Motley Fool Hidden Gems Investing - Is The Oil Crisis Over? Or Is It Just Beginning?

Episode Date: July 1, 2026

Oil prices have plunged in recent weeks as the war in Iran appears to be coming to a halt. But why did predictions of $200 oil never materialize? We discuss the underlying dynamics. We also covered a new stablecoin that could be disruptive to payments and why Nike’s comeback is stalling out. Travis Hoium, Lou Whiteman, and Tyler Crowe discuss: - Why Oil Prices Are Dropping - Did China Prevent an Energy Crisis? - The New Open USD Stablecoin - Are Stablecoins Disruptive? - Nike’s Earnings - Can Nike Make a Comeback? Companies discussed: Nike (NKE), Visa (V), Mastercard (MA). Host: Travis Hoium Guests: Lou Whiteman, Tyler Crowe Engineer: Dan Boyd Disclosure: Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, “TMF”) do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement. We’re committed to transparency: All personal opinions in advertisements from Fools are their own. The product advertised in this episode was loaned to TMF and was returned after a test period or the product advertised in this episode was purchased by TMF. Advertiser has paid for the sponsorship of this episode. Learn more about your ad choices. Visit ⁠⁠⁠megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

Is Nike coming back into fashion? Motley Fool Hidden Gems Investing starts now. Welcome to Motley Fool Hidden Gems Investing. I'm Travis Hoy. I'm joined today by Lou Whiteman and our special guest, Tyler Crow. Guys, we're going to get to Nike. Nike stock was down pretty big after the market closed yesterday after they reported earnings. And now it's shockingly up today. We'll get to that a little bit later. But I wanted to start with an area of the market that We don't talk about all that much, but it's actually a huge deal for consumers, for the economy overall, and that's oil. And Tyler, this is a commodity that we thought was going to be a huge problem for the economy

by this time in 2026, when the Strait of Hormuz closed, we were supposed to have $200 barrels of oil. Oil's still up for the year, up about 20% for the year, but we're down to about $70 a barrel for West Texas Intermediate. what what is going on with the oil market is the fear did that just never materialize into the economic concerns that we thought they were going to and is this whole thing over well i mean talk about a loaded question here i i think one of the things with the the initial fears so much of this was basically this you know for a lot of commodity traders this was considered the doomsday scenario

But what some of the things that ended up happening were, you know, with a lot of investing decisions and major global geopolitical reactions, there was a lot of like second or third order, like a knock on effects that sort of affected this in some sort of ways. for one like we started this war or conflict however you want to label it with this with this closure of the strait of hormuz where not too long after it was like oh we're going to open it back up either we're going to open it up by force we're going to start negotiating and then there's just been this tit or tat it seems like for two or three months now of you know negotiations have started negotiations are we're going to open it and there's been a lot of like okay this is temporary we can get through this. And as we came into the crisis, there was actually quite a bit of surplus oil on the market, like we were actually oversupplied relative to demand in the

market. So we were in a kind of a position of strength on the market. And at the same time, there was a lot of unprecedented changes that we saw. Yeah, I mean, over this period so far, about 1.3 billion barrels have been drawn down from strategic petroleum reserves around the world, whether in the U.S., in Europe, Japan. And, you know, that's been a major buffer for this. And not to mention what China has done as well, because demand imports from there have also fallen off a cliff. But isn't that kind of like a Band-Aid for the market? Maybe a lot. This is the really hard thing to say, because one of the things that is not necessarily known is how much oil in storage or how much does China have? You know, there are some what they call

floating tank storages where that you can actually monitor and that's been like you know using satellite imagery data people have been able to do this because obviously china does not publish their strategic petroleum reserves but they also have these massive underground caverns that nobody really knows is how much is in there at any given moment and so it's been using those as a massive drawdown and they were reducing their total amount of imports at the time at about five million barrels per day. And so when you started thinking about a 13 million barrel per day gap that was leaving the Strait of Hormuz, taking five out was a huge chunk. And you start adding in SPR releases, you saw demands destruction, other parts of the world. It has somewhat deflected the blow

that I think a lot of people had seen so far. Lou, I remember talking about this a few months ago. And one of the things that we talked about was you just don't know what the second and third order effects were. And we were talking about that in a negative way. But it seems like the market has been I think the word that you were used was resilient in ways that we maybe didn't anticipate. Yeah, certainly. I think we've learned that maybe we have evolved some on oil, but I just underline what Tyler said. China is the most interesting story here. And China probably saved us all a ton. As Tyler said, fortunately, we were a wash in oil going in, which made it easier. But something weird and we may never know. I mean,

but my pet theory is with China is that they have been building a bigger stockpile than we realized for a long time simply because they wanted, you know, if mischief happened in Taiwan or something or if they were cut off, you know, just to have it. And they decided it was not their best interest as exporters to see the global economy crash. So it wasn't really benevolent, but they had the oil and they decided not to draw the oil so others could. Look, the big takeaway here is we can survive these things, but I don't know if we want to press our luck and try it again. I want to get out of here on this from both of you quickly. If this conflict with Iran, on the Strait of Hormuz, if oil is not flowing the way that it normally does over the next six

months, let's say through the end of this year, Tyler, I'll start with you. Do you think we can keep oil prices the way that they are? Are we going to, are these what I call band-aids just going to, there's only so much strategic petroleum reserve that you can, you can pull out of it and eventually we're undersupplied overall and that's going to impact prices or, or is that not the right way to think about it six months i think we might be pushing i mean we're i think four months into it now and there it is strained let's not take away from the fact that like spr releases have been patching things together we can't do this you know forever forever and also take into mind into account too that you know russia has also significantly lost

a lot of refining and export capacity recently because of its conflict with ukraine so there are some other things that are kind of knocking on here if we were to you know go for another six months that would be a little bit harder to do now on that band-aid sort of situation you're also seeing for example uh the uae is starting to build pipelines so they can actually you know circumvent the stratiform moves i can't really build one and a port in six months but there does seem to be some momentum towards ways to circumvent the existing bottlenecks. And maybe over the six months it wouldn't happen. But I think over the next couple of years, we're going to probably end up building a slightly more resilient system that can absorb these shocks even better than

before. When we come back, we're going to get to a new stable coin in the market. You're listening to Motley Fool Hidden Gems Investing. Welcome back to Motley Fool Hidden Gems Investing. Move over, Tether and USD, a new stable coin is here. OpenUSD is out. It has the support of a massive number of institutions. Lou, this is why I wanted to bring this to you. I know that you've been questioning the future of stable coins, but Visa, Stripe, MasterCard, BlackRock, BYN, Google, IBM, Solana,

all of these companies, there's a list of about 100 companies that are going to be adopting this stablecoin. Is this finally this disruption to payments that we've been promised from the blockchain over the past five or 10 years? I think it's disruptive for every other stablecoin. I don't know if it's disruptive for anyone else. Inevitably, most of the money

is going to gravitate towards one stablecoin or a couple of stablecoins if it goes anywhere at all. If this is where the cool kids are playing, this is where everyone will go. So if you were trying to compete against this stablecoin, all of these partners definitely puts you at a disadvantage. As far as the consumer goes, I don't see this as anything at all to worry about. Behind the scenes on the enterprise side of it, there is the potential here to make existing

payment flows more efficient. I know everyone always talks about how that was going to tear down Visa and MasterCard. It's going to destroy these plump margins they get. I think more likely is they adopt these tools, they grow more efficient, they lower their fees, but keep margins intact. Never underestimate the power of inertia in finance, especially among these big players. The house usually wins. I think this might end up with lower fees everywhere, but I think Visa and MasterCard will be just fine. Tyler, what do you think? Is it really disruption if every major existing player in a system is implementing it?

it well let me make that let me make the case for this because i i've been watching this for a while and one of the things if you've ever run a business and you paid the three percent credit card fees that's a massive fee like a restaurant for example the credit card fees are about the same as the profitability of a really good restaurant so you're you're you're basically you could double your profits if you just didn't have to pay those fees the potential fee reduction is real. And the example that I always point to is Stripe accepts USDC stable coins on their platform. It's just a digital transfer, just like using your credit card. But they charge about 1.5% as opposed to 2.9% for using credit cards. So that, if it is implemented, could potentially

be disruptive to someone in that ecosystem. Now, is that Visa and MasterCard? Is it the banks who are actually taking a big chunk of that. I don't know that we necessarily know the final answer to that, but I know that merchants would love to pay a 1.5% fee instead of a 2.9% fee. So that's potentially the case for this consortium at least moving in that direction, a potentially more efficient way of moving money around. And that will at least change who's got their fingers in a pie. That's fair. But I guess when I'm thinking of disruption, I'm thinking of, you know, tackling the institutions that have built up the, you know, whatever problem this happens to be solving. And when I look at this, it's like, well, you know, stable coins, payment processing,

this was supposed to, you know, upend like the Visa and MasterCards and all that. When if they're all implementing it, it's, I don't know, it almost feels like we're the Basel rules coming out of the financial crisis a disruption to the banks or is it kind of like standard protocol that everyone adopted and you know for the for better or worse change the way they do that yeah and this really does feel a little bit more like entrenchment of the existing systems because now you know who does uh for example in this you know crypto world who we are in you know think of circle or think of any or tether with any of the other stable coins. Like, what is their case?

It seems like they're just disrupting the disruptors, I guess, as if you will, because it's, you know, taking something that was sort of starting to gain traction, but then immediate was like every major entrenched institution is basically playing a better version of your own game.

So I'm team Tyler here. Maybe with semantics, we're talking about words, but disruption means incumbents fall. And I think incumbents get stronger here. Maybe there is a benefit for retail and maybe, you know, that that's if anything, if Visa and MasterCard can find a technology that allows them to keep their margins, but shut up all these critics that are always complaining about their high, high fees, that's a win for them.

I think the incumbents win here. The technology may change. There may be a little benefit for the restaurants, retailers, but Visa and MasterCard, the idea that you should sell these stocks because technology that they can adopt to is coming. That's to me, I don't get that. The interesting thing to watch will be how does this change under the hood?

And that fee structure, Visa and MasterCard actually don't take a huge percentage of that 2.9% that I talked about. They take a pretty small cut. The bigger cut goes to banks. And ultimately, in a lot of cases, comes back to consumers with the cash back that you may have with your credit card.

So is that something that consumers would be willing to adopt? Hey, instead of having that surcharge on your restaurant of 3% or 4% on your bill, you'll have a little bit less in money back. I don't know. That is changing consumer behavior that I don't know that we're necessarily ready for yet. But definitely something to watch given all of the huge names that are involved here in adopting this new stable coin.

When we come back, we're going to get to Nike's earnings and why the stock is maybe up today. You're listening to Motley Fool hidden gems investing. Welcome back to Motley Fool hidden gems investing. Nike's earnings are out. They on the surface don't really look all that good on a reported basis. Revenue was flat on a currency neutral basis. It was actually down direct to consumer sales down 7%. But Lou, the stock is up about 2% today. So what should we be taking from this earnings report. And mind you, still down 35 percent for the year, which I think is a bigger. Yeah, it has not been a good run. But look, I got to be honest with you. I don't think these were great results. If you are a Nike shareholder, I don't think there's much to

celebrate here. They did beat expectations. So you have that headline there. But the bad news is expectations were rock bottom. Nobody was expecting much coming in here. And even the good news was bad news if you look under the hood. They earned 72 cents per share, but 52 cents of that was related to tariff recovery. Same story with gross margins. Improved by 890 basis points. That includes 900 basis points of margin benefits. So margins would have been down without tariffs. Sales were down across the board, down in China. Look, this is not a company where individual quarters matter. What we need to see is that there is a turnaround in place. And I don't know how you can read this and say anything other than if there is a turnaround going on, we are very, very,

very early here. Something happened within the most couple most recent weeks that actually wasn't anything related to Nike, but I think it's emblematic to some of the troubles or challenges that we've seen with Nike. Steph Curry signed a 10 year shoe deal with Li Ning, which is a Chinese footwear company. He was, you know, a free agent after he left Under Armour. And, you know, look, I get it that like maybe Steph Curry isn't like the newest hot thing in the NBA right now, but his this past year in 2026, he was still the top selling jersey in all the NBA. So whatever brand he has, it still carries a lot of weight. And the fact that Nike with this, you know, Elliott Hills win now effort and being obsessed with sport and athletes, I find it kind of strange that it couldn't land Curry. I feel that like that's like emblematic of the challenges that it's been having, trying to, you know, meet the customer where it wants to be and all that stuff.

And look, I've done my best to help Nike. I have bought so many Paris Saint-Germain kits lately. I, you know, I think they should actually be highlighting me in the conference call. That would be a really nice call out for you. the thing that i wanted to just ask quickly as we round things up here is is this a company that even can turn it around at this point uh tyler i want you to go first yes and no and that's like the weird disparity in their business because if you look like at the north america numbers it's actually doing surprisingly well like uh wholesale numbers were up double digits year

over year for North America. The challenge is China. And this has not just been like a one-time thing. They saw a 17% decline in retail sales quarter over quarter. And I saw this on a substack from the Science of Hitting, who's been tracking Nike for a long time. Nike's sales in China are down 30% over the past five years. It's gone from what was a structural tailwind for them for many years into a headwind. And I, I struggle to see when that, you know, decline reverses course. Yeah. Great brand. Can they turn it around as in, can they go up from here? Yes. Because the brand isn't going anywhere. Can they get back to their heyday? No. Like Tyler said, it's a much more international market. Instagram influencers have made, you really just need one

person on Instagram to promote a brand, not just the way they used to throw money and feel ubiquitous. That doesn't work anymore. The Nike of my childhood is never coming back. I do think it's possible that thanks to the brand, they can get their house together with how they do sales and grow from here. The challenge for me as an investor is that, will that equal market beating returns i'm very much on the on the fence about that yeah it's one of those stocks that people always are making the argument that it's a great value and you do need to look at the underlying businesses and are the long-term trends in their favor one of the things that i look at as you know i have little kids and we're buying shoes is nike is now kind of a discount

brand that's not the way that it was when i was a kid and you were going in buying jordans and they were you know twice as expensive as every other shoe and you really stood out when you had them on. I don't think that's really the case anymore. So lots has changed for Nike. The stock is up today, but we'll see if they're able to implement any sort of turnaround that lasts long-term. As always, people on the program may have interest in the stocks they talked about, and The Motley Fool may have formal recommendations for or against. So don't buy or sell stocks based solely on what you hear. All personal finance content follows The Motley Fool's editorial standard and is not approved by advertisers. Advertisements are sponsored content and

provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. We're Lou Whiteman, Tyler Crow, and Dan Boyd behind the glass. I'm Travis William. Thanks for listening. We'll see you here tomorrow.