“China Has 21 Days” - Strait Of Hormuz Crisis THREATENS China’s Oil Lifeline
Episode Stats
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Summary
In this episode of the Stock Market Movers podcast, we talk about the latest in the Iran war, gas prices, and what it means for the future of the stock market. We also talk about Bitcoin and other precious metals.
Transcript
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So whatever you think is going to happen in the future, you can invest in it at Wealthsimple.
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With everything that's taking place right now with Iran, Rob, I believe if I'm not mistaken,
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Oh, by the way, this is the gas poll that you ran.
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How much have gas prices in the area increased?
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So that, Rob, how much was gas prices for you when you filled it up this morning?
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It's around 350 in my area, but that's up from last weekend.
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I think West Texas Intermediate opened this morning at 72.
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So, Tom, if this is six bucks today, and you're seeing, let's talk purely brass tacks,
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how the individual is going to be impacted by this, whether you're like Adam, you don't
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drive and you take Ubers, or if you're somebody that drives and you pay for gas, if it's going
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to 87, how quickly is the speed of the market feeling the pain of gas prices?
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So, every time there's a shortage, and a shortage creates prices to go up.
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Also, when demand goes up, and right now there's more demand for the U.S. oil because
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We've increased the output for Venezuela over the past four weeks, 2x from when we took
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The pipes are open from the valley, and that's 2x.
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So, we're pumping and we have it available, but there's demand for it because the Straits
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It gently goes up, and now look what happens on March 5th.
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So, it was hanging tough until the war started escalating, and now the Straits of Hormuz have
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been closed for a couple days, and that's putting pressure, you know, on China.
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And Rob, do you mind going to five years or even go to max?
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They want to keep the oil, bear of oil, around 70 bucks.
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65 in the U.S., you make a profit, and you can afford to extract shale.
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So, if you look at this, and Pat, you're the numbers guy, it basically fell below market
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But historically, if you're looking, if you want to go back 10 years when Trump took office,
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And that was also the Saudi market manipulation, trying to keep the price low to hurt Alberta
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oil sands and North Dakota shale, because those are alternative drills that were working.
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2022, it spikes under Biden because we weren't pumping as much oil.
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We slowly opened after COVID, but what had Biden done trying to keep the price down?
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He emptied the SPR, the Strategic Petroleum Reserve.
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So that's Biden's, by the way, that's also Biden inflation, and just poor executive management
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Even though there's been a major spike in the last five days with the Iran war, it pales
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in comparison to what happened a few years ago, right?
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The spike is that little tiny thing at the end.
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You see, since Trump was elected, what's been happening?
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So the guy we should be asking is Vinny, who's got a massive truck.
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By the way, just so you know, here's what you need to know.
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Last Friday, it was around $67, $70 to now being at where it's at.
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So you're talking, you know, $17 to $20 up, which is direct impact.
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And how much of that's going to translate here?
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But if straight of Hormuz, if nothing's leaving there, and China's sitting around knowing 80% of their oil,
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However, Tom, how much longer can China sit around without coming out and saying,
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hey, we kind of need to protect ourselves with Iran because the oil we're relying on?
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I was reading that 21 days, they will start to feel it.
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But within 21 days, they're really going to start to feel it.
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And we have basically impacted a tremendous amount of their navy.
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Because that's where China's going to get their oil.
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Or are we, on the backside, willing to say, okay, I'm sorry, the Strait's closed.
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Yeah, if you look at this chart that Rob just pulled up,
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Iran and Venezuela export most of their crude oil to China.
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Share of Iran and Venezuela's crude oil export that go to China.
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And if you control both of them now, and China no longer has control of Panama Canal because of what happened with Panama.
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Panama's Supreme Court comes out and says, no, we're not doing it.
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Listen, you don't have any more authority over this.
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If you think these guys, when they say they're playing, you know, chess and they're grandmasters, if you think that.
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Now China's sitting around saying, well, how can we create pain for U.S.?
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How can we create pain for U.S. to do anything?
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Strategically, it's actually very interesting when you think about the sequencing of what's been done.
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Maybe they could embargo the knockoff Callaway drivers.
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Trump's been saying he's going to do two things.
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You know, we talk about the 20-point plan that he was going to do.
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At the top of the list, he was going to shut down the border, and he's going to drill baby drill.
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We just learned that China, which is our number one combatant.
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They get what percentage of their oil from Venezuela and Iran?
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A year ago, when Syria was about to fall, Syria, Bashar al-Assad calls his boys,
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Can't help him, because he's embroiled in a war in Ukraine.
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Iran can't do anything, because they're fighting with Israel.
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Venezuela, when they fall, they say, hey, guys, who's going to come help us out here?
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So, could it be that Trump, when he said, drill, baby, drill, this was all part of his plan
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to take out all these countries and basically say, China, what's up with the tariffs now,
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You have a billion people that you need to keep the lights on, and you're going to be
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major struggling when I take out all your allies.
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So, could it be that Trump had this planned all along?
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If this is exactly how they thought about this, what a master plan.
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He said Marco Rubio will end up being the greatest.
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So, Tom, what are we looking at here with the China imports?
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China imported 5 million barrels a day through the Strait of Hormuz last year.
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703 Oman, 1.5 million Saudi, and 1.4 million Iran.
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00:10:51.300
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00:10:56.280
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00:11:04.940
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