The world is on the brink of an oil shock that will make the 1970s look
like child's play. Oil just cracked $100 a barrel. Most people think
it's only going to impact petrol prices, but the reality is it's going to
impact the cost of everything. Food, transport, construction, mortgage repayments. And
because Australia imports over 90% of its fuel. It's
sending our economy into a dive. I'm Lloyd
J. Ross, multiple seven-figure investor and entrepreneur, and I've helped thousands of
everyday people protect and grow their wealth. And in this video, I'm going to show
you exactly why the oil shock is different, and
what it means for your money, and how to position your portfolio right
now. Let me give you the facts, not the clickbait stuff. It's
just the actual numbers from credible sources, okay? So,
according to Fortune, in March, in fact, on the 12th of March, Brent
Crude hit $100 a barrel, and it's up from $69 a barrel for
2025, okay? That's nearly a 45% spike in a matter of weeks. And
according to the International Energy Agency, the global body that monitors oil
supply, the Strait of Hormuz is now at a near standstill,
if you haven't been watching the news. And the Strait of Hormuz carries about
20% of the world's petroleum supply, but not just that, other things too, right? But when
it closes, the world scrambles, of course, right? And so here's
the part that most people don't know. Australia imports more
than 90% of its fuel. And 80% of
Australia's petrol, diesel, and jet fuel comes through Asia, the refineries in
Asia that rely on the Gulf, right? Through
the Strait. So when the Strait closes, even
partially, Australia feels the pinch faster
and harder than almost any other developed nation, right? Because
we don't have the domestic production to buffer us like the U.S. does. We
don't have deep strategic reserves even. We
estimate that the fuel supply is probably under 90 days. In
fact, it's probably more like 10 days now, right? This is
wild. So as of March 2026, which is this month,
average fuel prices in Sydney and Brisbane hit $2.18 a
litre. So a standard family filling
up 35 litres, let's say a week, is now spending 25% more
than they were just a month ago, right? That's
the impact. And that's just at the petrol pump. The real damage
is what happens next in the economy broadly, right? And what most
people aren't talking about. And it's the domino effect of the
fact that one, your shopping center is about to get
more expensive because oil doesn't just go in your car. It
moves everything, trucks, freight. So trucks
need diesel. Trucks need to move freight. Aviation
needs jet fuel. and they move freight.
And of course, shipping uses diesel and it moves freight. So there's now an
extremely important
shift in pricing of the methods of transport of
everything, not just fuel, everything, right? And
when diesel costs more, the cost of food from farm goes
up, not just because the transport cost goes up, but even just to harvest the
food goes up. That means you go to Coles, you go to Woolworths, wherever you
go, and guess what? Your food's going to be more expensive. Everything is
going to be more expensive because either it's got oil in it, or
to produce it or harvest it or make it or manufacture it and move
it. So it's higher to create it, it's
higher to move it. Does that make sense? So the
cost of everything goes up. So who pays for that? You do, right? At
the checkout. So that's the first thing. The second
thing is, before the oil shock, and I've said this on previous
episodes, the inflation rate was already at 3.8%, moving towards
5%. And now, it's probably going to be like 6% or 7%, depending
on how impactful the oil is, right? So the Reserve Bank of Australia is
now being forced to, although
they haven't done it exactly, because yesterday was a rate decision. they're
gonna increase the rates a bit harder because inflation will tick up,
right? And if the public keeps spending, even with higher
oil prices, we're gonna see a bigger jump in the
interest rate environment, right? Because they're gonna have to fight the inflation by
raising interest rates. That's what they do. That's the only tool they have is
to raise rates, right? So they've got to factor that into the
next month. and that'll dictate how much extra you're
paying your mortgage. So you're gonna see prices go up in everything from anything
you buy, just about, and also in your mortgage if rates are gonna go up,
which it looks like they are, okay? So markets are gonna price in probably
three to four rate cuts in the space of the next year.
And if that all happens, we'll be at four, as I said on the previous episode,
4.6% to a 15-year high. 15-year high, right? So it's gonna
add like, you know, three to $400 a month extra on
a regular mortgage. And so over a course of
years, it's like four to $5,000. And that's gonna have an impact
for sure. If you're on variable rates, that's
a real problem too because you're gonna be stuck taking it on the chin and banks are
very quick to pass it on if you don't notice. So the third thing
is the stock market's already bleeding because it
knows that higher prices impact its own
production of, so for example, BHP,
the ability for it to produce things comes at a higher cost because all
the trucks and everything use diesel, right? And the refining uses
energy and oil and so forth. So there's a lot of embedded
costs now, like a lot that goes into
those companies, you've got to take it on the chin. So they either start selling
at a higher price or they just take a hit on their profit margin. And if they take a hit on
their profit margin, because they have no pricing power, you're going to see a shift
in prices of stocks on the stock exchange. So that's where
you're going to see oil making an impact on a lot of
the Australian companies and certainly international companies as
well. Because no company can avoid it,
right? The only companies that are going to do really well is oil companies. If
you had to listen to this podcast two months ago, I did a
whole episode on that before oil spiked. mention position
oil. And now a few people that did listen to that, I think they did it and they made a
lot of money. Not that it's not the show is for that. I didn't position
it that way, but there was a few hints. Um, anyway,
I digress. I'll talk about that in another episode, but. The
other thing that's happening because of those things would be
an amplification of unemployment. So if you think about oil
prices, the price of things going up has an impact
on whether employees can hold people or not. So it has an impact on their bottom line.
That's the first thing. They may start offloading employees. redundancies,
then of course, that will have an impact on mortgage repayments. Then
you might see bad debts grow up at the bank, which has happened in the past. And
then they may start retrenching employees. And then of course, you're going to
see the impacts of the oil shock in
public companies, which can have an effect on staffing numbers, et
cetera. So if it gets bad enough, you start to see the final domino,
which is unemployment. And the reason why the RBA didn't increase the rates by 0.5% yesterday
is because they are scared of unemployment. Couple
that with the fact that Claude is now pretty much doing everything for everyone at
work, there's going to be a huge shift in how
people work, which means there might be a ton of retrenchments. I mean, I
know that Atlassian just let go of 1600 people, but that's one
of however many are going to start to let go of people. So you might see an
increase in unemployment, of course. Then can you pay your mortgage? No, you can't. And then you have exacerbation
of the mortgage and bad debts in the banks go up. I mean, it's just this knock-on effect. It's
crazy what oil can do. And in the 1970s, This
is what happened, but it was much less then. So in the
70s, there was an embargo on oil, where they actually couldn't, it
was a man-made embargo, where oil supply wasn't provided
for the Middle East on purpose. And this
is different. This is like way worse. You
gotta understand this. The Strait of Hormuz is closed. I
would anticipate that oil is gonna go to $250 a barrel soon. Like,
oil was already going to 100 before this saga. It was already mispriced. It
was already undervalued. And now it's going to go to 250. You
think we're going to have some problems at 100, which we are. You wait till it
goes to 250. There's going to be people riding to work on their bicycles.
The impact of productivity is going to get crazy. The impact of cost
to companies is going to go crazy. I think we're seeing the beginnings of a real
shift in the business cycle here. So I don't think
we have seen anywhere remotely close to what's going to happen to oil. Now
what's cool about recording a podcast is you can come back in a year's time and see if
you're accurate. And so far, if I go back for the last few months,
we've been pretty accurate here as to what's going to happen. I smashed Bitcoin
at $127,000. Now it's $67,000. I said
the RBA made a mistake by dropping rates to $30.6. Now they're putting them back up, which they
have. I mentioned oil is going to weigh undervalued at $59,000. Now it's $100,000. Now
it's going to go up. I'm pretty sure it's going to go to $200,000. So
all those things. And now property is coming off the ball. So it's all
the things it's starting to happen, right? So I
think it's going to be worse than the 1970s. Now, in the 70s,
there was a fairly significant stock market collapse. And
it's also where they had to increase interest rates to
15% because inflation went up so fast because of the oil embargo, because
oil is in everything. They had to increase interest rates to
15%, 17% to bring it back down. So think about that for a second. Imagine if inflation
got carried away and went up to 10, 12, 14, 15% and
they had to increase rates to get rid of it. Imagine. What
would that would do to the property market? I mean, it would absolutely decimate
the economy. Now, it's not, with
Australia almost closed, which is worse than the 70s, it's
not a long tail risk anymore. It can happen. In
fact, the statistics are now probably supporting that more than anything else. So
I think the thing you've been waiting for to kind of create the end of the world scenario in
the economy is now starting to happen. So, Again,
we can add into that that AI is now going to start having
an impact on unemployment as well. We could have the perfect storm
of oil shock, coupled with unemployment, with
rate rises, et cetera, and you're having these two big forces or
three big forces acting at the same time. I
don't want to put the fear in you, but oil could hit $200 a barrel. I
know it sounds extreme, but by all accounts, the war in
Iran doesn't seem to be a fast one,
which means the longer the strait is closed, And
the more that Trump jawbones the market by saying, oh, it's gonna drop as
soon as the war's over, that's jawboning the market, right? He's keeping it
artificially low at 100. The longer he does that for, and
the longer the war goes for, the higher the spike and the higher the opportunity
and chances, the higher the chances of $200 oil, okay? Which
means the higher the chances of damage in the economy. Force rate rises, higher
inflation, unemployment, et cetera, et cetera. Drops in equity markets and
wealth markets and the fall in the property sector, okay? it
will be a real problem at 200. But there's already gonna
be problems at 100. So here's
what you need to do. Here's the outcome of this episode, right?
What you'd anticipate to do right now. What the smart people are doing.
Enough of bad news. How do you approach this? How do you digest it? So
here's the truth. Every major financial disruption in history has created more
wealth for more people than ever before. You know, there's an old saying, like,
you get rich in the bear markets. You just don't know about it at the time,
right? So it doesn't have to hurt you. You can be positioned. So here's the
first step. My book, Money Buys Happiness, simplifies investing
and wealth building with practical steps to help you achieve financial peace.
Get your copy via the link in the show notes and let's get your money working for
you. Now back to the episode. Here's the first step. Reduce costs
now. Aggressively now. Now would
be the time for two reasons. One, you either want to be prepared for
higher mortgage rates and unemployment, which would be the a bad case, or
two, you want to be available, you want to be ready for opportunities, right?
I know it sounds boring, cut costs, but it's the foundation of creating extra
cash. It's a buffer, right? Because when inflation and rates go up,
your margin forever shrinks. Facts. Every dollar of unnecessary spending
is a dollar you could be deploying into opportunity or into some
sort of contingency account, right? So that's the first thing.
So cut your subscriptions, cut on dining out, pull
back on that stuff. If you start doing that, you're gonna be part of the
actual reduction in spending, which you're gonna help the inflation rate go
down. So if you do it, that means that RBA doesn't have to increase rates
again. So take ownership of dropping the costs that
you're currently outlaying for things, right? So that's the
first thing. And aim for about $500 a month extra. That's
a good, just a good target. Can you create $500 a month extra?
Just do that. Second thing. The petrol
in your car is obviously gonna cost more. So it doesn't take a genius to
work out that if you can walk and ride places, or
perhaps if you're trading your car in for a hybrid or EV. That's
an immediate gain for you, particularly if you've got a car that's, say, $50,000 or
$60,000, it does diesel. I even said to my wife, should
we just go get an EV now? And she's like, no, we don't need
an EV. And it's fair, we don't. But you might, right? If I was certainly
younger and I was trying to get ahead or I was in a position where I needed
to get ahead, that car that's over there would be sold immediately. because
it takes diesel. And I'll be like, if I can save $200 a
month or $100 a month extra, I'm doing it. If I had to,
I would, right? So if you haven't considered an EV, you
haven't considered riding or taking public transport, now would
be the time. And I think you're gonna see an uptick there because it's the fastest way to save money
when petrol goes through the roof. Fact, right? And this
is the type of decisions you're gonna make, right? The third thing that
I consider that you do is if you're house poor,
And house poor means that you own a property, but
it's making you cashflow poor. So you're asset rich and cashflow poor, and
it's impacting your ability to live your life. That means you're house poor. You have a house and
you're poor. Now, I just wrote a book on this and it's just launched. You may see it floating around.
It's called House Poor. And so if you see it, grab it, because I
talk about this whole notion of people that have positioned themselves to be house poor,
because it's where you shouldn't have got a mortgage. You got FOMO, you went in, and
you bit off more than you can chew, and now you're, you know, you're
drowning effectively in the cash flow, okay? What's cool about that
too with the book is I built this really cool calculator and it
tells you whether you should rent or buy based on exact figures. So
if you get the book, I think there's a bonus here you can grab. Okay, so
if you're someone who is in that position, it's really difficult for me
to say this but if push comes to shove
and you really can't see a way out, Maybe
consider selling the asset. Maybe. It depends on everyone's personal circumstances.
Don't rush out and do it. But truthfully, if you're losing money,
like a lot of cash flow on a property investment, and you can't see
it turning around anytime soon, particularly with rates going up and property markets
settling, or if you're in a home and you know you bit off more than you can chew
in terms of your mortgage, perhaps divesting and finding something of
lower commitment would be more effective. Just consider it. Put
it on the table at least because I think what happens is a lot of people are house poor. They
stay there for a long time because they feel this social stigma
around, well, I let my house go. But if you don't make that decision now, the
bank will make it for you when you don't pay your mortgage for three straight months, right?
It'll be a foreclosure. It does happen. I don't think people realize it happens. It
does happen. Banks put reserves aside for what they call bad
and doubtful debts. And that happened last in 2009, 2010. is
when it happened from the GFC. So it will happen again and maybe this
is what will cause it. So either you revisit it now and make a really
difficult decision or it's forced upon you by the market anyway, but at least put
on the table. But if it's fine and you've got plenty clear, obviously you
keep you out. You don't sell real estate, you just keep it. But unless
it's bleeding you to death. Yes? I hope that makes sense. The next part, number
four, is I want you to reposition your portfolio or consider the
position that it's in, right? Now, that doesn't mean you run out and
buy a ton of oil stocks that already run up, but it might mean that you have more
exposure to energy and resources that typically do
really well, generally, when tech
doesn't. But of course, if you're in an ETF, And if you've been listening
to the show long enough, you'll know that a lay person will
always be better in a broad based index fund or an ETF that
already has these types of companies in it, then you're going
to be better prepared for downturns in the marketplace than just yollowing
into tech stocks in America, right? So if your portfolio is
currently overweight tech, then perhaps start
rebalancing it. And if you go back far enough to an episode I did here on
the show, I specifically explained about
three months ago where I was gonna actually position our portfolio and
I gave you the exact sectors. And lo and behold, they're
up, right? Because you could see it coming. So it's not
too late, but just assess what's happening in your portfolio and
be ready to address it, okay? Those that have Bitcoin and stuff
like that, I have no comment. You shouldn't be in it in the first place, but...
I don't know where to even go with that. But you know, I
think if we hit a credit crisis because of unemployment and other things, and
it's hard to find credit, let's say private equity just dies, you're
going to see a lot of people selling Bitcoin to find fiat currency. Because last time I checked, I
couldn't use Bitcoin to pay my rent, get my groceries, put fuel in the car.
Couldn't. So if you're going to see more people need that, you're going to see Bitcoin sell off
even more, even more, even more, and be ready for it. I'm thinking it's going to happen. So
I don't know if you own it, but I wouldn't be owning it. And with
gold? That should run for a fair while. But again, with gold, you
don't get any income. So I don't know when it's going to run out. It's a Cinderella type asset. I
have no comment on that either. But certainly with your home and
how you position your portfolio, I hope that makes sense with your costs. I
hope it makes sense of what to do now. But the bottom line is to take action. Yeah. like
now's the time before it's forced upon you because we don't
know how long the Strait of Hormuz is going to be closed. It could be closed for a whole flipping
year. You just don't know. You're like, oh it's going to fall. You don't know that.
What if it goes to 200? What if it goes to 300? You just
don't have any idea. What if the Houthis and the Flippin and
the Iranians just keep it closed and they've got all these Flippin mines
throughout the Sea of Hormuz and the United States doesn't need to
open. They don't get any oil from the The straight, none.
They produce all their own oil. They're energy independent. We, on the
other hand, are F-U-K-T because we
import all our oil. In fact, I'll tell you this interesting fact. We
are so stupid in this country, and there's no other word to describe it,
it's just stupidity. Poor leadership. This is
the worst government that's been in power. And let me explain
the stupidity, okay? Buckle up, share
this episode, pop it in the comments how you feel about it. This is how I feel
about it. We're so woke because we're
run by a bunch of Karens in this country at the Senate level, fact,
and poor leadership in men in this country that We
not only don't produce our own energy, we not only
export most of our natural gas and buy it back at a
higher rate, but because
of the woke policies, we said,
well, we won't be buying Russian oil because of what's happening with Ukraine. So
Russian oil is produced at 60, I think it's
$68 a barrel. They then sell it for about $100 a barrel market rate,
okay? Now we could buy it off Russia for, let's
say that. Certainly probably cheaper if we wanted to,
I'm sure. But instead of doing that, we
went work. And what that means is, well, we don't buy oil from
Russia, let's work. We'll buy it
from India. So we buy this Indian oil,
for $127 a barrel, which is 27% higher
than the market rate for oil, currently, of what it sells for.
And guess where India buys it from? Russia.
That's how stupid we are. So our work policies
are making us and forcing us to buy oil at a very high rate because we're
buying Russian oil anyway. It is Russian oil. Just the
Indians bought it and resold it to us because they're smarter than us at business. We're
a bunch of idiots. Oh my God. Anyway, that's how
I feel about that. So, I don't know how long this is going to go for.
It appears that Chris Bowen and the guys in Labor have underestimated
the requirements for fuel reserves. We're already into the
reserves. We've probably got 10 days left. And I know that we're already importing it
from India, because there's a tanker off the coast that's delivering us the oil. We'll get the oil,
but we're going to pay a ton for it. And I think it's a real misstep to
be energy dependent. It is for us. I mean, we are
the most dependent on energy out of all the mature countries and developed
countries in the world. Think about that. Take
that on board, make your financial moves now. Don't wait
because if all goes to 200, 300, you don't wanna be reacting
to it. You wanna be proactive in your finances, okay? So I
hope that makes sense. Take some notes on the four things you should do. Don't wait, act now
because we don't know what's gonna happen, all right? And if you're in Australia, Godspeed.