Yesterday, Iranian forces attacked three commercial ships in the Strait of Hormuz. Trump struck back and declared the ceasefire over. Brent crude jumped to $78.10 a barrel before surging another 7% overnight. Nasdaq futures fell 1.1%.
The pundits are focused on the conflict. I am focused on the money. Because in every energy disruption I have watched over 50 years, someone always collects the toll. Today, I want to tell you who that is.
Inside today's issue:
- The Hormuz math: who holds the choke point and what the numbers say about oil at $80.
- The UAE just quit OPEC and is pumping near records. What happens when a flood meets a fire.
- Three nuclear reactors hit criticality by July 4. Trump's grid play is real and the sector is moving.
- The last energy revolution made investors rich. The next one is already underway.
The Wire
Hormuz is hot again. Iranian forces attacked three commercial ships on Wednesday. Trump responded with new U.S. strikes and declared the ceasefire "over." Brent crude jumped to $78.10 a barrel. The Strait of Hormuz carries roughly 20% of global oil. When it runs hot, every barrel in the world gets repriced.
OPEC is flooding the market at the same time. This week, OPEC+ approved another output increase starting in August. Saudi Arabia made its biggest cut to official selling prices in 26 years. And the UAE, which quit OPEC effective May 1 after 65 years inside the cartel, is now pumping above 3.8 million barrels per day. That is near its all-time record. The old OPEC discipline is gone. What traders are reading as "OPEC production rebounded" no longer includes 3.2 million barrels per day of capacity that was in the group 60 days ago.
Trump's nuclear play hit its milestone. Three small modular reactors reached criticality by July 4, exactly as the White House directed. Deployable Energy's "Unity" reactor at Idaho National Laboratory was the final one. The DOE bypassed the traditional NRC bottleneck using new executive authority. Electricity demand is projected to rise 12% by 2028. These SMRs are the first real proof of concept for what comes next.
LNG export capacity is maxed out. With Gulf supply at risk, European and Asian buyers are paying up to $19 per MMBtu for spot natural gas. U.S. gas at home sits around $3. The spread is enormous. The bottleneck is terminal capacity. The United States cannot quickly offset Persian Gulf disruption because every export terminal is already full.
Now here is the number I want you to sit with. Oil can spike and crash in the same week. Hormuz is contested. OPEC is flooding. The only position immune to both outcomes is the one that collects a fee on every barrel regardless of which direction it travels. I have been watching one sector that fits that description exactly.
But first, our friend Porter Stansberry has been tracking something directly tied to this. Take a look:
Investor Angle
The midstream sector does not care who wins the Hormuz standoff. It does not care if OPEC floods the market or squeezes it. It collects a fee on every barrel that moves through its pipe, terminal, or storage tank. That fee is contractually locked. Often for 10 to 20 years at a time.
My rich dad called this a toll booth. You do not own the cars. You do not own the road. You own the gate. Everyone who wants through pays you first.
Right now, U.S. LNG terminal operators are running at capacity. Demand from Europe and Asia is overwhelming supply. The 20% shortfall in global natural gas caused by Hormuz disruption cannot be quickly offset because every export terminal is full. Whoever owns more terminal capacity in the next five years owns the toll gate for continents desperate for energy security.
On the nuclear side, three SMRs hitting criticality is not just a political win for Trump. It is a capital signal. Private money follows government proof of concept. The companies building the next generation of SMR capacity are in the earliest stage of a very long cycle. History says these infrastructure cycles last 20 to 30 years.
The noise is about war and peace in the Gulf. The signal is about who owns the pipe, the terminal, and the reactor when the dust settles. Position accordingly.
Chris Carroll
Publisher, Money, Power and Profit
P.S. For years, our friend Larry Benedict ran his own hedge fund, where he quietly generated over a quarter of a billion dollars in profit. Now he is pulling back the curtain on his top oil strategy. It has already helped his readers have a chance at payouts like $4,354, $4,783, and even $6,268. Watch the free presentation here.
You might also be interested in:
Trump to Unleash Giant $2.7 Trillion Gold Mine? — Jim Rickards
OPEC Raises Output Targets as UAE Pumps Near Record Levels (Reuters)
Larry Benedict: A Better Way to Play Oil (Free Presentation)
Trump's Energy Department Hits SMR Target. Now Comes the Hard Part. (Politico)