Latest / Money Grows on Trees / #360 - 5% of the World’s Oil Supply Just Got Bombed (Protect Your Money)

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#360 - 5% of the World’s Oil Supply Just Got Bombed (Protect Your Money) · Money Grows on Trees

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  Around 5% of the world's oil supply travels through infrastructure that was recently attacked.
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  Most people think that what happens in the Middle East stays in the Middle East. But the reality is.
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  Oil isn't just what goes in your car. It's embedded in your groceries, your mortgage rate,
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  your retirement fund, your rent, and the chain from a bombed pipeline in Saudi Arabia to your
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  household budget is shorter and faster than most people realize. I'm Lloyd J. Ross, significant
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  investor and entrepreneur, and I've helped thousands of everyday Australians, Americans, New
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  Zealanders, Canadians and those in the UK get out of debt and build real wealth. And in this video,
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  I'm going to show you exactly how this attack flows through to your cost of living. Why diesel
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  is a sleeper story that nobody's talking about, and the four numbers to watch right now to know
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  whether this is going to get better or worse. So stay to the end. Saudi Arabia's major oil
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  producing region is on the eastern side near the Persian Gulf. If you did not, and normally oil can
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  leave through the Strait of Hormuz, you've probably heard about the Strait of Hormuz until
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  the cows come home. But historically, the Strait of Hormuz has been enormous. Right. So something like
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  21 million barrels a day traveled through there in the first half of 2025, it's equivalent to
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  about 20% of global petroleum consumption or routing and supply massive about a quarter
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  globally traded maritime oil actually passes through there. So the conflict dramatically
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  changes everything. And that's what's happened right about halfway through this year, 2026. The
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  EIA estimates that Hormuz oil movements had collapsed from 21 million to about 4.9 million
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  barrels a day. Insane. Basically, what has happened if you haven't seen it is Donald Trump said, okay,
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  you can't have nukes, Iran. So we're going to bomb certain facilities. There was an uprising in Iran
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  there for a while from the people. And of course, Israel is a big proponent of this as well. They've
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  been in a hundred year war or longer with Iran. Goes back to Abraham. You could do a whole
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  flipping library on that until cows come home. By all accounts, I don't know enough about it to say
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  it politically, so I'm not going to go there. But what I do know is this there was reasons why
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  there was strikes on Iran. And I believe from what I learned, is that the generals in the military in
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  the US didn't want to do it because they said to Donald Trump, hey, listen, if we do this, are going
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  to close the Strait of Hormuz, they're going to put mines there. He said, I'm going to go in anyway.
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  So he did it, and that's what they did. They laid mines through the Strait of Hormuz, so that's
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  collapsed the oil supply through there. And the traffic has been basically collapsed for a long
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  time. So it's been had a massive impact on oil. The oil price went from around $50 a barrel to up to
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  now it's about $100 a barrel. But what's fascinating is diesel crack spreads no crack a
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  crack spread. Diesel crack spreads the spread between the oil price per barrel and diesel. Now,
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  quite often the spread is quite minimal that that spread. And the reason for it is because you buy
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  oil and then you refine it into these other products. And diesel being one of those products,
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  oil has multiple products that come from it, Petroleum's one diesel, asphalt, etc.. So based on
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  the thickness and the cleanness. Right. Motor oil, synthetics. So out of the oil, the diesel is one of
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  the things. But diesel is critically important to the economy. People don't realize this, but fossil
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  fuels still account for something like 85% of energy on the earth. It's not like we've just
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  created clean energy for everything. It's just not like that. So diesel is in all farming. Like if you
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  didn't have diesel, you ain't farming squat and you aren't creating phosphates, which
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  are go into fertilizers. And so like there's a huge impact on food development if diesel is not
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  available. So diesel crack spreads, they've widened massively. So you can buy a $100 barrel of oil.
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  Diesel is over $200 a barrel, so it's like the cracks beds are the highest in history industry
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  ever. And so China was not buying a lot of oil. And now China is coming out. They're buying oil and to
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  sell the diesel. So now there's more demand for oil happening. Now that's one part of it that's
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  happening and it's continuing to happen. So irrespective of what's happening like that's
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  happening in the Strait of Hormuz. Now that so oil is constrained, it's bad, but it got worse. The
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  East-West pipeline in Saudi Arabia, that is about 1200 days long. There's three pumping stations
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  that are part of that. And the Houthis or an extremist group funded by Iran or whatever. But
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  they reckon it was the Houthis. They bombed, I think, with a drone. I believe it was launched. I
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  think the drone was launched from Iraq and it bombed the East west pipeline, which is the only
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  pipeline or only place available to pump oil from Saudi Arabia to the world. And then the Houthis.
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  Bang. They took it offline. Right. And they estimate repairs are about 5 to 6 weeks. Interesting. So for
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  5 to 6 weeks, we're now absolutely lost. All of a sudden, if you bomb this flippin east west
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  pipeline, you've taken out a massive amount of oil supply in the world. Very bad. As soon as that
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  happened and it was announced, you could see there's a plume of smoke. You probably saw it
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  before. There's a plume of smoke. You could see it from space that this flippant oil pipeline had
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  been taken out. And so oil just pumps. It went up to $105 a barrel. Oh, my God, this is it. What's
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  going to happen? Right. So it's very important stuff because oil is in everything. People are
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  realizing now very quickly. And you can see that diesel I think it's diesel up to $3 now at the
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  petrol station. We have diesel cars. I'm like oh my God, I've got to fill it up soon. But so you're
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  seeing this now. What's interesting is I'm positioning oil companies and I'm well accounts
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  making money but I don't like it's not why I did it, but I did it because there's a secular decline
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  in oil supply, and that means that oil is going to go up. But I didn't anticipate the Iran war, right.
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  America is a big exporter of oil. And even this morning, I believe that Donald Trump mentioned
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  that they're actually going to create an export ban on diesel because it's becoming so sought
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  after. A lot of airlines have shut flights because they can't get jet fuel. So the problem is
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  becoming pretty bad. Very bad, incidentally. Very I don't want to panic you, but you think Covid was
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  bad with panic buying. If there's food shortage, you'll see panic. Oh, there's real panic, right? But
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  I'm not suggesting you panic. Okay, but if you're in a panic, panic, you know I shouldn't laugh, but
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  this is really serious. I'm pretty sure it's going to be solved because what I've learned is nothing
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  ever happens. But then look at what happened at Covid, right? Missed that one. What's happening is
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  this the SPR, which is the strategic Petroleum reserve in the States, is being drained now. It's
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  being drained methodically by the administration because they're trying to artificially keep oil
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  prices low so that prices at the petrol tank is low for gas for people in the States, for the
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  midterms. The midterm elections is where it's midterm. So a term in U.S. presidency is four
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  years. Two years is when the midterms are up and the Republicans get voted back in or not based on
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  their policies if they come into the midterms in November by then. So it's in about six weeks time
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  as the the midterm elections. And if they don't get control of this oil price, it's going to be
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  irritating for people. They're going to get voted out. They know this. Scott Benson and Donald Trump
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  are artificially trying to keep the oil price as low as they can. What's happening in the market
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  looks to be very manipulated. What's happening is there's a lot of oil shorts being built into the
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  paper oil market, which means a lot of people are shorting it on purpose to keep the paper market
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  low. But of course, you're seeing the rise in oil prices for diesel. It's $200 a barrel. You can see
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  that it's you can see that it's artificially kept low. And they're doing this for the midterms. And
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  then the SPR is being drained on purpose. The SPR is there as a strategic reserve for these moments,
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  but they're using it with just enough time all the way down to the bottom. If they can do it to
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  the midterms. And after that it's got to be refilled. So the demand for oil is going to go
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  through the roof. China's hasn't entered the market to start buying it, but they're starting to
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  come back to the market. They're a big buyer of oil. This is getting serious now. And the midterms
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  are still six weeks away. What are they going to do? Try and keep it artificially low for this long
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  diesel crack spread is going to go way up. You've got to understand this diesel problem is finding
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  its way through food. When diesel becomes expensive, food becomes expensive, is food becomes
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  expensive, inflation goes up. It's part of the core inflation CPI If that goes up, the only way they
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  know how to handle inflation is to increase interest rates. That's why the RBA in Australia
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  and many other places like the Federal Reserve, they're going to increase interest rates to curb
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  the inflation. You're going to feel it just quickly if you're ready to take control of your
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  finances but feel stuck on where to start. I have a solution. My book, Money Buys Happiness
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  Simplifies Investing and Wealth Building with practical steps to help you achieve financial
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  peace. Get your copy via the link in the show notes and let's get your money working for you.
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  Now back to the episode. It's like a slow train wreck happening, right? Or a slow car crash? This
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  east west pipeline by the Houthis when they took it out, that has exacerbated it drastically,
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  because all of a sudden you are getting an absolute reduction in oil supply. And it wouldn't
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  surprise me to see countries start locking down and not using oil. Having a lot of this export
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  bans and like it can get very bad very quickly. So the danger isn't necessarily the runs out of oil.
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  The world's not going to run out of oil, but that there's a danger in can it reliably secure
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  refined products from oil? Right. And if oil is not put through some of those refineries, the
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  refineries can't function. If the SPR gets basically sucked all the oil out of the SPR gets
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  sucked out and it comes down to the salt carbons left. I don't even know if it can even hold
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  anymore. There's very gnarly things. This is an unchartered territory for the global oil supply.
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  The reason why it's oil is not going to $20 a barrel is because they're holding it back on
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  purpose. Like just a couple days ago on X, all routers and all these mainstream media platforms,
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  they put out this thing saying, oh, there's an Iran deal happening. Iran said they're going to open
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  the strait within seven days if these things happen, blah, blah, blah. It's bullshit. It's a
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  bullshit. It's just made up. They just make it up to continue this bullshit charade about what's
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  happening. And don't forget. I'm. I'm a Republican fan. Like, I like most of the things Republican. I
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  like all their conservative policies make so much sense to protect the nation. Like, it makes sense.
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  But unfortunately, you can't say that it was a good idea to go and bomber. That was pretty dumb.
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  But again, walk a thousand miles in a man shoes before you judge him. But they. I can tell what
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  they're doing now is they're definitely doing this to win the midterms. And I believe they'll
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  artificially hold oil prices low until the midterms. You watch after the midterms, they take
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  their foot off it all. 250 a barrel like it's going now. That's going to have a massive impact
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  on our global market. That's also why I exited growth stocks. I'm positioned for this like I'm
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  positioning cash and I'm positioning oil copper and rail. My whole portfolio is positioned for
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  this, which means I don't get to participate in the upside of AI. But I'm waiting to jump back
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  into growth stocks because if this happens, there's going to be some bargains. And I want to
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  own those growth stocks, but I would love to own them for a cheaper price anyway. There's a bit of
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  insight. I haven't played this, but I'm ready for it. Like I'm ready for how it will impact our
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  businesses. I may underestimate that. I'm ready for how it impacts my personal expenses like I'm
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  watching this unfold. And if you aren't, I want you to be okay. Now, what's happened since we decided
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  to do this episode is they're fixing parts of the East West pipeline. I believe there's oil running
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  through it. So that's why you see a bit of a dip in the oil price the other day under $100 a
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  barrel. But who's to say that the Houthis can't just flip and go and bombing again with another
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  drone? Of course they can. And do you think that's not going to happen? Of course it's going to
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  happen until their demands are met. And the Iranian demands are absolutely horrific, like the
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  US is not going to bend the knee to those demands. And guess what? Iran is not going to bend the knee
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  to America. Now, what America is trying to do, they're basically trying to prevent oil being
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  exported by Iran. So Iran basically runs out of oil and runs out of money and runs out of hope.
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  They're trying to just cook them slowly to surrender. That's what they're trying to do. But
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  Iran, they know that if they do this properly, Donald Trump will be out of power and they'll
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  have a different president and they'll change the demands and the negotiations. Right. So you might
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  be thinking, that's all great stuff. How does this impact me personally? It's already impacting you
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  at the gas station? Yes, it's already doing it. It's going to affect inflation, which was going to, I
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  dare say, have 1 to 2 more rate rises in Australia specifically. But around the world if you're in
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  America it's going to have rate rises, impacts there, which is going to be harder on your
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  mortgage and food. Of course, the who's the big one? Like we haven't seen the harvest yet. What happens
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  when fertilizers are impacted and diesels impacted and it's higher. You're going to see in
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  food prices you think food's expensive now. Wait till then. Corn is up already rises up 60% like
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  it's already happened. We just haven't felt it yet. So you're going to get hit in the worst three
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  places shelter, food and gas for transport. So imagine this transport, food and shelter. The three
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  things we need to live our life effectively in the weight capacity it's in are going to get more
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  expensive. So how is it going to affect you? It's going to affect you in all those areas and it
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  sucks and it's fucked. But this is the nature of the world. So crude prices will go up, refined
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  fuels going up, freight prices going up, diesel is going up, food prices go up, Shelter is going to go
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  up. Everything's going to go up because oil's and everything. And I've been saying this on the show
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  for six months. Really? Go back and listen to the episodes. Right. And so if you haven't been
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  preparing for it, now would be a good time. Right. And that's what I want to just finish with. Here
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  is how do you prepare for this? Do you liquidate? No. You just if you're in an index,
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  you can find an opportunity to add to that soon with cheaper prices, which would be cool, right? But
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  I would say to you, if you've got any car debt or you've got any debts of any kind, that's starting
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  to hurt a little bit. Get rid of them. Do what you have to do. If you've got a mortgage over your
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  house, just try and look. If it was me and I had multiple properties and I could sell one and use
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  the equity to really massively reduce the debt on my other ones, I'd do it in a heartbeat. I'm
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  looking at the real estate market. It's just falling. I'm just like, here it is. And I think it
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  can get worse. So I'm basically positioning cash. As I said, dividend producing stocks in those
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  particular industries will do well with $200 oil. And I have no personal debt, so I'm just prepared
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  for it in that way. Now, if you aren't you, I want you to be. That's all. Get out! Control your debts.
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  Build a good emergency fund. Make sure you're irreplaceable in your job if you have one. Start
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  building a side business to get extra money. And of course, watch out for the opportunities in the
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  market. If it does fall, it could be an opportunity to continue to build into that portfolio. But
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  don't try and time the market and build in and out. Okay, just set up for higher food prices,
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  higher diesel prices and higher mortgage rates. Just set up for it. Just just pretend it's
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  happening now and start managing your expenses to alleviate the challenges there. That's all you
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  need to do and watch the news. Be aware of it. What's happening? Don't panic, but understand that
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  if they don't solve this oil problem, it can cause some serious problems. And it doesn't mean you're
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  going to run out and start buying all this food. But my mum said to me, only panic when I tell ya.
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  So if I if I get on my Instagram and say panic because my mum said panic anyway, I think the
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  Houthis or someone will bomb that pipeline again. I think that it's very clear that Saudi Arabia
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  does not have the US's backing in militarily. They're going to have to spend more money on
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  military. And I think they're exposed. And I think I've got friends that are leaving Saudi Arabia
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  right now. I think they're in a little bit of trouble unless the US can really control Iran.
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  Who's to say that Iran just can't take over Saudi Arabia? The Houthis are flipping fighters, man.
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  Saudi Arabia has probably been like, you know, the rich trust fund, baby. I think it just be
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  interesting to watch. I hope it doesn't go down that track, because I would not like to see the
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  world go through that, but be prepared for it. Just watch it. So hope that makes sense. I think that's
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  what's happening. To give you a bit of an update of what's happening with this east West pipeline,
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  I think it'll be bombed again. I think oil's going to $200 a barrel, and I think that all this
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  stuff's going to come to, to roost probably in the next six weeks and be ready for it. If I'm wrong,
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  we'll find out another episode, but I will come back and address this if I am and explain what
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  happened. But let's see. See you in the next episode. Hit the subscribe button. See you in the
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  comments!