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

Morgan and Daddy, thank you very much for doing this. We have searched far and wide for people who understand energy energy markets um the energy business uh and you came highly recommended. So I'm grateful that you're doing this. Where would you say we are globally with energy right now? Just give us the overview if you would. >> Yep. Um well to put a kind of a a a big perspective on things because people have been kind of um in living in a delusional world I believe in energy over the past 20 25 years the world gets 90% of its of its energy from hydrocarbons oil natural gas and coal it's 90% >> still >> still China Europe the US the last 10% is nuclear and a little bit of solar and wind and everyone talks about electrification of the world and uh putting solar panels up on your roof and all of that. That's you know going to be the energy transition as it's being marketed. Um that that is kind of a marketing pitch there. There has been additional uh solar wind uh energy generation capacity put in place over the last 25 years but that's been additional to that core undercoring 90% of hydrocarbons oil gas. 90% of energy in the world comes from >> oil, coal and gas.

>> 50 years ago and today in 2026, >> same percentage >> same roughly. Yep. >> And the other 10% is nuclear and then what we refer to as renewables. >> Solar and wind. Yep. >> Wow. So solar and wind are not even 10%. Like what? So what%? >> Five 5% 5% globally. So five 6% and it depends on the country but on a global scale five or 6%. And you go back 10 years ago, it was around 5 or 6%. And so, >> wait a second, we spent trillions of dollars on this and received endless lectures about it and we're still only at 5%. >> Yeah. And in 20 years time, it'll still be 5 or 6%. >> Oh, so the whole thing was a lie then is what you're saying. >> It's it's there there's a reality to there. Additional capacity has been added, but global demand for energy is growing with global population. And the only energy source that's been able to keep up with that demand for energy globally has been hydrocarbons. And the three hydrocarbons are oil, a third of the world's energy, coal, a third of the world's energy, uh roughly, and natural gas, a third of the world's energy. And that that that realization is kind of I I have this idea. People say, "Oh, are we living in a simulation whatnot?"

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 150 years. But people are disconnected from that reality and they think if you ask anyone, you know, how 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 uh energy comes from coal. Uh 80% of India's energy comes from coal. >> 80% of India. >> Yeah. Yeah. And they're growing rapidly and it's all coal. And so this holier than thou and I I can understand no one want even people that work in the oil and gas industry everyone wants to be environmentally conscious people live in the real world you know even people who work in the oil and gas and coal industry so no one wants to pollute but we also live in a world where you need energy to operate everything it's and not just energy you need plastics that go into everything uh you need petrochemicals that enable modern civilization and you know this is this is a very new thing The oil industry started here in P or down in Pennsylvania in 1859. So this is we 15 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 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 uh you know as a an additive nice thing to have. Um 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. Well, that is so when you say that we are living in a kind of simulation, the simulation you're describing is one in which people don't know that. >> Correct. People have disconnected from where their energy comes from that enables everything, where their food comes from. Uh everyone talks about the fertilizer crisis because of the hormone shutdown this year. Uh fertilizer uh 80% of the world's food that's grown everywhere across the entire world comes from natural gas. natural gas because remember it's 30% of the oil to 30% n gas 30% roughly is coal that 30% of n gas that makes ura and ammonia and all of the fertilizers and if those fertilizers didn't exist it's in basically ammonia and ura or n gas in a bag it uses fertilizer if that didn't exist we would have uh we have say the world's population is 8 billion we could only support maybe two billion if we didn't have nack gas so not only is it the energy system >> wait what >> yeah there would be if you turn off net gas production, natural gas production.

It's very closely, very similar to the oil industry. It's one/ird of the world's energy. Uh that produces nit nitrogen in the form of ura and ammonia. It is the essential uh fertilizer for uh growing crops globally, all crops. And with the hormone situation this year uh because you had a n gas production comes out of Qatar. Um you had a a disruption in in uh fertilizer production because natural gas is what produces fertilizer. Um that that's going to result in next year 2027. Usually there's a lag because crop cycles or seasons um that that lag is going to be one of the kind of the 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 this the the simulation that most people in the world are living in especially in western uh civilization is that they have forgotten or just are not aware of the fact that hydrocarbons are nine 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 in in uh as a fertilizer? It was a a discovery in Europe in the 1910s was a the uh habbos

discovery where you take it. It used to be uh back in the 1800s and this is why how all new this this situation is. Back in the 1800s, um, 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, uh, you used to have to rotate crops. It's a very slow process. You put down tubers. And it was a very you have to do cycle by cycle. Every few crop cycles, you had to plant a nitrogen fixing uh, uh, to get nitrogen from the air and pull it into the soil. >> Otherwise, you would exhaust the soil. >> You would exhaust the soil within a season or two and your yields would drop down. And um this this discovery around 1910 you could take natural gas which is a hydrocarbon and when I say hydrocarbon it's these molecules contain hydrogen and carbon from amoeba millions of years ago or animals millions of years ago buried underground uh they basically with pressure and heat over millions of years it turns into crude oil or natural gas or coal one of these hydrocarbon fuels and um around 1910 it was discovered how to use uh natural gas um and you take the nitrogen from the air.

Use the hydrogen that comes from the hydrocarbon of natural gas and you can make um uh fertilizer which basically you can put the nitrogen into the ground with a powders and things like that to uh as a fertilizer and it increased crop yields by five or six00% over time. Five or six hundred%. 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 it kind of it doesn't annoy me, but it it um disturbs me when people are 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 and similar proportion of food comes from that hydrocarbon ecosystem. >> Most people don't like thinking about life insurance. It's one of those topics you tend to kind of put off. But if you're married, you've got kids, you've got people who depend on you, you probably should think about what would happen if you weren't around. And that's why we've partnered with Ethos. They've made getting life insurance super easy.

You can do the whole thing online. You don't have to sit down with an agent or go through a medical exam. You get a quote in seconds, apply in just a few minutes, and in some cases, you get coverage the same day. You just answer a couple of simple health questions. You get up to $3 million in coverage. Some policies can be yours for as little as 30 bucks a month. So, it's a good deal. If you've been putting off life insurance because you thought it would be a very complicated, expensive process, you should probably check out Ethos. Take a couple of minutes, get your free quote online at ethos.com/tucker. Ethos is ethos.com/tucker. Application times obviously vary as do rates, but we think it's pretty good. So, you're saying if we were to shut down natural gas production globally, 6 billion people would starve to death? >> Pretty much. Yeah. And I was in New York yesterday. New York has banned drilling for that gas. The New York State sits on top of uh a field, a uh a uh nack gas field that runs right through West Virginia, Pennsylvania, the Marcelis, and Utica >> and the the names of the hydrocarbon basins. New York is New York City has uh if you look at go to Manhattan, New York, you'll see these big power stations, four big power stations on the the east side of Manhattan, those run on natural gas. And so all of the electricity for and there's a big one in Queens and a few others. But those big big power stations in Manhattan, they run natural gas. New York State has banned natural gas, drilling for natural

gas. They sit on top of a huge amount of natural gas. They've banned it. They've also banned the pipelines to deliver natural gas, new pipelines. So they're cutting off their face to spy or cutting off their nose to despite themselves in that they're denying the fact that the reality is all of the electricity in Manhattan or New York City comes from that gas. But then they ban sourcing that fuel and they ban the piping of that fuel to the source of what turns on the lights. I mean that is absurd that the whole uh you know it's 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 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 uh the uh 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 uh uh secretly building the solar panels and and wind turbines that they're getting away with some magic there is no magic it is oil natural gas and coal >> it's it's interesting that the two wars in progress threaten the world's natural gas supply or a lot of it >> yeah 20% is out of Qar of the world's LG liqufied natural gas, >> right? Which is the process by which the gas becomes liquid. So, it could be transported by ship.

>> Correct. You just cool it down into a liquid. >> It's it's the same fuel. It's just in a different form. >> Yeah. Yeah. And what's interesting about, you know, um in the US natural gas, the US is is produces around a quarter of the world's natural gas. Um the US I just looked at it this morning, the net gas is around $2.50. If you look at Asia, >> by what unit? uh per mm BTU it's like the gallon equivalent of natural gas but $2.50 50 and uh in Europe it's $31 the same unit and in Asia it's around $31 and it's basically that energy blindness of Europe um Asia has got a separate issue in that they use uh they don't use n gas as much as Europe does but the reason to say that the discrepancy between the US being a major energy producer and it has become so over the last 15 years before that it was the US was struggling up until 2005 2009 um but that disconnect between those who are truly energy blind. I mean I I was kind of mentioning Manhattan being energy ignorant if you will of what real based reality energy is. Europe is even doubly so they they're paying 10 times more for their electricity than the US is and it's primarily >> 10 times.

>> Yeah. And and you get the you get these same situations where I'm from Ireland and I was reading you know legacy press over the last few months and people are confused about why is our they say in Ireland and similarly in all of Western Europe why is our electricity so expensive and I'm kind of shocked of the fact that people kind of go well you're paying 10 times the the price of natural gas compared to the US and the reason being is that Europe has they shut down a huge portion of their uh energy system for uh ideological reasons, not for base reality reasons. They've turned it down, turned it off because uh they kind of in an energy sense, they kind of hate themselves. And it's like self flagagillation of let's shut down all the coal plants. Let's sh shut down all the nuclear plants. Let's try and move off that 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 is our electricity gone up by you know 200% this year or 100% this year. And uh that there's a kind of a disconnect there.

And um it's it's a it's it's amazing that that it it uh that just the level of of lack of knowledge of basic energy economics and this is because of political pressure from green parties in Europe like where did this come from this idea that you have to destroy your own civilization >> there there has been a lot of ideological capture there there has been a different movement I mean there's The environmental movement kind of started in the US back in the 60s. Um, >> can I just stop you right there? And just to be clear, our environment is disgusting. This country is much dirtier. Europe is much, much dirtier than it was 30 years ago. I mean, I visit a lot. I know. And so, there's no actual concern for the environment for like trees and cleanliness and keeping graffiti off your buildings and cleaning up your streets. Like, it is dirtier and the US is way dirtier. We've had unconstrained development. So, like none of this helps the environment. Just I just want to be clear about terms like no matter what they tell you.

>> Yep. Yep. And so the original environmental kind of the modern environmental movement started in the 1960s in California. California had a real smog problem and um uh you had and legitimately had a had an environmental issue. lived in Los Angeles at the time >> and they the uh this is before the EPA existed as a concept or as an organization and in the 1960s California had an issue and they created the carb ca orb uh California area resource board and they clamped down on the amount of sulfur and other pollutants that were really in oil back then and they also removed lead from gasoline. Lead is you had been added to gasoline from the 1920s. It's a it's a neurotoxin. You know, lead is obviously and uh but it improves the octane of gasoline. But California was leading for legitimate environmental reasons. This is all a very uh good reason to kind of uh 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 uh brought everyone had to put in catalytic catalytic converters and those catalytic converters um 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 uh the lead wasn't removed because of that reason that's kind of the the dirty little secret of the uh the business is that it was removed because if lead damages the catalysts in the catalytic converter so anyway California did clean up its air in the 1960s and it was a cutting it was they

were the leading uh edge of that movement. Um then EPA was established and there became a federal uh kind of environmental movement. Um and then but what happened was that movement kind of was then captured by uh political agendas and and uh social agendas and ideologies that were independent of environmental reasons. It became more of uh 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 uh impact in the 1960s and 70s in the starting with California but then over the past 50 years it's been captured by political movements that have wanted to uh 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 19 in the the alts the 2000s you had a big movement against fracking remember you had that Matt Damon movie someone turned on the faucet and flames came out of the the faucet because of nat ass and that doesn't happen. I'm sorry. That that was a propaganda that movie and and myth and and but that was kind of when the fracking industry started. A portion of uh the US oil and gas industry started and um 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, um if you fast forward it, 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 uh the uh data center lobby. So it basically there's there's a there's a stop oil uh group like what I I look at that group and I I think you know uh that's a death cult a so 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. The 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 there's a a kind of a feelood like who who is anti-environmental? No one. Even people work in the oil and gas industry. They love the environment. They they're just normal people like you and I. And but it's it's been a capture of that environmental movement has been captured by you know the the carbon capture you know the net zero growth in Europe and the in the UK all these countries have destroyed their economy under the opaces 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 uh it's been the environmental movement has been captured by control people who want to control how you live how much energy you buy what your carbon credits are today, what your, you know, your your your your welfare uh 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 uh they get a $100 check from the government for um because their electricity bill was

too high. And I thought, hang on a sec. Excuse me. The you got a what? And so every every taxpayer, I guess, in New York um get a $100 check. And meanwhile, they're banning pipelines that are bringing that fuel to New York. They're bring they're banning natural gas production, which is the fuel that's burned in those power stations. And natural gas is very clean fuel. And um it's it's uh the they're by making it dependent on the government by controlling or trying to shut down energy production, it makes even more dependent on the government. And uh so and Europe has been far more ideologically captured. And the reason for that is of course the centralization of power in in uh 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 uh you know if you ask your average person in Ireland or England or Ireland or France or or Spain um who their MEP is or 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 uh especially of um 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. >> So the bureaucracy of our banking system makes running a small business a lot harder than it should be. When entrepreneurs need capital, traditional banks drag them through weeks of red tape and paperwork. It's highly frustrating if you've done it. Working with Cardiff is totally different. Cardiff is America's favorite small business lender because it's built specifically for independent business owners who move at a very fast pace. Cardiff has loaned over $12 billion to small businesses across the country, cutting out the delays that big banks inherently put in the way. With Cardiff, there is no long wait. If your business has been open for at least a year and makes at least 20 grand a month in revenue, that's revenue, not profit, then you can get up to $500,000 in same day funding. It's that fast. Cardiff's online application takes three minutes. There's no impact on your credit score. You just get to see your options and you get approved and funded before the workday ends. So, we are not and would never encourage people to go into debt.

But there's no way to run a business without borrowing money. It's just a fact. Skip the legacy bank delays and get up to $500,000 in save day capital right now at cardiff.co/tucker. That's cardiff.co.co/tucker. Real growth, fastfunding. Cardiff borrow better. What effect does that have when a society begins to pay 10 times more than it used to for energy? >> You can't you don't have economic growth. I mean everyone looks at Europe and says why is there no economic growth in Europe? because they've killed their they are killing their energy and industry >> and that means people don't have >> everything's expensive >> families they don't have houses they don't have >> expensive everything becomes expensive oil gas coal and it may you you you don't necessarily see the energy being produced that's kind of the the reason it's so uh uh dangerous for people to be energy blind is that um people don't see where their food comes from or where their energy is produced and so they just think oh things are more expensive everything Building a house is more expensive. Uh buying a car is more expensive. Uh everything it becomes more expensive. It just becomes part of the the background noise of living of life becomes that everything is a little bit more expensive. And the real reason is that energy in Europe has been has been deliberately made more expensive than it needs to be. And um there's one part of it is is control.

Another part is you've got a um 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. >> So what explain what you can't see. So let's start here. 10 years ago, Europe, let's just say Western Europe, the countries Americans vacation in, got its energy from where? >> Where did the Yeah. Where did the energy come from? From Germany, Spain, >> Belgium, France, UK. >> Uh, a third came from oil. And that oil came from oil is a global market. So, it's always been a global market. Um, it's and that comes from Russia, uh, the Middle East, uh, West Africa. So oil kind of comes from a little bit I mean it's it's it comes a little bit from everywhere. Oil that's a third of European uh energy 10 years ago, 5 years ago, even today 30% is oil global. Uh then they've got natural gas. Um Europe used to buy a lot of its natural gas from Russia. They famously built the Northstream pipeline across the Baltics uh to these two big pipelines. One never became active, Northstream 2. Um, one was uh destroyed in uh uh unusual circumstances, I'll put it that way.

Five months into the Russia Ukraine >> and the US government took it out. >> It it made Europe uh uh dependent on the US um exporting natural gas. So it basically, you know, there's there's a theory, you know, one theory behind a potential, you know, situation where, you know, that was a very difficult operation for someone to knock out an undersea pipeline. Um, did Ukraine really do that 5 months after the war started? You know, they I don't know if they have the uh the skills to do something like that. So, I would say say it was the US just for argument sake >> and not Ukrainian. Well, just for the record, we were told at Fox News and the whole world was told that Russia took out its own pipeline because Russia is so evil that having run out of people to hurt, they decided to hurt themselves. They told us that. That was on the front page of the New York Times. I was encouraged to repeat that lie. I didn't. But >> yeah. Wow. I mean, that just shows you >> how stupid they think people are.

>> I don't know if it's if it's uh stupidity. I think it's more of um that it's it's more of narrative setting. If you kind of set a kind of a dystopian view of information that everything is absurd, everything everything becomes you like you don't believe anything. Like there's no it's it's almost like they know you're going to laugh at that Putin would destroy his own pipeline. But then it kind of makes people who read that think, well, why do I believe anything? You know, it's kind of like a you sets people into this the the mush of believing being more malleable to to uh >> right they're turning the population into nihilists because they're nihilists are easy to to control. >> Yeah. But say it was but say it was the US government. Just let's put it put out there. Um and uh it did make uh Europe much more dependent on uh the US. And it goes back to also, you know, Trump uh we were talking this morning at breakfast is a very um has a very he operates in a very people say he's transactional. He's not, you know, in terms of he's not a strategically I think he's strategic also, but he's very transactional like a business.

>> Yeah. He's not ideological. Yeah. And then but he's also very he's a very uh personal uh he he's he takes things personally and as he you know he's a normal human being and so he got he became president you know inspired by Seth Meyers mocking him back in the in 2011 at the correspondence dinner um when Trump won the first uh time he was president um you had uh Angela Merkel and all the European leaders openly laughed at him. They mocked him and uh when he told them he chastised them there was a famous NATO meeting where they were mocking laughing at him. He was warning them do not be dependent on Russia for that gas and then also at the same time push Russia you know threaten Russia with uh you know weapons on Russia's border via NATO and other uh structures and um they mocked him openly mocked him and laughed at him. So I think that uh Europe um you know they they you know was it the US had that knocked out Northstream? I mean the US benefited hugely from that situation. It also uh was a little bit of revenge of Trump on those European leaders Merkel and that that mocked him and laughed at him um when he warned them about Russ them being overly dependent on Russia. Um >> so how much more LG does Europe buy from the US from what it bought 10 years ago?

It's a huge amount more. It's it's doubled at least. >> Really? >> Yes. Yeah. Yeah. It's very much and and the US um and it's growing every day and the Europe is becoming a a hugely energy dependent vassel of the US. Um I mean the US did make a decision back in 2005. Um it didn't make a decision. It happened in 2005 starting that the US oil and gas industry was transformed by two things. You had fracking which basically you pump water at high speed or high pressure underwater and it fracts. It basically became a new production method uh back in 2005 roughly um at scale and then you had horizontal drilling where you can drill down. It used to be 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 um than you could hit before that. And the US oil and gas production had been declining since the early 1970s to 2005. Um, with 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 it it didn't happen because there was no government policy that really enabled this. This was the oil and gas industry realizing this new technology transformed the space. And um 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. Um now uh and it was like one well in a 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 and it's a hugely uh uh interesting technology you know that development um but it's 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 as an oil producer and now we're net exporting oil and making Europe dependent on netcast. We can we if if the US shuts off uh uh you know the US released an SPR back in earlier this year and you know who who benefited most from that SPR release not the US Europe they they import 90% of their oil and so all those SP all those SPR crude oil releases they went into European refineries and Europe went thank you sir to Trump you know to the US

administration so it it uh Europe is a is hugely dependent on the US for energy and because of that I mean oil has has uh 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 you know oil and natural gas. It's also enabled um every the the political sphere and and geopolitics and um and Europe is now is kind of a is dependent hugely now on the US and they made that decision. They made that choice. They they banned energy production pretty much in the North Sea. I mean, they they'll say, "Oh, they technically didn't ban it, but they made it such that you can't drill in the North Sea." Um, I mean, the difference between Europe and the US is is very striking energy. In the US, if you buy a piece of land, you buy the the land under this table. In the US, as a private individual, you you own that land the whole way down to the core of the earth. All the minerals, if anything's in there, gold, oil, whatever, you you own it. Everywhere in the world, outside of the US, in Europe, uh the government owns it. You own the the surface down to a few feet.

>> The dirt. >> The dirt. That that surface layer. Everything below that is owned by the government. And are you going to risk your private capital to drill and uh you know in a very the oil industry is is uh you know it's not risk-f free. There's a lot of dry holes that are drilled and and there's a huge amount of capital risk and capital required to do that business. Um you're not going to drill it when the government's going to take it all. Why would I do that? I'm going to you know. So that's why the US also has a hugely booming oil and gas industry. The government just stepped back. There are environmental controls and you can sue an oil and gas company if they pollute your water where it doesn't happen. But you as in they don't pollute uh water tables like the environmentalist groups say you know can happen but um 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 uh but the government stepped back and the oil industry and n gas industry flourished um and just let do the thing and look at the situation na oil is I filled up my tank here yesterday in Maine it 345, sorry, 3.85 a gallon in Denmark. In Europe, it's $12 a gallon. I mean, these guys are >> for gasoline.

>> Yeah. Yeah. And Denmark is obviously the kind of the is a high price point in Europe, but roughly in Europe, it's four times or three or four times gasoline. And and people >> That's so weird because I mean there's in the region in Scandinavia, famously off Norway, there's massive energy reserves. >> Yeah. Norway is a very um they're as based and in terms of energy economics as more so uh I'm glad they exist in that environment, but that they're not part of the EU. They never joined the EU because they knew they would have to be they would have to join into that that blob of no energy production and self-hatred in terms of energy production. And so, uh Norway is in Europe, but it's not part of the EU. They deliberately stayed out there in the E, uh the European Economic Area. So, it's kind of like a junior version of the EU. And because they realize that the blob in B in Brussels, they have no idea about how energy works. They're so disconnected and they're blind to it. And uh so Norway is a very good example of um uh they you know produce a lot of oil and gas. Um so Europe has a lot of energy resources there. they just don't use it and it's uh 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 um they have no money because they're uh they've made their energy uh they've taxed the health I mean that difference between 385 in here in Maine and $12 in 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 they tax the hell out of it there and it's it's it uh has destroyed their is destroying their economy. Um energy is the fundamental bedrock of everything. >> Owning a home has always been the core of the American dream. It's the asset that families work their lives to build. Place of stability, security, and actual wealth. But too many homeowners right now are stuck swiping credit cards to cover groceries, paying a survival tax of 20% interest or more. So, we're against debt. We always say that. But you can't buy a house without debt right now. Almost anybody has to take out a loan. So, the question is, who you going to get a loan from? Why are you handing your money to big banks when you can keep it for your family? Our friends at American Financing have a better way. They're helping homeowners tap into their hard-earned equity. They're supporting Americans looking to fulfill the American dream of owning a home. American Financing saves its customers an average of 800 bucks a month. That's nearly $10,000 a year.

It's not just a loan. It's a total financial reset. And so, American Financing is worth looking at. They're called America's home for home loans for a reason. Find out more at 8006855696. 800685-5696 or visit americanfancing.net/tucker. So, the idea was that you Yeah, because I mean it's priced on the international market. So, you know, Denmark's buying oil at the same whatever the brand crude price is or whatever, however you're marking it, >> the same price everyone's buying it for. Correct. >> Pretty much. Yeah. The difference is just tax. Yeah. >> So, you tax things in order to discourage their use. That's why cigarettes are $20 a pack. >> Yeah. And and you know, so I I noticed recently I was reading something that in Australia they tax cigarettes or something ridiculous. 20 $30 a pack. Uh the amount of illegal untacked cigarettes now in Australia is like it's 80% or some ridiculously high amount. They lecture you like you're a bad person. >> And I mean tax has an impact. We were talking about it earlier that you know I grew up in 1980s Ireland. Ireland unemployment at the time was uh 22%. You know it was it was bad. We joined the E the legitimate thing. We joined the EU and it was the EU that that did it for a good reason. When Ireland was in the 70s we joined 1973. Ireland had a protectionist environment back then. We made shoes and weird stuff. There was no economic reason for Ireland to do that.

So we joined the EU and we had 3% unemployment in 1973. By 1985 or late ' 80s it was around 22 23%. So went up 20% because we had to drop all the tariffs. All these companies went bankrupt. But what the what Ireland Ireland could have gone socialist. Ireland would never really go that kind of like weird socialism. But the what Ireland did was and it was one of the most uh great uh government decisions I think in history for a western European uh 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. Um Ireland just said let's uh cut tax to zero or as close to zero as possible. Corporate tax zero and 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 laugher curve with Reagan, you know, where you cut taxes, growth uh takes off. Uh 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 boomed for the last 50 years since or 40 years since. It was basically proof that tax has a real impact. And um it was there was no lag. It didn't even take 10 years, 5 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 um hasn't looked back since. I mean, there were a few, you know, issues over the time with the housing crisis. You know, everyone had that great 2008, but um it it was a a proof point of tax, you know, creates incentives. I mean it's a >> so the reason you tax hydrocarbons is to get people to use them less use less of them but that hasn't worked. No, it hasn't. Not at all. You know, the interesting thing is that if you go back over time, uh global population is now 8 billion roughly, give or take. >> 83. If you go back over time, 50 years ago, you know, generations back, I mean, say 50 years is a generation roughly. Say just for argument sake. Um today the world, every person per capita in the world consumes four barrels of oil.

Today, 2006, 50 years ago, it was four barrels of oil. 50 years before that, it was four barrels of oil. So doing the tax situation, all it does, >> is that true? >> It's four barrels of oil per capita. That's across the entire world. China, India, it's four barrels of oil per person. And you've got a >> And that's never changed. >> No, not at all. It hasn't changed in the last 100 years. And the oil industry is not that old. It's four barrels. >> That's amazing. >> And what's interesting is that the US in the US, the US consumes, the US is a very unusual place in that there's a lot of space here compared to Europe. Europe is a very dense place. You've got uh the US consumes around 20 uh barrels of oil per person. So remember the global average is four. The US per person per year. The US is 20. So the US is quite up there. But the US you've got spread a spread out population. A lot of commuting driving to and from school and offices and whatnot. I mean everyone thinks of the US be New York City. No, there's everyone lives in, you know, distant from their place of work or or so. The US consumes 20 a day barrels of sorry 20 barrels of oil per year per person. Um 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 or just over four but the world is average is around four barrels per person per year. And so because Europe is more dense, remember they consume 10 barrels per person per year versus the US. Um you can build a lot more trains in Europe, the whole, you know, uh everyone thinks trains are in Europe are

more and bicycles are more popular because they're just greener. No, it's because you get a lot of population living closer together. Europe is a very very dense place. Um the US is not. I mean you have dense spots of the US, but in general the US is much more spread out. And um where is 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. Um and then also politicians lie about it. They just say, "Hey, it's the oil companies making that money." No, they're the 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 refineses it, that produces it, that has to transport it. Um, eight of the 12 is going to the government. And um, so most people in Europe, they they're disconnected from the energy market. And I don't want to kind of harp on Europe as as but it's they're they are the most um extreme uh signs of that energy blindness, that just complete unawareness of >> Well, let's just take the UK for example. So the UK had a pretty robust oil and gas industry based in the North Sea. That's where the >> brand oil field was there which is now defunct I think.

>> Um but they're not extracting from the North Sea. Is that cuz there's no energy left there? >> No, there is there is oil there. I mean it's look at Norway. Norway is still producing. What happened in the UK? >> Also from the North Sea. >> Also from the North Sea. It's the same roughly the same oil fields and gas not gas fields. And what happened in the UK was that um you did have oil fields when you drill them, they do decline. They they're nonres renewable resource. So they they do decline. So you've got to constantly go exploration and production. You got to go out and drill and explore and you take some risk because you can drill a dry hole or um so there's a lot of uh uh capital to be risked there. But in order to encourage people to risk that capital, you know, say say oil today say roughly $100 a barrel uh to produce that oil is uh 60 $70 a barrel in the US. It depends on where you're producing and if it's onshore offshore different environments, but say it's $60 a barrel. Um 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 as long as you're 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, there they call windfall taxes and whatnot. Um, I'm no one's going to risk money in that environment to to drill a build a rig offshore and uh, you know, helicopter everyone out there every every few weeks and uh, you might drill a dry hole. Um, it's a, you know, the the Norwegians understand how it kind of works and they've kind of created a more um, profit incentive for part of that oil and gas industry to take that risk. But um the US has kind of proven they're like the Ireland. Ireland proved that the ler curve low taxes economic boom it just works. The US uh 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. Uh it is sorry not one of it is the largest now energy producer in the world for oil and that gas. and just by step stepping back and just let these guys do what they they're going to do. They they're they are regulated. There's controls around in terms of envir environmental but the UK regulated remove the profit incentive no oil production or net gas just dwindled to almost nothing. the Brent Brent crude um you know the Brent crude is kind of the price people quote in television $110 a barrel and there's the WTI crude index which is West Texas Intermediate

and uh 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 uh uh US crude trans goes transatlantic and sets the price for Brent. So Brent crude is actually now set by West Texas inter intermediate set by the US crude oil market. And so even with that Brent crude as 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 uh on production and it worked. It's it's very there was a very simple thing and it's the proof is here here we are. Um 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 knacks 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 at large.

Um, 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. Uh, you're driving past me on the road. Um, I'm the electricity here is either is oil uh or sorry, it's n gas or coal. And so the um 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. Um and as I said it goes back to a combination of ideology and um I don't want to say ignorance because ignorance would imply that there the information is not about available out there and how energy is produced. It's more ideology than anything else. In late October, AI bot hackers launched millions of cyber attacks across the world and governments worldwide suddenly took down their websites to protect them. So think about that. That means government can't keep its own systems running.

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I think that energy policy globally um especially in the west um is it is definitely not designed it's not designed to help people at all. It's there's that that is not no part of the the consideration. It actually it's it's more it's designed how can we get because the political class know that energy is essential to modern life and so it's a method of control. If we control how people consume and produce energy, we can control a lot more of their lives than uh otherwise. And it's um so yeah, it's it's it's more the energy policy is more ideological. It's not to help people. If the helping people on energy policy would be to step back to reduce government involvement in energy policy and um 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 uh before uh just during the uh invasion, Russian invasion Ukraine, Europe put these sanctions on uh Russian um oil, crude oil exports, and they set the price at $60 per barrel versus uh Russian exports. And um that's they put those that it didn't change hardly one bit what Russia produced in terms of crude oil. It was basically selfharm on Russia on Europe. They set these uh the price $60. The price went to 70 and Europe basically starved themselves of crude oil. I mean you couldn't believe this the how badly Europe has used things like sanctions and energy policy. It they have done almost everything you could possibly do wrong. um in terms of energy policy and all those sanctions and the US has not uh has fallen into the sanctions trap also imposing sanctions on uh 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 uh trying to restrict by economics um how much oil those countries could export. Those count 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. >> So all you did was lower energy costs for China. >> Yeah. And it enabled China to China's been gorging on the sanctioned oil from those three countries for the last five or six years. So, I mean, again, back to your point that you can't ascribe decisions like that to ignorance because the information is available. It's demonstrable. It's obvious. I mean, just look at Russian, Venezuelan, Iranian oil output. And you're like, well, where's the oil going? It's being bought at a discount by our main geopolitical rival, China. >> So, you can't say that they don't know that that's happening. So, you have to at a certain point, if it continues to happen assume >> it happening is the point of the exercise. like this is an effort to help China over the West. Like how is it not that? >> I think I I think that um there's there's and it it it showed the limits of control of the blob if you will, the deep state, the blob, the bureaucracy. There's they they think they can control energy markets at large globally. They cannot. And so they that was kind of it showed where that that controllability >> they kept doing it >> because these are these are not uh uh quick moving entities the EU I mean they make a decision and it's it it goes in place and it stays there for 5 10 years and it they're very slowmoving bureaucracies and the oil and gas industry showed the limits of the the

stupidity if you will of that uh those decisions and it I think they thought that they could somehow control the oil industry and and and we saw industry just oil production globally. They can't and um they shouldn't. I mean, my god, if they did, we would all be in trouble. If if uh if if those sanctions and things like that worked, we'd be paying if if they stopped uh Iranian production, Russian production, Venezuelan production, it would hurt us all. You know, it's it's like uh 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 uh I say the world is 100 million barrels per day of crude oil. Uh China is uh consumes 16 million barrels. They import 12 of that. So they're huge oil importer. They don't produce that much oil. Um they've been building up their stock piles ahead of Taiwan 2027. I mean it's a publicly acknowledged uh 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. Um and as part of that they needed to uh 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 stock piles. And China went from uh almost very little strategic storage four or 5 years ago to now they have 1.5 billion barrels of oil in storage underground salt cars. 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's built up has happened all of it pretty much with sanctioned oil cheaply created by the US sanctions and uh European sanctions on Russia Iran and Venezuela. China's gorged in that oil to build up their SPR ahead of a Taiwan uh 2027 invasion. And so it's sanctions don't just aren't necessarily ide uh 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 that than they have but they've been enabled to build a huge reserve ahead of uh a potential planned you know alleged plan for 2027. So the sanctions >> why I mean if you just wouldn't mind stating the obvious why would China want to stockpile energy before moving on to Taiwan >> because all of their ships you know everyone has this myth about China being solar and electricity and what and they do produce a lot China gets electricity is 60% of their energy comes from coal 20% soil and the balance is natural gas 20% natural gas and then they have solar and wind even in 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 nuclearpowered vessel, but they 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 Malika and Singapore or Hormuz, it's already blockaded, but if you blockaded those, um 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 uh navy military equipment that they need for an invasion. What percentage of China's electricity is produced by coal? >> It's it's around I think it's up in the 70s 70%. Overwhelming. >> Yeah. >> Why coal? >> It's cheap. It's cheap. That's that's the the actually a very good question to ask about why and any of this like why oil? Why coal? Why? Um the first thing is cheap. Why does India make 80% of its or use 80% of its electricity from coal? It's cheap. Coal is the cheapest way to produce electricity. And not just anywhere. It's in the US. The US produces a one-third of the US uh energy consumption is coal. And coal has got a bad rap. And I'm, you know, I'm going to be not careful here, but you know, coal um back in the the 60s and 70s back when the smog issue was around and the coal industry did really transform. And yes, there's this whole thing of marketing word of clean coal. Um but basically when you burn coal uh the most dangerous thing the most immediately dangerous thing is uh sulfur sulfur going into the atmosphere and it falls it turns into sulfuric acid it 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 uh uh where they burn the coal and um those scrubbers can remove pretty much

most or all of the pollutants that come out of coal. The only downside is it's it uh it's uh it's very expensive to put those scrubbers on or whatnot, but coal gets a bad rap, but it's cheap. It is so cheap. And um it's still the >> Why is it so cheap? Cuz it's so abundant. >> It's it's uh it's abundant. It is the most it's it's similar to uh to um Yeah, it's abundant and it's easy. 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 could 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 well European Europe banned natural gas uh production and so they don't produce any but they're they've decided to be dependent on others and um 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 uh it's uh it it it's enabled so many different uh tech 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 uh all the the others you know it's plastics it's it's a uh it's it's in everything but yeah going back to your your original question is cheap that's why it's the base load it's one/ird 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 uh all the others nuclear, nuclear is very expensive just because of all the regulations around it. Solar and wind they're not uh the the economics of solar and wind are dependent on location. You know what the oil and gas industry these are uh sharp guys and women who are uh 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 uh a uh it's sunny in Texas a lot. It's during this most of the year and um solar panels are cheap from China. I mean, we're basically, we don't want to become too dependent on China for those uh solar panels, but um you're basically kind of technically importing coal because that energy to produce those solar panels was built by China gets 70% of electricity from coal. And so those solar panels are

really disguised coal and China basically is willing to uh 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 uh of these quote unquote environmentally friendly uh uh energy sources. >> What about wind turbines? >> Wind turbines, I mean that's it's very very it's tiny in terms of the global energy. It's tiny. It's like a few percent. And it's very difficult to scale and uh you've got issues with it's too could be too windy, not enough wind or or it can be uh it's a very unreliable energy source. It I'm not knocking them because it they are useful in some parts of the world at some times of the day at some, you know, they're they're an additional energy source. It's a good thing to have, but it's it's not a base load. We can run our society off that energy source. um you know that for all good and bad pe you know intents it's hydrocarbons we have we depend and need hydrocarbon production and maybe with AI we come up with uh you know uh fusion uh uh uh some new um 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.

>> How many uh how many countries have deep coal reserves of the big countries? I mean, how much coal is there in the world? >> Um there's a lot a lot more. Like we're not never going to we're not going to run out in the next 50 100 years. Um a lot of Australia produces a lot of coal. Um or has a lot of coal. >> Has a lot of coal. Yeah. Um uh China itself, China itself produces a lot of coal. The US produces a lot of coal in you know the Appala in Appalachia. >> Wyoming. >> Wyoming. Yeah. It's less than it has been because you know what destroyed the coal industry? Everyone thinks, you know, Mike Bloomberg walks around, you know, he's he is who he is. The ex mayor of New York, >> Stalinist Mitch. >> Well, no, he's been called that. I I'm not I'm not endorsing the title, but yeah, he has been called. >> He he, you know, he he banned straws in New York. Let's put it that he's one of those guys. >> And um he but he, you know, railed against um coal the coal industry in the US. And he, you know, claims or one of his, you know, he says that he, you know, helped destroy the coal industry.

The coal industry, coal production, mining in the US was destroyed by fracking and and uh natural gas, cheap natural gas. It was undercut. It wasn't coal wasn't destroyed by burning coal wasn't destroyed by environmentalists. It was undercut by the n gas industry in the in the US that discovered fracking and horizontal drilling, you know, drilling these wells sideways. That was amazing technology development back in the early 2000s and um and that and fracking as well. You're pumping these wells with water and cracking the rock a couple of miles down. Um 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. >> That gas became cheaper. And it's one of those interesting things people in the US say gas and as an oil guy, energy guy, I always make sure gasoline is the stuff you put in a car, >> right? Nat gas is a so when people if you say gas to an energy person they always think you're talking about nat gas um because you it's but it's a yeah gas n natural gas and and no one ever talks about it it's like a hidden fuel because it's in pipes no one ever pumps it you kind of it just gets goes to the power station it's onethird of US electricity of energy not even electricity energy is from that gas and it's the it just hums along behind the scenes no one ever complains earlier on this year it was per MMBTU because it was a coal snap up here. Sorry, in down in Texas and it's now $3 per MMBTU, but no one complained when it was 10. It's a

third of the US energy uh 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 um not gas is uh is probably, you know, everyone talks about energy independence. is 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 um 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 a 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 n 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 uh in terms of potential there's pipelines that are blocked that people are not allowing that those two things just uncracking the n gas production uncracking n gas production in the US will that is truly will make the US such that um it will not just disconnect the US from physical energy, it will also price disconnect because remember Europe is $31 net gas.

Uh 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 field to do that is really nack gas. Um oil is always going to be linked to the world. Coal pretty much is going to be linked to the world, but nack 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 that gas. As I said, no one talks about it because it's it's under it's in pipes. It 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. Um they what they you know, banning the fuel that makes the light work. Um and so it's um that is kind of it's an interesting fuel in that regard and it's um it's it's production is growing at a rapid rate in in the US even at $3 it's so cheap net gas it gas cheap net gas killed the coal industry that did not Mike Bloomberg n gas killed the coal industry and net gas can actually can continue to transform we've got energy demand growth over the next five 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 just it happens it's like people because that the cost of doing everything becomes cheaper. So whether it be a data center

or it becomes a a factory making something, you know, for China's making something because they've got cheap energy. They use coal, that's their cheap energy. The US, if we increase snack 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 uh people will build things here with just cheap energy. Um so yeah it's that gas >> trying to gasify some of its coal. >> Yeah there was a big thing of it this year you know when uh >> what is can you explain that? >> Yeah it's actually it's an interesting because again these are oil gas coal or hydrocarbons. So you can turn coal into crude oil. You can turn coal into n gas. You basically have to heat it and put it under pressure and those hydrocarbons and even oil refineries do this as well. They transform the hydrogen carbon atoms into a different hydrogen carbon atom. And so coal is hydrocarbon in solid form. N gas is kind of the most pure form methane, another form of hydrocarbon. And so and oil is the same. And so you can change by heat and pressure just simple, it's a relatively simple chemical reaction.

Coal into n gas, coal into gasoline. The problem is and it was made famous in the 1930s in Germany. That's where it was fisher trope was the technology. Germany had no oil at the time a tiny amount and it 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 uh $200 a barrel to do that process to turn coal from coal coal into uh crude oil into gasoline. So it's very expensive, $200 a barrel and so you can technically do it and it's it's uh 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 cost $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 uh coal to liquids as the people call it in the industry. Um 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 just like any other place they boil it which is basically what oil refinery does. You boil it and it separates into Napa 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 uh is very basic. You basically boil this

crude and the different cruds you know Venezuela is sort of heavy oil. It's basically like tar thickly. You've got some very light oil out of West Texas all this 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 um China basically does buys uh oil and refineses 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 uh the 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 why did they curtail almost shut down their oil imports when the war in Iran started? >> That's you know that's the biggest question in the energy space this year or oil space because it didn't matter like which analyst you talked to or which oil company you talk to or which people you know people in government that should supposedly have deeper knowledge you know from various means.

Um h how did China and why did they do that? I'm glad to hear you say that because I asked a lot of people including in the US government, what is this? And some apparently hadn't even thought about it. I thought it was one of the weirdest things I'd ever seen >> and there's no consensus on why >> it is a very unusual thing. I mean basically China cut their they consumed 12 million imports 12 million barrels per day. They dropped it at one stage to six and you could then people said okay that's that's a lot. they haved their oil imports and you you can't just do that. You're like, >> but they did. >> But they did. And so people said, well, where did they get that extra six million barrels from because they cut their imports and and remember they were getting 2 million from Venezuela of the six 2 million from Iran gone. 2 million from Russia kind of restricted with the sanctions and so but anyway they they they cut their imports by two six 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 one and a half billion barrels. Remember the USS SPR is five times less 300 300 million. So people they definitely dipped into that strategic reserve um 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 um so they dipped into that uh strategic reserve um and which kind of set back their Taiwan 2027 strategy a year or two maybe longer u because they were building that up ahead of 2027 so they dipped into that strategic reserve um 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 uh they cut their prochemical productions. I mean a huge portion of oil and gas globally goes into petrochemicals making plastics and uh and making making fertilizer also but uh 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 the most simple answer they dipped into their reserves that they were using they had built up from all the sanctioned oil from those three countries that they had gorged on for the prior 5 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 economy is kind of fragile. They've got a housing crisis pretty much slowmoving housing crisis, but it's going through their economy. They've got a debt crisis. They've got a huge uh their debt GDP is huge if you add in all of their debt level like government debt, personal debt. Um so they had to kind of save their economy and they they have a record of doing this. They did this in uh the financial crisis 2008. They pumped a huge amount of money into their uh domestic manufacturing economy uh 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 and no one really knows. I don't know. Um no one really knows. Um, 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. >> Well, I've heard that. That's exactly what I have heard. But it doesn't explain why. Why did they do that? >> One, to save their economy. They need because oil is a critical part of their >> No, no, no, no. Why did they have their imports? Why did they cut their imports in half? >> Well, they were one is there was a blockade and they couldn't get the oil. that physically couldn't get the oil out of the Persian Gulf. And so that was one thing. There were there were back in March of this year exports from the Middle East were zero from the through the streets. >> Remember, but they couldn't increase it from Russia. >> No, they couldn't >> or West Africa. >> No, I mean you you can technically do it, but you have to the ships have to go the whole way around Africa and it becomes and you have to get the tankers and it becomes a logistical nightmare. China is trying to build pipelines to Russia very that's a very long distance and the oil and gas industry and long distance in oil and gas means expensive and it's also a very cold harsh environment look at you got to heat the pipes or put dilluent in there to to enable it to flow so one was technically China couldn't get access to the crude oil at that time and that now just China a lot of Southeast Asia and Asia in general India um one is that two they really did want to save their economy by releasing crude oil from their own stockpiles into the uh into the world into the uh the uh uh domestic refining space. The other one is um that

they didn't want high oil prices. I mean oil looked at one stage like it was going to go straight to $2 $300 a barrel. >> Yeah, I remember. >> And so they um it does the oil industry operates at a margin that they basically didn't want them to contribute to that $2 $300 price spike. And so uh they decided they just decided there's relatively centralized government not to import and they just made a decision and they had a stockpile that they could use and they had these other marginal things like the electric cars. I don't believe those those are at scale a big reason and they just dipped into that stockpile and then there's also the economic thing of China has been buying that $20 sanctioned oil at a discount for the past 5 years um when oil went over 100 and they've historically they stop their imports and so every time it goes over 100 even right now we're at you know 105 or 110 China's imports over the past two weeks have dropped off a cliff to again and so they're economically rational I mean everyone thinks of them as being communist or whatever they're they are they know the value of a 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. It was 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. Um, and so they they I think it was just a bit a combination of they dipped into their reserves to how their econ their imports dropped. They dipped into their stockpile. It set them back in terms of their Taiwan invasion plan. Um, so you know people think that you know Trump was playing 5D or 8D or whatever the D is chess. Um, 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 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 uh you know, Donro doctrine knocked China out of the Western Hemisphere, but also knocked 2 million barrels a day of sanctioned discounted oil to that China's got. >> Where's Venezuela oil going now?

>> The US. >> All of it. >> Yeah. I mean, it's not I'm not saying it's good or bad. It's it it's it's just that's what reality is and it's going there. And uh you know China had invested a huge amount of uh billions of dollars in in uh into Venezuela. China had also invested a hu billions of dollars into Iran. They built this Hormuz bypassing pipeline called Jask JK that went around uh uh the street of Hormuz. It's never been used. It was about to be completed by this year. And um but China basically has been the whole belt and road initiative. They've been applying that to the oil and gas industry. And you know uh Russia I think is kind of still independent of that influence of China. I mean chi 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 way Chinese that belt and road initiative. Venezuela was captured by it. Um and China doesn't care about Venezuela's politics or people or uh they care about the economics. They don't care about Iranian politics, religion, Israel, that whole situ. They don't care. They basically, can you get me cheap oil below $70 a barrel? How do I get that oil? And uh 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. To restate your point which seems provable, Western sanctions against outlaw countries help China's economy >> directly and it is it there's and China would love for more European sanctions and US sanctions. >> Western sanctions which western politicians brag about continuously, Western populations feel good about I think >> it it makes them it's a it feels good. It's a feel-good policy. >> All help China's economy >> directly. Yes. And it's quantifiable. $10, $20 a barrel. And the Chinese would love nothing more than the EU to flagagillate themselves even further. More sanctions, put a $20 cap on Russian oil. So, the main reason I want to have this conversation, of course, was the war, which has heightened the world's awareness of how important energy is and how hard it is to have a civilization without it. And this war and both wars, the war against Russia and the war against Iran have both reminded us of that. So what effect have those wars had on global energy?

>> I mean it's obviously it's because of um being the uh regions that they are in um it's had effect on crude oil and and natural gas. So coal you can just put that aside. So that's again a third of the world's energy that's not involved in this whole situation. put that aside. So, it's oil and natural gas and um the the world or the energy market had kind of war gamed out the shutting of the street of Hormuz for a long time and it kind of did happen a little bit in the 1980s. You had the tanker wars when Iraq and Iran were fighting and there were I think it was four was a huge number of tankers that were uh knocked out by in that war. the US uh you know was escorting tankers in and out of the uh straits at that time and so there there was kind of an awareness that the vulnerability was there of the whole uh choking of hormones. um the oil market immediately in Feb 28 uh assumed it was going to be a week or two now and you can tell how >> 26 this year >> of this year of 2026 um and was because you can tell that there's the forward curve which is the price of oil as you go out into the future. So you could 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 a few 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 oil markets do use

futures and options to do the same thing as prediction markets do and so the oil market was saying that >> they're pretty accurate and 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 I looked this morning it was like down at >> Don't look at Brent. You look at Yeah. Yeah. I mean, Brent is there's an issue of manipulation there. And >> well, I've noticed, >> but it's uh it's WTI. Look at WTI. >> So, just for people watching this, if you've made it this far in the interview and you're interested in understanding energy markets, WTI is >> West Texas. >> Yeah. Yeah, West Texas Intermediate and West Texas Midland crude is also what's what now sets the price for Brent crude. Yes. So it actually it's Brent is a derivative of West Texas crude. So it's kind of a there was a window of 15 years where Brent took over because this is before fracking you know before that 20 2005 revolution then um US crude production was declining and Brent took over for about 15 years between uh 2005 2020 but now that that has flipped back to WTI crude in the US that's the global benchmark and uh so yeah so 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 that one thing I can tell if it's a war or whatever and just by looking at that one thing or so I look at other things well that's the first thing I look at the price of crude and

uh back in in February uh 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 the months ahead for delivery futures curves months ahead that price was uh 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 the they the 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 uh you know early January in Venezuela. Uh there was kind of a it uh everyone thought this would be a hit and you're one and done would be out within two weeks. Just eliminate a few politicians at the top layer which I think was strategically a terrible thing to do.

>> Yeah. Uh but it basically and the oil market very quickly um 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 IRGC and besiege do and so it went to that mo in other words you you can't slice off the onion layer by layer at the top it just doesn't work and Iran has developed this method of working for the last 30 40 years since the late 1970s and uh they uh That's when uh and Iran started retali retaliating with drones. That's when uh the oil market went okay this is going to be a more protracted thing. >> They started hitting Gulf production facilities. Um they hit uh Qar's natural gas uh LG plant which is still out and will be out for the next 3 to 5 years. That's a Qatar's main source of uh of revenue is that LG plant and uh 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 net gas industry you know like Nordstream Qar um you know if if you were to be conspiratorial about it you could just knock out all of Qar and then the US would benefit even more so it's kind of a an interesting kind of secondary effect that this in this uh situation has kind of been a very

positive to the US economy because the US is a huge net gas and oil producer. But anyway, so you had 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 produce a lot of diesel and that was the kind of the second effect was the diesel uh 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. >> There they knocked out 2 million barrels per day of Persian Gulf refining capacity. And >> but why would it have not the same effect on jet fuel, gasoline, heating oil, the rest? it just the that the world the US produces is a lot more gasoline dependent than diesel. And so it just it was the way of um the world's supply and demand system for gasoline and than diesel. It it it had that impact much more than uh significantly just because Asia consumes more diesel. Um Europe consumes more diesel. It was basically uh a it seems kind of like a a uh 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. And >> how hard is it to switch a refinery's proportion of gasoline to diesel to all the other refined products? >> Extremely difficult. >> Oh, really? >> Yeah. You can switch 2 or 3% from diesel molecules that come out of a you put crude oil in you can move a slight 2 or 3% of the barrel into from diesel into gasoline or vice versa. So it's a very very difficult thing to switch. >> Oh wow. >> And so yeah so but everyone talks about diesel but gasoline margins went from 10 $15 to 60. So gasoline did also rally a lot this that refining margin. And um so diesel went to $100 spread over crude. So you've got a crude at 100. Diesel is $200 a barrel. Gasoline, you know, crude at 100, you had gasoline at $160 a barrel. So it did cause a rally in crew in gasoline also. It was just that diesel was much more tighter. It's as a reaction. Um and then that was combined with and I know people knock Trump for blaming uh Ukraine and Russia. Ukraine did start hitting all these Russian refineries and that did start coincidentally with the first half of this year when the hormone situation. So that knocked another 2 million barrels per day of refining capacity out of Europe and um the world as I said it's 100 million barrels per day of production. You knock 4 million barrels per day of refining capacity out. Um it does have an impact and it it uh it uh it basically caused diesel prices to

spike. >> Why would Ukraine do that? because the CIA helped them target. >> Well, obviously I mean this that Thank you for pointing that out, right? It's not Ukraine's not an independent actor. >> Ukraine everything in Ukraine hits pretty much in Russia is approved and signed off. >> Well, that's factually true what you said and thank you for saying it. Um why would the US intel community want to reduce Russia's refining capacity when it affects the price of diesel fuel and gasoline in the United States? Um I think that even though they're very sophisticated entities, the you know CIA and other entities in the US uh government um sometimes I don't think they think about the effect. They're they're energy blind to a certain extent as well. I didn't think that they would thought it would have they thought it would just like sanctions on Russia. They thought that if we just target Russian refineries, we can kind of damage Russia and it wouldn't affect global markets. I think they themselves >> Are you serious? They they they thought that they could just target pinpoint target these Russian refineries and oil refineries are easy to target. They're big pieces of equipment and uh and they thought let's >> they're exposed too.

>> And they did want to create a little bit of uh uh 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 not 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 don't Europe again. Here we go talking negatively about Europe. But it's uh uh the CIA or whoever was providing the targeting information. Um they didn't think about the impact on diesel. Now they realize that of course and um because they thought it's just 2 million barrels per day of refining capacity rate of 100. It can't have that much of an impact. It did. It immediately did. And so, um, you know, the talk about blowback, it this blowback was in the energy market. And so, it was a mistake. The CI should never have targeted those refineries. They did. And, uh, but they provided all the targeting. They because they do want to pressure Putin to come to the table. They want to pressure Zilinski by Elon Musk flipping on and off the Starlink button every other day that seems to be doing now. Um, and they're these are kind of the two pressure points that they're applying.

uh they're applying, you know, they're trying to destroy Russian revenue with refineries and Zilinsk'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 uh that was kind of the original thought process behind it. I think they were surprised by how much diesel prices rallied and interesting explanation >> and it happened at the same time of of hormones. If they did this when hormones were not was not happening, diesel would not have spiked as much. how much uh oil and natural gas is making its way out of the Gulf now. >> So now it depends on day-to-day. You've got you you have a pipeline. It was a pipeline that the Saudis built. It's called the East West pipeline back in the 1980s because the original tanker war, Iran Iraq tanker war back in the 1980s. And >> can you explain where it goes? >> It goes from all of the oil and gas and pretty much oil, let's talk about crude oil in Saudi is produced on the edge of the Persian Gulf. So on the east side of Saudi Arabia, but Saudi Arabia is a big piece of land that goes the whole way all desert. There's no greenery there whatsoever all the way over to the Red Sea.

>> And the Red Sea is, you know, they've got issues there with the the healthies and whatnot over the past few months. But basically, um, 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. So during the um 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 uh produce 10 of that 100. So not as they're not as big as these. 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 uh this pipeline was usually run at two to three million bars per day of the Saudi 10. And so they kind of used it as a backup plan and um >> 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 um if you're a buyer from China, the main or Asia from Saudi for them to send a tanker the whole way into the Red Sea, it's and past uh Yemen and it's it's very much more dangerous area.

more confined and so it was just cheaper for the tankers. Pipeline shipping is is uh is cheap also but uh if you were to buy the oil from the Red Sea at the end of this 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 um for China. And so Saudi used to produce um 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 regionally it's and uh even you know people talk about tan even tan tan 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 car island and it's also down by the coast >> it's the same reservoir obviously >> it's pretty much yeah the same basin it's a different reservoirs they're some of them are connected like Kuwait and Iraq their reservoirs are connected but it's the same uh basin it's the you know they as a you know this the same millions of years ago it was it was created at the same time low spot >> and so basically um it was uh some of them were connected but anyway the um the uh when uh it the whole situation kicked off um the first surprise was the the issue of refineries then it came into tankers because um the uh no one would in their right mind send a tanker through the streets of form when the act of there's an act of war and Iran is targeting tankers and these are civilian

tankers. These are not military tankers and Iran was hitting them and uh would hit the occasional one and they were hitting them cheaply. They send these 20 $50,000 drones to hit them and uh so you had the you had the spike in 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 uh hits and refineries. Then you had a spike in tanker rates and these tankers went from you could hire a super tanker. Super tankers like two million barrels a day. Two sorry two million barrels capacity. A super tanker. They call them in the oil industry VLCC's very large crude carriers. But they're these buildings effectively carrying 2 million bars of crude. And uh the these things you could um hire them for uh 50,000 to $100,000 per day. That's the day rate they call it. um uh before in January and February this year. Now it's 1.5 million barrels $1.5 million per day. So we went from >> per day >> per day from $100,000 per day to $1.5 million uh 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.

>> They self-insure by raising their fees. Saudis uh well they self mature that a lot of the tankers that are doing this route they it's like a speedrun of the streets of Hormuz. You hug the coast of the uh of Oman and uh you speedrun and the only people doing that are the Saudis because they have their own tankers so they're not paying other people to do this. Uh >> and the Emiratis have their own tankers >> and they yeah the UAE got their own tankers Abu Dhabi and so those guys are half of the the tanker run and basically they're at speed. When I say at speed, these are super tankers that that are full of 2 million barrels of crude. They can't move at speed, but they're trying to. They move as fast as they technically possibly can into the Persian Gulf, grab the oil, load it, and come back out. And usually before February, they would then continue on to China or continue on to Asia somewhere. And now they don't. They stop outside the Gulf of Oman, they lighter, they load the crude onto another tanker, and they go back in again and do that loading. So those super tankers now this doing this uh speedrun into the Persian Gulf and Persian Gulf is 20 million barrels per day of ex uh Persian Gulf ex produces 20 million barrels per day. Um 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. Um they got some oil out of this. There's another pipeline to Friger. 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 streets of form was being shot. And then the big one is they started doing these uh tanker runs, speedr runninging into in and out of the Gulf and doing what's called ship to ship transfer STS outside in the Gulf of Oman. >> What I mean what's that journey like? >> It's a few it's a few days. It's a highly risk. >> What are they paying these crews to do that? >> They're paying them I think was in the FT a few weeks ago. They're paying them um for each run which takes a few days. They're paying the captain I think 10020 grand per run. I mean they're taking their lives under risk. They're right now today Iran is hitting one to two tankers a day. Hitting. So they're hitting the engine room. A surprising thing and there are some spills as a result of this. These are carrying crude oil. Um these tankers one to two tankers a day. And the that is the real thing that can't be sustained. I know Bessant and Trump have got these these uh economic sanctions and and pain points.

that's going to take too long. That that that you know uh that operation that financial operation that goes back to the sanctions things it doesn't really work. It causes immediate pain. Those sanctions you 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. And when I say longterm, I'm talking about we need to resolve this within 3 to 6 months max before it gets things just are things are already bad. They they need to start recovering. we because it 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. >> People getting killed in these attacks. >> Yes. And they're unfortunately they're crews from India, Philippines. Uh these are just civilians. These are not military people. They're these are civilian tankers. They're, you know, they're marine. Uh I know your you mentioned your father was in the Marines. >> Are they civilian Marines? um these are just uh people are just earning a you know working um Iran is is treating them like military hardware they're hitting them and so that can't be sustained and so one of the things to stop that because Iran you know the US reaction so far has been to do these mass kind of fireworks style campaigns dropping the mother of all bombs Trump is talking about things like that Iran is very they're very well educated population surprisingly and they historically have been >> higher median IQ than we do The most one of the most successful ethnic groups in the US is are Iranian

obvious the Persians. Yeah. >> Yeah. They actually think they may be the number one, you know. Well, everyone thinks it's like Asian population. It's the Iranian-Americans, Persian Americans. And um so these guys are very econ they're rational. Like they actually there's a a kind of a logic to what they're doing. They're also highly, you know, they've got a religious aspect to it. But uh I think that this hitting one to two tankers a day, you you annualize that that's going to knock out the entire global fleet of tankers because they can be repaired. They're not completely knocked out of commission, but the repair takes three or four months. Uh the US basically has to make every tanker hit matter. 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 uh uh secretly do this. You tell the Iran there's a there's a direct price to pay. Uh for every tanker you hit, we knock out two power stations. Start with Thran. 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 uh 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 to stop that ahead of negotiations and everything but to kind of write the world's uh 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 months or how weeks or months you know if you do it for another week you hit uh

seven tankers uh we're going to hit 14 power stations there should be some sort of it's a tit for tat uh 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 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 6 months. It has to stop that has to stop today. Um and >> how many oil tankers super tankers are there in the world? There are around 9,000 oil tankers in the world. 1,000 of these super tankers, the two million barrels >> on the planet. >> Yeah. I mean, it's a 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, your pipelines and so 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 uh 4 or 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 CI, they know where they are. 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. um you could just knock out there five refineries within uh and 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. Um and then the third thing I I think I think going back to kind of the original sin of this war. Um I mean Trump the US government uh killed the Ayatala and his family back in late February early March and then went onion layer tried to wipe out another layer. That kind of behavior I don't think is not that's that that is not conducive to getting of the balanced negotiation. First of all it's it's it's 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 mur murdering their religious leader. No endless murder. I mean this is But but here's the thing. Trump did it >> killing old people.

>> Trump Trump back in March said what you people were asking him the logic behind going to war and what I know you you talked to him beforehand. Um but he said I got him before he got me. That's what he said about the Itala. >> 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 would >> for a fact that there were >> Yeah. And so >> there are all kinds of flatterers and whisperers 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 uh intentionally uh 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 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 >> it was 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 is it right or wrong to kill anyone? 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 it's you went all in and you failed. So where what do you do now? >> I I think there needs to be a a a restatement of US policy and Trump could do one of his executive orders and whatnot just signed it whatever 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 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 fortat 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 publicly do. We're not going to endorse um even on a secondarily bas secondary basis with other entities, you know, doing that. Um we're not going to support it, endorse it or or promote it. Stop. We're not doing that anymore. That the US doesn't do that. I should go back to that uh doctrine because you can't negotiate on that basis. Um and then once once it's tri 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 5 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 dollars worth way more than the US has got locked up in NAS for 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 that 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 that's employed by the GCC put the toll as GCC plus Iran manage that toll. But that's something >> the other countries on the Pian Gulf in other words.

>> Yeah. Yeah. Put them all on the on the on the toll and have an equal share of 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. Get your money from China first. They're your biggest debtor, if you will. Iran. Uh the toll, make it a GCC toll. Put that in place. um 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 um let's come to some sort of a uh a situation, a uh 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 discussed Trump. Go back to the the uh the prior UN inspections 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 or five of those nukes or Pakistan and you 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 uh militarily. It's just too expensive. Let's come to an an agreement where that we treat them as if they're a nuclear power, constrain it, if you will. Um, ideally, I mean, I this is me personally, I hope they don't go back to the Ayatala 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 Ayatala. You know, they they've keeping that guy out of uh out of sight. you know, people speculate why the son of the Ayatala, 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, been killed by the US or Israel. The US should remove itself in that game and say we don't play that game. But uh basically the uh normalize the entire situation and triage the tanker situation, normalize the uh 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 uh guard guard rails around it like Pakistan the US controls Pakistan and nuclear uh supposedly uh nuclear weapons and um yeah that that that would be it just just those things and uh you don't need to go and do a large uh you know all

this escalatory talk of we're going to bomb huge things and make it a big spect spectacle. No, these are small incremental things that can be done. And Iran is um 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 uh these rich kids driving Ferraris around Thran. The they're just normal people like you and I. I mean, I don't drive furry, but they're all people that have, you know, we we they want we should treat them with dignity and respect and uh 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 kind of, you know, they're they they put out that uh 10,00 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, the then they say, "Oh, but the Sha is the what about the Sha before the current regime was even worse." No, not really. The Sha supposedly he killed

he had, you know, people tortured and killed during this time. But he maybe 2,000 people, 3,000 people. There's a great book that I read recently, The Cauldron, it's called, and just talks about the Sha. Yeah. He was a dictator pretty much a king figure, but he um and he was US supported because the US just needs someone stable in that environment. But uh the um the IRGC killed 20 30,000 people in January of this year. The shad over a 40-year period tortured 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 a way out of this. It doesn't involve n using nuclear weapons or doing these weird showy things. It revolves it it revolves around accepting that they're a rational player. They have legitimate concerns that uh you know we've kind of adopted the Israeli style MSAD 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-s 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.

>> 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 too. He said uh why did he go after into Iraq and Iraq too? You know they used the disguise of uh weapons of mass destruction all that but the one thing that sticks to me at that time is that George W said he tried to kill my daddy and you know that >> well in fact it was the Israeli government that plotted to kill George HW Bush and that came out in Victorsky's memoir Assad officer's memoir. I I think that's a fact. Uh, 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 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. Uh so they kind of did the US uh 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 uh a uh the energy prices to remain low. That's at its core level. but also to to just for general stability as the hedgeim and globally and to stop China becoming the hedgemon 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. Okay, whatever those they're sunk cost, they're written off. The US is going to uh have to come up with a more uh kind of even like Iranian inspired mosaic mobile base structure to defend the Middle East, the the non-Iranian side. But uh 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 independent country so the US we just 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 saying even saying that out loud is so um contrary to what we have been told for 40 years and what Even policy makers 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 don't I don't know. I 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? They have nuclear weapons in North Korea. You rocket boy. And so would they would the US love to destroy North Korea? Would everyone around them, the North 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 reality. >> There's a limit to your power cuz 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 uh Iran is one of those situations where we need to get a to walk away from the situ when I say walk away we're going to walk away with those bases okay tell tell Iran they're gone I mean but we're going to have still defend highly defend the eastern side or the western side of the Persian Gulf. But um we still need to be there. The US still needs to be there and defend oil production out of and natural gas production. Um one is a bull work 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. Um 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 and 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 I don't think that's crazy at all. >> So my my last question is about uh 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? >> Um so the one of the two of the big things that were knocked out this year most fertilizer is n gas in a bag. Natural gas is that onethird of the world's oil production. Qara was knocked out this year. half of its production with a big net gas producer and um there's because of that uh the feeds the thing that makes the fertilizer n 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 just sorry again sorry to interrupt you what percentage of global food supply is directly traceable just to the nation of% know >> just Qar which is one of the biggest gas producers >> it's of the world's LG 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 LG

and and uh ammonia production. >> It's just funny. So you got a country of 400,000 people. It's just 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 n gas, you have sulfur. 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 dig up. They have to So they have mountains of this yellow brick sulfur. The problem with sulfur is that it's not the actual material itself is kind of free. They would love to give it to you. Go up to Canada and get it. But the challenge is the uh Persian Gulf. Sulfur is used to make uh is natural most fertilizer is natural gas goes into ura and ammonia and sulfur and so sulfur is kind of free pretty much because it's a side a side byproduct of the oil and gas industry but the problem is it's not produced um in all places around the world and a big source of sulfur is also uh the Middle East and getting sulfur out so the um fertilizer industry has been hit by um natural gas out of Qar 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 um fertilizers

fertilizer prices have gone up by three or four% this year. And it doesn't really have a big impact in developed economies like even places like not developed economies as much like Russia and Ukraine, they produce a lot of wheat. Um the US produces a huge amount of grain. He's a huge food exporter of the US and uh especially to places like China. China imports a huge amount of western food. Um so it doesn't really have as direct a big impact in the west western farming but has a huge impact in place like India poor poor countries and for those people the main uh 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 in the most extreme case. Uh there will be less food produced next year. It's not going to affect the west like America or um it's just be it'll just become slightly more expensive food but you will get you know high you a lot of the world is still living at the bread line if you will and uh 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 place like India and places like that Africa

and no one will really talk about it and it'll just be uh into the background for 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 Finn move to Sweden in the also you saw the Irish move to the United States, right? >> Food reasons. >> Yeah. >> And so you're going to see mass migration every time food prices reach a certain threshold, people move. >> Yep. Yep. You've got you've got uh 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. They're the market the global market for food and the global market for energy. Um they they have impacts and some of those impacts are very very bad for especially poorer countries. Um, you know, it's it's a it's it's um 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, um should kind of have a not a not a uh you know, remember there was that uh uh when uh JD Vance was complaining to Zilinsky, 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 and not appreciated of it because it um it's it's it should be something that people should learn more about and and understand and appreciate and um it 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 uh solar panels and wind turbines. That's not reality. That's like still four or five% 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 in Persian Gulf this year, but um it's uh it's uh yeah, it's a kind of an interesting kind of um blind spot, energy blindness. >> Morgan Downey, one of the great experts on the topic, author of Oil 101. Thank you very much. That was great. >> Thank you, Tucker.