Sam Bourgi

For decades, China exported deflation by flooding the world with cheap manufactured goods.

Now it may be exporting something else: oil stability.

China spent years building a 1-billion-barrel strategic petroleum reserve while energy markets were calm. As the rest of Asia scrambles for crude, Beijing can afford to buy less.

That's one reason oil hasn't exploded higher.

Council on Foreign Relations fellow Brad Setser recently called China "the new central bank of oil," arguing its stockpiles may have helped spare the U.S. and Europe from a much larger energy shock.

The irony is that China's biggest contribution to global oil markets right now may be the oil it isn't buying.

"The parallels with the energy shocks in the 1970s are worrying" - Apollo's Torsten Slok

Starting to think this is the scariest chart in markets right now. We're on the cusp of a 70s-style stagflation.

Airlines are flashing recession-style warning signs.
Since the Iran war began:
• Jet fuel prices have nearly doubled
• Airlines cut ~2 million seats globally
• 12,000+ flights canceled
• Lufthansa, Turkish Airlines, Air China all slashing capacity
Spirit collapsed. JetBlue & Frontier are warning of mounting pressure.
The bigger issue: airlines can’t fully pass costs to consumers because travelers are already price sensitive. So instead, we’re seeing fewer flights, more fees, and shrinking service.
Fuel shocks don’t just raise ticket prices — they force the entire industry to shrink.

Every $10 increase in a barrel of oil adds roughly 0.2 percentage points to headline inflation. If crude keeps climbing, CPI will drift higher, making it harder for the Fed to justify rate cuts and pushing Trump further from his goal of near-zero rates.