Peter Zeihan

Now, if you compare the tools that they were using before that we really hated, most notably paramilitaries operating throughout the region, that is at a four-decade low now.

because of what the obama the trump and the biden administration did in cracking down on their oil sales without the money they weren't able to keep flushing these groups with the resources that were necessary in order to control them and so there are now very few places in the middle east after 10 days of war where we're seeing the sort of sectarian violence that we used to see during the war on terror because the iranians just don't have the cash

So the picture is evolving, but by going for the throat, we've encouraged them to reach for different tools.

Well, let me start by saying that the market reaction yesterday was too much.

Basically, we had our first energy assets targeted.

The Israelis went after some oil depots around Tehran, and everyone thought that meant that oil production infrastructure was gone.

That is not what happened, and that's why we saw quite a big drop back.

But the overall theme that this is a really big deal is a solid point.

Right now, the Persian Gulf, at normal, exports about 20 million barrels a day, which is half of internationally traded oil.

And roughly 80% of that goes to East Asia, with China being the number one country to take it, India number two, Japan number three, Korea number four.

Based on whose numbers you're using, most countries in the East Asian rim have 200 days of import cover that Indians don't have nearly that much.

And there is a debate as to whether or not the Chinese oil reserve exists.

Chinese numbers, we just don't know.

But they may have as little as 40 days of import cover.

So, if this conflict lasts for, let's just pick a number, a month, that's enough to probably break the economic models of most of East Asia.

And if we have the physical assets that produce the crude take significant damage, then East Asia is gone and it never comes back, with China being the first one to go down.

because they just don't have sufficient alternatives from anywhere else.

And that assumes that the Europeans do not continue with their crackdown on the shadow fleet of Russian tankers, which has been accelerating massively over the last two months.

This is one of the many, many things that I identified 10 years ago when I basically talked about what would end globalization.

This is one of them that would do it without any of the help, any help from any of the others.