Iran is a complete distraction…

Over the past 36 hours, the United States and its partners have launched Operation Epic Fury, one of the largest, most complex, most overwhelming military offensives the world has ever seen. Nobody's seen anything like it. We have hit hundreds of targets in Iran, including Revolutionary Guard facilities, Iranian air defense systems. Just now was announced that we knocked out nine ships plus their naval building. All in a matter of literally minutes. An Iranian regime armed with long range missiles and nuclear weapons would be a dire threat to every American. Here we are again, the second major attempt at some sort of a regime change within the first 90 days of the year. Remember when the US moved in to capture the president of Venezuela? How that turned out to be probably much more about oil than it was about the trafficking of illicit substances the way that we were initially told. Well, remember that because it's going to come back up. Now, we have the US launching a full-on attack in Iran, taking out the Iranian supreme leader and other top government officials. Now, these attacks on Iran are supposed to be about concerns about Iran's nuclear program. This is something that's been going on for quite some time since the 70s. But I'm pretty sure last year the United States bombed Iran and completely obliterated Iran's nuclear program. H I guess Iran was really quick to get back on their feet. Meanwhile, China, Russia, North Korea, and Hamas condemn the killing of Iran Supreme Leader. China said on Sunday that it strongly condemns the United States and Israel's killing of the Supreme Leader. And they called for a halt to military actions. Now, remember this part, keep that in mind. Right after the strikes on Iran, the first thing that Iran did was to send strikes across the Middle East toward US military bases within several countries. Now, most of these strikes were intercepted by air defense systems. But then Iran moved to block what is called the Strait of Hormuse. Iran even started firing at container ships passing through to make it clear that they are serious about closing it down. But what is the straight of Hermuz and why does this actually matter? The straight of Hermuz is a primary route for oil and liqufied natural gas exports coming out of the Middle East for all of global markets. It handles roughly 20 to 30% of the world's seaborn oil trade. So blocking this could spike global oil prices to $100 and above per barrel. And over the past week, prices were trading at around $60 for reference. Blocking the strait serves as leverage against sanctions that Iran's economy. By disrupting oil flows, Iran is trying to raise prices and pressure sanction imposing countries indirectly. This is their alternative to having a nuclear weapon and it's legitimately referred to as that a weapon of mass economic destruction to deter broader conflicts. But let's zoom in a bit on who is most affected by the blocking of the straight of Hermus. Earlier this year, the US moved to take over the largest oil reserve in the world in this country called Venezuela. Now, this was a critical moment because this might have been the US preparing for the fact that it might have to face upward pressure in oil prices in case they needed to make a move on Iran and this is how they would respond. That way, if Iran does block the straight, the US has at least a little bit of a cushion in how much oil it has access to at cheaper prices. But if you remember, this move to take over Venezuelan oil reserves also had a massive impact on one of the United States's major competitors, China. With Maduro as the leader of Venezuela, China was buying Venezuelan oil at discounted prices. Some shipments were actually being tied to debt repayment deals. Now once the US takes control of the exports of Venezuela, oil had to be sold at a fair market value and uh Trump made it very clear that he was going to still allow China to get access to Venezuelan oil. Well, in terms of China and Russia, uh, well, Russia, when we get things straightened out, but in terms of other countries that want oil, we're in the oil business. We're going to sell it to them. We're not going to say we're not going to get it. >> Now, let's actually take a look at this real quick because petroleum and other liquids account for approximately 20% of China's total primary energy consumption. Over 70% of China's total oil consumption is imported. And roughly 45 to 50% of China's imported oil comes from the Middle East. And the straight of Hormuz is where the majority of the Middle East oil is coming through. So the blocking of the straight of Hormuz might be exactly what Trump was counting on. You see this crushes the Middle East, India, China and other BICS nations mostly. But it might have a more limited impact on the United States if the US is able to rely on the massive oil reserve in Venezuela and increased domestic production. In general, part of the US plan may be to get control over the straight of Hormuse. But there's another element of this that we have to consider right now. And I want to give a shout out to Rohan Paul for his thoughts on this. Many electricity grids around the world rely on liqufied natural gas. And alongside the fact that 20% of the world's oil moves through the straight of Hormuz, so does liqufied natural gas. Now, liqufied natural gas coming out of the straight of Hormuz and out of the Middle East in general mostly goes to Asia. And if Asia were to see a major disruption in liqufied natural gas imports, then that could have a direct impact on the price of electricity. It turns out that the US would be a little bit less impacted by this because of the fact that the US produces a lot of its own liqufied natural gas and actually exports that rather than imports it. The battle for energy dominance at the moment is not particularly focused on uh industry and logistics and transportation the way that it always has been in the past. There's a new piece of the equation when it comes to electricity in particular. When we're thinking about artificial intelligence when electricity prices rise, this also means that the cost of AI inference or using these large language models technically also rises. And now it might be a bit early in the whole AI supremacy race to talk about uh inference prices being important, but we can point to the fact that the United States is certainly taking AI supremacy very seriously when they just kicked out Anthropic last week and labeled them a national supply chain risk, which is something that's never been done for an American company. All because Anthropic said that they wouldn't want their models to be used in fully autonomous weapon systems or for domestic mass surveillance. The point being here is that cutting off the straight of Hermuz might have a worse impact on China both in terms of oil imports and liqufied natural gas imports than it may have on the United States. And this is why China's diversification of its energy use over the past decade has been crucial, right? They've known that they can't rely on external parties to meet its energy demands, especially in this age of technology and AI where AI can be used as a weapon and is an energyintensive weapon. You know, this adds yet another element to this equation that we have to think about. Now, I'm not a financial adviser and 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. But what's happened here in Iran will very likely have a positive impact on the price of oil. We have already talked about on this channel thinking about what's important in the times that we're moving toward where abundance might be a little bit less important and scarcity becomes more important. We did an entire live stream where we broke down how Exxon was one of the major stocks that people have been looking at. And if we pay close attention, uh the XLE energy ETF as well as companies like Exxon have been absolutely on a massive run over the past couple of months, probably signaling that something like this was about to happen. Now, a spike in the price of oil also points to the knocking down of the first domino of Jay Claver's XRP domino theory. And if you want to hear more about that, you can watch the episode that we did with Jay Claver on memes and markets, breaking that down. And if you want my personal thoughts on what I think about the XRP domino theory, you can join my channel memberships as a macro analyst tier member where I go more in depth. Other than that, in general, I think that this geopolitical conflict will definitely lead to higher prices for assets like gold and silver. Uh, we've seen this continue to heat up and this just adds more fuel to that fire. But maybe I've completely lost the plot here. What did I miss? What did I get wrong? Or how could I be looking at all of 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. We go live every Tuesday and Thursday at 12:00 p.m. Eastern. And this week, we have some incredible episodes coming. So, be sure to click the link in the description to subscribe to Memes and Markets. I will also be going live this Saturday at 200 p.m. Eastern on this channel. So, be sure to set your alerts so that you know when I'm going live on this channel. If you want access to our private Discord community where we're having some of these discussions as well as exclusive videos, be sure to join the channel memberships as a macro analyst tier member. And I'll see you over there. I'm Keith D 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 Over the past 36 hours, global tensions have surged following the launch of Operation Epic Fury — a massive U.S.-led military offensive targeting key Iranian military infrastructure, air defense systems, and naval assets. In this video, we break down what actually happened, why Iran’s response focused on the Strait of Hormuz, and why this narrow shipping lane could become the single most important geopolitical choke point for global energy markets. We explore how a potential blockade of the Strait of Hormuz could disrupt up to a significant portion of the world’s seaborne oil and liquefied natural gas flows, sending shockwaves through oil prices, electricity costs, and even AI infrastructure economics. The discussion also zooms out to the larger macro implications — from energy dominance and sanctions strategy to China’s reliance on Middle Eastern oil and LNG imports, and how supply chain pressure could reshape global power dynamics. Additionally, we examine the strategic context surrounding Venezuelan oil, energy diversification, and the growing intersection between geopolitics, commodities, and financial markets. Could rising geopolitical instability be the catalyst for higher oil, gold, and commodity prices? And how might energy scarcity influence the AI race and global macro positioning? This is a macro-level breakdown of conflict, energy, markets, and power — connecting military escalation, global trade routes, and asset price movements in real time.