Oil Hits $100 Again: ‘Real Super Spike’ In All Assets Next | Doomberg

Doomberg (0:00)

We are one major explosion, accident, sabotage, pick your favorite theory away from a real problem. Canada has escalation dominance in this argument. High oil prices is bearish for US debt. People sell treasuries to buy oil. Trump is playing a very dangerous balancing act of allowing US domestic prices to go higher, even though the US produces way more than enough diesel for its own needs.

David Lin (0:23)

It's Tuesday, September 8th. Welcome back to The Law Weekend. I hope everybody had a good Labor Day weekend. Oil prices are surging once more on the back of even more escalations in the Middle East. The US just hit three Iranian tankers in retaliation for Iranian missiles being fired at US warships over the weekend. Now, the Iranians claim that a guided missile destroyer and a US carrier were hit directly by Iranian missiles. US Central Command denied these claims, even though missiles were fired, and they said that the Iranians missed their shots. But either way, markets were spooked and tensions are escalating. Meanwhile, the Houthis struck a key Saudi refinery as well. And this is key for refined products, including diesel. Diesel in the US surged to the highest level ever. Now at $5.90 a gallon. This is key because diesel is probably the single most important energy input for commercial transportation across the US.

Over 76% of commercial trucks run on diesel. So this affects everything that's being transported by trucks, including your groceries, by the way. So we'll see what's next. And if you think that diesel is going to continue going higher, well, on Kalshi, there's a trade for that. Traders are predicting that there is a 69% chance that diesel will climb above $6.40 by year. And if you agree and you place a $50 trade, your payout on that $50 could be $73, if you're right. This video is sponsored by Kalshi. It's the largest prediction market in the United States. Unlike a sports book, you're trading peer-to-peer on real-world events. From economic data to political outcomes, the price moves based on public opinion, not a house. And go to the link in the description down below. We'll scan the QR code here to get started. And new users can get $25 when they trade $25. Kalshi is CFTC approved and available in all 50 states, including California and Texas. Our next guest, Doomberg, head writer of the Doomberg Substack, is going to give us his take on where energy markets are headed next.

Is it going to escalate in Iran? Or are things going to calm down? What's going to happen to the diesel spread? And what's going to happen to the Federal Reserve now that energy prices have been soaring for weeks on end? So, Doomberg is going to give us the entire outline, energy, monetary policy and bond yields. Welcome back to the show, Doomberg. Good to see you.

Doomberg (2:45)

Great to see you again, my friend. Looking forward to it.

David Lin (2:47)

Looking forward to this as well. Very, very timely to have you back on today on September 8th. The Hill reported on September 6th that the Energy Secretary Chris Wright defended the Iran War as necessary to reset the Middle East. Let me just pull this title up.

I want to start there just to set the stage, because what happened over the weekend was the Saudi oil refiners were hit by the Houthis.

And then we have this statement. Energy Secretary Chris Wright said on Sunday, the Iran War is necessary. During an interview on ABC News this week, he reiterated the long-standing talking point from the administration, a nuclear-armed Iran is an existential threat, not just for the region, but for the world economy. We know the administration stands. Where I'm going with this is whether or not the administration has changed their attitude in the last couple of months. If not, can we expect this to escalate even further?

Doomberg (3:46)

Sure. Great set of questions. First of all, I would emphasize just to get the immediate quote out of the way that is little more than a talking point than I would guess, not to put words in his mouth, but long after Chris Wright is no longer the Secretary of Energy, and maybe when he sits down to write his memoirs, he'll probably have a different view of the wisdom of going to war with Iran in February of 2026 But I guess time will tell. To your specific question about the elevated price of oil as a consequence of what happened over the weekend, you hit a lot of the high points. You had this dust up between the Houthis, the government of Yemen and the Saudis. And if it sounds complex to you, it's because all civil wars basically are, which is one of the reasons why we would prefer the US not get entangled in too many of other people's civil wars. But we started to see the Houthis attack some Saudi assets and the oil markets are pricing in the prospect of closing of the Red Sea and all of these other sort of tail risks that have been simmering but have not yet been sort of imposed upon the market to truly deal with. Something else might have happened over the weekend. We have this open source methodology of trying to fight our way through all the signal on Telegram and TwitterX and things like that. And it looks like for the first time, Iran has been firing some pretty sophisticated missiles at US warships, including a US aircraft carrier. There's some speculation in the Twitterverse as to whether or not this might have caused a significant recalculation by the US. Navy. There's all these sort of side stories that we see about Pete Hegseth. And one wonders, just like in the early days of the war, when we saw these reports, a lot of them turned out to be true, denied by the White House, of course.