DIVERSIFY ENERGY

“The war will accelerate the region's appetite to restart nuclear power plants, ultimately lessening its dependence on imported natural gas. Though the acute pain may pass, this episode may already be reshaping the long-term energy trajectory of the region.”

“We're witnessing a temporary disruption or the end of a the U.S. unipolar era.”

“Asia is very heavily exposed right now and more acutely thinking about what the impacts might be, how they might want to preempt them than the United States. Asia is a massive crude importer, and principally from the Middle East because it's the most proximate supply and generally has the cheapest shipping distances.”

“Per his channel checks, the region is already seeing a jump in demand for electric vehicles, with BYD dealers holding less and less inventory on hand. The extreme rationing and high prices are forcing a faster transition than previously anticipated.”

“We are a net exporter of energy. We are the largest oil producer the world has ever seen. So why the heck am I paying higher gasoline prices when all of this is happening 7,000 miles away? The reason why is oil is the most global market. So we are a huge exporter of crude oil, of gasoline, of jet fuel, mainly from the US Gulf Coast. So that tethers us to the global market in a really big way.”

“Natural gas, which is a huge part of what the Middle East exports in terms of energy, that is key for global power generation. It's key for air conditioning. It's also a key input for manufacturers around the world. If we're thinking about companies that build everything from chips to companies that create steel and need high heat, to companies that produce fertilizer for farming, all of that requires an immense amount of natural gas.”

“The first revision to Q4 GDP was cut in half, down to 7 tenths of a percent from 1 percentage point... That's not the kind of mix that supports an economic resilience narrative.”

“The Strait of Hormuz and how shifting power dynamics are reshaping global markets and strategy.”

“Markets may be underestimating cascading global disruptions.”

“I forget which country was. They were, like, you know, they're doing that classic thing of only drive to work if your license plate ends in an odd number on this day. Whatever, very nineteen seventies. Yeah, and we're seeing a lot of these types of headlines, some in Korea, some Thailand, et cetera.”

“So year-over-year inflation through the CPI index, which is a broad measurement of inflation, is up 3.3% from a year ago. And the Federal Reserve uses 2% as a target for where it wants inflation to be. Even before the war with Iran started, inflation was above that target level. And what we have now is an energy shock that is sending gasoline and diesel prices on one of their steepest climbs in decades, if not ever.”

“One thing about our current market moment is we are getting like a crash course in real time about the flow of energy throughout the world. And as we will see in this conversation, like it is still very much geographically constrained East versus West, and so as you say, the big question is whether or not the east kind of I don't know, scrambles even harder to adapt to this.”

“There was a survey from the University of Michigan. It was the lowest ever in 74 years of the survey taking place. And so some of that might be an overreaction in vibes because the economy was pretty strong coming into this. But the direction of travel, how fast that plummeted in just one month as people were seeing those price increases in the gas station, that just goes to show that people hate this.”

“If you take a look at what's going on in the strait of war moves, it still seems to be shut more or less. You can see the number of ships that are going through that particular choke point, and I have two as of today, which is basically nothing compared to normal ship traffic.”

“I think the thing that's confusing everyone is we keep seeing these headlines about like a billion barrels lost of world supply or twenty percent of the world's oil supply now choked out because of the Horror Moves situation. And yet if you look at the oil price, you know WTI Brent definitely up, but they're not up as much as you might think given the scale of disruption.”

“The war in Iran has caused the price of all kinds of commodities to surge, and that has a negative economic impact almost everywhere. But the squeeze is really being felt hard in East Asia, which is the ultimate destination for a lot of oil and gas that come out of the Gulf.”

“There was some there were some headlines about how maybe even in the good case, they would let through ten to fifteen, which is still sort of nothing compared to normal ship traffic, so like nothing's back to normal.”

“WTI crew diverse earlier declines to finish up over 3% on the day, just under $100 a barrel.”

“Japan's opposition party is calling for increased nuclear plant usage to offset the Iran crisis, and that's highlighting how energy security is becoming a critical investment theme.”

“The challenge right now for Asia is that most of their crede supply does come from the Middle East, or there are some countries which do have some domestic production Malaysia, China of course, but broadly speaking, Asia is a massive crude import, and principally from the Middle East because it's the most proximate supply and generalize the chapest shipping distances and costs.”

“And while we can make up some of that gap, because countries and companies have stockpiles, we can sort of like massage it a little bit here and there for the moment. The longer this situation goes on, the longer the tankers can't make it out of the Strait of Hormuz, the longer that 10% will continue compounding. And the longer that the supply disruption will end up rippling through the global economy.”

“A war few expected to last this long is exposing how fragile global systems really are.”

“China’s quiet advantage is part of the shifting power dynamics we unpack.”