Rory Johnston

Let's say you need to destroy 10 million barrels a day of demand.

That was roughly the average demand loss through 2020 through COVID over the annual average.

But we would need to achieve that demand loss, not through kind of, you know, heavy handed top down government policies about no flights or lockdowns or whatever.

We would need to do it entirely through the kind of more brutal logic

of market pricing to say you push prices so high that people will consume less.

And that's the only way this market will solve if it's not given other options.

Absolutely.

And I think, you know, the vast majority of those barrels from the Middle East are historically sold into Asia.

And that is where you've seen the kind of epicenter of this demand loss.

And the other thing I should just note here is when we talk about demand destruction, I think it's important to kind of specify what we mean, because I think it means different things to different people.

I think when I think about it in general terms, like in a normal recession with high oil prices,

Like in 2022, for instance, what we would have talked about would be there are two main types of demand destruction.

So price elastic demand destruction.

So pump price is too high.

So I decide to take a bus or over a long enough timeline, I decide to purchase an EV to kind of remove that from my... Or a bicycle.

Right, exactly.

Or a bicycle.

And then...

The other option would be income elastic demand destruction.

So high oil prices stress the global economy.