On the Middle East and Surging Oil Prices

[] Today's market commentary from TradingPub is here! To view this email as a web page, go [here.]( To view this email as a web page, go [here.]( [] [] [] Join Lance Ippolito at 4 p.m. ET or 8 p.m. on Tuesday to [learn all about his Perfect Tesla Trader!]( On the Middle East and Surging Oil Prices Dear Fellow Trader: This morning, we witnessed a sizable pop in oil prices. The rise comes two days after Hamas attacked Israel. The latter has responded by cutting off electricity and food flowing into the Gaza Strip. In addition, the Biden administration is seeking a smoking gun that would suggest Iran had any involvement. However, our intelligence community must take the proper steps to confirm or deny such reports. The rise in oil prices today doesn’t have much to do with the sudden risk-off selling that transpired last week. After a solid 65-day rally in oil since June, the crude markets cratered last week as profit-taking and worries about rising interest rates took crude and energy stocks lower. But today, we’re seeing an uptick in crude due to the “geopolitical risk premium.” Today, I want to discuss this risk premium and give you a better understanding of drivers in crude prices outside traditional supply and demand metrics. What is the Geopolitical Risk Premium? In the energy markets, the geopolitical risk premium is the extra cost or price increase applied to crude oil and petroleum products due to perceived or actual geopolitical uncertainties or events. These uncertainties and risks are things that COULD — and we stress the word “could” — disrupt the global supply of crude. There is no guarantee that these events will fuel disruption. As a result, this geopolitical risk premium is not a fixed or quantifiable figure. Instead, it’s a concept brought on by trading that attempts to explain the impact of events like the attack on Israel on global crude prices. As I noted, the threat of escalation — particularly between Iran and Israel — could produce a dramatic risk premium. The reason is that Iran has significant sway over oil flow through the Strait of Hormuz. This narrow channel of water carries upward of 21 million barrels of crude per day — roughly 21% of the global daily supply of crude. Should Iran’s military blockade this waterway, it would prevent crude shipments for other major suppliers like Iraq, Kuwait and the United Arab Emirates, and it would paralyze natural gas shipments from Qatar. [] How The Premium Works It’s important to note that this premium is tied to a handful of macroeconomic and geopolitical concepts that could stall the global economy due to surging oil prices. The obvious one is what I just outlined with Iran. If there are conflicts like war or political instability (see Libya as an example), these events can disrupt the production and transportation of oil. These disruptions can reduce the global oil supply, leading to higher prices. Next, there are tensions around political sanctions. The U.S. has placed sanctions on nations like Iran and Russia in recent years. When nations put sanctions on oil-producing countries or companies, it could limit their ability to sell in the international market. This reduces the supply of oil and increases prices. A fine example of this has been the struggling U.S. sanctions on Moscow, which has been able to sell its crude at a higher price than the cap set by Western nations. Russia has pulled more crude off the market for domestic purposes and boosted its strategic relationship with China and India. Next, we have geopolitical tensions. Now, imagine that Iran and Iraq have a big geopolitical fight. When tensions rise between these big producers or regions, it can impact supply across the globe. Threats to oil infrastructure or shipping lanes can raise the geopolitical risk premium. Such tensions will impact market sentiment and traders' expectations. Even if there is no immediate supply disruption, the perception of increased risk can lead to higher oil prices. All of this is critical because at the end of the day, these geopolitical tensions really impact one major element: the deployment of investment capital. When tensions rise, Western producers in particular could become hesitant to invest in oil exploration and production in politically unstable regions, which can limit future supply growth. This is critical because right now, there is about a $500 billion gap between the amount of oil that is expected for global demand in the next few years, and the amount of money that is necessary to pull all that crude from the ground. Tensions like the ones heating up in the Middle East or in Ukraine can keep a lot of money on the sideline, or it can find itself allocated to other projects or sectors. This tension is not good for sentiment. Putting it Together Of course, you might read this article and say “Well, of course, Garrett.” This is extremely obvious. But if you already knew this, consider yourself in a very small camp of traders and investors. You would be very surprised by the lack of knowledge around OPEC+, the source of global crude, and the supply chains that keep the economy churning. People take oil for granted. It is the most important commodity for the global economy. The world economy was built around oil, not the other way around. As tensions increase across the globe, higher oil prices are very likely, and the transition toward green energy will underwhelm. As you look out into the next decade, it’s important to have a core portfolio of energy stocks that pay great dividends and provide unique upside. I just put out my latest recap of the global markets in Tactical Wealth Investor. While momentum is red, I walk you through what to do with your money right now, and lay out the stock that you need to buy when conditions improve. [] Chat soon, Garrett {NAME} *This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk. [] [] _________________________________________________ [] It’s Not Just Wall Street That Thinks TSLA Is a Buy… Like I mentioned in the subject line... A number of institutions say shares of [Tesla will reach nearly $600 by 2025…]( That’s more than double what the stock is trading at today… But in my opinion, there’s a better way to target that same return… One of our best traders has uncovered a market irregularity that’s specific to shares of Tesla. And when leveraged the right way… [It Can Shell Out Big Returns in Days]( [] _______________________________________________ [] Market Momentum is RED Equity Momentum is very red right now, despite the chop and recovery from early morning lows. Markets continue to react to the Hamas attack on Israel over the weekend. Commodity prices are ticking higher, and investors should keep a close eye on developments regarding Iran. *This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. [] _______________________________________________ [] Want to get a link to my TradingPub articles as soon as they post? I’ve got you covered! Telegram is an entirely free messaging app and getting access is as easy as 1… 2… 3… 1. Download Telegram on your mobile device (Before you can add Telegram to your desktop computer, you must download the application on your phone and create your account: To download to your iPhone, [click here](. To download to your Android device, [click here](. After the download is complete, please create an account. NOTE: You can manage your privacy settings by clicking “Settings,” and then “Privacy & Security.” 2. Download Telegram on your desktop: Once you’ve downloaded Telegram onto your mobile device and created your personal account, you can download it onto your desktop computer. To download onto your PC, [click here](. To download onto your MacOS, [click here](. 3. Then add the TradingPub channel and you’re done: [9_jjnFuAvno0MjNh]( See you there! Garrett [] [] [] Join Lance Ippolito at 4 p.m. ET or 8 p.m. on Tuesday to [learn all about his Perfect Tesla Trader!]( On the Middle East and Surging Oil Prices Dear Fellow Trader: This morning, we witnessed a sizable pop in oil prices. The rise comes two days after Hamas attacked Israel. The latter has responded by cutting off electricity and food flowing into the Gaza Strip. In addition, the Biden administration is seeking a smoking gun that would suggest Iran had any involvement. However, our intelligence community must take the proper steps to confirm or deny such reports. The rise in oil prices today doesn’t have much to do with the sudden risk-off selling that transpired last week. After a solid 65-day rally in oil since June, the crude markets cratered last week as profit-taking and worries about rising interest rates took crude and energy stocks lower. But today, we’re seeing an uptick in crude due to the “geopolitical risk premium.” Today, I want to discuss this risk premium and give you a better understanding of drivers in crude prices outside traditional supply and demand metrics. What is the Geopolitical Risk Premium? In the energy markets, the geopolitical risk premium is the extra cost or price increase applied to crude oil and petroleum products due to perceived or actual geopolitical uncertainties or events. These uncertainties and risks are things that COULD — and we stress the word “could” — disrupt the global supply of crude. There is no guarantee that these events will fuel disruption. As a result, this geopolitical risk premium is not a fixed or quantifiable figure. Instead, it’s a concept brought on by trading that attempts to explain the impact of events like the attack on Israel on global crude prices. As I noted, the threat of escalation — particularly between Iran and Israel — could produce a dramatic risk premium. The reason is that Iran has significant sway over oil flow through the Strait of Hormuz. This narrow channel of water carries upward of 21 million barrels of crude per day — roughly 21% of the global daily supply of crude. Should Iran’s military blockade this waterway, it would prevent crude shipments for other major suppliers like Iraq, Kuwait and the United Arab Emirates, and it would paralyze natural gas shipments from Qatar. [] How The Premium Works It’s important to note that this premium is tied to a handful of macroeconomic and geopolitical concepts that could stall the global economy due to surging oil prices. The obvious one is what I just outlined with Iran. If there are conflicts like war or political instability (see Libya as an example), these events can disrupt the production and transportation of oil. These disruptions can reduce the global oil supply, leading to higher prices. Next, there are tensions around political sanctions. The U.S. has placed sanctions on nations like Iran and Russia in recent years. When nations put sanctions on oil-producing countries or companies, it could limit their ability to sell in the international market. This reduces the supply of oil and increases prices. A fine example of this has been the struggling U.S. sanctions on Moscow, which has been able to sell its crude at a higher price than the cap set by Western nations. Russia has pulled more crude off the market for domestic purposes and boosted its strategic relationship with China and India. Next, we have geopolitical tensions. Now, imagine that Iran and Iraq have a big geopolitical fight. When tensions rise between these big producers or regions, it can impact supply across the globe. Threats to oil infrastructure or shipping lanes can raise the geopolitical risk premium. Such tensions will impact market sentiment and traders' expectations. Even if there is no immediate supply disruption, the perception of increased risk can lead to higher oil prices. All of this is critical because at the end of the day, these geopolitical tensions really impact one major element: the deployment of investment capital. When tensions rise, Western producers in particular could become hesitant to invest in oil exploration and production in politically unstable regions, which can limit future supply growth. This is critical because right now, there is about a $500 billion gap between the amount of oil that is expected for global demand in the next few years, and the amount of money that is necessary to pull all that crude from the ground. Tensions like the ones heating up in the Middle East or in Ukraine can keep a lot of money on the sideline, or it can find itself allocated to other projects or sectors. This tension is not good for sentiment. Putting it Together Of course, you might read this article and say “Well, of course, Garrett.” This is extremely obvious. But if you already knew this, consider yourself in a very small camp of traders and investors. You would be very surprised by the lack of knowledge around OPEC+, the source of global crude, and the supply chains that keep the economy churning. People take oil for granted. It is the most important commodity for the global economy. The world economy was built around oil, not the other way around. As tensions increase across the globe, higher oil prices are very likely, and the transition toward green energy will underwhelm. As you look out into the next decade, it’s important to have a core portfolio of energy stocks that pay great dividends and provide unique upside. I just put out my latest recap of the global markets in Tactical Wealth Investor. While momentum is red, I walk you through what to do with your money right now, and lay out the stock that you need to buy when conditions improve. [] Chat soon, Garrett {NAME} *This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk. [] [] _________________________________________________ [] It’s Not Just Wall Street That Thinks TSLA Is a Buy… Like I mentioned in the subject line... A number of institutions say shares of [Tesla will reach nearly $600 by 2025…]( That’s more than double what the stock is trading at today… But in my opinion, there’s a better way to target that same return… One of our best traders has uncovered a market irregularity that’s specific to shares of Tesla. And when leveraged the right way… [It Can Shell Out Big Returns in Days]( [] _______________________________________________ [] Market Momentum is RED Equity Momentum is very red right now, despite the chop and recovery from early morning lows. Markets continue to react to the Hamas attack on Israel over the weekend. Commodity prices are ticking higher, and investors should keep a close eye on developments regarding Iran. *This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. [] _______________________________________________ [] Want to get a link to my TradingPub articles as soon as they post? I’ve got you covered! Telegram is an entirely free messaging app and getting access is as easy as 1… 2… 3… 1. Download Telegram on your mobile device (Before you can add Telegram to your desktop computer, you must download the application on your phone and create your account: To download to your iPhone, [click here](. To download to your Android device, [click here](. After the download is complete, please create an account. NOTE: You can manage your privacy settings by clicking “Settings,” and then “Privacy & Security.” 2. Download Telegram on your desktop: Once you’ve downloaded Telegram onto your mobile device and created your personal account, you can download it onto your desktop computer. To download onto your PC, [click here](. To download onto your MacOS, [click here](. 3. Then add the TradingPub channel and you’re done: [9_jjnFuAvno0MjNh]( See you there! Garrett [] A TradingPub Publication ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. TradingPub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from TradingPub LLC are for your informational purposes only. Neither TradingPub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. TradingPub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by TradingPub 101 Marketside Ave, Suite 404 PMB 318 Ponte Vedra, Florida 32081, United States [] A TradingPub Publication ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. TradingPub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from TradingPub LLC are for your informational purposes only. Neither TradingPub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. TradingPub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by TradingPub 101 Marketside Ave, Suite 404 PMB 318 Ponte Vedra, Florida 32081, United States