Rob’s comments below are in italics.Derek’s comments below are in normal font.

It’s the 27th of March as we record. We’re going to discuss what’s going on and what the likely impact will be.

We’re now just at the end of the fourth week of the conflict in the Middle East — or Western Asia, as it’s increasingly being called.

‘Middle East’ is a funny term anyway, isn’t it?

It was obviously coined when London was the centre of the universe. So, we’re now at the end of the fourth week. The events of this week: last weekend, Trump gave a 48-hour ultimatum to Iran to open the Strait of Hormuz. He threatened to start attacking their power stations one by one if they didn’t comply.

Iran replied that if he did that, they would systematically attack all the energy installations of the Gulf states — nominally American allies. Then, on Monday, he announced he was delaying the ultimatum for a further five days. Oil prices dropped on the markets at that point.

It appears that a small number of people made hundreds of millions of dollars in profit on the trading that morning. There has been no attempt whatsoever to find out who was making those trades and how.

Catch them and put them in prison.

That would definitely be too much to hope for.

That revised deadline was due to expire this evening. We were wondering whether there would be an invasion, given that these five days were enough for the marine contingents from the Singapore area to reach the Gulf of Persia.

We were wondering whether there would have been dramatic events between recording this and its publication early next week. But apparently, this morning Trump extended the deadline by a further 10 days.

This may or may not mean anything. Whatever Trump announces in any area, as we’ve all noticed by now, he’s quite likely to do something entirely different the very next minute — or even contradict himself.

It seems that every time there’s any escalation from the Israelis or the Americans, Iran responds in a very measured way with an exactly similar answering strike.

There’s some speculation that when the Marines arrive, they’ll try to invade Karg Island — Iran’s principal export terminal. If they do, they seem almost certain to be obliterated. They’d have to go through the Strait of Hormuz to get to Karg Island, which strikes me as the very least likely scenario. They’d almost certainly be sunk before they got there.

That seems completely hypothetical, though there’s a great deal of speculation about it. Certainly, there have been attacks on Iranian refining and storage facilities.

Both this war and the Ukrainian conflict are wasting incredible proportions of the limited petroleum stocks we have, along with processing facilities. Petrol prices around here have gone up 20 pence in the past four weeks — about a 15% rise.

We’re going to see a lot more of that, and also supply difficulties. We have a much bigger problem with diesel than with petrol, certainly in Britain — and probably in the world as a whole.

On the way here, at least two service stations on the motorway are now out of diesel. We’re going to be seeing shortages of pretty much everything.

It’s a good time to make friends with your local farmer...

A good time indeed — and not only that, to stock up on as many things as you can.

The Ukrainians seem to be having rather more success with their missile and drone strikes on Russia, although they’re taking a pounding themselves as well. They’ve had substantial attacks on Russian refineries, storage facilities, and shipping facilities.

Both of these events will substantially affect the global energy and delivery situation. This is also going to have a substantial effect on mining, because all mining machinery and haulage is diesel-powered. One way or another, this is going to torpedo the world economy in a completely unprecedented way.

This underscores that you can’t disentangle energy from finance. We’ve talked a lot about energy on this podcast, and it’s for these reasons.

One way to look at it: this appears to be a warning shot across the bow of the world economic community. Although this is a highly artificial shortage, the best way to see it is as a preview of what is coming over the next decade or two — or three at the outside — as we no longer have the bonanza of fossil fuels that has given us a couple of centuries of extraordinary economic growth and development.

I still maintain some optimism that, before the century is out, the human race will have made the necessary adjustments to power society with solar energy. There are plenty of technologies available to capture that. China is, of course, leading the way, with about 50% of its energy needs coming from renewable sources.

Have they localised the generation of electricity from solar?

I don’t know the details of their structure, but they have enormous solar energy capacity. Because there’s such an enormous geographical area, it’s widely distributed — so when conditions aren’t conducive in one part of China, they will be in another. These feed into the Chinese grid.

When you said ‘localise’, were you thinking in terms of what we’ve discussed before about distributed generation to supply the immediate area?

Yes — so the electricity would have been generated closer to your home, with more of these facilities dotted around.

I don’t know the details of how they’ve done it in China, but I would imagine they’ve covered as many possible bases as could be imagined.

Otherwise you get the situation where entire woodlands are being chopped down to make way for solar panels. It’s mind-melting. Attaching these things to a building is something else entirely.

As far as the Middle East conflict goes, there seems to be no way this ends other than as a complete humiliation for the United States. Every conflict it has had — which has been continuous since the end of the Second World War — has ended that way.

In fact, for the entire period of its history, apart from a handful of years, the United States has been in some form of armed conflict.

Same for Israel.

The two sides have both publicised their terms for ending the conflict, and there’s absolutely no overlap whatsoever between them. Iran has made it clear over and over again that it doesn’t want a cessation which is going to be started up again in another six or twelve months — understandably so.

Even if the United States said it was giving up, it would be up to Iran whether to reopen the Strait of Hormuz. All the signs are that it won’t. Even if it opened tomorrow, it would apparently take at least four months to restore fuel shipments to pre-war levels — and that might not be possible at all, depending on how badly the refining and distribution facilities have been damaged.

The Gulf states have been paying enormous sums to the United States for weaponry, and have been providing them with bases on the grounds that the United States would protect them. It must be obvious to everybody that it’s had exactly the opposite result. Not only has there been no attempt whatsoever to protect the Gulf monarchies from Iran’s attacks, but the fact that the bases are there has simply made them a target.

Bahrain appears to be on the verge of a revolution. Bahrain and Qatar have said they’re not getting any more involved in the conflict, for what it’s worth. The United Arab Emirates and Saudi Arabia both appear to be cooperating with any forthcoming American strike. If they do, I’m sure they’ll live to regret that decision.

Meanwhile, the annual production of Patriot missiles is 750, and Israel has used 800 in the last month — or perhaps even the last week, I’m not sure. That has evidently not prevented a great deal of Iranian missiles from getting through.

In many cases, they fired three or four Patriots — at somewhere well north of a million dollars each — at one incoming missile, and they haven’t even hit it. We don’t know the scale of the damage in Israel. They have hit the town near the nuclear development site. They didn’t actually hit the nuclear installation itself, but they’ve shown that even one of the most heavily fortified sites in the country cannot defend itself.

More American aircraft are getting shot down, so they clearly don’t have the control over the skies they pretended to have. Iran has also made it absolutely clear that they’re in for the long haul and will continue to pursue this as long as it takes. Aside from the use of a nuclear weapon — which is a truly horrifying possibility — it seems that absolutely nothing can be done about it. Interesting times, indeed.

It’s like Vietnam 2.0.

It will be interesting to see what the reaction of the American public is once we start getting significant numbers of military casualties. There have probably been far more than have been publicly admitted, as it stands.

That’s my outline summary of where we stand. The other development in the Ukraine-Russia conflict: in the attacks last night, or the night before, they routed their flights — presumably cruise missiles — over Poland, Estonia, and Latvia, on the way to attack Russian ports in the Baltic Sea.

This puts Russia in a dilemma. If it shot them down, the debris would fall on those countries, and they would likely claim it as a Russian attack. If it doesn’t, those countries are co-belligerents in the conflict. That’s another alarming expansion of the conflict.

Any further thoughts?

My main thought is that it’s pretty obvious we live in a highly militarised society with a thin veneer of civilisation papered over the top — and you’ve only got to scratch it. The veneer has been ripped back. The...