Author: Radigan Carter

Translation: Deep Tide TechFlow

Deep Tide Guide: The background of this analysis speaks for itself—the author wrote this four-stage market framework while evacuating his family from Oman and dealing with missile attacks.

He does not attempt to predict outcomes but deduces the most likely middle path: six weeks is the critical point for inflation transmission, July to August is the buying window, and the Federal Reserve will be forced to lower interest rates in September.

This is one of the most information-dense and credible market analyses of the Iranian war to date.

The full text is as follows:

Over the past week, I intermittently completed this analysis while evacuating my wife and dealing with the attacks in Oman. This reflects my current thoughts on how this war will impact the market over the next 6 to 12 months. I am not making predictions; I simply want to outline the most likely middle path so that I can adjust accordingly as the situation evolves.

My goal is always to be like Thucydides: to take my own risks, pursue understanding, and speak the truth clearly. As great powers collide once again, we all feel the weight of uncertainty. My only focus is: as a personal investor, what should I do to protect my family.

I see four stages ahead.

Stage One

Denial. This is where we are now. What we see is the volatility surrounding presidential remarks—markets move based on what he says when they open. Everyone desperately wants to believe this new war in the Middle East will be short-lived. Powell has been assuring everyone that this is not stagflation, all the while watching Israel bomb the South Pars gas field, wishing he could throw his phone away.

Stage Two

If the war continues, the trigger point in mid-April will initiate this phase within six weeks. By the sixth week, the oil price shocks caused by attacks on energy infrastructure will permeate shipping, food, and consumer goods. CPI data will begin to induce panic. Tech stocks will begin to experience real pain as valuation multiples start to contract.

Tech stock valuations should decline—higher energy prices lead to hotter CPI data, which will quash any lingering expectations for Federal Reserve rate cuts. Powell has already started to dampen those hopes; the data from April and May will seal the deal. As long as Israel has a veto over our foreign policy, this situation won't change. Israel is bombing South Pars, while the U.S. allows Russia and Iran to sell oil in the global market, trying to stabilize energy prices.

When Powell extinguishes the last hope of rate cuts this year, the market will erupt. And unlike every sell-off over the past 15 years, I’m not sure I can simply buy the dips and wait for the Fed to lift me up. The inflation we will see is supply-side driven—coming from bombings of gas fields and LNG terminals.

The Federal Reserve has a bunch of useless economists with PhDs and a machine for printing money. They do not have a team of petroleum engineers, nor do they have LNG processing facilities in the basement. The Federal Reserve cannot solve this problem with monetary policy. Thus, tech stock valuations priced in under rate cut expectations will be repriced using interest rates maintained at current levels, and by the time everyone realizes there is no simple escape, everyone will suffer before the summer.

Stage Three

As summer arrives, targeting July to August, companies begin to release earnings reports, and the damage we are witnessing on the ground begins to manifest in real numbers. Corporate earnings will fall short of expectations. Unemployment rates will rise. Against the backdrop of this war, the process of AI replacing workers will only accelerate behind the scenes, as companies need to cut costs to cope with higher energy inputs. Politicians will start to panic before the November midterms.

Stage three is the buying opportunity I anticipate.

Quality picks on my shopping list are likely to appear at meaningful discounts—by then, everyone will be weary of it all, angry about rising costs while job security declines, and demanding action before the fall and midterms. This situation will happen. We have transitioned from cost-cutting to massive asset infusions similar to the Afghan War. The war is not yet three weeks old, costs have already skyrocketed with no signs of slowing, and hundreds of billions are just the beginning. The Federal Reserve will eventually compromise, politicians will ramp up fiscal support, and we will add over a trillion more in debt to pay for Israel's war. Just need to be patient.

Stage Four

By the end of 2026 to 2027. The Federal Reserve compromises and begins to cut rates, and everything bought in stage three starts to pay off. I believe that as we exit this crisis in stage four, there will be a heightened focus on energy independence and energy abundance. Both parties in Congress will sing the same tune. No one wants to be labeled as "hindering the resolution to this pain," because people will have seen firsthand how the disruption of energy markets in one part of the world leads to rising costs everywhere. And this gives them the rationale and cover to cut rates, increase spending, and create jobs.

The Iranian war will underscore the necessity of controlling input factors, and I expect this to be a boon for assets either within the jurisdiction of the United States or at least within the Western Hemisphere. Against this backdrop, AI will only accelerate. Companies facing margin pressure and rising energy and input costs will seek to cut labor costs using AI as much as possible. These are not typically thought of as AI or tech companies, but the increase in productivity will reflect in their margins in 2027 and beyond. Coming out of this war, the story of AI is not just about those building AI but also about those using AI to survive. This is the structural shift I am looking for this summer.

How This War Started

The war has been going on for almost three weeks and I still believe most people underestimate the duration of this conflict. It is not because I am predicting the worst-case scenario—I am trying to focus on the most likely middle path—but because the theological framework driving Iranian decision-making does not respond to the kinds of incentives assumed by Western politicians and commentators.

The Shia tradition is built upon the story of Hussein ibn Ali, the third Shia Imam, who knew he would die in the Battle of Karbala in 680 AD. He faced thousands of enemies with 72 companions and still went to his death. In Shia theology, resisting injustice is an obligation, even when victory seems impossible in a conventional sense. Failure and death are not failures; compromising in the face of overwhelming injustice is the real failure.

The way Israel and the U.S. started this war is like a precise reenactment of the Shia Islamic origin story itself—diplomacy is used as a tool of deception, attacking while the Omani foreign minister announces a diplomatic breakthrough, assassinating Khamenei and his family. Just like Hussein was slaughtered after being promised safe passage.

That is why no matter how many targeted killings Israel conducts—those men who are in residential areas with their families and civilians—Iran will not kneel. The Israelis know this; they do not care. Israel will bomb Tehran until it looks like Gaza, igniting the entire Middle East. They have no regard for chaos. And the U.S.? I know I can’t.

Shia theology reframes suffering as confirmation of walking the path of justice. This goes back to the 7th century when Arab tribes flooded out of the Arabian Peninsula to conquer parts of Roman and Persian territory. The Persians were an ancient civilization who viewed being conquered by Arabs as an injustice, so Shia theology found a natural home in Persian identity.

The notion that Israel and the U.S. could assassinate their leaders, launch a few missiles, and then the Iranians would yield to foreign powers—after all, their entire history has precisely been built upon resisting foreign powers for thousands of years—is absurd. We remain tragically ignorant of the entities we want to go to war with, learning nothing from the failures of the global war on terror and the war in Ukraine, yet relinquish veto power over foreign policy to psychopaths.

The Current Situation

Now on day 20, the conflict has crossed the threshold of stage two, where energy costs penetrate the supply chain.

Yesterday, Israel attacked Iran’s South Pars gas field, the largest gas field in the world. Iran retaliated, seriously damaging Qatar's Ras Laffan LNG facility, which is also the largest in the world. Qatar Energy has declared force majeure on gas exports and has shut down gas liquefaction production. Qatar accounts for about 20% of global LNG trade, with over 80% of the cargoes flowing to Japan, South Korea, China, and Taiwan. These supplies are now offline, and recovery may take years. Israel's Bazan refinery in Haifa, which supplies 65% of Israel's diesel and 59% of its gasoline, has also been hit, as well as other energy infrastructures in the Gulf region.

Regarding Qatar, I worked in the Ras Laffan Industrial City for five years, dealing with the pre-commissioning of LNG facilities. Qatar Energy (which was called Qatar Gas when I worked there) is vertically integrated. They control everything from offshore gas fields to LNG processing facilities to export terminals to the LNG tanker fleet.

These LNG processing facilities are behemoths. Twenty years ago during construction, 250,000 workers reported to work in the heat of that industrial city every morning, with the processing facilities under construction resembling a forest of cranes. Starting these facilities, especially after damages, requires repairs, inspections, and systematic re-commissioning—they are not quick processes. These gas processing facilities are like small cities, costing tens of billions, with intricate systems, where certain components are custom orders, and delivery times can stretch into years.

Once missiles and Shahed 136 suicide drones fly into these facilities, causing major and minor fragmentation damage along with fires and shockwaves from explosions, you must meticulously inspect these systems before they can be phased back into operation. Certain systems operate under extremely high pressure, and if a damaged point is overlooked, it could lead to catastrophic failure.

If any custom long-lead parts are damaged, you may have to wait months or even longer—for new containers to be manufactured in China or Korea, transported, unloaded at the docks, and then escorted into place by Mammoet’s heavy-lift crews.

I had hoped the damage in Ras Laffan wouldn’t be so severe and could be repaired within months instead of years. But unfortunately, it seems that is not the case.

This will have immediate ripple effects on other industries. Qatar’s offshore natural gas has high sulfur content and Qatar Energy extracts liquid hot sulfur from the gas, producing sulfur granules, which are then shipped out for use in the production of fertilizers, chemicals, cement, refined products, and more. Once LNG is offline, it will start triggering other cascading effects, and I am not yet fully certain about the second- and third-order impacts. The only thing that is certain is: if this situation persists long enough, the global economy will start to have problems in ways that are unexpected.

As Charles Gave said, the economy is a transformation of energy. As the energy the world relies on goes offline and remains offline, countries will scramble to seek other energy imports. Middle Eastern energy producers going offline will lead to rising global energy prices. This might be good for American energy exporters, but over time, higher energy costs will be passed on to consumers, and businesses unable to obtain energy at higher prices will shut down capacity and lay off workers.

Figure: On the path to inflationary collapse

The Hormuz Crisis

In addition to striking energy infrastructure, the conflict is also spreading regionally. Israel is invading southern Lebanon, causing around 1,000 deaths and displacing nearly a million people. Iraq’s Popular Mobilization Forces—Shia militia groups supported by Iran, which played a significant role in fighting ISIS in 2016—are now in the fray, attacking U.S. facilities in Iraq, Saudi Arabia, Kuwait, and Jordan. This has forced the U.S. to withdraw and redeploy personnel from the region, further weakening the military's ability to maintain operations there.

I have crossed the Strait of Hormuz by boat multiple times and previously wrote an article about the strait.

Since the outbreak of the war, more than 20 vessels have been attacked. The Islamic Revolutionary Guard Corps has conducted 50 operations against U.S. bases in the region. My understanding of this is that from Adana in southern Turkey, down through Israel, extending eastward, encompassing Lebanon, Syria, Iraq, the Arabian Peninsula, the Persian Gulf, and the Arabian Sea, the entire region is under Iranian fire control.

If we include the Houthis in Yemen, then when the Houthis begin to attack shipping in the Red Sea, global shipping and energy trade will be cleaved in two. Historical analogies include: the Ottoman Empire closing the Silk Road, the impact on the global economy during the summer of 1914 when World War I broke out, and the 1956 Suez Crisis showcasing that the British Empire had come to an end. That is why I believe that after exiting this crisis in stage four, investors will reassess their holdings and seriously consider the issues revealed by this war. Many may conclude: profits are nice, but is the asset safe, and in which jurisdiction is it located? Assets that do not require passage through perilous chokepoints to reach terminal markets, considered to be in safer jurisdictions, may command a premium. The outcomes of this conflict are significant.

Climbing the Ladder of Escalation

Some have asked why, given that Iran has fire control over the strait, the U.S. is not targeting life support infrastructure. After targeted killings have already occurred, regional spread of conflict and current attacks on energy producers, further escalation, regardless of how White House interns package this war as a video game and put out repulsive promotional videos, is not something to be taken lightly.

Unfortunately, we have already been attacking life support infrastructure. On the 7th day of the conflict, the U.S. struck a desalination plant on Iran’s Geshm Island, which guards the Strait of Hormuz. This island has geological conditions that allow for numerous natural caves; the Islamic Revolutionary Guard Corps has been improving and fortifying underground facilities there for decades.

The next day, Iran retaliated with an equivalent escalation, deploying attack drones to strike a desalination plant in Bahrain. Kuwait and the UAE have also reported damage related to missile strikes on desalination plants. Losing desalination facilities is a life-and-death threat for Gulf states and Israel. As summer approaches with temperatures reaching 46 degrees Celsius, interruptions to drinking water and electricity could trigger a humanitarian crisis with the real risk of fatalities.

Over 90% of desalinated water in the Gulf region comes from just 56 plants. In Kuwait and Bahrain, desalinated water accounts for about 90% of national water supply. In Oman, this ratio is 86%, in Israel it is 80%, in Saudi Arabia it is 70%, and in the UAE it is 42%.

If the U.S. and Israel continue to target life support infrastructure, Iran will retaliate. As air defense interception capacities dwindle, striking these facilities will become increasingly easy, revealing the asymmetrical vulnerability of Gulf states and Israel. Approximately 64 million people in the region could be affected. This will trigger a humanitarian and refugee crisis that dwarfs the Syrian civil war, having profound impacts on Europe and Turkey.

Oil built the modern Middle East, but desalination water sustains life. In this war, Iran has the escalation dominance in both areas. The United States needs energy to continuously flow out of the Persian Gulf to maintain stability in the global market, and the region cannot afford to lose desalination plants. Israel may continue to climb the ladder of escalation, but will inevitably reach a tipping point where Iran will strike their desalination plants.

Stage Two: The Logic of the Six-Week Trigger Point

So far, everything that has happened belongs to stage one—where we currently are, why neither side can back down, and why the conflict is likely to persist. But Trump might announce a glorious victory on Truth Social tomorrow, saying the war is over and he struck a magnificent deal—even if the details aren't true.

Whether the Strait of Hormuz remains under Iranian control is irrelevant; the U.S. has experienced its own Suez moment, which has longer-term implications, but that's another matter. In this case, what matters is whether higher energy costs can propagate swiftly to other sectors of the supply chain, which would nullify this entire analysis.

As I contemplated, I asked myself one question: when has it become irrelevant what is said or what agreements are announced, because higher energy prices are already flowing through the system and cannot be stopped?

Six weeks, that is the trigger point I derived. By the sixth week, the period of denial will have ended. Nothing will remain unaffected; this war is not a 20-minute escapade, and the inflation data from April and May will reflect the substantial damage already inflicted.

Figure: Every neoconservative is talking about the Middle East

This is how I derived the six-week trigger point:

From weeks one to two, we see oil product price adjustments already. Gasoline and diesel are being repriced at gas stations. We’re starting to see shortages in more vulnerable countries. Oil is up about 40% compared to pre-war levels.

From weeks three to four, which is the stage we are in now. As carriers reprice based on new fuel costs, freight and logistics costs start to adjust. February's PPI data was 0.7%, while the expectation was 0.3%, which is the early marginal signal for this stage; the inflation data in April will be worse as costs continue to permeate the system.

From weeks five to eight, the first two weeks of freight and logistics cost increases flow into consumer goods, as costs are passed on to consumers. Food, building materials, and manufactured goods are all being repriced, as the overall inflation from the previous month in fuel and freight costs reaches the consumer level.

By the sixth week, higher costs have reached consumers; it doesn’t matter if the conflict stops, as higher prices have already formed, especially after energy producers have gone offline—what comes next is simply waiting for stages three and four to unfold in summer and fall.

Six weeks prior, a ceasefire could resolve most of the damage since contracts hadn’t fully rolled over yet; businesses could revert to previous pricing, and the Federal Reserve could lower rates. Everything could be fine—at least theoretically. Yet, given the assaults on energy infrastructure and supply disruptions like Qatar gas offline for the foreseeable future, my assessment may contain inaccuracies.

Six weeks later, regardless of a ceasefire, there’s no rolling back what has already flowed through the pipeline. Repricing has happened; the CPI data for May and June will reflect the damages, irrespective of what occurs in Iran.

CPI data will extinguish the last flicker of rate cut hopes this year that Powell—who claims he is not worried about stagflation—has, maintaining interest rates at present levels. This will lead to a contraction in tech margins, and the market will not be pleased. As this war drags on, no one will be happy.

Stage Three: A Long Summer with AI

This summer, my plan is to go to the beach and the gym to maintain patience, and then at the end of summer, begin to seriously assess where the situation stands. By August, we should start seeing corporate earnings reports indicating the damage we are currently observing on the ground. Meanwhile, AI will continue to accelerate behind the scenes as companies seek to cut costs under higher energy input pressures.

Companies have been deploying AI instead of hiring, and now we are adding the layer of a stagflationary energy shock on top of that. It doesn’t take a rocket scientist to realize that a company facing margin compression from $95 oil prices will do everything possible to replace employees with AI tools when it needs to cut costs. This is no longer about innovative initiatives but about survival.

AI adoption will accelerate in downturns as it becomes the obvious means of cost reduction.

The cruel paradox is that this works very well for individual companies while simultaneously destroying aggregate demand. It will eliminate the income that workers would have spent, and I am uncertain what it means for creditors—those who previously thought they held gold-level investments.

Likewise, I am unsure about its impact on colleagues—they will become uncertain about their prospects and cut unnecessary spending, especially in the context of rising commodity costs driven by energy input increases.

So if we see prices rise from the energy shock while job deterioration speeds up faster than any historical models predict—because AI replacement is compounding and amplifying cyclical downturns—I will not be surprised.

This is what I think is the most important point regarding timing.

The Federal Reserve’s employment mandate will be triggered sooner than anyone expects. Not just because of the war, but because AI has structurally amplified unemployment behind the scenes. This will compress the entire timeline, pointing toward a rate cut in September.

The Federal Reserve will find itself in a bind: inflation they cannot combat, along with deteriorating employment. They will remain inactivity throughout summer and then cut rates in September due to midterm election pressures.

Stock prices in the AI and tech sectors will decline due to compression of multiples and slowing corporate revenues in this environment. But the narrative will actually become stronger. Companies that adopted AI are the ones that will survive the downturn, while those that didn’t will be the ones that collapse. So when stocks are at their cheapest, the long-term argument becomes the most compelling. This is why I want to be patient in stage three and buy those tech and research companies that will leverage AI to navigate the crisis.

After stage four, people will look back and say: I should have definitely bought that copper mining company, which was crushed because no sulfur was flowing out of Hormuz, but they turned 30 tons of dump trucks into autonomous vehicles and now they’re printing money because both parties in Congress believe in energy independence!

The Midterms

The Fed, the White House, and Congress all have different mandates, but they face the same date—November. No incumbent wants to confront voters during stagflation without a policy response. No Federal Reserve chair wants to be seen as sitting on their hands while the economy worsens.

This consistency breaks the stalemate. The Fed will signal in August at the Jackson Hole conference for a rate cut in September, and every politician will have something they can campaign on: "We took action."

The market will react 4 to 6 weeks in advance, which means that July to August is when I will seriously consider starting to build positions—if the six-week threshold is triggered and the war continues. And the AI-driven worsening of employment effectively helps this timeline. It provides the Fed with political cover to cut rates even if inflation pressures persist because they can frame it as an employment emergency rather than a policy capitulation.

Outlook for 2027

The theme of energy independence emerging from this crisis will be tremendous and bipartisan, much like defense spending in the global war on terror, but aimed at energy. The higher energy prices and related cost shocks resulting from this war after they impact consumers will position energy independence as the dominant political narrative, transcending party lines from 2026 to 2027.

This war, with mutual bombings of South Pars, Qatar LNG terminals, and Saudi refineries, makes the vulnerabilities undeniable. Every politician will campaign on “Never rely on the Middle East again.” Both parties in Congress will push for more infrastructure spending, as well as expanded drilling, approval reforms, nuclear energy, and clean energy.

I continually remind myself of the most important thing: I am not trying to predict; I am just trying to adapt. If a real peace agreement emerges—not just Trump tweeting that it’s over, but a genuine cessation of hostilities, reopening of Hormuz, re-engagement of insurance markets, and Iran having a negotiating counterpart capable of executing compliance—then I will pivot.

But honestly, as Larry Jani is killed and Israel continues to assassinate anyone we could negotiate with, that hope fades daily.

This is my current framework for thought. Not a prediction, just a framework that can adapt and adjust as the situation unfolds.