podcasts
Energy economist Anas Alhajji reveals Trump’s Middle East pivot and argues that failing energy infrastructure poses a greater threat than foreign rivals.
In this episode of TFTC, energy economist Anas Alhajji outlines a profound shift in U.S. foreign policy under Trump—away from military intervention and toward transactional diplomacy focused on trade, reconstruction, and curbing Chinese and Russian influence in the Middle East. He highlights Trump’s quiet outreach to Syria as emblematic of the U.S.'s strategic flexibility in legitimizing former adversaries when economically beneficial. Alhajji dismisses BRICS as a fractured bloc incapable of rivaling the U.S.-led order and insists the dollar and petrodollar remain dominant. On energy, he warns that despite favorable fundamentals, prices are suppressed by political confusion, underinvestment, and an aging power grid ill-prepared for the AI and urbanization boom. He also contends that Iran is stalling negotiations to buy time for nuclear advancement and that any deal will be superficial. Finally, Alhajji debunks the myth of Trump being pro-oil, noting his long-standing hostility toward the industry and explaining why a repeat of his past energy boom is implausible given today’s financial and structural constraints.
Anas Alhajji’s conclusion challenges conventional narratives, arguing that global power is shifting from military dominance to economic leverage, infrastructure investment, and energy control. He presents a nuanced view of U.S. foreign policy under Trump, emphasizing the strategic importance of trade and reconstruction over regime change. As energy demand soars and geopolitical risks mount, Alhajji warns that the real dangers lie not in foreign adversaries, but in policy confusion, infrastructural lag, and complacency—making this episode a crucial listen for anyone seeking to understand the high-stakes intersection of energy, economics, and diplomacy.
0:00 - Intro
0:48 - Syria and US diplomacy in Middle East
12:50 - Trump in the Middle East
18:12 - Fold & Bitkey
19:48 - Iran - Nuclear program and PR
33:53 - Unchained
34:22 - Crude markets, trade war and US debt
54:28 - Trump's energy stance
1:05:46 - Energy sector challanges
1:14:44 - Policy recommendations
1:21:18 - AI and bitcoin
(00:00) oil prices market fundamentals support higher price than where we are today. But because of this confusion, everyone is scared of low economic growth and that is a serious problem. The US media ignored part of Trump's speech when he said we are not about nation building and they refer to Afghanistan and Iraq.
(00:15) Look at them. This is a criticism of George W. Bush. We have groups that are talking about the demise of the dollar, the rise of bricks. Bricks is a paper tiger. Everything about bricks is what China does and that's it. The dollar is here to stay and the petro dollar is here to stay.
(00:31) The perception is that the Trump administration is cold but the reality Trump hates the oil [Music] indust. How are you? Very good. Very good. Thank you. As you were telling me, you've been a bit sleepd deprived this week trying to keep up with what's going on. Oh, absolutely. I mean, Trump keeps us on our toes uh all the time.
(01:06) In fact, I plan certain things for the weekend and Trump will say something or he will do something and all of a sudden we get busy again. Uh so clients are not going to wait for you until you finish your work. Basically, they want to know what's going on. So what is going on? What what how profound were the events in the Middle East? These are very uh very profound changes basically because it is very clear that if you look at the last 15 years uh and you look at the growth uh in the Middle East, you look at the growth of Saudi Arabia and uh the
(01:41) role of Turkey for example in the region uh it just just amazing be beyond any uh any thoughts. Uh in fact both of them Turkey and Saudi Arabia are part of the G20. Uh so they have economic influence and they have political influence. And of course the icing on the cake for those who are familiar with the region is to recognize the Syrian government and meet with the Syrian uh president.
(02:11) Uh this is a major a major change in economics and politics uh of the Middle East. Let's touch on that Syria uh topic for a while because I think a lot of people here in the United States were a bit shocked at how sort of welcoming President Trump was towards the new Syrian president considering the fact that uh he was considered an enemy not too long ago here in the United States.
(02:42) What first of all it's a fact of life for those who would like to check the history of politics. There were many people around the world who were classified or they were on the terrorism list and then they became friends of the United States or they were became heroes. I mean Nelson Mandela is one of them. You look at Latin America, there are presidents in Latin America who were uh the enemy of the United States and then they became uh uh cooperative with the United States and the United States recognized their governments and the result of their uh elections. Uh so
(03:15) we've seen this historically uh several uh several times around the world and as they say freedom fighters for some basically are the enemies and the terrorists for for others etc. So uh what we've seen that's why the the visit is very important that the recognition of this government is very important. uh the fact on the ground that uh the president of Syria had the power on the ground uh he had the the the people on the ground and he had the control on the ground and whatever he's been he's been doing since he came into power until now
(03:52) he done all the right steps u and people loved him I mean everyone who went to Syria whether the Syrians who left Syria 40 years ago or uh the visitors who are coming to Syria, they will tell you, "We have never seen the Syrian people as happy as we've seen them today, despite the fact that they they live in misery.
(04:17) They don't have um 8 million people without housing. Uh there is barely any electricity in most of the country. There is no internet. There is barely any food. The uh inflation is rampant, etc. But people are happy because they lived in fear for a very long time. And uh the steps they have taken. For example, the uh ministers in the previous government uh are still there and they are still in the housing of the government.
(04:49) They still have the drivers. They still have the cars from the previous government. They still have it until today. So uh they they were classified as enemies before. But all of a sudden now you have a new government that is uh accepting them. Uh so we we see some changes on the ground that are positive and we'll see how these things will go given that the area around them basically has been unstable for a very long time.
(05:17) how because I don't the the news when I was actually it was surreal for me because my first trip to the Middle East was last December when it was literally f flying over Syria to Abu Dhabi when uh um Assad was getting thrown out and it was pretty surreal to be in that region of the world.
(05:43) How as it pertains to like religious minorities within Syria moving forward is there protractions protections there? Um well let me just uh I want to emphasize one point that is very important. What did the interest of Turkey, Saudi Arabia and the United States in Syria if remember Syria was controlled by Iran and was controlled by the Russians.
(06:09) So in a sense it becomes uh kind of an imperative that taking it away from Iran and Russia and not bringing Iran or Russia back is extremely important. Now the Russians are still there and they have their own base but at least they are not bombing the Syrians and not killing them anymore. But the idea here is taking Syria out of Iran and Russia and probably later on if they kick the Russians out, Russians will not have access to the Mediterranean.
(06:37) Uh so there is an interest uh of all parties basically to take Russia out of Iran and um out of uh Syria regardless the country is uh devastated and it creates massive opportunities for US companies on all levels and uh we've seen a contract uh done recently with you mentioned Abu Dhabi uh uh a contract uh uh with the UA a basically to revamp all the Syrian ports and work on the Syrian ports.
(07:13) Uh so such contracts basically uh when you have a country that has nothing and it's completely devastated the whole infrastructure is devastated. Who is going to build it? If the uh what the Chinese, the Russians, so who who are going to build it? So, uh I think there is a a big room for US companies and others basically to come in and uh literally help on one side and make money on the other.
(07:38) Yeah, I think that that's what I'm trying to discern. What was this convoy from the United States to the Middle East this week signaling to the rest of the world? Do you think this was an attempt by the Trump administration to sort of get out there and say, "Hey, I notice we're at this inflection point. things are geopolitically messy.
(07:57) It seems like we're moving toward a more multipolar world. Was this this week of meetings essentially like hey I want you to work with the United States and not China and Russia. How how are China and Russia viewing this? Do you think it is it is part of it? That's absolutely correct. I mean the US has certain interests in the region.
(08:20) You we got to remember one thing over the whole history if you look at the map and you look at the old world Syria was at the heart of the world and every single civilization was there. So you look at that strategic location and you look at it as a US official and you look at that strategic relation or strategic location and you say wow you know this is where I want to be but the Iranians and the Russians beat them to it and now they they were kicked out and again the Russians still have a base there but now there is a big opportunity for the US and it's all basically to
(08:56) have some uh say in in Syria and moving outside of Syria to Saudi Arabia, UAE, Turkey, some of the deals that were made this week pertaining to weapons, artificial intelligence, energy. It seems like the United States is really trying to interlock itself with that region of the world economically beyond just energy which historically has been.
(09:24) I want to I want to go deeper into this uh on several fronts although I would rather talk about energy but since we are talking about it uh I I think it is very important to realize a couple of things here. Um as you know from previous shows we had and the discussions we had on Twitter or X.
(09:45) We have groups that are talking about the demise of the dollar, the rise of bricks, the currency of bricks, the Saudis trying to get rid of the dollar etc. What we've seen from this visit is bricks is a paper tiger. Period. It's over. Okay. The all this talk about the rise of bricks and the currency and all that stuff. It's a complete nonsense.
(10:11) It is everything about bricks is what China does and that's it. We already have seen a war between India and Pakistan and Pakistan was completely supported by China. So in a sense you can look at it as it was proxy war and and Pakistan basically fought this war on behalf of China and China and India are in bricks.
(10:37) So it's impossible to have bricks like some people the way they picture it as replacing the United States and and and making their own currency. Of course, when it comes to the currency, there is no way they can have their own currency because there are too many things that are required to have it. It took Europe uh 300 years to unify and 40 years to work on the currency.
(10:59) And you think those guys will do it in few years? There is no way. and at least Europe there are some kind of similarities in various ways. Uh there is no way you can put China, India and Brazil together. There is no way. So so that's the first result out of this visit that bricks is a paper tiger and is the second result basically is the dollar is here to stay and the petro dollar is here to stay. End of story.
(11:30) So these one and two basically are related that no bricks and the the dollar and the petro dollar basically are here to stay. The third result is that this trip was really an investment trip. It was it wasn't about politics. The only thing that made it about politics is the this sudden announcement about Syria and the meeting with the Syrian president.
(11:57) Beside that, it was about investment, investment, investment, investment. Look at who was with the president. The fourth point is the talk about AI. This is one way the United States can pull those countries out of China chips. That's the only way they can that to to involve them to to to to have those investments, etc.
(12:27) Otherwise, think about it this way. If you are talking about uh AI and you are talking about spying and you are talking about the what the advantage of having AI or what the advantage of having allies if if your enemy is spying on the on you through them. So there is more to the story than just an investment.
(12:53) Then you look at the other side of the story. You look at the contracts for example that the Saudis and the Qataries made with Boeing. Okay, this is people did not pay attention to it. What you are doing basically here is you're literally pulling the rug from under the Chinese under the Europeans literally. So when you when you talk about trade wars and Trump's trade wars, this is in one way an extension of it.
(13:25) just an extension of it because look at the type of contract that we made. It was literally to pull the rug from under China and and and Europe. So regardless of where you stand on Trump, whether you support him or you are against him, if you look at it from the trade wars point of view, it was a great trip because it was just an extension of it.
(13:50) The last point which is important in term of the uh looking at what Trump said because the US media ignored part of Trump's speech uh although he by the way he he looked tired when he gave that speech it was you know the time difference and jet lag and all that stuff but there is a part of the speech I think that was the most important if asked me what was the most important part of the whole thing.
(14:22) It was the part of speech when he said we are not about nation building and those who try to build nations and they refer to Afghanistan and Iraq look at them look at Kabell look at Baghdad how they are completely destroyed and look at the capital that we did not touch look how prosperous they are.
(14:44) This is a major a major change in US policy and criticism of the uh mainstream Republicans. This is a a criticism of George W. Bush. Literally, this is a criticism of uh kind of Clinton Democrats too. This is a complete change. And I I don't know why the US media just missed that. This is really one of the most important shifts in US foreign policy to say look sorry we destroyed those countries because we tried to rebuild them and it was a big mistake but when we left people alone look how they prosper and look at how they they've done in Riyad
(15:22) and and Abu Dhabi. This is very important lesson if they apply it in Syria. We will see because they they might put too many conditions that they may reag on what Trump says. But uh if if they leave people alone, I mean this is really an important shift in US foreign policy and we got to see how it's going to work.
(15:45) Yeah, many things to respond to there. But uh the No, I I think X is the only platform I saw pick it up. Basically that speech where Trump was like we we are not in the the sort of game of nation building anymore clearly hasn't worked. And and it was really inspiring even as an American that that's thought this for a long time just hearing him say to the people of the Middle East like you are fully capable of building a prosperous society yourselves.
(16:17) You don't really need our help. What we need is open trade and to work together. And that that's what I really admire about Trump's sort of tactics. Say what you will about Liberation Day and tariffs. But I think if you read between the lines and really get to the core of what he's trying to do, it's just like peace through trade seems to be his policy.
(16:37) Go out, make deals, let's not go to war. Let's build things. Division of labor. You guys build really good things. You are great in the energy sector. We have a lot of innovation in the United States. Let's do some deals. And then correct. But there there are some uh caveats to that. I mean it's not like a a pure uh okay let's have free trade and because his emphasis on you have to buy oil from me you have to buy LNG from me you have to this I I think it in a sense it is uh about uh US influence too if you want to be my friend then you have to do this
(17:15) for me so that that's very clear that's the case but the the issue here is no more military intervention to build nation S I think this is a major change. I think historians will talk about this moment because this is a very important change that u uh has implications for the Trump administration or any administration will go along the Trump lines in the future.
(17:49) Why? Because we have issues with uh Iran. We have issues with the Houthis. We have issues with Hamas. Okay. And now the the idea is let's negotiate. And what we see the the Trump administration is negotiating with the Houthis, is negotiating with the Iranians, is negotiating with Hamas. So in a sense, this is a complete change in policy and that's worth really looking at.
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(19:48) orld code TFTC20. Yeah, that was that was one of the rumors is that there was some side deals going on behind the scenes with Iran during this trip too. I don't think there was any explicit or scheduled or public meeting, but didn't Iran come out make some comments about their nuclear program this week as well? Yeah, let's talk about this in details because this is uh related to the work I do.
(20:12) So now now we are going to delve into into what I do rather than just uh uh opinions about politics. Um since uh over 20 years ago I wrote an article and the title of it was along the lines the Iran nuclear uh program the never ending crisis and uh the bottom line here is any oil outlook uh whenever since then basically has to uh has some uh scenario where you will have problems with Iran because this is a neverending crisis.
(20:49) And uh the prediction of that article basically 20 years ago became reality. It's it's never ending crisis. And the bottom line on this is that the US government regardless of who is in the White House, let's call it the deep state if if that fits. uh think that having a nuclear pe having peaceful nuclear program in Iran will provide electricity to the nation and whenever you provide electricity in ample amount basically you are stabilizing the economy you are stabilizing the nation at the same time you are enabling them to export more oil
(21:35) and more gas because nuclear is replacing that oil and gas so they will have more money. So they look at it as having a peaceful nuclear program is stabilizing for the regime, a regime you don't like and therefore this becomes a threat to your national security. So from the US point of view, any stabilizing force in Iran is a threat to the United States and therefore they should not have even the peaceful nuclear program because it stabilizes the regime.
(22:10) So that's from the US and therefore this story is not going to end. On the other side again we are talking about the peaceful program here. We will move to the non peaceful program in a minute. From the regime point of view they look at the history of Iran and they find that the shah was kicked out in 1951 by domestic forces by the people by the streets of inahan and others.
(22:35) And then the sha was kicked again kicked out again in 1979 by his own people in the streets of the so they look at the international pressure they look at the domestic pressure and they see that the domestic the foreign pressure is not changing the regime the domestic pressure is changing the regime and to keep the peace inside you need a peaceful nuclear program to provide electricity for the people for the economy and save the oil and gas for exports so you can generate revenue so you can spend. So the interest of the United
(23:11) States and the regime basically clashes over this point. This regime wants stability. The US does not want stability and therefore we have this clash. The whole thing will be different if the US agrees that this is a peaceful program and then we will allow Iran to have nuclear reactors, but they cannot enrich uranium because they can go to the military grade and then they can have the nuclear bomb.
(23:47) And because of this long history of mistrust, you cannot trust the Iranians. And therefore the the ultimate agreement with Iran will be if the government of Iran agrees to buy the enriched uranium from other countries like Russia for example or the United States or France or others and then once they are done they can take that uh disposed uranium and ship it overseas.
(24:20) that will work for both sides, but the Iranians basically are insisting on enrichment and that's where the problem is and therefore Trump cannot deliver what the Iranians want or the Iranian regime want and the Iranian regime cannot deliver what Trump wants and therefore those negotiations are going to go nowhere and if we end up with any agreement is going to be cosmetic and it's going to be temporary just like the previous agreement that the Obama administration signed.
(24:55) So it is very hard to reach an agreement. At the same time, the Trump administration is convinced that they can pressure Iran. And the fact is no, they cannot pressure Iran. And there are reasons for that. They think, oh, we have sanctions on Iranian oil exports. We are going to to drive them of the money. We are going to bring Iranian oil exports to zero.
(25:18) It's a complete nonsense when you have a government official saying we are going to bring Iran's oil exports to zero. Just look at the map and look at the Iranian borders. There is no way you can even reduce the uh the exports significantly. The fact is Iran and China have perfected the game of exporting the Iranian oil in in mass quantities in large quantities and there is no way they can even reduce that significantly.
(25:54) The Trump administration have evidence to show that when they imposed the sanctions on Iran in the fourth quarter of 2018 that production and exports declined significantly in 2019 and that's absolutely correct. They reduce it by more than 1 million barrels a day and therefore they think they can do the same.
(26:20) Oil bulls think oh why need that? I so they they are hanging uh by that stro basically. Oh, Trump is going to is going to do this. Well, Trump already done it and nothing happened. Why? Why 2025 is not 2019? The reason why there are of course several reasons. I'm going to mention few here for the audience so they realize why 2025 is not 2019.
(26:46) The first one is Iran was exporting oil to more than 20 countries in 2018 because after the agreement with the Obama administration in 2014, they were able to export to those countries and those countries were able to pay them. There were no problems during the deal with Obama.
(27:09) When Trump came in and reimposed the sanctions, some countries got scared of Trump, so they stopped importing from Iran altogether. Now Iran has some extra oil. They want to sell it to someone else who is not afraid of Trump or who understands exactly the law. They can play around the loopholes. We ended up with another group of countries that can import Iranian oil because there are no sanctions on importing oil.
(27:38) If you want to go and import or if you are a any country in Europe or others, if you want to go and import uh oil from Iran, let's say you are Vietnam and you want to import oil from Iran, you have no problem importing it, but you have a problem paying them for it. So countries basically were happy with that.
(28:00) Okay, I can take the oil, but I don't have to pay the Iranians because of the sanctions. That the Iranians were smart. They said, "Look, I'm I'm extracting this oil. I am paying for shipping it and paying for the ports and paying for the workers and I'm not getting the money because it's going to some an escro account somewhere in a bank that I'm not going to get for many many years.
(28:20) What the heck? I am not going to export to those countries." So those countries that are not paying me, I am not going to export to them. So some countries stopped importing from Iran and others basically that wanted to import Iran itself stopped exporting to them and as a result they had to cut production and cut imports but there were other issues.
(28:43) Now Iranians have the spare capacity they want to sell because some countries are not buying and some countries they don't want to sell to. So they have this extra oil their main customer is China. So they contacted China and said look you know you can can you take my oil and said I'll be happy to of course I have to take it at discount etc but some of the crude quality you have does not match my refineries so I cannot take it.
(29:15) So what the Iranians did, they closed the fields that produce oil that Chinese refiners do not want and that led to a decline in production and decline in export. And then they went and developed other fields that produce oil that Chinese refiners want. Now, China imports almost all the Iranian oil of all the qualities that Chinese refiners want.
(29:48) So, the old problems that existed in 2019 do not exist today. And China pays Iran through the Chinese payment system. So, it's not subject to the United States. It's not subject to the international system. It's not subject to anything. So there are several ways but the the most common way that uh they assigned a bank for Iranian uh for the revenues of Iranian oil exports.
(30:13) So companies Chinese companies that buy the Iranian oil they deposit the money in this Chinese bank and then Iran with its various companies etc. They go to China and shop and whatever they shop on the exit they refer all the merchants to their account in that bank and they get the goods and services etc everything they need and if there is something that does not exist in China and exist in the United States or Europe or anywhere else the Chinese merchants will import it to China and then ship it to Iran and then charge them through
(30:50) that back. So there is no pressure on the Iranians basically at all. The final point is this. The Iranians lost Syria, lost part of Lebanon and they might lose uh Yemen very soon. But despite all those losses, they are biting on their fingers and they are waiting. Even if they if they have to suffer a lot, they are waiting. what they are waiting for.
(31:20) They realize that once they have the bomb, the whole politics of the region will change. The whole treatment of the United States of Iran will change. At least that's what they think. And therefore, they are not going to negotiate over the bomb bomb. They want to drag everything for the longest period until they get the bomb.
(31:43) even if they have losses because if they go and fight notice that they haven't fought yet. I mean whatever they've done that there was kind of proxy mostly proxy wars they don't want to fight. Why they don't want to fight? Because if they want to fight then they will be bombed and their nuclear sites will be bombed and then they will be delayed another 30 40 years.
(32:06) Say you know what I'm going to handle all those my losses. I'm going to take all my losses right now. I'm going to wait until I have the bomb. And therefore, their job right now is to literally drag those negotiations for the longest period possible until they have the bomb and that's where the problem is. So, the ne never ending crisis is still never ending. Absolutely. Absolutely.
(32:33) What's is there any insights into the timeline of when they may I I am not an expert in this area. I mean if you uh there are all kind of talks the Israelis will exaggerate this and say it's tomorrow and uh the others will take say it's still 3 years away and etc. We don't know. I mean the fact is we don't know but the fact the the logic dictates I mean look at how the US is treating u North Korea for example and the Iranian said well North Korea basically no one is touching North Korea simply because they have the nuclear
(33:11) bomb. Uh they look at Israel and say well you know they are no one is touching them simply because they have nuclear bomb and even the Arab states they don't want to launch wars on Israel because they have the nuclear bomb. So for them it seems that they are convinced that uh if they have it then it will be a completely different world.
(33:28) Uh if you look at the war between India and Pakistan uh the whole world got involved including the Trump administration within couple of days uh simply because there are two nuclear power powers and everyone was scared that they might resort to nuclear. So in a sense they see this involvement they see the importance they see the significance and say you know what I'm going to wait and drag those negotiations until I have the bomb. Mhm.
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(34:13) This isn't just a thought experiment. It's a framework for capital allocation. Read it now at unchained.com/tc. That's unchained.com/tc. Yeah, it's been going on my whole life. This whole Iran thing. So, never ending continues. But bringing this back to I guess crude markets looking at WTI, I think it's trading around 6250 right now, down about 20% over the last year.
(34:43) That seems to be a big problem for oil producing nations, particularly in the Middle East. What do you think? What is the the landscape of crude markets right now? How did they get here? Where are they going? Oil prices. If you look at oil prices today and you look at market fundamentals, first of all, the reason why we are here in the 60s and not in the 70s is mainly China.
(35:09) No one, if you go back a year and a half ago, no one was expecting China will stall the way it did. regardless of the wars. Remember this happened even before the trade war. China been having serious problems. So we were predicting uh or we were bullish on the fourth quarter of 2024 from 2022 based on the market fundamentals based on what we see etc.
(35:36) And by the early second quarter in 2024, we we we see where China was going and really became a serious problem. So we have to change our forecast completely. So it is really about China and mainly China. the if you look at the data today, China is still suff because we haven't gotten the data yet.
(36:10) But the issue here is that if the United States wants to see global economic growth, they need to see growth in China. Without growth in China, whatever we've seen in recent months will drag for a long time. The other issue is we have a serious problem with the way that the Trump administration approach this trade war.
(36:39) Companies and CEOs have no problems with higher costs. They have no problems with higher taxes. They have no problems with higher tariffs. In fact, they've been dealing with these things forever. any investor tell them the cost went up they can deal with higher cost just give me the price give me the cost and I can manage but the problem is if I am going to wake up tomorrow and I don't know what's going to happen and then the second day is going to be the same and the third day is going to be the same and a month from later is going to be the same and I don't know what's going
(37:10) to happen because no one can predict what President Trump is going to say or what he's going to do everything will investment will stall and major purchases will stall. Well, between investment and major purchases, that's your economic growth. It's gone. And then we've seen the cut in government spending and what Doge did and the uh uh firing of federal employees etc.
(37:36) All this stuff you can see where everything is stalling. But for the world this confusion that being created basically is delaying everything. So that's another impact on oil prices and the oil market is that this confusion. So by delaying the uh tariff by 3 months until we see what China is doing.
(38:03) This is a very bad policy because if I am an investor, I'm going to invest $2 billion. All I got to do just wait another 3 months to see what's going to happen. I am not going to spend those uh two billion right now and if he's going to extend it another 3 months is the same issue. So this idea of delays and confusion are wreaking havoc on global markets and that's where the problems are and oil prices if you look at market fundamentals market fundamentals support higher price than where we are today.
(38:35) But because of this confusion, everyone is scared of a recession. Everyone is scared of low economic growth. And that is a serious problem. What is a bigger problem are the unintended consequences of this confusion, the unintended consequences of very large tariff. Because when we talk about 145% tariff, just look at it from a game theory point of view, how everyone is going to play.
(39:10) The best example was what Apple did just before the implication of uh implementation of the tariff. Remember those five cargo planes carrying iPhones coming to the United States ahead of the tariff? Well, it turns out everyone in every industry been doing exactly the same. everywhere. So what happened is we did this ahead of time and therefore you can see where trade is going to be less in the next few months because we brought everything forward.
(39:44) You look at what happened in Germany. All of a sudden the industrial sector in Germany went up. Germany's economy is completely devastated but all of a sudden the industrial sector is going up and we've seen a growth. Why? because they want to finish things before the tariff. It wasn't real economic growth in Germany.
(40:07) It was the reaction, one of the unintended consequences of the tariffs. And then what we've seen is we've seen shipping rates go up. Why? Because everyone wants to ship before the tariff is implemented. and Chinese companies want to ship to third countries for trans shipments later on to benefit from the differences in the in the tariffs.
(40:31) So this we have the confusion of of President Trump and the way he he conducted himself and the policies and then we have the confusion of the unintended consequences of those policies. So we cannot all the data basically is completely messed up right now and we cannot really make any conclusions from that until things settle.
(40:56) So to tell me well look we have economic growth here and shipping rates are high and shipping is up. Well this is just the unintended consequences of what happened and this is going to vanish very soon. So we have a serious problem right now and I think this confusion is going to continue with us. So we should not be surprised if we end up with a recession or slow economic growth for a longer period as a result of that.
(41:25) Uh markets especially some uh IT companies and tech companies basically benefited recently from the contracts in the Middle East etc. Well, we got to wait and see what's going to uh materialize because most of them are MUS. We'll see how many basically will materialize. The Trump administration is talking about those trillions of dollars.
(41:50) The fact is the actual amount is way, way, way smaller. And why it is smaller? because some of them even from the Obama days, not even the first Trump term, that there were deals that the because of the Yemen uh war, etc. that the Obama administration either held or or cancelled. Uh uh so there were money from from uh the Obama period.
(42:15) There were money from the first Trump period that been stalled in during the Biden administration and there were deals that are conditional. So the amount of money that's going to come to the United States is way way smaller than what the Trump administration is uh uh is claiming and therefore the idea of at least slow economic growth for longer is going to stay with us and that's going to uh pressure uh oil prices and keep them where they are today.
(42:45) If we end up with a recession, they are going to go lower until OPEC plus acts and start cutting production again. uh but uh uh the prices prices today are influenced by two factors. The China impact on one side and then the confusion about the uh tariffs and the trade wars on the other. If we end up with a recession, that would be the third factor.
(43:12) Yeah. Which is interesting. The confusion, the tactic of confusion by the Trump administration is a bit perplexing. It seems pretty obvious to most that at the very least they fumbled the implementation of the tariffs out of the gate with liberation day and the way they announced it and the way they calculated the tariffs and as you mentioned everything's changing from a day-to-day basis.
(43:38) It's like, all right, it's 145% today. Well, actually, we're going to do a 90-day reprieve where we try to negotiate. It's 10%. And it's like, okay, what's going to happen? Not only that, basically, we have other problems with that, too. Um the uh the issue here is if you look at the Trump theory supporters, uh they say, well, uh you you got to look at the full story, and the full story basically he's going to reduce taxes. Okay.
(44:08) The criticism to that is these are completely two two different time frames with different lags completely. So between the time you implement the taxes and then you see the impact on on the consumer uh because of the lag uh that will be way ahead in the future. why we are suffering today. We've seen it in the first quarter by the way and this is the results of the first quarter are a confirmation of the unintended consequences of the tariffs because as you know most of the decline came in because of the increase in imports to to import that stuff before
(44:45) the tariff. So uh the the the decline in the first quarter just proves of the proof of the idea that we have those unintended consequences that the administration and many analysts missed. Well, not to mention not only the tax cuts that have a lagging effect, but you look at the deficit in the first quarter.
(45:07) It's growing faster than it was this time last year. Interest expense on the debt exploding. You have the 10 year and the 30-year at elevated levels. I think 10 year around four four five the 30 year around 5% we've got to roll over and this is this will bring us to another point if you allow me please because I think the audience would be interested in this um we get questions all the time on uh look the Trump administration is trying to support the oil industry and they are going to open a new federal land and oil production will increase etc nonsense and one of
(45:41) the reasons is what you just mentioned Because Trump lives in the past. He look at his uh first term and he think he can repeat or replicate what he done in the first term. During his first term, we've seen an increase in oil production in the United States by 3 million barrels a day and he think he can bring them back.
(46:02) We can do the same. That's nonsense. And the reason why because remember we started after the collapse in prices in 2015 2016. And because of that collapse we already lost more than 1 million barrels a day in US oil production. So that 3 million one of it one of that 3 million is really a recovery.
(46:28) It's not an increase. Then we have 2 million. Well, what we all know that the production of shale in the United States and this massive growth that we've seen was because of cheap money. When Trump came into the scene when he was a candidate in 2015 and he was fighting with 16 Republican candidates at that time, interest rate was zero. Zero.
(46:59) Now given you just said it that this massive increase in interest rate is not going to help shale. Shale needs cheap money. So this number one. So he cannot replicate his first term and increase production. The second one is which is kind of very interesting. The model that existed in in the early days of shale between 2010 until almost 202021.
(47:32) The model basically was drill baby drill. The model what that means is we know that shale came about by small companies and medium-sized companies. The majors came in late to shale and we have thousands of small companies in shale in the early days. The objective was to prove reserves. So you drill, you prove reserves, you increase production, and then you sell your company to the bigger fish.
(48:06) And the bigger fish basically will enlarge it a little bit more and sell it to the bigger fish. and the bigger fish will send it to the bigger whale etc. That was the model. So the model was drill baby drill improve reserves increase production regardless of cash flow because you make your money at the end you don't make them through the life of your company which is mostly two to three years.
(48:32) So the model was drill baby drill regardless. That's why for those who are fascinated by or fixated with the idea of cash flow, they've been talking about the failure of the shell companies since 2011 and they always focus on cash flow. They did not realize that everyone became a millionaire simply because they sold their companies and they made their money at the end and they did not see it because they are fixated with the idea of cash flow.
(49:01) So in a sense you go to a private equity you get 15 20 $50 million 100 whatever and then you drill you you you prove reserves you enlarge your production and sell it for $1.5 billion and you make millions for everyone that at at the end that money is not shown anywhere if you want to search for it unless you figure out you go back and look at the contracts and look at the sale and all that That changed when the majors came in and start buying everyone and especially when they bought the largest companies in shale and the largest companies
(49:42) basically before they were bought they were buying all the smaller ones. So now the model changed completely changed from drill baby drill to control baby control. So the model changed. So interest rates is very high. The model has changed. I'm not going to mention there are seven eight reasons but I'll mention just the third reason and stop there.
(50:05) The third reason is we all know that the shale oil production reach record high during the Biden administration. What does that mean? It means that since decline rates in shale are very high and the shale production increased the replacement I need every year is also at record high which means that I need more money just to keep my production flat regardless of what President Trump wants.
(50:43) It just most of the investment will go to that. So get this number to keep US shell production flat today I need to add 600 about 600 something 600 plus thousand that's 600,000 plus barrels of oil of fresh oil every month not a year every month 600,000 I need to invest just to bring 600,000 barrels a day every month just to keep my production flat which mean that I need millions every year.
(51:24) Therefore this idea of Trump increasing production is not going to happen. The other related question is now people are predicting a decline in shield because of the high demand rates and some people are predicting a decline of 2 to three million barrels a day in SH. Strangely enough, you pick up the names who are predicting this. They are exactly the same people who predicted that Russia's oil production will decline by three to five million bars a day because of the sanctions. Exactly the same people.
(52:00) And we know that by the way uh uh I was the I claim to be the first one to say that Russian oil production is not going to decline if it's declined decline just little. And we realized later on when we got the data that the decline was only 200,000 barrels a day. It wasn't 3 to 5 million.
(52:23) So this idea that the same people are saying that this this is just a big question mark here. But the idea is no company no public company will accept the fact that they want to diminish and have their stock just melt down as their production decrease. There is no way. Yeah, but probably some crazy CEO might do something stupid, but in general, they are not going to let this happen.
(52:52) So, the idea of a decline uh a large decline is not going to happen either. We might see a decline in hundreds of thousands for various reasons, but most of that and this is a point that people ignore. Most of that decline is going to be in condensates and lighter quality cruds not in crude below AP uh uh 45. Okay.
(53:18) So in term of crude the decline is going to be very limited but most of the decline basically is going to be in condensates and lighter crude and therefore what we see today is the most likely scenario that's going to continue with us for a while. We will see some improvement over the summer for various reasons but what you see today is an extension basically just extend it and increase prices a little bit.
(53:44) That's what we see for the rest uh of the uh year and next year. If we end up with a recession, we will see a decline in prices. We will see a decline in global oil production. And the problem we see in 2025 is that a recession in 2025 means that oil wise 2026 is gone. And the reason why because we are going to see a massive build in inventories in 2025 because of the recession.
(54:12) That's going to be used to meet demand in 2026 and therefore the actual demand from the oil producing countries is going to be way lower because they will be using inventories from 2025 instead of buying it from the oil producing countries. Seems like this throws a wrench in Trump's broader energy plan.
(54:34) And that's what I'm trying to figure out is not only what's happening in oil markets, but more broadly in energy markets here in the United States, where it seems clear a key part of his policy is let's expand. The issue for me is this. Uh I'm going to shock some people by saying this, but for those who follow me on Twitter, they know my opinion longer.
(54:57) Uh there is a perception and there is a reality. The perception is that the Trump administration is provoy. The perception is they are pro they they support the oil industry but the reality Trump hates the oil industry. Trump always classified the oil industry as an enemy. And if you go back and 30 years and look at all his interviews, look at his statements, look at his books, look at his what he wrote, he is anti-boy.
(55:29) And for those interested, you want to look at the evidence, search Google for is, this is the title of the article, is Trump an anti- oil zealot? Question mark. Is Trump an anti- oil zealot? And you will see all the evidence, whether the videos or the writings, he is anti- oil, antiopic, anti- anti- anti. And some people look at the Gulf visit for example right now and his statements about Kuwait and Iraq and others that they seriously think that if you put it from the idea of hating oil for him to go he is getting the oil money because he hates oil not
(56:15) because he loves oil. He just want to get that money because he hates the oil industry. So you can frame it in that perspective and for those who who who are shocked by what I said just look at the evidence and look at the videos and look at what he wrote in his book and and you will be shocked and of course there are several explain he never invested in the oil industry by the way he blamed the oil industry for some of his bankruptcies.
(56:42) He blamed the oil industry for the bankruptcy of Trump Airlines. So uh in a sense for those who think he's supportive of the oil industry again it's mostly a perception than uh reality. Is he supportive of any part of the energy sector? Well as long as it suits him because he told them look give me $1 billion. Remember that statement.
(57:06) So as long as he's getting the money probably he he he's fine with it. But historically he never been a friend of the industry. So what are your thoughts on the prospects of expanding generation in the United States because it seems desperately needed if you're looking this is uh an issue related to those contracts in the Gulf.
(57:30) uh what those contracts in the Gulf when it's we mentioned that when I mentioned the five uh results out of that visit is that when you talk about AI when you talk about data centers you need energy and those countries in the Gulf basically are well suited for that simply because they have a lot of energy it's not only oil and gas by the way uh when it comes to solar for example or wind uh they are suited for that too And now they are going for nuclear as you know.
(58:02) So they have enough energy basically to supply that and they have enough energy if the issue is to compete with China. Uh US companies basically can compete with China in those countries. Uh here in the United States we have a serious problem because we have some states the large some of the largest states like California and Texas as you know uh they are on the edge they might suffer blackout at any moment.
(58:29) So we do have a serious problem. Uh the fact is if you look at various factors and this is a global issue not only in the United States energy demand is going through the roof is increasing substantially. The first reason is urbanization. Uh the in the United States here and most of Europe basically mostly is urbanized but the rest of the world even China is not.
(59:00) And as farmers and others basically move to the cities, their energy consumption increases substantially. To give you some examples and to give the audience some examples so they realize the magnitude of it. Remember when the Biden administration withdrew from Afghanistan and they brought in tens of thousands of Afghan families to the United States and put them in apartments and larger family to put them in houses even without income with zero income.
(59:31) So the the the the household has not made any money from work. the fact that they moved to those houses or apartments on average their energy consumption increased by about 70fold. 70fold just moving from Afghanistan to the United States. those African migrants who die in those boats in the Mediterranean trying to reach Europe, the the energy consumption increases by about 40fold the moment they live somewhere even without income.
(1:00:14) And there are by the way tens of millions of them coming every year to Europe. those migrants coming from Central America, Mexico and other places to the United States, the increase is about 30 to 40fold the moment they have an apartment in the United States. So urbanization basically plays a big role in energy consumption. It's not really the population growth is the urbanization. That's number one.
(1:00:41) Number two, uh so urbanization and migration. Uh number two, you have the uh AI and data centers. If you are richer or you make a million dollar tomorrow in the stock market and I hope you make a billion dollar this week, um you are not going to eat twice twice the amount. You are not going to go and double your wardrobe just because you made a million dollar.
(1:01:13) Everything is going to stay the same. But what is increasing over time is your data consumption. Your data use is increasing and will continue to increase no matter what. And as you get richer and you have more gadget and more things etc more options, the data consumption is going to increase over time.
(1:01:36) And generally speaking, there are two things that grow with the person. Education and health. your your consumption of health in particular basically increases as you get older and with that comes more data consumption with all the health records and everything else etc. So you can see that aside from AI that data consumption is increasing substantially.
(1:02:03) You put all of those together you end up with a situation where energy consumption is increasing substantially. What are the implications? The implications are huge. First, those people who adopted climate change policies, their objective was to replace coal and natural gas with solar and wind.
(1:02:31) But now the growth in energy consumption is higher than the growth in solar and wind. and therefore they are not going to achieve their objectives of replacing coal and natural gas. Is that important? Yes. Because if you look at the outlooks, especially the international energy agency outlook, you will see they counted for all the replacement ahead of time.
(1:02:54) A replacement that's not going to happen. What does that mean? is that the demand for oil, gas and coal is going to be higher than all forecasts. So the implications are huge because of this increase in energy consumption. Now you come to AI and you come to autonomous vehicles and things go crazy.
(1:03:25) Here we end up with a very serious problem whether in the United States or other places. Two things. The first one is the grid. The grid in Europe and the United States and many areas around the world is very old and does not you can increase energy consumption but if you cannot uh literally transmit that energy somewhere else you got stuck.
(1:03:48) So what the advantage of building a nuclear plant if you are going to have the transmission? So we have a serious problem with that and that needs worldwide need trillions of dollars. The other issue is and we wrote about it in the daily energy report on Friday. By the way, the daily energy report is a daily report that we publish um that we don't have because we have the only way to meet this demand is nuclear and natural gas.
(1:04:19) Wind and solar is not going to solve the problem. Batteries are not are okay. It's going to help little for a few hours on on on local p basis, but that's it. Uh but once you go for that massive increase in energy you need uh uh literally uh a base load a very large base load and you need natural gas and to use natural gas you need natural gas turbines and the problem is we don't have the manufacturing capacity for that number of natural gas turbines and that's where the problem is.
(1:04:56) So you have on one hand you have the grid on the other hand our manufacturing ability to manufacture those natural gas uh uh uh turbines or turbines depend on how you want to pronounce it. But the issue here is is really severe. It's not uh an easy fix and we will end up with blackouts worldwide. This is going to be we've seen it already in Spain and Portugal as you know just recently.
(1:05:18) We've seen it in California. We've seen it in Texas. I think this is going to be a common theme. Look at Kuwait. Kuwait is one of the richest countries in the world. They've been suffering for from blackouts for two years now. Uh so we do have a serious problem. Uh again to fix this problem, we need to put more emphasis on the grid and more emphasis on the uh manufacturing capacity of the uh natural gas turbines to solve this uh problem.
(1:05:47) It's probably good to have Chris Wright as a department of energy head. this is a problem because it seems like a problem that he understands pretty well considering and of course one of the problems we ended up with um this is kind of a really sad sad situation with Doge basically and what is done yes there were some benefits but the damage is done is massive especially when it comes to the department of energy and the department of energy right now what happened is uh many people left And many people basically were fired or
(1:06:22) or whatever. And as a result of that, they don't have the capability to produce what they've been producing for decades, such as the international energy outlook, which was something essential every energy expert wants to see every year and now they are not able to do it. And that's very sad to see that the Department of Energy ending up not being able to do the forecast and do things that the job that they need to do.
(1:06:52) They are not able to do it because people left because of Doge and other things. Uh so this is a big a big problem right now from our point of view and I hope this will reach the uh secretary for energy. We still mention the EIA forecasts in our reports, but we don't consider it because we don't have any trust left in the EIA.
(1:07:19) You would think that we should have done this in the during the Biden administration, but during the Biden administration, at least the professionals who've been there for 20 and 30 years, they're still there. Right now, they are no no longer there. So we we we we just put it so the clients can see it but we are not depending on it in any uh in any way and this is in first the first time in my career I see this.
(1:07:47) So it's a very sad situation. At the same time we see the secretary of energy basically tweeting every day uh some kind of cheerleading tweets that do not help anything. We really need to bring back the department of energy, the AIA the way it was during the times uh uh the previous years where they produce very high quality uh forecast and reports.
(1:08:15) I didn't realize that was going on at the EIA. Sorry, I uh will you speak to microphone because I don't hear you anymore. I said it uh I didn't realize that was going on um at the EIA specifically. No, it it is a serious problem. they already cancelled the uh March release of the international energy outlook because they don't have enough personnel and now we can see the uh quality of the monthly reports deteriorating substantially.
(1:08:41) Of course we do have data deterioration since 2017. So remember we discussed this in the previous show that we we've seen data data deterioration simply because of the confusion between uh condensates NGL's and crude. So we've seen all the messy data since then. They tried to fix it during the Biden administration.
(1:09:08) The fix was really kind of a an accounting fix in Excel sheets uh just to reduce something we call the adjustment which is the difference between the two sides of the equation. Uh but that was kind of an artificial fix uh to the problem but it has not been fixed completely. Uh so we do have problem before that still exists today but the the situation got really worse uh uh since um Trump was uh became president.
(1:09:38) So based off of everything you said over the last hour, it seems like it's a lot of talk uh but the data and the reality behind the scenes is a bit more dire than what is being projected publicly. It is way worse than what people think because one of the problems of course the the the sanctions that been imposed on Russia and Iran and Venezuela.
(1:10:03) Uh they are in a sense we can work around that trying to get real numbers but the problem is when the if you go back to the Biden administration and you see the secretary of treasure treasury basically saying oh the price band was effective and they keep saying the price band is effective. the price band sorry the price cap the price cap was effective $60 and as an analyst I look at the oral's price and is 72 and here is a government official telling me oh the price cap of 60 is working how do you want me to believe them so all of a sudden all the
(1:10:41) information that's supposed to be credible is no longer credible I'm looking at the market looking at the price the 72 and the Why administration is telling me 60. So in addition to the deterioration of the data all the politicization of the uh markets basically ended up with these problems. Remember last year we had uh in term of data deterioration last year was really bad year and the reason why it was bad year because we have two major elections worldwide in India and the United States and the media that supported both
(1:11:17) regimes the Biden uh administration and the Moody administration the media basically was literally paid to kind of tilt the stories. So there is a story and instead of reporting the story as is they tilt it. So for example uh there was a dispute between an Indian company and a Russian company about the price of shipments.
(1:11:47) So the Indian company refused to receive shipments because of a price dispute. Well, what the media that supports the Biden administration when he was a candidate before the switch um what the media was saying, oh look, Biden sanctions are effective. Even India is not able to import the Russian oil. It had nothing to do with sanctions.
(1:12:09) It was a price issue. But they lied. And then we've seen the media saying, "Oh, look, we have economic growth in China. uh that's a sign that uh you know the uh negotiation between the Biden administration and China is working. Well, it wasn't because whatever India refused to receive in term of shipments was bought at discount by Chinese companies and those guys are saying look they have more oil imports because they have economic growth because of the negotiations between China and and the Biden administration which was a
(1:12:43) complete lie. It was those 14 ships, 14 tankers were stuck at sea and the Chinese companies bought it at discount and they stored it. So there was a lot. It was aside from the data, the reporting itself was a lot. And we've seen a lot of lying like this. Uh we've seen even we talk about uh LNG for example, they say well this LNG tanker got stuck because of sanctions.
(1:13:11) Well, it was it because the fort was busy. They don't have a SL just like when when you you come in on a flight and you want to land at the airport and there is no gate. This is the same thing. There is no place for the ship on the port. So it has to wait. This all because of sanctions and couple of days later we've seen the ship the tanker unload and there is no problem.
(1:13:33) There is no mention of sanctions. So we have data to deterioration on one side and we have paid media that distorted the news on the other. By the way, all of this is good for my business because we can sell that we get more credibility uh out because we can dissif all of this stuff and publish those reports etc.
(1:13:55) is good for but it's very sad. I don't want to share reports because of that. I want to sell reports because of high quality research not because of someone's else's mistake or laziness. Seems like you may be stepping in where the government's falling short. Maybe the private market solving uh government problems here of data. Exactly.
(1:14:16) That's what's going to happen. That's why you see all those uh companies that monitor ships and and do this via satellite and all that stuff. Uh uh in fact I I I will I'm still wondering why Elon Musk until now has not even formed the company just to to monitor every single move of everything in the world.
(1:14:37) I mean he has the infrastructure in place if he wanted to do it. Absolutely. Absolutely. Yeah. And so I'm way more bearish than I was coming into this conversation based off everything we discussed. If I guess to wrap it up, last question I have for you. Like if you had the magic wand, you were you were anointed energies of the United States.
(1:15:02) What what moves would you make to fix these these problems? Obviously on the data side, make sure that you're collecting it and being truthful about it. But in terms I all I got to do basically just clarify one issue to the policy makers whether in Congress, senator or the president. Tell them look those energy products are designed for 20 30 40 years but you are here in the office either for two four 6 or 8 years. Okay.
(1:15:32) So the objective of the companies when they make those projects they are looking at the next 30 years while you are looking at the next election. And that's where the uh confusion and the kind of uh struggle between your objective and their objectives become. You got to think like what the companies think until you align the interests in this case.
(1:15:57) And that's where most of the problems we have between the government and politicians and the businesses that yes we have businesses that are they can adjust quickly and they are uh they have short cycles where they can adjust but when it comes to energy projects there are no energy projects that match the political cycle.
(1:16:19) All the energy projects basically are over decades and they must understand that. So they would companies would rather wait the president over four years than to adjust an investment in billions of dollars and they they they need to understand that. So politicians have to align their interests with the interest of the long-term projects to succeed rather than force the companies or trying to change the laws only with the presidential orders for only four years.
(1:16:53) If I am going to invest in climate change technologies, so my oil company basically can align with the law and then I have a president who came in and relaxed those laws with a presidential order that I know is going to change after four years, I'm not going to forgo my billions of dollars of investment in climate change technologies just because Trump relaxed those those laws.
(1:17:20) I'm not going to react to that. I would rather wait. I already spent billions of dollars. I would rather wait those four years because I know down the line there will be a president who is going to apply the original laws that were stopped because of the presidential order or anything else. So this alignment basically will help everyone and that will be a big accomplishment if I can succeed or anyone else can succeed in Dubai.
(1:17:50) We need a time scale alignment. Absolutely. And what would like a first move towards that alignment look like in your mind? Well, one thing is that this idea of flip-flop policies when it comes to energy project, when I'm talking about the 30-year uh project, you don't change the policies and the regulations with presidential orders every four years or every two years. This is a big problem.
(1:18:16) Big problem for everyone. It's costly. It's confusing. So at least when we when it comes to those project that take long time or planning they they are designed for 30 years or 40 years avoid this flip-flop policies. This is a big problem. So the Biden administration basically went this way and then the Trump administration went this way.
(1:18:39) This is not going to help either one and it's not going to help the politicians. It's not going to help the industry. So the industry if you look at investors basically they always hated the energy industry. And what this is one of the reasons because the lifespan of the products are do not match the political cycle.
(1:18:57) Yeah. Seems like we just need a law that says energy is good don't pollute. But in general I mean you said the to wrap it up uh we are bullish on two sectors in energy. Uh we are bullish on LNG. Any way you look at it LG is the future. Natural gas is not a bridge to the future. It is the future.
(1:19:24) So when you say we are bullish on LNG, it does not mean we are bullish on natural gas within the United States. We do have so much natural gas that it's very hard to be bullish on gas in the United States. But internationally speaking, we are bullish on LNG. LNG basically is going to be some it's going to get bigger and bigger.
(1:19:44) uh it might end up bigger than oil itself and we are bullish on the power sector especially the big utilities simply because of AI and everything else related to that and the problem we see right now with that we see acquisitions instead of expansion and that's important because uh without expansion that means the value of this company is going to go up because we are not expending the supply of that so but we do need to expand the power sector.
(1:20:15) So we are bullish on the power sector on utilities and we are bullish on uh on LNG. Uh US natural gas is a big question. Uh it it just it's very hard to be bullish on uh in term of oil. Uh it's it's depends right now on we see improvement over the summer but that's it. uh it's very hard to see uh any major movement in oil prices unless we see um trade deals where China will start growing again.
(1:20:44) And when I say China growing again, we need the Chinese economy to grow above 5%. Not the government announcement of 5%. I'm talking about the real growth in China above 5%. because uh based on our models the government is saying that they achieved their goal of 5%. Uh but the growth probably is about 2.5 to 3% old. So we need real growth above 5% and trade deals to see oil prices moving back to the 80s.
(1:21:16) Uh and that's that's very hard to see right now. Yeah. I wonder if Silicon Valley, which is obviously on the cutting edge and leading the path for artificial intelligence, will it seems like they've become politically more politically powerful than they have been um in in past decades around this election? They are already.
(1:21:39) I mean, we've seen who is next to Trump, right? Whether on this trip or in the White House. Yeah. Can they I mean, can they brute force better energy policy because of AI specifically? I I would not be shocked. Um it's very hard. What we are going to see basically is a lot of pressure on those companies because any limitation of AI is going to come from the energy sector. Mhm.
(1:22:00) And the last thing we want to see and mark my words for this because this could be a big problem. Uh if we end up in in one city where you have a big facility for let's say Microsoft or Apple or Amazon etc. And because they have a contract, you have a blackout in the city, but their facilities are operating.
(1:22:24) We might see a backlash back kind of a backlash from the population and we will see politicians basically being forced to fight them because of that. So we heard about fights over oil. We heard about wars over oil or water. Now it's going to be over over who is going to get the power. And and I will not be surprised if we end up with situation like this in some states and some cities maybe some cities by by where we live here in Texas where a lot of this seems well they don't have the same power.
(1:22:57) I mean this is the problem. Cities do not have the same power like Amazon or or or Microsoft or Apple. That's a big problem. Yeah, it is. And and the issue becomes and and we've seen it in Texas for example. We've seen it in Europe. so many times. What will happen when wind stops? Yeah. I mean it it just it we've seen a crisis all over Europe because of it.
(1:23:26) We've seen it in Texas. So the idea of increasing the role of wind makes sense, but on the other side, you got to be prepared when wind stops. So I can see like in the middle of the summer like you are in in in in the middle of August uh in Texas or in the southern states when wind stops and all of a sudden you have a crisis while the uh big AI companies are getting all the power.
(1:23:55) That would certainly be cause for some public backlash. That's why uh Oh, in fact, just to mention this before we close, um we've seen it with Bitcoin mining, by the way, with crypto mining. Mhm. Uh last year during shortages, basically, the crypto miners stopped and they literally sold their power and made money.
(1:24:20) They s made money during the shortages. So the problem with AI is you don't have the same flexibility like the the the crypto and that's where the issues are. Yeah. Now that's that's been a big discussion in the Bitcoin industry is do these AI data centers need to be paired with mining operations that can participate in demand response so that you don't have a situation where the grid shuts down and AI is the only thing running like that that flexibility of Bitcoin mining is extremely powerful.
(1:24:48) I mean real final final last note thoughts on Bitcoin broadly in this whole environment. Well, you are the expert on that. So, I I'll leave that to you. I think uh considering where interest rates are, where the debt is, it wouldn't be shocking to me if they need to print money. Uh geopolitical chaos, not chaos, but just geopolitical uncertainty.
(1:25:14) Um sanctions on certain countries. I think it all points to demand for Bitcoin increasing. That's what I would say. And we're the first time I had you on, this was probably like three or four years ago now. At this point, Bitcoin was probably like a $200 billion market cap. Now we're at two trillion. And one of the first questions I asked, I remember that, could these energy deals, these oil deals be settled in Bitcoin? It's more liquid market now.
(1:25:42) The the response you had four years ago is the market's not liquid. It's becoming more liquid over time. Absolutely. Yeah. Absolutely. Anas, thank you again. Let's not take uh as long to catch up between this episode and the next one. Um because I think Well, let's do it very soon. Then yeah, I'm sure there's going to be plenty to talk about throughout the rest of the year as as this uh Trump admin goes Leroy Jenkins on the world continues.
(1:26:11) True. Thank you. Um I hope you enjoy the rest of your Saturday. Thank you for joining me on a Saturday morning as well. Thank you. Thank you. Have a great day. All right. Peace and love, freaks. Freaks. Thank you for listening to the show. I hope you liked it. If you did like it, please make sure you subscribe, rate, review the show.
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