The dollar is rising modestly while oil prices surge, but delayed effects matter. Corporations lock in 2-12 month contracts that buffer price shocks, though Malaysia's government-subsidized fuel and Japan's 8-9 month reserves show different vulnerabilities. If geopolitical conflict persists, crypto faces real downside risk.
We take a look at the dollar. The dollar has already been going up for the past couple of weeks. Now, is it a huge move compared to what's happening on oil? No. But the problem with oil is that it doesn't always have negative implications right away. After all, most of these big companies and most of these big countries, they've got contracts with these oil companies for 2, 3, 6, 12 months in advance that, okay, I'm going to lock in this contract right now and I'm going to be purchasing oil from you at this price. This is just like a gesture of goodwill, like a bulk order, kind of like volume purchase. Thing where, all right, we get to lock in this price for the next, you know, 2 to 3 months. This just helps keep everything stable so that countries and these big organizations, they're not dealing with oil fluctuations like day in, day out. It's— you're not going to see the effects yet. But just as a couple of examples, my home country Malaysia has basically came out and said that if the oil prices remain this high, then they're going to have to bump the oil prices. And if there's any Malaysians here watching, you know that we have some of the lowest oil prices in the world. Like for as long as I can remember, and I'm talking like for more than a decade, the oil prices have been at a constant 40 or 50 cents per liter. And that's because the government is subsidizing the difference in, you know, whatever the oil prices are. But it's gotten so bad now that if the oil continues to remain this way, then the government is no longer able to continue tanking these bullets and just eating the damage. And they're going to have to raise prices. You take a look at Japan, they have 8 to 9 months worth of oil reserves. So In the immediate short term, right? Within the next couple of months, maybe 3 months, it's not going to have widely negative implications. But if this war continues, which I'm not one to say and I'm not one to make predictions, but if it does, like crypto is going to be in for a rough ride.
