TBPN - FULL INTERVIEW: Alex Epstein on The Oil Market’s Biggest Geopolitical Threat

Episode Date: March 10, 2026

This is our full interview with Alex Epstein, recorded live on TBPN.We discuss how the Iran conflict and the threat to the Strait of Hormuz could send shockwaves through global oil markets, unpack why roughly 20% of the world’s oil flows through a single chokepoint with no real replacement routes, and debate what governments can actually do in a crisis from strategic petroleum reserves and Saudi spare capacity to scrapping the Jones Act and deepening energy ties with Canada to stabilize the global economy.TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to podcast platforms immediately after. Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has recently featured Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. Sign up for TBPN’s daily newsletter at TBPN.comTBPN.com is made possible by:Ramp - https://Ramp.comAppLovin - https://axon.aiCisco - https://www.cisco.comCognition - https://cognition.aiConsole - https://console.comCrowdStrike - https://crowdstrike.comElevenLabs - https://elevenlabs.ioFigma - https://figma.comFin - https://fin.aiGemini - https://gemini.google.comGraphite - https://graphite.comGusto - https://gusto.com/tbpnKalshi - https://kalshi.comLabelbox - https://labelbox.comLambda - https://lambda.aiLinear - https://linear.appMongoDB - https://mongodb.comNYSE - https://nyse.comOkta - https://www.okta.comPhantom - https://phantom.com/cashPlaid - https://plaid.comPublic - https://public.comRailway - https://railway.comRamp - https://ramp.comRestream - https://restream.ioSentry - https://sentry.ioShopify - https://shopify.comTurbopuffer - https://turbopuffer.comVanta - https://vanta.comVibe - https://vibe.coFollow TBPN:https://TBPN.comhttps://x.com/tbpnhttps://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235https://www.youtube.com/@TBPNLive

We have Alex Epstein. He's the author of Fossil Future live in the TVPN Ultrudem. Welcome to the show. Good to see you. Thank you so much for coming down on short notice. What are your what are your what are your text been like the last 48 hours? Is it over? Because you're because John and I were thinking who's our oil guy? We had one. We had one. Yeah, I'm local too. Yeah, if I'm in town it's great. I was like coming in person versus Thank you so much so much.

So much. I appreciate it. I mean, there's so much in energy, but we can talk about this. I'm happy to just let you lead the conversation however you think it should go. What's going on? What are, what, how should we even be thinking about oil prices right now, the impact of the war in Iran? How do we, how should we be processing this news?

Okay. So we did this, so there's a million things to comment on, so I'm going to try to segment what I comment on, but we did get involved militarily and Iran, which I would just say in my non-area of expertise, in general that is a good idea. I think it's a better idea to have Congress involved if you can get them involved. And I think it's a good idea to have a lot of expertise on international oil markets being brought to bear when you do this. And I think this administration does a lot of good stuff on energy, but I think it's pretty

clear at this point that there was not maximum expertise brought in on this. So the standard issue when you're talking. And like indicators there would be like the strategic petroleum reserve hadn't been refilled. I mean, we can talk about that. So let's make sure to get back to that one. But the main thing is just, you know, rough numbers, you know, straight of Hormuz, which Iran has control over, is 20% of the world's oil production is flowing through that every day. And so whether you're looking backward or looking forward, there is no replacement whatsoever for open. that straight and keeping it open.

And one of the things we've heard from different people is, oh, we have a lot of options on the table. Like, there's a lot of things that we can do. There are definite things that you can do, but none of them is 20 million, right? So it's just, I mean, that's more than US oil production, just flowing through that one place. So yeah, we can talk about the other things,

but I think the first thing people need to recognize is if you do not get that thing open, then you have dramatically higher oil prices. And then the other thing to get is, Oil prices really matter. Straight from use. On the straight from use, dumb question. Can't you just go around?

I mean, you can try to some extent, but there's a reason why 20 million a day are being routed through here. Because it actually comes out of there as well, right? Yeah, there's just, I mean, all of these things are very, very optimized. One of the thing about just understanding the energy industry is like things are just

very optimized in terms of where the infrastructure is. You're doing all of these things. So it's, there are other, and we'll talk about this, I mean, there are certain pipelines, you can pipe more oil through their alternate routes, but we're talking about the millions a day maybe. Most of our other options are sort of in the one to two million barrels a day.

And just so people know barrels, 42 gallons, so you're talking about almost 100 million gallons a day for the stuff. But yeah, so you don't have a lot of great options. And I think that's very important for, I'm going to give some options, but the number one option is keep that thing open. And there are basically two ways to do that. One is you just win the war. if you want to call it that a lot more quickly.

Like if you get some form of surrender and you have friendly people controlling it, then guess what? It can open. That's one thing. So I'm not an expert on how to do that, but schematically, doing that is very effective. The other thing, which is a little bit-

But game theory for Iran is they actually benefit from global markets being in turmoil because it gives them some leverage over any type of negotiation. I mean, this is the biggest damage that they can do. I mean, clearly we've seen they're not going to do, you're not going to send missiles to Israel and get rid of Israel, let alone do anything to the U.S. Sure. But they have this incredible control of one of the centers of the world economy. And they have a bunch of stuff going on there. So let's talk about that. So option one is you get a surrender and they don't use all of their options. But then let's talk about their options. So they have mines in this thing. So they can blow up mines. they have missiles, maybe the worst thing they have, and this is a change in recent years.

And I, you've had Palmer on here and Ethan on here. Like, the drone thing is just a total game changer because you can have a small vehicle. You can launch one of these, you know, shaw heads out of the back of a truck. They can go really far. And that's a lot harder to deal with than a fixed installation. Yeah, they have something like 500 miles of range on a typical. Yeah, depending on the, yeah, right. So a truck drives up to a beach, drone launches, as soon as it finds that cargo tank.

that has a bunch of oil on it, it hits it. Yeah, and then there's the, you're worried about that. Sure, so you're not going to go. As you're going through. So you have to think about those are the kinds of threats you face, so how do you deal with that? I mean, basically you need the U.S. to lead some sort of convoy where people have sufficient security and economic assurances that'll go through.

So what's involved in that? Well, one thing is, if possible, you want to get allies involved. And it's even possible you get unconventional allies like China, who has, well, they depend, on this. Now they have a bunch of, unlike us, you want to go back to SPR, they've been filling up their reserves. Sure.

They have more reserves relative to their imports than we do relative to ours. If you think about ours, we have about 400 in the SPR and we can release about 4 million a day. So we don't have as much, but still, they really care about this and a protracted thing is bad. So but for sure, Japan, South Korea, India. So one thing is just at a high level if you're doing this convoy. can we get these countries that are aligned economically, maybe China, but definitely these others, can we get them involved? Because then they have military presence there. That's an additional threat

to Iran if they attack one of their ships. But that's a macro thing, is just can you do this alone or can you do it with allies? I think ideally you would do it with allies. Then there's a question of what you do about these various things. And I think the biggest, I mean, the other macro thing you can do is just in some way credibly threaten Iran and say, hey, if you, and I can't give the details of how to do it, but if you attack us, if you attack in the Strait of Hormuz,

it's going to be very, very bad for you. So just at a high level, can you make that threat so they understand this is going to be very, very, no, we've wiped out a couple layers of leadership, so they might be taking these things seriously. After that, I think the biggest thing from what I've heard from military experts is just these drones.

Like, what do you do about these drones? How do you give any kinds of assurances? And as far as I can tell, we don't have any one perfect solution, but you can do a certain amount of stuff from the air. You can do a certain amount of stuff from the ground, although it's very, very expensive. And then most cost-effective, where you can do it is you can take out certain stockpiles and facilities with the proviso that these things are decentralized.

And, of course, I have no specific knowledge about where they are. But in theory, if there's the suicide drone, the Shahid, that's there's a factory and you take out that factor, you have reduced that. Right, so that's going to be it. And you know, I know you guys had on Ethan Thornton, I'm friends with, and you know, he talks about this a lot, is just this cost asymmetry issue,

is you just want to be doing things, even if you're way wealthier, you do not want to be spending $3 million to take out $30,000. Which might be what happening with a Patriot missile battery. This, this, this, yeah, that's the kind of thing that happened. So you need a combination of those kinds of things. And then the other thing, so that's all the security stuff.

So you get the allies involved, you take these actions, specifically against drones, I think the, what was I going to say about the other thing you can do, I'm just making sure. They're still just. Well, like the other big. Oh, the insurance. Okay, insurance. Yeah, the insurance.

So, and this has been floated by the president, and it's a reasonable idea. But my understanding is the insurance vehicle we have, the development corporation, does not have enough funding. So you might need to go to Congress. But basically, you want to be able to say, hey, you, it's, we're going to lead this as the United States. We're going to lead it with allies. If Iran does anything, it's big trouble for them. And we can counter their specific attacks.

And if something goes wrong, you're insured. You're trying to create that confidence to get enough people going through, and then you get a certain amount of stability, and then you start to get closer to your 20 million barrels a day. Either that or you just defeat them really quickly or both. So the other factor is just the loss of production, disruption to production, plants shutting down, plants being damages, damaged. How does that factor in?

Do those, do those, do refineries get brought back? And I'm talking about an allied, allied country. You mean just the trend over time or what? Yeah, generally, I mean, just seeing the videos coming out, you've seen places, I think, like Qatar, Kuwait, places. Like, yeah, basically just saying like, yeah, we're going to pause production because we don't even have a place to store this and or they're suffering damages.

And it doesn't make sense to keep, you know, refineries online. This is all, but this is all just downstream of do you have the route open? Yeah, yeah. Got it. Like if you have the root open, then you're good. It solves everything. If you don't, the way to think of the other things, so we do have some other interesting options. We have to think of them as these are temporary stop gaps. None, like if anyone says, I mean, you hear some crazy things. People are like, oh, Venezuela. And we talked about this last you. I was going to ask you. Venezuela is less than a million. It's just, I mean, it's beyond crazy. It's just impossible. It's not like Venezuela has the ability to just increase their

production by any significant amount in the near future. I mean, we're talking about companies considering going in harm's way to get some incremental boost. So Venezuela is essentially useless. So best case scenario in the next year, Venezuela goes from under a million to two million? No, I mean, two million would be insane. I mean, if we made it our entire goal in life, I don't know, but why would you for that? Venezuela was it like three million? Yeah, yeah, some years ago, yeah. Yeah, yeah. Right, but there's so many. But there's a lot there. It's not going to It's just so, yeah, so Venezuela I would not even, that's just in the category of, it's not even a bad idea, it's just not an idea.

Sure. There's nothing, there's nothing there. No, no, that's right. So the bad, the bad ideas, by the way, are the worst idea imaginable is ban oil exports from the United States, which I have heard floated in conversation. Seems somewhat reasonable. I want the oil. Yeah, of course, because we have oil, so we don't want to sell. So, I mean, so many different things, but one obvious one, not obvious one, but it's obvious if you know how these things work.

is the refiners in the U.S. do not match up well to the oil produced in the United States. The refineries in the United States are based on heavier crude. Like crude is rated in terms of weight and sourness. And so our refineries are mostly for heavier crude. It's actually one reason why Venezuela has some appeal. Canada has a lot of appeal. Because they have heavier crude. Yeah, and we're going to talk about Canada.

We're good at refining it. We're good at refining it. But we produce a lighter cruise here. Yes, because the Shell Revolution was just this dramatic shift very quickly in oil. production. So our refineries are not primarily equipped. That's why when we ended the crude export oil ban, I forget it was 2014 or something like that, it was just this huge unlock because it allows the global market. It allows us to produce for a global market. You can't look at American oil production as a monolith. Yeah, it's not fungible. We import heavy crude and export light crude.

Is that roughly correct? That's roughly correct. Yeah, yeah. So that's one thing is it's just insane to do that. But in general, think about it. What is the value of higher prices? Is it stimulates production. We're going to talk about all these different ways where we want to unlock oil. So you want to tell American oil producers, hey, we're going to actually totally screw you over. It's actually going to be worse for you maybe than it was before because you don't even have a market. So you're going to strand all this oil. So that's terrible. There's also this financial manipulation idea, which has been floated. Everything is terrible. Hey, let's manipulate the financial markets basically in a way that you're selling future short on a certain time period and then you're buying

them. What you're trying to do is lower than near-term price. Oh, like Fed policy basically. Or treasury, yeah. A very American way to trust a real world problem. A lot of people that like that. The only solutions involve unlocking oil in one way or another. You do not want to screw up the markets so that people are less inclined to unlock oil, nor do you want to screw up the markets to destroy information.

So again, the main unlock is reopen that straight. There's no way around that. But then we can talk about other things. So one category is what you call spare or a market. emergency capacity. Okay. And this is, there's some uncertainty here, but it- Quickly, this is separate from the strategic reserve?

Yeah, yeah. So, well, emergency capacity is the strategic reserve. Oh, it is. So spare means you could be, you could pretty easily be producing more per day, but you're not because you're not happy with the price. And this is mainly Saudi Arabia is considered exhibit A in terms of amount of this. Now, there's a debate among experts about how much they have. But, you know, some people estimate they have one, two, three million barrels a day of spare.

capacity, they could ramp up on some kind of frame. And do they know how much capacity they have and they're just not sharing it? Or does no one know? I mean, that's always been the story. That's been the story of the Gulf, right? They're not going to, if they just flooded the market with every single barrel that they could possibly produce, they would be getting a worse, much worse price. Yeah, and there's this cartel arrangement that does.

I mean, in a sense, everyone has this on different timescales. You think about US shale producers. Sure. If prices were sustained at $100, guess what? There's a whole bunch of shale deposits. that they could produce at $75 a barrel and make a fortune on that they're not going to do four weeks ago when it was around $60 a barrel. But in terms of the thing about the Saudi oil is it's produced at a much lower cost. So this is them saying, hey, we have some of this on the table,

and then the question is you need to be able to produce it and then you need to be able to transport it. So you have estimates around maybe you could get one to two million barrels a day. So that's one of them. In terms of emergency, if you look around the world, you don't have a lot of immediate spare capacity besides that. So we have what's called emergency capacity or strategic petroleum reserve. You know, it's already mentioned that we didn't fill up our strategic petroleum reserve.

I think this is unequivocally a mistake. I mean, if you look at, the whole thing of the strategic petroleum reserve is you want it for when you need it, and the best possible time to fill it up is when prices are low. And is that physically a place with a bunch of barrels that we store?

There's a bunch of parts. It's like the Fort Knox of oil? Well, there's multiple different places. But you can think of it roughly that way. We basically cash the physical oil in America or somewhere we own it or can access it. And it's sitting there going unused until we're ready. Yeah. Now there's issues of Biden.

Biden definitely misused it. So they used it to basically have lower gasoline prices during midterm elections. Even though parenthetically their entire policy goal was get rid of fossil fuels, which means you want the price to go up so people can't afford it. There's a very cynical kind of move. They did it in a way that degrade. rated the facilities. So let's say we're at about four million barrels a day. We can get out of that thing. We have 400 million in there. We should have over 700 million. We could have easily filled it up.

I mean, it was a perfect time when you're talking about $50 barrel oil, 60 dollar barrel oil. Yeah. And can I do the basic arithmetic of four million a day, 400 million in the reserve, a hundred days of oil? But that's not actually, if we're talking about like relieving price pressure, you could you could trickle it out over a year and have one 20 or one quarter of the effect. But just think about $100 million a day, 100 million barrels a day is roughly the global market. Oh, okay, okay.

So, so 4 million is just, that's its maximum throughput capacity. Got it. It's kind of an analogy to batteries. Sure, sure. So there's a certain amount, like with a battery, if you hear, there's a one gigawatt battery installation. That means that usually means there's one gigawatt

for four hours. Sure. But if you wanted to do half a gigawatt, then you could do eight hours, right? It's the same deal with this. Okay. But keep in mind, this is not. 100 days of U.S. oil demand. And by the way, for the refinery reasons, we can't just supply

at all with our SPR. It's just the maximum output is, but you know, four million barrels a day something more tight. That's one-fifth of what's flowing through the straight of Hormuz. So yeah, it's a thing. But yeah, you can think of, yeah, maybe we'd be willing to do one to two million barrels a day from ours. Now, interestingly, the International Energy Agency, we are part of the International Energy Agency Reserve Program. So we have about 400, but they have about 1.400 million, they have 1.4 billion. So we have allies around the world that can also release this oil. So maybe we could get one to two million from them.

Now, at least last I checked the news, they hadn't agreed to do this because they don't think it's an emergency. Sure. But that's what it's there for. So notice the pattern is. At what point would they think it's an emergency? I don't know. I mean, and we can put pressure on them.

I think some of these determinations have to be made in conjunction with the military determination. You can't make them in isolation. Because if you think about what's the military objective, how close are we to that, or how close are we at least to opening this up via high security and financially backed convoys, then you can think about the timetable here. If you think about, well, the straight of former is going to be closed

for five years, let's just get used to being poor. Black bill. No, I mean, this is, people don't get oil. Like, oil is, there's a reason why I focus a lot of my life on, oil. There is nothing more, there's no material in the world of energy that is more valuable than oil because oil is just so unique in terms of it has this very high energy density and portability. And there's nothing like, I mean, nuclear has higher energy. Yeah, yeah, it doesn't have the same portability.

We're going to be rich. We're going to have energy too cheap to meter in five years. I talked to a lot of nuclear founders. Well, look, I love nuclear as much anyway. They don't, they don't even have a portability solution though for the near future unless you're talking about aircraft carrier or an icebreaker or something like that. So I'm just saying the world runs on mobility and oil is ideal for mobility. So you're gonna go back. Oh, portability in the sense of like using nuclear to actually power trade and commerce and moving ships around. Yeah, yeah, I mean we even if you can power the grid, you will be poor

because you will not be able to trade. Yeah, trade is really important. Trade is trade and well and also it's within the country too. We don't have the nuclear trucks to move things around. Sure, sure. Yeah, so obviously you want super cheap electricity and you want super cheap transport fuel and And we want to see if we can electrify some of this stuff. If you can do it cost effectively. Yeah, there are some people working on like electric bulldozers, for example. It's very hard.

And by the way, guess what? You need a lot of oil to even get that whole supply chain started because you need the mine. Yep. So, bottom line, yes. I meant that thing about we can all be poor very seriously. Very seriously. So we have, if you look at the spare capacity, I think that's all of them. So we have the rest of the IEA.

We have ours. And then to my knowledge, we have Saudi, slash UAE, them using spare capacity and then piping it where they can. So maybe combined, we're talking about $6 million a day if you use all of those. I mean, somebody could imagine 10 million a day. And all of these have time, particularly the emergency reserve things. These all, like at least the Saudi one is you're sort of, you have a deposit, a big deposit. Here, it's just you have a small reserve. So you can't do this forever. And of course, there's a risk of if you deplete the SPR more. What if you really, really?

needed in the future. And then there's a bunch of nearer-term stuff that you can do. And some of which I like, just because it could be done anyway. So number one to piss a whole bunch of people off is let's stop using this Jones Act. Do you know what this Jones Act thing is? I've heard of it, but explain. So the Jones Act is a set of restrictions that say that you can only transport things among ports in the United States if you have everything is basically American.

So it's owned by an American, it's run. I don't know, all the, it is all this. The American ship, American crew. Yes, yes. So it leads to all these crazy, crazy things. Like we end up importing things from, like instead of importing it from one part of the country to another, you end up importing it from some really far away place. It leads to that kind of thing.

But in this case in particular, as Californians, we should all recognize this. We don't have oil being piped into California. So we want very efficient maritime transportation. And if you suspend the Jones Act, then you can get more. efficient transportation, which means we can at least have lower prices here, and we can have less of a price shock here. But in general, I want people to get used to having no Jones Act because I want there to be no Jones Act. So that's a good thing to do. My favorite idea here is... And I imagine there's a bunch of powerful lobbies that will fight and kill for the Jones Act because there's an

entire industry built around... Yeah, it's the idea that we can only have a good shipbuilding industry, I don't know what people think is happening with our shipping, like our shipbuilding industry is not going as well as other people's. It didn't exactly work. Yeah, I mean, it worked to protect certain people's. I'm just saying if you look at American shipbuilding, it's certainly allowed us to be competitive on a global state. The shipbuilders would say we're early, but I take your point. Early, but you've seen, but I'm just saying like how many decades of declines do you need. I think, we're early.

We're still early. It's like a smiling curve, like churn. It goes down and then it goes back up. So that's the bulk case. That's the, all right, well, it's definitely not going to help us in your term. So here's the most interesting thing, which I is a pet issue of mine. Because we're, like this administration, I should say, does a lot of good stuff on energy. I say that I, you know, I'm in a fortunate position where I get a lot of people ask for advice and stuff like that.

I feel like one of my jobs is to tell people things they're not doing. A lot of things they'll just do right on their own. But Canada is not one of those things right now. We are just absolutely sleeping on Canada as an opportunity. So Canada has no people and infinite resources and is really friendly. So you did they have these oil sands, you know what these things are?

Yeah, you know, explain. So they're just like these deposits of oil. It's like nature basically committed an oil spill. Yeah. Is the way to think of it. Okay. So there's all these oil sands. For years they were not very useful.

They weren't viable because it's not just, you drill down, black gold comes up. It's like buried in the sands. There are different kinds of things. You can mine it out directly, or you can do what's called in situ, which is you heat it up underground. Oh, and it liquefies. In any case, they have just this unbelievable oil seep. They have way more oil deposits than we do, way more oil reserves, but they have on the order of a third of the production.

And in part, because they have absolutely terrible policies, which are their fault. But in part, we have had terrible policies, including getting rid of the Keystone XL pipeline and this kind of thing. So, but if you just think of Canada, it's just we should be so, they have water, I mean, they get no people, one tenth of the population, infinite raw materials. They got everything. They got timber. They got natural gas. They got oil. Like, and we're talking about Venezuela. They're a friendly country, right? They got smart people there. They haven't been driven out of the country because they're afraid of getting killed by Chavez or Maduro or whatever. So this is an opportunity to say, hey, Canada, let's work, let's have a task force. You got. are at a low in terms of, we don't have pipelines, but we can do rail. At least we can do rail, maybe trucks, but at least rail. Rail transports from Canada are really low right now. So let's have an initiative where maybe you bring a couple hundred thousand, depending on your expectations, maybe we can add a couple hundred thousand barrels a day. So that's one that excites me because I want to be, like the US Canada superpower thing is this huge opportunity

that we're sleeping on because of the idea of oh, we should only be doing it in quote America. This is just, by the way, unbelievable, I think they have the best uranium in the world. Yeah. It's a maple syrup up there. Yeah, I don't have a Canadian personality, but I love that place. No, strategically. It makes a ton of sense. And they're very friendly.

Yes. They're very friendly. Maybe we should be friendlier. Yes. You know, no, we should, and we have trade agreements coming up. Yes, yes. The other thing is we have some, you know, we can increase capacity here, as I mentioned, depending on prices going up.

Yeah. So there's that, but that might be a couple hundred thousand dollars a day. But so high level open the straight of Hormuz. That's the only thing that really works. Then you can talk about Saudi midi spare capacity, our emergency capacity, and IEA emergency capacity. And then below that you have Canada Jones Act and US production. That's a really, really thorough list. Thank you.

I appreciate that. Anything else, Jordy? What are you going to be paying attention to you most closely? Do you watch the price chart? Is that important to you? Well, it's important. I mean, I'm, it's weird, I work with, I run like a kind of a network of energy executives, but I'm focused on the policy side of things.

Sure. So I'm often laughably out of touch. I mean, I know in general within $10 usually what it is. Yeah. But as a policy, I don't, I don't invest in energy. You're looking at longer term five years. But also like I'm deliberately avoiding exposure to the commercial part of it. Of course, of course.

Yeah, you want to be independent. Yeah, I want to be independent. So, yeah, I'm not. But at the moment. Yes, I am looking at the prices. But I don't do predictions, but I'm just saying, I think there's a service right now and just laying out the options for people.

Because even in the government, I mean, not everyone has a lot of expertise in oil. And this is the kind of thing where, yeah, it's kind of why I think you texted me this morning. I mean, sometimes you need to know about oil today and sometimes you don't. But when you need to know, you really need to know. You really need to know.

Yeah. Well, it seems like whether you're in the business community or just, you know, humanitarian, everyone should be rooting for a swift and peaceful resolution. Yeah, do you have any insight as this might be totally out of your wheelhouse, but insight into how people running businesses that are most impacted by fluctuations in oil prices? Like, are they, have they been actively hedging over the last couple weeks? Are they doing, like, how do you run your business when your input costs can go up dramatically, potentially at a much higher rate than you can adjust your own prices.

I mean, just in general, these guys are sophisticated, I think, within the bounds of doing it. I don't think you can hedge indefinitely for this big a price kind of differential like somebody is going to say. I mean, but it's also, you think about there's on the consumer side, but on the production side is even more dramatic. If you just look at the margins of these guys, I mean, the oil industry is just fascinating. I mean, I just remember anecdotally when I came out with my first major book, The Moral Case for Fossil Fuels in 2014. Even I could see speaking engagements correlated to these prices because you had a big price crash around them. And then you think, wow, like this. Yeah, we don't need Alex.

Yeah, yeah, it might be nice to keep the troops motivated, but, you know, I'd probably rather be employed. That's well, yeah. But it's a hard, it's a hard business. And one of these things is you just, the people who survive have a very very important. strong constitution and they they can manage the risk very very well I was talking with a bunch of these these guys and anxious people we know in common and like some of the better ones some of the two of the young superstars in the industry they're just saying like like we love the chaos because we can

just no we can handle it like when the prices go down sure because that's you think about what they've been dealing with over the last year they've increased production prices have gone down and and you look that this administration is very focused, I would say too much focused on having prices go low. This is one of the variables here is although the administration I don't think was fully, was not fully prepared for this situation. In general, they are maniacal about prices going low. Like Trump in his mind has a very strong focus on $50 a barrel, which I think he feels like

that's always the perfect price for oil. Sure. And the people in oil industry say, wait a second, like we had inflation of everything else. Why does our one product have to stay at $50? And that's part of the appeal of Venezuela, rightly or wrongly, because it's not going to make a big difference soon. But it's like, how do we keep oil prices low? Low. But that's hard to be in that industry as a consumer, as a producer, rather, and it's hard as a consumer.

So they have financial instruments. But the main thing is you just, you need to just have the flexibility in your business, in your business model. And it's, oil is, again, it's the most valuable material in the world of energy, which is why. why everyone uses it, but is also why it's so inelastic and you have these price fluctuations. So you just need to come to terms with that or somebody needs to figure out something better. But it's really hard. And of course, policy-wise, we can have better policy to make it more stable, but it's still that thing where it's so valuable that guess what?

You get a little extra demand, a little less supply, price goes up a lot. It's different than other things which you can substitute for much more rapidly. You're out of a job when we build the Dyson sphere? Oh, man, I got, I'm working on this AI thought leader thing we talked about last time. So I got, I got plenty to do. We'll cross that bridge when we come to. I got plenty to do with my time. Thank you.

As long as we need energy, you'll be doing it. It's fine. All right, guys. Good to see you. Thank you so much for coming on the show.