What Could go Wrong?

 6/5/2026

 

What Could Wrong?

 

Elevated global oil inventories at the start of the year have caused a  muted response to the Hormuz stoppage. Those world inventories are staring to draw down rapidly.

Trafigura, Singapore commodity trading firm

Exxon Mobil and Chevron have joined that opinion.  The two major firms warn inventories of oil and refined products will reach a critical point  in the next few weeks.

Iran has been, to the surprise of Secretary of State Rubio, surprisingly resilient in the face of US and Israel air strikes. Just this week, Iran struck the Kuwait Airport, doing damage to the terminal. This takes the war home to the oil rich country Kuwait, the size of New Jersey.

Yes, as Secretary Rubio has said, inflation is rampant in Iran and the currency has collapsed. Today it takes 1,375,000 Iranian rials to buy one US dollar. But the Iranian mullahs don’t care.

Kill the Supreme Leader and his henchmen.  iI just means the survivors want revenge. Iran realizes the US President faces a November election of the entire Congress and one-third of the Senate.  Their ace in the hole is keeping world crude prices high. And if indeed, world supply particularly in refined products like jet fuel and gasoline pass the tipping point, so much the better.  Even if the Strait opened tomorrow,

·      mines would have to be removed

·      ships in que would need to pass, would you be anxious to do so if you owned a ship?

·      Reserves would need to be restored and refined products produced

·      All that takes time

Trump’s strategy of talking the crude price down and the stock market up,  is running out of gas, so to speak. The DOW dropped over 600 points Tuesday. On that day the House voted 215-208 to end the war with Iran. Four Republicans voted for the measure.  With Senators Cornyn and Cassidy out of their multi-decade jobs thanks to Trump’s intervention in the races, there is a growing chance they would join other Republicans Rand, Murkowski, and Collins to pass this in the Senate. Trump would no doubt veto the measure, but that is not going to help his standing in those mid-term elections.

All the data analytic AI excitement has driven markets to new highs. It finally appears that party may be at least pausing. The tech heavy NDX is down 3% today.  The equally important SOX semi-conductor index is also down 6.74%.  All the Magnificent Seven stocks are down today. The AIQ global AI index has dropped 6% just today. Someone call Elon Musk, surely this cannot be happening.

Speaking of which, SpaceX SPCX now owns Musk AI business. One gets a ticket  to outer space and the booming AI market. The SEC filing seeks a whopping $1.75 trillion valuation with proceeds of $775 billion. Pricing is expected June 11 with trading first day on June 12.

As Buddy Holly would say, that’ll be the day.