Chapter 1: What is the main topic discussed in this episode?
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Chapter 2: What are the implications of the Iran war on global oil prices?
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If money is evil, then that building is hell. The show goes on! The folks in there are watching. Show! Show! Welcome to Profiteer Markets. I'm Ed Elson. It is March 10th. Let's check in on yesterday's market vitals. The major indices rode out a volatile session with the S&P 500 falling as much as 1.5%.
By close, however, the major indices were back in positive territory after Trump said the Iran war was, quote, very complete, pretty much. Oil prices moderated after surging over the weekend. We'll talk about that shortly. Meanwhile, the dollar climbed and Bitcoin topped $69,000. Okay, what else is happening? The global energy market is facing its most severe shock since the 1970s.
The Strait of Hormuz closed for the first time in recorded history, pushing the price of oil above $100 a barrel on Sunday. It spiked as high as $119 before crashing back down to $85 a barrel on Monday. as the G7 signaled it is ready to release strategic reserves. Meanwhile, Qatar halted 20% of the global liquid natural gas supply after Iran fired drones at a Qatari facility.
Okay, here to help us break down what is happening in the Gulf and what it means for energy and for oil, we are speaking with Mohamed Sergi, editor at Semaphore Gulf. Mohamed, thank you for joining us. So much has happened.
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Chapter 3: How did the closure of the Strait of Hormuz impact oil supply?
In just a couple of days, this story is changing literally by the hour. I mean, oil skyrocketing and then coming way back down. What do you make of what has happened over the past couple of days? And what do you make of prices in reaction to what's happened? Yeah, thank you for having me. This has been just an incredible turn of events, I would say, for the Gulf.
And all the eyes went towards Hormuz. And that's a choke point for the natural gas that comes out of Qatar, obviously, and that had a huge price spike in gas prices in Asia and in Europe. But even more importantly, it's the choke point for about 30%, if not a bit more than the treated oil in the world. And, you know, it's what comes out from there.
It's all of the oil from Iraq, all of the oil from Kuwait and a significant portion from Saudi Arabia and the UAE. The idea here is that we couldn't see any more ships going through over the weekend. And this one was the unthinkable, the closing of Hormuz. And I think that's why we saw this huge swing up and down.
But then when people started looking at, okay, so what is actually happening to supply? Is the market well supplied? And how much can go through the pipelines that bypass Hormuz? There's a pipeline that goes from the east to west in Saudi Arabia.
usually has capacity i would say between five million could go up to seven million barrels a day so they could they could potentially move most of the oil that they need to the red sea and there's another pipeline that goes through um the uae down to the gulf of oman and i think once you once you start factoring that in uh the uh the supply the supply scenario would change a little bit and that's potentially one of the reasons why the prices came back down so quickly
Help me make sense of what exactly markets are reacting to, because there seem to be so many different stories here, one of which is Israel striking many of the oil facilities over the weekend in Iran. We all saw that giant cloud of smoke in Tehran that was going viral and seemed to be kind of the image of this war. There's also the fact that
They announced the new Supreme Leader, who is going to be Khamenei's son. There's the fact that Trump was then saying that he had opinions on how this regime change would work, so that seemed to be a signal, oh yeah, they're going after a regime change. Then they kind of pulled back on that. There's the fact that the Strait of Hormuz was closed.
And then there's also the factors that seem to be bringing prices down, which is that I guess... G7 nations said, oh, no, we have our own oil anyway, so it's fine. The price action is so temperamental, and it's hard to understand exactly what traders and investors are actually reacting to here, and therefore, which things are actually important for people like us who just
live in the U.S., who probably aren't going to get shot down in this war, but will be affected on the consumer side. So my question being, what exactly have markets been reacting to? I think it's more the first part of the factors that you were mentioning. So if this war is extended, if we see...
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Chapter 4: What factors are affecting the volatility of oil prices?
So there's a lag in some of this. I think there's a certain averaging that happens and there's a moving average over a couple of days that they price into the pump because it's a refined product. This is... obviously no huge relief to people who are really worried about their pocketbook and how much their main factors in life and gas prices are going to go up.
It's like a question of like, what is the real price of oil and what should it be? And should it always be stable at like $75 to $80 a barrel where that's a fair price or does it change over time? Right. But then how does it affect inflation? It's inflationary. There's no question about that because it increases the cost and the factors in every single input of the economy. Yeah.
Just before we end here, a thought on how you do your job as a reporter, as a journalist covering this stuff, something that I have been struggling with. I can't tell if the markets right now are proactive or reactive.
I can't tell if I'm looking at the price and oil traders are saying, this is a reflection of what we expect to happen in the future, or if they're completely just something changed, someone got shot, an oil facility got blown up, and now the price of oil is different.
And so my question to you, as a journalist who covers this stuff, are you looking to the price of oil as an indication of what is to come? Or do you look at the price of oil and does it simply tell you things that you've already known, things that you've been covering as a journalist on the ground when it comes to what is actually unfolding in this war and in the conflict? It's
probably a mix of both, right? So it has been that geopolitical risk premium has been muted for a long time. So there have been certain things that have happened in the Gulf and, you know, between The June war expectations were that oil should have increased, it should have popped higher.
And even the first few days of the strikes in this last week or so, we haven't seen, of course, oil did jump, but it didn't jump at the same level. It's that closing, I think a psychological,
switch happened with with hormos attacks on oil facilities attacks on processing plants and there was always this uh understanding in a way between all the gulf countries that you know you're not gonna we're not gonna hit critical infrastructure uh the attacks the retaliation from the iranian regime would be against perhaps U.S. assets, military assets, that sort of thing.
And very quickly, we saw that there was an attack on Ras Afan, which is the LNG complex in Qatar. There was another one on a processing plant in Bahrain, in a refinery. escalated it. And then, as you mentioned earlier, we believe it's an Israeli attack on a refinery in Tehran.
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Chapter 5: How are markets reacting to the latest developments in Iran?
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After just one week in court, one of the biggest antitrust cases in decades is nearing a resolution. On Monday, the Justice Department announced a settlement with Live Nation and Ticketmaster. In the sweeping monopoly case filed in 2024, the DOJ, along with 40 state attorneys general, argued that Live Nation legally dominates the market for live events.
One proposed remedy was to break up Live Nation and Ticketmaster. Now, under the proposed settlement, Live Nation will pay damages to states and change how it structures ticketing deals with venues. But the case is not over yet. Only 10 states have signed on to the settlement, while others are expected to keep fighting. Plus, the terms of the agreement must be approved by a federal judge.
Still, shares of Live Nation rose 6%. following the news. Joining us to discuss this case, we're speaking with Jonathan Cantor, former Assistant Attorney General for the Antitrust Division of the US Department of Justice. He's also the man who originally filed this case. Jonathan, thank you for joining us. I want to get right into this because this is a case that you have been talking a lot about
I remember when we last spoke, I said, what is the most important antitrust case that no one is talking about? And you said, this is it, because this is something that really affects consumers. Consumers really have a stake in this because consumers, they know that the price of tickets for live events have gone up significantly over the past few years. And it's because of this monopoly dynamic.
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Chapter 6: What are the potential consequences of rising oil prices for consumers?
I mean, if the option was to break this company up and now they've decided to settle and that's good for Live Nation, that doesn't seem great for consumers. And then the question becomes like, why did they settle? And perhaps it's because there was some lobbying happening here. I mean, Gail Slater, who was the antitrust chief before, she was just dismissed. She was ousted.
Like, why are we settling with Live Nation if it's so unpopular? There are a whole host of questions that have to get answered here, and that hopefully will get answered. But the fact of the matter is the DOJ started the trial, and after four days, the case was going extremely well.
By all accounts, DOJ was doing an extremely good job in court and was on a trajectory to have a big victory if they finished the trial to its end. And that was an extraordinary case with an opportunity for an extraordinary result. And when you're winning, you don't pull the plug. It's not how that works. Right.
Especially when you don't get the remedy that you asked for when you filed the case, which in this instance was a breakup. So it's quite unclear and raises a lot of questions about when and why and how and who.
And hopefully we'll get answers to those questions because under something, a little-known statute called the Tunney Act, antitrust settlements like this one have to get approved and investigated by the court.
And so in this instance, the judge in New York will have the opportunity to interrogate the settlement and actually get discovery from the Department of Justice and Live Nation and others about what was said to whom what was promised is in exchange for this deal.
Just in terms of what it looks like to me, I mean, we had Gail Slater in, who you and I discussed, was actually someone who was going to be pretty tough on antitrust. It was quite a good pick if you are pro-antitrust, which you are, and I think we are on this show as well. So it looks like what happened is that she was working on this.
We also learned that there was a lot of lobbying happening where people from Live Nation, also from Hewlett Packard and Juniper, they would go to the DOJ and they would try to create these affiliations with the DOJ. And if they got any pushback, what we'd see was Pam Bondi or someone higher up in the administration would say to Gail Slater, hey, get out of the way here.
you're being too harsh on these companies and we have a relationship with these companies, which is, in one sense, lobbying, and some would also characterize that as some level of corruption. That's certainly a genuine question. Then Gail Slater gets ousted. Then this case that seems to have a lot of momentum, suddenly the plug is pulled. Why did that happen? Who knows? My question to you is,
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Chapter 7: What is the significance of the Live Nation/Ticketmaster antitrust case?
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