The Peter Zeihan Podcast Series - The Reality of the Global Energy Situation || Peter Zeihan

Episode Date: June 25, 2026

We are still in the midst of a supply disruption of historical magnitude that will not reverse when the bullets stop. Join the Patreon here: https://www.patreon.com/PeterZeihan

Hey all, Peter Zine here. Come to you from the Pike National Forest on the side of Silverheels. Today we're taking a question from the Patreon crowd. Specifically, there's a lot of talk out there that there's been some demand destruction and that crude is still getting out of the Persian Gulf. So what are the brackets for when the energy crisis hits? The default, assuming 13 million barrels a day shortage, which is pretty much concerned.

I mean, we're seeing flows in. out of reserves being affected pretty badly. We're now at the one to five week period. That's when a lot of refineries and storage hubs reach minimum operating capacity, and that's when you should expect to see a significant increase in prices that is going to be pretty horrible everywhere. The opposite side is we now have reports coming out of various channels suggesting that some crude is leaking out of places like Kuwait and Iraq and Saudi. Arabia through the Persian Gulf through the Strait of Hormuz. The idea is that tankers are loading up, turning off their transponders, and then sprinting for the exit to the Gulf and the

Iranians haven't noticed. The most aggressive estimates for those numbers that I've seen come out to about 1.5 million barrels a day. Similarly, demand destruction and fuel switching in places like India and China is real. And the most aggressive estimate I've seen for that is 1.5 million barrels a day, which could potentially reduce the volume of crude that we've lost from 13 million barrels a day to net 10. Demand destruction is bad for a number of reasons, but when prices go up, demand eventually is destroyed, and the market gets back to some sort of balance, and this would help with that. So let's assume for the moment that those two extremes, 1.5 million barrels a day each for flows that haven't been accounted for and demand destruction are true. So 3 million barrels per

total. It does move the needle. Keep in mind that you're to be seeing this on the 110th day that the Persian Gulf has been shut down, which means according to the more readily accepted numbers, we've now had 1.3 billion barrels of crude that have never been produced and delivered. But if the 3 million barrel per day difference number is true, and we get to what, 300, 330 million barrels that don't matter, which shrinks us from 1.3 billion in shortage to just 1 billion in shortage. It's still, by far, the biggest energy shock the human race has ever experienced, but that extra 300 million barrels would matter,

and that would buy some time before everything gets to minimum operating levels. probably another one to maybe even two months, which is not nothing. But keep in mind that these numbers go against what we're seeing in commercial and government inventories, which have been drawn down extraordinarily fast. And even if, bottom line, even if the Persian Gulf reopens tomorrow for business, it's still going to be years before output is returned to what it was before. These fields cannot be turned on and off quickly. That's one of the things that people forget about OPEC when they're screaming at them to open up the pipes.

Only two countries in OPEC, Saudi Arabia and the United Arab Emirates, the Emirates is no longer in OPEC, have ever maintained fields with the intention of turning them on and off. And that takes three to six months. For everyone else, you're talking over a year. And for some countries like Iraq, probably closer to five. So we are, even in the best case scenario, still in a pretty shitty situation that we're all going to feel. this summer.