Currently, the major battlefield is in WTI and not in the warzone of the Middle East. The Psychological barrier of US$100 is the watershed. When WTI is under $100, the US is in a favorable situation, when over this watershed Iran is in favorable situation. Of course, the shuttling up and down means the condition is mixed or in a grey area. When the price is under the $77.62 of Jun 2025, that is the 12-day war between Israel and Iran, the US wins. When it is under the price of $67.02 that is the closing price of Feb 28 (Friday) before the war started, then Trump won the war from head to toe. On the other hand, if oil price goes to $127, then Iran wins, and when it is over $147, the record high before the Financial Tsunami of 2008, Iran has a complete and thorough victory.
Besides watching the spot rate, we also need to mind the futures. That is the future price of oil on the last day of April, May, June, July……. This is the market expectation of oil prices which will be lower as shown on page 3. They are not hundred percent accurate, but we can see what the trend of expectation is.
G7 Finance Ministers are calling for a video conference to press down the oil price. It surely will have some immediate effect. But the long-term effect is still on arms. The military power of Iran is diminishing day by day. On the first day of the war, missiles shot out by Iran were in 3 digits and now said to be in 1 digit only. Now the US has destroyed all major portions of Iranian armaments, and disabled all defense systems and radars. EA-18G with the help of RC-135 already ruled the skies of the Middle East. All ground radars are in blind position and cannot see anything but snowflakes. Therefore, now the US can use the B52 bombers which are known as Stratofortress bombers. That is, it can fly high into the Strato atmosphere as a fortress for it has 8 engines. The common name is BUFF (Big Ugly Fat Fucker/Fella). It can carry quite heavy bombs at a very low cost, but no stealth function. Therefore, it must fly in the latter stage after all radars are blinded. For investors, the most important thing to know is that the manufacturer is BA.
So, the strategy of Trump is to use air supremacy first and then have precise bombing until Iran surrenders. The period may really take 4-6 weeks as said. But after that, when the new regime is in office, it still takes time for them to negotiate or press them down.
Decapitation cannot last too long, when you kill one successor, the next will come up, and when no one dares to come up, it will be in group leadership. Anyway, they must leave one person for negotiation or else it is hard to lead the whole country. In terms of traditional military power or nuclear power, Iran is in a weak position. But since the US ranks number one in military power in the world, does it mean no one dares to fight with the US? Surely not! Since the 1950 Korean War, it was the first time the UN used enforcement by the Security council to carry out justice, there had been a lot of nations to fight against the UN force which was primarily led by the US. The opposition party also said they are on the justice side and the UN is on the injustice side. What the UN can do to the injustice side? There are still so many wars since the UN was established in 1945, already 81 years. The injustice sides are still existing on earth. To those opposition sides, the devil UN is still existing.
One thing that Iran is in a favourable position, even if all major weapons were being destroyed, if they can fly up just one or two single kamikaze drones, and have explosion like the fireball of the Super Blood Moon in the cover page of The Express on Mar 6 (Wed), then oil price will rocket up suddenly. Now they are using shadow tankers to pass through the Hormuz Strait and transport oil to China and East Asia, but USS George Bush is now heading for the Mediterranean Sea, and USS Ford shifted to Persian Gulf to meet with USS Abraham Lincoln. Three 100,000 tons aircraft carriers gathered. A grand chase of cat and mouse is on the way. Still remember the Houthi armed group in Red Sea, their aim is not to sink the US warships, it is impossible. But they just want to give disturbance to commercial ships and tankers, it is not so hard a deal. Let’s see how invincible the US fleet is for catching such rats.
Winter time has gone away, and summer time (DST) comes, now the stock index goes back to early November which is the same as the end of DST last year.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.