Key insights
- The author argues that current oil prices, even with the Hormuz blockage, are not as alarming as they seem when adjusted for inflation and compared to historical levels. They suggest the global economy might be overheating due to excessive stimulus, evidenced by rising stock markets, particularly in emerging economies. The Iran war is seen as a potential excuse for further monetary easing, potentially fueling further inflation and market exuberance.
with the hormuz blockage,
oil price is $100 right now
but world was fine when it was $150/barrel back in 2006~7
(yes there was crash in 08, but that was due to housing bubble/sub prime morgage issue)
if we apply inflation rate, it is whopping $220/barrel
current 2026 $100 oil is basically around $68/barrel back in 2010s (which is nothing burger)
also economy has evolved to be more efficient and much less dependent on oil
are ppl freaking out over nothing?
almost all stock markets around the world are all time high again (even the ones without tech/ai)
what's surprising is that emerging country stock market EEM etf (which are more oil dependent) have risen more than developed country stock market
every countries around the world had their stock market go skyrocket vertically in 2025
with iran war, it has given easy excuse to print money in every country all at the same time just like 2020
could it be that world economy is getting overheated (due to too much stimulus) unlike slowdown like most people think?