Kevin O’Leary urges Americans panicking about Trump, oil and Iran to chill out: ‘History being made.’ How to pounce on the ‘huge’ opportunity now

"To affect the U.S. economy, you need oil — I’m talking about recession talk, or hurting the economy or damaging small business — you need oil at above $93 for three months,” said the Shark Tank host (3). “We're only one third into it, so everybody chillax and let this thing play out."

If the conflict can be resolved quickly, O’Leary suggested it could create “huge” opportunities for everyone, including America’s allies in Asia and the Middle East. “It’s history being made,” he said.

Unfortunately, industry experts and representatives of America’s allies in the Middle East paint a very different picture. Here’s why ordinary Americans should get prepared instead of taking O’Leary’s advice to just “chillax.”

Prolonged impact, even if ‘the war stops tomorrow’

Oil prices are notoriously volatile and difficult to predict. However, a wide range of experts seem to agree on one potential outcome: higher prices for a longer period of time.

That’s likely due to the fact that Iran has not only closed the Strait of Hormuz, it’s also damaged dozens of refineries, oil fields, gas plants and ports with drones and missiles, as Bloomberg reports (4).

This infrastructure damage, according to HedgeEye Risk Management Energy Analyst Fernando Valle, “can’t be easily reversed.”

“It’s going to be a long-lasting effect even if the war stops tomorrow,” Valle said in a Yahoo Finance interview on March 17 (5). “It’s not as easy as flipping a switch to produce oil again.”

The head of the International Energy Agency, Fatih Birol, echoed these concerns in late March in an interview with CNBC (6). As many as 40 energy assets across nine countries have been “severely or very severely” damaged, he said, and the resulting oil shock could be as big as both of the major oil crises of the 1970s, plus the 2022 gas crisis “put together.”

The view that the conflict will be resolved quickly and the global economy will go back to normal is “overly optimistic,” European Central Bank President Christine Lagarde told The Economist (7).

“Maybe they are overly optimistic, and determined to stay optimistic, in the hope that a positive scenario will materialize and we will be back to normal in a relatively short time. Which is not what the technical experts are telling us in terms of capacity, extraction, refinery, distribution, because too much has already been damaged and there’s no way that it can be restored in a matter of months,” Lagarde said. “Most people are actually talking about years.”

Senior officials from Saudi Arabia also told the Wall Street Journal that crude oil prices could surge to $180 a barrel if the conflict continues past April (8), adding that this elevated price could trigger a global recession.

Making matters worse, the war in Iran seems to be escalating instead of heading for a quick resolution. Houthi rebels reportedly joined the battle on March 28, which could threaten the Bab el-Mandeb strait on the Red Sea, another chokepoint for Middle Eastern energy (9).

Meanwhile, the New York Times reports the U.S. has assembled more than 50,000 troops in the region, potentially setting the stage for a ground invasion (10).

What you can do to protect your finances

In this environment, neither panic nor complacency are good investment strategies. Instead, you should move to protect your finances and consider some exposure to energy stocks and ETFs.