Hedgeye Energy Policy analyst Joe McMonigle joined Hedgeye political analyst JT Taylor to discuss the upcoming OPEC meeting to be held in Vienna on July 1st and 2nd. Here's analysis from McMonigle:
If the US has a maximum pressure policy, Iran is now implementing a maximum chaos policy in the hopes that higher prices and threat of military conflict make the US and Trump rethink its policy. I think Iran is misjudging Trump as he views the Iran policy as stand-alone from oil prices, plus the administration believes global spare capacity and surging US production will mitigate price hikes.
But Iran is pursuing this new maximum chaos policy. The start was the tanker attacks, next week Iran will breach the JCPOA nuclear agreement by exceeding limits on uranium enrichment forcing the Europeans to make decisions on sanctions. Soon I believe we will see additional steps and attacks by Iran in the coming weeks and will be met with responses by the US and/or others. So geopolitical risk in the heart of the oil producing Gulf is only rising, and the market will start to see it more and more like whack-a-mole.
The current market focus is on the macro narrative and fears of a slowing global economy but geopolitical risks will be vying for attention soon.
From Iran Sanctions to production cuts and more, you won't want to miss this in-depth preview before Joe himself heads to Vienna.