MW The real outcome of the Iran war: America is now the world's most secure energy power
By Kenneth Rapoza
Trump's message is 'buy American' - the U.S. has fuel and is a safe alternative to the Gulf
The Strait of Hormuz is open - for now.
What has this war accomplished? Rerouting capital and resources into the U.S., for starters.
The Strait of Hormuz seemed to be back in business; Iran's foreign minister, Abbas Araghchi, said as much on Friday. Then Iran threatened to close to Strait if the U.S. continues to block Iranian ships and ports. President Donald Trump insisted the blockade would remain.
The Iran-U.S. cease-fire expires on April 22, but even as the Strait's status goes back and forth, it is clear the stock market believes this war is winding down: The Nasdaq COMP soared this past week, beating gold (GC00).
What appears on the surface as the final throes of another Middle East war is, perhaps, better viewed as a key maneuver in Cold War 2.0. What we have here is a heavily indebted but still militarily powerful United States deploying lethality and "madman" diplomacy to throttle energy chokepoints, reroute resource and capital flows back home, and reassert primacy against a rising China.
That's the bigger picture. On the ground, Iran's infrastructure has been pummeled. Tehran is taking Trump's threats seriously - as it should. Iran is hopeful Trump can stop Israel from resuming its bombing of Lebanon. More talks between the U.S. and Iran appear in the works - with Trump saying, yet again, "We are very close to making a deal."
That deal might see Iranian leadership opting to take Trump up on his offer to cross a "golden bridge" - no longer being isolated from the world.
If Iran rejects the offer, oil prices (CL00) (BRN00) go over $100 a barrel again, and Iran faces economic asphyxiation via maritime blockades plus more bombings designed to destroy its ability to finance itself. This might be untenable, even if some Iranian leaders truly would like to keep the war going and blow up a few more critical assets in the Gulf - testing the war tolerance of the U.A.E. and other U.S. allies.
"I'll put the odds of a deal in the next 10 days at 90%," says Brian McCarthy, managing principal of Macrolens, a boutique investment-research firm in Massachusetts. He had it at 85% in a recent note to clients. With Friday's announcements from Trump and Araghchi, those numbers are looking legit.
Oil prices have been a guiding light. Oil futures are declining to the low $80s and high $70s for delivery in late summer and autumn, assuming peace holds.
Equity markets are moving past the conflict - just like they did during America's 'Operation Midnight Hammer' in June 2025.
Equity markets are moving past the conflict - just like they did during America's "Operation Midnight Hammer" in June 2025. Those nuclear-site bombing runs led to a cease-fire by month's end. We have been through cease-fires with Iran before only to watch conflict flare up again. Could that happen this time? Certainly.
Still, one would hope the U.S. and Iran sincerely want the Strait of Hormuz open. Of course, it could become partially or fully closed again. But if that happens, Iran's economy crashes. For the U.S., it means allies, namely Japan, South Korea and Europe, suffer from higher fuel costs. There is no guarantee they will turn to the U.S. for their energy needs, as Washington hopes.
There have been positive signs in the strait all week. According to Vladimir Signorelli, head of Bretton Woods Research, "ship traffic through the Strait of Hormuz has been increasing, so all the drama queens who swore this would cripple us for months upon months are about to look like complete idiots."
Pakistan's involvement in the negotiations allowed Trump and Israeli Prime Minister Benjamin Netanyahu to play bad cop to Islamabad's good cop, Signorelli says. China's role in that mediation remains unclear, other than Beijing advising Iran not to escalate.
What is this war all about? It's more than the final battle in the global war on terrorism and more than a religious war between ancient warring tribes of the Levant. It's Cold War 2.0. It's why Trump is asking for more defense spending. Rerouting capital and resources into the U.S. has been the immediate outcome. Trump's message to the world: The U.S. has fuel - and it's a safe alternative to the Gulf.
The Americas region is loaded with oil and gas. This should be on investors' radar as oil stocks fall, providing good entry points. Occidental Petroleum $(OXY)$ in the Gulf of Mexico and Petrobras (PBR) in Brazil both reported new oil discoveries this year. The U.S. Geological Survey released an assessment in January of a technically recoverable 28.3 trillion cubic feet of natural gas and 1.6 billion barrels of oil in the Permian Basin in Texas and New Mexico.
"The intention here was to strain oil supply to Asia to drive capital out of gold and into dollars DXY, which filters back into U.S. markets. It keeps the [financial] bubble alive and the narrative in Trump's favor," says Albert Marko, a political and economic consultant for financial institutions.
There are risks to this strategy. Europe, Japan and South Korea can turn to Russia for fuel, ignoring sanctions. Europe can also turn to China for more solar power. Witness what happened when Spanish Prime Minister Pedro Sanchez visited China and called for peace and stability. Trump threw a fit; he threatened to end U.S. imports from Spain, a blunt way of saying: "This is Cold War 2.0. Which side are you on?"
The hysterics around the Iran war should moderate. The Ukraine war - another front in Cold War 2.0 - is a good example. Experts warned that Ukraine is Europe's breadbasket and Europe would starve. The war did cause some disruption, but importers simply looked elsewhere for goods. Corn prices (C00) have fallen about 30% in the last three years. The Ukraine war is still raging.
Markets adjust. Growth stocks now are the default beneficiary of greater stability and flat to lower energy costs. A more normalized Hormuz is now the highest probability going forward. As Marko says, oil at $80 is "mostly bullish."
Even within the Cold War 2.0 framework, China also benefits from America's bullying tactics because it is in its interest to keep the strait drama-free.
When the Strait of Hormuz is functioning normally, petrochemical and fertilizer trade routes will return - though maybe never to 100%. Meanwhile, the U.S. war machine shows it can also open or close Hormuz by using Iran as a villain, attaching a high insurance premium to Hormuz transit.
A lot can be said about Trump during this. But I am reminded of two characteristics: He can pull a rabbit out of his hat at opportune times. And he loves dramatic entrances and endings - he's a showman.
So picture this: July 4, 2026, Washington, D.C.: Trump and the leader of Iran watching the fireworks together. The "peace president" returns. Crazy? Sure. But what an ending to "Operation Epic Fury" that would be. The odds of it happening? Not zero.
Kenneth Rapoza is an analyst for the Coalition for a Prosperous America, which represents U.S. producers and workers. He is a former journalist who has reported from Brazil and covered the BRIC economies.
More: Iran declares Strait of Hormuz 'completely open.' Here's what that really means.
Plus: A 'full normalization scenario' for oil is still out of reach - even with the Strait of Hormuz now open
-Kenneth Rapoza
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 18, 2026 08:10 ET (12:10 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments