The Biggest Oil Disruption in History 3/9/26

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1:00Bring in show music, please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. Oil surging to its highest level in years on disruption fears sparked by the Iran war. Crude nearly touched$120 a barrel. Our reporter in the Middle East, Dan Murphy, on the price push. One of the most dramatic repricings the energy markets have seen in decades. The market response is swift. investors nervously watching supply, energy policy veteran Amos Hochstein. I think at some point, if you're talking about three to four more weeks, the cumulative economic damage is going to be globally, not just the United States.

1:40Plus, a conversation with Jared Cohen of Goldman Sachs, who lived in Iran researching youth movements. Where will the country and its people go from here? I think if it doesn't end this week, it's much more likely to drag out significantly further. It is Monday, March 9th, 2026. Squawk Pod begins right now. Stand Becky by in three, two, one. Cue it, please. Good morning, everyone. Welcome to Squawk Box right here on CNBC. We are live from the Nasdaq market site in Times Square. I'm Becky Quick, along with Joe Karnan and Andrew Ross Sorkin. And then energy prices, really the focus on all of this.

2:18WTI sitting just above$100 a barrel. It's up by about 10 percent. Again, we saw much higher levels overnight. I saw one hundred and eleven dollars for WTI. Brent got very near twenty hundred and twenty dollars a barrel. You can see at this point it is up by about 12 percent, one hundred and three dollars, 80 cents. You'll also notice that the differential between Brent and WTI has tightened up quite a bit. There used to be a bigger percentage difference between the two. I was just reading over the weekend that WTI was actually a net short position for trading there, and that may be some of the short squeeze that has brought that premium for Brent back down between the two of those.

2:58WTI and Arbob Gasoline had their biggest weekly gains ever last week. WTI was up more than 35 percent for the week, but again, we're watching very closely today to see what happens next. For the latest on what's happening in the Middle East right now, I'm going to get straight over to CNBC's Dan Murphy, who is in Dubai this morning. Good morning. Andrew, good morning to you. Well, today's move in oil, one of the most dramatic repricings the energy markets have seen in decades. And the first time oil has traded in triple digits since 2022. Traders are now pricing in a severe disruption to global supply.

3:32And of course, at the center of all of this is the Strait of Hormuz. Right now, that artery is effectively frozen with shippers unwilling to send vessels into a conflict zone after a series of strikes on energy infrastructure and commercial vessels, including at the weekend. Now that is leaving millions of barrels per day of supply stranded inside the Gulf. Today we've heard from Iraq, Kuwait and even the UAE, which have all started curbing some output now because storage capacity is becoming a real issue. And the market reaction has been fast. Remember, only weeks ago, many forecasters were pointing to a global surplus next year.

4:12Now, traders rapidly pricing in a potential deficit. Goldman Sachs also warning that if the strait remains disrupted, oil prices could push towards US$150 a barrel. Europe also now watching this very closely. G7 finance ministers now reportedly even weighing a coordinated response to the oil shock by releasing strategic reserves. It is the most significant threat to global supply since Russia's invasion of Ukraine. And if it drags on, it could very quickly change the color for the global growth and inflation outlook through the course of this year as well. Andrew. So one of the things that there seems to be even an additional fear on top of this about is how this is affecting China.

4:58And thus far, obviously, China has remained uninvolved in this scenario. But there seems to be chatter about, you know, if things continue a pace this way, whether they could somehow decide at some point to get involved? It's a key question at this point, of course. China and Iran have been very close associates, not just politically, but also economically. China is the primary buyer of Iranian crude. And while that supply is being curtailed, it is pretty clear that policymakers in Beijing have been suggesting that they will not hold back on their relationship with Iran. So whether or not we see additional support, be it militarily, financially or otherwise, is a big question mark in these markets at the moment as well.

5:44What's also interesting is what's happening inside Iran as well. We've just seen this really significant transition in Tehran that also suggests perhaps the road ahead here is going to be very long as well. No doubt you've seen Mojtaba Khamenei, the son of the late Ayatollah, has been revealed as the new supreme leader. It's a move that essentially signals one thing to the markets, and that is hardline continuity as well. No change with the relationship with China and no change in the stance towards the United States as well. Back to you. And then in terms of just containers, obviously, the biggest issue is, you know, where do you where do you put all of this supply to the extent that there's going to be a separate issue at some point?

6:27Is that where is that conversation going? Well, the constraints around supply are really concerning at the moment. And indeed, the storage conversation is a growing risk too. What we're seeing is these major producers in the Gulf being forced to shut production in because the reality of the situation is you can pump the oil out of the ground, but if you have nowhere to export it, then it has to be put into storage. At the moment, the estimate is we have about 25 days worth of storage remaining. That is 25 days until the storage capacity of the region is full. So, of course, we are seeing producers already scaling back some production.

7:08But, of course, how long they're willing to hold production off and how long the Strait of Hormuz is going to remain closed is a key question mark at this point as well. A lot of analysts that I've been talking to saying the biggest unknown unknown at this point for anyone exposed to these markets and for global energy trading right now is the duration risk. We still haven't got any signals of a potential off-ramp, either militarily or diplomatically, and that's obviously a key concern right now as well. Part of the reason we also saw this enormous spike in the price of oil, and of course, risk assets also in the crosshairs here, not just in Asia, but in Europe, and likely in the United States today as well.

7:51Okay, Dan, thank you. Appreciate it. Trying to figure that out. Unknown, unknown? As opposed to the known unknowns. The Goldman, you guys remember the super spike? There's been a couple of super stuff. Goldman follows the almighty. Well, I looked at it. There was one, the 350 was 2022 after Ukraine. But back in 2008, the last time there was a big move. That's the one I remember, yeah. How do we remember 17 years ago? It still. It just was shocking at the time. What was the number? That was only 200 back in 2000, the commodity super cycle. But Goldman's got a history. The predictions that they were making.

8:29I remember. Yeah. But I thought so, too. 2022 was much too recent. This seemed long. And they got some flack at the time before, but I think they were just they were talking worst case scenarios or best case, if you're drilling. Energy Secretary Chris Wright says the U.S. wants to get oil, gas and other products moving through the Strait of Hormuz. Wright made the comments in an interview yesterday morning before the price of oil had spiked in the evening. The plan is to get oil and natural gas and fertilizer and all the products from the Gulf flowing through the Straits before too long. And I may break a little news here, but one large tanker has already gone through the Straits with no issues at all.

9:13So as the general just described, we're massively attriting their ability to strike with missiles and drones. And that that rate of attrition will increase in the coming days. So we'll be cautious, we'll be careful, but energy will flow soon. And Wright said he believed energy prices would return to their previous level within weeks. That's the big question, how long this drags on, and we will continue to hear more on that as well. Reports say that the United States in the meantime is considering an operation that could see special forces deployed to Iran to secure the country's supply of highly enriched uranium pivotal in making nuclear bombs.

9:52It's unclear whether an operation would involve U.S. or Israeli troops, or both. Speaking on Air Force One over the weekend, President Trump said seizing Iran's uranium is, in his words, something we can do later on. The president also said the United States could send ground troops into Iran, but only for a very good reason. The Trump administration is reportedly working on an economic deal with Cuba. In a report in USA Today, it says that an agreement may be announced soon and could include easing restrictions on Americans' ability to travel to the island. Also under discussion, potential relaxation of U.S.

10:32sanctions, deals on ports and energy, and what the paper describes as an off-ramp for Cuba's president. There have been talks, President Trump himself, saying that Cuba could be next as recently as last week. I don't know what next means. Right. Yeah. Cheese will be next. Next on Squawk Pod, the oil squeeze in Iran's impact around the globe. We talked to Amos Hochstein, a key player in energy policy during the Biden administration, about what he's watching. I think with the conditions on the ground, without a change, this gets worse and worse because of that compounding effect of loss of both transport of crude, the production of crude starts slowing, and the refined products.

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12:38Right now, save 25 % on your first order at Zazzle.com. That's Zazzle.com. Make it z-amazing. Welcome back to Squawk Pod from CNBC. Here's Becky Quick. Joining us right now for the latest on surging energy prices and what's happening. Take a look right now. You see WTI up by about 12.7 % to$102.45 a barrel. TWG Global Managing Partner Amos Hochstein, who also served as White House Senior Advisor in the Biden administration. And Amos, thank you for being with us this morning. We've been talking all morning about the jump in oil prices, what's happening in the Middle East. Iran's resolve over the weekend caught a lot of people off guard.

13:25What do you think about where oil prices are and, more importantly, where they may head from here? Good morning, Becky. Look, I actually think no surprises have happened. Everything that we're seeing in the market was, I think, broadcast since last Monday. So the war started on Saturday with a shock and awe taking out the supreme leader and a lot of military leaders with a lot of headlines that the command and control of Iran would be gone by Tuesday, Wednesday. That obviously didn't happen. When you shut down the Strait of Hormuz, whether by closure de facto or de jure, right, The baseline is that ships are not crossing, so for very, very few.

14:03And you have a disruption somewhere in the 10 million barrel of oil plus jet fuel and diesel and other refined products. Then oil prices are priced today, I think, still even maybe a little bit complacently. This is the biggest shortage and energy crisis we've had in global history. So I think these prices now start compounding. In other words, we'll close it around, let's say today we'll be somewhere at around$100. But I think with the conditions on the ground, without a change, this gets worse and worse because of that compounding effect of loss of both transport of crude, the production of crude starts slowing, and the refined products.

14:48Amos, let me ask you, we have not done something like this in decades and decades. we have allowed Iran to get more and more belligerent, known that they were working on this enriched uranium, known that their potential for a nuclear weapon was there. Is what you're watching right now the reason that we've never taken more action, that we've been worried about what it would do to global oil prices, what it would do to Asia, Europe, our allies around the world that rely on this oil even more than we do? No, I think it's more complicated than that. I think for a long time it was about containment.

15:27Remember that if the nuclear issue is the most important, then there was a deal done during the Obama years to try to neutralize that threat. The problem with it was that it had sunsets and it was supposed to expire at some point. President Trump in his first term got out of that deal and eventually the Iranians started enriching again. But in June, the strikes that the United States took, which, as you recall, I was on your show and supported them. The president said we obliterated the nuclear program. That was six months ago. The Israelis said that we neutralized it. They used a little bit softer.

16:01In the run up of this crisis, it was not about the nuclear weapons. Remember, it first started out based on the on the protests. Right. Help is on the way. and the Israelis said that it was all about the missiles, the ballistic missiles, not the nuclear. They still believe today that the nuclear issue was not of vital concern because of the June strikes. But there's no doubt that when you consider war, you have to consider all the implications, and one of them is the energy markets. But I think nuclear threat was always something that we were going to address. But this war is not about nuclear.

16:37We are attacking a far greater part of Iran than just the nuclear sites or where the enriched uranium is. This is about much more about attacking the regime itself and taking away its capabilities to restore itself. Let's start with where we are now. What's already taken place over the last week and a half or 10 days? What do you see as being the way out of this? the way, what objectives can and should be met? What is the off-ramp, if there is one? How do you see this playing out? Look, I think right now, over the next few days, you're going to see intensifying strikes against Iran by both Israel and the United States.

17:22Although, at the beginning of the war, the first several days, the U.S. was the lead as far as the number of strikes. Today, that has flipped, and Israel is doing far greater percentage of the strikes in the United States. Where do I think it goes? Look, the Iran has been disrupted. Their missile manufacturing is disrupted. Their economy is degraded. Their nuclear weapons are further degraded from obliterated from six months ago. I think there's an ability to declare victory here and for the president a few days to say, look, I achieved all these things. They don't have an air force anymore. They don't have a Navy.

17:57We've disrupted them. And because we have air superiority, we'll stay in the region, and if they go back to bad behavior, I'll attack them again and end that war. The Israelis will do whatever Donald Trump says. If he says we're stopping the war, they will stop the war. And I think the Iranians will as well. So that is a scenario. However, the White House for that has to not want to see regime change because the Iranians were able to select a new supreme leader. Just the fact that they were able to select one and announce one and go through the process means that the regime is still very much intact.

18:31So I think at some point, if you're talking about three to four more weeks, the cumulative economic damage is going to be globally, not just the United States, but mostly in Asia and Europe. I think that we have to start looking at what that off ramp. And I think this is a credible off ramp. It's not a taco, you know, quote unquote, that people are saying, because it actually is a victory for the president if he can make that declaration. The TACO acronym might be tough at this time. Listening to you, Amos, and I know you've got a lot of different concerns and reasons to either support or not support.

19:09When I listen to people go over the four possible reasons why Trump would have done this, sometimes I think you just add them all together for one overriding reason. Could this end up, in your view, having been worth it almost? Look, yes, I think there's a scenario where you do. There's no doubt in my mind Iran is a horrific regime with so much blood on its hands of Americans and others, but also by creating a network of proxies and terror groups in the region and around the world. So if you're able to degrade them and take away their missile capacity, take away their ability to support Hezbollah and the Houthis and the Shia militia groups in Iraq and so on, I think there's a lot of good that could have been done here.

19:59But if the longer it goes, the more mission creep, the more you start thinking, I need to get just a few more things. If I just use some ground troops, to me, that's where the danger signs, Joe, are. And I think if you start paying this, I think we're still the market is still very complacent about what it means to take nine million barrels or 10 million barrels off the market on a day by day situation where it keeps, you know, compounding. The cut to production is only going to increase where you shut these things in. The LNG plant in Qatar could take two months to break back. The oil fields that you shut in, the longer they're shut in, the longer it takes to bring them back.

20:41The longer it takes empty tankers to come and collect what's in storage, et cetera, et cetera. So I think at some point, time starts running against you, not for you. But degrading Iran, that's not something I think is a bad thing for American national security. As for rationales, you know, people talk about a couple of levels of chess. I mean, you add Venezuela and this together with China, if they want to go after Taiwan anytime soon, they better have some. They have an SPR. I mean, what are they going to use? Their ability to. They do have an SPR, Joe. They have a very, very large one. They're going to need it.

21:21Well, I don't look. My view has always been that China is not looking to for a kinetic war with the United States to take Taiwan by force. I think they're trying to take Taiwan without firing a shot. I think they are taking over the business class. They are taking over interests inside Taiwan so that they can have a gradual takeover of the Taiwanese economy and eventually take over Taiwan with with a lot less than than is required. We only think about it in terms of war. I think they're thinking about it in other ways as well. But I'm not sure that I think China sees this as this war as an indication of strength vis-a-vis Asia.

21:58I think that what we're doing in in Iran today is a lot harder to do in Asia so far away from our bases and so far away from any other allies that may join or not. So I'm not sure that I would draw that that analysis. I think we should first focus on completing this mission and the depletion of munitions that is also happening both to the United States and to Israel.

22:26Wow. Amos, what pressure do you think President Trump is most susceptible to? Pressure from the idea of China getting upset and doing something, ideas of our allies getting upset and doing something, or just American voters getting frustrated with higher prices at the pump, higher prices that work their way into other inflationary measures? Look, I've worked in multiple administrations. I don't think that President Trump is concerned about China or concerned about other allies around the world. I think what he's really concerned about is what's happening here in the United States, like all presidents.

23:03Look how much time he dedicated to gasoline prices and oil in the State of the Union. Today, we're barreling towards$3.50 on gasoline. We're probably going to go to$4 in the coming week. Diesel is even higher. And remember, our food prices have an enormous amount of connectivity to diesel prices. Does that mean that you think he potentially steps away from this more quickly as a result? We've seen scenarios where he's pushed it to a certain place and then decides, I'm going to pull it back because I think it's going too far. Yes, I do think, Andrew. And I think that if you look at a number of examples over the last year, Greenland being one of them, when markets start to really react, I think there's a reassessment.

23:46I also think that while he's saying total surrender, he has his staff explaining that total surrender doesn't mean total and doesn't mean surrender. It means when they're weak, too weak to respond anymore. Well, I think the scenario that I built for you earlier, where he can declare that he has degraded their military, their nuclear, their missile and their economy and maintain air superiority. I think he can say, look, I've achieved my goals. And I think these kind of market conditions, if they last for several days and get worse, I think that he's going to have to reconsider. And I think he's you can see in the rhetoric that he's already doing that.

24:24We can survive at 350. We a gallon. That's what we averaged during your administration, Biden administration. Almost right. That's pretty good. 350. It doesn't stop at 350. We were at 280 a week ago, Joe. We're now at 350. It was nice that it came down. It was nice that it came down. But we have been at 350 before. I just looked up the average for five years. We sure have. Because, Joe, we went to$5 a gallon during that height. We have to take it down to 350. I remember. Thank you for being with us today. We appreciate it. Coming up, as the war in Iran enters week two, Goldman Sachs president of global affairs, Jared Cohen joins us on the path to a possible resolution.

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