The Open Bell — Ep. 041 — 18 Aug 2026

Today on The Open Bell: Iran's latest threats to the Strait of Hormuz, the narrow channel that carries roughly one in five barrels of oil shipped globally, are keeping crude above $84 a barrel, and that number doesn't stay in the Gulf forever — it follows you to the petrol station. BHP just reported a 30% jump in profit to $13.2 billion, and the bigger story buried inside those numbers is that copper, the metal wiring every electric vehicle and data cable on the planet, has overtaken iron ore as their biggest earner for the first time in the company's history. Meanwhile, Wall Street slid Monday after a surprise drop in July retail sales, and the part that should give you pause is that the market's own fear gauge is sitting at its calmest level of the year, right in the middle of rising oil prices, a cooling consumer, and an unresolved conflict in the Middle East. If this one was useful, a five-star rating takes about ten seconds and helps the next listener find it. Hosted by Alex Monroe. New episodes every weekday morning at theopenbell.co Not investment advice. For informational purposes only. --- Chapters: 00:00 Introduction 00:13 Oil Holds Above $84 as Iran Diplomacy Stalls, Hormuz Stays S 02:48 BHP FY26 Profit Surges 30% as Copper Overtakes Iron Ore 05:05 Wall Street Slides as Retail Sales Miss Weighs on Consumer O 07:06 Closing thoughts

Transcript

Copy Transcript Copied

SPEAKER_00 0:00

Good morning, it's Tuesday, 18th of August 2026, and this is the Open Bell. I'm Alex Monroe. The word stalled is doing a lot of heavy lifting in today's news. And wherever you find it, the price tag is rising. Oil is now into its sixth month of being the most disruptive story in the global economy, and this week it got a fresh reminder of why it refuses to go away. A senior Iranian official told Reuters on Monday that if US diplomacy continues to fail, Iran may shift to an offensive posture and specifically threaten to escalate in the Strait of Hormuz. WTI crude, the US benchmark, settled at $84.50 a barrel, up more than $2 on the day. Brent, the global benchmark, closed at just under $91, up nearly $2.40. Now we've covered the Hormuz mechanics before. The narrow channel, the fifth of global oil supply. You know the setup. What's changed this week is the tone. Iran isn't just holding the line on its conditions, sanctions relief, and war reparations from the US. It's threatening to make things worse. That is not a negotiating softening. That is the opposite. The numbers on the ground back up just how entrenched this has become. Marine traffic data shows somewhere between 8 and 15 vessel transits per day through the strait in early August. Before the conflict began, that number was around 130. A 90% collapse in traffic, and it has been running at those levels for months. Asia is absorbing the bulk of this. China alone was taking in around 5.3 million barrels per day through Hormuz before the closure. It is not getting that now, not at anything close to normal cost. The counter argument from some analysts is that Iranian oil is still trickling to China and Russia through informal channels, and that rising US and Guyanese production is capping how high global prices can really go. There's something to that, but something to it and enough to fix the problem are very different thresholds. And $84 oil at the pump heading into autumn makes that distinction academic for the person filling up a tank. What this really tells us is that the diplomatic track is not just stalled, it's going backwards. The US has responded to Iran's posture not with concessions but with tighter economic pressure. That is a defensible strategy. It is not a quick one. And every week it continues. The oil price premium embeds itself a little further into inflation numbers that central banks are already struggling to explain away. What started as a geopolitical crisis is now a structural feature of global consumer prices. When fewer ships cross a single stretch of water than dock at a mid-sized marina on a busy weekend, something in the price of almost everything has already changed. You just see it last at the pump. BHP's results this morning show you exactly where the commodity cycle has moved while the world was watching oil. The world's largest mining company just reported a 30% jump in full year profit. Underlying attributable profit came in at $13.2 billion against $10.2 billion a year ago, comfortably ahead of analysts' estimates. The headline number is impressive. The detail underneath it is the actual story. For the first time in BHP's history, copper generated more earnings than iron ore. Copper, the metal inside every EV battery, every charging cable, every data center being built to run AI infrastructure, produced underlying EVTDA, which is essentially the company's operating cash flow before accounting adjustments of $18 billion. That's a 70% margin, driven by a 35% rise in the average price BHP received for its copper, which came in at around $5.70 per pound. Iron ore, the commodity that industrialized the 20th century and made BHP a global giant, is now second. This is not just a corporate milestone, it tells you something about where the world is spending money. Steel demand, which drives iron ore, is relatively mature, tied to construction and infrastructure cycles. Copper demand is being pulled forward by electrification, by the green transition, and by the physical infrastructure required to run large-scale computing. BHP is essentially placing a multi-decade bet that this shift is structural, not cyclical, targeting a 50% increase in copper production by the mid-2000s and 30s. The bears have a point worth naming. Copper grades at BHP's flagship Escondida Mine in Chile are declining, and the company took a $2.3 billion non-cash write down on its Janssen Potash project in Canada. If copper prices pulled back sharply from current levels, that 70% margin story would look very different very fast. But for now, the results landed. Sydney listed shares were up around 3.5% in early Tuesday trading. And for the millions of people with Australian superannuation, essentially compulsory retirement savings, accounts holding BHP, a record high final dividend of just under a dollar per share, is a direct, real benefit that shows up in retirement balances. The metal that wires your house, powers your car, and connects your phone just became the engine of the world's biggest mining company. The 20th century ran on steel. The 21st apparently runs on copper. Wall Street had a quiet Monday, and not in the reassuring sense. The S P 500 finished barely changed, while the Dow Jones industrial average, the index of 30 large American companies, closed down 123 points, about a fifth of a percent. Small moves on the surface. But the context underneath them is worth taking seriously. Friday's retail sales data for July came in below expectations, signaling that American consumers, who drive roughly two-thirds of the US economy, are starting to pull back. That caution is showing up in the University of Michigan's Consumer Sentiment Survey, which tracks how ordinary households feel about their financial situation. August reading dropped 8% to 51%, its lowest in months, and one year inflation expectations among those households ticked up to 4.3%, the highest since the Iran conflict began. Here's the thing that jumps out the VIX, the options market's measure of expected volatility, often called Wall Street's fear gauge, hit its calmest level of the entire year on Friday, closing below 14. Then on Monday morning it popped 4%. That divergence between options markets pricing and tranquility and underlying data pointing to consumer stress is historically not a comfortable combination. What resolves it or doesn't comes fast. Home Depot reports today, Walmart on Thursday. Both companies have enormous insight into consumer spending patterns. Home improvement and grocery budgets are among the first places households adjust when they feel squeezed. And Wednesday brings the minutes from the Federal Reserve's July meeting, which will show how much internal disagreement there was about rate policy. Full year earnings estimates for the S P 500 are still running above 30% growth, which sounds like a solid floor, but estimates are about the future and consumer sentiment is a leading signal. When households expect prices to stay high and start spending less today, the earnings revisions tend to follow. The stock market's fear gauge just hit its lowest point of the year. On the same Friday, that consumers told pollsters they're more worried about prices than at any point since the war began. The thread connecting today's three stories is tighter than it might appear. Hormuz keeps oil expensive. Expensive oil keeps inflation sticky. Sticky inflation keeps consumers cautious. Cautious consumers put corporate earnings at risk, even when the headline earnings numbers look strong. The number to watch closest this week is Wednesday's Fed Minutes. They'll tell us how divided the room actually is. And right now, that room is making decisions that affect your mortgage rate, your job market, and what it costs to fill a tank. If you want today's figures in writing, the newsletter has all of them. It's free, and the link is in the show notes. That's the open bell. I'm Alex Monroe. Have a sharp morning.