Rory Johnston

Me most of all.

Thus far in the war, we're at more than half a billion barrels of oil that should have been produced this year based on all of our normal expectations going into the war that now haven't been.

If you can't fill in supply, you draw down too many inventories, prices need to rise to destroy demand on the other side.

So this would be a massive downshifting of the entire global economy forced by supply restraint.

This is not just a consumer kind of recessionary, depressionary crisis.

This is also a government fiscal crisis because the government at this current stage is naturally going to try and shoulder a lot of that pricing pain itself.

It's going to be a catastrophe.

I think that like very simple, it will be devastating.

Thanks for having me, Nate.

I think it's always good in these conversations to start with what I will call the barrel counting of it all.

It's kind of, you know, exactly what we're talking about in a supply demand sense.

So for viewers or listeners not familiar with the oil market generally, we typically refer and talk about it in terms of flow rate.

So right now, supply and demand, or I guess immediately prior to the war, supply and demand in the global oil market was around 105 million barrels a day.

But given for easy math, let's just say 100 million barrels a day of supply and demand in the market.

Of that, roughly 20%, 20 million barrels a day flowed through the Strait of Hormuz.

Of that was roughly 15 million barrels a day of crude oil specifically, and another 5 million barrels of refined products and natural gas liquids.

So mostly middle distillates like diesel and jet fuel that largely went to East Africa and up into Europe.

And then natural gas liquids like gas condensate, natural gas liquids like propane and butane, et cetera, that largely went into pet chem feed or petrochemical feeds in Asia.

So that's the kind of that's the chunk, 20 percent, roughly one fifth of the world's supplies travels through this very critical maritime choke point.

No, I mean, the spice, the barrels must flow.