SAUDI ARABIA CUTS OIL OUTPUT BY AT LEAST 2 MILLION BPD TO AROUND 8 MLN BPD, SOURCES SAY

Saudi Arabia has cut oil production by some 2 million barrels per day to around 8 million bpd after reducing output from two major offshore fields amid the Iran ‌war

U.S. DEMOCRATIC PARTY NOW LEADING TO WIN BOTH SENATE & HOUSE CONTROL IN 2026 MID-TERM ELECTIONS ACCORDING TO PREDICTION MARKETS: INFINITYHEDGE

IRAN WARNS RESIDENTS TO LEAVE AREAS NEAR JEBEL ALI PORT IN DUBAI, KHALIFA PORT IN ABU DHABI AND UAE'S FUJAIRAH PORT: INFINITYHEDGE

THESE AREAS HAVE BECOME LEGITIMATE TARGETS AND WILL BE TARGETED IN THE COMING HOURS: INFINITYHEDGE

TRUMP: COUNTRIES OF WORLD THAT RECEIVE OIL THROUGH HORMUZ STRAIT MUST TAKE CARE OF THAT PASSAGE, AND WE WILL HELP

TRUMP: THIS SHOULD HAVE ALWAYS BEEN A TEAM EFFORT, AND NOW IT WILL BE

TRUMP: EFFORT WILL BRING THE WORLD TOGETHER TOWARD HARMONY, SECURITY, AND EVERLASTING PEACE

IRAN'S IRGC WARNS U.S. TO MOVE INDUSTRIES FROM REGION AND URGES PEOPLE TO MOVE AWAY FROM FACTORIES IN WHICH US HOLDS SHARES

TRUMP HAS WARNED THAT NATO FACES A "VERY BAD" FUTURE IF US ALLIES FAIL TO ASSIST IN OPENING UP THE STRAIT OF HORMUZ, SENDING A BLUNT MESSAGE TO EUROPEAN NATIONS TO JOIN HIS WAR EFFORT IN IRAN: INFINITYHEDGE

TRUMP SAYS HE MAY DELAY CHINA SUMMIT LATER THIS MONTH UNLESS BEIJING HELPS WITH HORMUZ

GERMANY'S FOREIGN MINISTER: DON'T SEE A ROLE OF NATO IN THE STRAIT OF HORMUZ

MIDDLE EAST WAR UPDATE: INFINITYHEDGE

U.S.:
- Sees Iran War Lasting Up to 6 Weeks
- Trump on hormuz: countries should protect their own territory..maybe we shouldn't be there at all, we have a lot of oil. He also threatened to strike Kharg Island oil infra
- ~half of all US military sites in region damaged
- burning at $2b/d (exhausting years of interceptors)
- deploying ~2.5k Marines

*Iran started new phase: struck embassies, energy infra, airports, etc & going after hormuz bypass routes but so far, hasn't attacked east west pipeline neither houthis entered war

Israel:
-preparing a major ground invasion of southern Lebanon (largest invasion of Lebanon since 2006)
- strikes on Tehran fuel depots sent toxic plumes over 9M+ people. WHO warned of burns & lung damage. "Black rain" may contaminate soil & water for decades

HORMUZ:
- still effectively closed
- supertankers rates Gulf→Asia +1,100%
- Aramco told oil buyers it has no clear idea which port to use for Apr exports due to Hormuz closure, telling customers they may not receive cargoes until May
- despite repeated requests from shipping industry, the US has explicitly refused to provide escorts

SPR: max flow rate: ~2mbpd (covers less than half of the ~10mb/d deficit) plus it requires ~45days transit.
- JPM says realistic pace given current low inventory is likely below 1mbpd
JPM: G-7 release of ~1.2M b/d is feasible but "insufficient"; a drop in the bucket

VIEWS:
- Aramco CEO: There would be catastrophic consequences for the oil markets the longer the disruption goes on...this one by far is the biggest crisis region's oil industry has faced
- JPM: In the whole written history of the strait, it has never been closed, ever. To me, it was not just the worst-case scenario. It was an unthinkable scenario
- Mackenzie: industry has never faced a loss of supply vol of this magnitude
- SocGen: geopolitical risk premium in oil now est. at ~$50; ex-geopolitical fair value ~$62; at $84, market embedding ~$22 premium
- GS: if Hormuz stays blocked through Mar, Brent could exceed 2008 peak of $147; "$200 no longer unthinkable"
- Simon Flowers: even when conflict ends, cranking up the supply chain won't be swift — well shut-ins could take "weeks or longer" to restart. Oilfields reducing output may take time to recover — pressure loss risk = permanent capacity reduction: infinity hedge

Inflation & Rate Cuts:
- EU markets at one point pricing in 2 ECB rate hikes in 2026 (complete reversal from prior expectations of cuts)
- GS pushed Fed cut projections from Jun to Sept; market now pricing less than 25bp in cuts for full year 2026
- March FOMC: Fed expected to hold; Powell will face heavy questioning on Iran inflation pass-through
- Historically, there is a rather worrying correlation btw oil prices & recessions. In fact, most serious US economic downturns have been preceded by a sudden spike in energy prices

Output Cuts:
- Total vol of shut-in supply ~10M bpd
- 2.9m (iraq); 2.5m(KSA); 1.5m (UAE); 1.3m (kuwait)
- Saudi Red Sea pipeline can't absorb regional vol, Well shut-in risk: Saudi/Kuwait wells, after decades of production, risk permanent pressure loss if shut in too long
- Asia has inventory to cover ~1 month, beyond that, firms face margin pressure & production cuts
- South Korea first-ever fuel price caps in 30years; China ordered major refiners to suspend diesel & gasoline exports
- OPEC+ spare capacity (Saudi + UAE) trapped behind Hormuz blockade; alternatives (US, Brazil, Venezuela, West Africa) involve higher transport costs

JPM Timeline:
- Day 13: ~6.5mb/d lost
- Within 2 weeks: sees losses reaching ~12mb/d
- supply shut-in model (Day 13): actual shut-ins already tracking above crude-only forecast

Trump Measures: offering insurance; escort; Jones Act waiver; Russia oil un-sanctioning; restart of the Sable Offshore platform: infinityhedge

Putin: Winner
- russian oil is currently trading at premiums of $20 to $30 per barrel above historical avg., generating an ~$54M/day extra rev., earning $1.3B–$1.9B in windfall tax rev over the first 12 days after iran war started

Market:
- Stocks posted 3rd straight week of losses
- GS Stagflation basket: among top 10 quarterly moves in 21years
- retail investor weekly flows fell to $6.7B, below the 12-mo avg. of $7.1B; ETF inflows cut 22% breaking a 3-month streak; overall weekly equity purchases decelerated by 30%
- USO ETF saw record $115M inflows in 5 days

SECONDARY SUPPLY CHAIN CONTAGION BEYOND CRUDE OIL:
- Qatar's Gas Halt cuts ~20% of global LNG supply
- Citi analysts: if maritime traffic through Hormuz does not normalize by mid-April, multiple major ethylene facilities across Asia will be forced into total, uncontrolled shutdowns, this scenario will instantly sever the supply of derivative chemicals, including ethylene, propylene, & butane, triggering cascading failures across global automotive, medical & consumer goods manufacturing lines
- China attempting to insulate its market has ordered state refiner Sinopec to slash throughput by 10%+ & suspended all exports of diesel & gasoline

- roughly 1/3 of globally traded fertilizer transits Hormuz; Gulf states are the world's most critical exporters of urea & ammonia, leveraging vast, low-cost natural gas reserves to synthesize the nitrogen-based fertilizers essential for global high-yield agriculture; If farmers in US, EU, & India are forced to plant without sufficient nitrogen applications, yield of intensive crops such as corn, wheat will decline by an ~25 to 40%: (infinity-hedge)
- Fertilizer prices drifting higher → food price inflation risk
- Analysts warn that this dynamic effectively puts the "Haber-Bosch revolution into reverse," precipitating a structural food inflation shock that will manifest in retail markets by late 2026 and early 2027
- Aluminum hit multiyear highs, Bahrain Starts Output Cuts at World's Top Aluminum Smelter

Helium Shock:
- Qatar supplies ~30% of global helium (vital for chip manufacturing/wafer cooling & SpaceX rockets).
- TSMC claims 6 months safety inventory
- If the conflict persists into the h2, fabs are likely to begin making allocation decisions well before stockpiles are exhausted, and the memory market will price that shift in advance.
- Even before inventories are fully depleted, helium constraints could begin to limit tool utilization and output in helium-intensive processes. [infinityhedge] Under those conditions, fabs would be forced to prioritize their highest-margin products

Iran's Strategic Calculus:
- BCA: 70% chance of lingering oil disruption, only 30% chance of rapid diplomatic solution
- Iran's incentive: prolong economic pain to maximize US domestic political damage ahead of midterms; keep leverage before Dems potentially return power in 2027–28; maintain pressure while it has leverage

JPM:
- SHORT-TERM CONFLICT - can end via (i) successful US military assault OR (ii) a diplomatic solution. Recent headlines suggest US military assault is the more likely
- LONG-TERM CONFLICT - if US cannot achieve a short-term victory, it seems likely that it will be forced to attempt a ground war to reopen Hormuz. If so, this could transform into a multi-year war

Tail Risk Scenarios/Key Variables:
- Hormuz: If blocked through end of March, oil prices could shoot toward $147 (2008 peak),
- JPM shut-in model shows supply losses accelerating sharply after Day ~14
- Iran agreeing to ceasefire (not Trump) is real deal
- Production recovery will take weeks to months even after conflict ends, damage is not instantly reversible
- Iran attacking east west pipeline or Houthis entering war will be major escalation if happens
- U.S. has only ~2mos of rare-earths inventory left for advanced weapon manufacturing, handing china massive indirect leverage over how long the US can sustain the campaign in a way
- Powell stagflation acknowledgment vs. look-through?

TRUMP: U.S. HAS BEEN INFORMED BY MOST OF OUR NATO ALLIES THAT THEY DON'T WANT TO GET INVOLVED WITH OUR MILITARY OPERATION AGAINST THE TERRORIST REGIME OF IRAN

TRUMP: WE NO LONGER NEED OR DESIRE NATO COUNTRIES' ASSISTANCE

TRUMP: WE DO NOT NEED THE HELP OF ANYONE!

TRUMP: WE DON'T NEED ANY HELP ESCORTING SHIPS THROUGH THE STRAIT OF HORMUZ

AXIOS CITING A WHITE HOUSE OFFICIAL: ISRAEL WILL TRY TO ASSASSINATE THE NEW IRAN LEADER: INFINITYHEDGE

TWITTER (X), A COMPANY WORTH $50B AND OWNED BY THE RICHEST PERSON IN THE UNIVERSE DOWN AGAIN: INFINITYHEDGE

U.S. AND ISRAEL COORDINATED IRAN'S SOUTH PARS GAS FIELD ATTACK AS WARNING OF POTENTIAL ESCALATION IN ENERGY INFRASTRUCTURE TARGETING IF HORMUZ REMAINS CLOSED- AXIOS: INFINITYHEDGE

"IT WAS A SIGNAL OF WHAT COULD COME NEXT", THE OFFICIAL SAID

FED LEAVES RATES UNCHANGED: INFINITYHEDGE

FOMC STATEMENT

FED MAINTAINS PROJECTIONS FOR ONE RATE CUT IN 2026, ONE IN 2027

FED SAYS IMPLICATIONS OF MIDDLE EAST DEVELOPMENTS ARE UNCERTAIN

FED BOOSTS MEDIAN 2026 CORE PCE PROJECTION TO 2.7% FROM 2.5%

FED BOOSTS MEDIAN 2026 GDP PROJECTION TO 2.4% FROM 2.3%

POWELL: WE HAVE SEEN MORE SUPPLY SHOCKS IN THE LAST FIVE YEARS THAN WE'VE SEEN IN MANY YEARS BEFORE THAT. IT'S A FACT: INFINITYHEDGE

POWELL PRESS CONFERENCE SUMMARY: INFINITYHEDGE

POWELL: IMPLICATIONS OF MIDDLE EAST ARE UNCERTAIN

POWELL: THERE WILL BE SOME EFFECTS ON INFLATION COMING FORWARD

POWELL: WHETHER WE LOOK THROUGH ENERGY INFLATION DOESNT ARISE UNTIL WE CHECK BOX ON GOODS INFLATION

POWELL: PROGRESS ON TARIFFS INFLATION SHOULD BE SEEN BY MIDDLE OF THE YEAR

POWELL: SERIES OF SHOCKS INTERRUPTING INFLATION PROGRESS

POWELL: IF WE DON'T SEE INFLATION PROGRESS, WON'T SEE RATE CUT

POWELL: WOULD SERVE AS CHAIR PRO-TEM UNTIL SUCCESSOR CONFIRMED; NO INTENTION OF LEAVING FED BOARD UNTIL DOJ PROBE IS OVER

POWELL: WHAT HAPPENS IN MIDDLE EAST WILL BE A BIG FACTOR

POWELL: ENERGY SHOCK MAY OR MAY NOT MAKE BIG IMPRINT ON ECONOMY

POWELL: HAVEN'T STARTED TO SEE PRODUCTIVITY EFFECTS FROM AI; RECENT PRODUCTIVITY TREND NOT BECAUSE OF AI

POWELL: DATA CENTER BUILDOUT PROBABLY IS PUSHING INFLATION UP

Powell on energy price said It’s standard to “look through” an energy-price spike, but the context is important....Things are more complex now because of the past several years and the jump in goods-price inflation from tariffs. So it’s not like this energy-price jump is happening in isolation and can just be ignored...

Powell on Iran war impact: The economics effect could be bigger, they could be smaller, they could be much smaller or much bigger. We just don’t know (yet)

TRADERS PRICE IN ONLY 50% CHANCE FED CUTS RATES THIS YEAR

MIDDLE EAST WAR ESCALATES TO MORE SENSITIVE ENERGY INFRASTRUCTURE: INFINITYHEDGE

BRENT HITS $117; WTI-BRENT OIL SPREAD WIDENS TO $19

EU GAS PRICES SOAR 35%; UK NATURAL GAS FUTURES HIT HIGHEST SINCE 2023

US RETAIL GASOLINE AND DIESEL PRICE REACHES HIGHEST SINCE 2022

GOLD FALLS BELOW $4,700; SILVER BELOW $70

U.S. CONSIDERING CRUDE-OIL EXPORT TARIFF OR OUTRIGHT BAN

Energy infrastructure across Saudi Arabia, Qatar, Kuwait and UAE targeted by Iran in retaliation to Israel striking of world's largest natural gas field 'south pars'

Iranian missile struck world's largest LNG hub 'Ras Laffan industrial city' twice in less than 12 hours, causing "extensive damage"....Qatar is the world's second-largest LNG exporter (after the U.S.), supplying ~20% of global LNG from its Ras Laffan hub. The facility also produces fertilizers (urea & ammonia), sulfur & helium — covering roughly 25% of global helium - critical for semiconductors

QatarEnergy CEO said Iran’s attacks ‌on Qatar have damaged facilities that produce 17% of the company’s LPG export capacity, causing an estimated $20 billion in lost annual revenue and it will take three to five years to repair them

Saudi Aramco's samref refinery in yanbu was also targeted by iran (Samref worryingly close to the Yanbu export terminal that Aramco has been using since the Hormuz was disrupted to bypass hormuz)

The Pentagon has asked the White House to approve $200B+ request to Congress to fund the Iran war (At the height of combat the Iraq War cost ~$140b/year)

Trump also considering deploying thousands of U.S. troops to middle east, including securing hormuz; one option for securing hormuz includes deploying troops to iranian shores: [infinity hedge]

JAPANESE REPORTER: WHY U.S. ALLIES WERE NOT INFORMED ABOUT STARTING A WAR AGAINST IRAN

TRUMP: WHY DIDN'T YOU TELL ME ABOUT PEARL HARBOR?

- INFINITYHEDGE