Spot on (pun intended). This guy knows the oil markets.

What's your take on the probability of a recession given the oil price shock and currently high interest rates? Historical parallels do not look good.

There are too many moving parts to predict this with any accuracy such as:

1. What happens with interest rates? Powell's replacement will be Kevin Warsh who has seemingly promised to lower interest rates in a short-term ploy aimed at the midterms. Should this happen, it'll likely be a disaster for inflation and the dollar;

2. How and when this impasse ends? Ending tomorrow is still singificantly better than ending in September. Also, there could be a comprehensive deal or Trump could simply walk away and declare victory, essentially leaving the situation unresolved but basically allowing Iran to charge a toll;

3. How bad will inflation get? I think I heard that in 2008 households still saved on average 10% of their income. That's basically 0% now. There simply is no buffer;

4. Does the AI market crash? That could happen but I'm not betting it will. Lookk at how long the market has remained irrational about TSLA;

5. How bad is the energy crunch going to get in Asia and Europe in particular? Unlike 1973, the US might get expensive gas but as a net energy exporter now, there won't be no gas like there was then. Asia and Europe (particularly for heating come winter) are in a different category;

6. What regimes are going to fall from all of this? I don't know what that number will be but I suspect it won't be zero;

7. What political realignments will take place because the US security guarantees (particularly for the GCC) and guarantees of maritime trade (since WW2) have been broken; and

8. How bad are the food shortages going to be? Developing countries will bear the brunt of this of course.

I wish I knew.