Jason Bordoff

That's gas that can be traded more easily.

And prices went through the roof.

And like markets are supposed to do, the market allocated the supply to the people who could pay for it.

So those flows went to Europe and Europe paid a premium for it.

And that meant that coal prices went up because coal was the substitute for the gas that would have otherwise gone to Asia.

And so a country like China used more coal instead.

But if you were a lower to middle income country like Pakistan, Bangladesh, you struggle to afford any energy at all.

And they really did start to see significant economic impacts to shut down economic activity, to not be able to get around.

We're seeing in Pakistan now a huge cricket tournament and they're telling people to watch on television rather than go in person.

India, oil spending is about 3% of GDP.

Thailand, it's about 5%.

Fossil fuels overall in Thailand are 7%.

These are very large shares of the economy that are spent on fossil fuels, and nearly all of which is imported.

And these are countries that don't have the fiscal space to pay more.

And we haven't, again, even talked about the fact that the Strait of Hormuz is a critical choke point for fertilizer.

And if fertilizer has trouble getting to the market, you're going to see potential impacts on food and food prices.

And that puts enormous economic strain on countries that are already struggling to afford these essential products in the first place.

Well, it would take time.

So, you know, there's not many countries, Saudi Arabia is really the only one, maybe a few others, that hold so-called spare capacity.

They have invested and spent extra money so that in an emergency, they can quickly bring oil to the market that they otherwise could produce, but they hold it back in case the market needs it.