“The blockade scares them even more than the bombing,” President Trump said of the Iranian regime. “They’ve been bombed for years but the blockade they hate.”
“Once those wells go down, sometimes they are down for good,” Trump added.1 Hmm … interesting little add-on there …
This was a snippet of a Fox News report on Iran Wednesday. I had just begun reading the night before about what happens to oil wells when there’s nowhere else to store the oil they gush. Again, this is the weirdness I delve into in my spare time. What can I say? I watched both seasons of Landman and all I want to do now want to do now is walk around in a felt cowboy hat with a cattleman crease and talk like Billy Bob Thornton’s Tommy Norris character.
What’s happening with the US Naval blockade with the Strait of Hormuz? I’ll play Captain Obvious for a minute. The ships carrying the precious Iranian oil to foreign ports can’t get out to fulfill their lucrative contracts, and there’s no adequate alternative shipping route. So, as all the Iranian oil storage capacity fills up the oil has nowhere to go, and they cannot keep pumping their wells with no place to put it. Translation: if the blockade holds for 2 plus weeks by some estimates, many Iranian wells may have to be shut-in.
What happens when a well is shut-in? The pumping of oil comes from a porous rock like sandstone. The oil and gas are released by the actions of drilling and pumping, which if halted, can clog the rock with sediment or paraffin2. This can cause the production of the well to be cut by half or even fail totally when pumping begins again. The thick mud that’s pumped in to block the flow of oil can clog the pores of the rock and change the pressure inside the well. It also doesn’t help if cement is poured on top. The process is expensive. It’s dangerous, and it’s very likely debilitating to the old oil infrastructure in Iran.
Extrapolation: the Iranian oil industry may never be the same again. And there, perhaps, is your real end game. No excess oil revenue = no funding of terrorist cells, no funding of Shahed drones, no funding of nuclear programs. Like Trump or hate Trump, it’s hard not to acknowledge that it’s a neat solution to the 47-year-old problem of how to stop the powerful terrorist regime. You don’t even have to attack the oil fields and inflame international relations with overt action against civilian infrastructure. All we have to do is have our Navy sit there for a few weeks in the Strait of Hormuz to cause irreparable damage to the piggy banks of the bad guys.
This strategy, like any strategy on a stage this big, is not without consequences. Iran is responsible for 20% of the oil production that’s shipped on the sea. Meanwhile Venezuela, under the tyrant Maduro, had failed to produce anywhere near the oil they had capacity to do over the last decade3. Bringing up production in Venezuela and letting the oil flow there could level the total output over the long term as it would take time to properly drill and bring to market their heavy, sour crude in the Orinoco oil fields. I guess if they want to get that oil out of the ground they should be listening to Enya’s “Orinoco Flow”.4 I suppose it’s a good thing Venezuela was our Navy’s first stop this year. I sense a long-term global oil market restructuring plan coming together.
But … there are definitely some near-term consequences beginning to show up in corporate earnings reports. These are but a few: American Airlines reported this Thursday morning and while revenues are up their earnings per share has been cut to a range of a loss of 40 cents per share to $1.10 per share5. The CEO noted that the growth in revenues offset the $4 billion increase in fuel costs. The closure of some regional airspace has caused its own set of issues.
Software company Service Now had been left for dead by the market and down to $82 per share before getting a bump back close to $100. Unfortunately, the Middle East crisis halted a number of big deals they were trying to make and the stock lost 15% at its worst point Wednesday, despite beating their earnings estimates on the top and bottom line. On their earnings report they referred to a “headwind from delayed closings of several large on-premise deals in the Middle East, due to the ongoing conflict in the region.”6
I can’t wrap up our mini-earnings report without laughing at LVMH (Louis Vuitton Moet Hennessy) CEO Bernard Arnault, who is also the world’s richest sports club owner. He shared at the company’s annual meeting that the Middle East crisis could result in a “world catastrophe”.7 He is entirely correct. That’s not the funny part. The funny part was what prompted what some might consider to be hyperbole. The Middle East war had a 1% negative impact on the organic growth of the luxury brand provider. World Catastrophe! Haughty French CEO Translation: Those dirty peasants are not picking up our pocketbooks with their filthy little fingers anymore. Don’t they want to be like us! This is the END I tell you! (To be fair to Monsieur Arnault, he was nicknamed The Terminator due to his aggressive business deals, so he probably doesn’t sound like that … I hope). (Monsieur Arnault is not a client of our firm, nor was he compensated for appearing in this article. ~The Compliance Department)
We don’t have to all act like Monsieur Arnault. In fact, I’d rather we conjure Tommy Norris to inform us all of when to be concerned about oil prices.
The Landman said this in Season 1, Episode 10: “You want oil to live above 60 but below 90. And don’t get me wrong, we’re still printing money at 90, but … gas gets over $3.50 a gallon, it starts to pinch. It hits a hundred, every product in America has to readjust is price. $78 a barrel, that’s about perfect. You know, brings enough profit to keep exploring, but it don’t sting as much at the pump.”8 Ahh … that just hits like true words of wisdom. As of the writing of this, WTI Oil, which is of course the one Tommy Norris would be quoting, is $97.23. It stands to reason the Landman would probably say we’re getting into more dangerous territory with oil prices in the high 90s and the market doesn’t like it today as the Nasdaq’s down 1.66% and we’re retreating from record highs. We’re only a Texas Two-Step from a hundred dollars a barrel, which would stir up a hornet’s nest, and it all goes cattywampus from there. Texas Translation: The economy would be all askew and in disarray. Our Marketing Director Shannon Forehand’s Translation: Cattywampus – noun – a childhood nighttime monster in the Pelzer woods.
So … if you want to understand the Middle East issues better my best advice is to get a Paramount+ subscription and start watching Landman9. Or, you know, you could give us a holler too. We’ll even wear felt cowboy hats if you promise to be all ears. Remember … if you listen to us, we’ll change your financial world.
Sincerely,
Scotty W. Norris
Landman
CTT Oil Exploration & Cattle Division
The Wealth Training Academy
(Marketing Disclaimer: Past performance is never a guarantee of future results. We offer a lot of services. Our planning, tax, and insurance strategies are designed to improve financial outcomes when implemented as recommended. We’re confident in these strategies, but results will vary based on individual circumstances. Investment results cannot be guaranteed. Unless otherwise indicated, no third party individuals mentioned in this article are clients of our firm, nor have they been compensated for appearing. This article is for educational purposes only – we do not recommend anyone buy or sell any security discussed here. Instead, we recommend readers call our office for personal advice about your circumstances! ~The Compliance Department.)
Sources:
2Shutting Down Oil Wells, a Risky and Expensive Option – resilience
3Venezuela, Maduro And The Long Shadow Of Oil Expropriation
4Enya – Orinoco Flow (Official 4K Music Video) – YouTube
5American Airlines (AAL) Q1 2026 earnings
6ServiceNow stock sinks as subscription revenue takes hit from Iran war
7LVMH CEO Arnault warns of ‘world catastrophe’ if Middle East conflict is not resolved
8Tommy Norris: You want oil to live above 60 but below 90 (Landman Paramount+ Series Quotes) #shorts
