The Iran War’s Lasting Scars Across Asia – Odd Lots

The Iran War’s Lasting Scars Across Asia – Odd Lots — Transcript

Market views

Bullish

ENERGY— Governments and companies globally are learning to build up energy stockpiles and capacity in response to repeated supply disruptions, creating structural demand for energy infrastructure and reserves.
CLEANENERGY— Higher oil prices are driving countries to build out clean energy capacity and increase EV adoption as an economic response to energy supply shocks.
SEMICONDUCTORS— AI infrastructure spending is overriding traditional macro signals, with existential demand for memory chips from Korea and Taiwan regardless of currency fluctuations or interest rates.

Bearish

CHINA— China is doing heavy demand destruction with oil demand falling 9% (1.5 million barrels/day), potentially signaling economic weakness and reduced manufacturing activity.
EMERGINGMARKETS— Emerging Asian markets face structural vulnerability from strong dollar and lack of stockpiles, with governments selling reserve assets including gold to buy oil, weakening fiscal positions.
AGRICULTURE— Brewing food crisis in Southeast Asia as farmers skip planting seasons due to unaffordable diesel costs, with crops rotting in ground and fishermen keeping boats anchored, threatening food supply 6-12 months out.
SANCTIONS— Sanctions losing effectiveness as a policy tool, with North Korea's economy doing surprisingly well despite being heavily sanctioned, calling into question their power.
GLOBALIZATION— Structural reversal of globalization with rising trade barriers and declining trust between countries, negative for productivity and prices.

Not investment advice.