Oil, Yields Surge Again: Expect Shortages, 'Much, Much Higher' Prices Next | Josh Young

**David Lin** (0:00)
It's Tuesday, September 1st, and oil is soaring once again on new strikes against Iran. WTI crude is now at $92 a barrel, climbing more than 13% since last week, August 27th, and now up more than 30% since its July lows. Last night, on August 31st, two oil tankers, one Saudi and one South Korean, were struck by projectiles in the Strait of Hormuz within minutes of each other. Fortunately, there have been no casualties or spills reported thus far. And today, US. Central Command announced new strikes on Iran's Revolutionary Guard in retaliation for what they claim is Iran trying to lay more sea mines in the Strait. Iran vowed to retaliate against the United States and said that the US will regret its new attacks. President Trump warned that if Tehran hits back again, the next round of attacks will leave very little of the Islamic Republic of Iran.
Meanwhile, the White House says its new Venezuela oil deal gives the United States a 35% stake in 65 billion barrels of reserves with output bound for US refineries.
On the news, stocks are falling, and the US 10-year Treasury yield has climbed to 4.76%. It's highest since January 2025 Further energy market shocks may be coming. If inflation remains sticky or increases, the Fed will likely raise rates in September rather than put the Fed funds rate on pause. Oil is an important input in pretty much everything we consume. Inflation will come in fast and furious if diesel prices continue to go up. So the question is how high will oil get on recent escalations, especially if the Strait of Hormuz remains closed? Well, right now traders on Kalshi are predicting that there's a 32% chance that WTI crew will hit above $115 by the end of the year. If you agree and you place a $50 trade, your payout could be $147 if you're right.
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Kalshi is CFTC approved and available in all 50 states, including California and Texas. Josh Young is here to give us his outlook on oil. He is the CIO of Bison Interests. Welcome back, Josh.

**Josh Young** (2:26)
Thanks for having me.

**David Lin** (2:27)
You have been bullish on oil for the remain for most of this year since I started talking to you about the Iran War. And oil has been heating up in the last couple of months, especially since the beginning of July.
New attacks on Iran starting yesterday or the night before. And oil is now WTI at $90 a barrel. It was just at $80 a few days ago. Josh, tell us about this trend that we're seeing right now.

**Josh Young** (2:54)
Yeah, so I've actually been bullish on oil partly because of this specific geopolitical risk for a few years now since we actually first did an interview, I think, a few years ago. And so I think I missed the risk on Venezuela in terms of the US coming in, and actually there's more supply coming from there. But this supply risk from Iran, from the Strait of Hormuz is significant, and no one knows how long it will go. And so the thing I think that was happening with the oil market the last few months was the price was down, there was this big narrative on there being potentially a glut again of oil, which is sort of wild to hear people talk about there being a glut when there's five to 10 million barrels a day of under supply.
But we've seen persistent attacks by Iran, their IRGC, as well as by IRGC proxies like the Houthis. And these have materially limited transits. So there's this big debate that went on over the last couple of weeks. Are there five million barrels a day coming through the Strait of Hormuz, or was there seven or even 10? But that sort of misses the point that there were 20 million barrels a day coming through the Strait of Hormuz in February. So I think that's sort of the setup. And then the one other thing that's really big that I think people are sort of missing from like a news headline perspective. Yesterday, the EIA failed to deliver their June oil report. And they had an error message on their website saying that they couldn't reconcile their systems with the front, like the back office systems equivalent with the front facing systems. They were able to deliver their natural gas report though. So if you were a public company and you announced that you couldn't reconcile your internal numbers with, let's say, your financial statements, your stock would fall 50 percent and the SEC would halt it, and the exchange would halt it and you'd get investigated.