Jason Bordoff

considerations, you want to pursue an effort that might result in that with allies and in cooperation with other countries.

And obviously, other countries did not know this was coming to the extent where the president of the United States is now taking to social media to ask both adversaries and allies alike, send your warships to the region and help reopen the strait because you need that oil just as much as we do.

And most countries are saying, no, thanks.

This is not a problem of our making.

Well, again, those are probably questions for military experts even more.

But like I said a moment ago, it doesn't take a lot to create a risk perception.

You just have to hit one every couple of days or every week or two to create a fear about going through the strait.

And there are so many tankers.

And it's not that hard with drone technology, with small little boats that can race out to a tanker.

You could probably protect a couple of warships or a couple of vessels that need to transit.

But if you're talking about dozens or even 100 or so tankers a day, it's just hard to protect all of them from any risk.

And so insurance has been canceled for a lot of these tankers.

So they're not going to go through unless they're insured.

And they're not willing to put these huge cargoes at risk.

Yeah, it's a good question because I think both the impact of higher prices on the economy are nonlinear, but the impact of conflict and supply disruption on oil prices are nonlinear.

As I said a moment ago, this is the mother of all nightmare scenarios, closing the strait.

If someone had said we're going to close a strait with 20 million barrels a day to most of its supply, you'd be talking about $150, $200 a barrel.

It's striking that oil prices are just a bit over $100, which historically is not an excessively high price.

It's high, but it's not crazy high.

And so I think there are a couple of reasons for that.