The Iran War and Oil Prices: What Investors Need to Know

SPEAKER_1 (0:00)

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Jason (0:03)

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SPEAKER_1 (0:06)

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Michael Zuber (0:31)

Alrighty, folks, let me just get this out of the way right now. This video has the potential to be political. Yes, if you hate politics, do me a favor, shut the video off right now, because I don't want to see the craziness. It's not something that I enjoy talking about, but I think we have to talk about the Iran War. It is now going on six plus months. We have oil at or near $100.

We have oil, we have diesel problems that are going to be inflationary for months, if not years to come. So I think we at least need to acknowledge that this Iran War, this Iran conflict, whatever we are calling it these days, is not over, did not end in six weeks. And frankly, it may not end in the next six months. This could go on for the next 18 to 24 months on the outside. So I think we need to talk about it, because it is impacting lots of things.

Jason, what say you? I know you had initially thought this thing would be over quickly. I think it's fair to say it didn't happen.

Jason (1:34)

Yep, I brought that up with you, and I want to say that I was wrong.

I get most stuff right, but what I don't get right is estimating when conflicts will start and end, and interest rates. Those are my two Achilles' heels, I guess. But in my defense, I would argue that what is going on in Iran is not a war. That it's not a war anymore. I mean, it was a war. The war, I think, ended actually pretty quickly, after maybe two months.

Now it's just sort of dragging on in this ongoing sort of tit-for-tat kind of conflict. Now, but I wouldn't call it a full-fledged war. What do you think?

Michael Zuber (2:25)

Well, I think you're wrong.

Jason (2:27)

Really?

Michael Zuber (2:27)

Why is that? I actually think it's getting worse.

Jason (2:29)

I mean, compared to Afghanistan, Vietnam, the Korean War, it's not a war like that.

Michael Zuber (2:36)

Let me respond.

Jason (2:37)

Yeah.

Michael Zuber (2:37)

So again, I think this war started with two parties, the US and Iran.

I think what we are currently watching is the unfortunate reality that is going to, it is being morphed right now into something much more substantial. Specifically, the cleanest example that's public, and I'm sure there's lots of stuff going on in private. The Houthis have taken over part of Yemen, that little tip that now basically cuts off the Red Sea. And the Houthis are now bombing Saudi Arabia. And that is, you know, I don't know...

Jason (3:13)

You almost, Saudi asked us to get involved in that part.

Michael Zuber (3:17)

Yeah, well, let's be clear, it's coming. Saudi Arabia is not going to just get in, going to stand there and keep getting punched in the face. They are eventually going to reply. And if history is any storyteller, we are going to be involved, somehow, someway, because of our connection to Saudi Arabia.

So I would argue this war is expanding, not shrinking. It went from a two-party affair to something much more substantial, and frankly, much more dangerous.

Jason (3:48)

Yeah. Well, you're right that Iran is trying to bring in other parties. And we almost got involved in defending Saudi Arabia, which I don't think we should do in a million years.

But at the last minute, as literally the jets were being armed with their missiles and bombs. Yeah. Trump backed out of that. So yeah. But you know, this stuff is so complicated. I mean, there are so many interrelationships that none of us really understand, unless this is our full-time career. It's just a very... geopolitics is a super complicated thing. Yeah.

Michael Zuber (4:27)

I don't pretend to know all of this, but again, the first and second-order effects of this, again, my assumption is this gets worse before it gets better, which is not fun for me to say. What does worse look like, dude? I have no idea. Just worse. And it's like porn. You'll know when you see it, right? When this thing gets worse, you'll know when you see it, right?