Iran attrition war. LNG supply crunch

0:00All right, Alexander. Let's do an update on what is going on with the war in Iran. And let's look at the energy situation, you know, the gas LNG crisis. And I'm sure we're also going to have, or we have, for we will have an oil crisis, so just a general global energy crisis. You can talk about the closure of the streets of Hormuz, which is not my understanding of it. It's not the military that is actually closed it, even though we are seeing tankers that are trying to cross. It looks like they're getting hit. Of course, there's still a lot of fog of war as well, but a lot of it boils down to the Lloyds of London. And insurance, you have Trump saying that he'll ensure those tankers, the United States will ensure those tankers, but that can't fly. And then we have everything that's going on with Qatar. They're shutting down their LNG. They're not stopping it. They're shutting the whole thing down. And that means that we could be looking at

1:02at a two week period for them to restart it if they did the set started. And then another two weeks to get it back up to where it was before they shut it down. Yes. This is going to cause all kinds of issues in horrific issues in Europe around the world. And then you have China. It looks like they're going to stop exporting fuel. You have Russian President Putin actually saying, maybe we need to stop any gas exports to Europe. Europe was going to stop Russian. They were going to block Russian exports by 2027. And now Putin is coming back and saying, forget about 2027, we just might stop them now. What do you think about everything that's going on? Well, let's just quickly start with the war. Of course, we're discussing the war. We're providing people to the extent that we can pretty much daily updates at the moment. But to me, for the moment, it looks the war itself is looking like a swarging match.

2:03And it's exactly what we anticipated it would turn into. There was clearly an intention right at the beginning to decapitate the Iranian leadership, all kinds of assumptions that once the leadership fell, there would be revolution in Iran, there would be a takeover in Iran, Pakhlavi, or someone else would come in, or maybe there would be some person from within the Iranian leadership will take over and do a DLC, Rodriguez there. Clearly, that's not happened. Oh, that plan, plan A has gone. So we have a swarging match. The United States and Israel have vastly more ability to hit Iran. They're pounding Iran. They're smashing Tehran to pieces. They're doing enormous damage. They're trying to start something with the Kurds in the west of Iran. So the pressure on Iran is extremely strong.

3:03We don't know how long Iran can withstand this, this kind of pressure, or whether it is able to withstand it indefinitely. But the US and Israel and the West are now also under pressure as well. Firstly, we have the problem of the depletion of air defense missile interceptors. This is quite clear. This is indeed what's happening. Hege says talked about the US Air Force conducting bombing raids using gravity bombs over Iran. I interpret that as a sign that the US is running out of a long range, standoff, weapons, tomahorks, jathams, all that kind of thing. So there's that problem as well. So it's a test of endurance. There's now talk about a 100 day war. That was this morning. You know, it's gone from two weeks to four weeks to eight weeks. Now it's we're talking

4:09about three months and maybe even up to September. I mean, maybe even up to September, taking us all the way up in other words to the midterms in the United States. Now this is very bad for the United States. It is a debacle. If this if this turns out and the reason it's a debacle is because firstly, the military situation, the the the stockpiles get depleted. But now we come on to what is the immediate and major crisis, which is the situation with the energy markets. Now, the United States itself is self-sufficient in energy. It reduces it has coal, it has oil, it's also is an oil exporter. In fact, it isn't gas exporter as well. But the US functions within a global energy system. If prices of oil and gas rise in Europe and Asia, they will rise in the

5:10United States too. And it's becoming increasingly clear that the Straits of Hormuzis in deep closed, the Iranians are playing a extremely devious game here, which they do. And you know, I'm not criticizing them for this, by the way. But they're playing a game. They're saying, oh no, the military hasn't closed the Straits of Hormuz. And the IRG says, IRGC says, we have closed the Straits of Hormuz. The point is that Iran has these two parallel militaries that function alongside each other. Both for the moment are remaining loyal to the Iranian government. But of course, the conventional military, if you like, represents the state, the IRGC is a force on its own. The Iranians are playing this game of pretending at one when it suits them that they haven't closed the Straits of Hormuz, even as donating that they effectively have.

6:15The fact is that the only tankers and ships that are able to transit through the Straits of Hormuz at the moment are those that the Iranians allow. And so far, they've allowed two ships. I believe they were both China connected, but mostly the Straits of Hormuz are shot. Now, this is having an impact. We are already seeing the Qataris, as you rightly say, they've shut down their entire natural gas industry. I was reading just before we did this program, an article in the Financial Times. It says that the problem in the Gulf is about to get much more serious, because since the Gulf producers cannot export oil, what oil they are producing, they are having to put in their storage tanks. Those storage tanks are going to start

7:18to fill. In the case of Q8, it will be in about three days. In the case of, I believe the UAE, it's going to be five days. The moment that happens, they have to stop oil production. If they stop oil production, if the oil fields close, then just as it takes time to restart natural gas production in Qatar, it takes time to restart production of oil. If oil production is shut down for more than a few weeks, oil fields start to accumulate damage and the time taken to restart them increases. So we're looking no longer at weeks. We might be looking at months. Now Saudi Arabia has by far the biggest oil storage facilities. They have apparently six big facilities in Saudi Arabia.

8:28Four are believed to be mostly or entirely filled. That leaves two. At some point, if this is prolonged for a hundred days, and the streets of almost is closed for a hundred days, then those facilities will also fill. And at that point, Saudi Arabia has to stop production. Now that is a colossal crisis. That is a crisis of a sort that we have never seen since the 1973 oil crisis. And it is going to have massive repercussions around the world. The United States, as you rightly say, is, as we've said, has self-sufficiency in energy. But oil prices will rise, but there will still be energy. There will still be oil and gas in the United States. Other countries around

9:31the world, the Asian consumers, Japan, South Korea, are far more vulnerable. Europe is more vulnerable still. They depend entirely now on American LNG. Well, overwhelmingly on American LNG. If LNG Qatar, which is the third biggest producer, stops. And LNG prices globally start to surge. I'm going to say exactly what I think is going to happen. The United States, certainly this administration, in advance of the midterms, is going to start releasing oil from its strategic reserve to try to cushion prices in the United States. And it's going to stop exports of LNG. I think that is a very high probability come the autumn, in which case the Europeans are in

10:31deep crisis. Already, their reserves of natural gas were low for this time of the year because of the cold winter. LNG prices are rising. We're high anyway. And they're getting higher. They're going to get higher. Without LNG coming from Qatar, without LNG coming from the United States, with the Russians now saying that LNG, they're not prepared to sell LNG to Europe. And they're going to stop supplying it immediately. And this is connected with that lunatic attack on that ship in the Mediterranean, which will come to in a moment. But with the Russians saying all of that, well, I just don't want to even begin to calculate what this is going to mean for the Europeans. They rely on oil from the Gulf. That isn't coming. They rely on LNG from the United States.

11:34That might not be coming. We're going to have a deep crisis. I was going to make the exact point that you made. Actually, I said in a couple of videos I made a couple of days ago, what if Trump wakes up because of the war one day he wakes up and he posts on through social because of the conflict because we're at war. We're not going to be exporting LNG anymore. Which we actually said, I believe you said in a video almost nine months ago, when we were talking about all of the EU sanctions and how the EU is now very dependent on the United States for gas and for LNG. And you brought up the point that perhaps the United States had especially Donald Trump meant and may not be the best person to rely on for your energy security because he can wake up. And we had no idea there was going to be the war in around. We would never imagine that we would be at a point where the Straits of Hormuz would be closed and you'd have all the issues with Saudi Arabia and Qatar completely shutting down their gas facilities. But the point

12:42was made. One day Trump may decide, you know what? I'm not going to be exporting LNG for whatever reason. Now we have the reason or the reason is coming or the reason is forming. If this thing drags on, no doubt about it. The United States is going to stop exporting LNG, especially the closer we get to midterms. I mean, we see China using the war as a reason to stop fuel exports in their refineries. Yes. We see Putin now saying, perhaps that's a good idea. Yeah. We're in a war, but there's a war in the Middle East as a crisis. Perhaps we need to to husband our resources. What does Europe do? You know, Europe doesn't seem very concerned. I've been listening to statements from from Kayakalis, from from Ursula, from other European officials. Outside of of Hungary or Bad Seattle Fizo. The rest of the European leadership, the EU leadership doesn't seem to be

13:42very concerned about this at all. Shouldn't they be on a plane to Moscow? They should be on a plane to the United States and telling Donald Trump. Merch was just there. He was giving this full support, but they should be on the plane to the United States and explain to the to Trump. Look, this has got to this cannot go on for a hundred days or three weeks or whatever it is. It was where it didn't do that. Well, you didn't do that. No. So that's my that's my question. Okay. So you didn't do that. And there's Germany. Yes. So so where is Europe at? Well, they could also start doing something else, by the way, which is they could start rationing gas and oil. They could do that now because at the moment, there is no the only limiting factor on consumption of gas and oil is that provided by the price mechanism. But if you are looking ahead and you are saying to yourself, well, there might be a one hundred day war. And the US might start taking the kind of steps that

14:48we've just been talking about. Then maybe we need to start a husband. What reserves we have now before winter comes. I mean, this is a crisis. They ought to be meeting. They ought to be making a decision about it. Have you ever seen the Europeans behave that way? No, I never have. They never do these things. What they're going to do is nothing. They're going to wait like the proverbial rabbits on the motorway, called in the headlights, until finally the truck hits them. What does that mean when the truck hits them? Well, when we do start to get shortages in Europe, when prices, there's shortages, there's rationing, severe rationing, not just the kind of rationing I'm talking about, the severe rationing in Europe over the course of the winter. And when we start to have cutoffs of gas to cities and when we start to see production across Europe implode.

15:54Can the Europeans push Trump to to wind this war down in a month? Well, at the moment, try his furious Europeans. He's very angry with Macron. He's very, very angry with Stammer. He's an absolutely incandescent with Sanchez. He's Spain. I get the sense that there really isn't very much community of spirit between Trump and the Europeans at this time. The other people that perhaps the Europeans might want to talk to is the Gulf producers who must be extremely worried. For them, oil is also an existential matter. If they can't export oil, bear in mind, these are extremely high spend, high welfare economies. That is how they buy compliance from their populations. I don't want to overstate this, but no doubt they do have

16:56a reservoir of legitimacy that they can draw on. But if they can't keep funding their societies in the way that their societies have become used to, then one can see that they're going to be massive problems for them. They presumably want this to end fast. You would have thought that the Europeans would be talking to them and that they would all be beating their way to the White House and telling the Americans, look, we can't afford this to go on for 100 days. I mean, perhaps you can. We don't think it's wise even for you. But if you're looking at the whole situation and the globally economy, which does impact on you, you've got to find some kind of off-ram. You've got to find some way out. And you think I'd say about Trump is, yes, at the moment, he's absolutely committed to this war and he talks about this. But we all know that Trump can

17:56change. He changes, he turns on a dime sometimes. If he's presented with demands from all the sorts of people we're talking about, you know, from MBS, from the Qataris, the Ammanis, the Qwaitis, the UAE, they all troop up and the Europeans are there as well. Then, you know, maybe he will listen and maybe he will also listen to the economic people in the United States as well. So this is what they ought to be doing. But if they don't, well, they do have the other option. They can go to Moscow. They can ask Putin, please restart Nord Stream 1, please restart the Yamal pipeline. That would be the end of project Ukraine, by the way. If we ever get to that position, then that throws the Lensky and Ukraine finally under a bus. Ukraine ends. I mean, the conflict ends. The Russians dictate terms. There's no point in talking about negotiations

18:59anymore because from that moment on, the entire sanctions war has ended and ended forever. And that is something that given the psychologists of some of the people in Europe, they're going to find very difficult to do. But yeah, they can do that as well. But they also have to face the problem. What if the Russians say no? Can Putin say yes? Does he have, I mean, what would, would, would, would Putin say yes to, to, to such an ask from the Europeans, given everything that they've done to Russia? I am far from sure. I, if, if I have to say, first of all, I think the mood in Moscow, if you're talking about the, you know, the wider mood, you know, apart from Putin and Demetriev and people like that, I'm not even sure Putin and Demetri, but you know, if you're talking about the opinions of the elite in Moscow, if you're talking about the wider population in Moscow, they would say absolutely no. If you remember,

20:00way back in 2015, this is long before we had the economic sanctions, the sangrian of the super sanctions and all of that. Way back in 2014, 2015, Gasprom said they would stop building pipelines to Europe because they found Europe such an impossible market. They were facing constant legal claims, endless harassment, the relationship, the trust had completely broken down, and along comes Angela Merkel and she says to Putin, wouldn't be a great idea to restart Nord Stream 2 and because Putin is the soft spot for Germany or had at that time, he soft spot for Germany, he said, yes, the point was even then there were people in Russia who would say, this is not a wise energy trade. Yes, the Europeans are paying quite a lot, but they cannot be trusted. And of course, in 2022, they showed the extent to which they cannot be trusted.

21:06And now they've done something else which shows even further that they cannot be trusted because you had a ship, a Russian ship carrying, I think it was an energy tanker. And it's attacked off the coast of Malta and it's attacked by the Ukrainians using drones underwater drones. I am told the Ukrainians, yeah, Ukrainians, I'm told, I've heard it said that the Ukrainians were given by someone an old Soviet foxtrot, some Malta or it is exactly, it is impossible for the Ukrainians to be doing things like this without assistance from some of the Western countries, from some of the European countries. The British perhaps, given that we're talking about the Mediterranean, I cannot imagine it could have been done without some say so from

22:06the French. Why? Well, I presume this has all decided upon, this is a clever plan that somebody came up with a few weeks ago just to say, but I mean, they should have called it off. It's a crazy thing to do at this time. Putin is furious about this. This is why he took the decision to stop all exports of LNG to Europe ahead of the Europeans own time table. So, given that this is the kind of people that would be coming in this crisis to Moscow, to ask the Russians to resume energy exports. Why would the Russians say yes? Wouldn't they be far more likely, in fact, to say no? Just say. Well, Putin is thinking about doing it. I mean, I think he will. He's floating it out there. Why would he mention it if he's not going to do it to cut off the gas to Europe? I have never known it. I have never known Vladimir Putin to float

23:10an idea that he doesn't act on. Just to say, I have no doubt that he will do it. I think the decision has already been made. You know, from the European perspective, going back to the Europeans and in the Gulf States, the sense that I'm getting with the Europeans is that they're not going to Trump and to the White House and asking them to find an offer up to this conflict because they're going to have big problems. Their stance in all of this or their strategy, if you even want to call this a strategy, it seems stupid to me, but we're dealing with very stupid people, is to push Trump, to push the United States, to go harder. The belief that if they press harder, even if they get involved, even if the Europeans get involved in certain ways, then perhaps they can end this war with a victory in the next week or two, and then they're out of this mess. In other words, defeat around quickly. They're not going to Trump and saying,

24:14find an offer up quickly and let's get to a stable situation because we're going to be hammered in two, three weeks. They seem to be going to the United States and saying, finish them off in one or two weeks so then we can be okay with the situation. That's exactly what's happening. I get to tell you something else. All this story that they've been circulating, that they weren't consulted and that they didn't know what was coming is impossible. We could see, we on the see what was coming. The idea that the British, the French, the Germans, all of the other big western countries, the NATO countries, that the NATO bureaucracy was not aware that the United States was about to attack Iran is ridiculous. They all knew that the United States was about to attack Iran and they supported it. They told the Americans, go ahead. We are there behind you. We support you because they too believed that it would end quickly just as they believed in February

25:232022 that the sanctions against Russia would cause Russia to implode. They are trapped and one of the reasons Trump is so angry with Starmer especially and Macron is because he'd been given, I have no doubt about this, indications from the French and the British that they would be fully participating and on board with this and he's very, very angry that they're not doing that and by the way the reason that happened in London is because apparently there was a massive rebellion in the British cabinet. A whole group of ministers said that this is a crazy idea. Britain must not be involved in this and there's been legal advice from the Attorney General's office in London that this isn't a legal attack as well. So that takes us to the Gulf States to wrap up the video. Do the Gulf States have an in them to go to the United States and tell the United States to back off?

26:27Is that something they would do? Is that something they can do as a group as one? One voice can they go to Trump and say will they go to Trump and say enough? Or are they also going to operate under the assumption that the United States is going to finish off Iran quickly in the next week or two and then they're out of this mess? Can the Gulf States do it? I don't think they can. You think they can? I think this is what I think they're going to do. I think they're initial they're initial advice to Trump is have and say get this done fast. We've only got two weeks at most. Knock out Iran in two weeks time. If in two weeks time Iran is still there and it looks as if this is going to drag on until the autumn then they will come along. They will get together because as if this is existential for them and they will start to say to Trump well look the time has gone to get an off ramp together and if Trump isn't listening they will come crawling to Vladimir

27:30Putin. They will say try get the Iranians and the Americans to end this. They're already talking to Putin about this. The problem is not that they would hold back from asking Trump to stop it's just that I'm not convinced that within the United States, within this relatively small group of people in Washington who took this decision to start this war which of course includes Trump himself. They are really prepared to listen to that kind of advice because of course if they do get if you do listen to this advice and they do call it all off well this is the end of Donald Trump's presidency. So I'm guessing that at the moment the talk in Washington is not about calling off or dialing down or looking for off ramps. It is for further escalation and I suspect

28:40that will be the same in two weeks time and of course we can already see what the escalation in the short term is going to be. It's trying to involve the Kurds. If that doesn't work then you try to involve Azerbaijan. If that doesn't work well they're already talking about sending ground troops. So I think this is where we are. I think we are not yet at the moment when they're prepared to listen to advice to look for our off ramps. They are looking instead for ways to achieve the objective faster, faster than slower. That's I think what this is all about at the moment. What do the Kurds accomplish? What does Azerbaijan accomplish? I mean I was looking at maps and analysis of Iran. It's massive. It is a huge country. It's twice the size of Ukraine. It's about the size of Alaska. It's massive country, difficult terrain, a lot of mountains.

29:47I go back to Zalensky's big super victory of Kursk and how he presented that. We've invaded Russia. Russia is massive. Look, we've invaded Russia and now we have a part of Kursk. And we talked about that incursion and we analyzed it as many people did including the Russian military from the standpoint of okay, now you're inside a Kursk. Now you're all going to die. Because where are you going to go from there? Where do you go from there? I mean I don't want to say it's the exact same thing with Iran because at the same time Tehran is getting pounded by the US and then by Israel from the air. But you have this mosaic command structure. It's everything's decentralized. And so the Kurds come in or the Azeris come in and do what exactly? They're not going to make it to Tehran. They're going to set up shopware on the border. They're going to

30:47occupy a piece of land. And then eventually when everything reaches some sort of equilibrium at least in the air campaign, the bombing campaign, eventually Iran is going to start hammering them. Yes. Because you're going to need hundreds of thousands if not millions of ground troops to make any dent inside of Iran. I mean maybe the plan is to destabilize from within. Obviously that definitely is the plan. So I guess they're hoping that certain factions in Iran will rise up and they will take up arms and then the country can start to fracture like in Syria. But I don't see that happening. I mean how do you see this whole ground operation unfolding? Because if Trump doesn't wrap this up in a week or two, his presidency is toast. I think it's already toast. I think it's already over. I think it's done. But if he doesn't wrap this up in two weeks, I'm starting to think the reverse when it comes to the Gulf states, I'm starting to think you

31:47know what? Knowing the Middle East and how devious and deceptive and cutthroat all of these monarchies are, I'm thinking they might actually say, okay, so Trump doesn't want to wind this thing down. Well, maybe we'll make it painful for the United States. So that Trump winds this thing down. I mean, what do you think of everything I said in the world? Absolutely. I mean we've been saying this already. Iran is huge. The geography is very difficult. It's also, by the way, of a much more coherent society. It's not similar to Syria or Libya or Iraq. Syria, Libya and Iraq are modern countries. They emerged in the 20th century. Iran is not like that at all. So it's much more modern. It's much more educated. I mean, the population is it's educated. It's much more coherent. And it is huge. And as you said, the geography is very, very difficult. And they're

32:47not going to reach Iran, Iran obviously not. And I mean, that cannot even be the plan. So what I think the immediate intention is, if there is a plan is to try to get all these Trump problems on Iran's western borders and hope that this somehow increases the pressure in Iran itself so that the government there begins to crack. Now, at the moment, that strategy as far as we know is not working. The government is holding together. There'd be no visible defections, no embassy. For example, has changed its flag. What up the monarchist flag? No senior diplomat has defected from the government. There's no sign of military units changing their loyalties. There's no protests on the streets. Nothing like that has happened. There's rallies on the streets.

33:52There's rallies on the streets and support of the government, not protests against it. So at the moment, there's no sign of that. But to the extent that there is a plan, that has to be the one. It's to try to increase the pressure on the assumption that sooner or later, in one way or another, the government there will crack. Now, you know, Iran has problems. It snookes us at the most structured government, just to say. They still haven't yet announced who the U-Supreme leader is, at least not at the time making this program. There's going to be economic stresses in Iran, too, because the countries are war. There's hammering of these cities, there's hammering of Tehran. They can also export oil either. I mean, to remember that. Obviously, they could put their entire economy on a mobilization basis. But there's going to be a

34:57steepfall in living standards. There's going to be shortages of every kind of consumer goods, food, the supplies. By the way, just to say, this is where the bricks become more important. It's more important at the moment for the Russians and the Chinese and the others to provide Iran with civilian supplies, foodstuffs, oil, by the way. By the way, Russia already supplies oil and natural gas to Iran. It seems very strange when you think that Iran is an oil exporter or was an oil exporter. But the Russians were already doing it before the war began. So I've often wondered why. Well, perhaps now we know. But that has to continue to happen. They have to continue to be able to provide basic services to the population in order to keep

36:00going. That might be a challenge. That might not be something that they are able to do. It may be that despite whatever assistance they're getting, things start to break down. But for the moment they're holding strong, what is they're holding? If they can continue to do that, if they can drag this all out to September, well, as I said, we're in a massive crisis, a massive crisis in world energy markets, a political crisis in the United States. And of course, the Russians are going to start holding more and more of the big high cards. They'll have leverage over Iran because even Chinese supplies will have to reach Iran through territory controlled from Moscow. Just to say, they will have leverage over Iran. And they will have an increasing leverage over the West as well because of the global crisis and because of the

37:00way in which the Russians have the ability to control now the situation in Ukraine. So this is a complex game. It's always depended on Iran's power of endurance. I'm not able to assess the situation in Iran internally. I don't know how long Iran can endure, but the moment it is enduring and that is creating more and more problems in exactly the way that we said. Yeah. Final question. Do you think the decentralization is going to benefit around in the long term? The structure. Well, this is a very good question because, of course, he said the war ends. Do they re-centralize? What does even re-centralization even mean? It's not

38:00impossible that Iran comes out of this war. In its own view, a winner, the political system, has survived and things are intact, but the decentralization of the country can or be fully reversed and that creates all sorts of administrative and political problems for the future. I'm not able to discuss what that means, but for the moment, again, it's working. It is helping the Iranians to resist. The other thing I should say is that, of course, if any senior military commander in any particular region decides to rebel, then a decentralized structure in theory should make that easier, but for the moment, they don't seem to be planning to do that. I get the sense that the security systems, the security systems that monitor the military remain centralised and

39:07under control and responses to the central government. Wherever there is, by the way, because we don't know where that's located anymore, I doubt it's in central Tehran, just to say. All right, we will end the video there, the derand.logos.com. We're an ex-rounder. We are at Telegram. Go to the derand.shop, pick up some merch, and also check us out on sub-stack. The link to our sub-stack is in the description box down below. Take care.