War With Iran: Why Oil Didn’t Spike As Expected | Prof G Markets
TL;DR
Despite the US entering war with Iran and threats to the Strait of Hormuz, oil prices rose only 7% rather than the feared 20% as markets bet on a swift resolution that could actually increase Iranian crude exports. Simultaneously, OpenAI closed a record $110 billion funding round and secured a Pentagon partnership within 24 hours of rival Anthropic being blacklisted for refusing to loosen AI safety guardrails for military use.
🛢️ Iran War & Energy Market Reaction 4 insights
Oil spike falls short of doomsday forecasts
Brent crude jumped just 7% to $77/barrel, well below the anticipated 15-20% surge, even as Iran effectively halted traffic through the Strait of Hormuz.
Markets pricing in regime change scenario
Investors appear to be betting that aggressive US strikes will quickly neutralize Iran, potentially lifting sanctions and allowing previously sanctioned Iranian barrels to flow to global markets rather than just China at steep discounts.
Diesel and natural gas outperform crude
Diesel prices surged 15% after Saudi Arabia's Rastanura refinery was hit, while European natural gas spiked nearly 50% following strikes on Qatar's LNG terminals.
Investors face unwinding geopolitical premium
Analysts warn that if the conflict resolves quickly, oil prices could fall considerably as the risk premium evaporates against already soft global supply fundamentals.
💰 OpenAI's Record Fundraising 3 insights
Largest private round in history
OpenAI raised $110 billion at a $730 billion pre-money valuation, with Amazon contributing $50 billion, Nvidia $30 billion, and SoftBank $30 billion.
Strategic pivot to Amazon ecosystem
The partnership signals OpenAI's shift to Amazon after losing the Apple distribution deal to Google/Gemini, securing hardware touchpoints, AWS infrastructure, and Trainium chip access.
Oversubscribed round signals peak FOMO
The round was $10 billion oversubscribed, reflecting intense investor appetite to gain exposure before a potential IPO in peak 'bubble froth' conditions.
🏛️ Anthropic Blacklist & Pentagon Drama 3 insights
Blacklisted for safety principles
Trump designated Anthropic a 'radical left' supply chain risk and cut all federal contracts after the company refused to loosen AI guardrails for surveillance and lethal military strikes.
OpenAI's rapid Pentagon deal
Within 24 hours of Anthropic's ouster, OpenAI signed its own Pentagon contract, triggering user boycotts that paradoxically drove Anthropic's Claude to number one on the US App Store.
The safety-integration paradox
Anthropic, historically the most vocal 'doomer' lab regarding AI existential risks, had been the most deeply integrated AI model within classified government systems prior to the blacklist.
Bottom Line
Geopolitical uncertainty in oil markets is being treated as temporary and ultimately supply-positive, while in AI, commercial dominance is rapidly shifting toward companies willing to meet defense sector demands regardless of safety concerns.
More from The Prof G Pod (Scott Galloway)
View all
Hong Kong's AI Crackdown, Lululemon’s Marketing Backlash, and World Cup Fever | China Decode
This episode examines escalating US-China tech tensions, with JP Morgan and Goldman Sachs restricting Anthropic AI access in Hong Kong while Washington pressures ASML over alleged advanced chip equipment shipments to China. The hosts also analyze Lululemon's marketing crisis in China, where a culturally ambiguous drum triggered nationalist backlash despite potentially Chinese origins.
Heather Cox Richardson: Is America Repeating the Gilded Age?
Historian Heather Cox Richardson and host Scott Galloway analyze the Trump administration's governance through the lens of the Gilded Age, focusing on institutional decay, performative politics over policy competence, and a potentially hollow Iran agreement that favors Tehran while exposing America's diplomatic weakness.
China Gets LOCKED OUT of SpaceX and America’s Biggest IPOs (ft. Ed Elson) | China Decode
The historic $86 billion SpaceX IPO marked a turning point in financial markets as Chinese investors were explicitly banned from participating, reflecting a broader bilateral decoupling where both Washington and Beijing are restricting cross-border capital flows to protect strategic tech interests and redirect investment toward domestic priorities.
The Future of Media Is Audio — ft. Axios’ Sara Fischer | Office Hours
Media correspondent Sara Fischer joins Scott Galloway to examine the collapse of trust at 60 Minutes under new ownership, the dangers of extreme media consolidation among politically connected billionaires, and how independent audio formats and reader-funded models are creating a sustainable alternative to traditional broadcast journalism.