Igor Sechin—head of Russian oil giant Rosneft and a man who looks like he practices his handshake in a mirror—has identified the real winners of the Strait of Hormuz closure. U.S. oil companies. Brilliant work, detective. When 20% of global oil supply gets choked off, the people selling the other 80% make more money. Someone get this man a Nobel Prize in noticing things.
The Strait closure sent oil prices to multi-year highs. Retail traders saw this as their moment. Finally, a clear signal. Geopolitical crisis equals higher oil prices equals they should buy energy stocks. They loaded up on shares at the peak, right before every analyst on CNBC told them to. They are currently explaining to their spouses why they invested their emergency fund in a commodity they don't understand based on news from a waterway they can't locate on a map.
Sechin's observation carries the analytical weight of pointing out that umbrella sales increase during rain. U.S. shale producers benefit when their competitors can't ship product. Shocking. The global market gets rattled, inflation accelerates, economic growth takes a hit, and somewhere in Texas an oil executive buys his third ranch. This is not conspiracy. This is supply and demand, which retail traders learned about in high school and immediately forgot once they downloaded Robinhood.
The beautiful part is Sechin saying this like it's some revelation. A Russian oil oligarch noticed that American oil companies profit when Middle Eastern oil can't reach market. What's next? Will he discover that Boeing benefits when Airbus planes fall out of the sky? That Pepsi sells more soda when Coke factories explode? The man has cracked the code of capitalism: scarcity increases price.
Meanwhile your neighbor Gary is still holding his USO calls underwater, convinced the Strait situation is "bullish for energy" because a YouTube trader with 900 subscribers told him so. Gary doesn't know where Hormuz is. Gary thinks Iran is next to Iraq, which is technically correct but represents the full extent of his geopolitical knowledge. Gary is thrilled Sechin confirmed his thesis. Gary will be poor forever.
Sechin gets paid to state the obvious. Gary pays to ignore it.
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