Bob FraserCFO & Macro Strategist | Data-Driven Investing Expert | Speaker & Author

20% of the World’s Oil Just Got Cut Off

Name: 20% of the World’s Oil Just Got Cut Off
Uploaded: 2026-03-25T20:00:21+00:00
Duration: 1 min 30 s
Channel: Bob Fraser
Description: In this commentary, Bob Fraser explains that the United States is actively attacking Iran, leading to the effective closure of the Strait of Hormuz…

25 Mar 2026 · 2 min

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1:30

In this commentary, Bob Fraser explains that the United States is actively attacking Iran, leading to the effective closure of the Strait of Hormuz, which handles about 20% of global oil trade. This sudden loss of supply has driven oil prices up to around $100 per barrel, far above his earlier forecast of $60 per barrel. Fraser emphasizes that although oil is a tiny component of official inflation metrics, its pervasive presence in transportation, manufacturing, and energy means it has a far larger real impact on the economy. He argues that oil, together with wages, are the two primary drivers of inflation, which in turn dictates Federal Reserve policy on interest rates and consequently influences investment growth.

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What's happening, of course, is we're watching America attack Iran. And right now, as we speak, 20% of the global oil trade goes through the Strait of Hormuz, and it is pretty much closed down. So that is creating a real spike in oil prices. You know, oil hovering around $100 a barrel. When I made my forecast, it was around $60 a barrel, and we had kind of a supply, oversupply estimated for, you know, the next couple years. Well, obviously the geopolitical tensions in removing 20% of the world's oil supply is a pretty big deal. So oil really matters. Now, oil is not a part of the inflation metrics, okay? It's a— it's actually a very teeny tiny part, but that understates the impact of oil because oil is in everything. I mean, look outside. How many cars are moving? How many trucks are moving? Trains, planes, automobiles. It is in everything we do. Nothing is made without energy, without fossil fuels. Nothing is transported. Nothing is delivered. Nothing happens without energy. So it underlies absolutely Everything. So even though it's not a part of the actual inflation forecasts and inflation metrics, it actually has a much bigger impact than, than probably any other factor. And it's one of two, two things that I look at, that and wages, which is also not part that drives inflation. Well, why does inflation matter? Because that is the primary thing that determines what the Fed is going to do. So if the inflation is high, the Fed is not going to reduce interest rates. And that is what drives a lot of investment growth, which we're concerned about.