Oil's Setup for 2026: OPEC+, SPR, and the Trade Wall Street Missed

Oil's Setup for 2026: OPEC+, SPR, and the Trade Wall Street Missed

In this Lead-Lag Live episode, Michael A. Gayed, CFA, explores the market forces, portfolio risks, and investment themes behind the conversation. The discussion is built for investors, financial advisors, portfolio managers, and market observers looking for clearer frameworks around macro, ETFs, asset allocation, risk management, and market structure.

Listen for practical takeaways on how today’s market narratives connect to portfolio positioning, risk-on/risk-off behavior, and the decisions investors face in real time.

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Host: Michael A. Gayed, CFA Disclaimer: This podcast is for educational purposes only and does not constitute investment advice.

Transcript

Welcome From Future Proof Miami

SPEAKER_02 0:06

Okay.

SPEAKER_01 0:07

Hello and welcome to Lead Leg Live at Future Proof in Miami. I'm here with John Love of USCF

War Risk And Oil Supply Fear

SPEAKER_01 0:13

Investments. Harry of Good, how are you doing? Yeah, so I wanted to get right into it and ask you about oil with the war going on in Iran and the Strait of Harbours.

SPEAKER_00 0:22

Yeah, it's incredible. I think this is one of the uh, you know, I have probably a handful of events uh like this. Um can I start it? I can start that over. I'm sorry.

SPEAKER_01 0:31

Yeah, no, no, just just start and that they this is not live, so it will just come back. All right, all right, perfect. I am I'm also making states. I'm like I've I never thought that I would be someone who gets tired of talking, but I'm getting tired of talking.

Strait Of Hormuz And Market Pricing

SPEAKER_00 0:44

I just did a webinar for this, so uh okay, so uh this is an incredible time. There's only been a handful of events like this since futures started trading in 1983 on oil. And uh, you know, you really can pretty much count on one hand. This one's very unique. If you look back to uh maybe the most consequential one before this is 1973, the Arab oil crisis, prices went up 300%, but only 7% of the world's oil supply was affected at that time. Right now, we're looking at the straight-of-form moves, as most people are probably aware, 20% of oil is at risk. 6% has already been shut in. Now, that may not last as long. Uh that's really the key question right now is what is the duration of this? Uh today, you know, March uh March 10th, we're seeing from President uh Trump some signals that you know it might be shorter than expected. There's a lot of pressures, not just from the market. Yeah, we watch that closely, but other countries, the Gulf countries, I mean, they're hurting, they're hurting from shut-in production. Their customers are hurting, uh, Asia, Japan. The US is not hurting as much because we have abundant uh supply of oil, but we don't get we don't produce all the oil we need. The question, the real issue right now is getting oil to the customers who need it, or you know, getting the right barrels to the right people. So while there's enough oil in the world, it's not getting there. And then what you know can get out, people are competing to get. So it's really uh uh it's just an incredible time. And the price action we've seen, you know, from a frankly a fairly tepid response when the war broke out to a panic on Sunday night and Monday, you know, with oil on the sitting 120, equity markets tanking, uh overseas markets, you know, down quite a bit, and then Monday, you know, the seeming recovery. Uh the two things that are happening right now is yes, reassuring words from not just President Trump, but also other G7 leaders talking about a coordinated release. I think the market is probably uh underpricing the risk a bit, at least in the outright futures price. But you know, if this really does end in a matter of days, then uh, you know, we should see some improvements. Uh, if it goes on for weeks and weeks or it gets worse, or Iran does not comply, and that's the real question. It takes two to tango here. So we've got President Trump uh on the one side, G7 leaders uh doing trying to do some relief, but you also have to have Iran say, uh, yeah, okay, we're you know, uh sure, we'll stop. So it's gonna be interesting how things develop

Iran’s Options And Escalation Risks

SPEAKER_00 3:11

from here.

SPEAKER_01 3:11

Yeah, there are there was a conversation last night um where uh a couple of advisors were discussing or or stating that this might be the exact playbook as the Iraq war.

SPEAKER_00 3:22

I I hope that's not the case. Uh I mean the the administration's been clear they don't want to quagmire. It's not clear that they went into it with a plan to avoid it happening. But I think you know, if you don't put boots on the ground, it is you know much easier to pull back our forces. The question again is you know, with Iran, they have this we've we've depleted a lot of their you know munitions, a lot of their uh weaponry, but their drone capability is still very high. But almost guerrilla-like tactics, they have a lot of small boats. We destroyed you know the big ships. Yeah, but the small boats they can load with explosives and go after tankers if they want to do that. I think, you know, at some point, you know, that the regime has been pragmatic in the past. However, there's been a massive turnover at the top. It's yeah, you know, they've got a lot of uh redundancy in the regime, yet, you know, when you take out 40 liters at the beginning and more along the way, it's like who who's in charge? And you know, what are they gonna do? The new Ayatollah, not only did he lose his father, they appointed the son, okay, lost his mother, lost his wife, and lost his son. So

How Fast Oil Can Drop

SPEAKER_00 4:26

uh, you know, I'm not sure that that's the person who's necessarily want to rest and come back to the table. And uh we'll see how this develops.

SPEAKER_01 4:33

Yeah, so i if if Trump does call off the war, if the war does end, how long will the price of oil remain?

SPEAKER_00 4:39

And then you had one of the that up to that time, and and actually I think until 2020, the biggest single-day drop, uh, 33%, just from us invading. And by no means this the war was just starting, the bombing campaign just started, but the market looking ahead said, okay, the resolution is being delivered right now, it was choppy for the next two months, extremely short war. So, you know, it took a little while for things to, you know, uh, you know, ek out or you know, things to normalize. Um, but I think I kind of would expect something here. We saw the same thing yesterday when when Trump spoke, oil had been very high, it came down, uh, it's been choppy. Um, if it goes back up, if if things get worse and then he ends it and Iran agrees, then I I think you see a similar kind of probably a quick drop there. So I think the risk at the moment is still to the upside, but we'll see what happens when uh I mean things can change in a dime. We've seen it with tariffs, we've seen it with all kinds of policies. When even when Trump seems to be in a corner by saying, you know, I'm only accepting unconditional surrender, they'll just say something different and and it'll change. So I think it'll I think the price will change quickly. It will

Other Flashpoints Investors Track

SPEAKER_00 5:49

take time for supply to, you know, normalize all of that. So there'll be some choppiness uh from there.

SPEAKER_01 5:55

And are there any other risks geopolitically that investors should be watching?

SPEAKER_00 5:58

Well, you know, if if if countries draw down their strategic petroleum reserves, I mean, uh uh probably not. I think right now, you know, people want uh are looking for stability. I think that's the message that the administration is getting. But you know, uh he always worries about something like China and Taiwan because they have built up their strategic reserve uh over the last year. That has been one thing the supporting markets and actually kept barrels, uh, you know, people can competing for barrels at the front of the futures curve. Um, you know, that maybe that's opportunistic for them. Uh we'll see what happens with, you know, is there terrorism, is there other things like that? And uh yeah, we'll we'll see. But I think that right now is the flashway. And then of course there's Ukraine and Russia, and that continues to go on, although that's a much smaller effect in that uh, you know, at that time uh that's three three percent of the world supply, and it was really rerouting of barrels, uh, which we're using right now, or you know, temporarily at least lifting sanctions so those barrels can flow. So there's a number of mitigation measures going on, but ultimately we still have maybe 15 to 20 million barrels that that could be off the market for a while if this gets worse.

Where To Learn More

SPEAKER_01 7:05

Yeah, where can investors go to learn more about you? Advisors and investors go to uscfinvestments.com.

SPEAKER_00 7:11

Got a lot of material on uh uh just commodities in general, a number of different funds, ways to to play the commodity space, and uh a substack, and you'll find all of that at our website, uscfinvestments.com.

SPEAKER_01 7:24

Awesome. Well, thank you so much for joining me. Thank you. You think that's good? Is there anything else you'd like to do? I think that's good. So yeah, you did a great job.

SPEAKER_00 7:31

Thanks.

SPEAKER_01 7:36

Oh, I'll put it all in the description. Okay. Oh on YouTube, yeah.

SPEAKER_02 7:41

Awesome. Yeah, that's and uh