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My mental model in the war in Iran is the US and the Israeli's are 'in control.' I am wondering if this is accurate today. Iran 'controls' the Straight of Hormuz. The longer they remain in control of the straight, the more their position improves. (Iran simply needs to not lose.) My assumption has been that Trump and Isreal will exit (declare victory) and the war will be over. But what if Iran keeps the Straight of Hormuz closed? It makes no sense to me that Iran would open the straight without a signed deal with the US/Israeli's (the fact that Trump is unreliable - putting it politely - is another fly in the ointment). The current leader of Iran had his father, wife and kid killed by US/Iranian strikes. He knows the US/Israeli's are now actively trying to take him out. How do you negotiate with someone who is actively trying to kill you? My guess is Iran is motivated to inflict pain on the US. How? Keep the straight closed for a couple of months. Oil at $150 (or even $200) will cause inflation expectations to ramp higher - this will cause interest rates to ramp higher. Obviously, the stock market expects this to be a big nothing burger (averages are near all time highs - which is almost always the right call). No idea how this plays out. The Straight of Hormuz has never been shut down before. We are in uncharted waters. What makes this conflict so interesting is the pain it is causing is highly disproportionate. It is barely (so far) impacting the US. It is having a big impact on oil importing countries (Europe, India, Japan etc). And it is having a massive impact on the economies of Gulf countries (who were not consulted before hand). This will likely become a much more important story the longer the straight remains closed. Trump is the master a pivoting when he needs to. I am starting to wonder if he has miscalculated this time. We will find out in the coming weeks and months. Crazy times. There is a reason no previous president has done what the US/Israeli's have just done - the risk of the Straight of Hormuz being closed for an extended period was too high (and the catastrophic impact this would have on the global economy). We are now in uncharted territory. Trump might be about to learn a very hard lesson: wars are very easy to start. And sometimes much more difficult to end. PS: Having said all of that, by base case is this ends up being a big nothing burger for financial markets. But it looks to me like the tail risks are getting larger the longer the straight remains closed.

Strathcona shareholder letter is out. I think it’s really thoughtful and educational if anyone is interested in oil stocks. Greenfire is expected to report tomorrow. Both stocks are very cheap and meaningful positions for Fairfax. Overtime the Adam Waterous lore will grow and the stocks will trade at big premiums vs peers as opposed to the current big discounts. https://www.strathconaresources.com/wp-content/uploads/2026/03/2025-Shareholder-Letter_vFINAL.pdf