Iran is playing a completely different game...

So the US attack on Iran has prompted Iran to close the straight of Hormuz. Yikes. The more obvious problem here is that the straight of Hormuz is responsible for about 20 to 30% of oil and liqufied natural gas trade. Now approximately 80 to 90% of the crude oil that's moving through the straight of Hormuz is destined for Asian markets, primarily China, India, Japan, and South Korea. We talked yesterday about how important it was for the US to get control of the largest oil reserves in the world in Venezuela before making this kind of a move. That move in Venezuela cushions the United States as far as the US having access to more oil in this time, but also prevented China from continuing to get discounted oil from Venezuela as well. With that in consideration, as well as the fact that around 45 to 50% of China's oil imports are coming from the Middle East, there's a chance that the closing of the straight of Hormuz only further adds to the pain that the US competitor China is going to feel regarding its oil imports. We also talked about the importance of liqufied natural gas and that being cut off from the straight of Hormuz and how that might actually impact electricity production around the world and this being even more significant because of the fact that we have this global race for AI supremacy where electricity is needed. So the AI narrative is a piece of this that we have to keep an eye on. We also saw an Amazon Web Services data center in the United Arab Emirates apparently get shut down after a fire amid Iran strikes. Now, we can't know for sure if this was particularly being targeted, but it does lead us into the core of today's focus. What a lot of us may be overlooking here regarding the situation in the straight of Hormuz is that besides a significant portion of the world's oil and natural gas flowing through the straight, there's also a significant portion of the world's fiber optic cables that are going through the straight of Hormuz as well. Now, not too many people know this, but the internet does rely on physical infrastructure. In particular, there are what are called fiber optics cables that connect the internet across continents. The vast majority of longd distanceance internet data. Roughly 95% of the world's internet data travels by undersea fiber optic cables, not satellites or any routes along the ground. Now, there are fiber optic cables that run through the straight of Hormuz that carry a significant portion of internet data traffic between Europe, the Middle East, Asia, and beyond. And there's a possibility of Iran looking to disrupt the undersea fiber optic cables in the straight of Hormuz. Let's not forget that several key undersea fiber optic cables in the Red Sea were damaged in early 2024 and this caused significant disruptions to internet traffic between Europe, Asia, and the Middle East just a year and a half ago. Now, the Iranian Houthy rebels were initially being accused of deliberately attacking these cables, and experts and reports have since suggested that maybe this damage was likely caused by commercial ship anchors that were dragging across the seabed. Well, whether or not Iran was actually responsible for the disruption of those fiber optic cables is probably something that we'll see soon if they move to do this to the fiber optic cables that are running through the straight of Hormuz. Now, it's not that all of the internet's traffic is running through the straight of Hormuz, but if they were to deliberately attack and try to break up and disrupt these fiber optic cables, it could cause some problems throughout the entire region and potentially even in India, Pakistan, and the rest of Asia. Now, if Iran were to try to disrupt these fiber optic cables that go through the straight of Hermuz, it would probably have the biggest impact on the other Gulf countries. In that event, it's also questionable what impact this would actually have. I mean, there's a lot of redundancy in these networks. So if you just try to take out one of the major choke points, it might just light up the other ones and only lead to internet traffic uh rerouting for instance or uh increases in latency or just slower connections and maybe some regional congestion spikes and financial networks in the Gulf might see delays in any of the payments and things that they're trying to get through. But depending upon how they went about it, it could create bigger issues. Iran is very much so aware of the power of attacking digital infrastructure. Someone who I had the pleasure of meeting throughout some of my travels in life has been in Iran throughout all of this that has been going on. His name is Ali. And he reported to me that throughout the protests that were taking place, the Iranian government shut down the internet across the country so that no one could access information and know what was actually going on in the streets. He said he wasn't able to get in touch with his family throughout the time that they were killing thousands of protesters. So Iran is not a stranger to the idea of using digital infrastructure as a weapon. There are several domains through which warfare takes place in the modern day with the primary ones being land, air and sea. Now we also have space warfare which is combat that's conducted from outer space. But then we also have information warfare where targeting information systems and public perception is the main medium. And finally, we have cyber warfare, attacks on digital infrastructure, computers, and networks. And with the land, air, and sea already very much so at play, the next move for Iran might be to move things to the world of information and cyber warfare. Something like what you may have seen in the movie Leave the World Behind. Now, I'm not a financial adviser. None of this is financial advice and I highly recommend that you do not take financial advice from a random guy walking around a park talking to a stick. I imagine that what's going on with oil uh will be one of the most important things to keep an eye on. Right? If oil does push itself above $100, this is going to have a massive impact on the entire global trade. As we've talked about before on the channel, wars tend to initially have negative impacts on risk markets, but as you get into it, war is essentially a a growth driving phenomenon. Okay? So, you could expect to see more spending, more growth, more investment happening during these kinds of times. But I don't know, maybe I've completely lost the plot. What did I miss? What did I get wrong? or how could I be looking at this differently? Let me know in the comments down below. If you haven't already, you got to subscribe to my live show that I do with Ben Levit. It's called Memes and Markets, and we go live every Tuesday and Thursday at 12:00 p.m. Eastern. And we're having some incredible guests on this week. In fact, we're probably live right now, so click the link in the description or in the pin comment to join us live. I'm also going live again this Saturday at 2:00 p.m. Eastern. Be sure to hit the notification bell, turn on notifications so that you know when I'm live. And if you want access to more of what I'm doing with this kind of information and my private Discord community, be sure to sign up for the channel memberships. The macro analyst tier members get access to exclusive videos. You can find all of that in the link in the description down below. I'm Keith E here to talk everything money and markets. And if you got anything from this at all whatsoever, be sure to hit that like button and subscribe. And until next time, peace.

📹 Become a Channel Member (Exclusive Videos): https://www.youtube.com/channel/UCAFqzhDwJd12pBDgdk-2GqA/join 📖 Or Join My Patreon (Weekly Newsletter): https://www.patreon.com/c/theinneroperator/ 🎙️Subscribe to Memes and Markets: https://www.youtube.com/@MemesandMarketsPod For a 1:1 conversation, book your paid consultation here: https://calendly.com/keithsmithspeaks All Sponsorship & Business Enquiries: keithdenterprise@gmail.com The U.S. strike on Iran has triggered a massive escalation: Iran has now closed the Strait of Hormuz. That’s not just a regional headline — it’s a global economic shockwave. Roughly 20–30% of the world’s oil and liquefied natural gas flows through the Strait of Hormuz. And about 80–90% of that crude is headed to Asia — primarily China, India, Japan, and South Korea. With China sourcing roughly 45–50% of its oil imports from the Middle East, this chokepoint could create enormous energy pressure on America’s largest geopolitical competitor. But oil is only part of the story. What many people overlook is that undersea fiber optic cables — responsible for about 95% of global internet traffic — also run through the Strait. If those cables were disrupted, it could impact internet connectivity across Europe, the Middle East, and Asia, potentially affecting financial systems, digital payments, cloud infrastructure, and even AI data center operations. We’ve already seen how vulnerable these networks are. In 2024, fiber optic cables in the Red Sea were damaged, causing major internet slowdowns across multiple regions. Now, with rising tensions, cyber warfare and digital infrastructure attacks are very much on the table. And in a world racing toward AI dominance — where electricity, data centers, and digital infrastructure are critical — this situation may be bigger than oil alone. In this video, we break down: • Why the Strait of Hormuz is one of the most important choke points in the world • How energy disruptions could impact China vs. the U.S. • The overlooked risk to global internet infrastructure • Cyber warfare, information warfare, and modern conflict domains • What $100+ oil could mean for markets • Why wars historically shift risk markets and growth dynamics Is this an energy war? A cyber escalation? Or the beginning of something much bigger? Let me know what I’m missing in the comments.