Louis-Vincent Gave, CEO of Gavekal, tells Macro Voices that current oil prices, while elevated, have not yet reached a crisis level for equity markets. Gave notes that stocks may not react significantly until prices hit $120-$130 a barrel.
However, he warns that geopolitical tensions could quickly change the landscape. Gave highlights the uncertainty surrounding the Strait of Hormuz, stating that Iran has strong financial incentives to keep it closed. If regional conflicts escalate, he says oil prices could surge to $200.
The futures market may be overly optimistic about a return to full production from Saudi Arabia and the UAE. Gave argues that oil may remain undervalued despite significant supply disruptions.
A key theme of the interview is the shifting global order. Gave argues that reliance on US Treasuries to secure essential commodities is becoming obsolete. Countries, he says, must now stockpile resources like oil, natural gas, and fertilizer to maintain independent monetary and foreign policies.
This trend has major implications for investors, potentially signaling a structural bull market in commodities. Gave also points out that energy constraints are a critical limiting factor for the growth of the AI sector.