AI Summary
5 min readThe hosts of The Compound and Friends, Josh Brown and Michael Batnick, discuss with guests Dan Greenhouse (chief economist at Solus Alternative Asset Management) and Alexandra Seminova (Bloomberg reporter on U.S. stocks) why surging oil and gas prices amid a fictionalized Middle East war—centered on Strait of Hormuz disruptions—have not derailed stock markets. Despite WTI crude jumping to $110 and Brent dated hitting 2008 highs, the S&P 500 has shrugged off initial dips, staying roughly flat with equal-weight indices even rising.
Oil Disruption Mechanisms and Initial Market Shrug
Pre-war oversupply of about 2 million barrels per day, plus floating storage and high inventories, cushioned the initial shock. Alternative routes mitigate roughly half of the 20 million barrels daily through the strait: Saudi Arabia's East-West Pipeline (7 million barrel capacity, expandable to more via Yanbu to the Gulf of Aden) and UAE's pipeline to Fujaira (1.5 million barrels). Ships take 20-30 days in transit, so disruptions are only now hitting Asia (90% of strait oil destination), causing rationing. No major blockages yet—ship traffic dropped from 50 to 5-6 daily—but oil on water has halted. Greenhouse warns inventories cannot deplete too low without risking refineries, pipelines, and LNG plants (which operate at -120°C to -250°C and cannot easily restart), forcing prices higher to curb de
Continue reading the full summary in the app — free to try.
Read Full Summary →Free • No credit card required
What you'll learn
- 1 (04:43) **Episode Intro and Guests** - Hosts introduce episode 236, guests Dan Greenhouse (Solus economist) and Alexandra Seminova (Bloomberg reporter)
- 2 (06:11) **Oil Price Spike Reaction** - Market shrugs off WTI jump to $110 despite war fears
- 3 (07:34) **Earnings Resilience** - Analysts raise SPX estimates amid crisis, unlike past shocks
- 4 (08:29) **Supply Mitigants Explained** - Dan warns of bigger oil risks despite initial buffers
- 5 (11:35) **Inventory Drawdown Warning** - Effects hitting Asia now; prices must rise to curb demand
- 6 (13:03) **SPX Insensitivity to Oil** - Energy minor SPX earner; labor > inputs for most firms
- 7 (14:20) **Consumer Energy Share Decline** - Energy now 3.7% of spending vs 6% in 90s
+ Full timestamped outline available in the app
Show Notes
On episode 236 of The Compound and Friends, Michael Batnick and Downtown Josh Brown are joined by Alexandra Semenova and Dan Greenhaus to discuss: oil prices and the market's reaction, the SpaceX IPO, V-shaped recoveries, the opportunity in private credit, the worst stock ever, and much more!
This episode is sponsored by Aberdeen Investments and ClearBridge Investments.
- Learn more at https://www.aberdeeninvestments.com/active-etfs
- Find out more at https://www.clearbridge.com/
Sign up for The Compound Newsletter and never miss out: thecompoundnews.com/subscribe
Instagram: instagram.com/thecompoundnews
Twitter: twitter.com/thecompoundnews
LinkedIn: linkedin.com/company/the-compound-media/
TikTok: tiktok.com/@thecompoundnews
Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management.
The Compound Media, Incorporated, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security a
More from this podcast
The Compound and Friends →