Higher for longer - that was the core message in my discussion with @CNBC Squawk Box Europe this morning. Everyone is focused on the spot price of oil. But look further out: calendar 2027 Brent is holding around $97 a barrel. That’s close to $100 priced in for an entire year, not simply a short-term spike. That has implications for everything from industrial and agriculture production to transportation costs and inflation in the months ahead. Now look at energy equities. The Munificent 7 are hitting all-time highs as the back end of the oil curve approaches $100. This is looking increasingly structural, not transient. It's the Revenge of the Old Economy in action. The old economy is short-duration, asset-heavy and benefiting from higher commodity prices, whereas the new economy is long-duration, asset-light and increasingly exposed to higher interest rates and inflation. The irony in all this is that the old economy is fuelling the new economy. AI needs electricity, transformers, copper, high-voltage cables and critical minerals. None of that exists without the physical world. ‘Generalists’ in the market are beginning to recognise what specialists across the physical economy has been telling us for some time: higher for longer isn't just centred on bottlenecks and disruption to the flow of hydrocarbons out of the Strait of Hormuz. Instead, it’s a structural shift that is likely here to stay. We’re electrifying the world for many reasons, chief among them the so-called energy transition. The original driving force of the transition, led by the Carter administration, wasn’t the need to adopt clean energy with climate change in mind; it was driven by an urgent need for energy security in response to the oil shocks of the 1970s. We’re seeing a repeat today: the crisis in the Strait of Hormuz and bottlenecks elsewhere, impacting our ability to source and transport hydrocarbons, is forcing states to turn to electrification. Great discussion with @cnbcKaren and Steve Sedgwick - thank you for having me on.

Thank you to @KellyCNBC and the @CNBCTheExchange team for having me on today. The old economy is taking its revenge. We are dealing with higher structural inflation after years of underinvestment in the ability to supply and deliver hard assets. There are two trades happening at the exact same time: scarcity and debasement. They actually feed on one another. War and weather are ravaging supply, while financial repression is the road to debasement. That’s toxic. We have a fuel crisis, a food crisis and copper hitting high after high. All commodities, particularly the non-energy ones, are dirt and diesel. Diesel is now the highest-price commodity on the screen. The key point is that these pressures aren’t happening in isolation. When supply is this constrained and the currency is being debased at the same time, the inflationary impact is much bigger than the headline numbers suggest. Watch the full interview here: https://t.co/nLDSIERtXW

We’re in a critical situation right now - there’s no easy fix to a lack of refinery capacity, a lack of strategic reserves and products, and now-depleted crude reserves. A route to partial normalisation would be looking to China to release spare refining capacity, which seems to be happening, but a return to full normalisation is unlikely any time soon. This will shape the broader commodity and macro-economic outlook. All other commodities are dirt and diesel: we saw all time highs in copper yesterday, record-high diesel last week - we’re going to see more highs across the non-energy complex. Throughout all this, the market is obsessed with crude oil - but everyone reading this right now, as well as the rest of the world, mostly has exposure to the refined product: gasoline, diesel, jet fuel. That will hit the headline CPI index very soon. And we’ve not event talked about food - Ukrainian strikes in the grain corridors in the Black Sea, as well as weather-impacted crop yields has combined to create a food crisis alongside the fuel crisis - wheat, corn and other crops have risen sharply over the summer. Again, that will hit the headline inflation number. The bottom line: this is a crisis not only caused by the Strait of Hormuz. Chokepoints from the Red Sea to the Black Sea grain corridor, the Rhine River, the Russian interior, the Panama Canal - weather, war and policymaking - have combined to create a crisis that has no easy way out. The energy crisis is here: it has arrived and it’s showing in the product prices, not in crude. My interview on @CNBC Access Middle East with @dan_murphy can be watched in full below - thanks to Dan and team for inviting me on.

Copper’s record-breaking run above $14,500/ton should get everyone’s attention. It is the latest sign that the physical economy is repricing scarcity in the real world.  Yes, part of yesterday’s move reflects tariff front-running and metal being pulled into US warehouses. But that doesn’t paint the whole picture.  Metal stranded in one part of the world is unavailable to everyone outside it. Scarcity is not just about how many tonnes exist, it is about having the tonnes in the right place at the right time.  You cannot build data centres, expand grids, electrify industry or duplicate supply chains without copper. Yet supply cannot respond quickly enough because of the same constraints I have highlighted in the thread below.  This is the latest rotation of the commodity cycle. Last month it was grain. Last week it was diesel. Today it is copper.  Weather, war and policymaking are the three horsemen that have combined against underinvestment (the revenge of the old economy) to create a scarcity problem that shows no signs of being solved. The bears will say the metal exists. Fine. But if it is locked in a warehouse, it is just a pile of metal. Just two weeks ago I said the next phase of this cycle would bring “higher highs across more markets”. Copper is now doing exactly that.

Wake up, folks. Commodities are telling you something, and yesterday the Treasury confirmed it. Scarcity in the physical world. Repression in the financial one. Scarcity pushes prices up. Repression holds yields down. The gap between them is the debasement. Commodities are the only asset class that wins on both sides. The structural case for commodities has been turbo charged. Underinvestment, deglobalization and electrification all pushing markets like diesel cracks and copper to new highs. Meanwhile the chokepoints are increasing, from Hormuz to the Red Sea, the Rhine, the Panama Canal, the Black Sea grain corridor and Russian refining capacity. It is becoming increasingly apparent that not a single one of those is reachable by anything in Washington's toolkit whether it be caused by war or weather. The illusion of abundance is likely behind us. I said as much on CNBC this Monday, and I got long gold, silver and agriculture last week. Ten points for you to consider. (1/11)