You know that scene from "Don't Look Up"? The scientists screaming that a meteor is about to destroy Earth and everyone's busy obsessing over celebrity gossip?
Yeah. Welcome to the financial markets in 2025.
The elephant in the room nobody wants to see
A report from Politico just confirmed what anyone with two functioning brain cells already suspected: an open war with Iran would represent the largest oil supply disruption in history. This isn't hyperbole. This isn't clickbait. It's the damn geopolitical reality knocking at the door while the market sits around debating whether the Fed will cut 25 or 50 basis points.
We're talking about the Strait of Hormuz — that little chokepoint through which roughly 20% of all the oil consumed on the planet flows. Twenty percent. One-fifth. If Iran decides (or is forced) to shut that tap off, it makes the 1973 crisis look like a hiccup.
A history lesson for those with short memories
Let's revisit the biggest oil supply disruptions the world has ever seen:
- 1973 — OPEC Embargo: The Arabs cut off supply to the U.S. and its allies. Price per barrel quadrupled. Lines at gas stations. Global recession.
- 1979 — Iranian Revolution: Iranian production collapsed. Prices doubled. Inflation ran wild.
- 1990 — Invasion of Kuwait: Saddam Hussein decided to play conqueror. Oil spiked 130% in months.
- 2019 — Attack on Saudi facilities: Houthi drones hit Aramco. Largest single-day disruption ever recorded at the time. Prices surged 15% in a single day.
Now imagine all of that combined. And multiply it.
That's what we're talking about when the subject is a direct conflict with Iran. The country produces around 3 to 4 million barrels per day, but the real impact isn't Iranian production itself — it's the strategic control of the Strait of Hormuz, through which nearly 17 million barrels flow daily.
What this actually means (and what it means for your wallet)
If you think $4-a-gallon gas is expensive, wait until you see what happens with oil at $150 or $200 a barrel.
It's not just gasoline. It's everything. Freight, plastics, fertilizer, food, electricity, the entire logistics of global supply chains. The inflation that central banks have been trying to tame with sky-high interest rates? Becomes a bad joke.
And the most mind-blowing part: the market prices this risk like it's some marginal probability. Oil keeps trading in relatively "well-behaved" ranges. The VIX isn't screaming. U.S. stock markets keep partying.
It's like watching someone dance on the roof of a building that's on fire and commenting: "Nice choreography."
What Taleb would say about this
Nassim Taleb has a quote I love: "The biggest risk is the one nobody is measuring."
This is the textbook case of a Black Swan being announced in advance. The risk exists. It's concrete. There are reports documenting it. And the market, in its infinite arrogance, looks the other way and pretends everything will work out because "it always has."
No, it damn well hasn't. Ask anyone who was leveraged in 2008. Or in March 2020. Or in Russia in February 2022.
So what about the U.S. investor?
Energy stocks moon, right? Maybe. In the short term, oil producers benefit. But the broader economy — dependent on affordable energy across every sector — takes a knife to the gut. Inflation surges, rates go higher, consumer spending drops, leveraged companies bleed out.
It's the classic paradox: the U.S. produces a ton of oil, but the net impact of a global energy shock still hurts like hell.
The question that remains
Do you have protection in your portfolio against this scenario? Exposure to energy commodities? Dollar-hedged positions? Gold? Or are you 100% in equities and bonds praying nothing happens?
Because praying is great — I pray every day. But God helps those who prepare.
And preparation, in the markets, is what separates the survivors from the statistics.
