Transcript of Trump’s Energy Crisis Causes Food Shortages, Skyrocketing Prices, and Global Suffering. What’s Next?

People have no connection with base reality. And the base reality is that we're still living in a hydrocarbon world. We have been living in a hydrocarbon world. It's enabled amazing civilization developments over the last 100, 150 years. But people are disconnected from that reality, and they think if you ask anyone, you know, how does China get its electricity? People will say, oh, it's isn't it solar? They have the best solar industry and they have wind turbines and all that. No. 60% of China's energy comes from coal. 80% of India's energy comes from coal.

The oil industry started here in Pennsylvania in 1859. So this is we're 150 years into the mass-scale hydrocarbon world. And this world that we live in is enabled by and is paid for. Modern civilization sits on top of hydrocarbons, 90%. And you get people, especially in Europe, which kind of annoys me. I'm from Ireland. I was born in Ireland. You get people complaining, why is energy so expensive? And even senior policy level and political leaders, and they have no base level understanding of the reality of this is where we get it.

They think it's we just put more solar panels. That's their answer to everything, which is fine. You put up solar panels and that's great and, you know, as an additive, nice thing to have. But 90% of the world's energy comes from oil, natural gas, and coal. And it has 50 years ago, it has today, and it will 50 years from today.

It uses fertilizer. If that didn't exist, we would have we have say the world's population is 8 billion. We could only support maybe 2 billion if we didn't have natural gas. So not only is it the energy system.

That's going to result in next year, 2027, usually there's a lag because crop cycles are in seasons. That lag is going to be one of the kind of the more laggy effects of the Middle Eastern situation with Iran this year. But so it's not only energy, it's also food. And there's just the simulation that most people in the world are living in, especially in Western civilization, is that they have gotten or just are not aware of the fact that hydrocarbons are 9 out of 10 portions of the energy that they consume.

And for also for food, all of the food, pretty much most of the food that you eat today. And it doesn't matter what kind of food. You might say, oh, well, I eat, you know, vegetables. Well, that's also fertilizer goes into that as well. There's fertilizer used in every crop. And all of the world's food is dependent on natural gas. And so we can go back to, you know, this why is natural gas used as a fertilizer? It was a discovery in Europe in the 1910s. It was the Haber-Bosch discovery. We take it it used to be back in the 1800s.

This is why how all new this situation is. Back in the 1800s, if you wanted to put nitrogen into a crop, nitrogen is one of the essential nutrients for growing any kind of crop pretty much. And you used to have to rotate crops. It's a very slow process. You put down tubers and it was a very you had to do it cycle by cycle. Every few crop cycles, you had to plant nitrogen fixing to get nitrogen from the air and pull it into the soil.

And you take the nitrogen from the air, you use the hydrogen that comes from the hydrocarbon of natural gas, and you can make fertilizer, which basically you can put the nitrogen into the ground with powders and things like that to as a fertilizer. And it increased crop yields by 5 or 600% over time. 5 or 600%. So everyone goes, why did the population grow? Because cheap energy and cheap food because of natural gas. Those two reasons. That's why how we live in this world today.

And it kind of it doesn't annoy me, but it disturbs me when people are disconnected from that base reality. Base reality is 90% of the world's energy today and 50 years from now and 50 years in the past and a similar proportion of food comes from that hydrocarbon ecosystem.

So they're cutting off their face to cutting off their nose to spite themselves in that they're denying the fact that the reality is all of the electricity in Manhattan or New York City comes from natural gas. But then they banned sourcing that fuel and they banned the piping of that fuel to the source of what turns on the lights. I mean, that is absurd. That whole, you know, it's a distortion of what environmentalism is. Environmentalism should be you have a sustainable environment where you don't create negative consequences and pollution into it.

But you also have to be aware of there's you need energy to just to live in modern civilization and you need energy for food. You need natural gas for food. And the it's enabled the food supply for people living in the West. Luxury civilization is dependent on it. And not just luxury civilization, also the developing world, China and India are similarly dependent. There's no one no one's sneaking away getting a trick of secretly building solar panels and wind turbines that they're getting away with some magic.

There is no magic. It is oil, natural gas, and coal.

But that disconnect between those who are truly energy blind. I mean, I was kind of mentioning Manhattan being energy ignorant, if you will, of what base reality energy is. Europe is even doubly so. They're paying 10 times more for their electricity than the US is. And it's primarily.

They've turned it down turned it off because they kind of in an energy sense, they kind of hate themselves. And it's like self-flagellation of let's shut down all the coal plants. Let's shut down all the nuclear plants. Let's try and move off natural gas and replace it with solar and wind, which I'm not knocking solar and wind. They're good. But and then they turn around and go, why has our electricity gone up by, you know, 200% this year or 100% this year? And there's a kind of a disconnect there. And it's amazing that that it that just the level of lack of knowledge of basic energy economics.

But California was leading for legitimate environmental reasons. This is all a very good reason to kind of start an environmental movement. And it started in California. And it did really clean up the air in California. They removed they got ultra low sulfur diesel. They brought everyone had to put in catalytic converters. And those catalytic converters, they didn't, you know, lead in gasoline did reduce IQ levels back in the when it was in the 1920s to 1960s or '80s. And the lead wasn't removed because of that reason.

That's kind of the dirty little secret of the business is that it was removed because if lead damages the catalytes in the catalytic converter. So but anyway, California did clean up its air in the 1960s. And it was a cutting edge. It was there were the leading edge of that movement. And then EPA was established and they became a federal kind of environmental movement. And then but what happened was that movement kind of was then captured by political agendas and social agendas and ideologies that were independent of environmental reasons.

It became more of control of controlling how people think and behave. And so environmentalism is a good thing and was a good thing and it had a good origin story and had a good impact in the 1960s and '70s in starting with California. But then over the past 50 years, it's been captured by political movements that have wanted to have a kind of a controlling effect on society. And some of the things, you know, and you can see it morph into over time. Back in the 2000s, you had a big movement against fracking.

Remember we had that Matt Damon movie. Someone turned on the faucet and flames came out of the faucet because of natural gas. And that doesn't happen. I'm sorry. That was propaganda, that movie and myth. And but that was kind of when the fracking industry started, a portion of the US oil and gas industry started. And it was kind of a novel new technology. It is, by the way, the core reason US has become energy independent over the last 20 years has become because of fracking and horizontal drilling. But anyway, if you fast forward, there was the anti-fracking lobby.

And so all these kind of ideologies trying to stop different pieces of technology. Now it's the anti-data, the data center lobby. So it basically there's a stop oil group. Like what I look at that group and I think, you know, that's a death cult, a social death cult because you remove you stop oil, we all die. We stop natural gas, we all die. And it's not just we in the West, everyone, India and China. That's where we get all our food from, fertilizer.

So all of these different movements have been about an element of control because there's a kind of a feel good. Like who is anti-environmental? No one. Even people who work in the oil and gas industry, they love the environment. They're just normal people like you and I. And but it's been a capture of that environmental movement has been captured by, you know, the carbon capture, you know, the net zero growth in Europe and in the UK. All these countries have destroyed their economy under the auspices of taking care of the environment, ignoring base reality of energy production and where all that energy really comes from.

And ultimately, it's been about it's been the environmental movement has been captured by control. People want to control how you live, how much energy you buy, what your carbon credits are today, what your, you know, your welfare check from the government to make you dependent on the government because then they can control you. And even in New York, I was talking to a friend of mine there yesterday in Manhattan and they get a $100 check from the government for because their electricity bill was too high. And I thought, hang on a second. Excuse me? You got a what?

And so every taxpayer, I guess, in New York got a $100 check. And meanwhile, they're banning pipelines that are bringing that fuel to New York. They're banning natural gas production, which is the fuel that's burned in those power stations. And natural gas is a very clean fuel. And it's they're by making you dependent on the government by controlling or trying to shut down energy production, it makes you even more dependent on the government. And so and Europe has been far more ideologically captured.

And the reason for that is, of course, the centralization of power in Brussels and the EU. People don't know who they're voting for in Europe anymore. They're voting for the blob in Europe. And, you know, if you ask your average person in Ireland or England or Ireland or France or Spain who their MEP is, their member of the European Parliament, they have no idea. They, you know, they might know their local member of their local national parliament. But the blob in Brussels, they can get away with a lot of these kind of control, especially of how people consume and use energy.

And the net result is they pay 10 times more for energy in Europe than they do in the US.

And the real reason is that energy in Europe has been has been deliberately made more expensive than it needs to be. And there's one part of it is control. And another part is you've got a kind of social agendas that have pushed energy blindness because people don't want you to know that 90% of your oil and gas or 90% of your energy comes from oil, gas, and coal. They want you to think it's solar and wind because you can kind of see those things, you know, spinning.

And so it makes people feel like something's been done, but it's there's nothing being done.

They famously built the Nord Stream pipeline across the Baltics. These two big pipelines, one never became active, Nord Stream 2. One was destroyed in unusual circumstances. I'll put it that way. Five months into the Russia Ukraine.

You know, it's kind of like a you sets people into this the mush of believing being more malleable to.

He was warning them, do not be dependent on Russia for nat gas. And then also at the same time, push Russia, you know, threaten Russia with, you know, weapons on Russia's border via NATO and other structures. And they mocked him, openly mocked him and laughed at him. So I think that Europe, you know, they, you know, was it the US that knocked out Nord Stream? I mean, the US benefited hugely from that situation. It also was a little bit of revenge of Trump on those European leaders, Merkel and that that mocked him and laughed at him when he warned them about Russia, them being overly dependent on Russia.

And then you had horizontal drilling where you can drill down at your speed. That was it sounds old school now, but now you can turn the drill bit and steer it sideways for three or four miles and you can produce a huge amount more oil and gas that way than you could before that. And the US oil and gas production had been declining since the early 1970s to 2005, which fracking and horizontal drilling, it transformed the oil and gas industry. And the US now produces roughly a quarter of the world's oil and a quarter of the world's natural gas. That's up from under 10%.

So it's doubled over the past 15 years. And it didn't happen because there was no government policy that really enabled this. This is the oil and gas industry realizing this new technology transformed the space. And fracking was banned. You go to France, I think bans fracking. I mean, and fracking, it was a new technology 20 years ago in 2005. It transformed, as I said, the US oil and gas industry. Now, and it was like one well in 100 back in 2005 was fracked. Now it's all, all wells. That is the default method of production of oil and gas in the US is you frack and you drill sideways.

That's, you know, they you have a fracking crew and it's a hugely interesting technology, you know, that development, but it's transformed the US into a global superpower. And that also then has kind of changed the US's view on foreign adventures and going up against foreign oil producers, you know, that because the US had been in decline since the early 1970s as an oil producer and now we're net exporting oil and making Europe dependent on nat gas.

We can if the US shuts off, you know, the US released an SPO back in earlier this year. And you know who benefited most from that SPO release? Not the US. Europe. They import 90% of their oil. And so all those SPO, all those SPO crude oil releases, they went into European refineries. And Europe went, thank you, sir, to Trump, you know, to the US administration. So it Europe is hugely dependent on the US for energy. And because of that, I mean, oil has steered every war over the past 150 years, has been at the core of and enabling just like it's enabled civilization with food and oil and natural gas, it's also enabled every the political sphere and geopolitics.

And Europe is now is kind of is dependent hugely now on the US. And they made that decision. They made that choice. They banned energy production pretty much in the Nord Sea. I mean, they'll say they technically didn't ban it, but they made it such that you can't drill in the Nord Sea. I mean, the difference between Europe and the US is very striking. Energy. In the US, if you buy a piece of land, you buy the land under this table. In the US, as a private individual, you own that land the whole way down to the core of the earth. All the minerals, anything's in there, gold, oil, whatever, you own it.

Everywhere in the world outside of the US, in Europe, the government owns it. You own the surface down to a few feet.

It doesn't happen, but as in they don't pollute water tables like the environmentalist groups say, you know, can happen. But the US just the government stepped back let and in a lot of parts of the US. It didn't happen in all of the US. It didn't. But the government stepped back and the oil industry and nat gas industry flourished and let them do the thing. And look at the situation. Nat oil is I filled up my tank here yesterday in Maine.

It was 345, sorry, 385 a gallon. In Denmark, in Europe, it's $12 a gallon. I mean, these guys are.

They're so disconnected and they're blind to it. And so Norway is a very good example of they produce a lot of oil and gas. So Europe has a lot of energy resources there. They just don't use it. And it's hurt them. And that's why they have no economic growth. And, you know, a lot of the reasons why buying everything, houses, electricity, they have no money because they've made their energy they've taxed the health.

I mean, that difference between 385 here in Maine and $12 in Denmark is tax. It's not because the oil is it's the same thing. It's the exact same molecules in Denmark as Maine. It's just that they tax the hell out of it there. And it's destroyed their is destroying their economy. Energy is the fundamental bedrock of everything.

By 1985 or late 80s, it was around 22, 23%. So we went up 20% because we had to drop all the tariffs. All these companies went bankrupt. But what what Ireland could have gone socialist, Ireland would never really go that kind of like weird socialism. But what Ireland did was and it was one of the most great government decisions, I think, in history for a Western European economy is that Ireland, the income tax rate was 65% or something ridiculous. Corporate tax rate was 40% or something very high.

Ireland just it was so desperate. We were going to go bankrupt. This is in the middle 80s. Ireland just said, let's cut tax to zero or as close to zero as possible. Corporate tax zero. And just we're that we're that desperate anyway. We're going to default next year. Let's see what happens. And true to remember the Laffer curve with Reagan, you know, where you cut taxes, growth takes off. Ireland cut its corporate tax rate to zero and income tax cut hugely as well. And we had 23% unemployment.

What happened the next year? Boom. And it's boom for the last 50 years since or 40 years since. It was basically proof that tax has a real impact. And it was there was no lag. It didn't even take 10 years, five years, eight years. It it was the next year as soon as Ireland made that pivot to become a low tax environment, economic growth took off and hasn't looked back since. I mean, there were a few, you know, issues over time with the housing crisis. You know, everyone had that great 2008, but it it was a proof point of tax, you know, creates incentives.

I mean, it's.

Europe consumes 10. Half. And then because it's a more dense place, they don't drive as much. And China is around four. So to give you a sense of just over four. But the world average is around four barrels per person per year. And so because Europe is more dense, they consume 10 barrels per person per year versus the US. You can build a lot more trains in Europe. The whole, you know, everyone thinks trains in Europe are more and bicycles are more popular because they're just greener. No, it's because you've got a lot of population living closer together.

Europe is a very, very dense place. The US is not. I mean, you have dense spots of the US, but in general, the US is much more spread out. And we're going to Denmark. Denmark is one of the most densely populated places in the world or that portion of Europe. And so there you can tax people put a lot of tax on gasoline because they're it's usually it's it's a more easily thing easy thing to tax. And then also politicians lie about it. They just say, hey, it's the oil companies making that money. No, they're they're four of that eight sorry eight of that $12 is going to the government.

Four goes to the industry that gets it out of the ground, that refines it, that produces it, that has to transport it. Eight of the 12 is going to the government. And so most people in Europe, they're disconnected from the energy market. And I don't want to kind of harp on Europe as but it's they're they are the most extreme signs of that energy blindness, that just complete unawareness of.

But in order to encourage people to risk that capital, you know, say say oil today, say roughly $100 a barrel. To produce that oil is 60, $70 a barrel in the US. It depends on where you're producing and you know if it's onshore, offshore, different environments. But say it's $60 a barrel. And so, you know, just before the hormone situation, oil was 50. So, you know, there are periods of time where you can lose money for years as an oil producer. And so to risk capital to go and produce energy, you have to have some sort of profit incentive to do that.

The UK in the 1980s, 1990s and up to today removed all that incentive. They basically they're a country where you drill a hole in the ground off even offshore something in the UK that money goes to the crown. It goes to the British government. And so there's no incentive. I'm not going to drill in the North Sea when there's these you know they they're they call windfall taxes and whatnot. I'm no one's going to risk money in that environment to to drill up build a rig offshore and you know helicopter everyone out there every every few weeks and you might drill a dry hole.

It's a you know the the Norwegians understand how it kind of works and they've kind of created a more profit incentive for part of that oil and gas industry to take that risk. But the US has kind of proven they're like the Ireland. Ireland proved that the Laffer curve, low taxes, economic boom, it just works. The US proves the fact of stand out of the way, give private individuals the rights to the profits if they risk capital and look what happens. The US becomes one of the largest energy producers in the world.

It is sorry not one of it is the largest now energy producer in the world for oil and not gas. And just by step stepping back and just let these guys do what they're going to do. They they are regulated. There's controls around in terms of environmental. But the UK regulated removed the profit incentive. No oil production or not gas. It just dwindled to almost nothing. The Brent Brent crude you know the Brent crude is kind of the price people quote on television $110 a barrel and there's the WTI crude index which is West Texas Intermediate and the Brent crude it does that field stopped producing a long time ago 20 years ago and so now the the they changed the underlying way that pricing works such that US crude goes transatlantic and sets the price for Brent.

So Brent crude is actually now set by West Texas Intermediate set by the US crude oil market. And so even with that Brent crude there's a price. People say oh it's the international benchmark which historically it has been but it's also it's now set by the US. The US barrels that move across the Atlantic just like US natural gas moves across the Atlantic. We set here in the US the price of oil in Europe and by extension the world. And because the US the government stepped a little bit back gave people the the authority to just take the profit risk on production and it worked.

It's it very it was a very simple thing and it's the proof is here here we are. And no, it was not all the US parts of the US Washington New York State then here up here in New England Maine and so on banned Nat gas you know production just like Europe did. It was a very and even California you know the the two coasts California and New England in the US have got the same energy blindness as Europe the EU writ large in that as I said all the electricity for the Northeast I just I was coming here driving my car this morning I passed four propane tankers you're driving past me on the road and the the electricity here is either is oil or sorry it's Nat gas or coal and so the people the regulations here and in California have crushed the energy industry in parts of the US and similar to what has happened in Europe.

And as I said it goes back to a combination of ideology and I don't want to say ignorance because ignorance would imply that the information is not about available out there and how energy is produced. It's more ideology than anything else.

And it's yeah, it's it's it's more the energy policy is more ideological. It's not to help people. If that helping people an energy policy would be to step back to reduce government involvement in energy policy and allow to operate more freely. Another good example is the sanctions. Oh my god. It's sanctions over the past on energy sanctions on oil. So Europe you couldn't even this is so crazy. Europe before just during the invasion Russian invasion Ukraine Europe put these sanctions on Russian oil crude oil exports and they set the price at $60 per barrel versus Russian exports and that's they put those that it didn't change hardly one bit what Russia produced in terms of crude oil.

It was basically self-harm on Russia on Europe. They set these the price $60. The price went to 70 and Europe basically starved themselves of crude oil. I mean, you couldn't believe the the how badly Europe has used things like sanctions and energy policy. It they have done almost everything you could possibly do wrong in terms of energy policy and all those sanctions. And the US is not has fallen into the sanctions trap also imposing sanctions on Venezuela, Iran on their oil production and Russia.

And so what has happened those three countries Russia, Iran, Venezuela, the US and Europe put oil sanctions trying to restrict by economics how much oil those countries could export. Those countries it didn't restrict one barrel of exports. You know who bought all that oil? China. They bought 2 million barrels a day from Venezuela. 2 million barrels a day of sanctioned crude from Iran. 2 million barrels a day of sanctioned crude from Russia. And they bought it all at a 10 to $20 per barrel discount because Europe and the US transferred that money.

Like how is it not that?

I mean my god if they did we would all be in trouble. If if if if those sanctions and things like that worked, we'd be paying if if they stopped Iranian production, Russian production, Venezuelan production, it would hurt us all. You know, it's it's like and but China has been sitting there quietly buying up this $20 per barrel discounted crude from those three sanctioned countries. Saying saying nothing. Secretly saying thank you very much EU and US for these sanctions. They've been so great. China has been building a strategic stockpile of oil and China's say the world is 100 million barrels per day of crude oil.

China is consumes 16 million barrels. They import 12 of that. So they're a huge oil importer. They don't produce that much oil. They've been building up their stockpiles ahead of Taiwan 2027. I mean, it's a publicly not acknowledged invasion plan of Taiwan or control plan of Taiwan for next year. At least it that was the plan two years ago and three years ago. And as part of that, they needed to bolster their inventory of crude oil ahead of that 2027 invasion of Taiwan. And they've they've been using sanctioned barrels from those three countries to fill their stockpiles.

And China went from almost very little strategic storage four or five years ago to now they have 1.5 billion barrels of oil in storage underground salt covers. And to put that in perspective, the US SPR has 300 million roughly. China has 1.5 billion. So it's it's got it five times. And that storage that China has built up has happened all of it pretty much with sanctioned oil cheaply created by the US sanctions and European sanctions on Russia, Iran and Venezuela.

China's gorged in that oil to build up their SPR ahead of a Taiwan 2027 invasion. And so it's sanctions don't just aren't necessarily economically irrational. They also have side effects that you basically are doing an economic transfer and enabling China to build up strategic reserves. And strategically it creates all these side effects that China now is sitting on. They still need to store more I think than they have, but they've been enabled to build a huge reserve ahead of a potential plan, you know, ledger plan for 2027.

So those sanctions, why I mean, if you just wouldn't mind stating the obvious, why would China want to stockpile energy before moving on Taiwan? Because all of their ships, you know, everyone has this myth about China being solar and electricity and whatnot. They do produce a lot. China gets electricity. 60% of their energy comes from coal, 20% oil, and the balance is natural gas. 20% natural gas. And then they have solar and wind. Even China are under 10% and nuclear under 10%. So they're in the same 90% hydrocarbon world.

But that 20% oil is for all of their ships are diesel. I mean, they do have nuclear powered vessels, but they're all of their ships are diesel. All of their military equipment are diesel and or some are gasoline, but they and they're importing 12 million barrels a day. If if they didn't have a strategic reserve, they would be done within 20 days, 30 days of if they were blockaded. If you blockaded Malaca and Singapore or Hormuz, it's already blockaded. But if you blockaded those, you could if China was trying to invade Taiwan, they wouldn't have the oil for their ships within three or four weeks.

And so that that that was why they've built up a stockpile that they they need that oil to power their navy and their military equipment. And they do have electrical equipment and vehicles, but not the hardcore navy military equipment that they need for an invasion.

And yes, there's this whole thing of marketing word of clean coal. But basically when you burn coal, the most dangerous thing, the most immediately dangerous thing is sulfur sulfur going into the atmosphere and it falls it turns into sulfuric acid acid rain. It's not it's and there's lead comes out of the coal also. But what the coal industry did not just in the US but globally has put scrubbers on all of their the tires that where they burn the coal and those scrubbers can remove pretty much most or all of the pollutants that come out of coal.

The only downside is it's it it's it's it's very expensive to put those scrubbers on and whatnot, but coal gets a bad rap, but it's cheap. It is so cheap. And it's still the why is it so cheap? Because it's so abundant. It's it's it's abundant. It is the most it's it's similar to to yeah, it's it's abundant and it's e it's an easy material to handle. You know, it's it doesn't require natural gas is a a challenging material to handle because you can you have to comp if you want to ship it overseas, you've got to compress it into a liquid or cool it down to a liquid.

That that's a very expensive process. Incredibly. That's why one of the reasons why Europe is $30 gas natural gas. We have $3 natural gas. The big difference is that while European Europe banned natural gas production and so they they don't produce any, but they're they've decided to be dependent on others. And but natural gas is a is a situation where you've got it's very hard to transport. The most ideal fuel of all is oil because it's a liquid. It's dense. You can it's it it's enabled so many different it's that's it's the most one of the most ideal energy sources is crude oil and it's the refined products of crude crude oil, diesel, gasoline, all the other things, plastics.

It's it's a it's it's in everything. But yeah, going back to your your original question, coal is cheap. That's why it's the base load. It's 1/3 of the world's energy is coal, 1/3 oil, 1/3 natural gas. And that other 10% this year, last year, 50 years ago has been all the others. Nuclear nuclear is very expensive just because of all the regulations around it. Solar and wind they're they're not the economics of solar and wind are dependent on location.

You know what the oil and gas industry these are sharp guys and women who are they'll make a dollar if they can. And so if you look at the the biggest buildout of solar in the US is Texas in oil country. You know it's and because people are realizing okay there's a good there's a a it's sunny in Texas a lot. It's during this most of the year and solar panels are cheap from China. I mean we're basically we don't want to become too dependent on China for those solar panels. But you're basically kind of technically importing coal because that energy to produce those solar panels is built by China gets 70% of electricity from coal.

And so those solar panels are really disguised coal. And China basically is willing to do that for now in terms of building solar panels. No one else really at scale in the world builds solar panels or any other of these quote unquote environmentally friendly energy sources.

We can run our society off that energy source. You know that for all good and bad you know intense it's hydrocarbons. We have we depend and need hydrocarbon production. And maybe with AI we come up with you know fusion or some new technology over the next 50 years or 40 years. But right now there's no no alternative. We're we're and we should just appreciate that and just and be okay with that.

Make make peace with that.

You know, drilling these wells sideways. That was amazing technology development back in the early 2000s. And and that and fracking as well. You're pumping these wells with water and cracking the rock a couple of miles down. That's what killed the the coal industry in the US. The environmental regulations were more on putting scrubbers because gas became cheaper than coal. Nat gas became cheaper. And it's one of those interesting people in the US say gas and as an oil guy energy guy I always make sure I gasoline is the stuff you put in the car.

It's the third of the US energy supply was $10. Now it's three and it's because you know diesel gets a lot of the attention this year but it's Nat gas is is probably you know everyone talks about energy independence. It's probably the fuel that can most make the US truly energy dependent because oil production you know one of the problems Trump's had this year was he dumped all the oil crude oil from the SPR that went to Europe pretty much which for good or bad because it goes into the international bucket or basin of oil the oil market is very global because you can ship it around natural gas is not as well connected it's very expensive to ship it you have to cool it down and compress it and so but if you want the US to be truly energy independent Nat gas is that fuel and basically and it's that has not been unlocked in the US look at the whole northeast there's a huge amount of Nat gas under there.

There's also in terms of potential there's pipelines that are blocked that people are not allowing that those two things just uncracking the Nat gas production uncracking Nat gas production in the US will that is truly will make the US such that it will not just disconnect the US from physical energy it will also price disconnect because remember Europe is $31 Nat gas the US is three so if the US increase the US can become energy independent as well as price independent of the rest of the world and the only fuel to do that is really Nat gas.

Oil is always going to be linked to the world. Coal pretty much is going to be linked to the world. But Nat gas because it's so difficult to ship, it's kind of for good or bad, it's trapped in the US. There are some exports, but it's very expensive. So that is the fuel for true energy independence is Nat gas. As I said, no one talks about it because it's it's under it's in pipes. It goes into the power station. People in Manhattan ban it and they don't realize, hang on, that's the reason the light works. They what? They you know banning the fuel that makes the light work.

And so it's that is kind of it's an interesting fuel in that regard and it's it's it's production is growing at a rapid rate in in the US even at $3. It's so cheap Nat gas. It Nat gas cheap Nat gas killed the coal industry. That did not Mike Bloomberg. Nat gas killed the coal industry and Nat gas can actually can continue to transform. We've got energy demand growth over the next 5 or 10 years because the US now is learning that just like Ireland learned when you cut taxes if you increase energy production in a country and make it cheap energy your economy grows and it doesn't matter is it it it just it happens it's like people because that the cost of doing everything becomes cheaper see whether it be a data center or it becomes a a factory making something you know for China is making something because they've got cheap energy they use coal that's their cheap energy the US if we increase Nat gas production that's how you get manufacturing back to the US at least to a certain extent there's some manufacturing that's been lost you know pretty much forever unfortunately or at least for the foreseeable future but you can at least stop the the the drain of manufacturing out of the US with cheap energy.

I mean you'll get people will build things here with just cheap energy. So yeah, it's it's Nat gas.

And so you can change by heat and pressure. Just simple it's a relatively simple chemical reaction. Coal into Nat gas, coal into gasoline. The problem is it was made famous in the 1930s in Germany. That's where it was Fisher trop was the technology. Germany had no oil at the time or tiny amount. And it the oil basically defined World War II. Japan going down to Indonesia. They had coal. And so what they tried to do is it is a very expensive process. It it costs $200 a barrel to do that process to turn coal from coal coal into crude oil into gasoline.

So it's very expensive. $200 a barrel. And so you can technically do it and it's it's it's called the Fisher trop process and Germany did it out of desperation. South Africa did it. You know everyone says okay China does this now. They're not economic idiots. They're not going to pay do a process that costs $200 a barrel. So they do it. They have it available but they don't do it at scale because it's a very expensive process and you don't necessarily do it with coal. You can convert other parts of the energy space into gasoline. So you can coal gasification or coal turning coal coal to liquids is the people call it in the industry.

The you can do it but it's a very expensive process. But China is basically a very basic terms of oil consumption. They can they import crude oil. They're just like any other place. They boil it, which is basically what oil refinery does. You boil it and it separates into naphtha gasoline, diesel, heating oil, jet fuel. Yeah. Down to asphalt. And they do the old school. I mean it's a very the oil industry is very basic. You basically boil this crude and the different crudes, you know, Venezuela has got heavy oil. It's basically like tar, threakly.

You've got some very light oil out of West Texas. All this is very light. It it produces a lot of gasoline very easily in a refinery. You don't have to boil it that much kind of thing. And Canada produces a lot of heavy oil. So crude oil is a there's people define it by weight. Is it light or heavy crude oil? But it's China basically does buys oil and refines it. They don't get into the the coal to liquids is a very expensive. You kind of only do it in desperation. I think that one of the reasons they they do it at a small scale, very small scale is that they do it just to in case they are cut off from oil oil from the Middle East in a war situation that they would at least have some oil because remember they import 12 million barrels per day of their 16.

So but anyway they they they cut their imports by two 6 million barrels per day. And one is they have that big strategic 2027 Taiwan and people have people in outside of China have no idea how much oil is in there. People estimate because you can count the barrels and tankers going to China from the Middle East. People estimate it's 1 and a half billion barrels. Remember the US SPR is five times less 300 million. So people they definitely dipped into that strategic reserve because they had to save their own economy. You know they they they need to transport they're a manufacturing economy.

They have to transport diesel trucks and cars and so they dipped into that strategic reserve and which kind of set back their Taiwan 2027 strategy a year or two maybe longer because they were building that up ahead of 2027. So they dipped into that strategic reserve. They then everyone says okay they did coal to liquids. They did I'm I'm very skeptical of these other reasons. Coal to liquids. They did they told everyone to drive electric cars. No. Not even in China.

You can't tell people drive your you know the the BYD today. You know they don't use Teslas as much over there. But you can't tell people to drive an electric car. You you can't force that kind of behavior. But people put this out there as a as a reason. I think the main thing they did was they dipped into their own reserves and no one knows how much they did. People say oh they maybe only reduced it by 1 million. You know of the six they ate in just a little bit and they were relying more on they cut their petrochemical productions. I mean a huge portion of oil and gas globally goes into petrochemicals making plastics and and making fertilizer also but making plastics and there people were saying oh they diverted crude oil from petrochemicals plastics into gasoline and again technically you can kind of do that very expensive awkward process to do.

You can't just do it on a turn on a dime like that. I think what they do it's a most simple answer. They dipped into their reserves that they were using. They had built up from all this sanctioned oil from those three countries that they had gorged on for the prior five years ahead of Taiwan 2027. They dipped into that and they dipped into that big time. They were they they had no choice because they can't survive. Their their their economies kind of fragile. They've got a housing crisis pretty much slow moving housing crisis but it's going through their economy.

They've got a debt crisis. They've got a huge their debt to GDP is huge if you add in all of their debt level like government debt, personal debt. So they had to kind of save their economy and they they have a record of doing this. They did this in the financial crisis 2008. They pumped a huge amount of money into their domestic manufacturing economy in an emergency way immediately following 2008. So they basically dipped into that strategic reserve in a big way. And people say oh they didn't or that no one really knows.

I don't know. No one really knows. If I were at you know an intelligence organization I would try and determine how much oil. I'm sure there are people that know know that.

One is that two they really did want to save their economy by just releasing crude oil from their own stockpiles into the into the world into the the domestic refining space. The other one is that they didn't want high oil prices. I mean oil looked at one stage like it was going to go straight to $300 per barrel.

I mean everyone thinks of them as being communist or whatever they're they are they know the value of a dollar or yuan or whatever and so but they're they're they basically stop buying they buy below 70 and they stop buying above 100 and and it's true it's a simple thing they they and they stop buying once we got above 100 back in Feb March they stop buying and so they don't want to buy expensive oil. These are naturally that culture in China is a naturally trader instinct and they stopped and so they they I think it was just a a combination of they dipped into their reserves how their their imports dropped.

They dipped into their stockpile. It set them back in terms of their Taiwan invasion plan. So you know people think that you know Trump was playing 5D or 8D or whatever the D is chess. It did it did have the side effect of knocking them back and also Venezuela knocked them back in terms of China was buying almost 2 million barrels a day of Venezuelan oil. Venezuela everyone forgets about that was only this year. It was back in January of this year. There you go. It's it seems so long ago but that knocked that was a basically a you know Donald Rhoad doctrine knocked China out of the western hemisphere but also knocked 2 million barrels a day of sanctioned discounted oil to that China was getting.

They've been applying that to the oil and gas industry. And you know Russia I think is kind of still independent of that influence of China. I mean China Russia will sell their oil to anyone but they haven't been kind of captured by that Belt and Road initiative economics. Iran was captured by it by Chinese that Belt and Road initiative. Venezuela was captured by it. And China doesn't care about Venezuela's politics or people or they care about the economics.

They don't care about Iranian politics, religion, Israel, that whole situation. They don't care. They basically can you get me cheap oil below $70 a barrel? How do I get that oil? And if if you could ask the EU to put more sanctions to discount it even further, please. That would be a a bonus because all that money is not going to Europe. It's just going straight into the pockets of Beijing.

And there were I think it was four was a huge number of tankers that were knocked out by in that war. The US you know was escorting tankers in and out of the straits at that time. And so there there was kind of an awareness that the vulnerability was there of the whole choking of Hormuz. The oil market immediately in Feb 28 assumed it was going to be a week or two and you can tell how 26 this year of this year of 2026 and it was because you can tell there's the forward curve which is the price of oil as you go out into the future.

So you can tell that the market in the front of the curve was very high and then but you it was backwardated they call it but very low only a few months forward and so even the oil market itself and the oil market is hyper geopolitically aware and and very reactionary. It's kind of like almost prediction markets existed but it's it's the oil markets use futures and options to do the same thing as prediction markets do. And so the oil market was saying pretty accurate you think those markets are pretty accurate in their predictions. They're accurate in the very short term.

They're very short term aware. Like so the first thing I do when I wake up in the morning is I look at the price of WTI and I can tell if if Iran has been hit. That's I just looked this morning it was like down to 78 cents.

That's the global benchmark. And so yeah. So I look I look at WTI every morning. First thing I look at and you can tell how geopolitically changed the world is overnight by just looking at that one thing. I can tell if there's a war or whatever and just by looking at that one thing or I look at other things. Well that's the first thing I look at the price of crude and back in in February we went from $60 WTI up to you know we got up into the hundreds and very quickly but the curve the forward curve you can trade crude oil out into months ahead for delivery futures curves months ahead that price was going down to like $80 $70 so the front was 120 you go out three or four months it was back down to 80 you can so the the market was predicting this thing is going to be quick the oil market was predicting and which I think you know Trump went into this also thinking it was going to be quick and the US intelligence agencies and they they they the the blob the deep state everyone thought that this was going to be really quick because we were just coming off Maduro in you know early January in Venezuela.

There was kind of a it everyone thought this would be a hit and one and done would be out within two weeks. Just eliminate a few politicians of the top layer which I think was strategically a terrible thing to do. But it basically and the oil market very quickly rallied and then once it wasn't over in two weeks because Iran went to that mosaic structure where they basically distribute control of their military throughout the entire country. The Irish IRC embassy used to do. And so it went to that in other words you you can't slice off the onion layer by layer.

The tab just doesn't work. And Iran has developed this method working for the last 30 40 years since the late 1970s. And they that's when and Iran started retaliating with drones. That's when the oil market went okay this is going to be a more protracted thing. They started hitting golf production facilities. They hit a Qatar's natural gas LNG plant which is still out and will be out for the next three to five years. That's a Qatar's main source of of revenue is that LNG plant and they knocked half of its production out and that's Qatar produces 20% of the world's LNG.

So you know that's goes that's what that gas will go to Europe natural gas and will go to Asia. That's gone now for three to five years. Again who benefits from this? The US night gas industry. You know like Nordstream Qatar. You know if if you were to be conspiratorial about it you could just knock out all of Qatar and then the US would benefit even more. So it's kind of a an interesting kind of secondary effect that this in this situation Hormuz has kind of been a very positive to the US economy because the US is a huge nat gas and oil producer.

But anyway so you had a the oil market initially priced in a quick win and then Iran started attacking all the production facilities and particularly refineries in the Persian Gulf and these refineries produced a lot of diesel and that was the kind of the second effect was the diesel price spiking crude oil. The spread between diesel and crude or gasoline and crude is called the crack spread. That blew out to diesel to crude used to be diesel used to be $10 refining margin above crude. It went to 100 and it stayed there since.

That's crazy. And that's because of reduced refining capacity.

Europe consumes more diesel. It was basically a it it seems kind of like a a a kind of convoluted thing but basically the the world had more gasoline capacity in refineries than it did have for diesel. So diesel was more tight as a global situation than gasoline.

Ukraine did start hitting all these Russian refineries and that did start coincidentally with the first half of this year when the Hormuz situation. So that knocked another 2 million barrels per day of refining capacity out of Europe. And the world, as I said, is 100 million barrels per day of production. You knock 4 million barrels per day of refining capacity out. It does have an impact and it it it it basically caused diesel prices to spike.

And oil refineries are easy to target. They're big pieces of equipment and and they thought let's they're exposed too. And they did want to create a little bit of pressure on Russia, Putin to come to the table this year. Trump wants out of Ukraine and Russia that whole situation. He wants out of it as everyone should want out of it. It's it's it's not a the that war should never have started but it everyone wants out except for a certain few vested interests. You know you know Europe again here we go talking negatively about Europe but it's the CIA or whoever was providing the targeting information they didn't think about the impact on diesel.

Now they realize that of course and because they thought hey it was just 2 million barrels per day of refining capacity out of 100. It can't have that much of an impact. It did. It immediately did. And so you know the kind of blowback this blowback was in the energy market and so it was a mistake. The CIA should never have targeted those refineries. They did and but they provided all the targeting. They because they do want to pressure Putin to come to the table. They want to pressure Zelenski by Elon Musk flipping on and off the Starlink button every other day that seems to be doing now. And they're these are kind of the two pressure points that they're applying.

They're applying you know they're trying to destroy Russian revenue with refineries and Zelenski's defense with the Starlink turning it on and off every few days to try and force these guys to come together and at least have some sort of a ceasefire. And that was kind of the original thought process behind it. I think they were surprised by how much diesel prices rallied.

And the Red Sea is you know they've got issues there with the the Houthis and whatnot over the past few months. But basically all of the oil production is is trapped in the Persian Gulf and but the Red Sea is kind of one place they can get it out outside of the Hormuz. And so during the the 1980s they built this pipeline as kind of a backup plan and it was a 7 million barrel per day capacity pipeline. Again scale the world produces 100 million barrels per day. The Saudis produce 10 of that 100.

So not they're not as big as these two. The US produces 25. So but of the 10 the Saudis produce they could get seven of this out through this pipeline. But they didn't used to do this because this pipeline was usually run at 2 to 3 million barrels per day of the Saudi 10. And so they kind of use it as a backup plan. And why is it cheaper to ship it through the Gulf? Yeah. And you've got to pump it across all these pumping stations. And also if you're a buyer from China their main or Asia from Saudi for them to send a tanker the whole way into the Red Sea it's and past Yemen and and it's a very much more dangerous area.

It's more confined and so it was just cheaper for the tankers. Pipeline shipping is is is cheap also but if you were to buy the oil from the Red Sea at the end of the East West pipeline it was a dollar per barrel. Nowadays it doesn't seem like that much but it was a dollar a barrel more expensive. It was cheaper to buy it from the Persian Gulf for China. And so Saudi used to produce oil all the those Gulf producers are in trapped inside the Persian Gulf. It's it's kind of the same oil basin that whole region.

It's and even you know people talk about Tehran even Tehran Tehran is is the almost the other edge of Iran to where their oil is produced. Their oil is also produced at the edge of the you know Carg Island and is also down by the coast.

These are civilian tankers. These are not military tankers. And Iran was hitting them and would hit the occasional one and they were hitting them cheaply. They were sending these 20 $50,000 drones to hit them. And so you had the you had the spiking crude first. That was the first wave. Then you had the spike in refined products. Diesel was the most extreme one. But because you hit these refineries combined with the Russia hits on refineries then you had a spike in tanker rates. And these tankers went from you could hire a super tanker. Super tankers are 2 million barrels a day. Two sorry 2 million barrels capacity.

A super tanker. They call them in the oil industry VLCCs very large crude carriers but they're these buildings effectively carrying 2 million barrels of crude. And these things you could hire them for $50,000 to $100,000 per day. That's the day rate they call it before in January February this year. Now it's 1.5 million barrels or $1.5 million per day. So we went from per day per day from $100,000 per day to $1.5 million dollars per day.

And the reason the tankers have gone up is that first of all you don't want your you can't get insurance and you can get technically get insurance but the insurance rates have gone up.

So those super tankers are now this doing this speed run into the Persian Gulf. And the Persian Gulf is 20 million barrels per day of ex Persian Gulf ex produces 20 million barrels per day. The East West pipeline that was built in the 1980s they ramp that up from 3 to 7. So they got some oil coming out of that pipeline extra oil. They got some oil out of this there's another pipeline to Fujaira so they got another million barrels per day out of that. So they they they cranked up all the alternative bypass pipelines. So that was that compensated a little bit for the Straits of Hormuz being shot.

And then the big one is they started doing these tanker runs, speed running in and out of the Gulf and doing what's called ship to ship transfer STS outside the Gulf of Oman.

That's going to take too long. That that that you know that operation that financial operation that goes back to the sanctions things. It doesn't really work. It causes immediate pain those sanctions. You know they close down money transfers and try to sanction companies that deal with Iran. But that's not going to be that's not a long-term sustainable. I want to say long-term I'm talking about we need to resolve this within 3 to 6 months max before it gets it things just are things are already bad. They're they need to start recovering we because it's it's flowing through to food and fertilizers but Iran is hitting one to two tankers a day right now today in November 2026.

There are only 1,000 super tankers in the world.

Trump is talking about things like that. Iran is very there's a very well educated population surprisingly and they historically have been higher median IQ than we do. They're the most one of the most successful ethnic groups in the US is are Iranian.

And so one way to do that is Iran has 150 power generation stations. I mean this is an energy war. You say to Iran just and you don't secretly do this. You tell that Iran there's a there's a direct price to pay. For every tanker you hit we knock out two power stations. Start with Tehran. They've got five major ones and just make it each incrementally painful to stop that tanker hitting situation because Iran is hitting civilian infrastructure going through a you know on a civilian purpose.

There's no military purpose for this and the US should just make every hit painful. Stop it. Just stop that ahead of negotiations and everything but to kind of right the world's economic situation in terms of energy there has that has to stop and that's one way to do it. Iran has 150 power stations. You continue to Iran to do that for another month or weeks or months. If you do it for another week you hit seven tankers. We're going to hit 14 power stations. There should be some sort of it's a tit for tat retaliatory strike.

You don't tell them which power stations but you make it economically energy painful. That's one thing the US could do and to try and stop those tanker hits because that's it's like triage. You have that is the most important thing is to stop those tankers being hit on a daily daily basis now because it just can't be the as I said you can't do this for months. It's you can do the economic war behind the scenes whatever but the tanker market the physical base tanker market can't wait six months. It has to stop. That has to stop today.

And how many oil tankers super tankers are there in the world? There around 9,000 oil tankers in the world. 1,000 of these super tankers. The 2 million barrels on the planet. Yeah. I mean it's it's a I mean 2 million barrels is a big amount of crude. If the world is 100 million barrels per day of oil production and not all of it is tankered. You know pipelines and so but the but 9,000 tankers in the world 1,000 are super tankers and but if you hit one a day that's you know annualize that that's four 500 a year you know that's a big chunk of the super tanker you just can't that has to be stopped and the other way is that you can stop the Iranian army the IRGC Iran has five refineries just knock them out just like take the CIA they know where they these are not hidden things or secret things and just within 20 days the Iranian economy energy wise the financial side is the best in strategy of it's like the sanctions thing it's a very messy long term it creates all these weird side effects like China gorging on that free oil or discounted oil you could just knock out their five refineries within within 20 days that country seizes it stops operating as in they can't diesel trucks gasoline cars motorbikes the entire economy it physically can't operate so the US has got options all this talk about nuclear weapons and that don't do that that it's not necessary it's Iran is an extremely vulnerable on an energy side economy and these things also are repairable like you don't want to destroy civilian infrastructure or dual

use infrastructure in Iran that just to be negative and punish these people you basically want to say stop we let's stop let's parlay let's take a take a breath here you can't hit these tankers every day we we're not going to negotiate with you even as you do that and then the third thing I I think I think going back to kind of the original scene of this war I mean Trump the US government killed the Ayatollah and his family back in late February early March and then went onion layer tried to wipe out another layer and that kind of behavior I don't think is not that's that that is not conducive to getting a a balanced negotiation.

First of all, it's it's it's I love there should be there should be there should be that kind of behavior is not conducive to getting a negotiated settlement. No, it's not murdering their religious leader. No. And that is murder. I mean, it's but but but here's the thing. Trump did it. Killing old people. Trump back in March said what you know people were asking him the logic behind going to war and what I know you you talked to him beforehand but he said I got him before he got me. That's what he said about the Ayatollah. It's just that's just a child talking. It's absurd. I'm sure but it doesn't even if it were that I'm sure there were people whispering in his ear that that were the truth for a fact that there were.

Yeah. And so there are all kinds of flatterers and whispers and liars around him mostly in the Israeli lobby all telling him this lie that they're trying to kill you and you have to kill them first. As a sign of good faith the US should have a policy revert back to it used to be a policy in the US not to intentionally kill or assassinate foreign leaders. That needs to be that was our policy up until we did this. I mean we have assassinated as you know foreign heads of state but we always lied about it and pretended we didn't. And I think you know there's some value in upholding the standard even if you don't meet it.

There you go. And I'm and it does matter because I think that every leader in Iran and there are you know as I said they've got that mosaic structure but they you can't negotiate with someone under that kind of threat and it's not just it wasn't just during a peace negotiation that we did this as you know it was a surprise attack. That was that that was I mean that was just it was a wrong I mean is it right around to kill anyone but but just as a as a strategic negotiating kind of tactic that was that just doesn't work. You send in fake negotiators into a fake negotiation and then you kill the elderly head of their religion and his family in the opening salvo.

And then by the way, in case they didn't get the point, you double tap a girl school. Like that's not the kind and then you demand unconditional surrender which our president did. Unconditional surrender, whatever that means. Yeah. I mean that's you went all in and you failed. So where what do you do now? I I think there needs to be a a restatement of US policy and Trump could do one of his executive orders and whatnot just signed or whatever. It says that US and no one endorsed even secondarily via the US like CIA whatever should get it back into that business of killing politicians elect politicians even if we don't like the election or whatever you know for whatever reason stop that that is not good it's not good for ethically and morally but it's also a basic military strategy you don't you know that was why you would never kill the generals you would negotiate you need someone to parlay with and it destroys for a whole variety of reasons that that should be a key component of this stage.

One, stop the daily tanker wars. Two, by saying you hit one, we're going to knock out two power stations. Let's see how long you know that's going to quickly stop. I mean, if it doesn't, Iran is making a rational decision to wipe out their own power grid. Okay. I mean, they're not I think that you need to have some tit for tat escalation there because that needs to be stopped right now. That's triage. Two, you tell the Iranians, we are no longer going to endorse. We'll publicly do. We're not going to endorse even on a secondarily base secondary basis with other entities, you know, doing that.

We're not going to support it, endorse it, or promote it. Stop. We're not doing that anymore. The US doesn't do that. I should go back to that doctrine because you can't negotiate on that basis. And then once once you create the situation is triaged, okay, then then we can go back and talk about all these other issues. We have the Iran wanting this silly toll. We're not doing the toll. They want their money. You know who who owes Iran more money? China has they've been buying all this discounted sanctioned crude over the last five years.

They have $60 billion of in yuan. I mean the the fact that the Iranians were stupid enough to sell their oil for yuan. But anyway, they've got it locked up in China. $60 billion worth. Way more than the US has got locked up in NASA's for. So who if so if Iran wants to pay someone someone wants to pay Iran that toll, China can pay the toll a dollar a barrel, whatever it is. Take it out of China's money. They're the guys who have been taking advantage of Iran over the last 5 10 years. And so but let's put it back on the table. You want the toll. Have it be a toll that's addressed by the GCC.

Put the toll as GCC plus Iran. Manage that toll. But that's something the other countries on the Persian Gulf in other words. Yeah. Yeah. Put them all on the on the on the toll and have an equal share of of the Yeah. Yeah. A dollar a barrel and get them all sharing that toll. Yeah. Okay. But no other party outside of the Persian Gulf is going to contribute that toll. So you've got the assets getting money from China first. They're your biggest debtor, if you will, Iran. The toll make it a GCC toll. Put that in place.

We're not going to target your your political infrastructure and even nefariously do it. Really have it as a a real thing, you know, where there's even secondary parties are not going to target that. And let's come to some sort of a a situation a an agreement on the nuclear situation. We're not Trump talks about bombing, you know, Pickaxe Mountain and all this nonsense. I mean, let's put go back to and it's probably disgust Trump.

Go back to the the the prior UN's inspection situation with Iran. Have Iran treat Iran, by the way, as if it's a nuclear power because even if you take all that dust out, you think they aren't going to now try with every means possible to get one of those nukes from North Korea or five of those nukes or Pakistan and in other words treat them as if they're as if they are a nuclear power. Iran is a major power in the Middle East. Accept that as a reality. You can't crush it.

You're not going to defeat it militarily. It's too expensive. Let's come to an agreement where that we treat them as if they're a nuclear power. Constrain it, if you will. Ideally, I mean, this is me personally, I hope they don't go back to the Ayatollah regime and all of that. I would prefer Iran. It's they tried the civilian rebellion back in January. It's probably going to end up being a military hunter like Pakistan controlled by the IRGC. They'll have the Ayatollah, you know, they they've keeping that guy out of out of sight.

You know, people speculate why the son of the Ayatollah, why they haven't, you know, he's been maimed or he can't speak or or legitimately they're afraid for him, you know, being killed by the US or Israel. The US should remove itself from that game and say we don't play that game. But basically the normalize the entire situation and triage the tanker situation. Normalize the Iran as a proxy nuclear power. I mean, it's sad to say, but it is what it is. And there you can knock out the dust, but put some guard guard rails around it.

Like Pakistan, the US controls Pakistan's nuclear supposedly nuclear weapons. And yeah, that that that would be it. Just just deal deal things. And you don't need to go and do a large, you know, all this escalatory talk of we're going to bomb huge things and make it a big spectacle. No, these are small incremental things that can be done. And Iran is is looking for an out also. They don't want this situation to escalate. You know, I remember 10 years ago when Instagram kind of kicked off, they had the rich kids of Tehran.

These were all like these these rich kids driving Ferraris around Tehran. They're just normal people like you and I mean I don't drive Ferrari but they're normal people that have you know we we they they want we should treat them with dignity and respect and and realize that they want to escalate deescalate the situation as much as we do and they they're great at at their media game throughout this whole war has been amazingly good. I mean they're they're trying to you know they're they put out that 1,000 page or whatever it was number page document saying here's the legitimate reasons why they're their grievance document if you will and they said you know we don't have a we don't have they're trying to spin the US word of we don't have a problem with the people of America we have a problem with the government and I'm thinking hang on a second for 50 years or 47 years since they've death to America so you only meant the government you didn't mean the people of America in other words Iran they're not you know the the the innocent party in this whole escapade either they they've they've done some terrible horrible terrible things and you know then they say oh but the Shah is the what about the Shah before the current regime was even worse no not really the Shah supposedly he killed he had you know people tortured and killed during his time but he maybe 2,000 people 3,000 people there's a great book I read recently The Cauldron it's called and just talks about the Shah yeah he was a dictator pretty much a king figure but he and he was US supported because the US just needed someone stable in that environment but the

the the IRGC killed 20 30,000 people in January of this year. The Shah over a 40-year period tortured or killed 2,000 people. I mean, so no one is innocent in this whole situation. Let's stabilize it. For the energy markets perspective, there's a way out of this. It doesn't involve new using nuclear weapons or doing these weird showy things. It revolves it revolves around accepting that they're a rational player. They have legitimate concerns that you know we've kind of adopted the Israeli style, Mossad style, kill all the politicians first.

No, the US should just back away from that. Go back to 1980 style. And yes, there were some behind the scenes things happening. But don't as a policy make it a crime. It was never really a crime in the past. But make it as close to a crime as possible to kill or assassinate a foreign leader or especially their family. I mean that is just not a good it's not a western understanding of justice at all. The family didn't do anything. It's not a crime to be someone's child. Yeah. And Trump said again said I got him before he got me.

I mean okay you know George W. Bush used the same logic back in Iraq when it were Iraq 2 he said he why did he go after into Iraq and Iraq 2 you know they used the disguise of weapons of mass destruction a lot but the one thing that sticks to me about that time is that George W said he tried to kill my daddy and you know when in fact it was the Israeli government that plotted to kill George H.W. Bush and that came out in Victor Ostrovsky's memoir from Mossad officer's memoir. I I think that's a fact.

So you know whatever it's a complicated world. A lot of bad players in it but stability has got to be the goal. Let me ask you though. Do you think the United States and Israel can accept an ending to this war in which the current Iranian government or some version of it remains in control? There are no or certainly fewer American bases on the Gulf. Like America is not keeping the peace in the Gulf going forward. We can't even keep the straight open. Yeah. I I don't think the loss of those bases is a bad thing. I think they they they basically did what the US should have done.

Those military bases, they were exposed targets for years. They don't they shouldn't exist in the modern drone warfare. So they kind of did the US a favor by shutting those bases down. The US should still when I say everyone talks about the US walking away from the Middle East, the US is not going to walk away from the Middle East. US still needs to be there and protect those countries because we need a a a energy prices to remain low. That's its core level. But also to just for general stability as the hegemon globally and to stop China becoming the hegemon especially in the Middle East.

So the US is going to is not going to walk away from the Middle East no matter what Iran wants or needs or thinks they're going to do. Those bases whatever those their sunk costs they're written off. The US going to have to come up with a more kind of even like Iranian inspired mosaic mobile base structure to defend the Middle East the the non-Iranian side. But the US and Israel have to accept that Iran is there. It's a it's can't be defeated. And Iran good on them. They shouldn't be defeated.

I mean they're they can do whatever they want as long as they don't assault especially with nuclear weapons the rest of the world. They can do whatever they want. They're an independent country. So the US and Israel but accepting what you just said which seems demonstrable. I mean the geography of Iran is ultimately its power and the fact it's a cohesive country basically and an ancient civilization. But just say even saying that out loud is so contrary to what we have been told for 40 years and what even policymakers are saying now.

Like we you know we can't accept this government. We can't accept Iran as a nation. I mean they're going to have to, right? But do you think they can? I I I don't I don't know. I don't think it's a matter of if they can, they have to. They have no choice. We have no choice but to accept Iran as it is. Sometimes, you know, it's like North Korea. Would the US love to, you know, they have nuclear weapons in North Korea, rocket boy. And so would they would the US love to destroy North Korea with everyone around them, the Japanese and South Koreans?

Yes, of course. But it just is what it is. And sometimes you take the draw and you walk away and just allow it to exist. It's sad, but that's just because there's a limit to your power because you're not God. Yeah. And it's not that's not a bad thing. Everyone thinks everyone thinks that the US has has to intervene everywhere. No. No. You basically there's a payoff structure here where you don't sometimes it's not worth intervening. It's just in not in US interests. And that in Iran is a classic case of that.

North Korea is another case where you do as much as you need to, but you stop when the payoff stops working. And Iran is one of those situations where we need to get to walk away from the situation. When I say walk away, we're going to walk away with those bases. Okay. Tell Iran they're gone. I mean, but we're going to have still defend, highly defend the the eastern side or the western side of the Persian Gulf. But we still need to be there. The US still needs to be there and defend oil production out of and natural gas production.

One is a bulwark against China and and what they're doing. But two, because it does affect global energy prices and all of our allies as well as our selfish own needs. We need to defend that side. And even if you ignore take Israel out of the equation, we still need to be in the Persian Gulf. We need to be in there. Even if Israel Israel I think messes with the mind of the US military in terms of tactics like the thing about assassinating leadership. The US shouldn't do that and shouldn't get into that. But the actual physical logistics of defending those countries, the US still needs to be there irrespective of Israel.

If Israel didn't exist, the US unfortunately still needs to be there. I don't think that's crazy at all. So my my last question is about global food supply and prices. And you said at the outset that there's just a huge lag because the growing cycle between the constriction of certain inputs, fertilizers, and outputs like you don't see the consequences right away. What are we going to see in the next couple of years? So one of the two of the big things that were knocked out this year, most fertilizer is not gas in a bag.

Natural gas is that one-third of the world's oil production. Qatar was knocked out this year, half of its production with a big Nat gas producer. And there's because of that the feeds the thing that makes the fertilizer Nat gas has gone up in price. As I said, it's only $2 in the $3 in the US. It's $30 in Asia. The price of natural gas. What what I just sorry again to start interrupt you. What percentage of global food supply is directly traceable just to the nation of Qatar? Oh, sorry. I'll say no to Qatar. Just Qatar, which is one of the biggest gas producers.

It's 1/5th of the world's LNG. So it's a decent chunk. It's it's like of of the world's food. It's a a fifth of of terms of LNG and and ammonia production. It's just funny. So you got a country of 400,000 people. It's just a tiny little country. One of the smallest countries. Yeah. And is responsible indirect but kind of directly really for like a huge percentage of global food supply. Yes. And also not just Nat gas, you have sulfur. Yeah. What you know a lot of heavy crude oil produces a lot of sulfur.

It's and you have to remove that sulfur and sulfur is pretty much free. You can buy the sulfur like someone will give you away the sulfur. If you go up to Canada, they desulfurize those oil sands that they pick up. They have to desu they have mountains of this yellow brick sulfur. The problem with sulfur is that it's not the actual material itself. It's kind of free. They would love to give it to you. Go up to Canada and get it. But the challenge is the Persian Gulf sulfur is used to make natural most fertilizer is natural gas goes into urea and ammonia and sulfur.

And so sulfur is kind of free pretty much because the side side byproduct of the oil and gas industry. But the problem is it's not produced in all places around the world. And a big source of sulfur is also the Middle East and getting sulfur out. So the fertilizer industry has been hit by natural gas out of Qatar being shut down and sulfur. And the problem with sulfur is that Canada has a huge amount of sulfur, but it takes a while for the supply chains to turn a huge industry to point to Canada because Canada has to rail it out and get it to fertilizer production facilities.

And so the net effect is that fertilizer fertilizer prices have gone up by three or four 100% this year and it doesn't really have a big impact in developed economies like even places like that are not developed economies as much like Russia and Ukraine they produce a lot of wheat the US produces a huge amount of grain these huge food exporter the US and especially to places like China China imports a huge amount of western food so it doesn't really have as direct a big impact in the west western farming but has a huge impact in places like India poor poor countries and for those people the main variable on their crop yield is fertilizer and that has just gone up by 300%.

So that will impact a lot of countries next year when crop cycles come through next year. And I don't think it's I mean people always talk about famine and the most extreme case. There will be less food produced next year. It's not going to affect the west like America or it's just be it'll just become slightly more expensive food. But you will get you know high a lot of the world is still living at the breadline if you will and that is having going to have a real impact. So that's why stopping this now as quickly as possible and reverting to a more quote unquote normal situation is is not just urgent for energy prices.

It is going to have an impact and it that impact is going to be on the it's you know what's going to happen? No one will talk about it. It'll just happen under the radar. People will be hungrier and especially in poorer countries, places like India and places like that Africa and no one will really talk about it and it'll just be into the background of the next year or two. But that's actually already unfortunately baked in. That's not Well, you'll see people move. I mean, you saw, you know, in the 19th century, Finns moved to Sweden. In then also you saw the Irish move to the United States like food reasons.

Yeah. And so you're going to see mass migration. Every time food prices reach a certain threshold, people move. Yeah. Yeah. You've got you've got it's it goes back to this kind of the thing I began with as that you know everyone is so disconnected on where their energy all of like 90% of their energy people have this misconception where it comes from but also in terms of food people also don't realize how it's not fragile the the the oil industry and natural gas everyone thinks they're fragile they're very they're not they're very robust just as proven by this year the Persian Gulf they're they're not a fragile space but they do have a price the market price sensitivity there the market the global market for food and the global market for energy they they have impacts and some of those impacts are very very bad for especially poorer countries.

You know, it's it's it's it's and I hope that people can have a realization of that people in Europe, people in the US that have a that that rail against reality. They're railing against how food is produced, how energy is produced should kind of have a not not a you know remember there was that when JD Vance was complaining to Zelensky you're not grateful. I think that the world as a whole is kind of not grateful for where its energy comes from and is not not appreciated of it because it it's it it should be something that people should learn more about and and understand and appreciate and it will because of that it will affect how people deal with their own lives and and reality.

You know, it's it's a very fundamental part of the world we live in is oil and gas and coal and food. And we didn't leave that world. It still exists underpinning modern civilization. It's just that people have disconnected themselves and are living in this simulated world where it's all solar panels and wind turbines. That's not reality. That's like still 4 5% of the world's energy. And that people need to kind of anchor themselves however they do it into understanding where their food and and oil comes from.

And sometimes they're forced to because the situation Persian Gulf this year. But it's it's yeah, it's a kind of an interesting kind of blind spot, energy blindness. Morgan Downy, one of the great experts on the topic, author of Oil 101. Thank you very much. That was great. Thank you, Tucker.