US Strikes Kharg Island

Last night the US lit up Kharg Island again. Second time in four weeks.

CENTCOM says naval mines, missile bunkers, ninety-something military targets.

What CENTCOM did not say: that any of the oil terminals got touched.

Why does Kharg matter?

^ a pic from Kharg island in the game Battlefield 6. Yup, even game devs knew this was important.

Kharg moves around 90% of Iran's crude exports. It is the single most consequential pile of pipes in the global oil market. The US Air Force has now flown two large precision raids onto that island and walked away from the terminals both times.The bombs are landing within shouting distance of the loading arms.

Meanwhile Brent went from the mid-60s in February to a $120 print on March 14, settled at $103, and now sits around $106. Up 56% on the month. The market is trading like the terminals are next.

Here's how I'm thinking about it

There are two stories on the tape and only one of them can be right.

Either Washington eventually slips, the restraint breaks, and a tanker burns - in which case $120 is a floor, not a ceiling.

Alls we can do (that is inside our control) is that if we get a nice big crash, I will buy great companies at great prices. But of course, I hope for the safety of innocent lives and US service members and our allies. Interesting times.