{"id":3414,"date":"2026-04-24T17:49:43","date_gmt":"2026-04-24T17:49:43","guid":{"rendered":"https:\/\/trusteconomics.eu\/?p=3414"},"modified":"2026-04-24T17:49:43","modified_gmt":"2026-04-24T17:49:43","slug":"debt-is-exploding-oil-shock-is-coming","status":"publish","type":"post","link":"https:\/\/trusteconomics.eu\/index.php\/2026\/04\/24\/debt-is-exploding-oil-shock-is-coming\/","title":{"rendered":"Debt is exploding \u2013 Oil shock is coming"},"content":{"rendered":"\r\n\r\nWith strategic oil reserves running dry, energy prices threatening an inflationary holocaust, and the bond market sending out danger signals that suggest the end of Western hegemony, collapse is no longer a hypothetical scenario but a significant possibility.\r\n\r\n \r\n\r\nIn fact, today\u2019s \u201ccalm before the financial boom\u201d seems almost surreal when you compare the hard data on oil, bonds, and the real economy with a stock market at its peak and a completely incomprehensible \u201cconflict narrative\u201d coming from Washington.\r\n\r\n \r\n

Oil\u2019s \u201cwarning signs\u201d<\/strong><\/p>\r\n \r\n\r\nHistory reminds us that the great \u201coil shocks\u201d of 1973 and 1990 had enormous effects on markets and the economy. What\u2019s coming, however, will be much worse.\r\n\r\n \r\n\r\nDuring the 1973 oil embargo, for example, the world faced a 7% oil supply deficit.\r\n\r\n \r\n\r\nThis led to a 300% increase in the price of oil, a 52% drop in US stocks (over a 2-year period), and inflation of over 12%.\r\n\r\n \r\n\r\nSeventeen years later, during the Gulf War, the world saw a similar global oil deficit (7%), a 75% rise in oil prices, and a 21% drop in US stocks.\r\n\r\n \r\n\r\nFast forward to today, however, and we see an almost surreal moment of complete disregard for such warnings, as well as blindness to the financial volcano roaring on the horizon.\r\n\r\n \r\n\r\nSince the last tanker passed through the Strait of Hormuz in late February, global oil consumption of 100 million barrels per day has fallen by 13%, as 13 million barrels per day have been delayed due to the \u201cfog of war.\u201d\r\n\r\n \r\n\r\nThat marks a global oil deficit in 2026 almost double the levels seen in 1973 and 1990, and yet the US stock market (always the last to get the message) is trading near record highs at the time of writing, reports Trust Economics.\r\n\r\n \r\n

This is crazy\u2026<\/strong><\/p>\r\n \r\n\r\nGlobally, oil reserves are running low, including in the US, whose Strategic Petroleum Reserve is half of its 400 million barrel level.\r\n\r\n \r\n\r\nThe situation is worse in Asia, India and Africa, where the last oil deliveries through the Strait of Hormuz stopped days ago. This explains why hotels have closed in Mubai, and why fishing boats have run out of fuel off the coast of Thailand.\r\n\r\n \r\n\r\nAs for Australia, the EU and the UK, their last deliveries through Hormuz were on April 10. Now their leaders are nervously trying to curb demand while hoping for a real and lasting truce in a conflict with Iran that is driven more by a Truth Social account than by professional diplomacy or even a rudimentary understanding of global finance.\r\n\r\n \r\n\r\nEven if this conflict were to end right now, the delayed economic effects of these historic energy deficits are and will be extraordinary – this is not a myth but a fact.\r\n\r\n \r\n\r\nOil, which moves the world, also moves the goods that feed and move the world. When oil prices rise, the cost of everything goes up, including food shipped on oil-powered ships and food grown with oil-based fertilizers.\r\n\r\n \r\n\r\nWithin weeks, we could be facing a humanitarian food crisis in developing economies.\r\n\r\n \r\n\r\nAt the same time, in the US, the University of Michigan Consumer Confidence Index is near its lowest point, while the S&P is nearing its all-time high, signaling a complete (and tragically comic) disconnect between real-economy indicators and Wall Street\u2019s frenzy, the likes of which we have never seen before.\r\n\r\n \r\n\r\nAlso unprecedented in history is the surreal disconnect between the \u201ccharted\u201d (futures) price of oil and the actual selling price (\u201cdated Brent\u201d) of the product in real time \u2013 a gap of over $35.\r\n\r\n \r\n\r\nThis gap between the real price of oil and the stock market price is a sad attempt by politicians to psychologically suppress panic through\u2026 sheer dishonesty.\r\n\r\n \r\n\r\nAccording to Trust Economics, dishonesty as a political practice is nothing new in broken financial regimes, as evidenced by inflation manipulation, recession denial, or the latest frauds legalized on the COMEX. (Incidentally, any government machinery trying to discount the fake price of oil futures risks a massive short squeeze unless this war \u2013 and the price spike \u2013 is resolved immediately\u2026).\r\n\r\n \r\n\r\nOverall, what we are experiencing right now is the worst oil supply deficit in history, set to expose a US stock bubble to record highs, completely disconnected from the real economy, at the same time as a fertilizer\/food crisis is about to erupt in the world\u2019s most vulnerable economies.\r\n\r\n \r\n

And then there\u2019s the bond market\u2026<\/strong><\/p>\r\n \r\n\r\nBut even these dire conditions pale in comparison to what global bond markets are showing.\r\nAs Trust Economics has been saying for years: \u201cThe bond market is everything.\u201d Boring? Maybe. But bonds are absolutely critical.\r\n\r\n \r\n\r\nAs demand for government bonds falls and yields rise, the cost of borrowing rises. That\u2019s deadly for economies that now run almost exclusively on debt.\r\n\r\n \r\n\r\nAnd there\u2019s no better measure of the cost of debt than the yield on 10-year government bonds, almost all of which are rising like shark fins around heavily indebted countries like the UK, Germany, the US and Japan.\r\n\r\n \r\n\r\nBut even more remarkable is what\u2019s happening in China, where yields are falling rather than rising. This means that Chinese bonds are in greater demand than US Treasuries, UK Gilts, Japanese JGBs and German Bunds, which means that the era of Western hegemony in bonds \u2013 and especially US bonds \u2013 is reaching a historic turning point.\r\n\r\n \r\n\r\nIn the case of the US, the US 10-year yield is dangerously close to the \u201cred line\u201d of recession at 4.6% to 4.8%. With a public debt of $40 trillion, the US simply cannot afford such increases in yields.\r\n\r\n \r\n\r\nRegardless of who is at the Fed (which is neither \u201cfederal\u201d, nor \u201creserve\u201d, nor even a real bank), trillions will need to be printed to buy up the unwanted government IOUs.\r\n\r\n \r\n

And then comes the devaluation<\/strong><\/p>\r\n \r\n\r\nEven if a \u201csoft default\u201d is attempted through yield controls or bond maturities, such measures will not stop the inevitable creation of trillions in money by the Fed to save the bond markets at the expense of the currency.\r\n\r\n \r\n\r\nSimply put, the US will be forced to create money out of thin air to pay off its own debts. Even if peace were declared in the Middle East today, the damage to the debt and the currency was already done long before the Iran crisis.\r\n\r\n \r\n

It all leads to gold<\/strong><\/p>\r\n \r\n\r\nThe increasingly undeniable erosion of the dollar\u2019s \u200b\u200bpurchasing power and the desperate but unsuccessful measures to maintain its hegemony are beyond question, reports Trust Economics.\r\n\r\n \r\n\r\nThe US and the dollar will not disappear, but their hegemony is already declining. History reminds us again and again that heavily indebted nations engaged in wars and fiscal mismanagement devalue their currencies to temporarily preserve their political image. This always leads to \u201ctemporary prosperity and permanent collapse.\u201d\r\n\r\n \r\n\r\nAs the dollar loses its power, gold, as it has for thousands of years, will continue to rise in an environment of increasingly irrational dishonesty.\r\n\r\n","protected":false},"excerpt":{"rendered":"

With strategic oil reserves running dry, energy prices threatening an inflationary holocaust, and the bond market sending out danger signals that suggest the end of Western hegemony, collapse is no longer a hypothetical scenario but a significant possibility. In fact, today\u2019s \u201ccalm before the financial boom\u201d seems almost surreal when you compare the hard data … <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[105,59,106],"tags":[303,213,82,65,540,631],"class_list":["post-3414","post","type-post","status-publish","format-standard","hentry","category-developed-economies","category-proposed-fiscal-policies","category-us","tag-debt","tag-devaluation","tag-gold","tag-oil","tag-trust-economics","tag-wall-street"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts\/3414","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/comments?post=3414"}],"version-history":[{"count":1,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts\/3414\/revisions"}],"predecessor-version":[{"id":3415,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts\/3414\/revisions\/3415"}],"wp:attachment":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/media?parent=3414"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/categories?post=3414"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/tags?post=3414"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}