You've had a dynamic where money has become freer than free.
If you talk about a Fed just gone nuts, all the central banks going nuts.
So it's all acting like safe haven.
I believe that in a world where central bankers are tripping over themselves to devalue their
currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor.
I mean, that's part of the bull case for Bitcoin.
If you're not paying attention, you probably should be.
Dr. Anas El-Haji, welcome back to the show.
Thank you. Thank you. It's always a pleasure.
It's been a while since you were last on, and you haven't been on since the war in Iran started.
And I was rereading through the notes of our last recording,
and it was when the saber rattling around Iran was really beginning to heat up.
And last time we spoke, he called Iran's nuclear standoff, the never ending crisis and said sanctions cannot take Iran's exports anywhere close to zero.
We're not looking at a conflict that appears to escape the narrow Iran-Israeli frame spread into arteries of the global energy trade.
But before we go into price, just give us the map.
It's obviously been evolving, started between the U.S., Israel and Iran in recent weeks.
It looks like the Houthis in Yemen have entered the fray in the Red Sea.
There's been a memorandum of understanding, ceasefire on, off, on, off.
Oil prices up above 100, down to the low 70s, high 60s back in the, I haven't checked today, but I imagine 80s or 90s.
What is the map looking like today?
Well, a couple of things before we look at the map, because there are some important issues that people must understand.
That what we call the Iranian regime is not a unified regime.
That there are people who want to negotiate.
There are people who are sincere and they want to build a country and they want to build a nation.
And there are the others who are after themselves.
So there are elements of the IRGC, which is the Revolutionary Guard.
who benefited greatly from the sanctions over the last three decades.
And they literally make billions of dollars.
And sanctions enable them to control the economy of Iraq
and everything that comes in and out.
So for them, a peaceful resolution basically will literally put them aside,
and they don't want that.
So for the last 10 years or so,
they've been trying really hard to derail any negotiations.
and when you see their reaction
and you see the attacks,
you can tell where the negotiations are going
from the severity of their attacks,
which means that the more severe the attack,
that means the negotiations were doing very well
and they want to derail them.
And the issue right now is with those guys.
But the bigger issue is,
it just happened those guys
who are now gaining control in Tehran
They are the international arm of the regime, which means that they are connected to the Houthis,
they are connected to Hejbollah, they are connected to the others in Iraq and other places,
even to the drug cartels in South America and other places.
Those guys do not care about the future of Iran or building a nation.
Those guys behave like drug cartels, exactly like drug cartels.
Look how the drug cartels, for 80 years right now, the United States has been fighting them.
until now they were not able to conquer them.
And they are awfully rich.
They are well-trained.
They have the most advanced kind of armors in the world.
They have all kinds of weapons, and they fight.
So those guys are behaving the same.
So what is the problem?
The problem is the U.S. is sending a regular army,
a regular navy, trying to fight, in their thinking,
a regular army and a regular navy,
and that is not the case.
You are sending a regular army to fight a guerrilla war or a militia, and that does not add up.
That's one of the mistakes that's been done.
The other mistake basically being done by the Trump administration is they fail to understand the motives because they thought, oh, well, those guys are after building Iran and the nation, and therefore we can do this and we can do this.
No, they are not after that.
They are literally after control and money.
And if you go for a peaceful resolution, that means you wipe out all their income sources.
And that does not fit.
And that's what the Trump administration has to understand.
So the Trump administration being after them in the recent attack for 14 days, they've been after those guys.
Notice that they did not kill any of the negotiating team.
They were after the extremists at the IRGC.
and everything they done it seems they did not do much simply because those guys are mobile They keep moving And that why the whole structure of the world has to change to be able to make any advancement in the region
At the same time, again, this part of the regime is the international arm of it.
So they have people all around the world.
And that is another problem.
And that forces the U.S. government and others to think about another strategy on how to work the area.
And so let's get into the state of the area, because obviously when the war started, there was bombing on both sides.
And I think one of the biggest fears in the first month was the degradation of the refinery infrastructure, particularly in Qatar, with the natural gas refinery, water salination plants, potentially targets.
You have a bunch of pipelines and other refineries across the region that were taking on heavy damage.
And initial reports going to take years to build that capacity back.
Now, again, like I said earlier, it looks like the Houthis are getting involved in the Red Sea, beginning to bomb Saudi tankers.
So what is the state of, I guess, the supply chain of oil and gas look like right now as a sandstone?
And obviously, the strait through which a lot of...
Before we answer this question, people have to answer the following question.
And this is kind of the answer to this will lead us to other questions.
Do people believe that this war is about Iran and its nuclear program?
Or is it part of a larger change that is happening around the world that includes trade wars, sanctions, tariffs, Venezuela, Panama Canal, China, Russia, Greenland?
And is this part of the, of course, you add Ukraine and the European Union to this,
Nord Stream 1, Nord Stream 2.
So is this part of that big picture or is just limited to Iran and nuclear program?
Once people understand that we have to make that distinction and then they get the answer,
we can get other answers to the other questions.
because the whole issue at the end, if this is part of this global change,
then everything fits because the United States forced Russia out of Europe.
As you know, Russian share in natural gas market declined from 55% to 14%.
And U.S. share in natural gas market in the EU increased from zero to 30%.
Now you look at Asia, Qatar is not able to export LNG to Asia.
So what is the news two days ago?
Qatar is going to import American LNG to export it to Asia instead of Qatar.
So all of a sudden the U.S., well, again, when you start asking those questions, you start realizing things are not what the media is telling us and what people are telling us.
So you go back and look at what happened to Nord Stream 1 and Nord Stream 2 and how they shut down the Ukrainian pipeline when the contract ended.
And you look at how the U.S. LNG has become an integral part of U.S. foreign policy.
And then you look at what happened in Egypt yesterday.
In Egypt yesterday, we have an attack on LNG terminal, and then two regasification units, both of them are American, by the way, got hit.
And the question is why and who did that?
And the Egyptian government refused basically to say more than it is.
There were two drones and that's it.
and then the media
start telling us
oh it's 2,000 miles
2,000 kilometers from Iran
and 1,400 kilometers
from Yemen and they started kind of
redirecting our attention
into something that does not make any sense
okay
so Iran is sending
a drone
2,000 kilometers
and no one will know until they hit their targets
they crossed
several countries by the way
several countries and no
it tells you that whatever we are hearing from the media
is just not the right story.
I mean, I can't stop thinking about the
I think one thing that many people, particularly the mainstream media
aren't pulling into this is the national security strategy document that was written last year
by the Trump administration.
This is part of it, basically.
I don want to kind of like sound like talking about conspiracy theory or anything else I really would like to move to the energy markets and talk about the economics of it But if you go back to the national security strategy that was released last November it focuses on energy dominance and AI dominance
But you cannot have AI without energy.
So everything boils down to energy dominance.
and the only way you can have energy dominance is to have the resources.
You don't have all the resources in the world,
so you control the U.S.,
then indirectly control Canada,
and then directly or indirectly control Venezuela,
and now you want to directly or indirectly control the energy sources
in the other side of the world.
Well, what's better than waterways?
Look at what's happening in Iraq today.
All of a sudden, the Russian company that was controlling one of the largest oil fields being kicked out.
U.S. companies are taking over.
Exxon, Mabo, and Chevron are returning to Iraq.
Here's the problem.
They already left Iraq.
They are coming back to the same fields.
They asked them, why did you leave?
Because they said, 1, 2, 3, 4, 5, 6, 7.
Okay, now you are back.
But 1, 2, 3, 4, 5, 6, 7 is still there.
Nothing changed. So what changed in your attitude until you want to go back to Iraq now?
And you look at other things. There are more questions than what we even can ask questions, and let alone answers.
I'm going to give you one.
Last week, Lloyd of London informed shippers that if they pay Iran to pass Hermes Strait,
they will cancel insurance
I mean this is
kind of like the FBI
or the State Department
or someone else will do that
why they are doing the job of a
foreign government
why insurance company is threatening them
because people were saying
oh they cancelled the insurance in the Gulf
on March 1st
simply because risk is very high
well if it is about risk
paying Iran reduces risk
so why you cancel the insurance then
so this is one of them
then you add other things to the equation
which a lot of things do not make
any sense out of this
we heard about
the releases of the SPR
and we can discuss the issues of SPR
and what the conspiracy about the SPR etc
But you look at the SPR releases and you look at the impact.
Supposedly, Trump wanted lower gasoline prices.
But releasing oil from the SPR does not have any impact on gasoline prices,
simply because our refineries are running at maximum.
And if they are running at maximum, they cannot use more crude anyway.
So it doesn't matter.
I heard some commentary on this. I mean, somebody was comparing Trump's draw, the SPR to Biden's.
And the commentary I saw is that he was making a trade, because if you look at where the oil price was when Trump was draining it, he was trying to sell it, sell it high to lock in, I guess, some profits or something like that.
No, they cannot. This is OK. I have I've written a lot about this and I have a long video on this kind of a timeless video.
Let me explain something about the SPR that is very important.
The release of Biden. Probably will end up the highlight of Biden presidency in a very positive way.
Because if you go back and look at everything we've been told, even by analysts, it's all wrong.
Why is it all wrong?
Because they told us oil prices will go to $250 because of the sanctions on Russia.
And we were going to, I was on your show, basically, and I said this at that time.
And they said, we are going to lose up to 5 million barrels.
Remember that?
Because of the sanctions.
And I said, none.
And what happened?
We did not lose any Russian oil.
Yet prices increased to $120, $130.
And Biden released 211 million barrels, 180 from the SPR that's the Biden release, plus the Congress mandated releases.
There were 211.
So if we did not lose the Russian oil and that 211 million being swallowed by the market, how do you explain that?
Everything the analysts told us about basically was completely off, completely wrong.
So how does that compare to Trump's draw on the SPR?
I will explain in a minute.
But what happened is we were coming off the lockdowns and the demand was the increase in demand was massive So what happened in 2022 was a repeat of 2007 2008 where the demand outstripped supply
regardless of what happened in Russia.
We did not lose Russian oil.
It was demand that was extremely strong.
And therefore, the actions of Biden, and I'm being completely apolitical here.
The actions of Biden basically at that time was one of the smartest moves of his presidency,
because otherwise prices would have gone above $200 and then destroy the world economy, destroy the U.S. economy.
Now, you come to the Trump administration release.
On a daily basis, it is the largest release in history, so it's way higher than Biden.
So in total, Biden release is larger, but it's been done over a long period of time.
With Trump, it's smaller in total, but on a daily basis, it's larger.
And it has tremendous impact on the market simply because the amount is very large.
The confusion we've gotten basically was about products versus crude.
And that is really one of the main problems we have today.
Throughout this crisis, after the initial period, let's say, so we start in April instead of starting in March,
The crisis in the energy market was in the products, not in crude.
So we have serious problems in the product market.
And for your audience, I used this analogy before, and I'm going to use it again here.
I'm going to explain what happened in the diesel market, and you can apply it to any other market,
but diesel because we still have diesel crisis until today, and that's why I want to explain it to people.
So what happened in the initial period is after the insurance was canceled and ships were not able to leave, and then we started all those problems and the claims of blockades and the U.S. blockades, et cetera, we have three major refineries in the Gulf.
One in Kuwait, one in the UAE, and one in Saudi Arabia.
None of them was able to export anything.
So we lost their products.
And that created panic in the market.
The problem is these are massive, some of the biggest refineries in the world, and we lost that.
And the panic basically kind of took hold.
As a result, governments around the world panicked, and they banned exports of petroleum products for fear of shortages.
The method differed from country to country.
So China, for example, it was outright ban.
No export, period.
And this is one of the reasons why it led to their decline in imports, by the way, because now they don't need to import to re-export.
Anyway, India imposed taxes, heavy taxes, and South Korea put a minimum, said as long as you meet this minimum, you can export above that or maximum, whatever you want to call it.
So we started losing diesel from around the world as a result.
So we have the first effect.
Then we have the secondary effect as a result.
Here, diesel prices start going up.
Again, this applies to other products too.
This is just an example.
If you are a trader and physically you own diesel or crude or gasoline or just fuel or anything else,
and you know prices are going to go up next week,
and the margin between this week and next week is way higher than the cost of storage.
Will you store?
Sure.
So hoarding basically started.
So that made the situation even worse because of this.
So because of these situations now, we have people panicking because they want the diesel.
So India was, and this is a true example, India was selling a shipment of diesel to South Africa.
The shipment was around East Africa, around Tanzania, Madhashkar, and someone in Singapore bought it.
Of course, they paid the higher price.
So the ship got diverted.
Now it's going to Singapore.
Someone in China panicked.
Now they bought the same shipment and redirected it from Singapore to China.
On the way to China, a Japanese company panicked.
Now they took it to Japan.
But that shipment should have been delivered to South Africa a week ago.
Now, two weeks later, it's still in the ocean.
Now, take one ship and multiply it by hundreds, probably thousands.
And you can see how the situation got exacerbated.
As if this is not enough, we have Zelensky basically taking his time bombing the Russian refineries
and bombing the ships and the outlets and all the stuff.
And he literally turned Russia into an importing company.
country instead of exporting. So in a sense, we did not only lose the gasoline out of Russia.
Russia now is taking the gasoline out of the market out of India that's supposed to go to
Singapore. So you put all of those together, you can see the impact. But what made the situation
really scary right now is we have what I call right now the four seas crisis.
Until last week, it was the three seas.
Now, after the attack on Egypt, it's the four seas.
So we have the Gulf, we have the Red Sea, we have the Black Sea, and we have the Mediterranean Sea.
We have problems in all of them.
And the question that needs to be answered is, now Kazakhstan exports stopped for the third time this month.
why Ukraine is halting the exports of Kazakhstan.
Seriously, why the Trump administration is not saying a single word?
We lost 1.4 million barrels a day.
1.4 million.
During crisis, when Babel Mendeb is semi-closed and Hormuz is semi-closed,
and we lost 1.4 million, not a single senator, not a single congressman said anything.
And everyone is complaining about gasoline prices and diesel prices.
So what the situation is really kind of once you start looking at it in a different way, you try to kind of like ask questions, say, OK, what is really going on?
Why Zelensky is doing this over and over and over?
You look at the media and the big accounts on Twitter and other social media accounts, they've been fooling us all along.
Whether intentionally or out of ignorance.
So the Saudi refinery in Jazan was hit.
There is no oil in Jazan, by the way.
The whole area, the southwestern Saudi Arabia does not have any oil.
All the oil, all the crude basically is far in the east.
So this is the refinery.
That's it.
So we did not lose that much oil because the refinery was hit.
That's mostly domestic, and there are some product exports out of it.
And then two days later, the gig was hit, which is an essential part of Aramco in the eastern province.
And they accused an Iraqi group that is part of the Iranian regime.
And as a result, the U.S. and Saudi Arabia bombed them the following day.
But the amount of oil lost from Saudi Arabia was very, very limited.
And the reason why, because you cannot kill the horse twice.
The Saudis cannot export from the east.
They cannot export from the west.
So whether their production goes up or down, it doesn't matter because they cannot export.
During this time, we lost the 1.4 million barrels a day out of Kazakhstan.
That was a real loss.
But the media and social media accounts kept talking about Saudi Arabia,
and they ignored Kazakhstan completely, where the real loss was.
And the question is, why?
Seriously, why?
and those analysts basically why they are doing this.
And during this period, of course,
hundreds of videos were fake videos or old videos.
So we have some big accounts basically,
literally when Gig was bombed three days ago.
I can guarantee you that some of those guys never heard of it before.
And because of the use of AI,
because some of those accounts depend heavily on AI in their postings,
They went to AI and saved GIG, and the news is fresh.
The AI has not collected the information yet.
The only information exists from 2019 when GIG was hit, when we lost 5.5 million barrels a day.
And those guys basically were too young at that time to even know it existed.
So they literally pulled the 2019.
They start posting it as if it happened today.
with the pictures, with all the announcements, with everything.
We lost 5.5 million barrels.
That was from 2019.
So we ended up with the four seas crisis with all this misinformation.
And then we ended up with something I call the obsession crisis.
And this is related to what you guys do on a daily basis, etc.
Many of your followers basically do.
We know that the first rule of investing is do not fall in love with your stock.
Do not fall in love with whatever you are investing in.
But obsession leads to that love.
And we have people who get obsessed with the idea that all prices will go to $150.
I'm talking about rent.
And they went on and on and on and on and on.
and it got so nasty
that anyone will say no it not going to go to 150 became the enemy but it was the result of that obsession And that obsession led to literally taking the social media fake news
and promoting it because it fits with the obsession of 150 or 120 oil.
So in a sense, we got it from all sides.
We have physical crisis on the ground and we have a mental crisis.
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unchained.com. From your perspective, what is the single most important physical constraint right
now? It's like a fog of war, not only morally on the ground. For those who are interested,
and I will send you the link, you can send it to them. There is a part of the newsletter that is
out of the paywall, so they can read it without paying. And that sums up, it's a very short,
but sums up the whole situation. We are in deep trouble. Any way you look at it,
We are in deep trouble.
So if you look at the Saudi economy, the Saudi numbers being published yesterday, it was minus 4.5%.
In the first quarter, it was plus 3%.
This is a country that was one of the most promising countries in the world, and it tanked.
And Saudi Arabia, relative to other oil-producing countries, fared very well because they tried to diversify their economy,
and they have pipelines to divert from east to west.
But other countries, if you look at Iraq, you look at Kuwait, you look at Qatar, they have no other choice.
They got stuck.
So even at minus 4.5%, the Saudi performance was way better than others.
But now you take it worldwide, you got to think the following.
Those countries, whether you're talking about Saudi Arabia, UAE, Qatar, Kuwait, and Iraq, those are countries, they are heavy purchasers.
They are heavy consumers.
They are heavy importers.
They are the ones who import all kinds of things, whether from wheat to plains.
And they are the ones who are supposed to make those massive investments in the United States.
And they are the ones who are expected to be the largest donors to the poorer countries in the world.
All of that is gone.
The consumption is gone.
The investment is gone.
The aid is gone.
So what do you expect is going to happen?
The Q2 data, the second quarter data, is not out yet.
Only we have very few countries that came out with the data.
And even if we get out of the data, if you think, and this is a message to the audience,
if you really think that the oil prices and the oil market is heavily manipulated by the government
and by the Trump administration, if you really believe it,
then you must believe that the economic data is manipulated too.
It's just logical.
Okay?
I believe when it comes to the oil market that, yeah, there is some manipulation,
but based on evidence for the last hundreds of years, basically,
and there are many theories, there are books and articles on this,
you can manipulate the market or cheat the market twice, three times, and that's it.
And then the market figure it out, and then you lose that edge.
And even OPEC basically realized this long ago That why they became very innovative in the way they make their announcements Because once they are discovered people will know what the game is
So they became very innovative.
And to think that the Trump administration is repeating the same thing again and again and again,
and you are being fooled again and again and again, it is your problem, not Trump's problem.
That tells you it's not.
There is some manipulation in the market.
That's absolutely correct.
But we do have some structural issues.
We have major decline in demand and we have demand destruction.
Because one of the problems when we talk about that obsession that we talked about earlier, we still have today, until today, we have analysts, well-known names, who think that oil prices have not increased to mask the crisis.
And that is absolutely not correct.
Because if you look at prices in March,
medium sour crude in Asia was sold above $170.
That was the record.
And we have some shipments being sold close to $200.
And the damage came from there.
You are living in the United States or Europe,
probably you are not feeling it.
But in Asia, they felt it.
When China stopped importing 6 million barrels a day,
they did because prices were $170.
and even when they declined, they declined to $155
and they stayed there for a while
and people are still saying, well, WTI is $95 only
that's absolutely correct
but you are looking at the wrong marker
you are looking at the wrong market
they don't use WTI in Asia, WTI is for North America
you want to look at the prices in Asia, you look at Dubai and Oman
and that was one of the problems
so what happened is, those countries basically
and refiners reacted to those extreme
prices. But that's not the only story.
You look at what happened in Japan. The Japanese yen, as you know,
collapsed. So oil prices in the end
were the highest ever.
And Japanese refiners are not going to buy that oil. There is no way they are going to buy
at the highest price ever. That's why their inventories declined substantially
because they would rather use their inventories than to pay the highest price ever.
So I'm going to tell you, you've been in this market, you've been there for a while.
How many times you heard about Japan basically having the highest prices ever?
Quite a few, because they're heavily dependent on it, right?
Sorry?
They're heavily dependent on oil, right?
No, no, I'm talking about Japan refiners paying the highest price ever.
How many times you heard that?
No, never.
why but this is reality why the media why analysts are not talking about that
so there are there is this obsession thing that oh we still need for prices to go up well if the
damage already is already happening and it already happened because prices went up and japan basically
was damaged you cannot kill the horse twice the horse already being killed you cannot kill it
twice. That's it. It's not there. And if it's not there, then you cannot feed it. It's dead.
So the demand destruction was so strong in Asia and parts of the world, like a higher price doesn't
make sense because nobody's going to pay it. But even you look at the United States, look at the
data that was released this morning. This morning, the decline in gasoline demand is almost 2.5%
year over year and has nothing to do with EVs, by the way.
It has nothing to do with EVs at all.
And so how do you explain that?
U.S. demand was going up.
Now it's 2.5%.
It was going up by 1.7%.
So the difference is between 1.7 and 2.5.
That difference is very large.
So the damage is already happening even in the United States,
but we still need more time to get the data.
In other countries, you look at Pakistan,
You look at Bangladesh, you look at Tanzania, Kenya, and South Africa, Egypt.
Those countries are completely devastated.
And it's not only oil.
Let's remember that.
This is my cheating sheet here.
Okay.
So, Hermos rate is not only about oil.
It's about helium.
And you cannot make any computer chip without helium.
It is about fertilizers and we cannot find food without fertilizers.
It is about methanol and you cannot make biofuel without methanol.
There are many products we cannot make without methanol.
It's about aluminum.
Aluminum price is basically set at record high right now as a result of that.
So it's not only about that.
And once you start adding those together and you see the massive increase in prices and costs and everything else,
it's not only about energy.
It's about everything else.
It was my mistake because I was supposed to buy two laptops.
And I kept delaying it and now prices going up All the high end computers basically went up And I on the morning show that I speak on every single morning I told them that there was a time when an air conditioning unit need to
be changed, but I can't wait. But the moment the crisis happened, immediately I decided to change
it. And the cost is about $20,000, by the way, because I know if I wait, the cost will go up.
The same unit that I paid $20,000 at the beginning, that's only five months ago, now is $26,000.
And this is in the United States.
So the problem and the crisis or what we've seen so far is only the tip of the iceberg.
Yeah, well, I'm happy you brought that up, particularly fertilizer, because I had somebody in my DMs the other day.
basically saying that they have a buddy that works at a fertilizer refinery in Louisiana and
the workers there have gotten noticed that their hours are being reduced to 80%
and he thinks it's basically like a extend and pretend before furloughs and
layoffs come because they started importing fertilizer from Morocco because the input
cost here and the refineries in the u.s went from something like 400 to 1700 or something like that
in addition basically we have a new problem that we covered in the daily energy report today
uh that banks are going to um support the building of 15 billion dollar um ai center south of dallas
and when we are talking about 15 billion dollar ai center the of course the energy consumption is
just beyond imagination and it's they are going to build their own gas fired power plant and the
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that's aven.com slash bitcoin check it out well this has been a common theme through our discussion
throughout the throughout the years you said uh you've been saying natural gas isn't a bridge to
the future it is the future it seems absolutely absolutely but now it's getting like what i as you
know i've been bullish on on lng etc but whatever we have right now is is way above the expectations
And one of the problems is once the cost goes up, everyone gets hurt because for LNG, you have only limited margin.
For the AI, the competition is so severe that if your cost, basically, you cannot manage your cost, you have a serious problem.
And with AI, by the way, people are talking about solar and wind, etc.
You cannot afford to lose power for one second, not even one second.
So you need a reliable energy, and that's why they are moving toward nuclear and natural gas as a result of that.
It's nice to have solar and wind next to you as redundancy basically becomes important.
But you need those things.
So if you look at all the data centers around the United States, all of them have backup.
And the irony is all that backup is a diesel backup.
So what does this mean?
What are the next 30, 60, 90 days look like?
what should we be hoping for in terms of any resolution?
I really want people to read that paragraph, that long paragraph that I wrote,
and it sounds gloomy and kind of very pessimistic view.
And probably we have to go through that to get the better future that we are looking for.
Otherwise, things the way they are in will drag on for a very long time,
and this is not in the interest of anyone.
Let's get it over with.
Let's get the bad news and get it over with.
And let's have that demand destruction and everything else until we move forward.
Otherwise, it's going to be a very, very difficult situation.
And something got to give.
Things do not add up.
So I'm going to give you another example on how things got to give.
I don't know how much time we have left.
You've played 20 minutes.
As you know, the Saudis couldn't export their oil through Bab el-Mandeb on their own ships.
So Saudi oil is going through Bab el-Mandeb, but on someone else's ships.
And Saudis have one of the largest VLCC fleet in the world.
And now the discussion is going toward, okay, how they are going to export it through the Swiss Canal.
Here are the issues.
If they want to export it through the Swiss Canal, the Swiss Canal cannot handle a fully loaded VLCC.
So you've got to forget about that.
They can send the ships that can take 700,000 barrels to a million 1.1.
That can go through.
But if you are talking about 2, 2.2, they cannot.
Long time ago, they found a solution.
The solution is, if you can imagine the map, you send the ships north in the Red Sea.
You go to Egypt.
Just before you reach the Swiss Canal, on the left, there are a couple of lakes there.
On the left, there is a small town called Ayan al-Sukhna.
Ayan al-Sukhna, they built a terminal there with storage facilities,
and it's connected to the Mediterranean via a pipeline called Sumed.
Sumed, that's the Waste Mediterranean Pipeline.
And the pipeline, if you can imagine the map, it goes west, crosses the Nile, crosses Cairo, and then turn north and go to Alexandria.
Next to Alexandria, there is a small town called Sidi Kray.
They made the terminal there, and it has a storage facility of about 22 million boroughs.
So those big ships basically would go historically.
They used to go to Ayan Sakhna and load some.
they will float and because of the shape of the ship now they can go through the Swiss Canal.
But later on the Saudis basically kind of because of efficiency and better management everything else
they learned I don't even have to send all of them at all. I can just unload everything in
and send it via pipeline because the pipeline capacity is 2.5 million barrels a day and I can
send it to the other side, ships can come from the other side and load.
I don't have to go through the Swiss Canal and pay for it and all that stuff.
So the question now is, can Saudi Arabia export 6 million barrels a day, which is the amount
of export they had before, through this method, both Swiss Canal and Sumit pipeline, to compensate
for the losses of Hermes and Babelmende?
And the answer is, yes, they can.
And you can work the math, you can work the capacities, everything else.
They literally can.
That's the easy part.
The problem is now ships, instead of going from Bab al-Mandeep directly to Asia,
now they have to go from the Mediterranean all the way around Africa to go to Asia.
Once you start playing the math, there will be a time when the Saudis wanted ships,
but there are none because all of them in the ocean.
Those are going to deliver and those who are returning.
And therefore they have to stop exports and they have to stop production That the problem right now with the supposedly the new system if we are going to go with that new system So we do have a serious problem
But with the hit to Egypt the day before yesterday for the LNG terminal and the two
regasification terminals, this is very serious because the question is, whoever did that,
did they really mean to head the LNG?
Or that was a message about the Swiss Canal?
Because that unit on the Mediterranean is very close to the Swiss Canal.
Very close.
So was that a message, look, we can close the Swiss Canal too?
Or that was the LNG literally was intended?
And of course, there are several suspicious leaderships in countries you can put there.
But the issue here is, even if all the stars line up for the Saudis and the rest of the world, aside from the risk, we will reach a point where we have more oil and water and we don't have enough ships.
And what is the problem?
The problem is a large number of the ships that could be available are sanctioned because they carried in the past or they're still carrying the Iranian oil and the Russian oil.
So in a sense, you look at all of this, it's kind of like almost a self-made crisis once you start expanding and looking at the details of it.
The final issue here is when we talk about those sanctions,
we got to remember that in the short run, China was prepared.
And China built those massive inventories of almost everything.
So China was doing very well throughout this period.
The only way to hurt China is to drag whatever we are in right now until,
let's say, a year from now.
That's when you start hurting China.
But by that time, the whole world would collapse.
And probably the U.S. economy would collapse even before that happened.
So there is a serious problem there that it's not only Hermos, it's not only Bab el-Mandeb,
it's really this trade war and the issues with China and everything else that we got to look at.
And when Trump visited China, the Chinese tried to be nice,
So they imported LNG from the United States to please Trump.
What they've done last week, the same shipment that arrived in China, they resold it at a higher price.
Now, China's talking about trade routes to Europe, to the Arctic, too, as well, which gets to the question, how does all this impact the relationships between the U.S., Gulf states?
I mean, Europe is obviously affected by this.
I've been viewing this through the lens of,
it seems like a big proxy war with China and this AI race.
At this time, emotions are very raw.
So when people in the Gulf basically are extremely angry,
they're being hit, their economy's being hit,
their factory's being hit, their refiner's being hit,
and their emotions are very raw.
against the Iranians and they are blaming Trump because supposedly they have those contracts with
Trump and they paid a lot of money and it says to be protected and they were not protected.
You look at countries like Kuwait, Bahrain, Saudi Arabia, etc. They were not protected. So
the emotions at this stage are very raw. That's why we see articles like one yesterday saying that
Saudi Arabia literally should tilt
toward the Chinese
big time as a result of that.
And that goes back to your old theory
about the dollar and the Bitcoin
and all the stuff. If you remember that,
we did this, what, three years ago or something like this.
So,
if that happened,
that is a crisis. But why the Saudis
are even talking, or why some Saudis
are talking about this?
Because the emotions are very raw.
And the Europeans are the same thing.
They are suffering from the highest jet fuel
prices ever diesel prices, energy prices, everything you just too expensive. And they
blame the United States because from their point of view, if Trump and Netanyahu did
not go to Iran would not we would not have this problem. And of course, from my point
of view, our problem with Europe is not only the United States, our problem with Europe
is its leadership. And if you look at what they've been doing, it's crazy. I mean,
And crazy beyond imagination, I'm going to tell you a story.
Just last week, Germany signed a contract with Canada to import LNG from Canada, from northwest Canada.
So if you can imagine the map from that corner where Alaska meets with Canada that where they are building an LNG terminal So Germany wants to buy LNG from there Germany has all the choices from around the world that are way closer to Germany But yet they chose this one because it has the lowest CO2
footprint per unit. Why? Because they use hydroelectric. They don't use fossil fuel.
but it is fossil fuel
okay
so here is the issue
how you are going to get that gas to
Germany
look at the map
we are talking about
northwestern Canada
so that's almost like across the ocean
from Japan
okay how you are going to get that to Germany
the only way to get it to Germany
is to have an LNG carrier
going from the north pole because this is close
to the North Pole, going all the way south to the South Pole, going around South Africa,
going back again to the North Pole.
Imagine the footprint of the fuel that is used in the carrier just to get that LNG to Germany.
So that's the first crazy story.
The second crazy story is they said, oh, no, no, we are not going to do that.
We'll be doing something else.
What are you going to do?
Oh, we are going to do swaps.
What do you mean swabs?
Oh, we take that LNG from Canada.
We send it to nearby Japan and China.
Okay.
And then whatever Japan and China was going to get from the U.S.,
from the Gulf, we get it from there.
So we do this swap, so we save.
Here is the crazy thing.
By their own definition, U.S. gas is dirty
because they chose the Canadian one because it had the lowest CO2.
That's not the case for the U.S.
And the second one is they are anti-fracking.
And that gas came from shale where it's fracked.
So why just go ahead and get it from the United States?
It's cheaper.
It's better.
You are getting it anyway.
Why you have to play like this?
So you take this mentality of the European leaders and apply it to so many things.
And you will find they are playing all those games like that.
And they are destroying Europe.
The deindustrialization of Germany basically has become so obvious right now.
It's a big problem.
Finally, I would like to end with the following.
As we speak right now, we have 15, literally 15 events around the world.
All of them are bullish for oil, for energy in general.
15 events.
We never seen something like this in history in terms of everything lining up this way.
Now, that does not mean oil prices will go through the roof.
No, it just means that the economies will self-destruct.
That's what that means.
So we have the four seas crisis.
If you look at the Panama Canal, in addition to everything we've seen, we have the Panama Canal.
So when we talk about the waterways, by the way, as you all know, Panama Canal is a waterway.
Bab el-Mendeb is a waterway.
Swiss Canal, which was nearby the incident that happened, that's a waterway.
And then we have the Hermann Street, that is a waterway.
The Black Sea, the only way to exit the Black Sea, that's a waterway.
And guess what?
You've seen the video of those Moroccans crossing to Spain?
That's another waterway.
And one of my colleagues asked me today whether this is just another event of a waterway rather than an immigration issue.
So almost every waterway we know of basically is having problems.
The Turkish waterways, well, Zelensky from time to time is bombing ships there.
That's other waterways.
And the Danish waterways there, they are thinking about blocking the Russian, the sanctioned Russian ships from passing.
So that's another waterway.
Anyway, so we have the Panama Canal because of low water level.
So shipping is slowing down.
Then we have the Rhine River where the water level is just like 30, 40 centimeters only.
So barges cannot go through.
They carry everything, including fuel and everything else.
So we have problems there.
In France, because of the heat wave, the temperature of the water in the rivers is a little bit high to cool the nuclear plants, so they shut some of them down.
And now they are using oil instead to generate electricity.
So you start looking at all those events worldwide, and you can see that where are we heading now?
We have a serious problem in all those events basically taking place.
We lost by the way Libyan production from two oil fields because of disputes among the tribes So that was another one And now we are coming into the refining maintenance season What next Hurricane season too Oh hurricane Yeah you right There was
by the way, we lost some production because of the recent storm. What, Bertha? I think the name
was Bertha. Yeah. And then it's not really oil and gas related, but then obviously Taiwan's an
an island that is a waterway that can pop off at any moment.
What would your advice to this administration be?
I would rather just avoid talking about the politics here because it's too late.
The damage already happened.
And it seems that there is a lot of things that we don't know.
But one issue when it comes to investment, I think, and I still think that LNG is going to be one of the best investments ever.
And LNG names, especially American names, basically are going to pay off handsomely.
And natural gas, basically, in the United States is going to go up and down.
So it's kind of very dangerous trade and investment.
But for LNG, I mean, it's kind of like the best choice.
Anyway, you look at it even 10 years from now, 15 years from now.
On the oil front, it is a very dangerous trade, not because of the politics of it, not because of manipulation,
simply because of the demand destruction and the demand decline that happened.
And as a result of this, everyone is looking at China and say, okay, only China was not affected that much by this crisis.
So what we need to do to avoid this crisis again?
So they are going to study China and they are going to find out that the success of China stems from the fact that they knew the information ahead of time and they prepared for it.
So they linked energy security to national security.
They linked energy sources to energy security, and therefore they made the immediate link between energy sources and national security.
And therefore, cost does not matter anymore.
So what will happen now is every country, including European countries, are going to look at their domestic sources.
and in most cases they will say, okay, we have those climate change policies that failed on solar, wind, EVs, and batteries.
Now we are not going to use the word or the expression climate change anymore.
We are going to use national security because no one can argue with us when we say national security.
So we are going to provide a lot of subsidies.
We are going to give tax breaks.
all this criticism about subsidies and tax breaks will disappear once you start talking about national security.
And once you do that, you are going to see emphasis on solar, wind, storage, batteries, EVs.
So one of the best investments probably will be in the future or in the coming years, basically,
is storage batteries in addition to LNG because this is going to be very big no matter what.
And governments are going to subsidize it.
So it's going to happen.
But that does not mean the emphasis on climate change and their national security does not mean that renewables are going to take over.
It's exactly the opposite.
Now countries basically are going to hold into coal.
We are bullish on coal.
Coal is going to stay with us for years to come after Hermes.
So Hermes saved coal.
And then there will be a lot of emphasis on natural gas.
Natural gas, like we said before, is going to be the future.
Hermes has sealed the case for natural gas and energy.
So when it comes to energy, I think the road is very clear right now.
The idea that we'll go back to the past is not going to happen.
Hermes is not going to be the same.
Barmendip is not going to be the same.
And the whole oil industry is not going to be the same.
It's a brave new world.
And the issue of national security, basically, and that's where the fear is.
Remember, there were a government that owned companies, oil companies, and then they privatized them, but they still own 49 percent or 20 percent or 10 percent or whatever.
And I fear that there will be a time when we are going to see nationalization, even in the West.
It's already happening.
So we see more government control.
It's already happening in AI.
Until?
Yes.
Rare earth metals.
So the fear is it might move to the energy sector.
Where do you think they would start?
Batteries or natural gas?
I mean, you sort of already have it, right, with the renewable energy credits.
I guess it's not really nationalization.
They don't have equity stakes in these companies, but.
In a sense, the SPR is the Strategic Petroleum Resilient
but I don't think it's going to be enough because when it comes to energy
dominance, those who created the concept of energy dominance,
basically they missed one area and it is the most important area,
which is refining. If the United States wants energy dominance,
they need to increase refining capacity by at least 4 million barrels a day
a day, above today, which means that probably we need at least three, four refineries, new
refineries. And you need more because some of the refineries have to literally, they are so old that
you need to get rid of them. So probably we need more than that. But for the energy dominance, you
need more refining. And the refining sector did an incredible job in terms of financial performance
a recent mass i mean just look at uh valero and all the other sisters just incredible performance
and we wouldn't even talk about venezuela and if the u.s wants to take advantage of that oil it's uh
ask me i mean what is the state i don't know last time we talked about guayana
and the deposits obviously since we last talk maduro was taken out it seems like the u.s is
for partly taking part in regime change there.
I think there's...
Since December, it was very clear,
and we published reports on that,
basically saying that, look,
Venezuela, based on various pieces of information we have,
they can increase production up to,
or exports to 1.1, probably 1.2 million barrels a day,
and then they stop,
and then they need way more time
to increase production and exports.
And that's where we are right now. So they reached their maximum. And now we need that investment to take place for it to increase production. The problem is people have to realize that the problems are too many.
And the Trump administration and the Venezuelan government have done a big, very big mistake.
It's a historic mistake, which is the speed in which they changed the laws in Venezuela to allow the American companies to come back.
That's a big mistake because any new Chavez, any new young Chavez basically can come back and say, look, this was under duress.
The American army was in our capital and our leadership was threatened and therefore they had to change the laws and they did not consult the Venezuelan people, etc.
And therefore, all of those basically are void.
They should have taken their time literally to change those laws so they can be on kind of firm ground to make the changes Because if you look historically at what happened you can see it And not only in Venezuela basically in various countries
the same thing.
So I think they have not learned from history
that they should have taken their time to change those laws.
Trump was in hurry,
and those guys in charge in Venezuela were in hurry,
and they've done it quickly,
and that is a very big mistake.
To increase Venezuelan production
by another one million barrels a day,
They need three years. The problem is U.S. companies, even in the negotiations, are still having serious problems. Why? Because the change of the laws was so quick, there is a kind of mismatch between certain laws and those laws.
Just to give you an idea on how the mismatch happened.
Remember when Trump allowed Iran, what that was a month and a half ago, when he removed the sanctions or suspended the sanctions on Iran, and he said Iran can sell its oil freely and for U.S. dollars?
Okay.
Well, it did not work out.
Iran did not sell a single drop of oil to any country except China.
despite that. Why? Because the Trump administration missed two things.
First, to deliver that oil, you deliver it on ships.
And those ships were sanctioned individually.
So no country is going to allow those ships to come in no matter what.
So they kind of ease the sanctions on one side,
but when it comes down to practical things on the ground, it did not happen.
And then Iran is still out of the SWIFT system.
So how are you going to pay them?
And the Iranians said, if you're not going to pay me cash,
I'm not going to take anything from you.
I'm not going to deal with you.
So you take this idea of conflict between the policies,
you have Trump easing the sanctions, but all the other laws are still there.
So easing the sanctions meant nothing.
We have the same problem in Venezuela now.
They changed the laws here, but we still have many things here, here and here, that do not work to achieve that objective.
So companies are still struggling.
The other thing is because of what's been happening in the last 15 years or so, think about it this way.
The cream of the crop of Venezuelan engineers left the country long ago.
to work where?
To work in Aramco and Adnok and BP and NE and Total around the world.
And guess what?
Their salaries are international salaries.
So they got paid handsomely.
Those guys are not going to go from let say a year to or There is no way which means that you have to pay them the same international salary to bring them back
And that changes the calculus because they kept telling us
it's so cheap, it's so cheap, it's so cheap.
But if the cost is going up, that changes the calculus.
And this is one of the problems.
Otherwise, they have to bring the American engineers.
And the American engineers are the most expensive engineers
in the world.
So they have all kinds of problems right now, and they can be solved on the margin.
But in terms of politics and political instability, I think Venezuela is still an explosive kick,
and we don't know what's going to happen tomorrow.
And the reason why, because the actual Venezuelans on the street have not benefited from the change that happened until today.
They haven't seen it, and they need to see it to believe in it.
A lot going on all over the world.
Man, I'm sorry.
I have bad news today.
It's all bad news.
So I don't know what to say.
No, it makes you, I mean, going back to national security strategy, I think, yes, energy dominance was a theme.
But the other big theme in that was like, hey, we're going to stop expanding our military excursions throughout the rest of the world and try to pack it in, focus on the Western hemisphere.
and it seems like almost immediately,
I mean, obviously,
when Maduro was taken out overnight,
it was very odd how it happened.
Thank God it was very swift and quick.
There's no ground war.
I think everybody's like,
okay, this makes a little sense.
But then when Iran started,
it's like, wait a second,
you just went back on.
Everything you said was the strategy.
No more Middle Eastern wars.
And you literally start one three months later.
One of the criticisms that's been pointed out
against what I've been saying,
basically is saying that
those plans are too complex for President Trump and his team.
In a sense, they don't think highly of them in terms of being smart,
and therefore I am completely wrong.
I have no problem, and I hope I am wrong,
because if I am wrong, that means things are better.
But they have to realize that these plans,
being constructed over a long period of time,
way before Trump,
And Trump and his team basically just executed the plan, and probably they executed it badly.
It does not mean that all these plans that we see today are coming out of Trump.
So the issue here is whether you like it or not, if you look at how the United States took over 30% of the AULNG from 0% to 30%,
if you think that just happened, no, it did not happen just like that.
They were planned.
They put those plans and we have construction and we have things and we have companies and we have government involved and we have President Trump and President Biden going around basically marketing this LNG etc
This did not happen overnight.
These things happened because of a plan.
So to think what, because they are trying to sell us the idea that, oh, Netanyahu came into Trump and said we are going to attack Iran and Trump just got convinced.
and all of a sudden we have all the US Navy overnight there and just happen.
This is naive.
Just to put those ships there takes months to prepare.
So it cannot be just the way they are describing it as just, you know, things just happen.
There is more to the story than that.
And then you all have the variable of like drone warfare, asymmetric drone warfare,
really throwing a wrench in conventional naval battles as well.
So that adds a layer of chaos and unpredictability to the mix that you'd like to think people would have the foresight to imagine.
But I mean, when there's the drones going from Ukraine to Russia or Iran to Gulf states, I think it's pretty clear that these drones are having an asymmetric effect.
Absolutely. Absolutely.
Well, Nas, it's always a pleasure. I know it's Friday afternoon for both of us.
Thank you. Thank you.
I appreciate you.
Thank you.
And I apologize to the audience.
I don't have better news to tell you, but just be careful out there and just focus on the real things.
Don't be fooled by the media.
Don't be fooled by this big account on social media, et cetera.
And don't take my words for granted in any way.
Take my words, basically, and judge them against everything else you hear because that's the way to go.
If you just take things for granted and you have that obsession that I criticized in the beginning, you are going to lose money.
So be careful and best of luck for all of you.
Beware, Freaks. Peace and love.
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