweet, the candle went back green, and then immediately afterward there was an announcement that Iran was deploying mines into the strait. Oil started curling, like it's doing right now.

If ships are going through, why was that headline—why was that tweet and delete—so significant?

I think everybody—the market is volatile, right? Oil has never moved this much in a day. I can share a chart with you if you're interested.

Actually, please share the chart. How do I do that? Hold on just a second. I know we're on a livestream.

Good. I'm not showing your screen. I can go full cam, so I don't show your screen yet until you tell me.

Should I share an image, or should I just share a tab on my browser?

Share a tab on your browser. I have my full cam on. No one can see anything. Tell me when, and I'll flip it.

Here, share your screen. Here—Brent crude intraday range, the daily chart.

Okay. Ever seen this before? You can share it with the audience.

Yeah, cool. I'm showing it. This is the dollar-per-barrel intraday range since the '80s. It moved $36 intraday yesterday. That is the biggest single-day intraday range in the history of crude oil as a commodity. This is wild.

When a commodity that's supposed to be pretty stable does one of these, generally what's going to happen is—

Liquidity gets thin, and tweets that shouldn't move markets move markets because nobody is positioned right now. Everybody's been rinsed out of their position over the course of that move.

Wow, this is insane. If it's like, “Why is this random guy who no one cares about tweeting, and why is it moving the price of oil?”—this is why. We're in a volatile time. The market's pretty fragile, and things are going insane.

Now, the other point that I would make about mining in the strait: the Iranians can't mine the strait. That's fake news. Even Trump just tweeted, “If they mine the strait, we're going to hit them harder than they've ever been hit, or than anybody's ever been hit.”

The strait's not that wide. I forget how many miles wide.

Thirty-something, right? Thirty-five?

The United States can police that. They've got nine of those Reaper radar planes flying around. You try to row a raft made out of driftwood anywhere near that thing, and you're getting blown out of the water right now.

Basically, no, I don't believe the fake news. Yes, I believe that the United States military can guarantee security of transit through the Strait of Hormuz.

Yes, I believe that the United States is insuring cargoes; otherwise, they wouldn't be transiting the strait right now. No, this is not going to cause an economic crisis.

The thing about geopolitics is, when I tweeted that this is a fade, I got a lot of online hate from people who were like, “There's a war going on. How could you be so stupid as to suggest that you fade a war?” It's like, I've seen it—I've seen literally dozens of these over the course of my career. They're usually a fade. There literally was a 12-day war in Iran that was a fade. This one's a fade, too.

The only time it's not a fade is when Iran has the upper hand and they can control things, but they're literally pinned to the mat, unable to move, bleeding out right now. So, how do you think this ends? When is this going to end? And also, my question is—

You know, Trump sort of did a TACO, or a reverse TACO, where he says, “The war's basically over,” and then he followed it up and said, “We don't really want to end it yet, though.” And so, it's a TACO that's sort of like a reverse TACO. Right? Like a TACO-ception. Where are we in actually ending this thing?

Yeah, I mean, it's funny that you talked about liberal versus conservative or pro-America versus anti-America freak-outs over this. I grew up in Berkeley, California. I went to Columbia University. I've no shortage of very intelligent, very anti-America, very liberal friends.

And since I'm the oil guy, they have me on their version of this stream, right? They call me into theirs. I got the text on the group chat: “Yeah. Hell yeah. Yo, Jonah, what's going on here?” Even the cover of The Economist says, “A war without a strategy.”

I think there's a really well-considered strategy here, which none of these people seem to understand. So, I'll start with the anti-Iran intervention argument that I've heard, then I'll rebut it, and then get to the conclusion, which is where this is going.

What I hear from my friends, and what The Economist authors are probably saying, is like, “Hey, Jonah, but if we just left the Ayatollahs alone, then they would be peaceful and love America. They would just sit around and do Ayatollah things and jail their women peacefully, and they wouldn't want to build nuclear weapons, and everything would be better.”

My point to them is, “Okay, so I've been following Iran. I've been an oil trader for almost 20 years. I've been following this really closely for a long time.”

Unlike North Korea, whose doctrine as a nuclear rogue state is something called Juche, which is radical self-reliance—it's basically Burning Man up in the snow—they just want to be alone. Fine.

In Iran, the government adheres to a radical theology called Twelver Shia Islam. To bring the 12th Imam, their version of the Messiah, you basically have to have a Muslim takeover of the world. That is not a radical isolationist ideology. That is a very expansionist, world-domination-style ideology.

Much like you don't want Adolf Hitler having nuclear weapons because he's an expansionist, world-domination guy, or Dr. Evil having them, you certainly don't want the Ayatollahs having them because of this ideology. It's literally what they believe, what they're preaching, and what they're aiming their country toward.

No, I do not think that it's a viable strategy to just leave them alone and hope that after they get a nuclear weapon—which they will, because when the JCPOA was in place, the nuclear agreement that Obama signed, the IAEA, an international left-leaning atomic inspection body, literally said they were violating it because they wanted nuclear weapons to take over the world.

This is not me going out on a limb here. They were violating their agreement. If you just leave them alone, they're going to end up with nuclear weapons, and they're not just going to sit on them; they're going to use them. They're going to start with Israel, and then they're going to move to their other enemies down their list.

I think the United States, Israel, and various Gulf allies who are quietly helping out here have a viable point and a viable strategy in dismantling this regime and taking away their nuclear weapons, which will cause some market disruption now, but literally not one ship has been taken out in the Strait of Hormuz. There is no problem there.

This short-term economic volatility is a viable trade-off toward the long-term goal of a non-nuclear Iran. And geostrategically, by taking out Venezuela and Iran's ability to self-govern, China loses 2 hostile sources of oil supply. So, when they want to invade Taiwan, they can't militarize these 2 places, and they don't get 50%-discounted oil for free forever.

Is it enough to be significant to China? Was it Venezuela plus Iran, like 15% of China's oil supply? Something like this?

So again, the world consumes 105 million barrels a day. China imports about 11 million barrels a day. They consume about 15, but 4 is produced domestically.

Of that 11 that they import, I would say about 1 to 1.2-ish was coming from Venezuela, and let's call it 1.6 to 2 was coming from Iran. So, let's just say cumulatively maybe we round up to 3 million. Let's say 25% of their imports were coming from Venezuela and Iran at crazy discounted prices because Venezuela and Iran couldn't sell to anybody else other than China.

The way this war winds down is that Iran will be like Venezuela. They will export oil onto the global market at global market prices, not exclusively to China at discounted prices.

There will be regime change in Iran. Either it'll be another Ayatollah who is friendly to the United States because he doesn't want to get bombed out of his bunker, or it'll be a totally different regime entirely.

Either way, Iran will be like Venezuela, a quasi-client state of America, or at least a compliant state, rather than the current rogue, anti-American state. Does that make sense? I think it'll take a couple weeks, I think.

It does make sense. Do you think the plans we're trying to implement here are going to work?

Yeah, absolutely. I don't doubt that it'll work. I mean, there'll be hiccups, but the only difference is—you know, I grew up—I'm a boomer, right? I'm 40 years old.

In 2003, when George W. Bush invaded Iraq, I was right there with the other hippies from my community, marching through the streets of San Francisco with peace signs painted on my cheeks with lipstick and the “No blood for oil” sign. Literally.

But now, I would still march that march, honestly. There's a big difference between what America did in Iraq versus what they're doing in Iran, right? Saddam Hussein, who cares? These are legitimately insane freaks who should not have nuclear weapons. And they were about to have them, unlike Saddam.

Also, regime change: Are we going to go in there for 20 years and lose thousands of American lives and try to do nation-building and introduce democracy into the Middle East? No. Those lessons have been learned.

This time, we're just going to bomb their missile production, nuclear production, and government facilities into the Iron Age. In terms of what comes next, they've lost Ayatollah number 1, Ayatollah number 2, and the guy that they just appointed is either a vegetable or dead.

They literally brought out a—did you see? They marched out a cardboard.

See that? No. They marched out a cardboard cutout of him, like a South Park style.

Yeah, that was ridiculous. We're living in a weird timeline. That's not AI; that's real. So, the current Ayatollah of Iran is—I think reports have been released that he's so injured in one of these attacks that he's unconscious. And he's the Ayatollah. He's Mojtaba Khamenei, the son of Khamenei.

They'll just keep going through these guys until eventually one of them is going to show up and be like, “All right, I want to live. Oil goes to the open market. We're not going to build nuclear weapons.”

Jeez.

I think you can do most of that from the air. I think this is going to take another week or two, and then it's over. And then oil to $50? I don't know about oil to $50. That's what it should be worth if it weren't for this conflict, but the lingering geopolitical risk probably keeps it at $70 or something for a while.

Okay.

Absent this conflict, it's worth $50 a barrel. There's too much oil. There's way too much oil, and demand is growing way too slowly.

What about the damage that's already been done to the supply chain and the existing oil infrastructure?

No damage has been done to the supply chain. What about existing oil refineries? Iran's blown up the GCC, and we've blown up theirs. The biggest refinery in the UAE got blown up this morning or last night, right? Fujairah. There was a fire at Fujairah that will probably take a month or two to repair, I would guess.

When I worked at Vitol, we literally owned that thing. That was part of our infrastructure. Fujairah is a big Vitol place. I know that one. That fire—you would have gotten a different headline if it had been blown up.

I don't know about refineries in Iran. I've read something about refineries being blown up. Again, refineries are not production.

Refineries are consumption. So, you could blow up every single refinery in Iran, and that would be just fine. The oil would go somewhere else. It’s when you start blowing up oil fields that you have a problem. No oil fields have been blown up.

If you told me that the South Pars field in Iran had been taken out, I’d be like, “Ooh, okay. I forget exactly what it is—600,000 to 800,000 barrels a day is gone for a year.” Still, there’s way too much oil in the world absent this crisis. As soon as this is over, it’s really over, and you go back to the status quo.

Is there any risk of the operation not going smoothly? What is our biggest concern? If X happens, we’re in trouble. If Y happens, we’re in trouble.

I mean, I’m really going out on a limb here. All right, guys, so don’t quote me.

But quote me.

Okay, so let’s talk about wild, right-tail scenarios where everything goes to—Pakistan slips Iran a nuke, and they detonate it on some aircraft carriers. That’s really the only thing I can think of. Iran is so screwed. There’s really nothing else.

That’s the only lose condition for us: if Pakistan gives Iran a nuke.

I’m just, again, really going out on a limb. I don’t think they’d do that. Why would they want a war on their hands? Why would they want to start World War III? They’re not.

Again, this gets into it. When you analyze geopolitical scenarios as an armchair quarterback, you don’t understand what people who have been doing it in the geopolitical macro-trading trenches for 20 years, like me, have seen, which is that most of this is a fade. It’s always more nuanced than it looks.

Don’t short things with unbounded upside like oil futures, even if you’re absolutely right. Find other ways to express the trade—more elegant ways to express the trade. Pakistan—they’re not Twelver Shia Islam. I think they’re a different branch of that ideology. They’re not going to risk World War III to help out an incapacitated son who’s the third Ayatollah of the last three days. They’re not going to do that. So, I don’t think this is a good idea.

“Of the last three days” is nuts. Okay, what do you think about all this? Are you talking about Professor Jang? Do you watch Jang at all? You know who that is?

I don’t.

No, I’m too old. Okay, he’s good. You should watch him. He does all these—what do you think of this asymmetric warfare and Iran’s ability, despite being crippled and incapacitated, to still cause extreme damage with our supply chain, blow up oil fields, refineries, whatever? Kind of like what Ukraine has been able to do in Russia.

Ukraine has the backing of the United States. Iran, I just don’t put them in the same category, frankly. I think Israel has so deeply infiltrated Iran that they’re going to have a hard time driving a truck full of explosives halfway to where it needs to be, let alone threatening the global supply chain.

Iran sort of has China and Russia, though, in theory.

Not really. In theory, yes. In practice, no. China and Russia are basically two very different entities. Russia’s an oil producer. They want the Strait of Hormuz to be closed forever.

Right? China has the opposite problem.

As for Russia, yeah. They’re not going to aid Iran in a conflict that actually chokes their own supply. China gets a lot of oil from the Gulf. Even if they didn’t, the Gulf being closed raises the price of all oil. So, I just don’t see China being too helpful here.

Russia’s got its own problems. They’re tied up in Ukraine. They’re not going to be helping Iran fight its war against the United States.

Russia benefits from this, right? The Strait being closed and oil being squeezed?

That’s right.

Okay. Yeah. Dude, it’s kind of an electric combo, Jonah. You brought some heat today. I’m not going to lie. I’ll let you go in a second, but one of the last things I want to ask you is: at what point are you taking a position, long or short, into oil? Are you a buyer or seller at any point?

Put it this way: if there was legitimate regime change in Iran, if Pezeshkian became leader of a democratically elected government, then I think it would be back to business as usual in oil-fundamentals land. I think you could safely—I wouldn’t sell the front. I would sell December futures, December 2026 futures expiring in October, and just let it roll down as the market succumbs to oversupply again.

In the meantime, given that chart I shared with you earlier—

Mm-hmm.

—I don’t think taking a delta-one position in oil is a very intelligent idea right now. If I were still an active oil-market participant, which I’m not—I’m retired—I would be selling options here because they’re probably still wildly overvalued.

Part of the reason why the move was so dampened is because the market is naturally long optionality. When you’re long gamma and the price goes up, you have a lot of extra price to sell, which is probably what smacked it back down yesterday after the weekend.

If I were in the seat, I would be selling options. Since I’m not in the seat, I’m just going to wait for the dust to settle and then play it from the short side.

I appreciate the explanation. Is there any concluding thought, summary, or sign-off that you would like to leave people with—to watch out for, look out for, or think about—as we go through the next couple of weeks of this conflict?

Yeah, absolutely. I would say if we get another flare-up, which is always possible, use it to accumulate things you like from the long side that are selling off in sympathy with geopolitical problems. That’s the most elegant retail, Thread Guy-listener trade expression that you can benefit from because you get great entry points as a result of these things.

I would not, unless you feel like you have some sort of insider edge, try to trade the ultimate insider market—crude oil—from either the long or the short side, unless you’re counting barrels and doing systematic strategies and really have some sort of discernible edge.

I love it, Jonah. 1000X pod, you know we're fans over here, man. I appreciate you coming on. It's awesome.

I appreciate you, too. I’m excited to fire some clips out. It was electric, man.

Thanks for coming on, dude. I showed it on the 1000X pod earlier. I got some crude oil for you today.

No way. Yeah, I’m long a little bit today.

What is that?

It’s crude oil. How did you get that? What is it, literally?

I worked at Vitol. This is literally crude oil.

Yeah, that’s insane. Can you buy that?

Yeah, you could probably grab it. When I worked at Vitol, I asked one of our refinery guys to send me a sample.

He sent you—it’s just on your desk?

Yeah, he sent me a jar of crude oil. I’ve still got my diesel—my Vin Diesel—here. I lost my jet fuel and my naphtha, but I’ve still got that. So, it’s pretty cool. I had some gasoline, too. That was awesome. Dude, thank you, Jonah. You’re the man, bro.

Kambani's corner. Kambani's corner. I appreciate you, brother. Until next time. See you later.

Have a good one. Peace. Peace.