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Speaker 1: I like to remain you know, calm and collected during

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Speaker 1: times of crisis.

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Speaker 2: That seems to be a very rare trait, a very

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Speaker 2: rare trait for anyone.

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Speaker 1: Yeah, yeah, I mean it's it's it's tough when things

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Speaker 1: are happening so quickly. Yes, and when something like this

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Speaker 1: happens that really nobody saw coming. Was the thing. I mean,

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Speaker 1: we were having meetings. I was having meetings the week

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Speaker 1: before the Hamas attack on Israel where the question of

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Speaker 1: sort of Middle East tensions or Middle East crisis would

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Speaker 1: come up, and the general feeling was that, like, no,

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Speaker 1: things look pretty quiet. We've got Saudi is Iran normalization.

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Speaker 1: You know, oil seems to be flowing, although there's always

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Speaker 1: the US OPEC problems. You have Saudi's and israelis kind

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Speaker 1: of slowly moving towards normalization. Things seems pretty quiet, and

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Speaker 1: then bam, something huge happens that nobody really anticipated.

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Speaker 2: I did a deadlift one, okay, uh barges. This isn't special, except.

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Speaker 3: I've decided I'm going to base my entire personality going

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Speaker 3: forward on campaigning for a strategic pork reserve in the US.

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Speaker 2: Where's the best with imposta?

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Speaker 3: These are the important question, is it robots taking over

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Speaker 3: the world. No.

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Speaker 2: I think that like in a couple of years, the

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Speaker 2: AI will do a really good job of making the

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Speaker 2: odd launch podcast and people today, I don't really need

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Speaker 2: to listen to Joe and Tracy anymore.

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Speaker 1: We do have the perfect.

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Speaker 3: Well in the meantime, this is lots more.

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Speaker 2: A weekly chat about whatever is on our minds.

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Speaker 3: This is one of those episodes where I feel like

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Speaker 3: we need to get the recording date right at the top,

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Speaker 3: which is October eighteenth, because things are moving so quickly

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Speaker 3: and we are going to be discussing the Israel Hamas conflict,

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Speaker 3: and there's just new headlines every hour, it feels like.

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Speaker 2: So we are here in the studio with Gregory brew

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Speaker 2: he is an analyst at the Eurasia Group. We've had

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Speaker 2: him on the podcast before. We talked about Guyana last

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Speaker 2: time we did Yeah, but.

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Speaker 3: That was a happier story.

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Speaker 2: I feel, yes, the country with the fastest growing oil,

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Speaker 2: but the current crisis that we're seeing, the war that's

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Speaker 2: going on. This is right in your wheelhouse because it's

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Speaker 2: geopolitical and your background other than studying oil, which is

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Speaker 2: what we talked to you about last time, in the

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Speaker 2: history of oil. You have a expert on the history

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Speaker 2: of Iran as well, so Tuck.

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Speaker 1: Yeah, no, Yeah, It unfortunately happens to combine the two

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Speaker 1: things that I've done the most work on, and whenever

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Speaker 1: that happens, it generally doesn't tend to bode very well

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Speaker 1: because it means there's you know, crises, there's disruptions, there's tensions,

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Speaker 1: and yeah, I mean the crisis right now does seem

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Speaker 1: to be contained to Israel and the violence in Gaza,

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Speaker 1: but everyone is concerned about how this could spill over

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Speaker 1: into oil. You saw a very surprising reaction this morning

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Speaker 1: from Iran's foreign minister making a wild claim about an

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Speaker 1: oil and bargo on Israel, suddenly sending oil prices up surprisingly.

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Speaker 1: So I think there's a lot of I think there's jumpiness.

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Speaker 1: I think there's concerns, broadly speaking, that this crisis could

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Speaker 1: eventually spill over and start affecting oil.

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Speaker 3: Wait, you said it was kind of a wild threat.

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Speaker 3: Why And also how crazy is it that we're talking

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Speaker 3: about an oil embargo, like exactly fifty years after the

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Speaker 3: Arab oil embargo that like contributed to nineteen seventies inflation.

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Speaker 3: I find that mind blowing like almost to the day.

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Speaker 1: Right, Yeah, I mean history does seem to be rhyming, right.

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Speaker 1: I mean the attack, the Hamas attack happened exactly fifty

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Speaker 1: years and one day.

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Speaker 2: After the outbreak of.

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Speaker 1: The Omkapur War in nineteen seventy three, so obvious parallels

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Speaker 1: and I think so yeah, turning things back a bit,

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Speaker 1: you know, Iran's foreign minister, who's currently in Saudi Arabia

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Speaker 1: of all places, made kind of a wild claim in

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Speaker 1: front of press. He said Iran was going to call

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Speaker 1: on all Muslim countries, including countries like Saudi Arabia and

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Speaker 1: the UAE and Kuwait, to embargo oil shipments to Israel,

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Speaker 1: very clearly trying to replicate what happened in nineteen seventy three,

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Speaker 1: or at least a version of it. And the reason

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Speaker 1: why it strikes me and I think a lot of

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Speaker 1: other analysts who watch Iran and oil closely, why it

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Speaker 1: strikes me as kind of a wild claim is that,

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Speaker 1: first of all, Iran doesn't sell any oil to Israel.

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Speaker 1: Iran and Israel are antagonists, they're competitors, you know, and honestly,

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Speaker 1: not many other Middle East countries sell oil to Israel

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Speaker 1: either or at least what oil that they do sell.

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Speaker 1: It's a fairly small amount, and there really isn't any

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Speaker 1: appetite i think, within OPEC or the broader Middle East

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Speaker 1: for another nineteen seventy three, certainly not for another embargo.

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Speaker 1: So I saw those comments, and also, it needs to

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Speaker 1: be said, Iranian officials, including the Foreign Minister Supreme Leader

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Speaker 1: Ali Kramene, they've been talking a lot of tough talk

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Speaker 1: over the last couple of days about how this crisis

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Speaker 1: could escalate, about how Iran might have to get involved.

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Speaker 1: So this kind of fits within that broader sort of

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Speaker 1: rhetorical campaign that Iran's been running of the last couple

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Speaker 1: of days, that they haven't really followed through with in

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Speaker 1: terms of direct action. So I saw the comments and

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Speaker 1: I thought like, well, Iran's talking tough, there's not going

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Speaker 1: to be an embargo, but markets seems to react, right.

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Speaker 1: Brent shot up from ninety one fifty to ninety two

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Speaker 1: to fifty. It's come back down since then, but clearly

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Speaker 1: there's there's wariness and jumpiness out there about how this

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Speaker 1: crisis could start affecting the broader market.

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Speaker 2: To reiterate for people listening, we're recording this on the eighteenth,

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Speaker 2: and so, you know, who knows what will happen in

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Speaker 2: this war, this crisis by the time people are listening

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Speaker 2: to it. But this is why, you know, the oil

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Speaker 2: perspective is obviously one that we're particularly interested. Brent is

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Speaker 2: still below where it was like at the end of September.

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Speaker 2: I mean, yeah, it's been a pickup in oil prices.

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Speaker 2: I mean, first of all, could it be that the

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Speaker 2: concern is not so much embargo, but that the more

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Speaker 2: the rhetoric gets tightened up and perhaps something where the

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Speaker 2: you know, sort of broadening out of the war itself.

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Speaker 2: I know, there was a lot of talk about the

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Speaker 2: Biden administration having been particularly rigorous about sanctions enforcement. You

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Speaker 2: to listen what's going on with.

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Speaker 1: The Yeah, totally so, I think, you know, as soon

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Speaker 1: as the attack happened and this crisis started growing and

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Speaker 1: started taking on the proportions that it has, the immediate

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Speaker 1: thought was how was Iran involved? How will the US

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Speaker 1: and Israel respond? Right, Iran backs Hamas has for years.

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Speaker 1: It's a major supporter of Hamas. It supplies it with

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Speaker 1: weapons and funding and training. There still isn't any clear

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Speaker 1: answer as to whether Iran was involved in the attack,

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Speaker 1: and Iran has, as I mentioned, it's been talking tough,

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Speaker 1: but it really hasn't been taking a direct role. But

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Speaker 1: the bigger concern is, yes, will the US and Israel

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Speaker 1: decide to retaliate against Iran for its support for Hamas

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Speaker 1: And one of the major vectors that has been speculated

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Speaker 1: on or discussed is this question of will the US

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Speaker 1: titan restrictions on Iran's oil exports. It's been a big

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Speaker 1: story this year, right the recovery of Iran as a

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Speaker 1: major oil exporter. Exports were you know, around seven hundred

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Speaker 1: thousand barrels a day last year. They're now in the

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Speaker 1: range of one point five one point six million barrels

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Speaker 1: a day today. Yeah, I mean, and Iran is still

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Speaker 1: technically under sanction, right, so there's been a lot of

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Speaker 1: discussion of has the US eased off sanctions is as

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Speaker 1: part of a bigger deal between the US and Iran?

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Speaker 1: And now that this crisis has broken out, will the

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Speaker 1: US respond by tightening sanctions? And to me, it's a

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Speaker 1: lot more complicated than just you know, President Biden having

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Speaker 1: a big button on his desk sanctions, no sanctions, and

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Speaker 1: then pushing it and suddenly Iran oil exports fall. Like

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Speaker 1: the range of action that the US could take to

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Speaker 1: cut off the flow of oil, It's not quite as

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Speaker 1: simple as just adding new sanctions to Iran. Iran is

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Speaker 1: already under heavy, heavy sanctions. It's also a question of,

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Speaker 1: you know, if the US tries to do that, how

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Speaker 1: will that affect the broader market? How will that affect prices?

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Speaker 1: It'll certainly send prices up, and also how will it

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Speaker 1: affect the one country who is taking almost all of

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Speaker 1: Iran's oil China?

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Speaker 2: Right, we talk.

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Speaker 1: About have sanctions been lowered or reduced? Not really. What's

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Speaker 1: been happening is that China and small Chinese refiners have

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Speaker 1: been willing to take more and more Iranian oil at

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Speaker 1: low prices. Right, Iran is putting a big discount on

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Speaker 1: its crude, and they're taking this oil through somewhat shady means.

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Speaker 1: There's ship to ship transfers, the oil is being disguised

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Speaker 1: in Chinese customs data. China still technically doesn't take any

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Speaker 1: Iranian oil. It all gets redirected through other venues. So

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Speaker 1: there's a lot of shadiness to this oil trade, which

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Speaker 1: makes imposing sanctions by the US a lot harder. But

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Speaker 1: if you're cutting off the supply of oil to China,

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Speaker 1: which is what tougher sanctions enforcement would do. The Chinese

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Speaker 1: are bound to respond, right, They're not going to like that,

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Speaker 1: and I think the Biden administration is wary of provoking China.

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Speaker 1: And anything you do to disrupt Iran's oil exports is

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Speaker 1: going to have an impact on the broader market and

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Speaker 1: it's going to send oil prices up, and that's also

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Speaker 1: something that the Biden administration doesn't really want to do.

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Speaker 1: So you have operational constraints on how sanctions would even work.

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Speaker 1: You have provoking the Chinese, you have potentially provoking the Iranians,

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Speaker 1: and everything that you do is going to increase the

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Speaker 1: price of oil, something that this administration has really been

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Speaker 1: tried to trying to avoid. So I think it's in

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Speaker 1: the conversation right, tougher sanctions on Iranian and oil exports.

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Speaker 1: I still think the risk is fairly limited, and I

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Speaker 1: think if the US were to consider doing it, it

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Speaker 1: would be deterred by some of these more negative knock

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Speaker 1: on effects.

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Speaker 3: Yeah, what kind of response could you expect from opek here,

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Speaker 3: because like it feels like there's been a lot of

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Speaker 3: I mean, there's always internal drama at OPEK, but it

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Speaker 3: feels like there's been even more recently with regards to

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Speaker 3: you know, output and slack, extra capacity and things like that.

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Speaker 3: But it's such a disparate group, like in any case,

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Speaker 3: do you get a sense of like what they might

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Speaker 3: do here?

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Speaker 1: Yeah, I mean, that's a really it's an interesting question

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Speaker 1: because of course OPEC's been pursuing you know, supply management,

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Speaker 1: market management. They've been maintaining their cuts. The Saudia's have

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Speaker 1: been adding additional voluntary cuts to try to push prices upward.

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Speaker 1: And you know, curiously enough, this has been happening while

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Speaker 1: Iran has been increasing its exports, and it's also been

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Speaker 1: happening while Saudi and Iran pursue normalization. So there's you know,

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Speaker 1: there seems to be some cross purposes here. There does

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Speaker 1: seem to be a certain paradox and how the Saudis

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Speaker 1: particularly are approaching managing this market. But in terms of

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Speaker 1: what OPEK might do if the US suddenly cracked down

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Speaker 1: in Iran in a way that would really reduce the

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Speaker 1: flow right in a way that would create physical a

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Speaker 1: change in the physical market to fundamentals, I don't know

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Speaker 1: if OPEK or the Saudis would respond immediately because, as

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Speaker 1: I said, anything that the US would do would send

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Speaker 1: prices higher, and that's exactly what the Saudis want, right,

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Speaker 1: They want a higher price floor. They want to rise

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Speaker 1: prices maybe into the nineties, maybe close to one hundred.

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Speaker 1: So initially I don't think they would do a whole lot, right.

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Speaker 3: It feels like in the market there's still an assumption that,

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Speaker 3: like well, OPEC could ramp up capacity if it needed to,

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Speaker 3: But like to your point, Gragle, I don'uld see why

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Speaker 3: they would want to in that scenario.

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Speaker 2: Yeah.

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Speaker 1: Yeah.

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Speaker 2: Prior to the attack by Hamas, as you mentioned, one

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Speaker 2: of the big stories had been the sort of loosening

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Speaker 2: in some sense of the physical market for Ronnie and

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Speaker 2: all the other I think it was a headline the

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Speaker 2: day before the attack. I think it was from the

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Speaker 2: Wall Street Journal about Saudi talking about maybe lifting its

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Speaker 2: production as part of an Israel normalism. Yeah. Yeah, you

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Speaker 2: had a very strong condemnation from the Kingdom of Saudi

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Speaker 2: Arabia towards Israel about the bombing at the hospital, which,

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Speaker 2: of course people don't really know what happened, but obviously

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Speaker 2: the public stance from Saudi and other golf countries is

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Speaker 2: pretty strong. What is Saudi's position here, How does it

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Speaker 2: affect where it was going with its talks on Israel

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Speaker 2: and so forth.

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Speaker 1: Yeah, I mean, you have to remember, even though we've

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Speaker 1: seen a lot over the last year or so on

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Speaker 1: Saudi Israel normalization, and even with the you know, the

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Speaker 1: so called Abraham Accords came together at the end of

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Speaker 1: the Trump administration, right, Israel normalizing with a number of

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Speaker 1: Arab states, you have to remember that formal relation between

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Speaker 1: Israel and the rest of the Middle East or specifically

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Speaker 1: the Arab world is still a very touchy, complicated issue.

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Speaker 1: There's still a great deal of history of sentiment that

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Speaker 1: Arab leaders, specifically, particularly in conservative Arab states like Saudi Arabia,

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Speaker 1: they have to be sort of wary of managing. And

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Speaker 1: I think the Saudi approach to this crisis has been

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Speaker 1: trying to thread that needle.

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Speaker 3: Right.

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Speaker 1: You've seen Saudi condemnations of Israeli actions in Gaza, You've

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Speaker 1: seen the Saudis, I mean MBS Muhammad bin Salman, the

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Speaker 1: Crown Prince of Saudi Arabia. He took a phone call

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Speaker 1: with President Raisi of Iran last week, the first time

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Speaker 1: they ever spoke right, and he did that in the

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Speaker 1: context of this crisis. So Saudi Arabia has been trying

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Speaker 1: to sort of maintain a middle line of not appearing

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Speaker 1: too friendly with Israel while also I think largely staying

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Speaker 1: on the sidelines of the crisis. Now, what does that

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Speaker 1: mean for this Israeli Saudi normalization. You mentioned the peace

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Speaker 1: that came out right before the crisis. It kind of

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Speaker 1: got buried this news that Saudi Arabia was opening up

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Speaker 1: a little bit to this idea that it would try

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Speaker 1: to lower oil prices as part of this grand bargain

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Speaker 1: with the US and Israel. That news came out, it

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Speaker 1: was greeted with a certain amount of skepticism because this

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Speaker 1: generally speaking, that wouldn't really align up with how the

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Speaker 1: Saudis have been trying to manage markets. But it did

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Speaker 1: suggest that there was progress on this deal. Now, where's

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Speaker 1: the deal now? Given the crisis is happening, the crisis

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Speaker 1: is escalating, I would say that it's on ice, but

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Speaker 1: it's not necessarily dead. I think the Saudi government has

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Speaker 1: to take the line that it's taken for political concerns,

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Speaker 1: for domestic concerns. It's concerned about regional stability. But in private,

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Speaker 1: I would imagine that there is still quite a lot

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Speaker 1: of interest from MBS in this deal because remember what

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Speaker 1: were the terms of the deal being discussed. Saudi Arabia

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Speaker 1: would get a security guarantee from the United States, it

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Speaker 1: would get US support for a civilian nuclear program. Israel

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Speaker 1: and Saudi Arabia would form a sort of a United

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Speaker 1: security front to contain Aron. These are all things that

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Speaker 1: Saudi Arabia NBS is interested in getting. I think he's

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Speaker 1: still interested in getting them now. He just maybe isn't

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Speaker 1: willing to talk about them publicly given the crisis that's happening.

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Speaker 1: So I think the deal, Yeah, the deal is on ice,

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Speaker 1: but it's not dead. It will take some time to

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Speaker 1: revive it though. I mean, like this crisis could go

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Speaker 1: on for weeks, it could go on for months. The

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Speaker 1: worst things get in Gaza, the harder it will be

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Speaker 1: for governments like Saudi Arabia to look friendly with Israel.

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Speaker 1: And that all works against a deal in the short term.

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Speaker 1: But I wouldn't say that it's dead. I mean NBS

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Speaker 1: is going to be in charge in Saudi Arabia for

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Speaker 1: a long time. He can afford to wait for this

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Speaker 1: crisis to subside or potentially even blow over, and revisit

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Speaker 1: a deal with Israel at some point in the future.

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Speaker 1: But I don't think we're going to see much talk

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Speaker 1: about it anytime soon.

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Speaker 3: I have a q slightly off topic, but not really

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Speaker 3: your research on Iran. I'm assuming you never actually got

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Speaker 3: to go to the country given existing sanctions, but I'm

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Speaker 3: just curious, like what the actual process was like of

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Speaker 3: gathering that information, and like did you travel, did you

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Speaker 3: talk to people on the ground, that sort of a shing.

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Speaker 1: I love these kinds of questions because it reminds me of,

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Speaker 1: you know, being a historian, which is my training. Before

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Speaker 1: I came to Yourrasier group, I was at Yale. I

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Speaker 1: was mostly working on my next book, so I wasn't

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Speaker 1: able to go to Iran. That's right. I'm an American national,

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Speaker 1: and at the time that I was doing my research,

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Speaker 1: this was twenty seventeen or so, it was dangerous. I

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Speaker 1: think for researchers who were Americans to go to Iran,

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Speaker 1: you ran the risk of physical harm, you ran the

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Speaker 1: risk of arrest. There have been Americans who have gone

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Speaker 1: to Iran to do historical research who have been arrested

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Speaker 1: and have remained in prison for years. I mean what

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Speaker 1: we just saw the recent prisoner exchange between the United

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Speaker 1: States and Iran. Some of those individuals, none of them

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Speaker 1: were historians, but they had some of them had been

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Speaker 1: held in prison for nearly ten years for really no reason.

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Speaker 1: So it wasn't possible for me to go to Iran

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Speaker 1: to do research. But that being said, I was doing

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Speaker 1: research on the fifties and sixties, you know, the Cold War,

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Speaker 1: and there's actually quite a lot of information of documentary

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Speaker 1: evidence in Farsi, in Persian that's available in the US

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Speaker 1: in Europe. A lot of it is in the form

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Speaker 1: of memoirs or interviews, but there are sort of collections

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Speaker 1: of documents that you can find that have been published.

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Speaker 1: So I, you know, writing the book that I wrote,

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Speaker 1: which was mostly about oil the Cold War US Iranian relations,

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Speaker 1: I tried to use as many of those sources as

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Speaker 1: I could, right, I really really strove to incorporate an

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Speaker 1: Iranian perspective as much as I could, because I thought

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Speaker 1: that perspective was important. Even if I wasn't able to

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Speaker 1: go to Iran and do research there, I still felt that,

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Speaker 1: you know, I couldn't write just another book about the

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Speaker 1: US and oil I had to incorporate to the Iranians.

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Speaker 2: So what is your forthcoming book.

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Speaker 1: Well, it's very much in progress, Joe. But what I'm

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Speaker 1: going to try to do, so my last book was

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Speaker 1: about the US and Iran specifically in the Cold War.

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Speaker 1: I wrote another I co wrote another book about the

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Speaker 1: nineteen fifty three coup in Iran, which also celebrated an

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Speaker 1: anniversary this year. But my next book is going to

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Speaker 1: be about oil and the US more broadly in the

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Speaker 1: twentieth century. What I'd really like to do is examine

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Speaker 1: how oil has helped sort of form the foundation for

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Speaker 1: American power in the twentieth century, and how the oil

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Speaker 1: industry companies like Exon Mobil, but also smaller companies that

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Speaker 1: are operating in Texas and other places, how they served

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Speaker 1: as tools of US foreign policy and formed a part

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Speaker 1: of the US conception of national security. So oil national

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Speaker 1: security in the twentieth century is kind of the broad focus,

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Speaker 1: but it's still, you know, in the early stages. So

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Speaker 1: I'll let you know what I make more progress.

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Speaker 2: All right, Well, we'll be back on for that, yeah,

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Speaker 2: I hope. So, speaking of going back to the market, reaction.

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Speaker 2: There's like a couple interesting things. I mean, I'm in

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Speaker 2: a way, I've been surprised that, you know, you expressed

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Speaker 2: surprise oil popped on these headlines which you didn't think

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Speaker 2: had much teeth to them. In general, though, I've been

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Speaker 2: surprised Tracy at like most markets for the last you know,

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Speaker 2: ten days lighter than I might have expected overall, across oil,

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Speaker 2: across raids, across stocks, which are more or less flat

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Speaker 2: or actually slightly up over the last two weeks. Is

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Speaker 2: not what I would have guess, given the intensity of

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Speaker 2: the headlines and the just uncertainty of world.

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Speaker 3: This is going now, I know what you mean. Although

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Speaker 3: I do think today, hold on, I'm just looking at this.

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Speaker 3: It looks like today is like kind of the first

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Speaker 3: day where we've seen a significant pop in gold, which

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Speaker 3: is like a classic yes war reaction, asset flight to

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Speaker 3: safe haven kind of thing. True, So that's interesting to see.

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Speaker 3: It does feel like today with that explosion, the deadly

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Speaker 3: explosion at that hospital, it feels like things have like

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Speaker 3: shifted a little bit, even though there's no certainty about

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Speaker 3: what exactly just happened.

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Speaker 1: Yeah, we're still trying to piece together precisely what happened right,

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Speaker 1: whether it was a rocket misfire, whether it was something

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Speaker 1: caused from the Israeli side, something caused from Hamas or

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Speaker 1: another group active in Gaza. I think the evidence is

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Speaker 1: still kind of coming together, but there was an immediate

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Speaker 1: reaction to the explosion across the Arab world. There were

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Speaker 1: spontaneous protests in places like Jordan, in the West Bank,

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Speaker 1: even in Iran, where the struggle in Palistine or the

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Speaker 1: issue of the Palestinian people is followed quite closely. And

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Speaker 1: you saw, as Joe mentioned, quite quick condemnations of the

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Speaker 1: Israeli action from governments across the region.

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Speaker 2: And to some extent that's for a domestic audience that

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Speaker 2: the public protests and then the leadership feels it has

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Speaker 2: to take.

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Speaker 1: Us oide totally. A lot of it is out of

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Speaker 1: concern for how the public, how the so called Arab

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Speaker 1: street is, how it's referred to, how the public will

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Speaker 1: respond to violence in Gaza. You know, perceived attacks by

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Speaker 1: Israel against Palestinians tend to have ripple effects across the

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Speaker 1: public opinion across the entire Arab world. So you saw

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Speaker 1: that quite quickly, and then you saw Arab governments issuing

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Speaker 1: condemnations I think maybe to get ahead of public opinion

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Speaker 1: even before the evidence could confirm exactly what had happened

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Speaker 1: at the hospital, and that has caused a shift. I mean,

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Speaker 1: you saw President Biden was supposed to go to Jordan

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Speaker 1: to meet with various Arab leaders. That meeting apparently is

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Speaker 1: now off the table, so he is flying to Israel

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Speaker 1: to just meet with the Israeli government, which is not

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Speaker 1: going to look good I think for the President broadly speaking,

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Speaker 1: as he tries to contain this crisis.

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Speaker 3: So we have a question from our discord. It is

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Speaker 3: from Materials Dan, which is you know, a good name

404
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Speaker 3: for materials Dan, and he's asking about materials So he's asking,

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Speaker 3: how does the conflict affect relative demand for different products

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Speaker 3: like petrol, kerosene, distillates.

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Speaker 1: Huh, that's a good question. You're gonna make you do

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Speaker 1: this in real time, one that I would expect from

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Speaker 1: Materials Dan. Thanks Dan. Right now. Yeah, like market is

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Speaker 1: kind of taking it in stride the product market. I think,

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Speaker 1: I think people are still I think it's real important

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Speaker 1: to look at the picture that was coming together in

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Speaker 1: fundamentals and sentiment before the crisis broke out. There's been

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Speaker 1: some signs that Chinese demand in the fall was a

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Speaker 1: little stronger than some head thought. That's maybe encouraging a

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Speaker 1: more bullish outlook for twenty twenty four. As far as

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Speaker 1: products are concerned, the crisis hasn't really spilled out into

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Speaker 1: markets quite yet. Yeah, right, there hasn't been actual physical disruptions.

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Speaker 1: There's been some movement in Brent, I think caused by

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Speaker 1: positions shifting, although those came, you know, after the calamitous

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Speaker 1: eleven dollars plunge that Brent took right before the crisis happened,

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Speaker 1: so you know, you saw sentiment shifting there. The crisis

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Speaker 1: hasn't really affected physical flows quite yet. It has caused

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Speaker 1: I think a slight spike in some prices in disease,

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Speaker 1: but I think the factors to still focus on are

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Speaker 1: the fundamentals and the supply picture, the suply demand picture.

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Speaker 1: Moving into twenty twenty four, where I still think there's

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Speaker 1: a lot of uncertainty there, right. Could the US slip

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Speaker 1: into a minor recession, could demand fall off in the EU?

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Speaker 1: Will China keep having the problems it's been having. This

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Speaker 1: is pushing back against a little bit of the bullishness

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Speaker 1: that OPEC I think was putting out for the end

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Speaker 1: of this year about where prices were going to be.

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Speaker 3: Joe, you know one physical disruption that has happened. It's

435
00:22:10,600 --> 00:22:15,160
Speaker 3: actually not an oil but our old friend Evergreen declared

436
00:22:15,200 --> 00:22:18,360
Speaker 3: force masure on a container ship on an Israel which

437
00:22:18,400 --> 00:22:22,120
Speaker 3: I guess isn't really surprising. It's funny, how like, whenever

438
00:22:22,400 --> 00:22:25,160
Speaker 3: there seems to be a physical disruption of any sort,

439
00:22:25,280 --> 00:22:29,760
Speaker 3: like you will find Evergreen and their fleet of interestingly

440
00:22:29,920 --> 00:22:33,320
Speaker 3: named ships. This one was called the ever Cozy affected

441
00:22:33,400 --> 00:22:34,240
Speaker 3: in one way or another.

442
00:22:34,520 --> 00:22:39,440
Speaker 1: Oh, man, I think about that weekly. The suis Yeah,

443
00:22:39,560 --> 00:22:42,920
Speaker 1: it's your Roman Empire. Yeah it's my Roman Empire. But

444
00:22:42,960 --> 00:22:45,119
Speaker 1: I think about Roman Empire daily, as I think we all.

445
00:22:46,320 --> 00:22:47,240
Speaker 2: I never got into that.

446
00:22:47,480 --> 00:22:48,120
Speaker 1: There's still time.

447
00:22:48,400 --> 00:22:51,640
Speaker 2: I'm looking at the ever Cozy is built in twenty

448
00:22:51,680 --> 00:22:54,000
Speaker 2: twenty one. Oh, that's interesting. So this is a relatively

449
00:22:54,240 --> 00:22:56,480
Speaker 2: newer ship that was built. It was built in twenty

450
00:22:56,560 --> 00:22:59,359
Speaker 2: twenty one, built at the peak of the shipping boom

451
00:22:59,640 --> 00:23:03,520
Speaker 2: and now global freight prices. This is interesting. Despite the

452
00:23:03,600 --> 00:23:06,920
Speaker 2: strength of the US consumer generally, you would think that

453
00:23:07,400 --> 00:23:10,960
Speaker 2: you know, the particularly still strong, very strong goods demand.

454
00:23:11,280 --> 00:23:14,160
Speaker 2: I think you would expect like freight and trucking prices

455
00:23:14,240 --> 00:23:17,439
Speaker 2: to be more robust than they have been, but they

456
00:23:17,480 --> 00:23:19,840
Speaker 2: really have it. I think I saw global container freight

457
00:23:20,280 --> 00:23:22,200
Speaker 2: rates fell to a five year low.

458
00:23:22,600 --> 00:23:25,080
Speaker 3: Yeah, we're going to have to do another freight episode,

459
00:23:25,080 --> 00:23:27,600
Speaker 3: I think definitely, because a lot of people were predicting

460
00:23:27,640 --> 00:23:29,920
Speaker 3: that it would be bad, but it has indeed turned

461
00:23:29,920 --> 00:23:31,000
Speaker 3: out to be quite bad.

462
00:23:31,119 --> 00:23:33,080
Speaker 2: A lot of we have to do an episode at

463
00:23:33,119 --> 00:23:35,120
Speaker 2: a time when a prediction turned out to be true

464
00:23:35,520 --> 00:23:45,320
Speaker 2: because it sounds like what you're saying medium term for

465
00:23:45,480 --> 00:23:49,800
Speaker 2: this crisis, this war, what are you looking for? What

466
00:23:49,960 --> 00:23:52,080
Speaker 2: are going to be the sort of tells in terms

467
00:23:52,119 --> 00:23:53,119
Speaker 2: of how long this could go on?

468
00:23:53,240 --> 00:23:53,520
Speaker 3: So far?

469
00:23:53,760 --> 00:23:56,639
Speaker 1: Yeah, I mean it's in an interesting phase right now

470
00:23:56,680 --> 00:23:59,080
Speaker 1: because it's coming up on two weeks. A week and

471
00:23:59,080 --> 00:24:01,480
Speaker 1: a half or so since the attack. Israel has been

472
00:24:01,560 --> 00:24:04,240
Speaker 1: Bombardi Gaza and has been planning an offensive but still

473
00:24:04,240 --> 00:24:06,480
Speaker 1: hasn't gone in. And I think a lot of the

474
00:24:06,600 --> 00:24:10,639
Speaker 1: medium term fallout from this crisis will depend on what

475
00:24:10,880 --> 00:24:13,560
Speaker 1: the Israeli offensive in Gazo looks like and what their

476
00:24:13,680 --> 00:24:15,879
Speaker 1: goal is. They still haven't said what they want to do.

477
00:24:16,359 --> 00:24:19,040
Speaker 1: I mean they want to destroy Hamas, that's clear. But

478
00:24:19,200 --> 00:24:21,399
Speaker 1: how do you do that without Do you have to

479
00:24:21,440 --> 00:24:24,120
Speaker 1: occupy Gaza? Do you have to carve it up into

480
00:24:24,280 --> 00:24:27,760
Speaker 1: separate zones? Does the IDF have to occupy parts of

481
00:24:27,800 --> 00:24:31,439
Speaker 1: the territory or push the population out? There's the refugee problem,

482
00:24:31,600 --> 00:24:34,600
Speaker 1: right where do you move hundreds of thousands of Gazas

483
00:24:34,640 --> 00:24:37,120
Speaker 1: if Egypt won't take them, if they can't be moved

484
00:24:37,119 --> 00:24:40,000
Speaker 1: into Israeli territory? How do you launch a huge offensive

485
00:24:40,160 --> 00:24:43,840
Speaker 1: when there's so many civilians in the line of fire. So,

486
00:24:44,400 --> 00:24:46,760
Speaker 1: while the IDF continues to plan this offensive, I think

487
00:24:46,880 --> 00:24:49,520
Speaker 1: everyone's kind of in a holding pattern because the scale

488
00:24:49,560 --> 00:24:52,959
Speaker 1: of the offensive may determine how or how or if

489
00:24:53,080 --> 00:24:55,920
Speaker 1: other actors get involved. And there I would look specifically

490
00:24:55,960 --> 00:24:58,760
Speaker 1: at what Hezbolah in Lebanon is doing. I mean, Hesbelah

491
00:24:59,200 --> 00:25:02,080
Speaker 1: is a you know, lar large armed militia. It dominates

492
00:25:02,160 --> 00:25:04,800
Speaker 1: large portions of Lebanon. It's very closely tied to Iran.

493
00:25:05,119 --> 00:25:08,520
Speaker 1: And there's been this constant skirmishing happening between Hesbelah and

494
00:25:08,560 --> 00:25:11,480
Speaker 1: the Israeli military since the attack took place, sort of

495
00:25:11,800 --> 00:25:14,200
Speaker 1: kind of each side's warning the other to back off

496
00:25:14,680 --> 00:25:17,359
Speaker 1: right in case either side tries to take advantage of

497
00:25:17,520 --> 00:25:19,600
Speaker 1: this crisis, and if things start to get really bad

498
00:25:19,640 --> 00:25:22,280
Speaker 1: in Gaza, if the Israeli offensive sort really starts to

499
00:25:22,359 --> 00:25:25,440
Speaker 1: push at what Middle East public opinion will accept, you

500
00:25:25,600 --> 00:25:29,280
Speaker 1: may start to see signs that Hesbelah could escalate. There

501
00:25:29,320 --> 00:25:31,679
Speaker 1: you have a US threat too, right the US has

502
00:25:31,720 --> 00:25:34,760
Speaker 1: moved two carrier groups into the Eastern Mediterranean. President Biden

503
00:25:34,800 --> 00:25:37,440
Speaker 1: and Secretary Blincoln have made very clear that the US

504
00:25:37,560 --> 00:25:41,199
Speaker 1: is going to back Israel. They've sent very clear deterrent

505
00:25:41,240 --> 00:25:44,520
Speaker 1: signs against Iran to not get involved. So there's a

506
00:25:44,560 --> 00:25:47,359
Speaker 1: potential risk for the US to become entangled in this

507
00:25:47,520 --> 00:25:50,159
Speaker 1: depending on how bad things get. But right now, I

508
00:25:50,200 --> 00:25:52,600
Speaker 1: think everyone is kind of holding their breadth to see

509
00:25:52,920 --> 00:25:56,919
Speaker 1: what the outcome of Biden's visit is, what the Israeli

510
00:25:56,960 --> 00:26:00,879
Speaker 1: offensive in Gaza looks like, and also how regional public

511
00:26:00,960 --> 00:26:05,080
Speaker 1: opinion continues to digest not just the disaster at the hospital,

512
00:26:05,400 --> 00:26:08,480
Speaker 1: but the continued bombings of Gaza and the outcomes there.

513
00:26:08,840 --> 00:26:11,600
Speaker 3: Greg you mentioned Hezbolah, and I just got a flashback

514
00:26:11,680 --> 00:26:13,399
Speaker 3: to one of the books that I read when I

515
00:26:13,480 --> 00:26:15,240
Speaker 3: was heading out to Abu Dhabi and trying to do

516
00:26:15,359 --> 00:26:18,119
Speaker 3: a crash course in Middle East history, which is pretty

517
00:26:18,200 --> 00:26:20,560
Speaker 3: much impossible. That's the thing I learned. But there's this

518
00:26:20,680 --> 00:26:24,200
Speaker 3: great book. It had one of the most fantastic titles

519
00:26:24,280 --> 00:26:26,680
Speaker 3: that I've ever seen. It was called the Media Relations

520
00:26:26,760 --> 00:26:30,159
Speaker 3: Department of Hezbolah which is you a Happy Birthday. Unexpected

521
00:26:30,240 --> 00:26:33,240
Speaker 3: Encounters in the Changing Middle East. And it is funny

522
00:26:33,240 --> 00:26:34,720
Speaker 3: because I think back to that book and like, so

523
00:26:34,880 --> 00:26:37,879
Speaker 3: much has changed, even you know, in the past ten

524
00:26:38,000 --> 00:26:40,840
Speaker 3: years since that book was published or so. But it

525
00:26:41,040 --> 00:26:43,080
Speaker 3: just feels like, I mean, how many books are going

526
00:26:43,119 --> 00:26:46,600
Speaker 3: to be written about this current conflict. I can't even imagine.

527
00:26:46,800 --> 00:26:49,119
Speaker 1: Yeah, And it also gets to one other element that

528
00:26:49,280 --> 00:26:51,240
Speaker 1: maybe doesn't get quite the attention that it deserves, which

529
00:26:51,280 --> 00:26:55,840
Speaker 1: is that these groups Hamas hezbolah Aran as well, they're

530
00:26:55,920 --> 00:26:57,879
Speaker 1: fighting a war on several fronts.

531
00:26:58,080 --> 00:26:58,199
Speaker 3: Right.

532
00:26:58,280 --> 00:27:01,000
Speaker 1: They're fighting it with weapons and arms and you know,

533
00:27:01,240 --> 00:27:03,960
Speaker 1: forces on the ground. They're also fighting what they see

534
00:27:04,000 --> 00:27:06,440
Speaker 1: as being a war of ideas on social media and

535
00:27:06,560 --> 00:27:10,359
Speaker 1: in the press. These are political organizations. They conceive of

536
00:27:10,400 --> 00:27:13,880
Speaker 1: themselves as having constituencies, right, people who will support them,

537
00:27:14,119 --> 00:27:17,919
Speaker 1: and they have ideologies, right, They're selling ideas as much

538
00:27:17,960 --> 00:27:20,240
Speaker 1: as they are trying to fight a war against Israel.

539
00:27:20,320 --> 00:27:22,760
Speaker 1: Or the IDEF. So that's another thing to bear in mind,

540
00:27:22,800 --> 00:27:25,840
Speaker 1: particularly when we look at things that Iran says. Right,

541
00:27:26,119 --> 00:27:29,720
Speaker 1: Iran is putting out rhetoric, putting out tough talk, because

542
00:27:29,760 --> 00:27:31,760
Speaker 1: in many ways they're trying to talk up their own

543
00:27:31,800 --> 00:27:35,240
Speaker 1: sort of propaganda, their own ideology, their own perspective of

544
00:27:35,359 --> 00:27:37,800
Speaker 1: the conflict. That doesn't necessarily mean they're going to do

545
00:27:38,040 --> 00:27:41,440
Speaker 1: anything right, that they might not actually get involved, but

546
00:27:41,520 --> 00:27:44,280
Speaker 1: it's important to bear in mind that these actors are

547
00:27:44,520 --> 00:27:47,440
Speaker 1: engaging in this conflict on multiple levels. Some of them

548
00:27:47,560 --> 00:27:49,720
Speaker 1: are on social media, some of them are just you know,

549
00:27:49,960 --> 00:27:53,680
Speaker 1: involving ideas, trying to get more support for their particular positions.

550
00:27:53,880 --> 00:27:57,160
Speaker 2: Greg other than your own book what should I download

551
00:27:57,240 --> 00:27:59,359
Speaker 2: on my kendle this weekend? If I want to be

552
00:27:59,400 --> 00:28:00,639
Speaker 2: a little bit smaller about all this.

553
00:28:00,760 --> 00:28:05,240
Speaker 1: Oh boy, man, I mean there's I very often point

554
00:28:05,240 --> 00:28:07,840
Speaker 1: people towards the work of Rashid Khalidi, who's a historian

555
00:28:07,880 --> 00:28:10,560
Speaker 1: of the Middle East. They're old now, but the writings

556
00:28:10,600 --> 00:28:13,639
Speaker 1: of Edward Sayid, who's a Palestinian intellectual of the twentieth century,

557
00:28:13,680 --> 00:28:15,040
Speaker 1: are always great.

558
00:28:15,119 --> 00:28:18,040
Speaker 3: Oh wait, Edward Sayid is like a little bit that's

559
00:28:18,359 --> 00:28:21,679
Speaker 3: slightly controversial suggestion here controversial.

560
00:28:21,240 --> 00:28:23,960
Speaker 1: Older, but I think still, you know, still still vital

561
00:28:24,040 --> 00:28:26,280
Speaker 1: to understanding where the conflict is coming from. I mean,

562
00:28:26,320 --> 00:28:30,320
Speaker 1: there's so many books written more recently and articles as well.

563
00:28:30,320 --> 00:28:32,880
Speaker 1: I mean, for understanding Iran's role in this, I would

564
00:28:32,920 --> 00:28:35,760
Speaker 1: point people towards the work of Afshan Ostovar. He had

565
00:28:35,800 --> 00:28:37,560
Speaker 1: a great article in War in the Rocks, I think

566
00:28:37,640 --> 00:28:41,600
Speaker 1: just yesterday about Hamas and Iran's relationship. I mean, the

567
00:28:42,000 --> 00:28:45,000
Speaker 1: list is endless. Really, there's as you said, Tracy, you

568
00:28:45,000 --> 00:28:47,360
Speaker 1: could read forever on this subject, and still I don't

569
00:28:47,360 --> 00:28:48,520
Speaker 1: not fully understand how it goes.

570
00:28:48,680 --> 00:28:50,960
Speaker 3: I tried. I tried for a few months, and I

571
00:28:51,080 --> 00:28:53,680
Speaker 3: didn't get very far. Joe, you know what I just remembered.

572
00:28:53,880 --> 00:28:56,120
Speaker 3: We should have back remember the episode we did on

573
00:28:56,360 --> 00:29:00,600
Speaker 3: Iranian stocks, the fund manager who is investing in Iranian equities.

574
00:29:01,120 --> 00:29:04,360
Speaker 3: That would be a super interesting perspective to have right now,

575
00:29:04,440 --> 00:29:05,200
Speaker 3: All right, let's do it.

576
00:29:09,840 --> 00:29:13,000
Speaker 2: Lots More is produced by Carmen Rodriguez and dash Ol Bennett,

577
00:29:13,040 --> 00:29:14,280
Speaker 2: with help from Moses Anda.

578
00:29:14,640 --> 00:29:16,760
Speaker 3: Our sound engineer is Blake Maple.

579
00:29:16,680 --> 00:29:18,600
Speaker 2: Sage Bauman, who is our head of podcasts.

580
00:29:18,960 --> 00:29:20,680
Speaker 3: Catch you next time for lots More.

581
00:29:20,880 --> 00:29:21,640
Speaker 2: Thanks for listening,