MacroVoices #551 Michael Every: Decoding The Global Geopolitical Puzzle

Michael Every, Rabobank’s global strategist, argued that markets cannot be read from economic data and price charts alone: geopolitical and geo-economic forces shape supply, trade and financial leverage. He saw the recent oil decline as unjustified optimism while the Iran conflict continued to escalate. Prices had briefly reached $110, and he warned that tensions in the Red Sea, Houthi activity and attacks on the East-West pipeline and Yanbu could foreshadow further disruption, including possible threats to Yanbu, Riyadh, Aramco and the pipeline.

Every rejected the idea that Iran would make peace after the U.S. election, describing the sides’ positions as irreconcilable. His base case was further escalation afterward, whatever the election result, potentially involving Israel and a GCC coalition; a U.S. strike could come sooner if Iran escalated, although he allowed that a sudden deal remained possible. He said foreign actors might prefer elevated oil prices through the election to hurt Trump’s prospects. If the U.S. failed to topple Iran, Every expected Trump to maintain pressure rather than retreat, in part to prevent an energy bloc shifting toward China, Russia, North Korea and Iran. He did not rule out a major election-season escalation as a “Hail Mary,” but presented it as uncertain.

Every contrasted the Iran campaign with what he called an earlier geopolitical and oil success in Venezuela. He argued that U.S. influence over energy production and refining across the Americas and Middle East could give Washington leverage over China and other rivals. Energy markets remain integrated despite tariffs and protectionism, he said, but trade is likely to divide increasingly along geopolitical lines. A U.S.-aligned North American bloc could use tools such as the Defense Production Act or selective export restrictions to direct production and treat energy as statecraft. Ukrainian refinery strikes, he said, should be judged by their wider effects: continued disruption could worsen diesel prices, already at record levels in many places, and threaten food and other essential deliveries.

A U.S. halt to diesel exports could reduce European supplies and increase pressure on Zelensky to stop refinery attacks and seek a settlement, Every said. But industry participants did not expect an export ban to restrain U.S. prices while prices rose abroad; a cutoff could also alienate buyers and push them toward other suppliers. Separately, he described the Greenland-Denmark agreement as a lasting U.S. strategic gain: expanded military rights without a Danish veto and U.S. veto rights over other countries’ investment in Greenland’s resources, even if the island became independent. He called it a major loss of Danish and Greenlandic sovereignty, while noting that the circumstances were unclear. Greenland’s location matters for missile defense and control of Arctic shipping routes; he also said Denmark’s funding of public services was relevant to its strategic control.

Every said China benefits most from avoiding war but has prepared to resist coercion and can pressure other countries. Beijing wants the Russia-Ukraine war to end without Russia losing and Middle East conflict to end without Iran losing. He said a Trump-Xi meeting could show how both sides had reassessed their positions. China reportedly proposed extending the trade truce through Trump’s term, while the U.S. was reportedly considering only three to six months; Every said the shorter proposal could indicate U.S. confidence in its strategic position over that period. He also argued that a clear U.S. legal framework for dollar stablecoins could strengthen American influence. The stalled CLARITY Act leaves questions about interest and rewards unresolved, while a proposed SWORD department within the DFC would use stablecoins for strategic lending to support supply chains tied to national security.

Market participants cautioned that lower oil prices did not establish that geopolitical risk or physical tightness had eased. One speaker called the pullback a headline-driven correction after crude rose from about $80 to $105, with global inventories substantially depleted and demand destruction the only way to address that depletion; $110–$120 remained possible. Patrick noted that oil had fallen almost $10 from its high even as the 10-year Treasury yield reached about 5.10%, the 30-year exceeded 5.40%, and the 10-year real yield was around 2.7%. Futures priced close to a 70% chance of an October Fed hike and more than 50% for hikes in both October and December. Patrick proposed a January 15, 2027 USO $150/$180 bull call spread for an $8.25 net debit, with limited loss and capped upside, linking $180 USO to crude near $120.

Equity and currency signals were mixed: the cap-weighted S&P 500 chart looked bullish, but only 28% of stocks were above their 50-day moving average and five mega-cap stocks were carrying the index. A break above 52-week highs could point to 8,000–8,200, while persistent yield increases could bring a 10% correction and a 10-year yield of 5.25%–5.50%. The dollar index had broken above 101, and further strength alongside rising yields could pressure risk assets and gold; gold was near a technical “knife’s edge.” Copper buyers quickly absorbed a tariff-related 7% correction, while uranium equities remained weak. Yen futures positioning swung sharply from net short to net long, leaving recent longs potentially vulnerable if the dollar strengthened further.