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5 min readThe oil price jumped 27% in a single day on Monday, then fell back to end the day down 5% from where it started. That 33-point swing in one trading session was the largest percentage daily rise in history, and it collapsed just as fast. For Andrew Page, co-host of Motley Fool Money, that volatility was not a market glitch. It was a perfect illustration of a deeper failure: six years after COVID exposed the brittleness of just-in-time supply chains, Australia has done almost nothing to prepare for the next disruption.
The mechanics of a finely balanced market
The international oil market is not a free market. OPEC is a cartel that artificially limits supply, so the system is already finely tuned. When a disruption hits — in this case, tensions in the Strait of Hormuz — the balance tips fast. Page explains the mechanism clearly: if you need 100 barrels and have 101, the price is low. If you need 100 and have 99, the price is set by the 99th buyer, and the slope of that curve is steep. That is why oil spiked 27% in a single day. The price then collapsed just as fast because markets are "groups of people who are emotional beings pretending to be rational." Speculation and panic amplified the move, but the underlying physical reality was simple: supply tightened, and the bidding got serious.
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What you'll learn
- 1 (01:52) **Oil Price Volatility and the Strait of Hormuz** - Andrew Page and Scott Phillips discuss the massive oil price swings triggered by the Strait of Hormuz disruption, including a 27% intraday spike that reversed to a loss.
- 2 (08:07) **Why High Oil Prices Are "Natural and Good"** - Scott argues that the price spike is a healthy market signal that motivates conservation and alternative solutions, unlike price controls.
- 3 (10:15) **The RBA's One-Lever Problem** - Andrew challenges the logic of raising interest rates to fix a supply-driven oil price spike, calling it a blunt tool that hurts the most vulnerable.
- 4 (16:00) **Keynesian Budgeting vs. Doing Nothing** - The hosts debate whether a properly run Keynesian budget would work or if the current system is so broken that inaction is better.
- 5 (19:50) **Who Bears the Burden of Rate Hikes?** - The conversation narrows to which demographic is most hurt by interest rate rises: recent mortgage holders and renters, not wealthy retirees.
- 6 (30:30) **The COVID Lesson We Ignored: Stockpiling** - Andrew rants that despite learning the value of strategic reserves during COVID, Australia has done almost nothing to build oil or PPE stockpiles.
- 7 (36:15) **Atlassian Job Cuts and the AI Disruption Signal** - The hosts discuss Atlassian cutting 1,600 jobs (30% in Australia) and blaming AI, seeing it as a real signal of structural change.
+ Full timestamped outline available in the app
Show Notes
– Oil and volatility. Shortages and stockpiles
– Atlassian cuts 1600 jobs
– Allegra Spender’s great contribution on tax
– How can a fertiliser plant be sold for $1?
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