Amidst heightened tensions resulting from the (suspicious) attacks on a pair of tankers in the Gulf of Oman (near the Straits of Hormuz); the markets nevertheless held together, and not particularly due to limited Oil strength. I have contended for a couple years now that the USA already achieved our long-held goal of 'energy independence'. The limited move of Oil amidst the (potential) crisis proves this contention; regardless of speculation about Iran as the triggering party to this (apparent simultaneous strike).  

Late today it's being reported (by CBS News), that not only did a US Navy vessel see an Iranian patrol boat approach a burning tanker, and remove a 'magnetic mine' from the side of its hull, but took a video of that behavior. It is essentially 'as if' they were trying to remove the evidence to enable their government to continue the facade of 'plausible deniability', and appears to be the 'intelligence' that Sec'y. Pompeo was referring to in his remarks.    

In recent months I've mentioned that the United State had evolved (partially a result of Permian Basin and shale oil exploration and secondary recovery) to become the 'swing producer' of Crude Oil in the world. It's why I pointed out that the usual 'follow the money / follow the oil' analogs don't impact like they formerly did; because the U.S. didn't have a stake in the Iran vs. Saudi issues to the extent proclaimed; although that doesn't mean we're not really involved; because (like it or not), the U.S. has a serious stake in all of it. 

That of course illuminates the topic from both a political and strategic point of view. That part is interesting because China, Taiwan and Japan surely are not energy independent; and the United States isn't 'yet' set-up to provide a level of petroleum or related exports to entirely offset Mideast dependency.  

So that begs the question as to whether any action by the US really focuses on protecting the flow of Oil (and LNG etc.) to our Allies (and by inference it becomes the USA protecting Oil flowing to China too; consider them some sort of mixed 'frienemy' as one might). This politically goes beyond 'conflict fears' and delves into the politics of the US 'policing' the world to protect the oil supplies; which obviously goes beyond keep 'shipping lanes open' for the global trade environment.  

It won't go unnoticed by the Chinese (with a Navy that is growing but not yet really projecting power) that, even if they disdain this, they are dependent a bit on US Navy shipping protection. Does this work toward U.S. interests in the run-up ahead of G20 meetings with Trump and China's Xi. That matters more, indirectly, than Iran's threat to inflict pain on the U.S. for sanctions.

So sure, we're in a situation with Iran (presuming they did it; and culpability is increasingly clear); but a point (no matter who did it) is made upon China and the focus on Oil exports that 'are' feasible from the USA to Asia. That's the focus we think is being missed aside the obvious economic war with the horrible regime in Tehran; but also with our support of the horrible regime in Riyadh not far in the background.   

Bits and Bytes - the larger macro companies were and are being hit; so some of the provider softness likely anticipates lower parts demand resulting partially from the ongoing trade conflict. Companies like Advanced Micro Devices (AMD), our mainstream stock-of-the-year, instead has doubled. In that case it's been 'ripping' on the AI development, which is largely (and competitively powered by) companies like AMD. It has now doubled from our 16-17 buy zone last Fall; and we'd not buy more of course; although envision it (along with lots of others as they digest the ramifications that hit the chip sector) at a higher level. I decided upon AMD at IFA last September; but at half-price, and got that in December. Now it's essentially a hold for the longer-term. 

P.S. Two developments today increase prospects for advanced technology projects in Florida; which may pull more start-ups to the area besides space and medically-related projects. One is the Governor signing a Bill that (really surprised it got through a conservative State legislature) allows 'driver-less' autonomous vehicle testing. That includes urban and highway roads; and no driver 'or' passenger is required. This may be the first no-human-occupant testing of this type, and apparently allowed State-wide. Also ribbon-cutting near Lakeland, for the largest specially-designed autonomous driving 'test track' (presumed before vehicles are let-loose on the roads).   

In sum: The minefields out there extend beyond the Middle East. However if there is an 'upside' to the near-sinking of two huge tankers, it's recognition a revitalized United States can provide both security and 'product' to a world that is still energy hungry; even if demand is lower at the moment; and/or a transition to alternative energy is underway (it is and that's a process).  

Ironically, although the United States is supplying weapons to Saudi Arabia (a controversial relationship itself; as I listened uncomfortably to an Ass't. Secretary of Defense providing illogical justification to a House Hearing on CSPAN); it's contrary to President Trump's desire to disengage from a lot of global 'policing' responsibilities. The reality is the words change; but overall the defensive / protective role of the US Navy in all this, has not changed at the same time an event like this provides evidence to others of their need to have shipping protected. (Notably nobody seemed to spot threatening naval or other risky activity near the wounded tankers until their distress calls.)  

Bottom-line: the general security aspect 'and' awareness of now-achieved 'swing producer' status for the U.S. matters both as a counter to OPEC and as 'competition' to Russia (especially for Natural Gas); but also may serve a bit to expand links between China and Russia; 'in theory' better-positioned for delivery of Oil to China, if they want to invest in the delivery means. That is not the case for the moment; although their bilateral trade deal intends it. I presume financial media focused on this aspect of the China & Russia deal.

Conclusion: If you view the OPEC cartel as an Empire; then that 'empire has no clothes'. While all the oil producing countries could be suspected for a diversion to support sagging oil prices, this backfires on the attacker (Iran if the Secretary of State's presumptions are validated) and everyone else in the region; while bolstering both Russian and American developments that are intended to fill any void from OPEC by providing Oil to the Far East. It's also a clear indication of American primacy in Oil & Gas, as well as being at this point the 'swing producer' of Crude Oil.  

Aside this escalating Persian Gulf tension; the FOMC and 'China trade deal' (and add to that the G20 meeting possibly with Russia's Putin) alone have a market somewhat on tenterhooks at a comparatively high level. Discretion is the better part of valor; and there is no compelling reason to buy big stocks, in general, with everything looming; and essentially on-top of a prior rally. 

Next week: the concern is whether the Fed's 'pushing on a string'.