War Dashboard
What to look for when energy markets open tonight.
“There is no avoiding war; it can only be postponed to the advantage of others.” – Niccolo Machiavelli
For a variety of reasons, most of the words that find their way to these pages are written overnight, usually between 2 and 5 a.m. The brain works remarkably well during this period. The news flow has usually ebbed. Even social media is comparatively docile, with the great majority of US-based influencers away from their keyboards on a more normal sleep schedule.
The session scheduled for Friday night into Saturday was intended for punching up a piece on the unfolding situation in Venezuela—specifically how natural gas production in the broader region, including Trinidad and Tobago, Guyana, and Suriname, might surprise on the upside. It even had a punchy title (“The Maduro Triangle”), with publication tentatively slated for Tuesday.
Alas, Mike Tyson, plans, and mouths. With the financial markets safely closed and Sunday’s opening session forever away in war terms, the opening salvos in the Middle East’s latest major conflict lit off.
Although all the signs suggested a clash was both imminent and inevitable, one could be forgiven for holding out hope for a last-second diplomatic solution that averted hostilities. That didn’t happen, and US President Donald Trump has put his presidency and legacy on the line.
Amid signs of a Strait of Hormuz shutdown, and with some insurers pulling coverage for tankers in the broader region, few doubt that energy prices will rise significantly when the futures markets open later tonight. Just how high remains to be seen, and much depends on how events unfold in the coming hours.
In times of crisis, markets do more than inform on prices, of course. They also provide valuable information about what is most likely really occurring on the ground, backed by the hard-earned money of market participants. In this way, markets can help separate signal from noise on social media, currently saturated with all manner of psych-ops, disinformation, and outright fabrications. With only hours before trading begins, what will we be watching most closely? How will the energy markets respond if the situation continues to escalate? Let’s fire up the terminal in search of answers, including a few counterintuitive ones.