You know that scene in Batman: The Dark Knight where the Joker burns a mountain of cash and says "it's not about the money, it's about sending a message"?
Well. Oil above $90 a barrel is that mountain of money going up in flames. And the message is crystal clear: geopolitics doesn't give a damn about your financial planning.
The cold, hard facts
Tensions between Iran and the West — which had been simmering on low heat for months — pushed oil prices above $90 a barrel. This isn't some clickbait headline from a doomsday blog. It's The Guardian reporting what the commodities market had already been pricing in between the lines.
And when oil goes up, everything goes up with it. Shipping. Food. Energy. That Uber you grab when it's raining. Your electric bill. Your morning bagel at the corner shop. Everything.
The threat of a broader conflict in the Persian Gulf region — through which something like 20% of all the oil consumed on the planet flows — is the kind of risk no Excel model predicts. No big-bank analyst with slicked-back hair and a $1,000 suit has the honesty to say: "Look, we don't know a damn thing about how this plays out."
Nassim Taleb would call this a slow-motion black swan. Everyone can see the thing approaching, but they're acting like it's a duck.
The domino effect nobody wants to talk about
Let's get to the meat of it.
Oil above $90 has a brutal cascading effect:
1. Global inflation reignites. Central banks — the Fed, the ECB, and our beloved Brazilian Central Bank — that were gearing up to cut rates now need to recalculate the route. If energy inflation starts pushing the indexes back up, forget about that easing cycle the market was already popping champagne over.
2. Emerging markets get punched in the face first. Brazil, India, Turkey — net oil-importing countries — get hit with a double whammy: currency devalues and import costs explode. Remember 2022? Yeah. This could be the rerun nobody asked for.
3. The consumer foots the bill. As always. While commodity traders in Chicago and London party on the volatility, a working mom in Detroit watches the price of gas climb yet again. This is skin in the game in reverse: the people making the decisions don't suffer the consequences. The people suffering the consequences don't get to decide anything.
And where does Brazil fit into all this?
Ah, Brazil. Our eternal supporting character who could've been the lead.
We're oil producers. Petrobras, in theory, benefits. Shares might react positively in the short term. But — and this "but" is as massive as the Pre-Salt reserves — the state-owned company's pricing policy is a chronic wild card. The government wants cheap gasoline to prop up approval ratings. Minority shareholders want price pass-throughs. And caught in the middle of this tug of war, the investor is left running around like a headless chicken.
If oil stays above $90 for an extended period, the pressure on Petrobras to not pass through international prices will be enormous. And then we're back to that horror movie we've already watched before: implicit subsidies, price gaps, shareholder value going up in smoke.
What the market is ignoring
The market has the memory of a goldfish and the attention span of a TikTok scroll. Today everyone's obsessed with when the Fed's going to cut rates, with the next meme coin, with Elon Musk's latest tweet.
Meanwhile, the price of a barrel of oil — the single most important commodity of modern civilization — is screaming that the world isn't as stable as your brokerage app would have you believe.
Bruce Kovner, one of the greatest macro traders in history, used to say that the biggest opportunities and the biggest risks lie in the geopolitical events the market underestimates.
Guess what the market is underestimating right now?
So tell me: are you positioned for a world where oil stays above $100 for months on end? Or are you praying for the problem to just disappear on its own — like everybody did in 2021 before inflation blew up in everyone's face?
Prayer is nice. But a hedge is better.
