Global Outlook: Shortages
Weekly PROPHET NOTES 3/23/26
Welcome to another week! Today we are anxiously awaiting the ultimatum deadline from Trump. I continue to sound the alarm as we are entering uncharted waters when it comes to acute energy supply shock. Expect shortages of some goods along with massive inflation coming to your country, wherever you live.
Some countries I expect will issue COVID-style lockdowns to manage demand as we enter deeper into the conflict. General prospects are bad, to say the least.
At PROPHET NOTES I continue to provide coverage of most consequential global events so look below for a summary of last week’s developments.
Weekly Outlook
US Inc.
This week has been a real roller-coaster in the US.
Trump asked China to delay his meeting with Xi Jinping because of the ongoing war with Iran.
Comment: there are many theories on why the meeting was actually delayed. My opinion is that Trump does not want to negotiate from a position of perceived weakness - the US needs to open the Strait of Hormuz first.
Joe Kent, the national counterterrorism chief, resigned from his post in protest against the Iran war.
Comment: feels like a hot potato game where no one wants to bear responsibility for the current war in Iran.
Trump met with Sanae Takaichi in Washington. They discussed the current conflict and Trump made a rather inappropriate joke about Pearl Harbor.
Comment: Japan is hit hard by the current crisis. However, they have almost a year’s worth of reserves - they have the leeway to think strategically about this war and potentially help the US. For now though, there is nothing concrete.
Trump also threatened to deploy ICE agents to airports if congressional Democrats don’t agree to fund airport security, which is the part of DHS funding lapse.
Comment: it’s refreshing to see some domestic politics during this crisis. However, Trump’s threat doesn’t seem to make any impression on the Democrats as chances of the DHS situation being resolved soon tanked.
The Americas
While all eyes are turned towards Iran, there is a real crisis brewing on the western hemisphere.
Cuba’s electricity grid collapsed, leaving around 10 million people without power as oil embargo on the island continues. Also violent protests broke out in response to the blackouts.
Comment: another crisis is brewing ion the island that if mismanaged, can lead to Cuba becoming another Haiti. It’s not very likely in my opinion, but with the current focus on Iran, anything is game.
Despite the threat of sanctions, Russia signaled that it is ready to back Cuba, in opposition to Trump. Some tankers were also sent to the island, however none have reached it yet.
Comment: between internet issues in Moscow and Iran shutting down the Strait of Hormuz, I believe Putin has more important matters to attend to in an effort to bolster Russian economy a bit. But it is arguably a decent PR move from him.
In a power consolidation move, Delcy Rodriguez got rid of Vladimir Padrino Lopez, the now ex defense minister regarded as top 3 powerful people in the country after Maduro’s kidnapping.
Comment: it can be power consolidation or a crisis in the making. Wee shall know soon if Lopez still has the power to challenge Delcy. For now her chances of staying are flat on the news.
Asia
With the Strait of Hormuz closure, Asian countries are the most affected and are already scrambling to limit the most severe consequences of shortages.
Sri Lanka announced its public institutions would no longer work on Wednesdays to save energy. Thailand encourages WFH and asks businesses to cut on the AC. Laos has supposedly 5 days of reserves left. And Vietnam cannot ensure het fuel availability beyond the end of March.
Comment: things are getting really dire in SEA and we can expect to see COVID-style lockdowns being implemented soon across the most affected economies.
Middle East & Africa
Iran war.
A lot has happened in the Iran war. Both sides continue the strikes, with some being extremely heavy as the one on southern Israel, near Dimona, that injured at least 160 people.
Qatari LNG facility was severely damaged, cutting 17% of capacity for the next 3-5 years, while South Pars facility in Iran was hit. Trump also threatened further strikes on the energy infrastructure if Iran does not open the strait by tomorrow. Iran threatened to respond in kind across the whole region.
Additional Marines units were deployed to the region, with an ETA around end of April. While they are en route, Trump is teasing Kharg Island invasion while complaining that no ally wants to help the US unlock the Strait of Hormuz.
The US and Israel continue to claim that Iranian capabilities are almost entirely destroyed, but the constant level of launches per day seems to deny that.
The Pentagon is also asking the Congress for additional $200 billion for the war in Iran. In the meantime Scott Bessent eased sanctions on Iranian oil to soften the blow to global energy markets.
Iran also launched missiles at Diego Garcia. They didn’t hit the island, but the action showcased Iran’s ability to target pretty much every European capital.
Comment: I made a whole video with commentary on the last week’s developments, I wouldn’t do the situation any justice, commenting here in a couple of sentences:
Israel is also continuing its invasion of southern Lebanon. Recently it destroyed Qasmiyeh Bridge, on the Litani River in the south of his country, warning that it was a prelude to a ground invasion.
Comment: Israel uses the situation to resolve the Hezbollah issue as well.
Europe
Europe also starts to feel the pressure from the Iran war.
European countries were told to lower its LNG refill targets by the EU to soften the impact of the Iran war.
Comment: Europe is also highly dependent on deliveries from the Gulf countries. It is the second most impacted region after Asia, and we can expect further measures as this conflict goes on.
Slovakia started fuel rationing to conserve oil amid Iran crisis.
Comment: as you see, it begins.
EU leaders failed to convince Viktor Orban to approve a 90 million EUR loan package to Ukraine as Hungary and Slovakia accuse Ukraine of delaying repairs to the Druzhba oil pipeline, which crosses its territory and was damaged in a drone attack in January.
Comment: I’m really curious to see the impact of Iran war on Ukraine war with Russia boosting revenue and Europe entering another energy crisis. The situation looks prime for escalation.
There was an election for the mayor of Paris, the last big election before the presidential election next year. Emmanuel Gregoire has won.
Comment: the Socialist Party candidate has won, he was expected to win since mid-January.
Business, Finance & Economics
Outside of all the force majeure clauses being triggered across LNG, oil and other petroleum-adjacent industries, we didn’t have any major news on business.
For now, everyone if focused on the price of oil, but price of all energy commodities is up a lot since the start of the war:
At this point the energy supply shock is a given and each day of the war brings closer the actual global crisis that could dwarf the 2008 GFC.
Wrap up
And that’s all for today. I will have my Strait of Hormuz thesis ready this week. Otherwise catch me either here or on X. Stay strong and see you soon!
This is not official investment or life advice. Do your own research. This are only my opinions and I encourage anyone to do their own research before putting any money anywhere.