Geopolitics and Strait of Hormuz (with Francine Lacqua)

Market is complacent on Strait of Hormuz risk. Iran has discovered durable leverage, and its regime is stable—this isn't Venezuela. The US military is effectively neutralized by asymmetric threats, and its blockade is porous (see: Chinese tankers). The only real US weapon is threatening USD system access, which accelerates de-dollarization risks. Oil is pricing in hope, not the inevitable supply shock. Fade the détente narrative; the tactical trade is long crude.

Yields

NDX

RUT

explicit

Metals

implicit

Oliver Wyman 3.0
Management Consulting
Daniel Tannenbaum 7.5

Geopolitics and Strait of Hormuz (with Francine Lacqua)

wti

Markets are pricing in hope. Second and third order effects will take months to materialize.

5/4/2026 10:32:51 PM	short term sharp up	6 days later	-4.11%	-6.16%

Francine Lacqua

How do you interpret the Trump-Xi meeting compared to Xi-Putin, and does it help with the Strait of Hormuz?
Daniel Tannenbaum

Both meetings showed China will work with anyone. China is getting ships through the Strait—two supertankers in the last 24 hours. The US blockade has not impeded them. The US military is being held at bay by Iranian drones and fast attack boats.
Francine Lacqua

Where do you think we are—close to a deal or escalation?
Daniel Tannenbaum

We will find some détente for normal resumption of flows, but Iran never realized they could do this until their back was to the wall. The world needs to prepare that Iran could shut down the Strait again.
Francine Lacqua

How strong is the Iranian regime? Does it have the money to pay its guards?
Daniel Tannenbaum

Nearly 1/10 of the country are true believers in the regime. This is not Venezuela—there is no opposition. Any deal Trump makes will be with this current government.
Francine Lacqua

At what point does Trump become desperate for a deal due to gasoline prices and midterms?
Daniel Tannenbaum

The US has tapped strategic reserves, offsetting price impacts. Until direct consumer impacts flow through to goods, they may wait for more pain. Markets are pricing in hope, not reality.
Francine Lacqua

What can the US government do now?
Daniel Tannenbaum

The US can more aggressively enforce sanctions on third countries supporting Iran. Current designations are not meaningful—they need to scare firms with threat of enforcement or banning from USD transactions.
Francine Lacqua

What are the odds Trump reconsiders oil export controls if this drags on?
Daniel Tannenbaum

Trump is scrambling to improve oil prices. Russian oil waivers provide cover for India and Southeast Asia to buy Russian oil without penalty. None of this helps American consumers.

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