Palisades Gold Radio

Rory Johnston, founder of Commodity Context and host of the Oil Ground Up podcast, joins Palisades Gold Radio to dissect the current energy crisis. He argues that while the market has avoided outright shortages in the West, the war has created a “balkanized” global oil market. The primary issue is not just crude supply, but a severe crisis in refining capacity, particularly for middle distillates like diesel and jet fuel. Diesel crack spreads have hit unprecedented levels (near $100-$120 a barrel), driven by a combination of the Iran war, Ukrainian attacks on Russian refineries, and Houthi strikes on Saudi infrastructure. This has led to a million to 1.5 million barrels per day loss in diesel supply, with emerging markets like Indonesia feeling the pain of outright shortages first.

Johnston highlights the compounding effect of skyrocketing shipping costs, which have risen tenfold due to the inefficient “dark transit” system in the Strait of Hormuz and attacks on vessels. This has fractured the global market into isolated pockets of oversupply and undersupply, making it expensive to arbitrage regional imbalances. He is skeptical of political fixes, dismissing the Trump-Putin diesel deal as a “drop in the bucket” (roughly 125,000 barrels per day) and warning that a US diesel export ban would be counterproductive, as it would reduce refining incentives and spike global prices. The only durable solutions, he argues, are ending the wars in Ukraine and the Middle East.

Looking ahead, Johnston sees a potential scenario where crude prices fall (even to $60) while diesel remains expensive ($150-$160) due to lingering refining constraints. He notes that the market is still in a deficit of 2-3 million barrels per day, drawing down stockpiles, but believes a resolution to the Iran war could flip crude into oversupply. A key wildcard is China, which could loosen its export quotas and provide critical diesel supply through the winter, as it did in 2022-2023. He also flags that a “Super El Nino” could provide a lucky reprieve by moderating winter demand for heating fuels.

Timestamps

00:00:29 – Introduction: Rory Johnston on energy crisis
00:00:41 – Assessing Middle East supply disruptions
00:01:28 – Impact of high prices on emerging markets
00:02:26 – Shipping rates surge and tanker inefficiency
00:05:20 – Iran attacks on tankers and fleet impact
00:09:56 – Refining capacity crisis and product tightness
00:15:19 – US-Russia diesel deal and export ban debate
00:20:05 – Ukraine refinery attacks and energy truce
00:24:44 – Outlook: product tightness vs crude recovery
00:30:57 – Demand destruction through diesel prices
00:35:36 – Escalation risks and stock drawdowns
00:39:22 – Saudi Arabia’s challenges and Houthi attacks
00:43:03 – Natural gas and LNG market tightness
00:44:46 – Wrap-up and where to follow Rory’s work

Links

https://www.commoditycontext.com/

https://x.com/Rory_Johnston

About the Guest

Rory Johnston is a Toronto-based oil market researcher, the founder of Commodity Context, a lecturer at the University of Toronto’s Munk School of Global Affairs and Public Policy, host of the Oil Ground Up podcast, as well as a Fellow with both the Canadian Global Affairs Institute and the Payne Institute for Public Policy at the Colorado School of Mines.

He is a leading voice on oil market analysis, advising institutional investors, global policy makers, and corporate decision makers. His views are regularly quoted in major international media including the Financial Times, New York Times, Wall Street Journal, Bloomberg News, Reuters, BNN Bloomberg, CBC, and Financial Post, and he frequently appears on numerous market and industry podcasts (e.g., Bloomberg’s Odd Lots, Hidden Forces, etc.).

Prior to founding Commodity Context, Rory led commodity economics research at Scotiabank where he set the bank’s energy and metals price forecasts, advised the bank’s executives and clients, and sat on the bank’s senior credit committee for commodity-exposed sectors.

Stijn Schmitz welcomes Bob Moriarty to the show. Bob Moriarty is Author, Founder 321 Gold, & Former Marine Fighter Pilot. The discussion centers on escalating Middle East conflicts, particularly the Houthi attacks on Saudi Arabia and the broader geopolitical brinkmanship involving Iran, Israel, and the United States.

Moriarty argues that current events stem not from grand strategy but from human stupidity, as outlined in classic texts on crowd madness. He contends that the U.S. and Israel are waging a voluntary war that serves only to protect political figures like Benjamin Netanyahu and Donald Trump, with no tangible benefit and enormous risks. Saudi Arabia, he suggests, could unilaterally end the conflict by pursuing peace, but its leadership remains blinded by wealth and hubris.

Timestamps:
00:00:00 – Introduction
00:01:27 – Middle East Geopolitics Overview
00:04:42 – Houthis Saudi Conflict History
00:09:20 – Saudi Economic Vulnerability Discussed
00:14:02 – Energy Market Implications Analyzed
00:16:48 – Escalation Risks and Politics
00:28:15 – Emerging Global Fuel Shortages
00:34:00 – Europe Energy Crisis Deepens
00:38:24 – Oil Price Outlook and Manipulation
00:44:33 – Gold Role in Crisis
00:54:15 – Gold Reset Concerns Raised
01:05:55 – Concluding Thoughts

Guest Links:

Website: http://www.321gold.com

Amazon: https://www.amazon.com/Robert-Moriarty/e/B01A9I4TJU?ref=sr_ntt_srch_lnk_3&qid=1599932580&sr=8-3

Bob Moriarty founded 321gold.com with his late wife, Barbara Moriarty, more than 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind, and nuclear energy. Both sites feature articles, editorial opinions, pricing figures, and updates on both sectors’ current events. Previously, Moriarty was a Marine F-4B and O-1 pilot, with more than 832 missions in Vietnam. He holds fourteen international aviation records.

Stijn Schmitz welcomes Trader Ferg to the show. Trader Ferg is a Full-time Trader and is the Author of the Trader Ferg Substack. The discussion opens with a vivid illustration of emerging fuel shortages, as Trader Ferg shares images of long queues at his local petrol station in Bali, a symptom of diesel and product tightness spreading across Asia. He argues that governments avoid admitting scarcity, instead running down strategic reserves, but this dynamic sets the stage for a prolonged “big refill” cycle that will keep crude and refined products tight for years. He cautions that markets are complacently expecting a quick resolution, while the reality points to sustained supply constraints.

Trader Ferg highlights the investment opportunity in underappreciated energy equities, favoring high-quality, cash‑generating companies with strong shareholder yields, such as Shell, over direct commodity futures. He extends this thesis to thermal coal, which he sees benefiting from Asia’s energy security pivot and substitution away from expensive LNG, supported by supply disruptions and a lack of new investment. The conversation then shifts to gold and precious metals. Trader Ferg remains a long‑term gold bull given the deteriorating US fiscal position, but he emphasizes the importance of diversifying into platinum and palladium. PGMs offer tighter supply dynamics, concentrated production in South Africa, and resilient demand from hybrid vehicles, making them less vulnerable to government confiscation risks that could threaten gold.

Throughout, Trader Ferg stresses aligning investment vehicles with long‑term theses, seeking cheap valuations with double‑digit shareholder yields, and avoiding obvious political targets. He notes the non‑consensus nature of energy trades and the potential for explosive moves in compressed markets like coal and uranium. The episode concludes with a nod to frontier market opportunities and a reminder to position ahead of policy desperation, as governments may increasingly resort to windfall taxes and capital controls.

Timestamps:

00:00:00 – Introduction

00:00:30 – Fuel Shortages in Asia

00:02:30 – Rationing and Demand Control

00:03:48 – Strategic Reserves Refill

00:06:36 – Product Shortages Spread West

00:10:34 – Sponsor Message

00:11:22 – Energy Investment Opportunities

00:14:20 – Non-Consensus Long-Term Views

00:16:48 – Playing via Equities Quality

00:21:06 – Shareholder Yield Strategy

00:23:32 – Thermal Coal Asia Thesis

00:28:13 – Gold and US Fiscal Risks

00:44:20 – Platinum PGMs Positioning

00:47:04 – Concluding Thoughts

Guest Links:

Substack: https://traderferg.substack.com/

X: https://x.com/trader_ferg

Trader Ferg is a Full-time trader for going on 8+ years now. He has a habit of hanging out in hated corners of the market that are considered uninvestable. He enjoys sharing his research and thoughts about possible trades and markets.

Stijn Schmitz welcomes Jeff Phillips to the show. Jeff Phillips is a Private Investor and President of Global Market Development. Jeff Phillips sees the current pullback in precious metals and junior miners as a buying opportunity within a longer-term commodity super cycle driven by underinvestment, supply chain concerns, and inflationary currency debasement. He cautions that short-term timing remains uncertain, so maintaining cash and avoiding overleverage is essential. Phillips focuses on junior exploration and development companies, typically entering at $5 to $40 million market caps, and stresses that management quality and share structure matter more than geology alone. He looks for experienced teams with significant insider ownership and long-term shareholders rather than warrant flippers.

Phillips highlights current tax-loss selling as a seasonal opportunity, noting many resource stocks trade well below highs into late fall and often re-rate into the new year. He encourages investors to study 52-week ranges, ensure companies have sufficient cash, and consider whether they seek short-term trades or multi-year holdings. He also discusses emerging artificial intelligence applications in exploration through Geomorphic AI, which uses data fusion and pattern recognition to identify overlooked mineral targets more quickly.

Overall, Phillips reiterates that disciplined speculation, strong management alignment, and long-term conviction are key to navigating the junior resource space.

Timestamps:

00:00:00 – Introduction

00:00:48 – Gold Market Consolidation

00:02:50 – Bull Market Thesis

00:05:20 – Investment Methodology

00:08:34 – Sponsor Palisades Goldcore

00:09:22 – Commodity Super Cycle

00:12:45 – Fiat Currency Printing

00:15:30 – Miners Leverage Opportunity

00:18:40 – Tax Loss Selling Season

00:22:10 – Management and Share Structure

00:25:50 – Prospect Generator Model

00:30:15 – Junior Royalty Strategies

00:35:40 – AI in Mineral Exploration

00:42:00 – Final Advice and Opportunities

00:46:24 – Concluding Thoughts

Guest Links:

Website: Geomorphic AI https://www.geomorphic.ai/

30+ years in resource capital markets; President of Global Market Development and a strategic private investor who has financed more than 100 mineral-exploration companies. An early financier of Patriot Battery Metals — one of the decade’s defining lithium discoveries — and a long-standing backer of critical-minerals developers across antimony, including US antimony developer Perpetua Resources, and rare earths, including heavy exposure to the major rare-earth developers through the 2009–2011 cycle. Deep experience in public-market financings across the TSXV, London AIM and ASX.

Stijn Schmitz welcomes David Hunter to the show. David Hunter is Chief Macro Strategist with Contrarian Macro Advisors. Hunter presents a deeply contrarian outlook, arguing that the extreme bearishness in the bond market signals a major bottom in bonds and a top in interest rates, particularly the 10-year Treasury. He believes the current narrative of an inescapable fiscal trap and higher rates is already priced in, and he expects oil prices to roll over into the $60 range, contributing to a downside surprise in inflation as the economy slows.

Despite this, Hunter maintains a near-term bullish stance on equities, forecasting a final, euphoric melt-up that could push the S&P 500 to 10,000 within months. He notes the unusual phenomenon of all-time highs in major indices coinciding with subdued or bearish investor sentiment, which he views as supportive of further gains. However, this rally represents the terminal phase of a 44-year secular bull market.

Hunter predicts this will culminate in a historic global bust, a deflationary crash potentially worse than 2008-2009, driven by extreme global leverage and derivatives. He anticipates an 80% decline in equities, with policymakers initially reluctant to deploy massive stimulus, causing a severe air pocket.

Following this bust, Hunter outlines a subsequent cycle where massive money printing triggers hyperinflation. This environment will fuel an explosive, multi-year bull market in commodities, with gold potentially reaching $20,000 and silver $1,000 by the early 2030s. He sees the precious metals mining sector as exceptionally undervalued, poised for a tremendous run as institutional investment flows in, supported by disciplined management and strong earnings.

Hunter’s long-term thesis concludes with a final systemic collapse in the mid-2030s when hyperinflation renders further money printing impossible.

Timestamps:

00:00:00 – Introduction

00:00:59 – Treasury Market and Yields

00:02:20 – Contrarian Bond Market View

00:04:40 – Oil Prices Roll Over

00:10:29 – Inflation Peaking and Softening

00:12:10 – Equity Markets Bullish Outlook

00:17:52 – Impending Global Economic Bust

00:35:39 – Gold and Silver Performance

00:47:29 – Mining Stocks Opportunities

00:52:24 – Concluding Thoughts

Guest Links:

X: https://x.com/DaveHcontrarian

David is Chief Macro Strategist with Contrarian Macro Advisors. He is an investment professional with 25 years of investment management experience and 21 years as a sell-side strategist with robust macroeconomic analysis and portfolio management expertise. His strong macro capabilities, combined with a contrarian philosophy, have allowed him to forecast economic cycles and spot market trends well ahead of the consensus. Intellectually honest, independent thinker comfortable with charting a course apart from the crowd.