3/31/26: Trump Floats Iran Surrender, Trump Rock Bottom Polls, Gas Prices Spike

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Good morning, everybody. Happy Tuesday.

We have an amazing show for everybody today.

What do you have, Crystal?

Another wild morning.

We've got a troop truth to reckon with.

He says he's very much indicating he'll just walk away from Iran,

leaving the Strait of Hormuz closed.

He tells the world to go get their own oil that he's done with it.

So I don't even know where to begin with this.

So we'll get into that.

Also, this may be quite related to seeing some of the worst poll numbers.

If not the worst poll numbers of either terms of his presidency.

So there's a lot going on there.

Some new analysis too of just how dire things may be for him and where we are heading.

National average for gas is officially over $4 a gallon.

Our oil analyst is going to join us to talk about the level of disruption

and what would happen even if Trump does unilaterally taco now.

What that will mean for the future.

Meanwhile, global ramifications of that oil blockade are spreading rapidly.

So we'll take a look at that.

Israel yesterday passed a death penalty bill that is only for Palestinians

in another new disgusting low.

We also are going to pick up the story we tried to do yesterday.

We just couldn't fit it in the show about the IDF assaulting a CNN photo journalist

and the fallout from that.

And then how to take a look at Trump's ballroom.

Apparently it's coming with a new nuclear bunker.

Yeah, wow.

The great timing.

Really.

It's time to put the tinfoil back on.

Oh, it was on yesterday.

A little unsettling there.

A little unsettling there.

A little home, but maybe we put it back.

Maybe all those people who have come up to me in the last several months

to tell me that there's a data center under the ballroom.

Maybe they were on to something.

Maybe they were right.

They were on us.

Trump says the stuff out loud.

All right, before we get to that, thank you to everybody who's been supporting

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Let's go ahead and start then with the unilateral potential Trump taco.

And let's put this up here on the screen, literally breaking as of this morning.

Let me go ahead and read it.

All of those countries that can't get jet fuel because of the

stretch of Hormuz, like the United Kingdom, which refused to get involved

in the decapitation of Iran.

I have a suggestion for you.

Number one, buy from the US.

We have plenty.

Number two, build up some delayed courage.

Go to the straight and just take it.

You'll have to start learning how to fight for yourself.

The USA won't be there to help you anymore.

Just like you weren't there for us.

Iran has been essentially decimated.

The hard part is gone.

Go get your own oil.

This fits very much with a late breaking story last night.

Let's go and put the Wall Street Journal up there on the screen.

Alex Ward over at the journal.

I highly recommend the follow by the way.

Excellent reporter.

He was also the person who broke the Roe versus Wade story back in the day.

So I highly recommend.

I've known him for a long time.

He says, Trump tells AIDS.

He's willing to end the war without reopening Hormuz.

So if you put these two things together, it does indicate that at the current moment,

that is what Trump wants us to think or is potentially doing.

So this is at least what Donald Trump is telegraphing now publicly and or privately

behind the scenes.

Everybody do keep in mind that all of this could be an elaborate siop,

as we have seen now multiple times from the Trump administration,

potentially trying to signal that the war is over.

Well, if we continue to follow all of the ground troops in the region.

So I know way I want to say that this is the end.

But let's pretend that it is.

Let's pretend that it's Taco Tuesday.

And of course, stock futures are surging right now as you and I speak over this.

Should they really be surging?

I mean, this is a genuine Suez moment for the United States.

Let's think about this.

The US military went into this campaign unilaterally with Israel,

with a singular objective.

Unconditional surrender, the decapitation of the Iranian regime,

a replacement of that regime, a reopening,

re-control of the Straits of Hormuz.

At one point, we floated a reinsurance scheme backed by the United States and the United States Navy,

sailing freely through the strait.

Now, after over a month, there is now an effective declaration.

Trump says, well, we have actually changed the regime because we killed the original Iatola.

Now, we have a new Iatola whose father was murdered and his brother,

who says why I mean, can't even go through the list of family members.

The guy who had the Fatwa against nuclear weapons, he's gone.

The hardline IRGC is all in control.

The Straits of Hormuz is under Iranian control,

who is allowing selectively certain ships that were either Pakistani or Chinese

or any country which is willing to make a deal with them.

They passed a piece of legislation yesterday in their parliament,

saying that they have officially approved a toll program,

almost like the Egyptians, in the control of the Suez crisis.

Trump's in and he says that we are basically will be done because you didn't join us.

So first of all, it was a war of choice.

It's not like we needed anybody.

Allegedly, we were told we could do this all by ourselves.

We didn't necessarily need anyone to come in.

We blew up the global economy quite literally.

We're going to tell everybody just in the one month of what it looks like.

Asia, 80% of oil from through the Straits of Hormuz goes to Asia.

Only 50% goes to China.

The rest of them are extremely critical US allies.

LNG, which is heavily reliant.

Europe is after the Russian invasion of Ukraine.

Oh, well, sorry, 70% of Qatar's Rasulafan gas.

That's gone, just evaporated for the next four to five years.

Good luck paying for it though, by the way.

So what this means is that the US came in here,

didn't even military accomplish its objectives.

Basically got all of our bases destroyed and or hit.

We lost all the strategic aircraft.

We humiliated ourselves really in terms of what people expected

the United States to be able to do.

Now we could finish the job with ground troops.

We decided we don't want to do that.

And we tell the Europeans and the Asians, go get your own oil.

So what's more likely, Crystal, that the UK and the EU and Japan and South Korea

are going to form a coalition of the unwilling and go and militarily take the Straits of Hormuz?

Or Tehran is going to be like, pay up.

Yeah.

Let's go.

And by the way, no more dollars.

You're going to denominate it in one.

Any US flagship, you're never coming through here.

You're still in Israel.

You're not going, you're not coming through here either.

And this is the new new sheriff in town in the Straits of Hormuz.

What's that sound like to you?

That sounds like a strategic victory right now.

Of course.

So far for the Iranian Empire.

They get to the Iranian regime potentially.

You used to be an empire.

So we've got the Iranian regime, which is now re-empowered.

Massively rich already as a result of the war and spiking oil prices.

Control over the Straits of Hormuz.

They stood up and survived over the big bad American military.

And Israel, I mean, this is a strategic nightmare.

And yet somehow it is still the preferable outcome.

Yes.

And that's what's so insane about it.

Yeah.

We were really screwed either way, which is why we never should have been in this war.

I'm just like thinking through all of the global ramifications.

And I'm like, I cannot believe that we just blew up the global empire and then the global economy

and told all of these countries, I mean, if you're the Gulf, I was telling you the poor, what do you do now?

Iran has been firing on ship.

Now you've got to pay the piper.

Yeah.

Dubai was getting messed up just yesterday.

Dubai was got more missiles yesterday than the first week of the war.

Do you just pay it?

I guess.

I mean, and you bought all these billions of dollars and all these troops are here.

And you were stopping your economy.

Dubai, your Abu Dhabi, like your whole brand is screwed.

Oh my God.

It's over.

I mean, it's okay.

So again, very possible that this is just to sigh up and some other thing is in the works we'll put that.

But I do actually, I actually do believe that Trump would really like to taco.

Yes.

That he, the, all the reporting about he's trying to find an off ramp level that he's bored.

I mean, I think that is all true.

And you see the, the fun markets are a problem from the oil markets are a problem and the stock markets problem for him.

His poll numbers are tanking.

He's looking at this and going like, all right, we need to wrap this up.

So I do give it some credence that this is possible that he's like, all right, we're just going to walk away.

So let's be really totally clear.

If he walks away and leaves the straight of hormones in Iranian hands for them to do with as they wish, it's a surrender.

I mean, it is a surrender.

The ultimate surrender.

Yeah, because the role of the US Navy, why do you and I pay the taxes we pay is to guarantee commerce on the high sea.

Yeah.

That is literally the point of the empire.

That's why Japan and South Korea and all these other countries are like, okay, let's do all this right.

In exchange, you guarantee our security and our ability not to be Chinese vassals.

I mean, what are we doing here now?

So we came in, okay, let's just remember, let's rewind.

Back when Trump announces in his baseball cap without a tie on before we go into a party at Mar-a-Lago,

announces that he started this war, okay.

He's calling out the Iranian people to rise up, right?

So regime change, like not the fake kind that he's claiming.

But the real like, oh, we're going to have somebody who's, you know, a puppet, an amenable tar interest blah, blah, blah, blah.

That's what the original goal was.

That and to, you know, destroy or make render impossible or do some deal with them to make sure that they're never going to pursue a nuclear weapon.

Okay, those things are off the table.

Then the war became about reopening the thing that the war closed, the straight of more moose.

Now they're saying that is also off the table.

And this is why you could never get a straight answer out of them after the initial days of the war of what the objectives actually are.

So now, what are we going to, I mean, Trump will claim mission of combo.

We decimated them and we set them back.

No, what you did is you strengthened them.

There's zero doubt about it.

Yes, they're, you know, this and that got hit and there were tons of civilian deaths.

It was horrible, right?

There's no doubt that there were losses on the Iranian side.

But if they come out of this with control over the straight of more moose,

this is like an ability for them to play in the world and have the sort of sanctioned power that we do, right?

If some other country is messing with them, if some country is, you know, supporting a genocide and Gaza or whatever,

they can yield this now as a weapon, they can throw their weight around.

Not to mention, okay, they still have, by all accounts, still have all of the, you know,

highly in maturanium and nuclear material and know how.

Do you think that they may pursue a nuclear weapon now to make sure they don't get messed with again?

Right.

I certainly would if I was them.

Oh, yeah.

So, I mean, what are we, like, so, okay, so let's play the sound.

I'm just trying to think of, like, what all the implications are.

So you're right, the Arab, like, Gulf Arab states totally fucked.

Totally screwed.

Like, what are they going to do?

They have all these bases, the Iranians, listen, come Iran.

I've got you by the balls and your Saudi Arabia and your UAE.

Every US troop on the ground got to go.

Yeah.

Now what?

I mean, Trump says he doesn't want to.

And this is what they said.

Right.

And this is what they said their original goal was we want all US troops out of the region.

We want these bases closed.

And we all look at that and we're like, that's insane.

Now it's like, is it?

No.

Is it insane?

Israel's on here floating.

Hey, we want the US bases on our soil.

Which would be a major, I mean, that's a major change in terms of their orientation or our orientation.

Basically, means like the merging of our states completely.

That's a whole other can of worms.

But that could be where we're heading if these Gulf Arab states are like, you know what?

This is not going to work for us.

Like, you made us a target.

And then you screwed everything up for us.

And then you cut and run.

Okay.

So that's the Gulf Arab states.

For the Israelis, Iran is not in chaos.

They did not collapse the state.

They strengthened the logic of pursuing, you know, longer range ballistic missiles and a nuclear weapon.

Do you think these Israelis are just going to sit back and say, that's cool.

We're going to let that happen.

No, they're not.

You're still going to have the same logic on the Israeli side from Netanyahu and his whole crew.

And they're going to continue to be trying to, you know, drag us back in.

The same sort of thing that played out here where reportedly Israel is going to strike Iran anyway.

And so our leaders were like, well, I guess we're going to do it too.

Are we just going to let them get hit by Iranian missiles?

Like that.

So that's, you know, a whole situation.

I mean, the whole thing is, and then of course, in terms of the rest of the world,

they look at us, this global superpower allegedly, nuclear armed, global superpower.

And we're like opening the Strait of War Moose.

It's going to be too militarily difficult for you.

You think they're going to go out?

No, of course not.

Of course not.

They're going to look at this and go, okay, China, okay, Iran, like, time to make some deals.

This is a new world order.

I mean, that truly is what we're looking at here.

And I know that may sound really grandiose.

But this level of humiliating defeat at the hands of, you know, I mean, Iran is a large country.

It's sort of like a middle income country.

They have clearly military power.

But really, they just outthought us.

They outplanned us.

They outthought us.

They were much smarter, much more strategic.

And Trump came barreling in thinking that he could do a few day excursion.

And get some, you know, dubbia before his meeting with China.

And then it'd be all good.

And he's an idiot.

And he's a fool.

And they revealed it.

This is why part of me is like, why is that we shouldn't be too declarative?

Is because all of this is about to become real obvious.

To NATO.

To Japan.

To South Korea.

To the Gulf.

Saudi.

I mean, yeah.

MBS and NBC are going to be on the phone today, right?

They're being like, listen, man, this is a, this is, you can't, you can't let,

leave us hanging like this.

And that's why every single report out of the Gulf is they're like, finish the job, finish the job.

We can't live this way.

So now what, so when Trump tells the UK and Japan and South Korea to go get your own oil,

they're like, oh, we'll get it.

All right.

But we're going to pay the Iranian hostage toll.

Whatever they want, we'll pay.

And to nominate it in Chinese land.

And then what are they going to say?

I mean, what's America going to say?

They're going to be like, oh, well, you can't do that because X, Y, and Z.

And now you, this is why this is like empire ending in a way.

Is the Japanese are going to be like, okay, our security guarantor or 90% of our oil.

What do we do?

What, what choice would you make?

I mean, this is when your actual back is up against people.

I mean, Pakistan is already.

They're dead.

Making deals with them.

Right.

Because they are so screwed.

100% of Pakistani LNG comes from Qatar.

They don't have a choice, right?

That this is, it's, it's literally existential.

Yeah.

Bangladesh, all of India.

I mean, already you've watched what happens with Russia.

I mean, yeah, by the way, even Russia.

In terms of their strength that's come out of this war.

I'm sure.

I don't accept that Russia is an enemy of the United States.

You could say adversary largely as a result of our own creation.

But whatever it has now proven its ability.

And this is part of why we're strengthening this Iran-China-Russia alliance.

Yes.

And that's very powerful.

So right then, let's think about China.

So China is going to come in and say we have to dominate all of the current,

all of the exchanges have to be denominated in one.

50% of our oil comes through the straight.

So they will make a deal where they massively enriched Iran.

They could create, they already created the parallel banking system to get around US sanctions.

They could create an entire exchange.

I mean, this is the backbone of America, of what we really are.

It's not just the strength of the dollar, but all of the power of the Swift sanctions

and our ability to compel commerce across the globe because of the strength of our consumer economy.

And that's part of why I go, he may want this today.

But soon the phone is going to ring.

And that's part of the reason with those troops in the region.

He might just have to use them.

He might say, you know what?

What we're all talking about here is so unacceptable that we actually do have to do some sort.

Not, we don't have to, but they will want to do some ground invasion.

Because you just can't, you cannot have this.

And you are all of these critical US allies.

And you could end up with a scenario where we effectively surrender.

And then Israel and Iran are still warring and we're right back in.

I mean, that's another possibility here is, you know, after the 12-day war,

something we warned about and many others who were opposed to going to war with Iran to begin with,

that this is not over.

Like, yes, Trump is declaring mission accomplished, and it was much, you know,

cleaner way to wrap it in a bow than anything that he thought of for this new phase of the Iran war.

But what we said is you have not fundamentally changed the logic coming through the Israelis

and the way that Trump is, you know, very susceptible to being lured into,

and again, I hate using this language because obviously it's on him.

But clearly, the Israelis were pushing for this, right?

And we knew that after the 12-day war, the fundamental logic was not going to change,

which is why I don't think any of us were surprised when we ended up back in horrified, yes, surprised.

No.

And so, if he does walk away, now you still have a situation,

not only has the logic not changed, the logic has gotten worse for the Israelis

or stronger for the Israelis in terms of continuing to pursue this war,

because you've got, you know, more of an impetus to actually pursue a nuclear weapon,

you've got a harder line regime, and now you've handed them this extraordinary power.

Now, I will say the Israelis are talking about, oh, we'll create a pipeline,

you know, that bypasses that.

That takes a lot of fucking time.

Just decade and we wiped out with a drone.

Exactly.

Yeah, it's such a great point.

But even if you give that credence, I mean, the time alone.

And so, in the next decade, we're just going to deal with it.

I mean, you'd be better off just going whole hog on like nuclear and renewable energy

versus thinking that some pipeline is going to save you at this point.

Not to mention, I mean, Israeli society has its own problems,

and I don't know.

I agree with you that I do believe, if I had to say, I think Trump does,

he wants to be done with this.

He's trying to find an off rant.

There's a lot of reporting in that regard.

He's been floating, various things, trying to, you know,

trying to basically like, will a deal into being project some sort of strength,

pretend like these ships that are passing through the straight-of-four moves

because other countries are making deals with Iran,

like this is some gift to him.

He's trying to figure something out, but he has really,

this is Robert Pape.

He is in an escalation trap.

It is a trap.

And if he walks away now, the repercussions may be such that he just can't stomach it,

and the countries surrounding us that are allies also can't stomach it,

and the business world can't stomach it.

And so, there's going to be tremendous pressure on him to continue this thing

and try to, I don't know.

I mean, and that's the other thing is let's say he, okay, you know,

he hears from everybody.

He's like, all right, I guess I got to keep going with that thing with this thing.

What does that mean?

Because the seizing of the nuclear material is a fool's errand and insane.

The seizing of the islands just immeshes you further.

Whether it's Carg Island or these UAE, whatever.

Like that just immeshes you further.

That's no solution.

The only solution is like a full-scale ground invasion.

Even then, it's not really a solution.

But this is the corner that he's backed himself into, and it is a disaster.

And look.

It's a disaster for the world.

I mean, we're, like, we're going to suffer here in the U.S.,

but people around the world, we're going to talk about this later.

Like, you know, developing countries around the world,

the level, people are going to starve to death.

Like, there's going to be places where you just can't buy fuel.

The level of demand destruction that would be required is just, you know, shocking.

We're not starving now because of the taco, but it's one of those where,

look, we may have an end to the actual crisis.

But this is a full-blown, like, this is the Pandora's box.

I mean, this is why you shouldn't get into any of this in the first place.

We have a lot of elements here.

I'll skip most of them, but let's just make sure, again, that we set the table

that there's still a war going on with Iran.

Let's put A2 up here on the screen just to show all of you.

This is video that came out just yesterday.

This is, by the way, what makes me very skeptical that this unilateral taco might happen.

So this was a massive airstrike, bunker-busting bombs dropped by the United States just yesterday

on an Iranian ammo depot, which was in Isfahan, which is near, of course,

all of those nuclear facilities in Iran.

Now, here's the thing.

Originally, there was some cope and hope, honestly, that there would, they were like,

oh, we finally hit the missile city, the Pentagon even confirmed this is an ammunition dump

with artillery and other things.

And that is what made me think, look, you can strike an ammo dump

with bunker-buster bombs, not the missile city.

Now, you probably would if you could, but why would you do that?

Especially in the area where you have these nuclear facilities

and some sort of potential nuclear operation was going to happen.

So keep your eyes open.

You know, the unilateral taco could also still happen, even after some sort of potential

nuclear operation that's happening there.

The other ground.

The other reading of this, so one reading of it is that, yeah, this is, you know,

Isfahan is where they think a lot of the nuclear material is at this point.

And so you could be trying to, you know, degrade their capabilities there

for some eventual, you know, commandos coming in and trying to seize the nuclear material,

all that stuff.

Okay. That's one possibility.

The other possibility is Trump shared this on true social, which makes it more noteworthy,

because clearly wanted to highlight, like, oh, look at this big explosion, you know.

The other possibility is this is just him trying to show, like, you know,

Oh, look at this grand display of how much we've decimated them, et cetera,

because it was a large explosion.

So I don't know, but I think either of those interpretations are possible.

Take it for what you will.

You also, look, now that we have this truth, the taco stuff, it's everywhere.

Let's put A3.

Let's go ahead and play it.

This was Caroline Levit telling everyone just yesterday.

Well, President said 46 weeks.

We're on day 30.

So we're on track.

Let's take a listen.

I think that's one of the things that Trump initially said about four weeks.

Secretary of State Rubio on Friday reportedly said it might be another two to four.

It's two to four.

The current whole part that the administration is thinking.

With respect to the timeline, again, the president commander in chief,

the Pentagon has always stated four to six weeks estimated timeline for Operation Epic Fury.

We're on day 30 today.

So again, you do the math on how much longer we, the Pentagon needs to fully achieve the objectives

of Operation Epic Fury, which I will reiterate.

Great.

So there she says, laying out the timeline.

Secretary Hegsett is briefing literally right as we're all talking here.

I haven't seen anything exactly noteworthy, but he has continued to say Iran should try to

make a deal because we're decimating.

We are the people that are making sure he said we are like, you know, bringing them to the table, negotiating them with bombs.

So you could see that the messaging has shifted dramatically.

We also should go to a seven.

Now this, again, was a little bit of a preview of the current true social of this morning.

A secretary of state, Marco Rubio, an interview with Al Jazeera, where he again opens the door too.

Well, maybe we don't have to control the streets of our moves.

Other countries can do it. Let's take a listen.

The streets of our moves will be open.

When this operation is over, it will be open and it'll be open one way or another.

It will be open because Iran agrees to abide by international law and not block a commercial waterway

or a coalition of nations from around the world and the region with the participation of the United States

will make sure that it's open.

So the Straits of Hormuz will be open.

Iran either agrees to abide by international law

and not the international law from this administration.

Come on.

I know.

This is fake as hell.

I know.

You opened the war by murdering a bunch of schoolgirls and assassinating their head of state

and threatening to bomb nuclear.

Sorry, it's a bomb like power plants.

Yeah, it's literally yesterday.

It was like a blow up your water plants.

I mean, this is like textbook war crimes, but whatever said.

International law is fake.

That's fine.

International law has always been fake.

It's really all been in terms of the norms and the enforceability of being able to do so.

We have decided to get in bed with Israel, this rogue state, and conduct ourselves the way that we have.

It always kind of has been an illusion.

We just decided to put the blinders on.

It's like, all right.

Well, if you're, if we're going to go about the world and we're going to kidnap Maduro

and we're going to just, you know, come in, create a gigantic mess,

withdraw, tell everybody else to do so.

Who are we to tell the Iranians exactly?

How are they going to govern the Straits of Hormuz?

They will govern by force.

As we could do it too, you can invade and take it if you want to.

It'd be a nightmare and a disaster.

Yeah.

Part of the reason you maybe shouldn't have gone into this mess in the first place.

Well, and just really quick.

Hegsat is doing a press briefing right now.

Yeah.

And just a couple things that were noteworthy here.

I see this one clip of him.

He says, President Trump will make a deal.

He is willing.

And the terms of the deal are known to them.

If Iran is not willing, then the US War Department will continue with even more intensity.

So that's the messaging they're putting out is continuing like this.

We'll deal with them.

But we're going to come in with even more, you know, fire and fury or whatever,

is where there's what he's still messaging this morning from the podium.

Yeah.

So look, very important just to put, I just, I really am all over the place this morning

just because I have to, I have to deal with the ramifications of what this would mean.

Also, to make sure our audience understands the war's still happening.

The bombs are still dropping.

Yeah.

It's not like the Israeli is about, oh, they're doing just great.

They just basically annexed a half of Lebanon in case anybody's wondering.

Israeli Empire, it's expanded.

The regional super think about this, this nation since October 7th.

They've expanded their border into Syria.

I mean, remove the leader there.

They're basically taking half of Lebanon.

They're basically taking the, I mean, they had the West Bank.

Another solidifying control over it.

Gaza.

Wow.

You really, you have to marvel at this country, which I, I don't want to say hijacked.

It was, you know, willingly given, I guess.

Yeah.

Think about it.

We will end our own empire and create a new Israeli one.

That's effectively been the net policy if the current status quo remains as it is.

Although the Israelis have their own vulnerability because they can only act the way that they act

because they have our full and complete backing at all turns.

And the moment that that has taken away, then they are extremely vulnerable.

So they have their own, you know, their own vulnerabilities here.

My heart breaks for them.

Actually, I saw Ryan was sharing this, this thread on Twitter about, you know, this whole like,

do they have a right to exist, the state of Israel have a right to exist discourse?

And someone was pointing out like, in what way are they even a state?

Because the state would indicate that there are borders and laws that are applied consistently

to the citizens of that state.

So by the conventional definition, Israel isn't even a state because of the way that they operate.

But that's another discussion for another day.

I mean, another thing I wanted to point out, because I think it's relevant,

you've now got two European allies, Italy and Spain, who both said,

we are not allowing U.S. military planes to land at, you know, base at our bases

and enjoy flyover rights.

So, I mean, that's really significant.

So it also tells you.

That's Italy is way bigger than Spain.

Yeah, Spain from the beginning has been like, you know, it's a left-wing government.

Their adversary will like, they've been opposed from the beginning.

Italy coming out and joining them and being like, yeah, we're done here too.

That is highly significant.

And it also shows you, you know, it shows you the way that our allies are feeling about this

and that they are also coming to a point where they're like, okay, whatever we're getting from the U.S.,

it is not worth it because the costs that are being imposed, I mean, the energy prices in Europe already were high.

Now, they're going even higher.

So they're in quite a bind here as well.

And yeah, I don't think it's your point about like, let's say we do walk away

and just tell them, go get your own oil and good luck with the straight-of-form news.

They're going to be, you know, quite willing, I think, to go and make a deal with Iran at whatever terms are necessary.

People know.

No big fan of Europe, you know, I would decouple on my own terms.

These aren't the terms that I would do it on.

And let's think about Italy.

All right.

So Italy, NATO country, it is, I think, four U.S., I want to say four major U.S. bases, probably 15,000 or so troops,

a major hub for AFRICOM operate.

Remember Benghazi and Libya and all that were scrambling the jets out of Italy?

It's kind of a critical U.S. no last time I checked.

Their own primate will get to this later on the show.

Their defense minister is saying like, he's like vague posting, being like, I can't sleep at night because of the things that I know that are coming.

So they're obviously then they're facing a crisis, and it's not like their economy was doing all that well, even within the EU context.

So for them, high energy prices, it's a nightmare.

It's a total disaster, especially on top of what just happened with Russia and with Ukraine.

I guess continuing on down this line, let's just make sure that we get a couple more things that are in here.

Oh, right, a 11, or sorry, a 12 please.

This also happened yesterday.

This was the Kuwaiti crude carrier, the al-Salmi, was directly attacked by Iranians, docked at the anchorage area of the Dubai port in UAE.

So yesterday, the UAE took more missiles and incoming drones than at any time since the first week of war.

Showing again, Iran's projected ability or Iran's ability to continue to project some force in the region and also to be able to hit whatever, you know, tanker that they want to.

There is some confusing stuff around this figure.

Apparently it was bound for China.

So there's a lot of reasons this were why Iran hit it.

They may have actually mistakenly targeted this carrier.

It's another one that was heading to Israel.

I've also seen it could have been, you know, a shrapnel from a missile intercept or something like that too.

I've got another clip here from Hegset that is noteworthy on the Strait of Hormuz significantly.

Specifically, he says on the Strait of Hormuz, there are many more vessels flowing through today than there were as the President has arranged.

No, he's not. The President has arranged that.

The President has been clear to Iran, open it for business or we have options and we certainly do.

There are countries around the world who ought to be prepared to step up on this critical waterway as well.

It's not just the United States Navy.

Last time I checked, there was supposed to be a big, bad Royal Navy that could be prepared to do things like that as well.

So he's pointing out this is an international waterway that we use less than most.

In fact, dramatically less than most.

So the world ought to pay attention and be prepared to stand up.

President Trump's been willing to do the heavy lifting on behalf of the free world.

Oh, thank you so much, President Trump, to address this threat of Iran.

It's not just our problem set going forward.

Even though we have done the lion's share of preparation to ensure that that Strait will be open.

So, you know, sort of consistent with what the reporting about Trump saying basically and his true social being like,

hey, you guys use this more than us.

Go and get the oil.

You know, but in other comments, Hegseth also said,

What year do they think we're living in 1898?

I know.

Where the Sun never sets on the British Empire.

Right. Look at the UK and their society.

You know, the idea.

And they want to go and do it.

We can't do it.

But we're going to.

Oh, they're going to do.

Okay. Right.

Yeah.

And then he also says, we'll negotiate with bombs.

He loves this line.

Our job is to ensure we compel Iran to realize that this new regime,

this regime in charge is in a better place if they make that deal.

And so we'll continue.

We're working hand in hand.

But the primary effort is a deal.

We want the deal to be accomplished if at all possible.

If not, then we're prepared to continue.

So take from that what you want.

All right.

Look.

I mean, we can't trust Trump's way.

We can't trust any of this.

This guy's just as idiot.

It's too much.

So I can't take any of his words seriously either.

I think this is what he wants to do.

I just don't agree.

It can be done.

I mean, well, it can.

It can.

And then all the consequences that we've laid out just are.

But let's just.

And those consequences are probably best case scenario at this point.

If you continue, it only gets worse.

But let's then talk about the economic ramifications.

We talked about the empire ramifications.

You've got the UAE and Saudi Arabia.

They're effectively being held hostage here now by Iran.

They've proven their capability to hit you.

They have to.

I was listening to an episode this morning about the amount from Adlauch

Shout out to them about Dubai and specifically the real estate market.

But they touched on the amount of 40% of global sovereign wealth is just the

Gulf.

The big four countries.

All they can out of the globe.

Gulf.

Almost all that wealth is invested in US companies from venture capital to commercial

real estate to private credit markets, which are having their own problems right now.

Now, let's take Qatar, the Qatar sovereign wealth fund, right?

QIA Qatar Investment Authority.

Well, they just took a 17% haircut on their natural gas.

It stands to reason they're going to take some haircut on their flow of cash, which

maybe means they can't fulfill future like deals or other things.

So let's call it 10%.

Well, if 10% of that money just dries up, that's a lot of money.

I mean, that's billions of dollars.

So what's that mean?

And then you've got high oil prices as a result of this shock potentially for years.

If Iran is just messing with the oil market.

So these Gulf economies will either be held hostage or they'll have

to pull back their investments here in the United States, Japan, South Korea.

All these Asian countries, which we're supposed to invest all this money here.

They are getting destroyed right now in their stock markets and their economy.

So just think about the ramifications for all of us.

I mean, again, look.

And our economy is a house of cards.

Like, it's basically AI speculation.

It's like the whole economy and like gambling.

And for everybody saying, well, I don't care about that.

I'm like, well, listen, you know, oh, actually it'd be a good thing.

Yeah, I mean, theoretically, you know what it also means?

It means you're going to lose your job.

It means you're going to pay higher interest rates.

It means you're going to pay high gas prices.

Like, remember, they'll be fine taking a 10% haircut.

Can you realistically afford to take that?

The answer is always no.

Is that the people at the top will be okay.

They're largely insulated from these decisions.

But you know, when the bottom falls out, then people get laid off.

They lose their jobs, can't buy home, can't buy a car.

It's a genuine nightmare.

So look, that's what things stand.

Obviously, this is breaking situation.

So, you know, hopefully it's still as up to date whenever we release it.

But that's it.

Why don't we turn to polling?

Just why did Trump decide to do this?

Yeah, I mean, this is one piece of that puzzle.

I think probably the markets are even more important piece.

But let's go ahead and put this up on the screen.

This UGov poll came out yesterday.

And it was a real eye opener.

Approval rating of 33%.

That is about as low as I have ever, ever seen it.

Disapproval at 62%.

Now, this is a little bit of an out.

It's not that much of an outlier.

It's a little bit of an outlier.

But we've been seeing a lot of polling coming in for him that has the approval rating under 40%.

And in fact, if we put B3 up on the screen, this Nate Silver's analysis of his poll numbers,

coordinating his average and keeps us up on the screen for a second,

because this chart is actually really useful.

Coordinating his average, he now has Trump dipping under 40% approval rating.

So 39.7%.

I think for an average of all the polls, the ones that are more favorable to him,

and the ones that are less favorable to him.

And you can see quite clearly.

First of all, the trajectory has just been consistently downward.

So, of course, there have been little peaks and valleys in between.

But overall, the story of his second term in office is just down, down, down.

Now, the place where he actually saw the steepest decline was after a liberation day,

and the terrorists were just wildly unpopular.

And then you can see, though, since the Iran War began,

he was actually at a little sort of localized peak there.

And it's just been downward ever since the Iran War started.

Nate Silver also tracking the popularity of the Iran War

and finding that it is very unpopular.

And usually Americans have a good war.

So it's kind of historically unusual for this country to have,

be negative on a war really from day one.

The other thing here, Sagar, is, but put me to, up on the screen.

So we called this because it was obviously predictable when Trump and Hexet said,

oh, we're going to need $200 billion to pay for this war.

And we're going to achieve it through reconciliation.

Well, that means you have to balance it with cuts elsewhere.

Where are you going to get that money?

Health care, because that's basically like the big, if you're not going to cut defense spending,

the other, and you can't cut interest spending.

In fact, that piece is going up, interest on the debt,

because of bond yield surging.

The only other place where you have a significant amount of funds is health care.

So they already cut health care significantly back in the one big beautiful bill,

and they are looking at taking another hatchet to health care,

Americans health care, in order to pay for the, the bombs to, you know,

to hit around and continue the war.

I'm like, where would you even cut it from?

They said, made deep cuts to Federer.

I'm looking just at even what, what even potentially.

Yeah, I mean, then you're, you're really, I mean, they already cut into the bone,

but you're really cutting into the bone with that one.

It would be Medicare advantage.

Okay.

And this is, this is, yeah, I mean, you're cutting Medicare.

You're cutting Medicare.

Yeah, you're cutting Medicare.

That's the bottom line.

You know, a pro Medicare also, you know, boomer's taking a little haircut right now.

I'm like, oh, what a tragedy.

I was lying.

Let's rather, boomers have their health care.

Then, not to mention, sorry, you know, you know, you know,

it's penny wise and pound foolish, because then you end up with people at the emergency.

I know.

I know.

I know.

I know.

You understand these things.

But in any case, let's talk about how this is going to play for a midterm election.

Right.

We're cutting your health care so we can bomb girls schools in Iran and, you know, wage

Israel's war.

Oh, I'm sure it's more expensive and any potential housing that you want to buy.

I'm sure people are going to love that.

I'm sure people are going to be flocking to the polls to, you know,

do their patriotic duty of paying more gas at the pump and giving up their health care

so that more bombs can be dropped on Iran.

I was thinking about it too.

At this point, I actually do, I don't say I support more defense spending,

because that would be the incorrect way of putting it.

I do not support an increase in the dollar amount.

I do genuinely think at this point, we need like a Manhattan level project to reform the entire

defense industrial base.

Of course, under this administration now, it's pretty clear that that's just not going to happen,

largely because of the people who are in charge, but also because of not just corruption,

the creative thinking and like ability to take on permanent Washington to basically,

we need to make sure that we're safe in a future conflict.

Because what has Iran really showed us is the asymmetry problem that we face

from drones, aircraft carriers with laundry fires, massively expensive interceptors

like this problem needs to be solved yesterday.

It's literally an urgent and a critical situation.

And let's say if we ever got into a conflict over something that really matters.

You know, one of the reasons why I think this is so bad too, is now this poisons the well.

People are going to be like, well, hold on a second, I'm not going to give you more stuff

so you can go do more stupid shit like this.

Total, right?

I mean, rational, right?

They're not going to sit there and give the same soft case that I did.

They already get a trillion dollars.

Do you know what Iran's annual military budget is?

It's $10 billion.

We're asking for $200 billion just for this one excursion, right?

They spent roughly $10 billion a year on them.

I do think they upped it a little bit since the, you know, 12-day war or whatever.

But yeah, whoever it was that was on the show that was like, we built our military

to fight the Cold War.

And it was more about like some big presentation of power

than it is the reality of modern warfare.

And we've seen the reality of modern warfare up close in the Ukraine Russia fight.

I mean, even with Hamas and what they're able to do, we've seen the reality of modern warfare.

And the more that we obliterated international law, frankly, the more it benefits a country like Iran.

Because in an asymmetric fight, yeah, if you have the ability to pick off civilian targets

and, you know, screw up an oil tanker, bomb a refinery,

water desalination plant, and no one can say shit to you because they murdered your head of state

and bomb little girl schools.

That is not actually to our benefit.

That is to the benefit of smaller players who, you know, can use these low-cost drones.

And of course, the number one drone producer in the world by far is China.

Yes, of course.

And see, that's what I'm most worried about.

I don't think we need an increase in the defense budget.

We need to read it literally.

We could probably spend less if we just took on the actual industrial base.

Absolutely.

There are companies, you know, had an intelligent, like DARPA, Manhattan level,

Manhattan project style, like investment, and just be like, okay, this is a crisis.

And by the way, everyone was saying this is agitating for war.

We're trying to listen.

Even at this point, like with the whole Taiwan situation, I mean, come on.

I don't know how you can look at this and say, there's any chance of the US having the ability, right now.

Please.

I'm not worried about that.

You know what, I'm worried about Japan.

I'm worried about South Korea.

I'm worried about, I mean, these are real allies.

These are people.

Number three, number seven or whatever economy in the world.

Top 10 trading partners.

We're talking about Singapore, Vietnam, the Philippines.

I mean, these people who have been there with us, this is the backbone of the US consumer market,

50% of global GDP.

That's the stuff that I actually worry about, you know, right now.

And I look at this and I go, oh, it's not going to happen.

I mean, and you could call a doomer or any of that.

I genuinely believe that if we could have done more in the Iran, where we would have,

it exposed all of these such, so predictable problems.

And it's like I said, for years, we heard people make fun of the Russians.

It's like, what if we're more like the Russians than we wanted to think?

It turns out we are.

That's just the truth.

Yeah.

This is like, and I mean, yeah, the level of change is will take from our government.

And the thing is we're a democracy.

We have to convince people why this is necessary.

And this has actually poisoned the well for any future defense industrial project.

Because people are going to say, I'm not going to give you more weapons to go out and fight stupid wars.

We should only have, you know, if you had a doctrine of like rearmament or reform in the system

without all of this insane adventurism, people would say, okay, that makes sense.

You know, all of this.

And of course, by the way, 200 billion of the $1 trillion is on try care last time I checked.

Like the healthcare system.

It's a disaster from everybody I've spoken to.

So, yeah, the level of reform and all that we would need would be Titanic.

And also, this is where Doge comes into play.

They poison the well on this is, you know, they never even looked over at the Pentagon.

Yeah.

So I look at this president.

I look at this like polling now.

And I just think about the overall like sweeping democratic effect that this is going to have.

People will very rationally not want to give a dollar more to defense under this administration.

Because they don't want to see more things like this.

And then in the interim, we still got what three more years to go.

Let's put B3 up there on the screen from Nate Silver.

He makes a point.

Trump's approval.

It's the 30s.

Can his numbers get any lower?

It's a genuine question.

It's one of those where what else could you, what could you do to lift yourself out of this?

I don't think in modern history we've ever had a president who has been at this low at this time

and had any meaningful recovery.

Not look, he's going to think about legacy, but let's think also generally about the GOP and about the ramifications.

So if you see this type of situation take place in, I mean, this is where the Senate starts to come into play.

Right?

This is what, what's the last time we live with something like this?

Oh, eight, I want to say.

Oh, eight with the financial crisis and Iraq.

I mean, that's when crazy shit happens.

Like that's when what were Democrats were getting elected in like North Dakota, right?

Obama won North Dakota.

Didn't, didn't Arkansas have a Democratic Senate?

I think Obama won North Dakota, but he won Indiana.

North Carolina.

North Carolina.

He won North Carolina.

Didn't like Arkansas have a Democratic Senate?

Yeah, I mean, part of that is because it was pre like full partisan realignment.

So things like winning in Arkansas and South Dakota were more possible.

But yeah, I mean in the 2008, like there were people who won the election.

I always think about that.

But no one thought we're, we're going to be on the table.

And you know, the other thing Nate Silver points out, because this question of like, can you

go even lower than the 30s because his base famously very strong, very cold, like, etc.

That is definitely the case.

But he does point out that the level of strong approval for Trump has really fallen off.

So if you ask people, you know, you can give people these options not just approve, disapprove,

but strong disapprove or strong approve, weak approve, weak disapprove.

And the strong approve has fallen from, you know, at the beginning of the term, it was at 36%.

Now it's only 22%.

And that's all his base going from like, yes, make America great again to being like, I think he's better than Kamala.

You know, I mean, that's, and that's significant.

Yeah, that's the only coke that you have left.

And in a midterm election, that's really significant because look, these are all people.

Anybody who approves of Trump is going to vote Republican if they come out and vote.

But if you're feeling like, eh, this is not that great, are you going to take the time to come out and vote?

I mean, it looks, and that's why also when he 10 is the same scenario, yes, you have all these disappointed Democrats.

And they're like, hey, you said you would get us out of Iraq.

That didn't happen.

You said you would end the war in Afghanistan.

We're sending more troops to Afghanistan when you just fucked up my health care.

Yeah.

I mean, I'm not happy about this.

Yeah.

And, and so, I mean, it's, look, the midterms, Democrats just want yet another seat in Florida.

It was like really close.

It was in a Trump plus 11 district.

This is different than the one that has, that represents Mar-a-Lago.

This is another Florida special election seat.

The Democrats just won.

I think that means that they've flipped 31 seats in, in, since Trump's election and Republicans have flipped zero.

I mean, it's very clear where things are trending.

The only question is what sort of, what sort of things Trump's going to do to try to mess with the elections.

But I have to say at this point, I'm less worried about that because it's one thing when things are marginal.

You can screw with things enough that it makes a difference.

It's looking increasingly like things are not going to be marginal.

Well, also.

It would be too big to rig.

It would agree.

Too big.

Yeah.

From 2024 to 2024 and 2026 will be the too big to rig elections, which is really funny.

But then let's think about, you know, generally what that even means politically.

This is, this would be 2008 level sea change, except within the Democratic Party there's been all kinds of learning.

Within the Republican Party, I have no idea.

I mean, I don't see a scenario where there are more Tom Tillis types who are willing to buck Trump.

But if anything, it'll probably narrow the faithful down to like an extremely small group.

But it could be years then in the wilderness, like those.

Yeah.

Those are wilderness years where six years, eight years out of power.

I mean, who knows, right?

And all kinds of crazy stuff happens.

So what do you make of, sorry, what do you make of all these reports about like, oh,

Judy Vance is trying to bring the word to a close and he's not happy.

And he said, Netanyahu, you better cut it down or whatever.

What is that coming from his team trying to separate or what is coming?

No, I don't.

So I think it's, I think I have no inside knowledge as people, you may suspect many people are very upset with me right now.

What?

But my theory, and this is based on a little bit of like observation and knowledge of the dynamic.

A lot of people who were his boosters are very worried about his potential candidacy.

And so that is a very convenient.

Now, here's the problem though, those leaks while could be important for him in the future are actually extremely detrimental to him in the interim.

Right.

Because any report that the vice president's, you know, straying away from the president is very bad for him in the immediate term.

At the end of the day, the calculus is empirically correct politically.

He has to chain himself at the hip with Trump.

That's why whatever Trump does, he has to defend him.

Did you see him, given the Iraq, you know, comment in the situation room about a suicide bomber?

Oh, God.

Yeah.

I was like, oh, I did.

Okay.

It's like, so we're doing this now.

Yeah.

When it was like, just to match it, they've got suicide vests that are nuclear bombs and they get into like, oh my God.

I mean, that's one of those where I'll tell you, look, I've been shocked by a lot.

I see that and I'm like, wow.

Yeah.

Like, that's, that's what we're doing now.

But that's evidence of, of the point of this dramatically difficult dynamic, which is you have to chain yourself to, if he loses his access to Trump, he loses everything.

The vice president sees in a relevant job.

Ask Kamala Harris, John Nance Garner, FDR's vice president.

It's not worth a warm bucket of piss, I believe, is what he said.

He hated it.

Absolutely hated it.

And so it's really only what the president decides to give you.

Now, look, there's various different schools of thought because clearly the president doesn't really give a shit what he thinks very much.

Whenever it comes to foreign policy, he's just going to make you go out and humiliate himself.

But I do think a lot of the people who are around him, let's say consultants and others are either either leaking it or they're trying to like prop up this type of messaging to preserve that optionality in the future.

But honestly, the smart play at this, I mean, we're talking now, who knows what things will look like in three years.

I've seen Sora Bammari with a guest we've had on.

He's very close to JD.

He wrote a piece and he's like, maybe you won't run in 2028.

Maybe you'd run in 2032, like some sort of Nixon style come back.

You know, spend a couple of years in the wilderness, let Marco Rubio be the heir to Trump.

Enjoy.

Enjoy, right?

Oh, I want to spend.

He's having a baby this year.

He's going to have four kids.

Easy excuse.

I want to spend more time with my family, my young family.

I could see that as well.

So I really have no idea.

I mean, if you were asking me today, that would be a smart play.

At the same time in politics, it's all about timing.

Like, you're only going to be vice president once.

People may not care who you are five years from.

I think the thing I'll say is that for Trump, it is not a good sign that the heir apparent,

which is obviously your vice president, either him or his staff,

think that it may be politically advantageous for them to try to create some distance

from the man who has been the kingmaker in the Republican Party.

I thought about that.

This is why vice presidents are terrible candidates.

They just shouldn't run.

Like, they really, if you look in history,

who are all the vice presidents who really got screwed?

Gore, Harris?

I mean, potentially.

JD, there's, I mean, there's a few successful campaigns.

But like, that'd be a bush.

Right.

Yeah.

Even then, you know, he's riding off the coattails of Reagan when he's to stand on his own

to feeding its bitch slapped by Bill Clinton, right?

And Ross Brinnell.

Ross Brinnell.

You can, you really can see in like vice presidents empirically,

then kind of bad candidates, because they're so chained to the status quo.

Sometimes you get lucky.

Especially in the modern.

It doesn't work out.

It doesn't work out.

Especially in the modern era where people are just disgusted with this stuff.

Right.

And we have change election after change election.

But I mean, all of the little leaks that they're putting on or whatever they're doing,

I mean, at the end of the day, when you decided to cozy up to Trump and be his guy

and defend it, like, you placed your bet.

Well, that would be the, you know, that would be the lane.

And it wasn't a bad bet, politically, because he has been so dominant

in terms of the Republican Party.

But I just think, yeah, I mean, it's very possible a Republican project is just destroyed

for quite a while for anyone, whether it's him or Rubio or even Tucker Carlson or who would ever want to.

Just your moment.

Things change rapidly in American politics.

A decade from now, I mean, a decade ago, you really going to say Trump is going to stick around

and still be the president of the United States?

No.

Nobody would say that, right?

Yeah.

Remember 40 more years.

So it never make grand pronouncements about it's over forever.

It could be over in the interim, six to eight years, something like that.

And I think American history, modern American history shows us genuine dominance would be the

FDR to Truman of about what was at 20 something years, 24 years, right?

Of Democratic rule.

That's about as good as you can get, I think, in America.

Yeah.

And so, yeah, large majority things change very rapidly.

But for Vance, I mean, I actually was thinking about this earlier.

I started going on a bit of a tangent, but he was at a donor retreat yesterday with a lot of tech people

and a lot of them are very pro AI.

And I was like, you know, that's like the wrong side of that issue.

Right?

Oh, you've got, I mean, it's not me saying this like Republican voters are like, hey,

I don't want these data centers here, right?

Voters period.

Right.

Voters period.

But I'm saying even Republican voters, they are not on board with a lot of the AI policy

out of this current White House.

They're not paying attention, per se.

But data center is going to be a critical issue, I think.

Especially an energy crunch after this nonsense.

Oh, yeah.

We're going to pay higher bills to make sure that Google's AI can, you know, create black Nazis

in the Gen Gemini and I'm like, no, we're not doing that.

Yeah.

So I was thinking about that too, about I actually think the insurgent lane and the Republican

party is probably more open than ever before.

Like, somebody could do to the Republican party today.

What Trump did?

Somebody has to be so disconnected from the system to be able to stand on the stage and be able

to be like, Donald, no, no one's ever told you this Mr. Vice President.

Iran was a disaster, you know?

Maybe.

You need somebody to be able to say that.

I mean, maybe, but at this point, we're still in a place where the Republican base, they

may not be in love, but they're, yeah, let's say years from now, like that's what it probably

couldn't happen in 2028.

And maybe it can't really happen while Trump is still alive, but look, he's 80, you know,

who knows 10 years from now, what that would look like.

So yeah, same thing like Iraq, 10 years later, somebody can come along, let's say any

Trump-aligned official is running.

And tell the truth.

And just say the truth about what happened with Iran.

I maybe wish casting.

I don't know how things will work out, obviously.

But last point I'll make, put, sorry, B3, Nate Silver's thing back up on the screen for

the third time here.

But I want to make a point about, look at each of these moments that, you know, where

he really suffers a significant decline.

So first, you have the Liberation Day announcement.

So none of these are external crises.

These are all things that Trump himself did, right?

So the Liberation Day tariffs, dreadfully unpopular, and a chaotic mess, even, you know,

were people who are sympathetic to targeted tariffs.

This was idiotic, okay?

Justice Department declares Epstein investigation over.

Again, the whole Epstein thing, total own goal, mess, disaster, really damaging to his

brand.

Government shutdown begins.

Again, these are, you know, political problems that he could have handled differently.

Then you have Renee Good, killed, and of course, Alex Pretty, a week or so after.

This was, again, all because of his choice to occupy the city of Minneapolis after Nick

Shirley does his, like, Somali fraud thing.

And then the Iran war starts.

I mean, in a sense, he's been so fortunate.

There haven't been a lot of really any major external crises in this administration.

This is all of his own making.

Every one of these decisions, and Doge was not even on there, was also ended up being,

you know, a total cluster and profoundly unpopular, et cetera, even though it started

off with people sort of open and receptive to it.

So, I mean, that's why I do think that the damage to the Republican Party will be, could

be relatively severe, because, you know, it's one thing like you're dealing with coronavirus.

It's not your fault.

And it's everybody struggling to deal with it, you know, I mean, obviously there were

moves that were made by the United States of America that helped to spark the Ukraine

Russia war, but that ultimately is also like an external event, at least it's perceived

that way by the general public.

These are all choices that he made that every single one of these for people were out there

defending.

I know.

So, I mean, that's part of why.

It's very Iraq level.

It's very similar.

That's right.

It's why Iraq just nuke them.

That's right.

And Iraq started off so much more popular, and honestly had less of a direct impact on our

lives than this is already having outside, obviously, you know, there were, you know, severe

casualties in American service members who were killed.

But unfortunately, the reality of service in this country at this point is that it's

confined to, it's sort of like segregated off from a lot of the population.

So, in any case, you know, certainly he's looking at these polls and feeling like things

are not going too great, which part of what played into potentially the attempted taco.

Yep, that's right.

All right.

We've got our friend Rory standing by, let's get to it.

Joining us now is our great friend, Rory Johnston.

He is the founder of Commodity Context on Subsec, which we highly recommend everybody

to go and subscribe to.

There will be a link down in the description.

Thanks for joining us, man.

Appreciate it.

Thanks for having me back.

All right.

So, Rory, let's start with your reaction to the Trump taco.

It's Taco Tuesday.

Let's put this up here on the screen.

All of those countries that can't get jet fuel because of the Straits of Hormuz, like

the United Kingdom, which refused to involve the capitation of Iran.

I have a suggestion from you.

Number one, buy from the US.

We have plenty.

Number two, build up some delayed courage.

Go to the strait.

Just take it.

You'll have to start learning how to fight for yourself.

The USA won't be there to help you anymore, just like you weren't there for us.

Iran has been essentially decimated.

The hard part is done.

Go get your own oil.

So as the premier oil analyst, how's that going to work?

I mean, it's just a wild statement from a US president.

I think just on two points here, actually, it's like, should it be a third point as

well?

So, hard parts done, you know, you do the rest.

Obviously, the rest is the part that's too hard for Trump to do himself.

So I would say at this stage, it's not entirely sincere, although that's not shocking in this

environment.

I think the part that really hits like a hammer, though, is the go get your own oil exclamation

mark, which is essentially like the epigraph on a book about the end of the Carter doctrine

that the United States has been the policeman in this region of the world for decades.

It has been the guarantor of these oil supplies and for the regional security of the Gulf

kingdoms and Gulf states and Gulf, you know, oil exporters.

It's a complete rewriting of how this situation in the Middle East works.

And I, you know, when we're talking about the unilateral talk, I think I kind of see

the two most likely scenarios here as kind of the really, really bad scenario where the

global economy goes into like a deep recession.

We get a $200 plus oil.

That is the scenario, I think, that we've been grinding towards steadily and disconcertingly

of boots on the ground, trying to take carg island, et cetera, et cetera.

That's where you get prolonged closure of the straight.

You get risk of further attacks on a regional oil infrastructure, things that can't just

be undone, things that are permanent or at least years long, durable.

I think that's a scenario, but I see that is so dire that I see it as very difficult

to hold as my base case because I just don't think that any politician, less at least

alone, Donald Trump has the way with all to go through with kind of something so long

and arduous like that.

I think more likely here is the other scenario, which is my base case from the very beginning,

which is being what I call the unilateral taco, which is people like, well, Trump can't

just taco.

This is not tariffs, this is not trade policy.

There are multiple participants in this war.

He can't just decide by himself.

I humbly disagree and I think that Trump would likely disagree with that as well.

I think if we've seen anything about Trump, he's not bound by precedent, he's not bound

by allies and not bound by anything.

And I think he's very clearly already bored of this war.

I think by this stage, he planned to basically be rolling over onto Cuba.

I think that, you know, I never thought that Trump planned to get this deep and he never

had a plan for once he was this deep.

So I think if the consequences keep ramping and I don't think this is over yet, I think

that we still need higher oil prices and lower equity prices and more economic pain

to force that unilateral taco, but that's how I see this eventually going.

It's the one day we're just going to get a post and say, it's done, you know, US Navy

selling home.

That's how I pitch this ending.

Let's put C zero up on the screen.

We're now officially at national average over $4 a gallon for gas.

So a significant and not great milestone being reached here.

Let's say that he does the full taco.

Go get your own gas.

We're out straight of four moves.

There's do reality.

There's new sheriff in town.

We're going to let Iran charge their toll and, you know, you can do deals with them in

Chinese.

You want we're out of here.

Okay.

Let's say that that is what happens.

What is the damage that's already been done and how will that trickle throughout the

global economy?

Yeah.

So the one thing I want to kind of stress here is that in no reasonable scenario coming

out of the Arom war, do I see the oil market being in a healthier or more secure position

than which it entered the war in?

Yeah.

So I think, you know, any scenario is going to have structurally higher prices.

I think in this scenario where you have, you know, a boost on the ground dragout, $200

plus.

In this scenario of a unilateral taco, Iran having some kind of sovereign control over

the street, which again, is just an unthinkable thing to kind of consider a long term.

But that's what we're looking like.

We're at least trending towards possibly in that scenario.

I still think that oil prices currently, I'm looking at my screen, Brent's just about

117.

I think that's still too low.

I think that, you know, even though this unilateral taco is bearish or a lower price

environment than the boots on the ground scenario, I think both of them are still

dire and like a deeply untenable supply situation.

I think in the scenario where Iran does continue to control the straight, then we're just going

to like, it's just setting us up very predictably for the next crisis.

I think this is like, this is a situation that can't last.

It is inherently politically untenable and unstable.

And we're going to get the next flare up.

So we go from a long drawn out, awful, Hormuz closure to maybe like a perennial two week

closure in Hormuz, which seems like an insane thing to bake into the system.

But that's kind of again, what it's looking like we might be arriving at.

Yeah, it really does.

Let's go and put a nine guys up on there on the screen.

That's the bill that has been passed through Iran.

They say that they would impose a toll system in Reals that they would ban passage of U.S.

and Israeli vessels through the strait, assert Iranian sovereignty over the airway, strategic

waterway, ban any country that imposes unilateral sanctions against Iran, Oman slated to help

shape the legal framework.

Which, by the way, that Oman East is actually pretty significant.

Yeah.

I mean, let's, let's game this out.

I was thinking earlier, I go, how could you be the Gulf countries where you have to get

all, you just got bombed by these people and then you have to pay them some sort of toll.

And maybe they won't even want money and they're like, bombs keep coming unless the bases

go.

But like, that seems to be the reality.

I mean, the UK, Japan, South Korea, all of these Asian countries, they would have to

pay.

I mean, I don't even know how they could get Reals, by the way.

I mean, is there a market, you know, to exchange, like, talk us through what that would

look like?

Yeah.

So just, let's talk through the, the, the size of the toll first.

So I think, you know, what we've seen discussed so far is a $2 million passage, which sounds

very expensive.

But relative to like a VLCC or a very large crude carrier tanker, the, the largest ones

they're typically used, they carry about two million barrels of crude.

So that's only about a dollar or a barrel on toll.

That is expensive, but relative to the current deeply, deeply problematic status quo, it is

a clear kind of beneficial change to the global supply situation.

But to your point, the politics of this are deeply untenable and it seems unlikely that

a ROM would allow a complete reopening of the straight again.

Prior to the war, we were having about 100 plus 100 to 120 vessels crossing the street

every day.

You know, maybe we get back up to 50% of that.

And with some of the offsets that we have in the system, like the Saudi East West pipeline

and other, and other sources, maybe we get back to something that's, you know, just a

deep deficit rather than a catastrophic supply deficit.

But I think that's a scenario is that we just have some kind of durable control for Iran

in this, in this, in this region.

And the Gulf country is kind of having just needs to, you know, swallow the, the bitter

pill because the alternative is existential for them.

This I think is, is, is existential for them as well.

But at least it is a scenario where they can continue exploring their oil and restarting

their economies relative to right now, where virtually, I mean, by far their large economic

sector is completely sideline.

All right.

The other thing Trump says offers us a solution other than go get your own oil and good

luck militarily in the street of Hormuz is, hey, come by from us.

We've got plenty of oil.

Can you talk about, you know, how our supply fits into the global oil markets and the

reality of what that looks like as well?

Yeah.

So, yeah, definitely.

So, let's say Europe is the only, because I think that's kind of who he's aiming this

tweet at in terms of like the UK reference.

The UK and Europe more broadly is a net importer of what we call middle distillates.

So diesel, jet fuel, etc.

Historically, Europe got that from Russia following 2022 in the invasion of Ukraine.

They banned the import of Russian oil and gas.

And increasingly they, they turn your European importers turn to the Middle East and the

Gulf for those supplies.

So this is obviously a particularly cute for them.

You can actually, you know, the United States is a net exporter of diesel and middle distillates.

Largely those current cargos go to Latin America.

Mexico is the largest single recipient.

So if Europe started to overbid those, one, they'd be paying a very pretty penny for

them.

And you'd essentially be taking those flows away from Latin American importers, which

are going to be in a different entire world of hurt.

But I think also what's further going to complicate this is if this crisis continues and

if prices get a get higher and more volatile, I think the one thing that a lot of people,

a lot of analysts have been watching for is any signs that the Trump administration is

going to pull the trigger on some kind of trade restrictions, which obviously I think,

I mean, the ultimate rug pull here would basically be that Trump starts the Iran war destabilizes

the straight leaves and says, Oh, by the way, you are a problem, go get your own oil or

buy from us.

They're like, OK, we'll buy from you.

And they look, actually, we're going to ban the export of diesel in the first place.

So go find it somewhere else.

Like this is a recurring cycle of kind of bad faith negotiations and diplomacy leading

to just a situation that is, you know, sure, the United States relative to a lot of the

rest of the world is going to be a relatively better spot because a lot of domestic production,

I'm up in Toronto, you know, you have secure supplies of Canadian crude into the US, Midwest,

in particular, that can't get enticed away to other regions.

So the United States is in a good spot, but the United States exists in a global economy.

And the US can, you know, just no matter how strong the US economy is, it's going to

feel those buffeting that buffeting from a global economy if it's under that retrenchment

of this recessionary pressure.

Something I've really learned from you, Rory, is about why an export ban would be a bad

idea.

You've talked actually about refinery capacity about the various different types of refineries

and what they're built for.

Some of this reform oil, some other foreign refineries built for US oil about how much that

would distort the global market.

So when people say, when Trump says you can come by from us, I think what you're trying

to hammer home is, yeah, they'll come by from us, but we have to buy ours too.

And that's really going to be expensive.

So it could still be a $6 gallon type scenario depending on where the crude oil market and

all of that goes.

Not to mention, I mean, I know you're not an LNG expert either, but like that is also

kind of critical.

Last time I checked for Europe, could you just talk through that about why you're kind

of screwed other way?

If you do an export ban, you really would hurt the US market, you know, kind of forever.

And if you don't, we're also still going to have to pay sky high prices.

Yeah, just to your point, even aside from the crude quality and the kind of, you know, refinery

slate stuff, even just on the product side.

If, you know, the US Gulf Coast, the net exporter of diesel and jet fuel and other products

like that, whereas the East and West Coast are net importers of gasoline, the relaxation

and kind of suspension or waving of the Jones Act could allow some more of those Gulf Coast

barrels to the coasts in a way that could help an autarkic kind of US petroleum trade

work without completely breaking.

But fundamentally, you need these export markets in order to clear additional, like, let's

say, access diesel from the US Gulf Coast.

If you ban the export of that, it would initially manifest as what the White House would see

as a great thing, which is you'd have access supplies, you'd have inventories that built

up, you'd have depressed diesel prices domestically, briefly, which is going to sound like a great

thing for a couple of weeks until that surplus of diesel ends up forcing those Gulf Coast

refineries to reduce their run rates because they can't put their diesel anywhere.

And that means that you would end up in a situation where you could actually end up running

out or having a scarcity of gasoline in the US Gulf Coast, which would be an insane thing.

One thing I keep saying is that for advanced economies, this will largely manifest as a debilitating

price shock, because we'll be able to, we have very low price density of these fuels.

I like to say, like, I'm driving my kids to school regardless of how high the pump

price is.

But much of the world does not have that scenario and they're going to feel the weight

of this through supply losses, but it's very actual scarcity and the lack of supply.

But the way you can short circuit that ability for us to pay for these fuels is by getting

to muck with trade.

And I think that is the temptation here and again, that's my worry of if this keeps going

where we could be headed.

Yeah.

Five up on the screen, there was an announcement from Russia, they're planning to ban gasoline

exports starting on April 1st, you know, Russia, obviously, major oil producer, a significant

global supplier.

What is the significance of this?

Yeah.

So I think you're seeing a lot of countries around the world.

Russia is one example.

China is another example.

I think even more critically that has banned the export of refined fuels in 2022.

They were a very important swing producer into that diesel-starved market.

With Russia specifically, Russia isn't off, isn't typically, it's a very, very minor

net export of gasoline.

And ever since Ukraine's attacks on domestic refining of a structure, it's increasingly

been pushed into a scenario of net imports.

So the reason that they're banning exports is to kind of try and hold back as much of

that gas in as possible.

The bigger concern would be if you started seeing Russia banning the export of diesel,

because unlike gasoline, where they're a minor export player, diesel, they're a major

export player.

More like a million barrels a day versus let's say gasoline a hundred thousand barrels

a day.

And in that scenario, again, diesel and middle distillates, the tightest area of the market,

that would, you know, really, really hurt in terms of those refining margins of cracks

in the prices you and I see at the pump.

But one thing on Moscow, I just, I keep repeating this that Moscow is the single largest beneficiary

of the Iran war, both in terms of an overall higher price environment.

Explicit removal of sanctions by the U.S. Treasury against Russian and shockingly in this

context, even Iranian crude.

And I think all of the pressure that the White House had very successfully imposed on the

Russian oil industry, you know, over the past, you know, eight, nine months, that was

undone in a month.

And I think we're back to square one.

And I think the one rub to this is that the one person who knows this has been a boon

and likely a windfall for Putin is Zelensky.

And what we've seen over the past couple of weeks is Ukrainian forces dramatically ramping

up against the attacks against Russian export infrastructure.

Last week, Ureiders had it at 40 percent of Russian oil export infrastructure was offline,

was the largest disruption to Russian supply in modern history.

Wow.

On top of the largest supply shock in the oil markets and tire history happening in the

Gulf, just entirely separately.

So I think there's this prosickical element now that the higher oil prices go, the more

pressure Ukraine is going to put on Russian exports.

And that's going to put prices higher.

And again, ramp pressure first, even more geopolitical spiral.

My last question for you, man, is let's put C3.

I love this map that you put out there.

I believe it was made by JP Morgan, which shows the actual, like you said, where the air pocket,

which is kind of way you could think about the supply loss, is moving through the world.

So East Africa was already hit.

East Asia this week, we're literally about to do an entire block about all of the global

chaos in South Korea and President being like, I can't sleep at night, Europe next week.

And you say North America two more weeks.

Now the Secretary Hegseth took the podium this morning, basically refused to give some

sort of a timeline.

The war is not going to end today.

That's for sure.

It's going to end sometime in the future, but you're saying two weeks coming up on that.

What does that look like?

We're already at $4 a gallon here in the U.S. nationally.

Let's say two more weeks when that pocket hits us.

How does that manifest?

Are we going to have supply shortages?

Are we going to be Australia with, you know, petrol stations that are closed?

What's that look like for us?

So I think the United States, like I was saying earlier, is in a beneficial and kind of privileged

position that it likely won't immediately run into any major physical shortages.

But to your point of like U.S. average gas prices already back over $4 a gallon, the price

pressure is going to keep coming.

So like that chart shows that that air pocket and just to give that the logic of this,

you know, before the war, you had tankers leaving the Gulf fully with crude.

They take upwards of a month or a month and a half to get where they're going.

You're not going to feel the loss of those supplies and the closure of the straight until

that final tanker reaches your shores, behind which there's nothing but air.

That's the air pocket.

That air pocket is landing in Asia likely this week, Europe next week and North America

two weeks after.

But if you look at that chart, North America also doesn't get that much oil from the

Gulf anymore.

It used to give a lot more.

So that's what we call revolution in the and growth in Canadian production has largely

displaced those barrels.

But we got a we end up back in the situation that Nancy is still in that importer of or

is still an importer of various fuels on the coasts and of crude oil in the Gulf because

of quality issues.

Those barrels that are imported are going to have furious demand and competition for

them already.

And as we as Asia starts drawing down stocks because that air pocket has arrived and then

Europe next week, that's when you're going to see mounting and ever more pressure and

one thing we keep talking about is this disconnect between paper or financial futures and crude

and the physical market underlying these industries.

That has remained fairly wide when the air pocket lands.

It's going to it's going to kind of wedge those things together.

We're going to see way more of that physical pressure manifest in the prices that we see

on our screen.

And Roy, if you could best you can sort of bottom line it for consumers who are listening,

like what should their expectations be over the coming weeks at what they're going to

pay at the pump?

It's going to be a very, very expensive driving season, like, you know, easily the most expensive

driving season since 2022.

And if this continues through April and further, we will likely, we will very, very likely

see all time high pump prices and surely all time high diesel prices in the United States.

Great.

All right.

Well, yeah.

Sorry.

Sorry.

Sorry.

Good weather.

But we got a note of one.

We trust you and you are not a sensational person.

That's one of the reasons I really enjoy speaking with you.

I'm not a sensational person, but not a sensationalist.

Well, yeah, sorry.

Not a sensationalist.

Not a sensationalist.

Listen, thank you.

He's not, what is it?

What's the term permable?

You're not a permable in the oil space.

Everybody go follow, Rory, and subscribe to our sub-sac.

Thanks, man.

Thank you for joining us.

Thanks for having me.

This is an I Heart Podcast.

Guaranteed Human.