Former Goldman Sachs commodities expert on the "US-Iran deal": Sell the rumors, buy the hard assets

```

The oil market is speaking through prices, not political statements.

Trump declared over the weekend that the US is close to reaching a peace deal with Iran and that the Strait of Hormuz might reopen; oil prices promptly fell that day. But former Goldman Sachs Head of Commodities Research and current Carlyle Group energy advisor Jeff Currie remains highly cautious about this.

In an interview on Monday, he cited a stark historical record: since the outbreak of conflict, there have been five deal announcements but zero deals completed. He summed up this pattern in one phrase—"sell the tweet, buy the molecule."

Currie pointed out that Iran's bargaining chips have been accumulating over time, not diminishing. Global oil inventories are still being heavily drawn down every week—just last week, inventories dropped by 17 million barrels. He warned that some markets in Asia have already reached their operational minimum inventory levels, Europe will face pressure in a few weeks, and the US may encounter supply tightness by July. Even if the Strait is announced open tomorrow, it would take at least another six months to truly resolve supply issues.

"Five announcements, zero deals": Why the deal hopes are hard to realize

Currie is clearly skeptical about the progress of US-Iran negotiations. He said that a senior official in the Middle East once told him there is an iron rule for negotiating with Iran: the moment you think you’re winning, that's the moment you’ll realize you might have lost.

He emphasized that Iran currently enjoys its strongest negotiating position in 47 years. The reason is that with every passing day, global oil inventories decline further and Iran's leverage rises, while Western bargaining power diminishes accordingly. This asymmetric structure makes it difficult for any announced deal to translate into a substantial supply release.

Inventory crunch: From Asia to Europe to the US

Currie directly challenged the common market perception of "ample inventories." He explained that there are about 8 billion barrels of oil in theory worldwide, but the vast majority is tied up in pipeline fill and system fill, and cannot actually be used. The genuinely usable inventory can only go down to the so-called "minimum operating level," and Asia has already reached this threshold.

He described a path of regional contagion: the Singapore market has already seen dramatic product price gyrations; while jet fuel prices have retreated somewhat, diesel prices have now surpassed jet fuel—trouble moving from one product to another. As for Europe, it is currently importing large volumes of crude oil exported from the US Strategic Petroleum Reserve (SPR), which has temporarily masked its own inventory pressure, but this transfusion channel is unsustainable. He expects Europe to run into trouble after the bank holidays are over and summer driving season begins, and the US may face a real supply bottleneck come July.

Ineffective policy tools: Tax cuts won’t fix real shortages

Regarding the Trump administration's consideration of suspending federal gasoline taxes, Currie's view was straightforward: this will not solve any problems.

He believes the only way to solve the supply crisis is to increase the availability of physical barrels. SPR releases have helped somewhat, but he noted that since policies were announced, indexes tracking commodities—including the Bloomberg Commodity Oil Subindex, USO, and related BMO products—have continued to climb in price, which in itself signals that the underlying supply problem remains unresolved.

His conclusion is that even if the Strait of Hormuz were announced open tomorrow, it would still take at least six months from announcement to genuinely resolve the issues.

The "rare earth moment": From scarcity to absence, a qualitative leap

Currie distinguished the current commodity market situation from historical price shocks. He pointed out that in 2008, when oil surged to $147 per barrel, mistakes still occurred, and the market was just rationing on a global scale; it was similar after Russia’s invasion of Ukraine in 2022.

But this time, he said, things are different: the market is moving from "scarcity" to "absence." He called this shift the "rare earth moment" and gave an example: if a small battery in a car door is removed, production lines in Detroit can grind to a halt. He believes that when key physical items are pulled from the economic system, the knock-on effects far surpass what their nominal share of GDP would suggest.

The capital rotation window: From bits to atoms

Currie believes the market's current neglect of commodities is partly due to a misreading of the AI narrative. He pointed out that today’s AI computing infrastructure is essentially a "combination of bits and atoms," but markets are only focusing on bits and ignoring atoms.

He used copper as an example: Copper just hit a record high two weeks ago, in part because tensions in the Strait of Hormuz have impeded sulfuric acid supplies and thus copper smelting. He said the price of bits is heading toward zero, while the cost floor for atoms is closing higher; once a true shortage appears on the atomic side, the technology sector will feel the pinch.

He also pointed out a structural backdrop: the energy and materials sectors currently account for only about 6% of stock index weightings, while AI and related sectors now exceed 50%. It’s exactly this weight imbalance that means commodity signals have long been ignored by markets—until they can’t be ignored any longer.

Risk Warning and DisclaimerThe market involves risk and investment requires caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial situation, or needs of individual users. Readers should consider whether any views, opinions, or conclusions in this article are appropriate for their particular circumstances. Investing accordingly is at your own risk. ```