Why Did the Iran War Restart? | Macro Mondays, July 13, 2026

Trump declared the ceasefire with Iran over and launched heavy attacks on the IRGC over the weekend, and approximately ninety minutes before recording he posted that the US wants to control the Strait of Hormuz. There was no indication of a return to negotiations, and the host noted this is roughly the third or fourth time the Iran war has been called over.

The oil supply math looks less alarming than it did in March or April. The current regional supply deficit is estimated at approximately four million barrels per day, compared to the roughly eight million barrels per day void that the US and China filled through April and May using strategic reserves. Strategic reserve capacity provides an estimated three to five month runway, making the situation serious but not immediately critical. Despite the renewed conflict, oil prices at the time of recording had not exceeded Thursday's peak, with the likely equilibrium around eighty dollars per barrel and a move toward one hundred dollars considered unlikely.

Tanker flow through the Strait of Hormuz has been better than widely reported throughout June and most of July, with dark transits continuing and Abu Dhabi suspected as the party behind them. The Omani bypass route triggered the IRGC military response and has since been effectively closed. The IRGC's behavior was characterized as game-theory-predictable, with the Guard using Hormuz disruption as leverage to secure money and their future position while testing the patience of both the US and China. Refined products such as jet fuel and diesel were identified as the more serious problem because refineries cannot be relocated the way crude routing can be adjusted. The US is experiencing record high crack spreads as refiners have shifted marginal capacity toward jet fuel, and the Hormuz situation is preventing oil price disinflation from passing through to consumers at the pump, delaying improvement by at least a few weeks.

The June FOMC minutes were described as the most hawkish Federal Reserve signal since the 2022 hiking cycle, though the shift was characterized as a forecasting error rather than a policy error because Fed members changed their inflation outlook rather than their reaction function. The host is forecasting headline inflation at 3.7 percent and core at 2.7 percent, roughly 0.2 percentage points below consensus, against a prior headline print of 4.2 percent with consensus around 3.9 percent. June European inflation data looked benign outside of energy, and nowcasting across all CPI categories points to a soft US print. A soft inflation number was said to have the potential to massively reprice the front end of the US yield curve, and the Iran situation gives Fed Chair Kevin Warsh political breathing room before pressure to cut rates intensifies.

Hyperscalers spending all of their free cash flows on semiconductors was described as the defining story of 2026 and likely 2027. Underlying spot prices for memory chips are still accelerating, up approximately 20 percent since recent major player updates, and a Taiwanese semiconductor company quoted expectations of 30 to 40 percent price hikes from major players in the third quarter. HBM supplier Hynix communicated a solid order book through 2031, and companies in the space say 2027 will be far wilder than 2026, which diverges sharply from bearish fund manager expectations. Mean reversion arguments from investors such as Michael Burry were dismissed as lazy analysis, with memory described as probably less cyclical than it once was given underlying hardware trends. The host holds approximately 9 to 10 percent of his portfolio in memory stocks and over 25 percent including other semiconductor names, with the trade expected to peak in late 2027 or early 2028. South Korea export data for the first ten days of July looked slightly weaker than June, attributed partly to summer vacation effects, and the South Korea export chart rolling over was identified as the signal that the memory trade is done.

ASML reports Wednesday and was described as probably the only gate Europe has on AI momentum, with risk flagged around how much ASML is genuinely selling into Asia and the possibility of China obtaining their technology. The US-China trade relationship remains as frosty as it has been despite the Beijing ceasefire meeting, with export data through June 1 showing no reversal. The ceasefire was attributed to a shared problem related to the Strait of Hormuz, and China was noted as capable of moving the needle on oil prices ahead of US midterms by purchasing large volumes.

The metals decoupling trade was described as a long-term theme going nowhere in the near term while the dollar stays strong and energy costs remain elevated. A softer dollar requires a softer inflation picture and a shift in Federal Reserve rhetoric, with Kevin Warsh specifically needing to signal alignment with the lower inflation view before a short dollar trade can be executed with conviction. The inflation report due the following day was identified as a potential catalyst for both the short dollar and metals positions to gain traction.