The Strait of Hormuz is just one of many choke points being squeezed right now, says Jeff Currie

Global energy markets are currently misinterpreting price signals by focusing on crude oil rather than refined products like diesel and gasoline, which drive the Consumer Price Index and actual consumption. Jeff Currie, CEO of Real Macro, argues that while crude prices may fluctuate on geopolitical headlines, the real inflationary pressure stems from severe bottlenecks at global choke points. These disruptions include missile threats in the Strait of Hormuz preventing product-laden tankers from passing, China shifting from a net exporter to a domestic consumer of refined products, and Ukrainian strikes disabling significant Russian refining capacity. Beyond energy, weather and conflict are creating similar constraints in the grain, Red Sea, and Panama Canal corridors. This systemic tightening across the commodity complex, evidenced by rising gold and silver prices, suggests a persistent inflationary outlook that complicates the Federal Reserve's interest rate trajectory due to the escalating costs of servicing sovereign debt.