The market is making a dangerous assumption: Trump will unblock Hormuz.
But what if he can’t?
Or worse… what if he loses control of it — just as the UK did during the 1956 Suez Canal Crisis?
Because the numbers don’t add up.
In 1973, oil surged 134% after ~7–9% of global oil supply was disrupted by the Arab Oil Embargo.
Today?
Roughly 20% of the global oil supply is being impacted by the shuttered Strait of Hormuz.
That’s more than double the impact of the 1973 shock.
And yet, oil is "only" up ~50%, having risen from $65 to $98 at the time of writing.
In summary, today's oil shock is over 2x larger than 1973, but it's being priced as less than half as severe.
If this gap closes, $150–200 oil is entirely plausible here.
But even above $80 oil, a nasty wave of 70s-style stagflation looks set to reverberate across the global economy.
In the 1970s, this exact setup drove gold to a 24x performance by 1980, with silver delivering an even more explosive ~40x return.
And yet, we think today's backdrop has the potential to be even more combustible:
1. Central Banks were not aggressive gold buyers in the 70s. Since 2022, they've been buying it hand over fist.
2. U.S debt went from $370 billion to $850 billion in the 70s. Today, it's at $39 trillion, and growing exponentially thanks to $1 trillion annual interest payments and relentless military spending.
3. The petrodollar enforced U.S monetary dominance since 1974. Today, it's compromised by Iran reportedly limiting the flow of tankers in the Strait of Hormuz to those settling payment in Chinese Yuan.
All of this raises a serious question:
What happens if gold doesn’t just repeat the 1970s… but exceeds it?
I break it all down in my latest piece for @SoundMoneyRpt 👇
👉 Be sure to subscribe for the full analysis.
soundmoneyreport.substack.com/p/war-oil-and-…
@RonStoeferle
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