Trader Ferg: What Everyone Gets Wrong About The Iran War | Asymmetric Upside
Summary
Offshore engineering and oil services sit at bottom-cycle valuations with order books filling as the Iran war pushes shippers to de-risk the Strait.
Thermal coal stays tight: Russian LNG only partially restarted, Asian cooling demand absorbs cargos, and buyers who cannot afford LNG upgrade to Newcastle-quality coal.
China's energy flexibility — an under-reported strategic reserve, swing coal-plant utilization, and resold LNG cargos — blunts crisis price spikes and caps oil upside.
Long-dated call options on trading houses like Shell pair cheap volatility with LNG exposure, a profitable trading arm, and buybacks into an energy-inflation decade.
Gold's tourist-driven pullback still shows negative GDXJ outflows, and a neutral reserve asset thesis keeps gold bid for at least a decade.
Stijn Schmitz's takeaways
- Top takeaway The host guides the conversation through oil supply dynamics, China's energy flexibility, thermal coal, gold, and inflation, pressing the guest on where shortages will show up and whether gold's pullback is a buy-the-dip opportunity.
- He contributes his own market observations, noting that urea prices had returned to pre-war levels and that gold was down roughly 25% from its January peak.
Fergus Cullen's takeaways
- Top takeaway The guest (Trader Ferg) argues the Iran war is closer to being over than markets think, based on Trump verbalizing how close to disaster the situation is during negotiations, but still sees energy risk as asymmetric to the upside and keeps buying long-dated energy exposure.
- His top themes are emerging-market exchange operators, trading houses, and offshore oil services, where he sees rock-bottom valuations, order books set to fill on de-risking of the Strait, and great earnings visibility; he cites the QQQ-to-XES ratio already showing oil services outperforming.
- He is bullish thermal coal as of the video, arguing restarted LNG trains will miss the July-August Asian cooling window, forcing poorer Asian buyers onto higher-quality (Newcastle-grade) coal, and he expects prices to hold or climb; he still likes rhodium and holds the coal thesis got stronger.
- On gold, he frames the pullback as the market working off the 'tourist' third of the move, expects a sideways period then the next leg up, and sees gold as the neutral reserve asset staying bid for at least a decade amid US dollar transition, holding a junior gold basket without leverage.
- He describes his process lessons: his P&L comes from long-dated (3+ year) options in hated markets while futures and short-term trades lose him money (corn, sugar), and he now uses AI tools to argue against his own positions, which is how he reversed his bearish assumption on CME.