Saturday Macro Note: Energy Crisis Pt. 4, Blunted TACOs, Latest Energy Data, War Updates, and Energy Portfolio Strategy Updates
In this Saturday Macro Note we discuss Pt. 4 of the energy crisis serious, talk about blunted 'TACOs', highlight the latest energy data from the Middle East - including production outages, & more.
Don Johnson (@DonMiami3), Chief Economist
Good Saturday afternoon MacroEdge Readers & Community,
This afternoon, I am delivering the Saturday Macro Note back from West Texas, where I will be for the next 72 hours. It’s a fantastic weather day thus far, though yesterday there was no shortage of dust and 55mph wind gusts to go around. The situation in the Middle East continues to develop, and for the time being, there has been no update on an Iranian response to the 15 demands made to essentially ‘earn’ a ceasefire. Today, both sides have the war has continued to trade shots at each other - with water infrastructure and manufacturing facilities being hit in Iran & Iran targeting Ukrainian weapons facilities in the UAE, along with other targets that are hosting US assets.
There seems to be little concern across the West thus far about the looming potential of a broader energy shock that could impact countries across East Asia, into South America, and even the United States from a price shock (PPI + goods) standpoint. As noted over the last month, the United States remains much better equipped to avoid an actual energy shortage given the strength of our industry domestically, but producers whom I talk to and data that I track point to no real excitement about drilling more at least in the next 6 months. As the globe works its way through the largest globally coordinated SPR release, pressure is again mounting on countries to try and quell the next oil, gasoline, and diesel price surge. Technically speaking, US crude spot closed the week above $100/bbl, which was the first time that’s happened since the crisis began. Thus far, the weekend hasn’t been hugely busy in terms of headlines, but I expect that Iran may be pivoting their response strategy to more dramatically impact energy prices during futures market trading. There were notable tweets from the past week, direct from Iranian politicians, highlighting how obvious that pain point is for the globe. With the Red Sea also in threat, the situation could deteriorate quickly if Iran pulls that lever as their ‘nuclear option’ through the Houthis. Note that it’s not so much the fact that the Houthis could actually take out capacity from transiting the Red Sea, they could just make it so costly to do so through a surge in insurance costs to pass through the Bab-al-Mandab Strait. The Houthis are currently sitting on a stockpile of ~1,000 ballistic missiles or so, and it would not take much for them to be able to pull that nuclear lever. The implications of an escalation that dramatic don’t need to be discussed, today, however, because they would likely have major consequences for the entire globe, through food and energy supply shocks that could cripple nations and economies.
The ‘normie’ category, who does not follow intelligence firms like ours, still seems to be asleep at the wheel and hoping the ‘5d/6d’ chess route works, though I really think the only offramp left now is an immediate ceasefire and concessions on both sides to start to process the impacts from this energy shock. At minimum, right now, we estimate that it will take at least 6-12 months for the energy supply chain to normalize - and we go into some of that data below in the report.
With all that being said, we are going to continue to be on top of all of the latest developments the minute they happen, and stay tuned for everything we’re delivering as an organization over the next 3-6 months through The Macro Club and our Economic Advisory division.
The Macro Club - from our Economic Advisory Team
If you missed our latest update on the changes coming with The Macro Club and our Economic Advisory division, there are a lot of exciting things on the horizon for us. You can find last night’s update on the exciting developments below:
In late June 2026, we will be introducing The Macro Club - a social and professional club designed to enhance the MacroEdge experience and build an intelligence community from the ground up. While Substack and X have been great building blocks, we’re looking to do something more in community building and build something that enables our readers and community members to build relationships with our professionals in the space and connect in a more streamlined way with members of our team. Think of it as an event (in-person and virtual), intelligence, data, strategy, and social hub all in one place - that’s The Macro Club. While we will begin membership interviews sometime in mid-late June, I will be periodically sharing the link here to complete the application, and a member of our team will get in touch within 24-48 hours about reserving a spot in the Club. Given the high-caliber of our community and reader base, I expect members (including myself) are going to find incredible opportunities from the Club, and generate new lifetime friendships.
… so why join The Macro Club?
The Macro Club will serve as our private community for serious investors, money managers, and financial professionals, financial authors on platforms like Substack, and business executives.
Complete an application today for The Macro Club - and experience a new level of MacroEdge connection:
A member of our team will be in touch with you within 24-48 hours about scheduling an interview. If demand surges above our available time capacity, we will schedule member interviews in late May to early June.
The Latest War Updates & Developments
In terms of the latest war updates and developments, the headlines and updates are of course non-stop. I am only going to cover the most major updates and developments in this Saturday’s Macro Note and recommend staying tuned to our X (@MacroEdgeRes) for the latest critical real-time updates on things like energy supply. With how fast things continue to evolve, this situation is fluid, and thus, in-depth updates do little in terms of keeping up with how fast situations are changing.
At #1 on the list, Iran will allow 20 Pakistani-flagged vessels to navigate the Strait over the next 10 days.
Iran to permit Pakistani vessels through new tolling system - this will have a very limited impact on the overall energy supply picture, as Pakistani tankers provide an irrelevant total supply to the global market (maximum about .43mbpd) - which will likely be supplying Pakistan domestically. Look for signs that this tolling system expands for the time being, as the US continues to mobilize resources for a potential ‘shock and awe’ ground operation to seize the Strait and Kharg Island… I disagree with the narrative being pushed through outlets claiming that this will ensure 50 years of peace and US dominance in the region… remember the Abraham Accords just a few years ago?
IDF targets Iran’s Marine Industries Organization in Tehran, and a uranium extraction plant in Yazd.
The IDF/US targeted the Iranian water supply - and I expect this will warrant a substantial response against either energy or water infrastructure in the GCC in the next 24 hours.
Iran targeted global logistics in the UAE - hitting a Ukrainian anti-drone depot in Dubai, and also striking key radar infrastructure in Kuwait.
GCC nations are facing domestic issues, notably Bahrain. The GCC monarchies will be dealing with broader unrest if economic issues continue to mount and Iran keeps the region crippled. Kuwait and Bahrain are the most likely to face civil unrest/uprisings.
Iran is pivoting its missile strategy to be more sporadic, as targeting of missile sites continues, and Russia has now confirmed that they are supplying additional suicide drone technology.
The Latest Data on the Energy Shock
The close yesterday was notable for US Spot Crude - being our first close on the weekly above $100/bbl - the several intraweek panic ‘TACOs’ and several notable examples of likely insider trading were reversed almost immediately. The current magnitude and supply impact of between 15-21mbpd offline is like nothing we’ve ever seen - and I expect that reality is lagging real-time data on the matter because we’re dealing with physical products and commodities. Oil is not something that you can just fire up and print - and by the end of next week, I expect that we will see more signs of shortage in East Asia & elsewhere in the news… The lag time for normies to notice what’s going on will again be significant, and again the situation is unlikely to mean actual *energy shortages* for net producers like the United States.
Our latest oil shock monitor - with the latest available data and updates - we estimate that ~15mbpd is currently impacted, though it may be up to 21mbpd with Russian outages and other undercovered supply disruptions in Hormuz and elsewhere.
In the Middle East, Iraq has almost 80% of national output shut-in, while Saudi has about 5mbpd, and Iran, and Oman slot into the third and fourth places in the region. The situation is going to continue to be fluid, so stay tuned to our latest monitor updates on the outages.
