Asks Jim to explain his 'Hail Mary' football term for potential US action against Iran's crude oil exports through Carg Island, which handles 90% of Iran's exports.
Speaker1
Jim Bianco
Carg Island is the only thing working for Iran right now - they're loading ships there. The Trump administration could apply final pressure by cutting off this flow, either through blockade or taking the island.
Notes crude oil markets are no longer simple, points to extreme price divergence: Dubai at $170/barrel vs WTI under $100, asks if Jim has ever seen such a spread.
Speaker1
Jim Bianco
No, never seen such a spread. Crude market has broken into three distinct markets: Asian crude (Middle East) clogged in Strait of Hormuz commanding huge premium, European Brent trading 17-20% higher than US WTI.
Asks how much worse it will get and whether markets suffer from complacency/lack of imagination since few traders have lived through such disruption and can't truly imagine Strait of Hormuz remaining closed.
Speaker1
Jim Bianco
Markets believe we're always a week or 10 days away from resolution - either opening of Strait or pathway to opening to get 20% of world crude moving again. That's why oil dribbles down daily rather than selling off sharply.