Zipf’s law drives anyone who thinks too much about it into gibbering madness

While everyone is focused on an Iran oil embargo, Ukraine is embargoing Russian oil in the Baltic. If Iran can close the Strait with drones, then Ukraine can certainly shut down Russia's ports in the Baltic. Ukraine is now doing what the EU should have done in 2022... www.reuters.com/world/blaze-...

If you're interested in what an Iran oil embargo means, how it would work, how it would be enforced, how high oil prices might rise as a result, what would happen to Iran's economy, I discussed all this with @pkrugman.bsky.social in his podcast last week, which is here: substack.com/home/post/p-...

Key mistake the West made after Putin's invasion of Ukraine was not to embargo Russian oil. The result is that - more than 4 years later - Russia is still waging war with appalling loss of life. A short, sharp shock is better than an interminable one... robinjbrooks.substack.com/p/is-there-a...

Key mistake the West made after Putin's invasion of Ukraine was not to embargo Russian oil. The result is that - more than 4 years later - Russia is still waging war with appalling loss of life. A short, sharp shock is better than an interminable one... robinjbrooks.substack.com/p/is-there-a...

Key pushback to a blockade is that it might spike oil prices. Iran's 2 million barrels per day could spike oil prices by 20% if they go offline, but - with Brent already up 60% from before the war - some of that's already priced. That favors a blockade... robinjbrooks.substack.com/p/how-high-w...

Best off-ramp for this war is to embargo Iran's oil. At $110, oil prices already price a meaningful probability that Iran's 2.5 million barrels per day get interrupted. So risk of a big spike in oil prices is manageable, while Iran's economy would implode... robinjbrooks.substack.com/p/embargo-iran

The Saudis are lobbying the US for war to continue. On the surface, they want Iran to be properly defeated, but there's another reason. They're making lots more money now than before the war, even with somewhat lower export volumes thanks to high prices... robinjbrooks.substack.com/p/do-the-sau...

Financial markets started to look worrying towards the end of last week, which may explain Trump's climb-down on Iran. They're still looking stressed now, which may mean the US will keep trying to declare "mission accomplished" when it obviously isn't... robinjbrooks.substack.com/p/financial-...

After Russia invaded Ukraine in 2022, oil prices rose, which scared Western politicians and kept them from embargoing Russia. It's the same now for Iran. This is the perfect scenario for the Brazilian Real, which should now take off. Prime time for Brazil. robinjbrooks.substack.com/p/prime-time...

Iran is a gas station masquerading as an Islamic Republic. We should shut it down with an embargo. It’s absurd Iranian oil is flowing but other oil out of the Gulf is blockaded. I was on @cnbc.com with Chery Kang and Martin Soong last night on how an embargo would work. www.cnbc.com/video/2026/0...

Does Iran have any incentive to make a deal without major concessions from the US? I don't think so. The closure of the Strait of Hormuz gives Iran huge leverage. Trump may have unleashed the perfect nightmare for himself and the Republicans in November... robinjbrooks.substack.com/p/is-this-wh...

Why has gold tumbled? Two reasons: (i) the big rally pre-war sucked in lots of retail investors who're more skittish than the previous buyer base; (ii) volatility has meant hedge funds had margin calls, so sold profitable positions like gold to free up cash. robinjbrooks.substack.com/p/why-have-p...

We go to war and end up getting embargoed by Iran, which is now charging protection fees for oil tankers to go through the Strait of Hormuz. That's nuts. If Iran can embargo us with a couple of drones, we can obviously do the same to them. Embargo Iran... robinjbrooks.substack.com/p/embargo-iran

Our book is finally here!! Oli Coibion @empctmacrotx.bsky.social & me with our advance copies Grateful to everyone who helped along the way—colleagues, students, coauthors, & early readers who shaped the project at every stage Official release tomorrow! tinyurl.com/385ak89u #EconSky

I talked with @kairyssdal.bsky.social on @marketplace.org yesterday about what's going on with oil prices after the latest switcheroo in the conflict with Iran. I don't think this war is over by a long shot, so I doubt we're headed back to $60 oil any time soon... www.marketplace.org/episode/2026...

Apocalyptic oil forecasts of $150 or $200 assume either very low price elasticities of demand - not backed up in the academic literature - or catastrophic escalation of the war back to near total closure of the Strait of Hormuz. Yesterday was a reminder... robinjbrooks.substack.com/p/how-high-w...

The oil price is a combination of two things: (i) a physical shortage of oil in the here and now; and (ii) expectations for how long this conflict lasts. The latter channel is by far the more important one in driving prices, as yesterday's price action shows robinjbrooks.substack.com/p/what-can-m...

President Trump has a habit of initiating conflict, escalating it wildly, then - when things spin out of control - backing down with nothing gained. That's what happened with Iran over the past weekend and with China in April 2025. The art of the non-deal... robinjbrooks.substack.com/p/is-this-wh...

Brent is down below $100. @hettena.bsky.social and I just finished a podcast on oil and where to from here. I've been pushing back on the idea that Brent is heading for $150 or $200 for various reason, including the risk of a Trump TACO. And here we are... robinjbrooks.substack.com/p/reschedule...

At the height of the tariff stand-off with China in April 2025, Trump was essentially negotiating with himself - threatening escalation and then pulling back - while China stayed silent. We're at that stage now on Iran. China won the 2025 stand-off... robinjbrooks.substack.com/p/how-high-w...

Brent is down to $100. The latest de-escalation signal is worth about as much as the escalation signal Saturday night, but - underneath all that - it's clear that high oil prices scare this administration as much as they scared the Biden administration... robinjbrooks.substack.com/p/financial-...

In this podcast conversation with @pkrugman.bsky.social from last week, we debate my view that oil prices are near their peak because large risk premia have been priced into oil that embed substantially reduced tanker traffic through the Strait of Hormuz. Watch here: substack.com/home/post/p-...

One thing the Trump and Biden administrations share is a fear of high oil prices. That means we can't get $150 or $200, as evidenced by Trump's latest about-turn today. Important to look through the alarmist hype and remember the key thing: "oil is king..." robinjbrooks.substack.com/p/how-high-w...

People had lots of questions about the oil shock after this weekend's podcast with @pkrugman.bsky.social, including on the different types of oil and which one is most important. I've been pounding the table that oil prices have peaked, so more on that too. robinjbrooks.substack.com/p/q-and-a-on...

Words > Actions

After all the hype over the weekend about escalation, you'd have thought oil prices would spike on tonight's open. But no sign of that. What matters are actions, not words. And those are that Iranian oil is flowing through SoH with the blessing of the US... robinjbrooks.substack.com/p/how-high-w...

Of course you can paint all kinds of horror scenarios for oil prices. But they require two things: (i) a collapse in oil export volumes out of the Gulf from current levels near 10 mmb/d; (ii) a price elasticity of demand near zero. Neither is realistic... robinjbrooks.substack.com/p/how-high-w...

Threats are flying between the US and Iran, but what matters for oil prices isn't words but deeds. Oil tankers with capacity of 2 million barrels keep docking at Kharg Island to fill up with US encouragement. My discussion with @pkrugman.bsky.social about oil prices... substack.com/home/post/p-...

If the US bombs Iran's power plants, there's no power to fill up oil tankers, so it's an embargo. Same with taking Kharg Island by force. Iran will stop exporting oil, so it's an embargo. Much better to do an actual embargo and blockade Iran's ports... robinjbrooks.substack.com/p/embargo-iran

“The overall picture is quite alarming. Where markets were well-behaved a week ago, there’s now mounting signs of stress, with oil prices embedding a much bigger risk premium than in 2022.” Dire outlook on rising financial stability risks from @robin-j-brooks.bsky.social

Short-term rates (black) are rising as markets settle in for a long war. That pushes up long-term yields, a problem for any high-debt country out there. The last time we saw this in 2022, Italy and Spain needed ECB bailouts and the UK Gilt market blew up... robinjbrooks.substack.com/p/what-this-...

Markets have been the ultimate constraint on Trump and they're starting to look very iffy, especially where the US bond market (bottom left) and private credit (bottom right) are concerned. If the US escalates the war with Iran, markets will below up... robinjbrooks.substack.com/p/financial-...

The key reason why IMO the most likely scenario is a Trump stand down w/o a formal ceasefire agreement, and probably in the next month or less. IMO Israel wld likely follow the US lead. But what’s IMO v unclear is what Iran wld do then - stop strikes, allow Hormuz to open, terrorism, etc?

Why do we do this? Porque podemos.

Gold is now down 15% from before war with Iran began. This is the biggest challenge so far to the debasement trade. I've become a convert to this trade and think it's driven by reckless fiscal policy across much of the G10. But this drawdown is large... robinjbrooks.substack.com/p/is-gold-no...

Markets have been the ultimate constraint on Trump. It was like that in April 2025 when China tariffs went to almost 150% and arguably also in January 2026 over Greenland. Markets are now very distressed. Trying to take Kharg Island just isn't realistic... robinjbrooks.substack.com/p/how-bad-is...

I learned much of what I know about international macro from @pkrugman.bsky.social. So it was a thrill and honor to talk with him about what’s now priced into oil and how realistic it is for prices to go to $150 or $200. Huge thank you for the great discussion! substack.com/home/post/p-...

This @projectsyndicate.bsky.social column by @simonhrjohnson.bsky.social is a must-read. Before he won the Nobel in 2024, Simon was deeply involved in design of the G7 price cap on Russia. Few other voices carry as much weight now as we look for an off-ramp. www.project-syndicate.org/commentary/i...

The last time the world faced a big supply shock - after COVID in 2022 - the Yen went into a depreciation spiral, Italy and Spain needed ECB bailouts and the Gilt market blew up in the UK. This environment is dangerous for all high-debt sovereigns out there. robinjbrooks.substack.com/p/what-this-...

Headlines that the US is thinking about taking Kharg island are pushing up Brent (lhs) and causing stocks to tank (rhs). Taking Kharg doesn't reopen the Strait and could turn into a fiasco. Better to embargo Iranian oil and force the Strait open that way... robinjbrooks.substack.com/p/embargo-iran

Feeling listless and irritable as I wait for Italy (lhs) to call for the ECB to activate its TPI tool because markets are being anti-Italian and France (rhs) to call for joint EU debt issuance on account of "force majeure" and terrible feelings of "ennui..." robinjbrooks.substack.com/p/the-global...

The 10y10y forward Treasury yield (red) is rising towards its historical highs. If only we'd brought our deficit under control after COVID, then we'd now have more gas in the tank for emergency spending. But we didn't. Reckless fiscal policy has costs... robinjbrooks.substack.com/p/the-lurkin...

Oil at $150 or $200 isn't the no brainer it's made out to be. You have to think carefully about what's priced at $110. My best guess is that current levels price half of all oil out of the Gulf being permanently disrupted. So $150 or $200 are a stretch... robinjbrooks.substack.com/p/how-high-w...

The reason the Dollar isn't stronger is because markets price a much more hawkish policy shift by central banks in the G10 compared to the Fed. That's moving rate differentials against the Dollar and tempering what otherwise would be an even bigger rise... robinjbrooks.substack.com/p/what-this-...

This war needs an off-ramp. That isn't military escalation or just declaring "mission accomplished." Instead, it's an embargo of Iran's oil. That'll throw Iran into chaos and the upside for oil prices is limited given how much they've already risen... robinjbrooks.substack.com/p/is-there-a...

Scott Bessent says that U.S. may unsanction the Iranian oil. "In essence, we'd be using the Iranian barrels against the Iranians to keep the price down for the next 10 or 14 days, as we continue this campaign." 1st unsanction Russian oil, now Iranian oil what is next???

Brent is back below $110. It's possible we go to $150 or $200 at some point, but those levels assume a return to full disruption of oil out of the Persian Gulf, which is unlikely. See my piece from earlier today on what's priced into oil prices right now... robinjbrooks.substack.com/p/how-high-w...

Mmmmmmh #privatecredit #US…. to me this has the smell of Mortgage-Backed Securities (MBS), Collateralized Debt Obligations (CDOs) Credit Default Swaps (CDS) @robin-j-brooks.bsky.social @carlquintanilla.bsky.social @financialtimes.com @finanzwende.de

Of course it's possible that oil goes to $200. But that kind of price level basically assumes a return to full shut down for all oil coming out of the Persian Gulf and a very low price elasticity of demand. $200 isn't going to happen and $150 is a stretch... robinjbrooks.substack.com/p/how-high-w...