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We
don't want to be cynical, but it does sometimes occur
that maybe we're talking about the wrong things.
We
mean that when a big news event happens and everyone in
the media is talking about one element of it, and we're
usually part of that herd, embarrassingly, you have to
ask yourself at a certain point,
could it be that the thing that we're all talking
about is not the most important thing...?
Could it be that we're talking about it or being led
into that conversation on purpose?
I
again not to be a conspiracy nut or anything, but it's
possible that happens. And here's a example ongoing. And
that's a straight of Hormuz.
We've done a bunch of different shows in the Straight of
Hormuz. Straight of Hormuz is obviously inherently
significant.
It's
the waterway now famously at the eastern end of the
Persian Gulf through which a lot of the world's energy
flows. Iran has the longest shoreline along that
straight.
We're all geography experts now. And so now we all know
that it's essential to keep that waterway open. And then
it curves around in the Red Sea along the coast of a
country called Yemen, which is controlled almost the
entire country by a group called the Houthis.
People are getting an ongoing education and all this.
And
and why is that meaningful? It's meaningful because you
can't get oil out of the richest oil producing region in
the world unless you have access through those waterways
straight up form into the into the Red Sea.
So
the ongoing conversation again including conversation we
participated in has been about how to open the straight
of formoose how to get that oil through. But if you
think about it is that really the most important
question that arises from the Iran war.
So a
waterway of course it is inherently important.
On
the other hand that's a problem that you can fix really
quickly. If you have a blocked waterway if one country
says you can't come through or we're going to blow up
your tankers.
Well, you could reach an accommodation with that country
and you could fix that in about 10 minutes if all sides
were willing to do it. What's harder to fix is the
destruction of energy infrastructure, pipelines,
wellheads, but more than anything else, refineries.
So,
a refinery is the plant is the factory where crude oil
pumped out of the ground is turned into products you can
actually use. And people may not have an appreciation
for how different crude oil is from the refined products
made from it.
So
from crude oil we get famously gasoline, jet fuel aka
kerosene. We get all the way down to asphalt. We get
diesel fuel and we also get a lot of the precursor
elements for fertilizer.
So
none of those things come directly out of the ground.
They
are made from this commodity called crude oil... |
