Is the Market Misreading the Biggest Energy Shock In Modern History? (Ft. Amos Hochstein)

Summary

The Rundown (Public.com)

Episode: Is the Market Misreading the Biggest Energy Shock In Modern History?

Guest: Amos Hochstein, Managing Partner at TWG, former White House Senior Advisor
Host: Zaid Admani
Date: March 29, 2026
Duration: ~29 minutes

Episode Overview

In this interview edition of The Rundown, host Zaid Admani sits down with Amos Hochstein—an energy infrastructure investor with high-level White House and international negotiation experience—to discuss the largest energy market disruption in modern times: the four-week closure of the Strait of Hormuz. Hochstein explains why he believes the market is woefully underpricing the crisis, breaks down how back-channel negotiations actually happen, and details the cascading effects for global oil, gas, and geopolitical strategy.

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Key Discussion Points & Insights

Hochstein’s Background and Negotiation Experience

• Amos Hochstein currently leads energy infrastructure investments at TWG, with a focus on connecting traditional power and AI/data center interests.
  • “I look after a lot of our investments in energy infrastructure...from the wellhead to data before that.” (01:05)
• Former Senior Advisor to President Biden; played a major role in energy policy and Middle East negotiations, including ceasefire talks and tech collaborations.

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How Sensitive International Negotiations Actually Happen

• Negotiating with Non-Communicative Parties:
  • Many parties refuse to speak directly (e.g., US and Iran, Israel and Saudi Arabia).
  • Negotiations are conducted via intermediaries (Oman, Pakistan, etc), often relaying messages between physically separate rooms.
  • “I’m talking to people in Lebanon who are delivering the messages to Hezbollah, and then they’re delivering it to me, and then I'm delivering it to Israel.” (03:18)
• Indirect Channels and Message Testing:
  • Multiple intermediaries/paths are used to ensure message fidelity and accuracy.
  • “Messengers are basically translators...sometimes I would send the same message through two, three different people...and then I would judge based on intelligence and other signals, who's delivering the message most loyally.” (05:16)

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The Closure of the Strait of Hormuz and Oil Market (07:00–15:00)

• Unprecedented Shock:
  • The current closure handles ~20% of global oil, yet market responses have been muted compared to previous crises.
  • “If I told someone six months ago that the Strait of Hormuz was going to be closed for a month...they’d expect oil prices to be like 150, 160, maybe 200 a barrel...yet Brent is at 110, WTI 95.” (06:35)
• Market Underreaction:
  • Hochstein is adamant that the markets are severely underpricing the true risk.
  • “The market is underpricing...We're not in a risk market, we're in a disruption market...[there are] very few who've lived through a disruption.” (07:10)
  • “This is the absolute worst energy disruption the world has ever seen. That's not hyperbole. That is a factual statement.” (10:44)
• Physical vs. Paper Price Disconnect:
  • “Paper” oil prices lag behind real “physical” market situations.
  • "The physical price? You go to Oman and pick up a cargo, it doesn't cost you $107. Earlier this week it was $150." (10:16)

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Rising Global Energy Distress & Policy Loops (09:27–16:00)

• Real World Impacts:
  • Airports facing jet fuel shortages; some countries moving to four-day workweeks or declaring emergencies.
  • “If you're Bangladesh, you stop buying. If you're Sri Lanka, you announce you're going to a four day workweek. That's already happened.” (09:28)
• Circular Market-Government Influence:
  • Markets downplay risk, governments respond less urgently, which then keeps markets calm—a dangerous feedback loop.
  • “The President says I don’t need to get out of the war because the market’s not down that much. And the market’s not down that much because the President’s about to tackle (end) it...It’s this cycle.” (14:34)
  • “When you don’t read the signs...at some point, the physical reality and the wishful thinking clash. And then when they clash, you get a crash.” (13:02)

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What Could Have Been Done to Prepare (18:00–20:10)

• Policy Shortfalls:
  • U.S. and allies could have pre-filled storage tanks globally, pre-positioned tankers, and coordinated buffer supplies among producers and buyers.
  • "Fill your storages...Fill your tankers and move them outside of Hormuz...make sure your airports...are full.” (18:15)
  • The Ukraine invasion response was much better prepared: contract waivers allowed LNG diversion to Europe, increasing resilience.

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Prospects for Resolution and Long-Term Impact (22:08–27:42)

• If the Strait Opens Soon:
  • Expect a glut of released oil (from stockpiled storage/tankers) followed by persistent shortages, especially in LNG.
  • “You’ll have all this oil and diesel and jet fuel...ready to go and so you’ll have this massive wave and then it'll decline...20% of [LNG] isn’t coming back...for three years, maybe five years.” (22:51, 24:15)
• Price Floors and Recovery:
  • Energy prices will not return to pre-war levels soon:
    • “Based on geopolitics, we're at 110. Yeah, we'll come down, but we're not going back down to 56 this year.” (24:55)
• If the Closure Persists:
  • April 11th (six-week mark) is a key panic threshold.
  • “The damage to the market is not linear, it's exponential.” (26:01)
  • Once storages empty, countries will truly run out—market panic could drive prices to 130-140, but not 200 due to forced demand destruction.
  • “Nobody's going on vacation this summer if this war is going on, I promise you that." (27:28)

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Notable Quotes & Memorable Moments

• On the Market’s Blindness:
  • “Markets are not good at reading signs...All the signs were there in 2008, except we only can read them in 2009.” (07:10)
• On Message Transmission:
  • “People take it for granted now that we're doing through Oman or Pakistan...During the Obama administration, John Kerry was negotiating directly with the foreign minister of Iran. Face to face...We don't do that anymore.” (03:45)
• On Supply Chain Fragility:
  • “There are airports in the world that have no jet fuel. Really. They're running out. They're grounding planes.” (08:55)
• On Catastrophic Risk:
  • “If we don't get the resolution in two weeks...does the market finally just have a panic attack...or do you think it's still going to be a trickle up?” – Zaid (25:03)
  • “April 11th...is the six weeks mark...I think at that point the market is like, all right, this is going to go on for a long time. And the, the damage to the market is not linear, it's exponential.” (25:33–26:13)

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Important Timestamps

• [01:00] Hochstein’s current and White House roles
• [02:28] How backchannel diplomacy works in the Middle East
• [06:13] Strait of Hormuz closure & oil price expectations
• [07:10] Why the market is misunderstanding the disruption
• [09:27] Real-world fuel shortages and government responses
• [10:16] Disconnect between “paper” and “physical” oil prices
• [13:02] Dangers of underpricing risk in policy and markets
• [18:15] Checklist of possible pre-war precautions that weren’t taken
• [22:51] What happens if the Strait reopens soon: glut and slow recovery
• [24:55] No return to pre-war prices in the short term
• [25:33–26:13] April 11th as panic inflection point—potential for exponential market move

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Takeaway

Amos Hochstein makes a compelling case that the current energy market turmoil is fundamentally misunderstood and underpriced by both investors and policymakers. Drawing from high-level negotiation experience, he reveals the complexity of diplomatic channels, emphasizes the difference between “risk” and actual “disruption,” and warns that unless physical realities are heeded, a catastrophic market correction could be imminent—especially if the Strait of Hormuz remains closed beyond the six-week mark.

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For deeper market analysis and investor guidance, follow The Rundown on Spotify and YouTube.

Transcript

[A]

Welcome back to the Rundown interview edition. Today we are talking to Amos Hochstein, a managing partner at TWG and a former White House senior advisor. Amos is someone that has negotiated Middle Eastern conflicts and dealt with energy crisis in the past. So in today's conversation we got to look behind the curtain of how international negotiations are done, why Amos thinks the energy markets are underreacting to the straight up Hormuz closure and what the next two to four weeks could look like. This. This was a very interesting conversation. I learned a lot about the Iran situation and also about the oil markets. So I think you guys are going to really enjoy this one. All right, let's get into it. Amos Hochstein, welcome to the Rundown.

[B]

It's great to be here.

[A]

I'm super excited for today's conversation. A lot of stuff to talk about. But before we get into the heavy stuff, I just want to kind of get a bit of your background. Can you give us a quick breakdown on your current role at TWG and also your previous role at the White House?

[B]

So I'm today I'm the managing partner at TWG Global. I look after our investments in it's a holding company and I look after a lot of our investments in energy infrastructure and the connection between from power to AI data centers and things in between. We TWG had launched an AI company. We're invested in some of the data center side and a lot of tech space and now connecting that. So if you will, from the wellhead to the, to data before that. For the previous four years I was at the White House working as a senior advisor to President Biden. Started out as specifically senior advisor on energy global and domestic. But I come from the national security side of things and spent a lot of time on national security in my career. So I was also one of his negotiators in the Middle East. I negotiated the ceasefire and with Hezbollah and a number of the AI and tech collaborations in Saudi Arabia and UAE as well as elsewhere around the world.

[A]

I'm kind of, let's talk about the negotiation stuff because like you said you've, you've been in the room when it comes to negotiating with, with players in the Middle East. This is more of like a broad based question but like how does that work? Like practically speaking, are you guys like in a WhatsApp group? Are you sending messages to like a third party? Are you doing voice memos that messages being forwarded? I'm just really curious to see how does negotiations even work when it comes to sensitive topics. Like this.

[B]

So it's really complicated because if you're doing regular negotiations, let's say, between even Israel and Jordan, right, they can talk to each other. A lot of these negotiations are between people who will never speak to each other. And sometimes the parties were mediating. Brett McGurk and I were in charge of negotiating a potential normalization agreement between Saudi Arabia and Israel. But they don't talk to each other. So it's a lot of message. We deliver the message back and forth, but you don't always want to say, I'm just delivering word for word. I'm not a mailbox. It's really shaping the conversation of understanding from both sides what are their real red lines and what are not. The added complexity is when we're a party to it. And so, for example, if I'm trying to bring a ceasefire between Israel and Lebanon, well, it's really Hezbollah, which is a terrorist organization supported by Iran. We don't talk to Hezbollah because they're a terrorist organization. We don't talk to terrorists. So I'm talking to people in Lebanon who are delivering the messages to Hezbollah, and then they're delivering it to me, and then I'm delivering it to Israel. And so it's really the same thing. In Iran, we don't have direct negotiations with the Iranians. The last time we did that was in the Obama administration when Donald Trump got out of the jcpoa, which was the agreement that the United States had on nuclear with Iran. When he tore it up in 20, what was it, 18 or 19, the Iranians decided that we basically betrayed them because we negotiated in good faith over multi years, reached an agreement on nuclear, and then the United States unilaterally got out of the deal. And so as a result, they've never come back to the table in direct negotiations. People take it for granted now that we're doing through Oman or Pakistan. But during Obama administration, John Kerry was negotiating directly with the foreign minister of Iran. Face to face. We were enemies, but we were face to face. We don't do that anymore. So for the four years of Biden and the last year plus of Trump, it was done through intermediaries. So when you hear the Jared Kushner or Steve Whitkoff negotiate with the Iranians, they're not okay. They're talking to the Omanis who are talking, and it's like two different rooms, and these guys are going between two rooms. Sometimes it was a glass wall. We can see the Iranians, they can see us.

[A]

Wow. Okay. See, that's that's, that's the part that I wanted to understand because you see headlines like the US Is negotiating with Iran, whether to Jared Kushner or Witkoff, or you see like, oh, Pakistan is going to be an intermediary. Like, I'm not even. I wasn't really sure what that meant, like back channel talks. But what you're saying is it's literally like you talk to one side and that that side carries the message over into the next room to talk to the Iranian side in this case, and then that's how messages are conveyed.

[B]

That's right. When President Trump said the other day, I delivered 15 points to the Iranians, then the Pakistanis said, we received the 15 points and we delivered them to Iranians. Right? It's, it makes it sound like it's direct, but it's not actually direct. Now we have intelligence and we have all kinds of sources, so we also test the waters. Right? I want to know when I'm negotiating, I want to know if the dude, I just talked to a. Are they really delivering the message? If they are, how loyal are they to my message? Because, you know, messengers are basically translators. They're not, it's not word for word. They have. There's tone. They add their own views into it. So I would sometimes send the same message through two, three different people, and then I would judge based on intelligence and other signals, who's delivering the message most loyally versus trying to insert themselves into the process.

[A]

Wow, this is really fascinating stuff. Now I want to kind of dig into, like, you know, what's happening right now with the war and the impact it's having on the markets. You know, I think we just wrapped up week four of the war. Straight up. Hormuz still close, handles what, 20% of the world's oil? If I was to go back in time, Amos, and like, if I told someone six months ago that those straight up horror moves was going to be closed for a month, do you think I. I feel like that person would probably expect oil prices to be like 150, 160, maybe 200 a barrel. Yet right now, as we record this on Friday, Brent is at 110 a barrel, WTI 95 or so. Do you think the markets are underpricing the risks right now, or do you think this is like a, an adequate response? Because someone who. I follow the energy markets pretty closely, just having oil and gas background, I'm a little bit surprised by how underwhelming the response has been.

[B]

The market is underpricing the market Is is at a loss. They don't know what they're doing. Honestly, I rarely say this about the market, but the market off. Look, when it comes to markets going through extreme moves, the market's the worst at reading signals, right? All the signs were there in 2008, except we only can read them in 2009. Yeah, right. It's not like Bear Stearns read any of those signs. It's not like Lehman Brothers did. Right. But post facto everybody read the signs. So markets are not good at reading signs. So what's happening right now, I think is the market is pricing in risk because that's what the market knows how to do. Price risk in energy and the risk of energy into broader markets. The problem is we're not in a risk market, we're in a disruption market. And the market, there's no participant in the market or probably not, maybe only a handful of who lived through a disruption. We've never had a disruption in decades, decades upon decades. When Russia invaded Ukraine, the market priced in risk and we went to $122 a barrel. Why the fear that we would lose 3 to 5 million barrels a day? I was running the energy strategy of the war at the time. Here we have 12 million barrels that are off the market per day. We have 5 million of jet fuel, gasoline, diesel per day. We have 20% of the world's LNG that is now out for months, Many, many months, probably not back till at least July. We have fertilizers, 35% of the fertilizer in the world. We have byproducts of gas, byproducts of NBRs which you need for all kinds of items that are all disrupted. Now take even further. There are airports in the world that have no jet fuel. Really? They're running out. They're grounding planes. There's a real shortage, not a risk of shortage, an actual shortage. Now what happens when you have a shortage?

[A]

Price go up.

[B]

The price go up a little bit, right. Or some. And then the people that can afford it the least stop buying. So if you're Bangladesh, you stop buying. If you're Sri Lanka, you announce that you're going to a four day workweek. That's already happened. There are a four day work week. Everybody must stay home to conserve energy. Philippines has announced today an emergency.

[A]

Yeah.

[B]

Malaysia emergency, Thailand emergency then. So the market is not even real. $100 for Brent or for $95 for WTI and 110. That's a fake price. That's a paper price of Oil. What do you mean? The physical price? You go to Oman and pick up a cargo, it doesn't cost you $107.

[A]

Oh, okay.

[B]

Earlier this week was 150.

[A]

Gotcha.

[B]

So you want to buy that why? Because the market, because the market doesn't understand what's happening outside the United States. Now gasoline's at $4 today on average. Diesel is well over $5. Diesel matters more to our economy. What do you think? And by the way, diesel In California is $7. You can say, okay, California, but guess what? The port of California is where all our, most of the goods that come into the United States go there. And then what do they do? They go on a ship, on a truck. That truck's buying diesel in California and then they're driving to New York and to Houston and to wherever else. So the market is complacent because this is the absolute worst energy disruption the world has ever seen. That's not hyperbole. Yeah, that is a factual statement.

[A]

I mean the street of Hormuz has never been closed, ever. And now it's been closed for going on four weeks now. But do you think that like the.

[B]

And will be for a few more weeks?

[A]

Right. That's the other thing. We don't really see an end in sight, at least not in the short term.

[B]

But the market does, Zaid, the market thinks it's, it's about to end.

[A]

So are you talking about because like the, the futures prices for like oil in November and December are trading, you know, no means and 80.

[B]

Because the market's saying, well, Donald Trump said it's going to end in a couple of days. So on Monday he said it was going to end on Friday, right? He said I give five day extension, we're going to reach a deal by Friday. All week. We'll reach a deal, reach a deal today. It's like actually original on April 6th. So he's constantly, he's drip dripping to the market. It's. And write all kinds of statements. We're almost finished, it's nearly complete. In fact, we actually already won. And that is, that's all. Those statements are not war assessments. Those are market management. Nobody in the market wants to get short, get caught short when quote unquote, the President tacos on the war.

[A]

Well, we saw what happened on Monday, right? Yeah, we saw what happened on Monday. Monday morning before the market opens, we get the tweet, five day pause, markets go up. But it's given all that back now and I feel like that's what's I think like the sentiment is starting to turn now. Yesterday we heard about the extension of the delays on attacks on energy infrastructure in Iran. The market still dropped. Oil went up today. As we record this on Friday, markets are down again. Oh my God, like deep in the red again today. Do you feel like that now the market is starting to accurately price in the, the potential of a prolonged conflict, a prolonged closure of the straight of Hormuz. I mean, treasury yields are also rising, you know, and so is the market finally waking up a little bit.

[B]

Not enough.

[A]

Okay.

[B]

And look, somebody would say to me, you can say to me almost, look, what do you. Why are you cheering? That they should. Market should go down or that oil price should go up. That's bad. It's good that they're not going up, the oil prices. Here's my concern. At first I didn't say anything because I think, yeah, I don't want Americans to suffer and I want to give. The United States should win, right? Whether you like the war, you don't like the war, America should always win. But here's the problem. When you don't read the signs, especially in physical markets like oil, gas, gasoline, diesel, etc. And you cheerlead because you want the party to keep going, at some point, the physical reality and the wishful thinking clash. And then when they clash, you get a crash. Because now, oh shit, I'm behind. Now I got a short. I gotta get out of my long positions. I gotta crash everything. That's what happens in markets, that's why they crash. If people read the signs before crashes, we wouldn't have crashes, we'd have decline. So I'd rather people see the market for what it is and decline a bit and have oil price go up a little bit so that policymakers can make accurate decisions based on real events. Here's our irony. In the market right now, the market thinks that the President's going to get out of this war asap. So they don't want to get caught in a short position. So the market doesn't go out so

[A]

much because we all got burned back in April with, with the tariff stuff, right?

[B]

Like Taco Liberation Day. Right, Right.

[A]

Liberation Day.

[B]

Right, Liberation Day. So I don't want to get stuck with Liberation Day shorts, right, and lose all my money. So what happens? The market says he's going to get out, so I'm going to be cautious. The President says I don't need to get out of the war because the market's not down that much. And the market's not down that much because the President's about to tackle, but he's not tackling because the market's not down. So it's this cycle. The President yesterday said, I thought oil prices would go up higher. I thought the market would go down steeper. He's right. The market's wrong. If the Secretary of Treasury says oil markets are well supplied, come on, we all know they're not well supplied. I don't blame him. I was in a position going out from the White House to the press and trying to cheerlead the market. I've been there. I've done exactly what Scott Bessen is doing.

[A]

But I'm actually curious to like, so when you guys are making policy decisions and deciding like geopolitical strategy at the White House, I'm sure the markets play an important role in that. Right? Is that like the top. Does that really dictate what you guys do and what the, what the moves are moving forward based on what the market is doing?

[B]

Right.

[A]

Like that probably plays a pretty big role.

[B]

It's an input. It's a very important input. Right. Because it's threshold of pain. You can take your people. You expect my citizen to be willing to pay a certain price, but there are thresholds. And now that if I see that it's going in a certain direction, if prices today are 120, I'm probably advising the President differently than they are. 95. It doesn't mean, oh my God, Mr. President, it's 120. Get out of the war. It doesn't work that way. 120. I said the President, let's plan the next seven days. How do we. How do we see an end? Maybe the goals that I wanted at the beginning I'm not going to achieve. But let's see. Maybe there's sort of 10% below that or 25% below that goal. Maybe I can address different goals. But if I go from 95 and suddenly overnight I'm at 120 because the market went crazy, right. Some tomorrow they hit a Saudi production site, markets will go nuts more than they would have two weeks ago. Because now the disruption went from 12 million to 20 million. Oh, shit, this is getting worse. And that's out of my control. So when it goes up slowly, 95, 100, 105, 110. Right. I can now say I can plan. What I can't plan is massive moves from one day to the next. So sometimes you cheerlead the market, you talk down the market. I've done that plenty. And Then it's. But then it catches up with you and they, in this case, unlike in Russia, Ukraine, Russia, Ukraine, we planned for an energy market hit. We planned for it for weeks. So you asked me before, six months before the war, if you told somebody we're going to go to war straight over closed. Yeah. The question you should ask is if two months before, one month before I know the straight over was going to close, what do I do to prepare for it? And there are things you could have done that they did not do and they're paying for the price for that now. We could have mitigated at least 50% of this.

[A]

I mean, can you walk through some of those things? Like what are some of those things that could have been done? Because you're still dealing with a significant amount of what, 12 million barrels of oil a day that are being blocked off. What else can you do?

[B]

Well, before the war starts, I assume I'm going to war. I assume straits are going to be closed. I call every producer in the Gulf, Iraq, Saudi, Qatar, uae, Kuwait, and I tell them guys, quietly, classified basis, there's going to be a war. The likelihood of the straits closing is not insignificant. It is high. You have storages in other countries in end use countries in Singapore, in China, in Japan, Korea, in Europe. Fill them, raise your production quietly. Don't announce a production increase, don't affect the markets, just fill all your storages everywhere around the world. Fill your tankers and move them outside of Hormuz.

[A]

Gotcha. Now that could have been a buffer to some of the disruption that we're feeling right now.

[B]

Huge buffer. Then I tell all my, all my allies, make sure your airports and whatever product storage you have of jet fuel, make sure it's full. We did this. We knew for certain that Putin was going to invade Ukraine. We had the Emir of Qatar in the Oval Office and we talked to him about changing and waiving contract obligations, requirements. You know the LNG has a, in the contract, Qatar Energy has, it says it's called a destination clause. If I sell it, if Amos sells Zayden a tanker, you can't resell it.

[A]

Gotcha. Okay.

[B]

We had them waive it so that we can do a massive surge of LNG to Europe to fill up all the storage and we took it from 65% to 100, near 100.

[A]

Gotcha.

[B]

Gave us a buffer. There are all kinds of things you can do, but for some reason people thought that it would not be closed.

[A]

I think the other key thing when it comes to this case versus like the Liberation Day stuff is like Trump could have back. Trump was able to backtrack because it was like a self inflicted, self inflicted wound, right? Like he, he just signed another executive order and paused the tariffs. In this case, there's multiple parties and now the Iranians know they have so much leverage when it comes to the control of the Strait of Hormuz. And they can, they can exert that leverage whenever they can, with or without the US's involvement. Right. So that makes the situation a lot more trickier in order to tackle. You can't even taco because there's multiple parties here.

[B]

You're right. But the first two weeks, you could have. So straights don't close the first week, they close towards the second week. Second in this, in the first two weeks, you could say I hit you again because after June you didn't get the message, right? In June we attacked the nuclear. I'm staying in the area. I've taken out your leader. I've taken out the head of the irgc, I've taken out the head of the military, I've taken out many of your political and military leaders. I've degraded you. I'm going to. And I have full air superiority. I've downed many of your ships and your planes. So I'm staying in the area. If you don't get the message again, we'll come back again and hit you. But I'm going to stop for now and declare victory. Right. This wasn't a war, this was an operation, or in Trump terms, excursion. You could have done that. Now you kind of went in too deep. Now it's a problem. Ending it is a lot more complicated. I don't worry so much about the multiple parties. If Donald Trump decides he wants to end something, he will tell the Israelis it's over and they will stop. And I think if he tells the Iranians, I'm done, you need to stop. They will open the straits.

[A]

Gotcha. So let's go there. Let's assume best case scenario, let's say within the next two weeks, maybe even sooner, the straits do get open, everything goes back to relatively normal. But like you mentioned earlier, there's been damages to energy infrastructure across the region. I mean, LNG facilities in Qatar have been hit. Facilities in UAE, in, in Saudi, they've all been hit. So we're still looking at a disruption to supply, especially with lng. So do you think that puts a floor on the oil prices moving forward just because it's going to take months, sometimes even years? I think I saw the Qatari say that it might take until next year for some of their facilities to come back on fully. So does that put a floor on energy prices then because of the disruption?

[B]

So I think we're going to have. When we reopen, right, The Straits reopen, the first thing that will happen is a glut. Tons of oil coming off onto the market. Why? Because when the Straits closed, all the producers, they didn't stop producing. They start. They didn't know how long this would last, so they filled their storages, then they fill every tanker they have. And when they have nowhere to put the oil anymore, they start cutting the production. Right, Right. Because when you cut production, it's harder to bring it back. Right. Takes hours to take it down. Takes days, weeks and months to bring it back up. So you'll have all this oil and diesel and jet fuel that's sitting there ready to go and so you'll have this massive wave and then it'll decline, it'll matriculate into the economy and then it'll take some time to bring everything else back. So when you shut in all the offshore production like Saudi and UAE and others have done Kuwait, that'll take some time. The LNG facility for natural gas, that takes two months to bring back, but 20% of it's not going to come back. Not for one year, but for three years, maybe five years. Wow. Because that. You got to rebuild that train. So that's going to take a while. So we're going to have a mixed. Your price will come down, but they're not going to go back to 56 where they were before the war.

[A]

Gotcha. I think that's what a lot of people are wondering is like, are we going to get back to pre war level prices if it's over?

[B]

Zay. Pre war needs to be considered. January, because the market started pricing in what I said before, they priced in risk. When the President said help is on the way to the protesters and people start talking. Bibi wants to go to war. Trump wants to go to war. We started talking about armadas and so on. Price was 60 in January, early January. Price is 60. Yeah, don't think about pre war. That, that was supply demand. On a supply demand basis, the world should be at 55, 50 maybe.

[A]

Okay, okay.

[B]

But based on geopolitics, we're at 110. Yeah, we'll come down, but we're not going back down to 56 this year.

[A]

This year. Okay, interesting. This is the last question I'll ask you because I know we're running, running close to time here. If we don't get the resolution in two weeks, does the market finally just have a panic attack one day and we're looking at 150, 160, 170. And you just have one of those crazy days that we talk about 10 years from now where oil just goes nuts. Or do you, or you think it's still going to be a trickle up, slow trickle up just because the market is just too terrified of a taco?

[B]

I think if it goes on more than. So I think a key date to think about is April 11th. Okay. Because that is the six weeks mark. And remember, Trump said four to six weeks. Right. If we're, we're getting towards that six weeks. And let's assume for the basis of your question that no extraordinary event has happened. Right. They didn't hit the largest Saudi production site or something like that.

[A]

Yeah.

[B]

I think at that point the market is like, all right, this is going to go on for a long time. And the, the damage to the market is not linear, it's exponential.

[A]

What do you mean by that?

[B]

So right now there are things in place to mitigate some of the damage. So I lose 12 million barrels, but I have, I unsanctioned the Russians. Right. 120, 130 million barrels. That's going to be gone by the end of next week.

[A]

Okay.

[B]

Countries have storage, right?

[A]

Right.

[B]

So they're usually storage.

[A]

Right, Right.

[B]

But even not the storage that we did, the big release, because that number is bullshit. But it's exaggerated. We do that. It's fake. Some of it's real. But you'll have jet fuel. Right. So when Philippines says we have gasoline and jet fuel for only 40 more days, but once you get to 25 days, you're not going to use it anymore. You're done. You're basically out. Right. So the market now is using the Russian fuel, they're using the, the stuff in storage, etc. But a lot of countries have very little storage. They're going to start running out.

[A]

Yeah.

[B]

And so I think the market's going to start in a couple of weeks from now. I think the market's going to start freaking out. And then you can see the 130, 140. Now people talk about 200. I don't believe in 200 because demand destruction will happen very fast. People will stop driving.

[A]

Yeah.

[B]

Nobody's going on vacation this summer if this war is going on, I promise you that. Because nobody's going to fly your tickets. You want to fly from Kentucky to Miami. That's going to cost you fifteen hundred dollars. The flight.

[A]

Yeah.

[B]

You.

[A]

Yeah, it's, it's so people. Vacation tickets and it's, it's already brutal right now. I should have booked in brutal four weeks ago.

[B]

Yeah, brutal. You want to go on a cruise? You know what shipping, fuel costs right now. So. So that's where it's starting. So you'll have demand destruction. So oil prices go up, up, up, up, and then people stop using the product. So they start going up a little less aggressively because there's less demand. So the market takes care of itself that way.

[A]

But, but still, it's, it's going to be something to watch. April 11th. I'll mark that in my calendar. Almost. This was a. This was a fantastic conversation. I appreciate your time today. And you're the man. Right now everyone's looking for your time, so I appreciate you making some time for us and hopefully we'll have you back on in two to three weeks and we can have a more relaxed conversation, a little bit less tense. And then you can tell me more about the, the emergency release stuff because I'm actually really curious to know why those numbers are and kind of how that works. But we'll save that for the next time.

[B]

Okay? All right. Great to be with you, man.

[A]

I appreciate Amos. Well, all right, guys. Hope you enjoyed that conversation with Amos Hochstein. You know, my favorite part of that conversation was getting a look at how international negotiations are actually done. I've always wondered what it really meant when you hear that back channel conversations are happening. And now we kind of know. I also thought his perspective on oil markets was really interesting. You know, I've personally felt that the market has been underpricing the risk when it comes to this trade of Hormuz. And after talking to Amos, I'm paying even closer attention to what's going on moving forward. Let me know what you guys thought about the conversation and how you feel about the oil markets. Drop your thoughts on Spotify and YouTube. And as always, thank you guys again for listening, watching and commenting. Shout out to Mike and Connor for all the work behind the scenes and we'll see you guys back here tomorrow.

[C]

Just a quick break. Here's a tip. Planning your next fishing trip. On TikTok, you'll find gear reviews, lake tips and local tricks. Short videos straight to the point. Download TikTok now.