MacroVoices #528 Luke Gromen: Hormuz Could Lead To a 1956 US Suez Moment

In Macro Voices Episode 528, host Eric Townsend interviews Luke Groman, founder of Forest for the Trees, about the escalating crisis in the Strait of Hormuz and its potential to trigger a global economic collapse akin to the 1956 Suez Crisis. Groman argues that the closure of Hormuz—now in its seventh week—has created a massive, lagged supply shock that has yet to fully impact global markets. Despite market optimism and a recent rally, he warns that the physical disruption of crude oil flows, which began in February, will only now begin to hit economies in earnest, with the last tanker to transit Hormuz not reaching its destination until next week. This 'air pocket' of missing supply will cause severe inflationary pressures, particularly in food and energy, potentially leading to a humanitarian crisis and forcing governments to print money, exacerbating fiscal stress. Groman emphasizes that the consensus complacency among financial markets is dangerously misplaced, as physical traders and geopolitical realities paint a far more dire picture. He also highlights the existential stakes for China and Russia, who are deeply dependent on global supply chains and could retaliate if the situation worsens. In a follow-up segment, Rory Johnston of CommodityContext.com confirms that only a handful of small ships have transited Hormuz, with no major VLCCs (Very Large Crude Carriers) passing since the ceasefire collapsed. He warns that the market’s relief is premature, as the full impact of the six-week supply disruption is just beginning to unfold. Johnston also cautions that Iran could close the Strait of Bab el-Mandeb via its Houthi allies, compounding the crisis and forcing oil to reroute around Africa—a delay of two weeks that would be catastrophic in today’s fragile supply chain environment. The episode concludes with Patrick Ceresna’s Trade of the Week: a structured options strategy using TLT to hedge against near-term inflation-driven bond sell-offs while maintaining upside exposure to a future growth slowdown. The hosts collectively stress that markets are dangerously underestimating the lagged, nonlinear consequences of the crisis, and that the real shock is yet to come.