The Strait of Hormuz blockade could go a for while... Oil futures spike again... The key level to watch... What the UAE leaving OPEC means... The Fed holds and Powell is staying... A robot visited our office...
The standoff continues...
We're more than two weeks into the U.S.'s blockade of the Strait of Hormuz. And it doesn't look like it'll end anytime soon...
According to a report late last night from the Wall Street Journal, President Donald Trump is preparing to keep blocking ships out of Iranian ports in the strait.
The report, citing White House officials, said the blockade could continue for months as the U.S. looks to hurt Iran's economy by cutting off oil exports.
Trump followed up the Journal's report with an early-morning post on Truth Social, saying that "Iran can't get their act together." The post includes an AI-generated image of Trump with the caption "No More Mr. Nice Guy."
Later, Trump gave an interview that said the blockade will remain until Iran agrees to a nuclear deal. Trump told Axios today...
The blockade is somewhat more effective than the bombing. They are choking like a stuffed pig, and it is going to be worse for them. They can’t have a nuclear weapon.
It doesn't appear that we'll see a solution to the Iranian conflict anytime soon. That means traffic through the Strait of Hormuz will remain well below normal levels.
As Amena Bakr, Head of Middle East Energy and OPEC+ Insights at data-intelligence firm Kpler, shared on social media platform X, the number of vessels transiting the opening to the Persian Gulf per day has rarely been in the double digits since the war began.
More than 100 vessels regularly traveled through the Strait of Hormuz per day before the war.
There was a brief rebound at the start of April, but traffic through the strait has trended downward again in recent weeks. That means the global energy supply will continue to decrease.
The latest war headlines have sent oil futures surging higher.
West Texas Intermediate ("WTI") crude has jumped almost 8% to nearly $108 per barrel in the past 24 hours. And Brent crude, the international benchmark, surged to a new "wartime high" near $120 and is up more than 7% since yesterday.
The major U.S. stock indexes were slightly lower to little changed and, once again, only the energy sector was up significantly, by more than 2%. Treasury yields moved higher, too.
There's a key level to watch...
In an update for subscribers this morning, Ten Stock Trader editor Greg Diamond analyzed the technical outlook for oil prices and the market. He said if WTI crude rises above $120 per barrel, it "would signal a much higher move in oil and would not bode well for the stock market."
There's still some room to go. From today's level, WTI would need to jump about 12%. We're not ruling that out.
Over the past few weeks, we've been saying that Mr. Market had seemingly moved past the negative war headlines. Today looked like another example.
But the idea of an extended blockade is new information. Further escalation between the U.S. and Iran could push oil prices even higher and turn stocks lower as expectations over the timeline of the war and risks shift.
More on a big shake-up in the oil market...
As we noted yesterday, the United Arab Emirates ("UAE") announced it's leaving the OPEC oil cartel this Friday. The reasoning is twofold.
First, there's the ongoing Iran war...
Throughout the conflict, the UAE has been a target of Iranian missile strikes. Iran and the UAE are both members of OPEC, so attacking one another (or Iran attacking the UAE in this case) goes against the group's common goal of a stable oil market.
The UAE is also heavily reliant on the Strait of Hormuz. About half of the UAE's oil output and more than 90% of its natural gas exports pass through the strait.
Now, the country was partially prepared for a disruption to energy shipping lanes. In 2012, the UAE completed construction on the Habshan-Fujairah pipeline, which transports crude oil 236 miles from the Habshan oilfield to the Fujairah port on the Gulf of Oman.
Importantly, it bypasses the Strait of Hormuz. Take a look...
This pipeline has a regular capacity of 1.5 million barrels per day and a peak capacity of about 1.8 million barrels per day. But more than half of the country's energy exports (oil plus gas) are still vulnerable to the blockades.
Then there's the issue of "compliance" with OPEC production quotas. As our colleague Bryan Beach explained in the April 2025 issue of Stansberry Venture Value, smaller OPEC nations don't always follow production guidelines.
From Bryan...
We'll spare you much of the Gulf States drama. All you need to know is that for months, Kazakhstan and Iraq have been producing far more oil than they're allowed to and cashing in by selling these excess barrels in the open market. Such moves both weaken the OPEC alliance and harm OPEC partners.
When it comes to the UAE, OPEC quotas mean keeping its own oil production well below full capacity – which hurts its economy when others skirt the rules.
You see, on its own, the UAE isn't constrained...
OPEC's production quota for the UAE has been well below the country's total capacity. The UAE has been producing about 3.2 million barrels of oil per day in 2026, per OPEC's guidelines.
But the country has expanded its production capacity in recent years. It's trying to hit a goal of 5 million barrels per day by 2027, as the folks over at investing research firm Hedgeye recently shared on X.
Now that it's no longer a member of OPEC, the UAE could almost immediately increase its production by more than 1 million barrels per day and up to 1.8 million barrels by the end of the year.
That would lower oil prices in the long run... if that oil can hit the markets. But with the Strait of Hormuz closed, it can't.
There is some additional oil supply hitting the market, but...
Over the past week, the U.S. Department of Energy released more than 7 million barrels from the Strategic Petroleum Reserve ("SPR").
That marked the largest weekly decline in the U.S.'s emergency oil reserve since October 2022, when the Russia-Ukraine war caused a spike in oil prices.
And it has almost completely undone the White House's SPR "rebuild," which began after Trump's second Inauguration Day. After this latest release, the SPR sits at just about the same level as when Trump took office in January 2025.
In short, the U.S. is trying to ease the impact of the Strait of Hormuz's closure. But oil prices are still headed higher because the release of these reserves is only helpful on the margin.
You see, daily U.S. crude consumption totals around 20 million barrels per day. U.S. crude reserves fell by 6.2 million barrels last week alone, and the world is now running at a deficit of 13 million barrels per day.
For U.S. consumers, the average price of regular gas is now more than $4.22 per gallon. And higher oil prices will likely push prices at the pump even higher, creating knock-on consequences in the economy.
Jerome Powell's (almost) swan song...
Today marked what will assuredly be Federal Reserve Chair Jerome Powell's last time presiding over a Fed meeting.
On the policy front, the Fed came out of its latest two-day meeting by announcing a nothing burger. As we expected, the Fed held its benchmark federal-funds rate between 3.5% and 3.75%, as it did at its two most recent policy meetings.
The Powell-led central bank elected to continue to play the "wait and see" game, this time because of the war in Iran's impact on inflation. Still, the pace of inflation is rising and the decision to hold rates wasn't without argument.
There was dissent in the Fed ranks. One voter (Stephen Miran) wanted to lower rates, and three others wanted to take out language in the Fed's post-meeting policy statement that suggested rate cuts could still be appropriate.
Powell's leaving the big decisions for the next guy. That will likely be Kevin Warsh, who passed a Senate banking committee nomination vote today. One more Senate-wide vote remains. But Powell isn't gone for good.
He's staying on the Fed board...
As we wrote earlier this week, the only legitimate question heading into today's Fed event was whether Powell would stick around on the Fed voting board. While his term as chair is up May 15, his term on the Fed Board of Governors isn't due to end until 2028.
In the opening statement of his post-meeting press conference, Powell provided an answer. He said he will continue to serve as a governor "for a period of time to be determined."
He added, "I plan to keep a low profile as a governor," and said that Warsh will be Fed chair. But Powell said he's staying on as a governor because he is concerned about the legal attacks "battering" and eroding trust in the Fed, including the Department of Justice investigation into him, which he still considers not "truly over with finality and transparency."
"I will leave when I think it's appropriate to do so," Powell said.
If Powell leaves, that would open a spot on the seven-member board and give Trump a chance to have four appointees.
Finally, our robot visit...
Today, the folks at KraneShares, who now run a Global Humanoid and Embodied Intelligence Fund (KOID), visited our Baltimore office – with a humanoid robot.
They brought it to show off just a few days after it rang the opening bell at the Nasdaq in New York City. Here's our Director of Research Matt Weinschenk (far left) and KraneShares Head of Marketing Joseph Dube with it...
The roughly 85-pound battery-powered robot, built by China-based Unitree Robotics, is remote-controlled. Directed by a human, it stomped loudly around one of our training rooms, with dozens of people stepping in to watch and interact with it, along with taking photos and video.
"I do not have emotions, but this is enjoyable," the robot said, while staring down one of our editors.
The jury is still out on how enjoyable pervasive robots will be for the rest of us over the long term...
The higher end of these robots can be programmed to do different physical tasks automatically, like ringing the opening bell at a stock exchange or playing tennis. Companies like OpenMind do the programming.
"People are like, 'When can it do my dishes?'" Dube said. "The answer is: as soon as the developers come up with a dishwashing program."
Hurry up on that, but leave some other paying jobs, please.
New 52-week highs (as of 4/28/26): Atlas Energy Solutions (AESI), Alpha Architect 1-3 Month Box Fund (BOXX), Simplify Managed Futures Strategy Fund (CTA), DXP Enterprises (DXPE), Flex LNG (FLNG), Helmerich & Payne (HP), Keyence (KYCCF), Liberty Energy (LBRT), Nucor (NUE), Invesco Oil & Gas Services Fund (PXJ), and USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund (SDCI).
In today's mailbag, feedback on yesterday's Digest about the latest in AI, including a foreboding report about OpenAI's finances and our friend Marc Chaikin's warning that the Magnificent Seven are about to "hit a brick wall." Marc debuts his new free presentation with the details tonight. Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"This 'hold back' regarding building of data centers has been a common revelation in the past few weeks. I call it the DATA CENTER BUBBLE. The short- and long-term impact will no doubt be significant.
"I am no expert, but from Day 1, I said to myself 'All this data center build up sure seems too good to be true'; and we know how that saying goes. It just all seemed to come down the pipe too fast... and not a lot of thought to all the ramifications especially regarding the need for water." – Subscriber David A.
"Given their embedded customer base, how does Google NOT win the AI battle... ? Give the lite version away free, charge for the upgraded version. Just like financial newsletters! (I am PAID!) No AI expert here but sure seems obvious to me." – Subscriber A.C.
Corey McLaughlin comment: First, thanks for being a paid subscriber. Second, the free-to-paid strategy is pretty much what Alphabet (GOOGL), Google's parent company, and the other big AI companies are using.
The free versions (of Google's Gemini, OpenAI's ChatGPT, and Anthropic's Claude) are limited to a certain amount of use before you're asked to pay for more access. I usually bounce around using the free versions of each.
But you're right to identify Alphabet's potential edge over its competition.
Alphabet is obviously investing big in developing its own AI model, but that's not its "only" thing. Alphabet's reach is already far and wide, from YouTube and Gmail to its search engine... and, yes, AI-aided autonomous cars via subsidiary Waymo.
Of all the Magnificent Seven companies (OpenAI and Anthropic notably aren't part of this group because they're private), our Stansberry's Investment Advisory editor Whitney Tilson has frequently said that Alphabet is his bet for the best long-term investment.
Investment Advisory subscribers are currently up about 90% on an Alphabet position opened in the model portfolio in May 2024.
All the best,
Corey McLaughlin and Nick Koziol
Baltimore, Maryland
April 29, 2026
