Posted on 07/23/2026 7:40:35 AM PDT by Miami Rebel
U.S. oil just topped $90 a barrel and Brent crude is passed $100 a barrel.
A number of new factors could mean this crude comeback has legs.
For example, what happens if all Iranian oil suddenly went offline?
It’s an outlier thought. Maybe it’s crazy. While we can’t all agree on much, can we at least agree that maybe now is the exact right time for crazy, outlier thoughts?
Before I get to that, here’s a quick synopsis of where we stand right now with the nearly hour-by-hour headlines around Hormuz and energy.
Angry militants in Iran continue to risk a wider war with the U.S., killing American servicemen in an attack on our ally Jordan. Trump again has warned the country, saying those responsible will “pay” for the attacks.
At the same time, one of Iran’s proxy terror groups, called the Houthis, is trying to ratchet things up by imposing a Red Sea blockade.
As I’ve written often lately, it’s an incredibly fluid, scary time where the news can change by the time you read this.
As I’ve been thinking about what’s going on, the one thought that hasn’t really played out is: what happens if all Iranian oil went offline? Right now Iran is still selling some oil on the global markets, either by avoiding the Strait blockade or by using the time under the peace MOU to increase sales and raise money. So what would happen if something were to happen to Iran’s oil hub, Kharg Island? Or the employees of the National Iran Oil Co (NIOC) just walked off the job and crushed Iranian production?
Oil expert Eric Nuttall of Canada’s Ninepoint Partners, a Toronto-based alternative asset management firm, said the risk to prices is higher, and he lays out the Iran scenario like this:
“With Middle Eastern production still down 7-8MM Bbl/d, global onshore inventories at near record low seasonal levels, an increasingly depleted US SPR, and significant tightness in refined product stocks, the world simply cannot afford to lose a further 2.6MM Bbl/d of Iranian production. The market up until now has been looking through or flat out ignoring the inevitable supply shock if the status quo persists, our base case expectation. Perhaps Iranian oil production going offline would be enough to finally act as a reality check. We think record high crack spreads are a leading indicator for what price action will look like for oil in the near future.”
Kevin Book of Clearview Energy Partners, an independent energy policy research firm that produces must-read research and is interviewed in our Inside Line below, says the key is how long Iranian oil were to be offline, but the market would be looking at a $5 per barrel increase at the minimum.
And Rapidan Energy Group’s Bob McNally is direct in his message, telling me that “all [Iran’s] exports are offline pretty much,” but if all their actual oil production closed, then “their refineries would shut down, and they’d have no more refined products after they drained storage. Transportation would grind to a halt. It would crush their economy.”
So while it’s a potentially crazy question about Iran and Hormuz, don’t write off the “no Iran oil” as pure fantasy.
Speaking of Hormuz, these days you need to keep your Straits straight. The next geographic area to study up on is the Bab el-Mandeb Strait (BAM). The BAM is the narrow strait that runs between Yemen and Africa and is about as wide as Hormuz. The Strait is the only southern entry to the Red Sea, another waterway critical for oil and product flows.
RBI →”’Bab el-Mandeb” roughly translates to “gate of grief”
RBI #2→ Some believe that thousands of years ago the BAM was shallow enough that humans could walk across it, leading to increased migration.
The risk to BAM is real. And it may be a reason why brent crude is nearing $100 a barrel.
Tobin Marcus of Wolfe Research writes that the market continues to believe things will get better from here and both the U.S. and Iran will be forced to de-escalate. But Marcus also thinks we shouldn’t automatically underestimate the risk of some kind of supply disruption around the Red Sea. With Saudi Arabia pumping more oil through its East-West pipeline into the port of Yanbu, any Houthi attacks risk about 4½ million barrels of oil per day.
Iranian strongmen may believe they have the upper hand right now, as the new attacks have led to a new drop in crude oil tanker traffic out of the SOH. An insurance industry source tells me that while a shipowner “can get cover” - the industry term for insurance - there isn’t much demand because ship traffic has again slowed considerably.
Bottom line, here’s my Power Point takeaway on oil, energy and the macro markets. This spring, we learned that stocks can keep going higher even if oil and gasoline go up. That’s certainly surprised many, myself included. It’s likely for a cornucopia of reasons, and the energy-specific would be that gasoline was more expensive in the summer of 2022 than it is now (we got used to it), cars get better fuel mileage than they used to, and many of you now have the ability to work from home. The bigger reason, however, is that the trillions in A.I.-related spending is helping power incomes and the economy more than gasoline can cut it down.
I’m actually writing some of these words from the Milwaukee, Wisconsin airport where I was stranded by a canceled flight. A flight, I might add, that was oversold both ways, despite air fares that few would call cheap. I fly more than most, and I can tell you that across America, people are spending money on travel this summer. Gasoline prices be darned ... at least for now.
Safe travels,
“You obviously don’t understand basic accounting, much less tax accounting.”
Tariffs are an expense.
If you are a business and get a refund on an expense claimed as such on a tax return, then that refund is taxable income.
holding steady at $100 ...
“It would seem you are in the category of wimpy American sheeple now“
When the American people want war, their Congress declares it. When they don’t, it doesn’t.
When the American people want lower taxes, and less government, congress does what the people want too. /s
“If you are a business....”
Much if not most of the tariffs were paid by consumers, not businesses. My wife spent $30 or $40 on yarn she bought from Denmark. Amazingly enough, she didn’t expense it.
But even if it WAS expensed, why would it merit a punitive 100% windfall tax? It wouldn’t constitute a windfall, rather it is merely a return of money that unlawfully seized. The only one who got a windfall was the federal government getting to use free money for a year or so. Tax it a marginal rate? Sure, no problem.
There is no fairness or legal basis for grabbing extra money just because the feds screwed up, and calling it a windfall tax would be an illegal way of grabbing the same money that the Supreme Court already said was illegally seized.
They were on the ropes
All Trump had to do was keep gas prices and inflation low, not start a pointless war and marginally improve the economy and the Dems would have been finished.
Worst case would be them squeaking out a teenie-tiny majority in the House, while the Republicans held or gained in the Senate.
And it wouldn’t have mattered in the long run, after redistricting, the 2030 Census + Blue State Exodus and our birthrates vs theirs, the Dems would have headed the way of the Whigs.
But nope, all that is likely gone now, all to sell out and pander to a country whose people hate us and vote 80%-20% Democrat and for some old Boomer Cons to try a score some last minute brownie points with the invisible man in the sky.
“When the American people want war, their Congress declares it. When they don’t, it doesn’t.”
Would Congress like a bomb to go off inside the Beltway?
Iranian U-235 can be smuggled into the USA without being detected.
Making U-235 for 11 bombs (instead of just enough to run a reactor to make plutonium) is the difficult way. Why would Iran do that?
Is Vance moving to Middleburg for the horse life?
“pander to a country whose people hate us and vote 80%-20% Democrat”
Trump made his opposition to Iran’s nuclear ambitions well known:
“Iran can’t have a nuclear weapon. Nuclear weapons are the greatest single threat to our country, but to the entire world.” (11/3/24)
“I would have been very good to Iran. They — I had to have one thing, no nuclear weapons. You can’t have nuclear weapon. Nuclear weapons are the greatest danger to our country going forward, to the world going forward.” (10/29/24)
“And all I wanted was Iran can’t have a nuclear weapon … That’s all I wanted. Very simple. You can’t have a nuclear weapon.” (10/28/24)
“We don’t want Iran to have a nuclear weapon.” (10/23/24)
“I didn’t want much. I wanted Iran to be very successful. I just don’t want them to have a nuclear weapon.” (10/16/24)
“You can’t let them have a nuclear weapon.” (10/14/24)
“I just don’t want them to have a nuclear weapon. It’s very simple.” (10/10/24)
“I only wanted one thing. You can’t have a nuclear weapon. You cannot let them have a nuclear weapon.” (10/7/24)
“No, they can’t have nukes. No, they can’t have nukes.” (10/7/24)
“They can’t have a nuclear weapon — and now they’re very close to having one and it’s very dangerous for the world, very dangerous for the world … The biggest problem today, in my opinion, the biggest risk is the nuclear weapons.” (10/1/24)
“All I want them to do is not have a nuclear weapon. They can’t have a nuclear weapon.” (9/30/24)
“The only thing is [Iran] cannot have nuclear weapons.” (9/26/24)
“I wanted one thing from Iran — no nuclear weapon. I didn’t want much — no nuclear weapon. And now they’re very close to getting it, and you can’t let that happen.” (9/19/24)
“All we want is we don’t want them to have a nuclear weapon. Very simple. That’s all we want. We don’t want you to have a nuclear weapon.” (9/17/24)
“They can’t have a nuclear weapon. We just can’t let them have a nuclear weapon. I’ll say this. If they do have a nuclear weapon, Israel is gone. It’ll be gone.” (8/27/24)
“I don’t want them to have a nuclear weapon.” (8/23/24)
“I just wanted to have a deal with Iran, very simple deal — can’t have a nuclear weapon. That’s it.” (8/23/24)
“They can’t have a nuclear weapon. They can’t have a nuclear weapon. And we were all set to make sure that they don’t have a nuclear weapon. Because once they do, it’s a whole different world, it’s a whole different negotiation.” (8/15/24)
“Iran can’t have a nuclear weapon — it’s very simple.” (8/8/24)
“They can’t have a nuclear weapon. It’s very simple. They can’t have a nuclear weapon. You cannot let Iran have a nuclear weapon.” (8/5/24)
“Iran should not have a nuclear weapon … Iran should never be allowed to have a nuclear weapon.” (7/10/24)
“The main thing is Iran can’t have a nuclear weapon. That was my main thing. The deal was a simple deal. Iran can’t have a nuclear. You know, it can’t have a missile, it can’t have a nuclear missile. It cannot have that nuclear capability.” (6/20/24)
“We have a very hostile country that wants nuclear weapons. You can’t let that happen.” (6/15/24)
“Iran should not be allowed to have a nuclear weapon. They would never have had even close to a nuclear weapon. They are very close to getting a nuclear weapon. You cannot let that happen.” (5/15/24)
“Iran cannot have a nuclear weapon — very simple. They cannot have a nuclear weapon.” (5/1/24)
“You can’t let Iran have nuclear weapons.” (4/30/24)
“Iran wanted to make a deal, and what the deal — 90% of the deal that I want to make is no nuclear weapon. That’s 90% — almost 100%. It might be 100%. That’s all I want. No nuclear weapon for Iran” (3/25/24)
“I want everybody to be happy. They just can’t have a nuclear weapon.” (2/23/24)
“I just didn’t want Iran to have a nuclear weapon. I said, ‘You know, we’re going to make a great deal. Everybody’s going to be happy. You’re going to be rich as hell again. Everything’s going to be great, but you cannot have a nuclear weapon.’” (1/20/24)
“They cannot have a nuclear weapon. That was the only thing — the one thing I said, ‘You cannot have.’” (1/5/24)
“I just don’t want them to have a nuclear weapon.” (1/5/24)
“They will have, within a short period of time, nuclear weapons — and that is never something that can be allowed to happen.” (12/30/23)
“No nuclear weapons. You can’t have nuclear weapons. Nuclear weapons are the single greatest threat to this world.” (11/9/23)
“They can’t have a nuclear weapon. That’s all. They can’t have nuclear weapons. It’s too destructive, too powerful. They can’t have it.” (10/29/23)
“Don’t let Iran have nuclear weapons. That’s my only thing I have to tell you today. Don’t let them have it.” (10/16/23)
“No nuclear weapons. You can’t give [Iran] nuclear weapons.” (7/15/23)
“You cannot let Iran have a nuclear weapon. You cannot let it happen because bad things will happen if that happens.” (6/24/23)
“IRAN WILL NEVER HAVE A NUCLEAR WEAPON!” (1/6/20)
“Iran cannot have Nuclear Weapons!” (6/22/19)
“We can’t let Iran get a nuclear weapon. We can’t do it. Can’t do it. We cannot let that happen.” (1/24/15)
“We can’t allow Iran to go nuclear.” (11/4/11)
“illegally seized”
The importers choose to import and to pay.
“illegal” That’s what the Supreme Court said.
There was no seizing that I’m aware of.
“why would it merit a punitive 100% windfall tax?”
pre-Trump tariff era
$70 item
$5 legal tariff
$30 other costs such as transportation
$120 wholesale selling price
$15 profit
Trump tariff era
$70 item
$5 legal tariff
$20 Trump add-on
$30 other costs such as transportation
$140 wholesale selling price
$15 normal profit
$30 rebate (received back mid 2026)
$45 total profit on item
That $45 total is $30 more than the $15 normal profit. The rebate made for a windfall profit of $30.
Remember the 2025 claims here on FR and elsewhere (largely true) that the consumers paid the tariffs?
You wrote:
“My wife spent $30 or $40 on yarn she bought from Denmark. Amazingly enough, she didn’t expense it.”
I previously wrote in post 18:
A windfall profits withholding tax could have been imposed and collected at the Treasury unless an exemption form (for say personal importation) was filed.
Filled one of our vehicles up with gasoline yesterday. $4/gallon.
“the invisible man in the sky”
The Muslims would ensure you are visible when tossed off a building.
You’ve never asserted a reason why importers should be singled out for punitive treatment relative to every other taxpayer.
They killed 3 of our troops.
Congress has been free to declare war on Iran every minute of every day since 1979.
Your question “does Congress to want a nuclear bomb to go off inside the beltway” is silly. I presume they don’t. There are many things they don’t want that don’t rise to the level of legislation, and the probability of an Iranian nuclear attack on the US (at least prior to 2/28) was in my opinion close enough to zero that it could and should have been ignored.
I agree. Didn’t Trump say we destroyed their nuclear capability (at least in the immediate future) with Midnight Hammer? Or was that not true?
Just say slandering Israel is more desirable than addressing the question.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.