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

Episode Date: March 29, 2026

Amos Hochstein, Managing Partner at TWG Global and former White House Sr. Advisor to President Biden, joins the show to break down the realities of global energy markets amid escalating geopolitical tensions. Drawing on firsthand experience in high-stakes diplomacy, including as a key negotiator in talks involving Hezbollah, he explains how backchannel negotiations actually work and why today’s market may be dangerously misreading the situation. He argues that what we’re seeing is “the worst energy disruption the world has ever seen.” The conversation dives into the gap between paper and physical oil prices, the impact of a prolonged Strait of Hormuz closure, and what policymakers could have done differently.

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 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 Hoxstein, welcome to the rundown. It's great to be here. 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? So 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 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 spend a lot of time on national security in my career. So it was also one of his negotiators in the Middle East.

I had negotiated the ceasefire with Chisbulla. and a number of the AI and tech collaborations with Saudi Arabia and UAE, as well as elsewhere around the world. I'm kind of, let's talk about the negotiations up because like you said, you've been in the room when it comes to negotiating 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 message is being forwarded.

I'm just really curious to see, like, how does, how does negotiations even work when it comes to sensitive topics like this? So it's really complicated because if you're doing regular negotiations, let's say, between, you know, 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, you know, Brett McGurke and I were in charge of negotiating a potential normalization agreement between Saudi Arabia and Israel. and 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.

That's, I'm not a mailbox. It's really shaping the conversation of understanding from both sides, what are there 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 Khizbullah, 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 a 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 that Jared Kushner or Steve Whitkoff are negotiating with the Iranians, they're not. Okay.

They're talking to the Umani's who are talking, and it's like two different rooms, and these guys are going between two rooms. sometimes there was a glass wall, we can see the Iranians. They can see us. Wow. Okay. See, that's the part that I wanted to understand because you see headlines like the U.S. is negotiating with Iran, whether it's 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. That's right. When President Trump said the other day, I delivered 15 points to the Iranians, then the Pakistanians said, we received the 15 points and we deliver them to Iranians, right? 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, and I'm negotiating, I want to know if the dude I just talked to, A, is, are they really delivering the message? If they are, are they, 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 tone. 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 is delivering the message most loyally versus trying to insert themselves into the process.

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 of 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 of Hormuz was going to be closed for a month, do you think, 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 an adequate response? Because someone who I followed the energy market is pretty closely, just having oil and gas background, I'm a little bit surprised by how, I don't know, underwhelming the response has been. The market is underpricing. The market. The market. is at a loss.

They don't know what they're doing. Honestly, I rarely say this about the market. But the market, 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-factor, 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, and 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. 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 three to five 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 until 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. 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? Price go up. 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 afford a day, work week that's already happened there at a four day work week everybody must stay home to conserve energy philippines has announced today an emergency yeah Malaysia emergency Thailand emergency then so the market is not even real a hundred dollars for brent or for ninety five dollars for wTI and 110 that's a fake price that's a paper price of oil What do you mean by that, though?

The physical price, if you go to Oman and pick up a cargo, it doesn't cost you $107. Oh, okay. Earlier this week, it was $150. Gotcha. So you want to buy that. Why is there a difference? 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 happened? And by the way, diesel in California is $7. You can say, okay, California. But guess what? The Port of California is where most of the goods that come into the United States go there. And 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. I mean, the Strait 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 narrative is... And we'll be for a few more weeks. Right. That's the other thing. We don't really see an end in sight, at least not in the short term. But the market does. Zaid, the market thinks it's about to end. So are you talking about because like the futures prices for like oil in November and December are trading, you know, in the 70s and 80? 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 a five-day extension.

We're going to reach a deal by Friday all week. We'll reach a deal, we'll reach a deal. Today it's like actually, we'll reach a deal on April 6. So he's constantly, he's drip-dripping to the market. And write all kinds of statements were almost finished. It's nearly complete. In fact, we actually already won. And that is, that's, 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. Well, we saw what happened on Monday, right? 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 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, 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 potential of prolonged conflict, a prolonged closure of the Strait of Hormuz? I mean, treasury yields are also rising, you know, and so is the market finally waking up? A little bit, not enough. Okay. And look, somebody who would say to me, you can say to me, I almost look, what do you, why are you cheering that the 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, et cetera,

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 got to get out of my long positions. I got to crash everything. That's what happens in markets. That's why they crash.

If people read the signs before crashes, we won't have crashes. We'd have declines. So I'd rather people see the market for what it is and decline a bit and have oil prices go up a little bit so that policymakers could 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 much. Because we all got burned back in April with the tariff stuff, right? Correct. Liberation Day, right?

Liberation Day, 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 talking 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 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 cheer lead the market I've been there I've done exactly

what Scott Besson is doing 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 market's play an important role in that, right? Is that like the top, does that really dictate what you guys do and what the moves are moving forward based on what the market is doing, right? That probably plays a pretty big role.

It's an input. It's a very important input, right? Because it's a 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 in 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 say the president, let's plan the next seven days. 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, 100, 100, 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, a straightover was closed. Yeah. The question you should ask is if two months before, one month before, I know the straightover was going to close, what do I do to prepare for it? And there are things you could have done, but they did not do. And they're paying for the price for that. now. We could have mitigated at least 50% of this. Well, I mean, how about how can you 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? Well, before the war starts, I assume, I'm going to war. I assume straight's 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. Gotcha.

That could have been a buffer to some of the disruption that we're feeling right now. Huge buffer. Then I tell 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 them about changing and waiving contract obligations requirements. You know, the LNG has a, in the contract,

the Qatar Energy has, it says it's called a destination clause. If I sell it, if Amos sells Zaid a tanker, you can't resell it. Gotcha, okay. We had them wave 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.

Gotcha. 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. 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? 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 exert that leverage whenever they can with or without the U.S.'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. You're right, but the first two weeks you could have. So straits don't close the first week. They close towards the second week. Second, in the first two weeks you could say, I hit you again because after June, you didn't get the message. 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 stay. 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. This wasn't a war. This was an operation. Right. Or in terms, excursion. Right.

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. 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 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? So I think we're going to have when we reopen, right? the straits reopened, 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 didn't know how long it should last, so they fill 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. It takes hours to take it down. It 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've 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. Gotcha. I think that's what a lot of people are wondering is like, are we going to get back to pre-war level price? if and when the conflict is over.

What's pre-war? It needs to be considered January. Okay. 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 started talking BB 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. So don't think about pre-war. That was supply demand, on a supply demand basis, the world should be at 55, 50 maybe. Okay, okay. But based on geopolitics, we're at 110.

Yeah. So we'll come down, but we're not going back down to 56 this year. This year. Okay, interesting. This is the last question I'll ask you, because I know we're running close to the 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, 1, 60, 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 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.

Yeah. I think at that point the market is like, all right, this is going to go on for a long time. And the damage to the market is not linear. It's exponential. What do you mean by that? So right now, there are things in place to mitigate some of the damage. So I lose 12 million barrels, but I unsanctioned the Russians, right? 120, 130 million barrels.

That's going to be gone by the end of next week. Okay. Countries have storage. Right, right. So they're using the storage. Right, right. 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 in the 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 stuff in storage, et cetera. But a lot of countries have very little storage. They're going to start running out. Yeah. 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. Yeah. 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 $1,500 the flight. Yeah. So people are not going to fly. vacation tickets and it's already brutal right now. I should have booked them four weeks ago. Brutal. Brutal. You want to go on a cruise?

You know what shipping fuel costs right now? So that's where it's like, 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. Yeah. The market takes care of itself that way. But still, it's going to be something to watch April 11th.

I'll mark that in my calendar. Amos, 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

and a little bit less tense. And then you can tell me more about the emergency release stuff because I'm actually really curious to know why those numbers are bullshit and kind of how that works. But we'll save that for the next time. Okay. All right. Great to be with you, man. I appreciate Amos.

Well, all right, guys. Hope you enjoyed that conversation with Amos. Hoxstein, 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 the trade of Hormuz. And after talking to Amos, I'm being even close to your 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. Rosen lasagna, medium power, 15 minutes. Sounds like Ojo time. Let's play. Feel the fun with Playojo. The online casino with all the latest slot and live. Casino Games. What you win is yours to keep with no wagering requirements, instant payouts, and no minimum withdraws. Hey, I just won. Woohoo. Feel the fun. Play Ojo. Honey, forget about the lasagna. Let's celebrate.

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