I have several crazy busy periods of the year and the busiest of all is the Summer when the farm cottage and glamping holiday rentals are at full belt; the riding school is crazy busy with tourists and we have a hay crop to manage which we have only one chance to get right. This year we have also had several young horses to bring on and anyone involved with either young horses or teenagers will understand the work, time and patience required.

To this you can add a large wildfire which approached within 4 km. The photograph above shows our small village of Nethy Bridge and our farm is 1 km to the left. We were lucky and the 1,000 year old Abernethy Forest escaped unscathed but the heather and scrub woodland on the high ground has been badly impacted.

The core problem is we now have idiots running the countryside - in this case the idiots are the locally widely despised RSPB who insist on a rewilding approach which leaves old leggy and highly flammable heather on the hill, rather than managing it as the keepers have for hundreds of years in the annual muirburn which burns away the old growth to encourage new shoots for the young grouse chicks. The RSPB hate grouse shooting and consequently any management practice, like muirburn, that supports it. Don’t get me started on our utterly corrupt and incompetent “government” sitting in Edinburgh either and their refusal to get the military involved because that is “doffing the cap” to Westminster.

Other life events also got in the way. I lost my 88 year old mother in the early Summer and God knows it was a difficult death. I simply do not understand why any politicians continues to delay the right to die legislation in Scotland (and elsewhere). They clearly have never been through a difficult death. My wife and I have worked with and kept dressage and event horses all our lives and if we treated them with such cruelty and lack of dignity near the end, we would be justifiably prosecuted and banned from keeping horses for life.

We also lost our collie Jack in the Summer. Jack was 16 which is a good age for a working collie that worked for 4 to 6 hours pretty much every day. Those of you who keep family dogs - for Jack lived in the house much to the disgust of my farmer friends - will understand the extent of the loss. We cannot be without a working collie and one appeared in a local dog rescue charity with our farm’s name on it. Funnily enough he came from a teacher’s home in our village but she could not control him - he chased everything: sheep, cars, bicycles, hares, rabbits, deer - if it moved he was off. He is off working strains on both his father and mother’s side and is in all other ways a delightful companion. We have renamed him Ziggy on account of how he covers the ground on the hill. It is true you have to wonder if he is a working collie or a pet … a bit of both I guess.

I tell you all this to explain why my publishing record over the past few months has been so scarce. The other reason is my own email inbox is full of emails from various sources, including Substack and I just don’t have the time to read it all, so I try and keep my own output down to a minimum both as a matter of courtesy, but also because the inactivity reflects my investing approach. My readers will know that I am a long term investor with a 2 to 5 year view and a focus on gold, commodities, energy and real assets. I am not a day or swing trader and see little value in reading breathless commentary on the day to day machinations of the market that more likely than not a dilettante farmer living up a windy wet glen has little understanding of and will be several hours behind the action on account of our abysmally slow internet connection anyway.

I have just emailed out a commentary on why I think silver miners will be a poor investment over the next few years. I must apologise to the jolly biologist as we had a chat about jurisdictional risk a few months ago and he will have noted that I have swerved 180 degrees on this. I have totally changed my mind on Mexico and I have also exited all my positions in South Africa for similar jurisdictional reasons - Thungela Resources, Valterra Platinum and Sibanye Stillwater have all been exited. I have no doubt platinum is heading higher and potentially much higher but sadly most of it is mined in South Africa or Russia, both no go areas for me given the political risk.

Anyway, I hope you find the silver commentary of interest.

Other changes to the portfolio include the selling of 80% of my gold miners; 100% of my silver miners; and 100% of my platinum miners. I did not get the top but sold slightly over the other side, but I did miss most of the correction. I have recently doubled my Agnico Eagle position; rebought the 30% of Wheaton I sold; and added a new position in Franco Nevada. I was lucky to be able to buy back cheaper. but did not get the absolute top or bottom. I believe we are at a bottom in the gold market and some miners, including Agnico Eagle were badly hit although there were some company specific issues with Agnico which will resolve over the next 24 months in my opinion. If you don’t want to do the work and are content with alpha measured against the whole market, you would do well with Wheaton, Franco Nevada and Agnico plus a healthy allocation to physical gold bullion.

On the subject of bullion, I have not sold a single oz but have used the 23% in sterling terms dip to invest this year’s tourism profits in Britannia’s which are held in a safe custody box in Switzerland and Cardiff (Royal Mint). I do not hold gold at home.

I believe there will be substantial opportunities in the mid tier gold miners as the Newmonts and Barricks of this World seek to consolidate the sector as a result of their own lack of exploration success. Of course Barrick is going through a period of considerable corporate uncertainty and I remain very unclear what structure or structures might emerge. I think it increasingly likely Barrick will spin out its African assets. I am currently researching the mid tiers for M&A attractiveness and will publish with the aid of my little helper Claude in the next few weeks. There are some attractive opportunities in London’s AIM markets as well and Charles Archer writes about some of these. I have even bought two such opportunities myself … Charles is a very compelling writer but I always keep these things in a small appropriately sized basket which I call Al’s day at the races. I accept some of them will die, sometimes painfully, but one or maybe two will go to the moon … just like horses at Perth Race Track.

The reports I am currently working on and intend publishing sooner rather than later are in order:

1. The Silver Miners report you now have

2. Are we at a bottom for the gold market (I am fairly sure we are)?

3. Mid Tier M&A targets in the gold sector (I will probably feed this as one target company per report)

4. Revisit Wheaton Precious Metals after all their silver stream deals in the copper mining sector

5. Why I have bought Franco Nevada recently despite it being, on the face of it, the most expensive of all the streamers

6. UK and European gas sector - I really like what I am seeing here politically

7. Deep Dive on Poland’s Lumina Metals

Right folks … that is about it for today.

I thank you for reading my stuff and giving me the opportunity to gather my thoughts.

Always free and hopefully useful!

Alastair

Clean PDF download available:

Silver Miners Note

602KB ∙ PDF file

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The Silver Miners Have Stopped Tracking the Metal

Consolidation has hollowed out the investable universe, the passive basket has lost its leverage, and jurisdiction has become a pricing variable in its own right. What used to be a beta trade is now a stock-picking problem.

Four themes have converged over the past eighteen months to change what it means to “own silver” through equities: the universe of investable primary producers has shrunk sharply through M&A; the sector ETF has quietly lost most of its leverage to the metal; operating costs and jurisdictional risk have both risen at the same time; and the physical market has tightened even as most miners remain poorly positioned to capture the upside. Taken together, they argue for careful selection of individual names over passive sector exposure — and for treating jurisdiction, not just cost curves, as a first-order input to that selection.

1 Consolidation has gutted the primary silver universe

The pool of pure-play primary silver producers has shrunk materially. Four primary silver companies were acquired inside eighteen months, and Discovery Silver pivoted its strategy toward gold. The knock-on effect shows up inside the sector’s flagship ETF: the Global X Silver Miners ETF (SIL) is now dominated by its top two holdings, which together make up roughly a third of the fund.

A shrinking, increasingly concentrated universe makes passive baskets structurally weaker and more exposed to single-name risk — the opposite of what an index is supposed to deliver.

2 SIL no longer delivers torque to the silver price

Historically, SIL offered roughly 1.5–1.8x beta to silver — the “torque” that drew generalist investors into miners rather than bullion. That leverage has compressed to something closer to 1.0–1.2x, largely a function of consolidation, top-heaviness, and operational underperformance across the constituent base.

SIL BETA TO SPOT SILVER

Illustrative midpoint of historical vs. current leverage range

Author estimate, illustrative ranges

The practical implication: the “basket trade” — buying the ETF as a leveraged proxy for the metal — is dead. Passive silver exposure now behaves like a low-beta instrument, and generating real torque requires curating individual names.

3 Operational quality has deteriorated sector-wide

Beneath the index, the operating picture has worsened: rising all-in sustaining costs (AISC), declining ore grades, unstable production, sell-side models that lag the spot price, and — especially in Mexico — a deteriorating jurisdictional backdrop. S&P Global’s most recent mine-cost outlook flags grade decline, consumables and labour costs, and higher sustaining capital as the persistent drivers of cost inflation across the metals complex into 2026, even as higher prices have helped many producers rebuild margins in nominal terms.

ALL-IN SUSTAINING COST PER SILVER OUNCE

Selected producers, most recent reported / guided figures (US$/oz)

Company disclosures — Hecla Q3 2025; Pan American 2025 silver-segment guidance; First Majestic Q3 2025 update

The spread is wide: Hecla’s US/Canada-heavy operations reported AISC around US$11 per silver ounce in its most recent quarter, while First Majestic’s record-production quarter still carried costs in the mid-US$20s. That gap is the whole argument for curation in one chart — silver miners will structurally underperform the metal itself unless the specific names held are among the handful of operationally reliable producers.

4 The only alpha left is in curation

Put together, points one through three mean the silver sector is no longer a beta trade but rather a stock-picking problem. The sector cannot be owned responsibly through an ETF. What is needed is selective ownership of the few survivors that combine:

— Stable, demonstrated operations

— Clean, low-risk jurisdictions

— Real embedded optionality (exploration upside, expansion, byproduct credits)

— Economics that sell-side models have not yet caught up with

5 Jurisdictional risk is now a first-order variable

Mexico’s security and regulatory environment has become a genuine pricing factor rather than a background tail risk. The clearest illustration is Vizsla Silver: in late January 2026, ten workers were abducted from the company’s Panuco project in Concordia, Sinaloa. The stock fell nearly 15% in a single session on the news, and after the workers were later confirmed dead, shares were down more than 40% from pre-incident levels. Panuco — described by the company as hosting the world’s largest undeveloped high-grade silver resource — was partially suspended, and the Mexican government deployed over a thousand troops to the region in response.

CASE IN POINT: Vizsla Silver (TSX: VZLA) — abduction and confirmed deaths of ten employees near its flagship Panuco project, January 2026. Operations partially suspended; share price collapse compounded by an active cartel power struggle in Sinaloa. The author has never held a position in Vizsla, despite the quality of the asset.

This is not an isolated event. Mexico’s federal “Public Security” budget was cut from roughly MXN 190 billion in 2024 to MXN 154 billion in 2025 — a fall from about 0.55% to 0.43% of GDP — even as INEGI’s survey of public perceptions of insecurity rose from 59.4% to 63.2% over the same period. The 2025 Mexico Peace Index estimates the annual economic cost of violence at around US$232 billion, close to a fifth of GDP. Camimex, the national mining chamber, has separately flagged that the 2023 reform shortening mining concessions from 50 to 30 years and tightening water-extraction permits is constraining new project development, even as existing operations continue.

MEXICO: SECURITY SPENDING VS. PERCEIVED INSECURITY

Federal public-security budget (US$bn) against INEGI insecurity-perception survey

Mexican Chamber of Deputies; INEGI,

via U.S. Dept. of Commerce Country Commercial Guide (2025)

A shrinking security budget alongside rising perceived insecurity, in the same window as a fatal, high-profile attack on a mine site, is a reasonable basis for treating the Mexico jurisdictional discount as structural rather than transient. That is the logic behind favouring U.S./Canada-domiciled producers such as Hecla, and BC-based developers such as Skeena, and behind exiting my Pan American Silver position and not currently holding Vizsla.

6 A Tight physical market, but limited leverage for most miners

The case for physical scarcity remains intact: COMEX inventory drawdowns, a persistent Shanghai premium, a widening convenience-yield gap, and a structural supply deficit that some estimates now put above 100 million ounces annually. Silver’s own price action underlines the point — the metal spiked to an all-time high near US$120/oz in early 2026 before a historic correction of more than 30% inside a single week, among the sharpest percentage moves in the metal’s modern history.

None of that guarantees miners — particularly those with Mexican exposure — will capture proportional upside. Costs tend to rise alongside price, governments look to raise royalties when producers are visibly more profitable, operational issues scale with throughput, jurisdictional risk widens rather than narrows, and sell-side models persistently lag the spot price on the way up. The clean expression of the scarcity thesis remains the metal itself; ideally vaulted in a low-cost, tax-efficient jurisdiction such as Switzerland, which for a UK-based investor can be structured free of VAT and CGT. Equities require much stricter filters, because most, though not all, miners will fail to deliver anything close to their theoretical leverage to the metal.

7 Which names currently pass the filter?

Applying jurisdiction, operational quality, balance sheet strength and genuine optionality as filters produces a fairly short list. This mapping is interpretive and it applies those filters to the current universe rather than offering a formal rating.

COMPOSITE FIT RANKING

Lower rank = stronger fit against jurisdiction, operations, balance sheet and optionality filters

Author’s interpretive ranking, not a formal model

8 Wheaton’s Silver Streams on Copper Mines and a Polish outsider worth watching

Wheaton Precious Metals has recently signed several substantial silver streaming agreements tied to copper mines in Tier 1 jurisdictions, which is the main reason it sits at the top of the table above. I have recently added to my position in Wheaton, taking advantage of the recent weakness in all gold and silver miners. A first position in Hecla is under consideration.

WHEATON’S SILVER REVENUE MIX

Estimated share of total revenue from silver streams, current vs. pro-forma for recent deals

Author estimate based on disclosed streaming terms

These copper-silver streaming deals are best read against the scale of investment the copper market needs: estimates for new copper-mining capital requirements run as high as US$250 billion to close the coming supply shortfall. On current estimates, silver already accounts for roughly 35–40% of Wheaton’s revenue; the recent deals should lift that to around 50–55%, and because streaming contracts run for decades, this amounts to long-duration, no-cost-of-carry optionality on the silver price: A long-dated call option with no decay if you like.

The flurry of streaming activity is enough to justify a fresh, deeper look at Wheaton on its own. Separately, the new Ross Beaty-backed project in Poland, Lumina Metals (TSX: LMCU), is worth watching: it is billed as one of the largest copper-silver deposits globally, sited near existing smelting, road, power and water infrastructure offering genuinely attractive fundamentals, backed by an experienced and well-regarded team. UK investors currently cannot access the TSX listing through SIPPs or ISAs for lack of CREST certification; a planned Warsaw listing may open that door. No valuation work has been done on it yet.

Disclosure: This note reflects the personal views, holdings and research of the author as of August 2026 and is provided for information only. It is not investment advice or a recommendation to buy or sell any security. Company names, prices and cost figures are drawn from public disclosures and third-party reporting and may change materially after publication. Do your own research, or consult a qualified financial adviser, before acting on anything here.

The Strategic Picture

I have been watching the strategic defeat of America unfold for some time, and nothing in recent weeks has changed my assessment. What Trump and Netanyahu have achieved is a reconfiguration of the Middle East that neither intended and neither can reverse. The targeted elimination of the original IRGC leadership has not, as was presumably hoped, decapitated Iranian power. It has concentrated it. The Islamic Revolutionary Guard Corps, leaner and more ideologically hardened, are now in effective control of Iran. The moderating voices are gone. The West should be careful what it wishes for.

US Bases in the Gulf

All seventeen US Gulf bases have been struck with varying degrees of destruction. Some are effectively gone. I have examined the satellite imagery, and what is unambiguous is that 100% of ground-based radar installations have been destroyed. Until these are rebuilt (and the political will to rebuild them is far from certain) American forces in the region will depend on satellite and airborne radar. That is a significant operational vulnerability.

The Gulf States are furious, and the back-channel diplomacy that is now under way tells a story of its own. Reports are circulating of quiet negotiations between Gulf capitals and Tehran, with Oman in its traditional role as honest broker, exploring an arrangement in which Iranian primacy over the Strait of Hormuz is tacitly recognised in exchange for the removal of American bases and a framework of peaceful coexistence. It is an astonishing outcome and the worst strategic failure for the America since Vietnam. US and Israeli military action has de facto elevated Iran to the status of a regional superpower controlling perhaps 20% of global oil flows, as well as sulphur, urea, helium, aluminium and nitrogen fertiliser. The geography of global supply chains is being redrawn.

American Weapons: The Emperor’s New Clothes

American weapons systems, which have cost European and Japanese allies a not insignificant proportion of their GDP for decades, have been exposed. The performance of US weapons in this conflict has been erratic at best and the continuation of supply during periods of high usage now highly questionable, and practically dependent on Chinese controlled supply of Rare Earth Metals and even electronics.

Europeans were already moving away from US-built platforms on sovereignty grounds and cost; they can now add battlefield credibility to the list. Canada looks increasingly likely to go with the SAAB Gripen over the F-35. Canada has recently chosen the Saab GlobalEye airborne early‑warning and control (AEW&C) system, built on the Bombardier Global 6500 airframe, as its preferred platform for the Royal Canadian Air Force, over the competing Boeing E7 Wedgetail on the grounds of cost and a desire to move away from American dependency.

Germany and several Nordic states are quietly accelerating domestic and European procurement frameworks. The transatlantic defence relationship, already damaged by Trump’s transactional approach to NATO, has taken what may prove to be a terminal blow as a commercial proposition. This has significant long-term implications for Lockheed, Raytheon and the broader US defence industrial complex; and conversely, for SAAB, Rheinmetall, Leonardo and the European primes.

The Drone Revolution and the End of Conventional Power Projection

The rise of drone warfare has produced a fundamental and irreversible shift in the balance between states. Nations widely regarded as unchallengeable have found themselves strategically constrained by adversaries deploying swarms of $5,000 weapons systems against billion-dollar assets. The aircraft carrier, that great symbol of American power projection, cannot be brought within a thousand miles of a theatre where a swarm of cheap airborne or seaborne drones poses an existential threat. The cost-exchange ratio is catastrophically unfavourable to the superpower.

What Ukraine demonstrated against Russia, Iran has now demonstrated against America. The lesson is not lost on Xi. A seaborne invasion of Taiwan, prosecuted under the threat of millions of autonomous airborne and seaborne platforms (many of them potentially supplied or inspired by Iranian and Ukrainian experience) looks considerably less attractive than it did three years ago. I suspect Xi is watching all of this very carefully and recalculating. That may be the one genuinely stabilising consequence of an otherwise deeply destabilising conflict.

It is worth adding: the proliferation of drone technology to non-state actors is a related and underappreciated risk. Hezbollah, the Houthis and others have demonstrated that the barrier to entry for asymmetric power projection is now remarkably low.

The End of Pax Americana

Nobody takes America seriously anymore, or at least relies on American honour and integrity. The inability of the Trump administration to conclude negotiations, honour agreements or sustain a coherent strategic posture has led allies and adversaries alike to ask a simple question: what is the point of negotiating with Washington? The Iranians have answered that question definitively. They were bombed in the middle of talks hosted by the Omanis. They will not forget it, and they will not be the only ones who draw the obvious lesson: Americans are dishonourable and not to be trusted.

The international order that America constructed after 1945, underwritten by military credibility, dollar hegemony and institutional leadership, is dissolving. This is not entirely Trump’s doing; the process has been under way for years. But he has accelerated it beyond what I believe is recoverable within any politically meaningful timeframe.

The dollar’s reserve status, whilst not immediately threatened, faces mounting structural pressure. The Gulf States, newly aligned with Iran, have every incentive to explore non-dollar settlement mechanisms for energy. The Chinese and Russians have been building that infrastructure for years. The missing catalyst was always a credible political rupture with Washington. We may now have it.

The Omanis, Arab Honour and the Ruin of American Diplomacy

The behaviour of the Trump administration towards Oman deserves specific mention, because it will reverberate across the Arab world for a generation. The Omanis are a deeply courteous people for whom hospitality is not merely a custom but a point of honour, almost a sacred obligation. The guest brings barakah — blessing. To launch military strikes on Iran while Omani hospitality was being extended, while Omani good offices were being used, was not merely a diplomatic blunder. It was a profound insult to an entire culture’s conception of honour and trust. Arabs will not forget this. The Americans may have permanently forfeited a friend in a country that has for decades been the most reliable backchannel the West had to Tehran.

The Strait of Hormuz: The Toll Booth

My view is that the Trump administration will walk away from this conflict. The Iranians understand this, and they are sophisticated enough to manage the timeline strategically. Every week the war continues past the midterms inflicts maximum political damage on Trump domestically. After the midterms, the Iranians, probably working with the Omanis, will be in de facto control of the Strait and will operate what I can only describe as a toll booth.

The rate they set will be instructive. If they are as strategically intelligent as they have proven themselves to be in this conflict, they will set it at a level below the economic threshold that would justify building pipeline infrastructure to bypass the Strait entirely. You need a hand around the neck of the goose, but not so tight the goose dies. The geopolitical economy of energy is being rewritten, and the authors are in Tehran.

Israel: The Edge of the Abyss

I think Netanyahu has led Israel to the edge of the abyss. Self-evidently to anyone who reads a “quality” European or UK newspaper, Israel no longer enjoys the support of Europe. The Gulf States will not be bounced into the Abraham Accords. American political support for Israel, whilst not gone, is visibly weakening, and American credibility as a guarantor has been badly damaged. Israelis are sophisticated political observers; they can read the runes as well as anyone. They can see what has happened in the Gulf, they can assess the strategic defeat of their principal patron, and they will draw their own conclusions about the long-term viability of a security arrangement predicated on American omnipotence.

Israel’s internal political system was sclerotic before this war. The blame game that will follow (and it will be ferocious) will be conducted within a system that may simply not be capable of producing the reforming leadership the country needs. The international isolation is real and deepening. I do not see a clear path forward and I think a great many Israelis do not either.

Capital Allocation in My Portfolio

As someone who once wore a uniform and trained as an agricultural chemist (a strange combination I know), I find it both professionally interesting and personally sobering how much geopolitics, supply chain sovereignty and atom scarcity have come to dominate investment thinking.

My current positioning:

I remain long Canadian nitrogen fertiliser. With Iranian and Gulf urea supply disrupted and Iranian control of the Strait creating structural uncertainty over sulphur flows (a critical feedstock for phosphate fertiliser via sulphuric acid), Canadian production has significant and durable pricing power. (I sold Yara and replaced it with Canadian company, CF Industries).

https://alchemist24.substack.com/p/the-hormuz-fertiliser-crisis

I am avoiding copper oxide deposits and preferring copper sulphides, which does not require sulphuric acid for heap-leach processing because I expect sulphur supply chains out of the Gulf to remain constrained and expensive.

https://alchemist24.substack.com/p/the-hormuz-chokepoint-sulphur-flows

I am long nuclear: uranium, enrichment capacity and the nuclear engineers. Europe’s energy security crisis is now a permanent feature of the landscape. The political resistance to nuclear is crumbling across France, the UK, Poland and the Nordics. This is a decade-long infrastructure build. HAN ETF have launched a very interesting nuclear renaissance ETF which I have recently bought and will write up here.

https://hanetf.com/fund/nukz-infrastructure-capital-nuclear-etf/

I am long Norwegian, Canadian and South American oil and gas. These producers are the obvious beneficiaries of structural disruption to Gulf supply.

I missed the aluminium trade entirely and will not chase the green candles, though I believe the structural story has further to run. Norsk Hydro — despite real challenges in its Qatari JV — has had an exceptional year and remains interesting. Iranian aluminium, which relied on Gulf energy inputs, faces structural headwinds. Non-Gulf production should benefit.

I am long cash and cash equivalents. Uncertainty of this magnitude is not a time to be fully invested.

https://alchemist24.substack.com/p/time-to-raise-some-cash-and-increase

Three Additional Themes Worth Watching

The renminbi and non-dollar settlement. China has been quietly constructing the infrastructure — mBridge, CIPS, bilateral swap lines — for a post-dollar energy settlement system. If even two or three major Gulf producers begin accepting renminbi for a portion of their exports, the symbolic and practical significance will be enormous. Watch Saudi Arabia’s posture carefully over the next twelve months.

Defence technology rerating. The drone war has not just changed tactics; it has changed the investment thesis for defence entirely. The era of the $400 million aircraft is giving way, at least at the margin, to swarm autonomy, electronic warfare, counter-drone systems and the supply chains that support them. AeroVironment, Elbit Systems, KNDS and the European electronic warfare specialists deserve attention. The US defence primes face a painful period of strategic and commercial repositioning. HAN ETF have recently launched an ETF focussed on investment in the drone eco-system. I do not own it on valuation grounds and on account of its American focus. There is no evidence Americans understand drone warfare, and I have a view on the involvement of the Trump regime investing in US-drone manufactures and the management of contract awards. The future of drone investment is Ukrainian and most Ukrainian drone companies are privately held.

Food security and fertiliser. This may prove to be the most important and least discussed consequence of the conflict. Sulphur, urea and phosphates are the chemical foundations of modern agriculture. Sustained disruption to Gulf supply chains flows directly into food prices, which flow into political instability in import-dependent nations across Africa, South Asia and the Middle East. This is a slow-moving but potentially very large story. In addition, 2026 is an El Niño year. Based on the latest IRI, NOAA, and WMO data, it will be a strong, high‑impact El Niño, with probabilities above 90% that conditions persist through late 2026.

Geography, as I have said before, is now at least as important as geology. I would add: chemistry may matter most of all.

Go well in these chaotic and dangerous times.

Alastair

Tea Research Lab, East Africa Tea Research Institute, taken by the author 2013

Downloadable report in PDF format at the end.

UK farm input costs have lurched higher since the Strait of Hormuz closed, with fertiliser prices rising 13–36 percent on official AHDB data and up to 70 percent for urea‑heavy imports exposed to Gulf shipping, while diesel has climbed by roughly 40 pence per litre, pushing pump prices close to £2.00.

For an average UK arable unit, the Strait‑of‑Hormuz shock translates into £20–£35/ha more on fertiliser and £6–£10/ha more on diesel, depending on rotation and machinery intensity. For a typical 400 ha arable farm this translates into a roughly £18,000–£28,000 hit to annual profit.

The Strait of Hormuz closure has quietly stripped around fifty pounds of profit per cropped hectare out of the P&L for the typical UK arable farm.

Most African countries import 80–95% of their nitrogen fertiliser, and a large share of that ultimately traces back to Gulf producers or shipping routes that now carry war‑risk premiums. A 30–70% global urea spike means smallholders simply buy less fertiliser; application rates fall 20–40% ; and yields drop 10–30% depending on crop

This is exactly what happened in 2021–22 when high prices cut African fertiliser use by a third and pushed millions into food insecurity.

Diesel inflation hits every stage of the food chain - Diesel is the backbone of African agriculture: irrigation pumps, tractors, transport to market, milling, cold‑chain logistics. A 30–40% rise in landed diesel costs translates into higher farm‑gate prices and higher retail food prices. In countries where food is 40–60% of CPI, this is macro‑destabilising.

The UK sees a profit squeeze. Poorer countries see reduced production, higher hunger, and higher instability.

Research Tea plantation, Malawi, taken by the author 2013

I allocated some capital to the World’s largest N-fertiliser company - Norwegian head-quartered Yara. The more logical buy would have been Canadian N-fertiliser company, CF Industries.

Download my analysis here:

Hormuz Report Final

282KB ∙ PDF file

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I think oil is structurally higher for years to come. It was always going to be thus prior to Iran due to the lack of investment; but Iran brings a new dynamic including the destruction of facilities in the gulf; introduction of new bottlenecks and I have no doubt Iran will be able to implement a permanent toll on tankers passing through the Strait and there will be nothing anyone will be able to do about it.

Having said this, the arithmetic does not point to a toll being necessarily catastrophic for the oil market. The Aframax (the closest thing to an “average crude tanker”) has a capacity of 600,000 – 800,000 barrels, and is mostly used for North Sea, Black Sea, Med, US Gulf, short‑haul crude.

The Iranians are reportedly charging a toll of USD2 million which works out at USD2.85/barrel for 700,000 barrels. Hardly the stuff of global recession or depression, especially when you consider the West’s economy is a lot less dependent on oil than the 1970s.

The Gulf States will now pivot to China for their security now they have been so badly let down by the US. The Chinese have so much oil in storage, they can just sit and watch this thing play out ... why interrupt your enemy when he is making such catastrophic errors of basic strategy? I always said Trump had the strategic depth of a puddle after a light Summer’s rain.

The trade is definitely long oil and the futures market will, in my opinion, eventually catch up with the reality of the physical market where physical delivered oil is trading at eye watering levels; crack margins are huge as well, so the integrated players might be the best option.

I am surprised Shell, with their exposure to Qatar’s LNG business has not been hit harder, but the shares are down only 10.9% from their peak which is in-line with many other majors. Shell has direct commercial exposure Qatar LNG (equity + offtake) through their ownership of 30% of QatarEnergy LNG (formerly Qatargas 4). Shell is also one of the largest lifters and traders of Qatari LNG and all Qatari LNG cargoes must pass through Hormuz. There is also the Pearl GTL (Gas‑to‑Liquids) complex at Ras Laffan. Pearl GTL produces condensate, LPG, naphtha, and middle distillates; all products which must exit via the Strait of Hormuz. As the World’s largest trader in LNG, Shell has obviously been able to shuffle trades and shipping around to mitigate the impact of the Iranian war.

I am trying to settle on a major integrated player as a long term investment which is not American. I might go for Canada’s Suncor; I like Norway’s Equinor, but we UK and European investors get stuffed for withholding tax on their generous dividend. Also, Equinor is less downstream‑heavy, more gas‑weighted, and more renewables‑tilted than the classic IOC model. I do like gas and hold Vår Energi. VAR produces ~300–350 kboe/d, of which roughly 50–55% is gas. All of this gas enters the Norwegian gas export system and is commingled with other Norwegian gas and sold as undifferentiated molecules to Europe by Equinor Marketing and Trading.

I will take a look at the other European players and write something up.

I like some of the Argentinian O&G plays as well - particularly Vista Energy, on which I previously made a lot of money. However, Milei is now playing silly buggers with The Falklands with the encouragement of the Trump Junta and it would just grate a bit to buy any more Argentinian assets - good as the Vaca Muerta fracking basin is.

So folks, if you have a favourite non-American integrated O&G company and want it included in an analysis which I will publish here, drop me an email or comment below. I have zero interest in small cap O&G plays … it is more fun losing my money at Perth Races.

Have a nice day

Alastair

A leaked internal Pentagon memo reported by The Independent states that the U.S. under Trump was considering reassessing diplomatic support for Britain’s claim to the Falkland Islands as part of punitive options against NATO allies who did not support U.S. military action against Iran.

Trump is such a total man child throwing his toys out of the pram, because NATO - a purely defence alliance - would not support his war of choice, stupidity and illegality against Iran. The poor Americans just cannot cope with Europe not jumping to attention in front of the American flag. Maybe - just maybe - America is starting to get the message: we do not like you and we do not trust you.

It will not matter one jot what Trump thinks unless he decides to send some US warships down to help Milei out but then that would be an attack on a NATO ally by a NATO ally. He can then kiss goodbye to all his European bases and NATO will fall apart along with the very small amount of American credibility they have left. The fact is that no retired NATO officer I know on this side of the Atlantic believes the US is a reliable ally anyway, so nothing lost there.

‘America Is No Longer An Ally’ | General Sir Richard Shirreff

Some history for any Americans reading this:

The Falklands were a protectorate of the UK before Argentina was even a country. Argentina was colonised by the Spanish who committed large‑scale violence, enslavement, and population collapse against several Indigenous peoples in what is now Argentina — most notably the Querandí, Pampas, and Guaraní — during the 16th–18th centuries. Later genocidal campaigns in Argentina (e.g., the Conquest of the Desert) were carried out by the Argentine state, not Spain.

It is arguable when Argentina formed as a country. There was the May Revolution against the Spanish which kicked off on 25 May 1810 when Buenos Aires removed the Spanish viceroy and established an autonomous government, claiming to rule in the name of the deposed Ferdinand VII. This marks the start of the independence process. The Declaration of Independence happened on 9 July 1816 so it was more of a process than a single event.

The British first settled the Falkland Islands in 1765, when they established a garrison at Port Egmont on West Falkland. The Islands were entirely unoccupied previously by humanity. We Scots quickly recognised the similarity of the Falklands to Benbecula and South Uist and got on with the business of sheep farming, fishing for squid, and growing neaps, tatties and kale.

Don’t laugh, but the reason I know so much about it is I own one of the largest Falkland Islands and British Antarctic stamp collections in the World. Of course it is also part of British Naval folklore and I was serving as a young midshipman when it all kicked off ... we all thought we were going down but it was all over quite quickly. One of my friends served as the personal assistant to the Governor of the Falkland Islands before his posting as air attaché to Paris.

One last but important point. 99.8% of Falkland Islanders voted to remain British in the 2013 sovereignty referendum. In the referendum held 10–11 March 2013, islanders were asked a single question:

“Do you wish the Falkland Islands to retain their current political status as an Overseas Territory of the United Kingdom?”

The results were:

• Yes: 1,513 votes (99.80%)

• No: 3 votes (0.20%)

• Turnout: 92% of registered voters

These results are documented in the official referendum report and summarised in multiple reputable sources, including the detailed breakdown on Wikipedia.

Where does this nonsense go? I think nowhere unless the Trump Junta sends US warships down to the South Atlantic. I do not doubt we would respond with a couple of nuclear attack submarines ... we saw European NATO come together to raise the political bar when they sent ships and troops to Greenland. Of course we would not win, but we would make sure the political costs to the US were terminal to any global perception of Americans as rational, decent and moral people.

It is just another nail in the coffin of US hegemony ... they cannot even open the Strait of Hormuz and are literally begging the Iranians for an exit strategy. The only good thing to come out of this latest in a very long line of American stupidity is that I think Xi is watching the kinetic and economic chaos Ukraine has unleashed against Russia and the mullahs and IRGC in Iran against the US (and the rest of us) and thought: maybe we will find another way with Taiwan.

The days of the Americans being taken seriously as moral and decent actors is long gone.

Introduction

I listen to only a few market commentators on account of time availability. It is therefore important that those I do listen to in a time constrained life, have something relevant and important to say. For me, Louis-Vincent Gave is one of the more interesting commentators out there; he is culturally and intellectually curious and generous with his time.

Louis‑Vincent Gave is a macro thinker whose entire framework is built on identifying regime shifts rather than trading cycles. He is not a forecaster in the sell‑side sense; he is a structural analyst who maps how capital, trade, and geopolitics reorganise themselves when the underlying architecture of the global system changes.

His work sits at the intersection of macro, geopolitics, and capital flows, and he is one of the few commentators who treats these as a single integrated system rather than separate silos. He is fundamentally a regime‑change analyst, not a momentum or valuation analyst. He looks for:

• inflection points in capital flows

• contradictions between narrative and data

• structural mispricing created by Western home‑bias

• geopolitical constraints that override market assumptions

He is unusually willing to challenge consensus views, particularly those rooted in
U.S. exceptionalism or Western financial dominance. Across multiple interviews, Louis‑Vincent Gave consistently signals a pro‑emerging‑markets, pro‑Asia,
pro‑commodities, anti‑U.S.-duration portfolio stance. His positioning framework is built around three pillars:

1. Underweight U.S. financial assets because he believes U.S.
dominance is peaking and the dollar is entering a long‑term decline.

2. Overweight emerging markets, especially China and India. He argues emerging markets are entering a relative performance upswing as the U.S. falters.

3. Overweight real assets (energy, commodities, value) because he sees rising energy prices, geopolitical fragmentation, and capital flight from the U.S. as structural tailwinds.

Underweight U.S. Equities & U.S.D Assets

In several recent interviews, Louis states explicitly that the U.S. dollar is losing its safe‑haven status and that the U.S. economy is weaker than headline data suggests. He argues that the U.S. is entering a long‑term decline in relative competitiveness, and that investors are overexposed to U.S. assets.

Portfolio implication:

• Underweight U.S. equities

• Underweight U.S. long‑duration bonds

• Underweight USD cash and USD credit

He repeatedly frames this as a structural, not cyclical, shift.

Overweight Emerging Markets (China, India, Asia)

Another of Louis’s core messages is: “As the U.S. falters, emerging markets rise.”

He argues that:

• China’s economic weakness is overstated

• India is entering a multi‑year growth phase

• EM equities are deeply discounted relative to the U.S.

• Capital is rotating toward Asia as geopolitical blocs harden

Portfolio implication:

• Overweight China A‑shares

• Overweight India

• Overweight EM Asia (Korea, ASEAN)

• Selective EM fixed income (countries aligned with China’s trade sphere)

This is consistent with his long‑standing “rise of Asia” thesis.

Overweight Energy, Commodities, and Value

Louis warns that a surge in energy prices could wreck portfolios overnight and argues that Western investors are structurally underweight commodities and energy.

He also highlights:

• China’s energy strategy is “leaving the West behind”

• Commodities and value stocks are beneficiaries of de‑globalisation

• Hard assets outperform in a weakening‑dollar regime

Portfolio implication:

• Overweight energy equities

• Overweight industrial metals (copper, nickel)

• Overweight gold and gold miners

• Overweight value vs growth

This aligns with his long‑running “Four Quadrants” framework, where inflation + weak growth favours real assets.

Preference for Countries Aligned With China’s Trade Bloc

In the DIFC interview, Gave distinguishes between:

• Countries “happy to do business with China”

• Countries preferring trade barriers

He argues that the former group offers better bond and equity opportunities.

Portfolio implication:

• Overweight Indonesia, Malaysia, Vietnam

• Overweight Middle East markets aligned with China

• Selective EM sovereign bonds

This is part of his thesis that the world is splitting into two financial systems.

Structural Underweight in Western Government Bonds

Across multiple interviews, he repeatedly criticises:

• Western fiscal trajectories

• Rising debt loads

• Politicised central banks

He argues that Western sovereign bonds no longer provide diversification or safety.

Portfolio implication:

• Underweight U.S. Treasuries

• Underweight Eurozone sovereigns

• Prefer EM local‑currency debt in Asia

Summary Table: Louis‑Vincent Gave’s Implied Positioning

What Might his Portfolio Look Like?

Now for the fun bit … extrapolating Louis’s interview comments and attempting to create a model portfolio. I emphasise this is a model portfolio that reflects the revealed preferences in Louis‑Vincent Gave’s commentary. It is not his literal portfolio (he does not publish one) but it is the closest faithful reconstruction of his positioning logic based on notes I took from over a dozen interviews.

Scenario Table: How His Positioning Performs

This table shows how the reconstructed portfolio behaves under four macro regimes he frequently discusses.

Legend: +++ = major beneficiary ++ = strong beneficiary

• = modest beneficiary – = negative –– = strongly negative

Interpretation: His portfolio is positively convex to every scenario except a strong USD rally or a U.S. growth renaissance — both of which he views as low‑probability.

How Louis‑Vincent Gave Is Positioned for the Next Decade

Louis‑Vincent Gave’s portfolio positioning is built around a simple but powerful thesis: the world is fragmenting, the U.S. is losing relative dominance, and capital is rotating toward Asia and real assets. Across interviews, he argues that investors are structurally overexposed to U.S. equities, U.S. duration, and the U.S. dollar — all of which he believes are entering long‑term downtrends. His framework is not tactical; it is a structural allocation for a world defined by geopolitical blocs, energy scarcity, and fiscal overstretch in the West.

The first pillar of his positioning is a decisive underweight in U.S. financial assets. He sees the U.S. dollar losing its safe‑haven status and believes U.S. equities are priced for a world that no longer exists. In his view, the next decade belongs to economies with improving competitiveness, rising productivity, and better fiscal trajectories — none of which describe the United States today.

The second pillar is a substantial overweight to emerging markets, especially India, ASEAN, and China A‑shares. He argues that Western investors are dramatically underweight Asia and are misreading China’s economic trajectory. In his framework, the centre of global demand, trade, and capital formation continues shifting eastward, and portfolios must reflect that reality.

The third pillar is a heavy allocation to real assets — energy, commodities, industrial metals, and gold. He believes the world is entering a period of structural underinvestment in energy and materials, exacerbated by geopolitical fragmentation and the weaponisation of supply chains. In this environment, real assets outperform financial assets, and value outperforms growth.

Finally, he prefers non‑USD cash and EM local‑currency bonds, particularly in countries aligned with China’s trade sphere. He argues these economies have better fiscal discipline, more favourable demographics, and less political interference in monetary policy than their Western counterparts.

Taken together, his positioning is a coherent response to a world where the U.S. is no longer the gravitational centre of global finance. It is a portfolio built for dollar decline, commodity scarcity, Asian ascendancy, and geopolitical bifurcation — the four forces he believes will define the next decade.

My Portfolios

SIPP

My SIPP diverges from Louis‑Vincent Gave’s portfolio in both geographic concentration and macro intent. Whereas Gave builds around a top‑down thesis of Asia rising, the West stagnating, and real assets outperforming, my SIPP expresses an extreme North American commodity‑producer concentration, with 60.9% Canada, 8.3% Latin America, and almost no U.S. or Asia exposure (United States 1.9%, China 0.49%, Japan 0%).

My sector profile is even more skewed: 51% basic materials, 20% energy, and 13% financials, compared with Louis’s more balanced mix of EM equities, China A‑shares, value, and diversified commodity equities.

I also hold 19% cash, versus Louis’s preference for non‑USD cash but only at a 5% weight (which is probably higher now given Louis’s most recent comments). Critically, my SIPP has zero fixed income, while Gave allocates 15% to Asian local‑currency bonds as a macro hedge.

In short, my SIPP is a high‑beta, metals‑and‑energy‑centric portfolio dominated by Canadian miners, whereas Louis’s is a macro‑balanced, Asia‑tilted, multi‑asset allocation designed to express geopolitical regime change rather than single‑country resource leverage.

ISA

Louis‑Vincent Gave’s portfolio and my AJ Bell ISA diverge sharply in structure and intent. His allocation is strategic and thematic, built around macro convictions: overweighting emerging markets (especially Asia‑aligned economies), commodities, and value equities; while underweighting Western sovereign debt and the U.S. dollar.

My ISA, by contrast, shows a concentrated equity portfolio dominated by developed‑market industrials and materials, with 64 % exposure to Europe (notably the U.K., Sweden, and Italy) and 35 % to the Americas, plus a large 21 % cash position.

I hold no bonds and minimal Asia exposure (≈1 %), whereas Louis’s model allocates 15 % to fixed income in Asian local‑currency bonds and 20 % to real assets such as gold and industrial metals. In short, my portfolio expresses a bottom‑up, company‑specific tilt toward Western cyclicals, while Louis’s expresses a top‑down macro thesis on de‑globalisation, commodity scarcity, and the rise of Asia.

My SIPP and ISA are two different ways of navigating the same global regime shift, but would be better balanced with some allocation to fixed income and Asia, probably financed by a further reduction in my allocation to gold and silver miners. I am not tempted by fixed income, but I would like to raise my exposure to Asia and India and add to my existing LatAm exposure with O&G and infrastructure. I am intensely relaxed about my cash balance and cash is actually higher than indicated if I count cash in bank accounts not allocated to the markets … probably nearer 35%. However, as I have said before, I have an ominous feeling about these markets and think we are about to enter a world of pain. I also believe the markets are severally underestimating the impact of the closure of the Strait of Hormuz on oil markets and hence on inflation and the severity of economic impact on Europe and SE Asian economies in the months ahead. Cash enables me to sleep at night knowing I have the optionality to react when the markets go pear-shaped, sometime this Summer.

Of course, we have not have an accurate picture of what is held in Louis’s portfolio, but the clues are in the many interviews he has done recently. This has been a fun exercise, and I hope you find some value in it. I might send Louis an email to see how close we got!

Stay safe out there and be kind … kindness is an under-rated human quality.

Alastair, 21st April, 2026

Morningstarreport Isa 21 April 2026

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Morningstarreport 17 04 2026

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Options Positioning: Retail and Institutional

Options positioning, index internals, and cross‑asset pricing all point to a classic bull‑trap dynamic rather than the start of a durable risk‑on trend. The most striking tell is the put‑call ratio, which has collapsed back toward the euphoric levels seen at previous local tops. When traders overwhelmingly prefer calls over puts after a volatility shock, it usually signals forced chase, not conviction. Dealers become structurally short gamma, and the market levitates mechanically as they hedge—until flows exhaust. That is exactly what we saw in the violent rebound following the Iran headlines: a flow‑driven melt‑up, not a fundamentals‑driven repricing.

In simpler language, Retail is buying calls, institutions (the smart money) are adding index hedges, and the rally is being driven by flows rather than conviction: a textbook bull‑trap structure.

INSTITUTIONAL: Index Put/Call Ratio ($CPCI). Measures index options only, which are used primarily by institutions, asset allocators, and hedgers. Latest CBOE reading: CPCI = 0.93 on 15 April 2026

RETAIL: Total Put/Call Ratio ($CPC) Aggregates equity + index + ETF options into one market‑wide ratio. It reflects broad positioning, heavily influenced by retail and short‑term traders. The Barchart graph shows CPC = 0.56, down −16.42% on the day.

What the current readings imply

• CPC = 0.56 → Call‑heavy, complacent, retail‑driven flows
  A sub‑0.60 total ratio indicates traders are buying far more calls than puts, typical of:

  • short‑covering rallies

  • retail call‑chasing

  • post‑shock complacency
    This aligns with a flow‑driven melt‑up, not fundamentals.

• CPCI = 0.93 → Institutions adding hedges
  A reading near 1.0 means almost as many index puts as calls, signalling:

  • institutional caution

  • portfolio hedging

  • distrust of the equity rebound
    This is the opposite of complacency.

This split between retail optimism and institutional hedging is a classic late‑cycle pattern and is starting to make me nervous:

• Retail removes hedges and buys calls → CPC collapses

• Institutions quietly add index protection → CPCI rises

Historically, this configuration appears near short‑term tops, not at the start of sustainable bull legs.

Is The Strait of Hormuz Open or Not?

The second pillar is the market’s belief that the Iran war will be over soon, which is now embedded across the entire curve complex. Front‑end crude remains elevated, but long‑dated WTI and Brent barely moved, implying traders expect a rapid normalisation of supply routes and geopolitical risk. Equity markets are even more complacent: defence, energy, and shipping names have already retraced, while the S&P’s volatility term structure has re‑inverted—something that historically happens only when investors assume the crisis is temporary. In other words, the market is pricing resolution, not escalation, even though events on the ground remain fluid.

The most striking feature of the current oil market is the complete breakdown between futures pricing and the real cost of physical barrels, with multiple independent data points confirming a structural divergence. Dated Brent hit $144.42 on April 7 while futures sat near $90, a ~$50 spread that Bloomberg and S&P Global have both flagged as unprecedented in modern market structure .

Saudi Aramco’s May OSP was set at $19.50 over Oman–Dubai, a record single‑month jump of $17, signalling that producers are pricing physical barrels at levels completely disconnected from the futures curve .

Governments and refiners are openly acknowledging the divergence: Sri Lanka’s CPC described $113/bbl as “favourable” versus the screen price of ~$90, while Saudi finance minister Mohammed Al‑Jadaan stated bluntly, “You see $90 on a screen. Good luck getting a barrel for $90. It’s $120, $130, $140, $150, $160” . Taken together, these signals show a market where paper barrels are trading in a fantasy world, while the physical market is clearing at crisis‑level prices — a structural warning that the futures curve is no longer a reliable indicator of real supply‑demand conditions.

Oil at USD 150 is not just “high oil”; it is a level that historically pushes the global economy into the 5–6% of global GDP energy‑expenditure danger zone, where growth, inflation, and policy all begin to break simultaneously. The Forbes analysis shows that at pre‑crisis prices of USD 65–70, oil accounted for roughly 2.5–3% of global GDP, but at USD 150 that burden almost doubles, crossing the threshold associated with past recessions . Vanguard’s modelling reinforces the same point: sustained oil at USD 150 would create stagflationary spillovers, pushing inflation higher, tightening financial conditions, and forcing central banks into pro‑cyclical tightening rather than easing . The Conversation’s analysis adds the microeconomic transmission channel: a USD 10 rise in crude typically lifts US gasoline prices by ~25 cents per gallon, meaning USD 150 oil delivers an immediate inflation shock to households, logistics, and food supply chains, with second‑round effects spreading across the entire price level if the shock persists The Conversation.

The distributional impact is asymmetric. Vanguard notes that the euro area and Japan would be hit hardest, with oil at USD 125–150 capable of cutting a full percentage point from euro‑area GDP and tipping the region into recession if sustained . Emerging‑market importers face even sharper pressure through currency depreciation, fuel subsidies, and current‑account deterioration — a dynamic Forbes highlights as a key mechanism through which USD 150 oil “destroys demand” in energy‑intensive and EM economies Forbes. The US is more resilient, but even there Vanguard estimates that a recession would require oil to remain at USD 150 for the rest of the year, combined with tighter financial conditions and weaker asset prices — a scenario that becomes more likely the longer the shock persists.

Private Credit Markets

he private credit market; now a $3 trillion shadow‑lending system; is showing its first systemic stress signals after a decade of uninterrupted expansion. A series of failures across 2024–26 has exposed structural weaknesses that were previously masked by low defaults and abundant liquidity. Tricolor Holdings, a subprime auto lender, ran into funding trouble in late 2024, marking the first visible fracture. This was followed by the First Brands scandal, where the company allegedly pledged the same collateral to multiple lenders, surfacing in early 2025. The most severe case was the collapse of Market Financial Solutions (MFS), a UK property lender with a $3.2 billion book, where court administrators alleged fraud and identified a $1 billion collateral shortfall, demonstrating that asset marks across parts of the sector were materially overstated. These failures, while individually containable, collectively reveal a pattern of opaque underwriting, weak collateral verification, and overstretched fund structures.

Liquidity stress is now amplifying these credit cracks. In February 2026, Blue Owl froze withdrawals from one of its retail private‑credit funds, signalling that redemption pressure had reached levels managers could no longer meet without forced asset sales. Around the same time, an Apollo‑managed fund cut its dividend and marked down loan values, acknowledging deterioration in underlying borrower performance. On a single day, a Blackstone private credit vehicle faced nearly $2 billion in withdrawal requests, forcing it to raise its repurchase limit to meet investor demand for liquidity. JPMorgan CEO Jamie Dimon captured the shift in tone, warning that “my antenna goes up when things like that happen,” reflecting growing concern among systemically important institutions. These events illustrate that private credit’s core vulnerabilities: illiquidity, opacity, and maturity mismatch, are now interacting with a slowing macro environment, creating the first genuine test of the asset class since its post‑2008 rise.

Market Breath and Liquidity

Finally, breadth and liquidity conditions contradict the headline index strength. The rebound has been driven by mega‑cap concentration, systematic flows, and short‑covering rather than genuine risk appetite. Credit spreads have not confirmed the equity rally, and safe‑haven demand (Treasuries, yen, and to a lesser extent gold) has not unwound in proportion to the equity bounce. When options markets scream “chase,” macro markets price “all clear,” and internals whisper “fragile,” the historical analogue is not the start of a new bull leg—it is a bull trap, with positioning and sentiment stretched far ahead of fundamentals.

Personal View

I have a sense of ominous premonition about today’s markets; the war in Iran and the stunning level of incompetence, blatant corruption and aggression emanating from the Trump regime as they manipulate the oil markets and global economy. At the same time, I am stunned by the complacency of retail investors.

We UK and European retail investors face a structural constraint: the SIPP and ISA wrappers most of us rely on simply do not permit the kind of institutional‑grade hedging that would allow us to manage drawdowns with precision. Add to that the reality that most private investors have full‑time careers outside the markets, and the result is most of us do not possess the tools, or psychological resilience required to run complex hedge overlays. In that context, the only practical defences are the simple ones. Holding some gold provides a basic shock absorber; accepting that it will be sold in a liquidation event, but also recognising that it has historically recovered quickly. Holding a meaningful cash balance avoids the downside altogether and preserves optionality for when conditions improve and re‑entry feels rational rather than emotional.

Age and circumstance also shape the appropriate level of risk. Most of my family’s modest wealth sits in agriculture and property rather than public markets, and at 62 - “a spring chicken,” as one lovely 84‑year‑old subscriber put it - I am acutely aware that older investors have less time to recover from large drawdowns. The purpose of investing at this stage is straightforward: to avoid poverty in old age and, if possible, leave enough behind to give the next generation a foothold in an increasingly unforgiving world.

With that in mind, here is my current SIPP portfolio, reflecting the trades executed on Friday, 19 April 2026:

Morningstarreport 17 04 2026 Account Number Removed

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Latin America is one of the few regions that fits the world we’re moving into rather than the world investors still wish we lived in. The decade of US exceptionalism is fading, valuations are stretched, and the dollar is no longer the one‑way bet it was.

Capital must go somewhere, and it is flowing toward places with real assets, real yields and real pricing power. Latin America has all three. The region is a major supplier of the commodities the global economy is short of - copper, oil, agricultural output, lithium. It is tied directly into China’s industrial cycle, which means any stabilisation there transmits quickly into Latin American export revenues.

Its financial systems, after years of being ignored, now offer high real rates, conservative balance sheets and cleaner credit cycles than many developed markets. And in a world that is fragmenting into blocs, Latin America benefits from geography as much as geology: close enough to the United States to be strategically relevant, far enough from the major fault lines to avoid becoming collateral damage.

The broader point is simple. The 2010s rewarded deflation, tech and a strong dollar. The 2020s are rewarding inflation, commodities and geopolitical realignment. Latin America sits on the right side of that shift.

The Growing Influence of China

China’s trade with Latin America has expanded at an extraordinary pace. Between 2000 and 2023, total flows rose from about US$8 billion to US$415 billion, an average annual increase of more than 15 percent. Over the same period, global trade grew at roughly 6 percent a year following the creation of the WTO.

US trade with Latin America has grown, but at nothing like China’s pace. In 2000, total flows were about US$353 billion. By 2023, they had reached roughly US$936 billion, an average annual increase of around 4 percent.

China is now the primary export destination for Brazil, Chile and Peru. The region’s growth engine has already rotated east. The LatAm region is no longer a pure US‑beta trade. Domestic demand and China exposure now drive the cycle.

Chinese investment in South America has expanded to the point where it is now a structural feature of the region’s economy. Direct investment reached roughly US$14.7 billion in 2024 and continues to rise across infrastructure, energy, mining, logistics, technology, agriculture and consumer sectors. China has become the region’s largest trading partner, and its capital underpins projects ranging from Peru’s Port of Chancay to copper and lithium ventures in Chile and Argentina, as well as manufacturing and retail expansion in Brazil and Mexico. The financial relationship has also deepened, with Beijing extending a US$9 billion credit line at a 2025 summit, signalling that China views South America as a long‑term strategic partner rather than a transactional market.

South America Can Be Viewed as a Proxy for China

If you are bullish on China and think the long-term prospects for China are far superior to the US but are worried about the regulatory safety of Western Capital in Chinese capital markets, then Latam maybe the answer.

China offers major growth potential in advanced manufacturing, robotics and AI, but the policy direction under Xi Jinping has made the country a far less reliable destination for Western capital. The core issue is the tightening of political control over information, capital flows and foreign firms. China remains a capital‑controlled system where the state can restrict the movement of money in or out of the country whenever it chooses, and recent regulatory changes have increased that uncertainty. The revised State Secrets Law and the expanded Counter‑Espionage Law have widened the definition of sensitive information to the point where normal due‑diligence work can be treated as a security risk. Beijing has also created a new bureau to monitor and prevent capital flight from overseas state‑owned assets, signalling a shift toward tighter oversight and greater scrutiny of cross‑border financial activity. At the same time, financial regulators have emphasised risk prevention, debt control and enforcement rather than liberalisation. The result is a market with clear technological upside but rising political and regulatory downside, where capital can be constrained or redirected according to the priorities of the Party rather than the needs of investors.

Latam assets at the aggregate level provide remarkably close correlation with Chinese GDP.

Latin America is a net beneficiary of higher energy prices

Latin America is structurally positioned to come out ahead when oil prices rise, and the J.P. Morgan analysis you have open reinforces the mechanics behind that outcome. The region contains several of the world’s major crude exporters: Brazil, Colombia, Ecuador and, to a lesser extent, Mexico; and higher prices improve their terms of trade, strengthen external balances and lift fiscal revenues.

Even though refining capacity has lagged extraction, meaning most countries still import refined products, the net effect for the big producers remains positive: export revenues rise faster than the cost of imported fuels.

For the net importers such as Chile and Peru, the picture is more nuanced, but their large metals exports (copper, gold and other minerals) provide a natural hedge that offsets the higher energy bill. The broader point is that Latin America’s commodity mix is unusually well suited to an environment of elevated oil prices. Exporters gain directly, importers are cushioned by metals, and the region is far less exposed to the kind of energy‑price vulnerability seen in Europe or parts of Asia.

How to Invest in LatAm

There are four options with increasing degrees of challenge:

1. Buy an ETF – for European and UK investors there are several UCITS-compliant options. I have chosen the ishares iShares MSCI Brazil UCITS ETF. There are plenty of other Latam country specific and region-wide options available.

2. Buy the only Investment Trust in this space: Blackrock Latin America Investment Trust. I have bought this as a good fit to sit alongside the iShares Brazil ETF.

3. Research individual Latam companies and buy depository receipts on the NYSE.

4. Open a broker’s account in Brasília, Buenos Aires, Santiago or Uruguay’s capital Montevideo (if I was younger, and knowing the current UK government’s love of us agricultural folks, I would have bought a ranch in Uruguay a long time ago and emigrated). Bear in mind, this option will be outside your ISA and SIPP tax wrappers.

As a farmer living up a windswept midge infested glen in the Cairngorms with limited time, I have gone for options 1 and 2. The disadvantage of this is the lack of exposure to Argentina, but I have existing exposure to Argentina via Lundin Mining, Pan American Silver and a new purchase: McEwen Mining, who have exposure to Argentina through their Los Azules copper project, operated by its subsidiary McEwen Copper Inc.

A Look Under the Bonnet of BRLA and IDBZ

Core Holdings

Holdings Unique to BRLA (Not in IDBZ top 25)

BRLA is an active, multi‑country trust. It holds:

Interpretation: BRLA is diversified across Mexico, Peru, Chile, and the US, whereas IDBZ is 100% Brazil.

Holdings Unique to IDBZ (Not in BRLA top 10)

IDBZ is a pure Brazil index tracker. It holds:

Interpretation: IDBZ is heavily tilted to Brazilian financials, industrials, and utilities.

Sector Exposure Comparison

BRLA (active, multi‑country)

• Financials: 23.35%

• Basic Materials: 22.75%

• Industrials: 15.48%

• Consumer Defensive: 11.85%

• Energy: 6.48%

IDBZ (Brazil‑only index)

Sector weights:

• Financials (Itaú, Bradesco, BTG, XP): ~25%+

• Materials (Vale, Suzano): ~12–15%

• Energy (Petrobras, PRIO): ~15%

• Industrials (WEG, Embraer, Localiza): ~10%

Interpretation:

BRLA is more diversified across Latin America and sectors. IDBZ is more concentrated in Brazilian banks + Vale + Petrobras.

Geographic Exposure

BRLA

• Brazil: 63.45%

• Mexico: 22.48%

• USA: 6.92%

• Canada: 2.75%

• Peru: 2.20%

• Chile: 1.69%

IDBZ

• Brazil: 100%

Summary

BRLA

• Active management

• Multi‑country LatAm exposure

• More diversified

• Lower Petrobras/Nu/Vale concentration

• Includes Mexico (Banorte, Walmart MX), Peru, Chile, US‑listed LatAm plays

IDBZ

• Pure Brazil beta

• Highly concentrated in Nu + Vale + Petrobras + Itaú

• Higher exposure to Brazilian financials

• More volatile, more cyclical, more commodity‑linked

Investment Performance

Time To Sell America And Buy Latin America

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References

Latin America economic outlook | Deloitte Insights

LatAm: net beneficiaries from the energy price shock | Capital Economics

WTO Blog | Data Blog - Thirty years of trade growth and poverty reduction

UN Comtrade

Global Economic Prospects -- June 2025 -- Latin America and the Caribbean

China’s footprint in Latin America | European Union Institute for Security Studies

China’s Growing Influence in Latin America | Council on Foreign Relations

China tightening its grip on Latin America – GIS Reports

Latin America in 2026: Between promise and pressure, the answer is optionality | J.P. Morgan Private Bank U.S.

How does the oil shock filter through Latin American economies? | J.P. Morgan Private Bank Latin America EN

Claude AI

I have been looking at investing in one or more of five off the beaten track ETFs and thought I would ask Claude to help me assess them. The ETFs of interest are:

1. HAN Middlefield Canadian Enhanced UCITS ETF

2. HAN Drone UCITS ETF

3. iShares MSCI Poland UCITS ETF

4. iShares MSCI Brazil ETF

5. HAN The Future of European Defence Screened UCITS ETF

I thought Claude would make the process of analysis quick and easy. However, I could not be more wrong and we ended up arguing (yes, you can argue with your AI assistant, but it does not take kindly to bad language … seriously).

The problems revolved around the way and where Claude was scraping data from. Some of the figures which I audited against Seeking Alpha were out by very significant amounts. Claude then proceeded to give me a list of excuses … Claude was starting to sound like one of my teenage nephews or nieces.

Here is an interactive string to give you some idea of the issue:

ME: Why do your figures differ from those published in seeking alpha?

CLAUDE: That’s a fair and important challenge. The honest answer is that some of the figures will differ, and for several legitimate reasons — but some differences may also reflect errors or stale data on my part. Let me be transparent about the sources of divergence:

Legitimate reasons figures may differ: The data I used was pulled from StockAnalysis.com, GuruFocus and SimplyWallSt at a snapshot in early April 2026. Seeking Alpha uses its own data feeds (largely S&P Global Market Intelligence) and calculates some metrics differently. Common divergence points include:

• P/E ratio — trailing vs. forward, GAAP vs. adjusted earnings, diluted vs. basic shares. A stock like Capital Power (CPX) can swing from 22x to 69x depending on whether you use adjusted or reported earnings.

• FCF yield — some providers deduct maintenance capex only; others use total capex. For energy companies with significant growth spending this is a big difference.

• EV — whether preferred shares, minority interests and lease liabilities are included varies by provider.

• Dividend yield — forward annualised vs. trailing twelve months. For monthly payers like WCP or PEY who have changed their dividend, this can differ meaningfully.

• Total returns — the measurement date matters enormously. A 1Y return calculated on 8 April 2026 vs. 31 March 2026 can differ by several percentage points given recent volatility.

Where I may simply be wrong: I should also be honest that some of my figures — particularly for the smaller holdings like NXR.UN, SGY, AP.UN, SFC and DIR.UN — were sourced from search snippets rather than direct page fetches, and I may have used stale data or made an error in the weighting. The back-tested performance figures are my own calculations applying current weights to reported trailing returns, which is a simplification that will differ from any properly constructed back-test.

What I’d recommend: If you’re using this for any actual investment decision, I’d suggest cross-referencing the specific figures that concern you directly against the Seeking Alpha pages — if you share which ones look most off, I can re-fetch the current data and correct the report. The qualitative analysis and structure should hold up, but the precise numbers in the valuation table should be treated as indicative rather than definitive.

Which holdings or metrics are showing the biggest discrepancies on Seeking Alpha?

ME: My biggest worry is the 5 year return figure. For example, Tourmaline Oil you quote as 48% but seeking alpha thinks it should be 129.44%

CLAUDE: You’re absolutely right to flag that — and that’s a significant error on my part. The discrepancy almost certainly comes from one of two mistakes:

Most likely cause: I confused price return with total return. Seeking Alpha’s 129.44% for Tourmaline over 5 years is almost certainly the correct total return figure (share price appreciation plus dividends reinvested). My 48% figure looks more like a rough price-only return, or I simply pulled an incorrect or partial figure from a search snippet. For a company like Tourmaline that pays both a regular and substantial special dividends, the gap between price return and total return is enormous.

Second possibility: wrong measurement period. If my 5Y figure was anchored to a different start date — say, from a period that included the COVID crash lows — it would also compress the apparent return.

The practical implication for the report. If Tourmaline is that far off, the other energy names are likely similarly understated. Canadian energy companies in particular pay very large special dividends on top of their base dividends, so the total return figures for CNQ, WCP, PEY, TOU and others will all be materially higher than I quoted. This means my back-tested portfolio 5Y CAGR of +16.2% is probably a significant underestimate — the true figure is likely considerably higher.

Would you like me to re-fetch the correct 5-year total return figures for all 37 holdings from Seeking Alpha or StockAnalysis, recalculate the weighted portfolio return, and reissue both the spreadsheet and the report with the corrected numbers? That would give you a much more accurate picture of the strategy’s historical performance.

ME: I would much rather you used seeking alpha figures which I trust, so yes, please reissue the report and spreadsheet.

Searched the web

Seeking Alpha blocks direct data scraping. Let me fetch the performance pages directly for each stock.

You get the picture.

What I did in the end was create PDF pages of the statistics from Yahoo Finance (Stockopedia … all is forgiven) and upload these to Claude who then had a hissy fit, saying they could only handle 20 individual items. I then merged the statistics into one PDF and uploaded that.

That seemed to work.

So is Claude AI worth it? Yes, it will save a fair amount of time, but you have to be super-careful. I have audited every figure in this, the third version of the report I wanted to create. I dare say I will be quicker next time. I will prepare reports on the other four ETFs of interest and share the results.

Here is the report:

Mctp Report Styled V3

296KB ∙ PDF file

Download

Download

About 18% of my portfolio is allocated to copper producers: Lundin Mining, Hudbay Minerals, and the Sprott Copper Miners ETF. Sulphuric acid is a critical input for certain types of copper production, and the closure of the Strait of Hormuz has already disrupted global supply. Sulphur is the precursor to Sulphuric Acid. My question is how the escalating and structurally significant shortages of sulphuric acid are likely to affect copper prices and the copper‑mining positions I hold.

Around 92% of sulphur comes from oil and gas processing. The Middle East produces roughly 24% of global sulphur, and about half of all seaborne sulphur must transit the Strait of Hormuz. You can reconcile these statistics with the graph as follows: The Middle East produces ~24% of global sulphur, which accounts for ~44% of global sulphur exports, and ~50% of global seaborne sulphur trade passes through The Strait of Hormuz.

The graph above answers the question: Of all sulphur that is exported globally, how much must pass through Hormuz?

Because sulphur is the precursor to sulphuric acid, this implies that approximately 15–20% of global sulphuric acid feedstock is exposed to The Strait of Hormuz maritime chokepoint. Any disruption in Hormuz therefore cascades directly into the global acid market.

The producers behind this flow are the Gulf’s national oil companies (Saudi Aramco, QatarEnergy, ADNOC, Kuwait Petroleum, and NIOC) whose refining and gas‑processing systems generate the sulphur that is later converted into acid.

Who Buys It

The buyers are the economies whose industrial systems depend on sulphuric acid:

• Chile – oxide‑copper leach operations (32% of China’s 2025 acid exports)

• Indonesia – HPAL nickel (15%)

• Morocco – phosphate fertilisers (12%)

• Saudi Arabia – fertiliser and chemical complexes (12%)

• India – fertilisers and industrial chemicals (9%)

These flows matter because sulphuric acid is the binding reagent for some of the world’s most important extractive and agricultural systems, and that includes copper mining.

What Sulphuric Acid Actually Does

Copper

• Oxide copper leaching (SX‑EW) – highly acid‑intensive; without acid, production stops.

• Sulphide copper – flotation + smelting; largely insulated because smelters produce acid.

Other Mining

• HPAL nickel – one of the most acid‑dependent industrial processes on earth.

• Uranium – many deposits require acid leaching.

• Rare earths – hydrometallurgical circuits often rely on acid.

• Titanium dioxide (sulphate route) – ilmenite digestion.

Non‑Mining

• Fertilisers – the single largest global use; phosphate rock is converted to phosphoric acid using sulphuric acid.

• General chemicals – detergents, pigments, explosives, petrochemicals, and industrial intermediates.

This is why the current squeeze is not just a “copper story”, but will impact other metals and food‑security.

China’s Strategic Response

China exported 4.6 million tonnes of sulphuric acid in 2025, with exports already halved in early 2026 due to quotas . Beijing has now moved to a near‑total export ban, allowing only electronic‑grade acid to leave the country.

This is a decisive shift:

• Smelter acid and sulphur‑based acid are no longer exportable.

• China becomes a domestic‑priority allocator, not a swing supplier.

• The global merchant‑acid market tightens sharply.

• Downstream effects hit fertilisers, HPAL nickel, and oxide copper hardest.

China’s move effectively compounds the Hormuz risk: one chokepoint is geographic, the other is policy‑driven.

The combination of Hormuz exposure, China’s export clamp, and rising acid intensity in the energy‑transition metals chain creates a new structural constraint on the global economy. Acid availability now determines the viability of copper, nickel, fertiliser, and food‑production systems across multiple continents.

This is a strategic‑materials bottleneck with potentially multi‑decade consequences.

Impact of Sulphuric Acid Shortage on The Portfolio

Sulphuric acid shortages only hit operations that rely on sulphuric acid for leaching (oxide copper, HPAL nickel, some uranium). Sulphide‑ore operations that use flotation + smelting are largely insulated.

Hudbay Minerals: Minimal direct exposure

Hudbay’s portfolio is overwhelmingly sulphide‑based, meaning its flowsheets do not depend on sulphuric acid.

Mine-by-mine exposure

• Constancia (Peru): copper‑moly sulphide.

  • Processing: flotation → concentrate.

  • No sulphuric acid dependency.

• Snow Lake (Manitoba): gold‑copper‑zinc sulphide.

  • Processing: flotation + conventional milling.

  • No acid dependency.

• Copper World (Arizona, development): is a mixed oxide/sulphide.

  • Early phases include oxide leaching, which would require acid.

  • However, the project has not yet built so there is no immediate exposure.

Conclusion for Hudbay: Hudbay is effectively insulated in the short and medium term. Only Copper World (future) would face cost pressure if acid prices spike structurally.

Lundin Mining: Moderate, but not critical, exposure

Lundin is more diversified, but still primarily a sulphide-based extraction operation. Only one asset has meaningful acid sensitivity.

Mine-by-mine exposure

• Candelaria (Chile): copper‑gold sulphide.

  • Flotation → concentrate.

  • No sulphuric acid dependency.

• Chapada (Brazil): copper‑gold sulphide.

  • Flotation.

  • No acid dependency.

• Eagle (USA): nickel‑copper sulphide.

  • Flotation.

  • No sulphuric acid dependency.

• Neves‑Corvo (Portugal): copper‑zinc sulphide.

  • Flotation.

  • No acid dependency.

• Zinkgruvan (Sweden) — zinc‑lead‑copper sulphide.

  • Flotation.

  • No acid dependency.

• Josemaria (Argentina, development) — copper‑gold.

  • Planned as a conventional sulphide concentrator, not an oxide leach.

  • Minimal acid exposure, though Argentina’s logistics constraints mean any reagent shortage (including acid) can create cost/transport friction.

Conclusion for Lundin: Lundin has very limited direct exposure. The only risk is indirect: if acid shortages disrupt neighbouring oxide operations in Chile/Peru, regional logistics and input markets tighten, raising costs for everyone.

For those who may hold other copper miners, Freeport McMoRan and Antofagasta are both copper sulphide operations and Robert Friedland’s Kamoa-Kakula mine is a smelter integrated operation which produces its own sulphuric acid.

Source: Trading Economics.

Sulphuric‑acid prices are rising sharply, and the eventual peak is unknowable. A sustained shortage would almost certainly constrain copper, other metals, and fertiliser production, with the usual price dislocations that follow. I have no intention of chasing any spike; the duration and severity of this disruption are impossible to price with confidence. What matters is that my two main copper positions face negligible direct exposure — more by luck than design.

Have a nice day

Alastair

12^th April, 2026

The Day America Blinked

Tuesday, April 8th, 2026 may come to be regarded as one of the most consequential days in modern geopolitical history. This morning, the United States, the guarantor of freedom of navigation and global order, was effectively forced to negotiate the terms of its own retreat in a deal brokered by Pakistan.

Trump had written on Truth Social that “a whole civilization will die tonight, never to be brought back again,” adding, “I don’t want that to happen, but it probably will.”

By evening, the bluster had evaporated. Trump announced he had agreed to suspend planned attacks on Iranian infrastructure for two weeks, backing off his threats to order the destruction of Iran’s entire civilisation. His late-night post celebrated what he called “a big day for World Peace,” claiming the U.S. “will be helping with the traffic buildup in the Strait of Hormuz.” Within the space of eighteen hours, Trump had moved from threatening genocide to offering to help with traffic management in a waterway his war had closed.

The Iranians were under no illusions about what had happened. Iran’s Supreme National Security Council confirmed the ceasefire and claimed victory, declaring that “nearly all war objectives have been achieved.”

Tehran’s 10-point plan, submitted through Pakistani intermediaries and described by Trump as a “workable basis“ for negotiation, is a document that should alarm every Gulf state, every NATO ally, and every government that has staked its security on American reliability.

The proposal demands:

· The coordinated control of the Strait of Hormuz under Iranian armed forces;

· An end to the war across all fronts;

· The withdrawal of all U.S. combat forces from regional bases;

· The full compensation for war damages;

· The lifting of all primary and secondary sanctions;

· The release of all frozen Iranian assets;

· The adoption of these terms in a binding UN Security Council resolution. Kurdistan24

Iran’s Supreme National Security Council warned its own population to remain vigilant, adding that “our hands remain on the trigger, and any mistake by the enemy will be met with full force.” Kurdistan24

Why Iran Has Won

The Strait of Hormuz, which was open before this war began, is now subject to coordinated passage under Iranian military authority. Iran’s explanation of the plan specified that the Strait would be subject to “regulated passage under the coordination of the Armed Forces of Iran,” thereby conferring upon Iran “a unique economic and geopolitical standing.” PBS

Iran fought a U.S.-Israeli military campaign to a negotiated standstill, preserved its government, and emerged with its core demand, sovereign control over the world’s most critical energy chokepoint, formally on the negotiating table with American endorsement. The regime that Trump promised to replace is still in place, and its successor leadership appears, by most accounts, to be harder in its outlook than those who were killed in the opening strikes. Tehran did not just survive; it extracted a strategic premium from survival.

The Betrayal of the Gulf States

For the Gulf monarchies the implications are profound and deeply unsettling. These states host American bases, purchase American weapons systems, and have for decades traded the legitimacy costs of that relationship against the security guarantee it implied. Any step-down in U.S. troop levels in the region would likely anger the Gulf Arab states that have already suffered through weeks of war, with both Israel and the UAE sounding missile alerts even after the ceasefire was announced. PBS

The terms Iran is demanding - U.S. military withdrawal from the region and Iranian control of Hormuz, would fundamentally alter the security architecture that underpins every Gulf government’s survival. If Washington accepts anything resembling those terms, the message to Riyadh, Abu Dhabi, and Doha is unambiguous: the Americans negotiated your security away without consulting you. The question of whether to begin seriously exploring alternatives to U.S. protection will move from theoretical to urgent.

The Petrodollar and London

The petrodollar system — the arrangement by which oil is priced and traded in U.S. dollars, recycled through American financial markets, and used to sustain dollar hegemony — depends on two things: American military credibility in the Gulf, and the free flow of oil through Hormuz. Both have been compromised simultaneously. If Iran retains meaningful control over passage through the strait and if sanctions relief comes with the deal, Tehran will be able to broker energy trade on its own terms including potentially in currencies other than the dollar. Saudi Arabia has already been in conversations with China about yuan-denominated oil contracts. This episode will accelerate those discussions considerably.

London’s position as the world’s leading centre for petrodollar recycling, trade finance, and energy derivatives is directly tied to the primacy of dollar-denominated Gulf oil. A genuine shift in the pricing architecture of Gulf energy exports would not eliminate London’s role overnight, but it would erode it steadily. The City has been quietly aware of this risk for some years. After this week, it can no longer be treated as hypothetical.

Israel After the Midterms

Israel’s long-term position is perhaps the most precarious of all. Netanyahu has prosecuted this war as a co-belligerent with Washington, absorbing enormous international reputational damage on the assumption that the United States would ultimately deliver. Israel is reportedly part of the ceasefire agreement and has agreed to halt bombing targets in Iran as negotiations continue. Foreign Policy

But Tehran’s 10-point plan explicitly demands an end to operations against what it calls the “axis of resistance“ - Hezbollah, Hamas, and allied militias - and describes this as a “historic defeat of the Zionist regime.” If the United States negotiates a settlement that includes protection for Iran’s regional proxy network, Israel will find itself isolated, having spent its military resources on a campaign that ended with its principal adversary stronger than before. Looking toward the U.S. midterm elections, the domestic political coalition that has sustained unconditional American support for Israel is already fraying. A peace deal that hands Iran a regional security umbrella would further fragment it. Israel would then face the question of whether it can sustain its current strategic posture without the kind of American backing it has historically relied upon.

American Credibility and the Rise of China

The long-term damage to American credibility is harder to quantify but easier to describe. The United States launched this war without congressional authorisation, threatened war crimes against civilian infrastructure, and then negotiated a ceasefire brokered not by a NATO ally or a traditional American partner but by Pakistan, a country with close ties to both China and Iran. China’s foreign ministry welcomed the ceasefire, with Beijing noting that its foreign minister had held 26 phone calls with relevant counterparts and that a Chinese special envoy had shuttled between Gulf nations to build support for a joint Chinese Pakistani peace proposal. ABC News China was not a bystander in this process. It was a quiet architect of the outcome.

Beijing has spent years building the economic and diplomatic infrastructure to replace American influence in the Gulf: Belt and Road investments, yuan-denominated trade arrangements, and a demonstrated willingness to offer security guarantees without the political conditions that American partnerships typically impose.

Pakistan’s emergence as mediator represents one of the most strategically significant developments of the crisis, and its new diplomatic role may eventually expand to include coordination over maritime security and deconfliction procedures in Hormuz. Defence Security Asia

Pakistan is not acting alone; it is acting within a Chinese strategic framework. If the final settlement includes any form of Iranian control over Hormuz passage, it is almost certain that China will seek to formalise its role as the guarantor of safe passage for Gulf oil, the majority of which flows east to Asia in any case.

The Last American War?

It is too early to declare this the terminal point of American military primacy, but the conditions that made that primacy possible are visibly degrading. The dollar’s reserve currency status, the credibility of extended deterrence, the willingness of allies to absorb political costs in exchange for American protection; all of these have been weakened, some of them severely, by a war that achieved none of its stated objectives and ended with the adversary dictating the terms of its own ceasefire. America still possesses the world’s most powerful military. But military power, as this episode illustrates, does not automatically translate into political outcomes. Iran, a country under sanctions, with its air force and navy largely destroyed, managed to hold the Strait of Hormuz closed long enough to force an American president into negotiations on Tehran’s terms. The leverage was not military. It was geographic, economic, and psychological.

The deeper question is whether the American political system, currently unable to hold its executive to account even for threats that international lawyers described as potential war crimes, can regenerate the credibility, consistency, and institutional coherence that effective global leadership requires. Right now, the answer is not obvious. And in the chancelleries of Beijing, Moscow, and Tehran, that uncertainty is a form of victory.

Stay safe out there.

Alastair Kendall, 8^th April 2026

Nursery 4 at the East Africa Tea Research Institute, 2013 … happy days.

I have been meaning to get this analysis done for a while and the final report is attached below for download should you be interested.

I have used Claude to help me with the financial modelling and as something of a Luddite (despite a Chemistry degree and a Masters in Information Management) I am simply blown away by how much time Claude has saved me. I would not advise any young person to go into the investment analysis or fund management game in this brave new world. We need to find new ways of leveraging human capital and ingenuity.

I have asked Claude to model two scenarios for us and to benchmark the results - profitability, FCF, EPS and intrinsic valuation - against the 2024 results. The two scenarios are:

• SCENARIO A: Gold USD 5,250; Silver USD 100 and Oil USD 65

• SCENARIO B: Gold USD 4,500; Silver USD 65 and Oil 110

Despite the recent falls in gold and silver prices, the investment banks are all calling for gold to be North of USD 6,000 by the end of 2026, so think of Scenario A as a 2027 / 2028 probability.

Major Investment Bank Gold calls:

J. P. Morgan USD 6,300

Well Fargo USD 6,100 to 6,300

UBS USD 5,900 to 6,000

Deutsche Bank Base USD 6,000; bull USD 6,900

Société Générale USD 6,000

Morgan Stanley USD 5,700

Bank of America USD 5,500

Goldman Sachs USD 5,400

Scenario B is where we are, and providing we see no further falls, is the optimistic outlook for 2025/26.

I own all these miners in my own portfolio which I recently published in the interests of accountability.

Two last points:

First, I have not adjusted for the recent acquisition of the remaining BHP Antamina stream by Wheaton Precious Metals. This stream, for which Wheaton paid USD 4.3 billion, adds 6 million oz of silver in the first five years, and an average of 5.4 million oz of silver over 10 years. This materially impacts Wheaton to the upside and I will publish a specific report on the addition of this new stream. If you are a silver bull, then Wheaton has just become a much more compelling investment.

Second, I have not adjusted the figures for Coeur Mining to reflect their acquisition of New Gold (which is how I came to own them). Again, there has been so much acquisition-led change at Coeur, I think the company deserves a deep dive to fully understand the potential here.

All figures have been drawn from SEC and SEDAR filings, but I make no warranty as to accuracy. I had to point out two errors to Claude which are now fixed, but you must always do your own research and not rely on some dilettante farmer up a wet, windy glen publishing his random thoughts on Substack, let alone some temperamental AI assistant. Still, I hope it gets my readers thinking because I see excellent opportunity.

Here is the downloadable report in PDF format:

Precious Metals Report

894KB ∙ PDF file

Download

Download

East Africa Tea Research Institute, Malawi, 2013 … happy days

It is sometimes only after leaving something you realise how good some of the functionality was. Stockopedia really does have very good portfolio management tools and I miss them.

I am still struggling to find a portfolio management tool which allow me to share my portfolio and infrequent trades with my readership without disclosing the actual amounts. I have come to the conclusion, I will have to code it myself. For some reason I have an image of Charles Archer’s excellent substack, an orange monkey and a laptop disappearing through the window.

I did discover that my broker, A J Bell, has a Morningstar feature which will give you a fair bit of information, but does not give you the profit and loss on trades, or when trades were entered and exited. I am not overly bothered by this, as I invest with a 2 to 5 year time horizon, and some of my investments like Investor AB (STO: INVE), Wheaton Precious Metals (TSX: WPM) and Brookfield (TSX: BN) I have held for a very long time. I have often found time can turn a dismal failure of timing into stunning success providing your initial thesis proves correct.

The basic themes outlined in December 2025 when I first started this Substack have not changed much, but the portfolio has been simplified and I have made a few disposals and a few additions. The themes remain:

• Fiat Currency Debasement (Gold)

• Copper

• Uranium (and now other energy assets: O&G)

• Gold & Silver Miners

• Upgrading the grid

• European Rearmament

• and I have a fondness for engineers (equities that would be)

DISPOSALS

Wisdom Tree Physical Silver (LSE: PHSP) - recycled partly into silver miners

Vatterra Platinum (LSE: VALT) - Platinum chart looked on the turn and needed cash for O&G

Sibanye Stillwater (LSE: SBSW) - Platinum chart looked on the turn and needed cash for O&G

Robertet (FR: RBT) - needed cash for O&G

Borregaard (OSL: BRGo) - needed cash for O&G

British Aerospace (LSE.BA.) - too expensive now

Goodwin (LSE GDWN) Oh dear, what is there to say?

Melrose (LSE: MEL - missed targets and needed cash for O&G

ACQUISITIONS

These have been mentioned in a previous post:

Harbour Energy (LSE: HBR)

Ithaca Energy (LSE: ITH)

Var Energi (OSL: VAR)

Canadian Natural Resources (TSX: CNQ)

Yara (OSL: YAR)

As mentioned in a previous post, physical gold bullion.

Here are two PDFs which show the holdings in my ISA and my SIPP. As you can see, they are unhealthily orientated towards real assets and commodities: these are not what you would call well balanced diversified portfolios. The Financial Conduct Authority would surely ensure the return of your practicing certificate if you recommended this to a client! As Charles Archer, the author of “A Whisky with Charles” says with his inimitable humour: you have to be a special kind of moron to take financial advice from a Substack. Quite.

BTW Charles’s substack is wholeheartedly recommended, and particularly for his sense of humour.

Portfolios below:

Morningstarreport Sipp 28 3 2026 Account

126KB ∙ PDF file

Download

Download

Isa Morningstarreport 31 3 2026 Account

126KB ∙ PDF file

Download

Download

To borrow a lovely cartoon from Tavi

Why Gold Crashed During the Iran War

To understand gold’s extraordinary sell-off since the outbreak of the US-Israel war on Iran on 28 February 2026, we must understand the confluence between multiple inter-connected factors.

The orthodox view, that gold rises during wars and crises, rests on a partial truth. Gold rises during crises that threaten monetary stability and erode real yields. But when a war generates an oil shock severe enough to reignite inflation and cause central banks to hold or raise rates, the environment inverts entirely. The fear is real, but it’s showing up in a stronger dollar and higher bond yields, not a surge in gold.

Gold had risen 23.9% over the 30 days prior to the US-Israeli air strikes of 28 February, meaning much of the geopolitical premium was already embedded in the price before a single bomb dropped. From its January all-time high of $5,589, gold has since fallen roughly 20%, putting in the worst gold price crash since 2013. What unfolded was a multi-layered collapse in which oil shock, monetary policy repricing, central bank selling, leveraged fund liquidation, and ETF outflows all hit simultaneously, each reinforcing the next.

The Oil-Inflation-Dollar Feedback Loop

The primary macro mechanism driving gold lower is the “oil-shock paradox.” Iran’s closure of the Strait of Hormuz sent crude surging, lifting inflation expectations and prompting markets to price in fewer Federal Reserve rate cuts and even the possibility of tighter policy. Higher real yields and a firmer US dollar are direct headwinds for a non-yielding asset such as gold.

This is counterintuitive because, on the surface, the same energy shock that is crushing gold should be stoking demand for an inflation hedge. The problem is that oil-driven inflation is not the kind gold was built to protect against; it is a supply shock that forces central banks to tighten, which in turn pushes up real yields and the dollar, both of which are toxic for bullion.

The mechanism — Hormuz closure → oil shock → inflation → hawkish Fed → strong dollar → gold collapse — is novel in its specificity. The decisive moment came on 18 March, when the FOMC held rates at 3.50–3.75% and projected only one cut for 2026. Gold crashed through $5,000, a critical psychological level, and the next day brought a flash crash: gold plunged 6.9% intraday to $4,557.80, with order book depth collapsing 98% in a 29-minute window as stop-losses triggered a cascade. It was gold’s worst week since 1983.

Central Bank Selling: Turkey, Russia, and Poland

Perhaps the most structurally damaging development has been the reversal of the central bank buying that underpinned gold’s entire multi-year bull run. Central bank demand has been the single most important structural support for gold since 2022, with net official sector purchases averaging close to 1,000 tonnes annually. That buying absorbed speculative selling, sustained the uptrend through periodic corrections, and provided the demand floor against which J.P. Morgan’s year-end 2026 target of $6,300 was set. The central banks that accumulated close to 1,000 tonnes per year since 2022 are now liquidating reserves to defend currencies under acute pressure from the oil shock, converting the market’s most reliable buyer into an involuntary seller at the worst possible moment.

Turkey has been the most dramatic case. As of 26 March 2026, Turkey’s central bank had sold and swapped approximately 58.4 tonnes of gold, valued at more than $8 billion, in the two weeks after the Iran conflict began. The primary driver was currency defence: Turkey is a large oil importer that heavily manages its exchange rate, forcing the central bank to prop up the lira when a spike in oil prices exerts depreciation pressure. Roughly 22 tonnes were sold outright on the open market, with the majority used in gold-for-foreign-exchange swap arrangements, mostly with the Bank of Engand, to generate dollar and euro liquidity. The Turkish lira is under pressure from rising energy import costs, the Middle East conflict, and high dollar demand, contributing to an inflation rate of around 30.9% in March 2026, with the central bank’s foreign exchange reserves falling to about $55 billion. UBS has cautioned that the Turkish headline figures are partly misread by the market as some operations are gold-collateralized swaps rather than outright sales, and the data is lagged; however, the directional signal is unmistakable.

Russia presents a different but equally damaging picture. The Central Bank of Russia began selling gold in 2025 to help fund the Kremlin’s war in Ukraine, and gold selling in January and February 2026 has now taken its bullion reserves down to a four-year low by weight, raising perhaps $2.4 billion so far based on year-average prices. Russia is the world’s fifth-largest national central bank gold holder and one of the world’s largest gold producers, meaning its selling carries both market and symbolic weight. Unlike Turkey’s crisis-driven liquidation, Russia’s selling is deliberate budget financing: the sale of gold helps cover the deficit, record quotes allow selling a little but with maximum benefit, and Russia is the leader in gold mining with some metal going to foreign markets and particularly China.

Poland adds the most geopolitically charged dimension. The National Bank of Poland who have been the heaviest gold buying central bank of the past three years, suggested tapping the unrealised profits from its huge gold accumulation to help fund the government’s defence spending, rather than taking on new debt. Poland has been the world’s largest reported central bank buyer of gold over the past two years, adding more than 100 tonnes annually in both 2024 and 2025. Any shift from accumulation toward disposal, even at the margin, removes a structural demand pillar. The market reaction reflects perceived supply risk, not confirmed physical flows, and that distinction is important. As of the most recent data, Poland’s central bank governor had floated the idea but the pro-EU government of Donald Tusk had apparently rejected it although the mere suggestion was enough to rattle markets.

Central Banks Still Buying: China, India and Others

Not every central bank has pivoted to selling, and this is a crucial counterweight that has prevented gold’s crash from being even worse. The PBOC increased its bullion holdings by 30,000 troy ounces in February, bringing its total fine troy gold reserves to 74.22 million ounces, extending its buying streak to 16 consecutive months. As always, China’s approach is strategically patient: it buys as a matter of de-dollarisation policy, not as a tactical trade, and the lower prices created by the sell-off may actually accelerate its accumulation. There is also a significant shadow dimension: some analysts believe China is buying through commercial banks and state enterprises rather than the PBOC directly, and if China is buying 200–300 tonnes annually off-books, the true global central bank demand figure could be 300–400 tonnes higher than reported.

India, despite the sharp price correction in rupee terms, has maintained its strategic accumulation programme. Central banks collectively bought 19 tonnes of gold in February, with Poland itself , despite the political noise around selling, adding 20 tonnes, its biggest purchase since February 2025.

The broad structural motivation across the emerging market buyer bloc of reducing exposure to US Treasuries, insulating reserves from potential sanctions, and building assets that sit outside Western financial infrastructure has not changed and has arguably intensified with the war.

Leveraged Hedge Funds and Stop-Loss Cascading

Gold’s financialisaton over the past decade created the conditions for a particularly violent sell-off. Gold entered 2026 on a historic run, up 64 to 67% in 2025, its best year since 1979. By January 28, spot gold reached $5,589.38, propelled by central bank buying, de-dollarisation flows, and fiscal sustainability fears. The rally attracted a wave of leveraged and retail speculative capital that would later become the fuel for the crash. By the time the war began, gold was the most crowded long trade in modern history.

Gold futures and options markets reached unprecedented scale by early 2026, with leveraged long positions estimated in billions of dollars. When technical support levels broke during the conflict, these positions faced margin calls that triggered automatic liquidation sequences. The forced unwinding process occurred with particular intensity during specific trading sessions when algorithmic systems recognised breach of predetermined risk parameters, creating cascading selling pressure that fed on itself, with each wave of liquidation triggering additional margin calls for remaining leveraged positions.

Commodity Trading Advisors (CTAs) — the systematic, trend-following funds that track momentum across asset classes — played a particularly destructive role. Once gold broke key moving averages, these systems flipped from long to short, generating mechanical selling that had nothing to do with any view on the metal’s fundamental value.

CME’s shift to percentage-based margins in January 2026 meant that margin requirements automatically scaled higher as prices rose — then triggered cascading calls as prices fell. A telling detail: while COMEX gold collapsed, physical premiums on the Shanghai Gold Exchange remained robust, and physical gold premiums stayed elevated globally; a stark illustration of the disconnect between paper and physical markets. The hedge fund community was badly burned overall: Millennium Management lost roughly $1.5 billion in a single week, Citadel’s fixed-income and macro trading books shed an estimated $1 billion, and London-based Caxton extended losses to $1.3 billion as the Iran war rocked markets.

ETF Outflows: Retail and Institutional Selling

Exchange-traded funds have become gold’s largest and most liquid investor base, and their behaviour during the crash was both a symptom and an amplifier of the decline. Investors withdrew more than $12 billion from the world’s two largest gold ETFs — the SPDR Gold Trust (GLD) shed $8.5 billion and the iShares Gold Trust (IAU) lost $3.7 billion — making it gold’s worst monthly outflow in 17 years. The SPDR Gold Shares recorded its biggest single-day outflow since 2016 on 4 March, with approximately $2.91 billion withdrawn in a single session.

The magnitude of the outflows indicates investors’ preference for ETFs as tactical tools. Highly liquid funds like GLD allow institutional investors to quickly reduce exposure and lock in profits, particularly after periods of strong performance. Gold’s decline appears to have both driven and reinforced the outflows. As prices began to fall, investors moved to secure gains, accelerating redemptions and adding further pressure on the metal. This feedback loop resulted in gold experiencing its worst monthly decline in 17 years.

A BIS report documented the mechanism in granular detail: retail investors had purchased approximately $70 billion in gold ETFs over the prior six months, with the BIS leverage rebalancing multiplier doubling over 2025. Liquidations of investors’ positions, alongside systematic selling from leveraged ETF rebalancing into the decline, probably added to downward pressure, creating a self-reinforcing loop. Notably, some of the capital leaving gold ETFs rotated into Bitcoin ETFs, which attracted nearly $700 million in net inflows in March, suggesting a partial structural shift in how some institutional capital perceives crisis hedging. Indian gold ETFs, by contrast, continued to see inflows — a reminder that the sell-off was concentrated in Western financial markets rather than physical-demand centres in Asia.

The Long View

Despite the carnage, the structural case for gold has not collapsed; it has merely been deferred. Goldman Sachs continues to forecast gold prices reaching $5,400 by end-2026. The PBOC continues buying. The de-dollarisation trend that drove gold’s 65% rally in 2025 is, if anything, accelerating.

As one market maxim has it: when people are worried about the future, they buy gold; when they are worried about the present, they sell it. For now, the present is dominating.

The Gulf States

The fiscal logic doesn’t demand it. Saudi Arabia’s fiscal breakeven oil price is approximately $76 per barrel; at current Brent prices above $100, Riyadh is running a substantial fiscal surplus, providing of course they can get the oil out. The scenario where Gulf states are forced to sell gold to fund operations requires oil prices below $65 for an extended period — the opposite of the current environment.

SAMA’s foreign reserve assets stood at SAR 1.78 trillion ($475 billion) in February 2026, a six-year high, and SAMA’s governor stated that reserves were “more than sufficient“ to defend the riyal-dollar peg. House of Saud Saudi Arabia also retains the crucial advantage of its East-West pipeline to Yanbu on the Red Sea, allowing it to continue exporting oil bypassing the closed Strait of Hormuz, limiting the revenue hit that is devastating Qatar and Kuwait, providing the Houthi’s do not join the fray (and there is every chance they will). The Yanbu pipeline is also vulnerable to missile or drone attack … just ask the Russians.

Qatar and Kuwait are the genuinely stressed cases

The picture is materially worse for the smaller, more Hormuz-dependent states. Following the closure of the Strait of Hormuz on 4 March 2026, QatarEnergy declared force majeure on all exports, and the oil production of Kuwait, Iraq, Saudi Arabia, and the UAE collectively dropped by at least 10 million barrels per day by 12 March. Goldman Sachs projected that Qatar and Kuwait could see their GDPs plunge 14 percent if the war lasts until the end of April. House of Saud Despite this, S&P Global Ratings affirmed a stable outlook for Qatar, noting that the country’s large financial buffers should enable sufficient fiscal and external space to offset the impacts of adverse geopolitical developments. Al Jazeera Neither Qatar nor Kuwait has disclosed gold sales.

Gulf State Sovereign Wealth Funds

Here is where genuine uncertainty lies. Gulf sovereign wealth funds (ADIA, Mubadala, PIF, QIA) do not disclose asset level holdings. LBMA vault outflows of approximately 45 tonnes in January to February 2026 are elevated, raising the possibility of undisclosed SWF repositioning, but I and others have been unable to identify any reliable confirmation. Themiddleeastinsider

The region’s sovereign wealth funds are vast. The Gulf states’ seven main sovereign wealth funds accounted for 43 percent of all capital invested by state-owned investors globally in 2025, tallying $126 billion in total outflows. Foreign Policy

If any of these funds hold gold exposure through ETFs or forwards rather than physical, those positions would show up in ETF outflow data rather than central bank reserve data and would be invisible in the IMF figures. The most plausible explanation for any Gulf-linked gold selling is not distress-liquidation but routine portfolio rebalancing: after gold’s 38% gain from 2023 to the 2025 peak, sovereign wealth funds with disciplined rebalancing policies would mechanically reduce gold exposure as it grew beyond target allocations. Themiddleeastinsider

There is the possibility of gold bullion sales by the Gulf Sovereign Wealth funds if the Houthis take out the flow of Saudi oil through the Yanbu pipeline with a blockade of the Bab al Mandeb Strait, or the Iranians manage to take out the pipeline itself. I suspect Qatar and maybe other smaller Gulf States may have to resort to gold sale if the Strait of Hormuz remains closed for an extended period. The Chinese will be willing buyers.

What I am doing

I was very tempted to write nothing, but that is not entirely correct. I am currently sitting at about 10% cash in my SIPP and ISA and I have a small brokers account in Canada which accounts for 10% or less of my total stock market exposure and is where I go to lose money in juniors when I have an itch that needs scratching. I have a strict rule in my ISA and SIPP accounts – no junior mining companies. Never!

I have sold some non-mining equities to raise cash but have not sold any of my blue-chip gold and silver miners. I have added a little to Wheaton Precious metals on the basis that the miner crash is partly the result of the fall in gold and silver prices, but also the substantial rise in diesel prices which account for 30 to 35% of AISCs. Of course, streamers, like Wheaton, suffer the fall in the prices of gold and silver but are completely unaffected by the rise in AISCs. Despite this, Wheaton fell the same percentage as the blue-chip miners. I intend to do some financial analysis on the impact of prices and costs on EPS for the holdings in my accounts.

I had some liquidity outside my SIPP and ISA probably accounting for another 10%. I have deployed half of this in what I call “strategic gold”, that is physical gold held in a personal safe custody box and which I hope to leave to the next generation so they can waste it on fast cars, fast women and good whisky.

Good luck out there, stay safe and don’t forget to duck.

Alastair

Saudi Arabia’s East-West pipeline is now pumping at its full capacity of 7 million barrels per day. Fortune

The pipeline runs 1,200km from the Abqaiq oil processing complex in eastern Saudi Arabia to Yanbu on the Red Sea. It was originally built at 5 million b/d capacity in the 1980s during the Iran-Iraq War and was upgraded to 7 million b/d in 2019 by converting parallel natural gas liquids pipelines to carry crude.

However, the port at Yanbu cannot keep up with the pipeline. While the pipeline can now move 7 million barrels per day, the port’s two terminals — Yanbu North and Yanbu South have a nominal combined loading capacity of only about 4.5 million barrels per day, with the effective operationally tested figure closer to 4 million b/d, and energy consultancy Vortexa estimating only around 3 million b/d under current wartime conditions. Engineering News-Record

Of the 7 million barrels a day going through the pipeline, roughly 2 million are destined for Saudi’s own Red Sea refineries, leaving around 5 million available for export. However, tanker scheduling and port capacity mean actual crude exports from Yanbu are running at between 3.66 and 5 million b/d in practice.

The Strait of Hormuz normally carries approximately 20 million barrels per day. The IEA estimates there is between 3.5 and 5.5 million barrels per day of available alternative export capacity via the Saudi pipeline to Yanbu and the UAE’s pipeline to Fujairah combined. The gap between that and 20 million barrels per day is unlikely to be closed. European Business Magazine

The Houthis Enter the Fray

The Houthi’s control the Bab-el-Mandeb Strait; sometimes called the “Gate of Grief“ or “Gate of Tears“ in Arabic.

It is the narrow chokepoint at the southern end of the Red Sea, between Yemen on the eastern side and Djibouti and Eritrea on the western side, connecting the Red Sea to the Gulf of Aden and then on to the Indian Ocean. It is only about 20 miles wide at its narrowest point.

It is one of the world’s most critical shipping lanes, connecting Europe and the Mediterranean to Asia via the Suez Canal. Before the current Iran war, the Houthis had already been targeting commercial vessels in this waterway since late 2023 in response to the Gaza conflict, forcing many ships to reroute around the Cape of Good Hope instead, adding weeks and significant cost to journeys.

In the context of the current crisis, the Bab-el-Mandeb compounds the Strait of Hormuz closure. Saudi Arabia has been trying to reroute oil exports via Yanbu on the Red Sea, but Houthi threats in the Bab-el-Mandeb then create a second chokepoint problem for those rerouted shipments trying to exit the Red Sea and reach global markets.

The Damage to Qatar’s Ras Laffan LNG Terminal is More Serious

On 19 March, Iranian missiles and drones struck Ras Laffan, the world’s largest LNG terminal, responsible for roughly one fifth of global supplies of the super-chilled fuel. Fires raged across the vast 295 square kilometre complex, and the damage was severe enough that QatarEnergy’s CEO declared force majeure on long-term contracts, warning that LNG supplies to Italy, Belgium, South Korea and China could be affected for up to five years. The financial losses run to tens of billions of dollars in infrastructure alone; infrastructure that took decades and multiple construction phases to build in the first place.

The reason the damage is so hard to repair quickly is the nature of LNG itself. To move methane by sea it must be chilled to below minus 162°C, temperatures at which ordinary steel shatters. Everything in the chain including the liquefaction trains, the storage tanks built from special double-walled alloys, the giant heat exchangers stretching more than 50 metres, the compressors and turbines weighing thousands of tonnes is extraordinarily complex and expensive. The plant cannot simply be switched off and back on; it must be warmed and cooled slowly to avoid catastrophic pipe failure. Spare parts are bulky, bespoke, and slow to manufacture. This is emphatically not an oil refinery that can be patched in weeks; the level of chemical engineering is on a different level and will take years of work to repair to previous capacity levels.

The consequences will be felt most acutely across Asia, which takes around three quarters of Qatar’s output but nowhere will be insulated from the price shock. Global Banking and Finance

The benchmark Dutch gas price has more than doubled since mid-January, and with the structural damage to Qatari production layered on top of the Hormuz closure, this is no longer a temporary logistical problem but a multi-year supply deficit. Some nations, particularly price-sensitive importers across South and Southeast Asia, will have little choice but to return to coal. Even parts of Europe may find the economics pointing the same way. Gas prices, already elevated, are likely to stay that way for a very long time.

When looking at LNG prices it is important to recognise that although LNG is a fungible product (oil is not as fungible as you might think), geography matters when selecting a price chart.

Here, we have used TTF (Title Transfer Facility) which is the Dutch virtual natural gas hub. TTF is Europe’s benchmark gas price and is the reference contract for European gas futures. It is the price most LNG cargoes into Europe are indexed again and sets the marginal price for the whole region.

Source: Trading Economics

Qatar exports LNG to over 30 countries. Its long-term contracts typically run 20-25 years. The customers that signed those contracts, including JERA in Japan, KOGAS in South Korea, Shell, TotalEnergies, Sinopec, have built entire national energy strategies around guaranteed Qatari supply. Abhs

Virtually all of those exports pass through the vulnerable Strait of Hormuz meaning the facility is doubly exposed: damaged at source and blocked at the exit. Global Banking and Finance

Worse, the complexity of Qatar’s LNG facility and the extent of the damage means it will be at least two years before the facility is able to operate at previous capacity. Given Ras Laffan supplies nearly 20% of global LNG, the global economy is about to be hit with a severe inflationary shock.

The Americans Escalate

Likelihood and the Planning Reality

The question of American boots on the ground in Iran has moved decisively from theoretical to operational. The Pentagon is preparing for weeks of ground operations in Iran which represent a new phase of the war that will be significantly more dangerous to US troops than the first four weeks. The Washington Post

The plans, which fall short of a full invasion, could involve raids by special operations and conventional infantry troops, potentially targeting Kharg Island and coastal sites near the Strait of Hormuz. Al Jazeera

The USS Tripoli has arrived in CENTCOM’s area of responsibility delivering approximately 3,500 sailors and Marines from the Tripoli Amphibious Ready Group and the 31st Marine Expeditionary Unit. The USS Boxer, carrying the 11th Marine Expeditionary Unit with at least 2,200 more Marines, is underway from California. Elements of the 82nd Airborne Division’s headquarters and two infantry battalions have also been ordered to deploy. Vision Times

The White House has stated that the Pentagon is giving the president “maximum optionality“ and that Trump has not yet approved any plan. CNBC

Analysts have interpreted the deployments less as a decision for war than as coercive leverage: a signal to Tehran that military options exist if diplomacy fails. However, as one military analyst observed, as force levels grow, the political and operational momentum becomes harder to reverse. Al Jazeera

The Targets and Why None of Them Solves the Problem

Three scenarios are actively circulating in Pentagon planning and public expert analysis. The most realistic is limited action along the Strait of Hormuz itself, securing key maritime terrain, suppressing Iranian fast-attack craft and mine-laying operations, and clearing coastal positions. The second is the seizure of Kharg Island, a coral outcrop roughly 15 miles off Iran’s southwestern coast that handles approximately 90% of Iran’s crude oil exports. The third and least realistic is a special-forces raid to locate and secure Iran’s 440kg stockpile of 60%e enriched uranium, which Secretary of State Rubio has already indicated may be necessary, telling a congressional briefing “people are going to have to go and get it.” Al Jazeera

Kharg dominates the planning discussions, but its strategic value is contested. Former NATO Supreme Allied Commander Admiral Stavridis has questioned whether seizing it would give Washington the leverage it seeks: “If the idea is to then bargain with Tehran for an opening of the Strait of Hormuz, it is unclear that the remaining leaders of the regime would be cowed by the threat of losing Kharg.“ CNN

Gulf allies are privately urging the Trump administration against it, warning that occupying Kharg would result in high casualties, likely trigger Iranian retaliation against Gulf infrastructure, and prolong the conflict. CNN

The Military Balance and Why the Logistics are a Nightmare

The Iranian military, even in its degraded wartime state, represents a formidable and extremely well-prepared opponent for precisely this kind of operation. The regular Artesh alone fields approximately 420,000 personnel: 350,000 in the ground forces, of whom 220,000 are conscripts, alongside the IRGC’s separate 190,000 active members including ground forces, the Quds Force and the Aerospace division. Wikipedia

Behind both stands the Basij paramilitary force, which can mobilise an estimated 600,000 to 1 million personnel in wartime, though training and equipment levels vary dramatically. Iran War Updates

Iran has spent four decades preparing specifically for the scenario now unfolding, investing in asymmetric capabilities including swarm drone tactics, fast-attack craft, anti-ship missiles, IEDs, and naval mines, precisely calibrated to maximise American casualties at minimum cost.

Iran has moved additional ground forces, MANPAD surface-to-air missile systems, and anti-personnel and anti-armour mines to Kharg’s shoreline, targeting likely amphibious landing zones, although an airborne assault is more likely. The island’s proximity to the Iranian coast (just 25 to 30 kilometres) means that even after a successful landing, US troops would be within range of mainland artillery, drones and missiles indefinitely. The Defense News The logistical challenge of the transit is equally sobering. Before a single Marine sets foot on Kharg, the amphibious ready group must transit the Strait of Hormuz itself — through Iranian mines, fast-attack boat swarms and ballistic missile threat envelopes. Mine clearance doctrine requires six cleared transit lanes within 48 hours; the US Navy’s mine countermeasures capability has been described as a “mission for which the US Navy is ill-prepared.” Vision Times Retired Brigadier General Steve Anderson described holding the island after any initial seizure as “the long pole in the tent” — underscoring the risk that even a successful landing could trigger prolonged attritional combat against entrenched Iranian forces equipped with low-cost drone swarms designed to inflict sustained casualties, shifting the cost equation of combat so that a defending force with limited high-end capabilities can impose sustained attrition on a technologically superior opponent. Defence Security Asia The consensus among military analysts is stark: the US has the force to seize Kharg quickly. It does not have the force to hold it — and holding it, under continuous fire from the Iranian mainland 15 miles away, with no mine countermeasures capability, no heavy armour, and no logistics depth, is precisely what any meaningful ground operation would require.

Impact on the UK, Europe and SE Asia

JP Morgan published this short report available as a PDF download which you can find down below labelled “Pandoras Bog”. I was going to spend a rainy day looking at this but this popped into my inbox, and they do it far greater justice than I ever could!

Pandoras Bog

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Analysis Comments

Good morning

Attached is a political analysis of the Iranian-US-Israeli war. Most of the material used is open source, although I have been able to source some material which is not. Where I hope this work, which is supported with over 100 references, might add value is pulling together all the strands. The critical chapters in my view are:

• The view from America … but they are lying.

• The view from Israel (which consists of a translation from Hebrew of analysis by Israel’s leading Iranian security expert.

• The view from Iran which includes a link to an interview with Mohsen Sazegara who was one of the co-founders of Iran’s Revolutionary Guard.

• The view from Japan (there will be information here which I hope you find shocking … I did).

• The view from the Gulf (which is largely one of betrayal)

I have tried to ensure everything is properly referenced so you can check for yourself. I believe these are the facts as I understand them and I have tried to be careful and identify when I offer an opinion. Hopefully the reader will be able to clearly differentiate.

I offer apologies to my Iranian friends in the German diaspora as I know they are full of hope for regime change. I do not think the Americans will achieve this. I also acknowledge that my Israeli friends may not agree with my analysis, but much of the report is really a curated and structured collection of the opinions of the important players, rather than my own opinion. I have tried to keep my opinion out of it, but I dare say I have not always succeeded, so the reader can regard that as my failure.

Running through all of this is the sheer malignancy of Donald Trump. It really is quite astonishing that one man can do such damage to the global economy. It is also quite surprising the consistency of view expressed across the political spectrum in Europe, sometimes expressed with careful diplomacy and sometimes expressed with no diplomacy at all.

It has been my belief from quite early in the war that investors were underestimating the potential for catastrophic damage to their portfolios. I also believe this is America’s Suez Canal moment and will mark the end of Pax Americana, and the beginning of a precipitous decline in the influence of America and the respect with which Americans have been held for the best part of 80 years since the end of the second world war.

From the perspective of retail investors managing retirement portfolios, with the financial security of our families at stake, it is hard to avoid the conclusion that we are entering genuinely uncharted and exceptionally dangerous territory. The unravelling of Pax Americana, which Donald Trump has accelerated, and what increasingly looks like America's long-term fiscal distress, is unlikely to be a peaceful or orderly process. History offers cold comfort here: when Britain finally relinquished its global role after the Suez Crisis in 1956, there was a clear and capable successor already waiting. The United States stepped forward with the economic strength, institutional weight and political will to assume leadership of the international order.

No such successor is visible today. China has the ambition but not the trust; no other power has either. What seems most likely is not a clean handover but a prolonged and contested interregnum leading to a more fragmented, multipolar world in which the rules that have governed trade, finance and security since 1945 are no longer reliably enforced by anyone.

For those of us trying to preserve and grow wealth across a retirement horizon, that is perhaps the most unsettling variable of all: not any single crisis, but the erosion of the stable framework within which all our assumptions about markets, currencies and institutions have been built.

You can download my report below. I make no apology for its length - there is a lot to say.

Portfolio

I have a small issue of house keeping. First, the portfolio published here is not up-to-date and I apologise for that. I relied upon the excellent portfolio tools of Stockopedia but no longer have access to them as I decided to cancel my subscription after 10 years as a direct result of recent events which some of you will be aware of. I am currently looking for another portfolio management tool, and if anyone knows of something suitable that will save me having to write a programme, a note in the comments would be greatly appreciated.

For the record:

• In the ETF portfolio, I sold the silver ETF and replaced it with the O&G ETF SPOG.

• In the stocks and shares portfolio I published last December 2025, I have sold a few shares raising cash levels to 20%. I have purchased four O&G stocks - Harbour Energy (LSE: HBR), Var Energi (OSL: VAR), Canadian Natural Resources (TSX: CNQ) and Ithaca Energy (LSE: ITH). I write about these purchases on this Substack. I have also purchased a position in Norwegian fertiliser company Yara (OSL: YAR)

• I am debating what to do with my gold and silver miners given the decline in the gold and silver price and the roughly USD200 increase in the AISC due to the increase in the price of diesel. I cannot help but notice that my two streaming company holdings - Wheaton Precious Metals (TSX: WPM) and Triple Flag Precious Metals (TSX: TFPM) have fallen as far as the miners despite having no exposure to the increase in AISC faced by the miners.

• The only other asset we are buying with cashflow from the farm, forestry and tourism businesses we run is physical gold - Gold Britannia’s to be precise held in a safe custody box.

My Research Priorities

• I would like to do some modelling on the financials of the gold and silver mining stocks in the portfolio given the material change in the price of gold and silver AND the large increase of circa USD200 / oz Au in the AISC. I will share this and quickly as it is a priority.

• I would like to address the recent fall in the gold price which I think is temporary.

• I would like to do some analysis on the impact on UK and European energy markets as a result of Trump’s war against Iran.

• I would like to do an analysis of the impact of the closure of the Strait of Hormuz on the Urea, Sulphur and Aluminium markets. I already own Norwegian companies Yara and Norsk Hydro, but are there other opportunities in Europe or Canada?

That it folks.

Good luck and stay safe wherever you are.

Alastair

Oil And Gas Report 2

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Photo: Silver Miners Underground Mine, Taxco, Mexico

This report provides a structured peer comparison of ten silver mining and streaming companies as at FY2024/early 2025, covering the full spectrum of business models in the sector — from pure primary silver miners through diversified precious metals producers to Wheaton Precious Metals, the group’s sole streaming company. For each company, the report summarises its producing asset base, development pipeline and exploration portfolio, before bringing the peer group together through a series of eight comparative scatter charts that plot the companies against key operational and financial metrics including cost efficiency, reserve life, balance sheet leverage, jurisdiction risk and valuation. The report also analyses the sensitivity of key metrics in different silver price environments. The analysis concludes with a weighted scorecard ranking all ten companies across ten criteria, offering a consolidated view of relative investment quality within the peer group.

Below you will find one downloadable PDF file and two spreadsheets to support the analysis. I apologise for the length but I hope you find them useful.

Best wishes

Alastair

Silver Miners Comparison

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Silver Scenario Model

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Silver Miners Assets

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Disclaimer

This document is prepared for informational purposes only and does not constitute investment advice. Production figures, resource estimates and project timelines are approximate and based on publicly available company disclosures as at early 2025. Readers should refer to each company’s most recent annual report, technical report (NI 43-101 / JORC) and management guidance for accurate and current information. All figures in US dollars unless stated.

Prepared March 2026 : All Data Approximate – verified against latest statutory company disclosures and where applicable, JORC.

Trump insists European NATO warships would go on escort duty through the Strait, a task the US Navy refuses to do for obvious reasons. He called on NATO to supply minesweepers not long after four US Avenger-class minesweepers previously based in in the Gulf area were on their way home.

The ships were USS Devastator, USS Dextrous, USS Gladiator, and USS Sentry.

First he says we are all useless (which looking at the current state of the British Royal Navy is probably true) and now he wants us. In fact, he sounds positively desperate. You confused? Me too. He has been told to Foxtrot Oscar by every single one of the European members of NATO.

I really can’t imagine why we Europeans have been so rude … Those poor Americans just can’t get the staff these days.

The other big issue is the 60% enriched Uranium.

Here is a nice LUMO / HOMO picture of the molecular orbitals of Uranium Hexaflouride - I thought it might be fun to see if we can bait a MAGA reader on account of the HOMO orbital. Apparently they are not too keen on Homo’s which when you think about it is a bit odd because I was sure “The Proud Boys” was a gay club in downtown San Francisco and JDV is fond of the old eye liner. Fair play I say … each to their own.

The only way to retrieve that Uranium - which apparently is in the form of gaseous UF₆ in canisters - is to put boots on the ground. Each canister would fit on the back of a Toyota pickup truck, so they are probably distributed far and wide over a country twice the size of Iraq. So good luck finding it.

A friend who did a chemistry degree with me at Glasgow University was head of nuclear safety at Aldermaston (now retired). He reckons they will have to put specialist nuclear experts alongside the special forces team to handle the material safely. So are there any chemistry lab rats out there with nuclear expertise who fancy a wee jaunt over to Iran and know their HOMOs from their LUMOs? You might even get a medal from the Mango Mussolini, or even better, Pete Kegsbreath.

You cannot blow it up in-situ as you would just contaminate a very large area .

... surely even Trump and Netanyahu would stop at that?

Surely these clowns are not that criminally stupid?

Or is that a rhetorical question?

UF₆ is also very heavy (molecular weight 352 a.m.u.) so it will just sit there at feet level, keeping your feet warm. It will not disperse which will be good news for the Gulf States.

Uranium Hexafluoride is also extremely reactive and hygroscopic:

• UF₆ reacts immediately and explosively with even trace water vapour in air - not much water in Iran so they may get away with it.

• The hydrolysis reaction is:

  UF₆ + H₂O → UO₂F₂ (solid) + HF (hydrogen fluoride gas)

  • HF is corrosive and toxic.

  • UO₂F₂ is a yellow, radioactive solid.

There is also a significant safety risk: if material from these canisters were to mix, the resulting interaction could create conditions for an unintended criticality event.

Sounds like a nightmare to me. You just have to hope the integrity of the canisters can be maintained whilst the special forces are under fire from some very motivated people.

Might be a bit of a struggle finding some nuclear chemists willing to accompany an insertion team: I believe I have other commitments, and besides I am just a humble agricultural chemist. This is specialist stuff and outside my pay grade.

They would also have to put a cordon of special forces support around the core team - Marines, 82 airborne? Is that why they are on their way?

Don’t worry folks, I am sure Trump has a plan.

Honestly, I will send out something more serious on silver miners this evening.

There is a widening disconnect between how many Americans perceive themselves and how they are viewed abroad. The gap between domestic self‑image and external reality has become so large that it may no longer be bridgeable. At some point, the rest of the world reaches saturation with the disinformation, the exceptionalist rhetoric, the endless violence and greed, and the recurring cycles of political dysfunction. There is only so much bullshit, lies and insults Europe can take and it is increasingly clear that European Governments do not wish to tie their future to the dysfunctional American 4-year election cycle. Europe, Canada, and Japan are quietly disengaging. This will/should have a major impact on portfolio design for European investors.

A new Politico survey illustrates this clearly: The reviews are in. It's not looking good, America. - POLITICO

It has reached such an extent that HANetf has even launched a new product: MEGA — Make Europe Great Again, a UCITS ETF designed to capitalise on Europe’s relative stability.

You can find it here: MEGA: Make Europe Great Again

Now, back to the usual programme. Later today I’ll publish a comparative analysis of the major silver miners, including full financial models and sensitivity work on silver and oil prices. My aim is to make the spreadsheets downloadable so you can run your own scenarios.

I plan to follow this with a similar report on the major copper producers. I would also like to do a deep dive on Hudbay Minerals which I have recently added to the portfolio.

There have also been several interesting drone/AI/robotics ETF launches from HANetf and WisdomTree that I want to examine. As you may have read elsewhere, Ukraine is partnering on two drone‑manufacturing facilities currently being built in the UK. I will also be able to share some direct experience from the front line in Ukraine, but I will edit out the more gruesome bits. Suffice to say, 80% of all kills now on the Ukrainian frontline are due to drones. It is a brutal war and increasingly led by technical innovation which I am told often has only a 2 to 4 week shelf life, before the Russians catch up.

Finally, I have nearly completed a review of the companies in the portfolio which I will distribute later this week.

Have a nice week.

Alastair