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What's Next For Oil and How To Prepare | Josh Young and Jimmy Connor

Jimmy Connor Mar 10, 2026 41:35

Summary

Josh Young argues the Strait of Hormuz blockade removes 10-20 million barrels a day, and longer disruption points oil toward $150 or higher.

He draws a 1970s analogy: an initial spike, a deep retracement, then a second supply-driven surge toward inflation-adjusted record prices.

Iranian exports keep flowing to China through workarounds, and unenforced sanctions signal weakness that Young says sets up a larger price shock.

Oil demand stays price-inelastic because fuel is a small share of ownership costs, and rising wealth keeps lifting per-capita consumption.

The guest sees the biggest opportunity in smaller oil and gas producers whose transformed cash flows are not yet reflected in share prices.

Josh Young's takeaways

  • Top takeaway Argues the Strait of Hormuz blockade removes 10-20 million barrels a day of supply and that the longer it lasts, the higher oil and related commodity prices should go.
  • Maps the 1970s pattern onto today — an initial spike, a deep retracement, then a second geopolitical wave — and calls the 2022 spike-and-retreat the parallel setup for a run toward $250 WTI.
  • Contends unenforced US sanctions on Iran signal weakness while Iranian barrels keep reaching China through laundering workarounds, setting up a larger eventual price shock.
  • Sees the biggest dislocation in smaller producers and services companies whose free cash flow he says transformed faster than their share prices.
  • Leans above the roughly $75 forward curve into end-2026, calling $85 a decent blended exit number while conceding it could be $65 or above $100.

Jimmy Connor's takeaways

  • Top takeaway Frames the 1970s analogy — the 1973 embargo took oil from $3 to $12 and the 1979 revolution from $14 to $38 — and asks whether a double-or-triple move could repeat now.
  • Highlights Canadian pump prices, noting the carbon-tax repeal cut 17 cents a litre while prices still jumped to about $1.50 a litre, roughly $4.20 a gallon, as oil surged.
  • Presses on investor positioning for the volatility and puts the guest on the spot on where oil lands by December 2026.
  • Flags the macro toll of high oil: a weak February non-farm number, rising unemployment, sticky inflation, and airline stocks down 20-40%.