Former Goldman Sachs Commodity Expert Talks about "US-Iran Agreement": Sell Posts, Buy Hard Assets

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

Trump claimed over the weekend that the United States is close to reaching a peace agreement with Iran and that the Strait of Hormuz may reopen, prompting a sharp drop in oil prices that day. However, former Goldman Sachs head of commodity research and current Carlyle Group energy advisor Jeff Currie remains highly cautious.

In an interview on Monday, he referred to a grim historical record: since the outbreak of the conflict, there have been five agreement announcements and zero deals completed. He summed up this pattern with one phrase—"sell the tweet, buy the molecule."

Currie pointed out that Iran's bargaining power is steadily accumulating over time, not diminishing. Global oil inventories are still being heavily drawn down each week, dropping 17 million barrels in just one week. He warned that some Asian markets have already hit minimum operating inventory levels, Europe will face pressure in a few weeks, and the United States may experience tight supply as soon as July. Even if the Strait were announced open tomorrow, a real solution to supply issues would still take at least six months.

"Five announcements, zero deals": Agreement expectations hard to materialize

Currie is clearly skeptical about the progress in US-Iran negotiations. He said a senior Middle Eastern official once told him there is an iron law when negotiating with Iran: the moment you think you’ve won is exactly when you realize you may have lost.

He emphasized that Iran's current bargaining position is at its strongest in 47 years. The reason is that with each passing day, global oil inventories decline further, increasing Iran's leverage while weakening Western bargaining power. This asymmetric structure makes it difficult for any agreement announcement to translate into substantive supply releases.

Inventory crisis: From Asia to Europe to the United States

Currie directly challenged the market perception of "ample inventories." He explained that globally, there are about 8 billion barrels of oil on paper, but the vast majority is for pipeline fill and system fill—practically untouchable. The true usable inventory can only be drawn 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 sharp price volatility in products. While jet fuel prices have declined, diesel prices have surpassed jet fuel, with problems shifting from one type of product to another. In Europe, a large amount of crude oil is currently being imported from the US Strategic Petroleum Reserve (SPR), temporarily masking its own inventory stress, but this channel of support is unsustainable. He expects Europe to face problems after the bank holiday ends and the summer driving season begins, while the US domestic market may see real supply bottlenecks in July.

Ineffective policy tools: Tax cuts can't solve a real shortage

Regarding the Trump administration’s consideration of suspending the federal gasoline tax, Currie was direct: this doesn’t solve anything.

He believes the only real solution to the supply crisis is increased physical availability. The SPR release has helped somewhat, but he notes that since this policy was announced, indices tracking commodities—including the Bloomberg Commodity Index Oil Subindex, USO, and BMO-related products—have continuously risen, signaling that the underlying supply issue 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 the announcement to truly resolve the issue.

"Rare earth moment": From scarcity to absence—A qualitative shift

Currie clearly distinguished the current commodity market situation from previous price shocks in history. He pointed out that when oil prices surged to $147 per barrel in 2008, there were still errors in play and the market was simply rationing on a global scale—similarly, after Russia invaded Ukraine in 2022.

This time, however, the difference is: the market is moving from "scarcity" to "absence." He called this transition the "rare earth moment," giving the example: a small battery inside a car door, once removed, can halt production lines in Detroit. He believes that when critical physical goods are withdrawn from the economy, their domino effect far exceeds what their nominal share of GDP implies.

Window for capital rotation: From bits to atoms

Currie believes that the market’s current neglect of the commodity sector is partly due to a misunderstanding of the AI narrative. He pointed out that today’s AI computing infrastructure is essentially a "combination of bits and atoms," but the market has only focused on bits, ignoring atoms.

He gave copper as an example: Copper just reached a historical high two weeks ago, one reason being the Strait of Hormuz crisis has disrupted sulfuric acid supplies, affecting copper smelting. He said that the pricing of bits is trending toward zero, while the cost floor for atoms is converging upward, and once there is a real shortage on the atomic side, the tech sector will feel the pressure.

He also pointed out a structural backdrop: energy and materials sectors currently account for only about 6% of the stock index weighting, while AI and related sectors surpass 50%. This stark difference in weighting is precisely why commodity signals have long been ignored by the market—until they can be ignored no longer.