#319 - WARNING! This Oil Shock Is Going To Destroy Australians

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.