Oil Hits $100 Again: ‘Real Super Spike’ In All Assets Next | Doomberg

0:00We are one major explosion, accident, sabotage, pick your favorite theory away from a real problem. Canada has escalation dominance in this argument. High oil prices is bearish for US that people sell treasuries to buy oil. The Trump is playing a very dangerous bouncing act of allowing US domestic prices to go higher even though the US produces way more than enough these will for its own needs. It's Tuesday, September 8th. Welcome back in the long weekend. I hope everybody had a good labor day weekend. Oil prices are searching once more on the back of even more escalations in the Middle East. The US just hit three Iranian tankers in retaliation for Iranian missiles being fired at US warships over the weekend. Now the Iranians claim that a guided missile destroyer and a US carrier were hit directly by Iranian missiles. US Central Command denied these claims even though missiles were fired. And they said that Iranians missed their shots. But either way, markets were spooked and tensions are escalating.

1:01Meanwhile, the Houthis struck a key Saudi refinery as well. And this is key for refined products including diesel. Diesel in the US searched to the highest level ever. Now at $5.90 a gallon. This is key because diesel is probably the single most important energy input for commercial transportation across the US. Over 76% of commercial trucks run on diesel. So this affects everything that's being transported by trucks, including your groceries, by the way. So we'll see what's next. And if you think that diesel is going to continue going higher, well on cash, there's a trade for that. Tradeors are predicting that there is a 69% chance that diesel will climb above $6.40 by a year. And if you agree in your place of $50 trade, your payout on that $50 could be $73. If you're right. This video is sponsored by Kashi. It's the largest prediction market in the United States. Unlike a sports bug, your trading peer to peer are real world events from economic data to political outcomes

2:03and the price moves based on public opinion, not a house. And go to the link in the description down below with scan the QR code here to get started. And new users can get $25 when they trade $25. Kashi is CFTC approved and available in all 50 states, including California and Texas. On S.K.Dunberg, head writer of the Duneberg Substack is going to give us his take on where energy markets are headed next. Is it going to escalate in Iran or are things going to calm down? What's going to happen to the diesel spread and what's going to happen to the Federal Reserve? Now that energy prices have been soaring for weeks on end. So Duneberg is going to give us the entire outline, energy, monetary policy and bond years. Welcome back to the show. Duneberg, good to see you. Great to see you again, my friend. Looking forward to it. Looking forward to this as well. Very, very timely to have you back on today on September 8th. The Hill reported on September 6th that the energy secretary Chris Wright defended the Iran War as necessary to reset the Middle East. Let me just pull this title up.

3:05I want to start there just to set the stage because what happened over the weekend was the Saudi oil refiner were hit by the Houthis. And then we have the statement. Energy Secretary Chris Wright said on Sunday, the Iran War is necessary during interview on ABC the news this week. He reiterated the law-stating talking point from the administration. A new clue on Iran is an existential threat, not just for the region, but for the world economy. We know the administration stands where I'm going with this is whether or not the administration has changed. They're added to in the last couple of months. And if not, can we expect this to escalate even further? Sure. Great set of questions. First of all, I would emphasize just to get the immediate quote out of the way that is a little more than a talking point than I would guess not to put words in his mouth. But long after Chris Wright is no longer the secretary of energy and maybe when he sits down to write his memoirs, he'll probably have a different view of the wisdom

4:07of going to war with Iran in February of 2026. But I guess time will tell. Two-year specific question about the elevated price of oil as a consequence of what happened over the weekend. You hit a lot of the high points. You had this dust up between the Houthis, the government of Yemen and the Saudis. And if it sounds complex to you, it's because all civil wars basically are, which is one of the reasons why we would prefer the US not get entangled into many of other people's civil wars. But we started to see the Houthis attack some Saudi assets and the oil markets are pricing in the prospect of closing of the Red Sea and all of these other sort of tail risks that have been simmering but have not yet been sort of imposed upon the market to truly deal with. Something else might have happened over the weekend. We have this open source methodology of trying to fight our way through all the signal on telegram and Twitter X and things like that. And it looks like for the first time Iran

5:07has been firing some pretty sophisticated missiles at US warships, including a US aircraft carrier. There's some speculation in the Twitter versus as to whether or not this might have caused a significant recalculation by the US Navy. There's all these sort of side stories that we see about Pete Higgseth. And one of the waters just like in the early days of the war, when we saw these reports, a lot of them turned out to be true denied by the White House, of course. But the escalation in the Middle East is generally bullish for short-term prices if for no other reason than the market has to price in the risk of uncontrolled escalation. In other words, if the escalation ladder escapes the control of the main actors and people start firing missiles into critical assets that get knocked offline for years, then you could see a real super spike in oil, not to give you the thumbnail for this interview up front. And then lastly, the diesel crack spread

6:08that you mentioned, this is something we've been writing about for a while, if you attack refineries, all things being equal, the refined products prices go up. And so prices are set at the margin. The export market for diesel is relatively small. Russia was a significant contributor to that export market, 15, 20%, depending on whose data set you use and whose definition of diesel you use. And by knocking off as many Russian refineries as the Ukrainians have done with the help of presumably their European and potentially even American backers, Russia has done the predictable thing, which is it closed off all exports of diesel to preserve diesel for its domestic market for its farmers, its long haul truckers, its military. And when you take 15 to 20% of any inelastic commodity off the market, you're going to see prices rise. And so I was just driving here and fly over country.

7:09And I saw 6.30, 6.40, even $6.50, you know, $6.50 a gallon diesel ahead of the US elections that doesn't foretell a positive outcome for the incumbents typically. But when you knock off refineries, you hurt refined product prices. And I find it interesting, obviously you and I are just reading the same reports. This hoofy attack in Saudi Arabia at a refinery might be a shift towards moving that choke, chokehold up one in the supply chain towards refined products away from crude itself, because crude is worthless until it gets to refinery. The only real buyers of crude are refineries. If you just take the refineries out, that's much more damaging to the global economy than just taking crude out in isolation. Because there's crude reserves on a scale that there isn't diesel reserves, right? And so, and it's a bit of a long answer, but there are a lot of questions in your opening preamble there, so that's sort of our view of the world as of this morning.

8:10Excellent. I mean, that sets up the tone very well for this interview. We can take it a number of directions. Let's start with the oil diesel cracks, but first this is from the EIA website. Where does the diesel fuel consumed in the US get produced? I mean, that's a pretty basic question that I think most of us want the answer to. You're talking about Russia and Ukraine, but it says here, US petroleum refineries produce most of the diesel fuel the US consumes. So the question is, yes, we understand Russia is closing down some of his exports, but still, why is the spread between crude oil and diesel still so high in the US, even though we apparently according to the EIA get most of our diesel from US refineries? It's even more of an ancient question than that. David, the US is a huge net exporter of diesel. It is, in fact, the largest net exporter of diesel. And it is only because US refineries are running at unheard of velocities and shifting towards diesel in their product slate that the rest of the world isn't suffering even more.

9:12But what this means, and I'll explain why the US still imports some diesel in a second, what this means is President Trump is playing a very dangerous bouncing act of allowing US domestic prices to go higher, even though the US produces way more than enough diesel for its own needs, while allowing refineries to print money and export diesel to keep the global markets a bit more under control. And in fact, we wrote a whole piece on this under the Bloomberg Mass Ed about a week or two ago, just pulling it up now. The piece was called marginal rations. And in that piece, we talk about the US being a net diesel exporter. Now, in that same article, you correctly state that, or the EIA, the EIA correctly states that the US still imports some diesel. That's because there's pockets of the US that are really fully integrated into the rest of the US energy grid, US Northeast, California, pick your favorite, blue, coastal, liberal, anti-hydrocarbon enclave.

10:14And so in certain parts of the US, there are still imports. But in aggregate, the US exports an enormous amount of diesel. And it is trying its best to make up for the whole that the Russian refinery attacks have created. And so as we say in the piece, once everybody learns that Trump could control domestic prices simply by limiting exports, putting attacks on exports, signaling to the refiners that they should be taken care of the domestic markets first. He hasn't done that yet. In the moment, people realize that he can. That's been an option he's had since the war started. He will almost be forced to politically, we think. Win of it. So is this a Trump foreign policy that he's exporting refined diesel? Or do you think that's just the free markets doing its thing, realizing there's a deficit of diesel abroad? And so US refinerers are just doing their thing and finding a market there. It's a geopolitical decision on the part of Trump balancing domestic needs with the total diesel market

11:22for competitive diesel. It's probably about 7 million barrels a day. The world makes much more diesel than that, but most of the diesel of the world makes gets consumed in the countries that refine it. And so the competitive barrels, the Seaborne diesel market, is somewhere around 7 million barrels a day. The US last year exported about 1.3 million of those barrels, and Russia was about 0.8. So you take off that 0.8 suddenly you have a hole. And then the US has upped its exports from 1.3 to 1.9. So closing part of that gap. To close part of that gap, it's leaning on domestic inventories. It's selling diesel to Europe and Japan and Australia and Korea and Singapore. Instead of selling it to Illinois and Oklahoma and New Hampshire and pick your favorite US state,

12:22it's just a fact. And look, it was illegal to export oil from the US until Obama. This is nothing new. The US has never run a truly free market economy. Trump puts tariffs on things left and right at the impulse of a two social post. So that US refiners are permitted to refine it in maximum velocities and send huge chunks of it overseas when American consumers are paying higher prices. That is a choice by definition. It's just as much a choice as it is slapping tariffs on Canada or entering a trade war with China. Trump has the power to declare an emergency and to say, look, I mean, we have a war going on with Iran and the Middle East. He has all the power in the world to set export controls on diesel, which is clearly a military fuel. And one that is also key to the growing of food in the US. And like if the word emergency means anything, Trump has the power to stop diesel exports and he hasn't. Let me just share this stat with the audience.

13:23For those of us who are wondering why we're talking about diesel in the first place, or quote, let me different stats from different places according to the engine technology forum, 76% of US trucks, commercial trucks run on diesel. And that number is even higher for certain other engine types. Now, here in life's a question, how much longer can this last? How high will these US diesel prices get this year? 69% chance on prediction markets, how she above $6.4. If Trump wanted to bring down diesel prices, he could, but he's not. And he's got two months to the midterm. This is important. So what's your take on what's next? Well, this is where sometimes I think Trump gets bad information. So for example, at a superficial level, we don't need Canada because we haven't as well. While there's a timing issue. And the time it's going to take for Venezuela to even begin to dent what happens from Canada is going to stretch well beyond the midterms, of course.

14:27And look, that brings up this trade war with Canada. Look, Canada has a very powerful card. It could limit exports of heavy crude from Alberta to the US, which are sold to the US at a significant discount. And are one of the reasons why US refiners are able to help the rest of the world by exporting so much diesel because the US has an abundance of light, heavy, medium, sweet, sour, all the crude that it wants. And it can be incredible to take that threat from Canada, from Doug Ford, premium Ontario, to stop exports of crude. I mean, isn't that taking a shotgun to the face when someone slaps you with a 250? Is it important to what the US is doing here? I mean, it is difficult for those who do not who live in the US and don't travel much outside the US to understand how the international media has portrayed Trump

15:27and Trump's, let's call it flamboyant inconsistencies around trade policy and the art of the deal and the weird stuff that everybody sees in posing on truth social. Now we have a different theory as to what's actually going on in Canada, but I could tell you we have lots of friends and contacts in Canada that they're at the level of Trump hatred as the word I would use in Canada is is utterly out of whack with historical comparisons. The, if you go back and you watch Tom Broca's documentary about 9-11, which is approaching, you know, and that all of the Americans who got stuck in Gander, Newfoundland and the great hospitality that they were shown by these rural Canadians and you watch that video and you see these two beautiful well-endowed countries with all the resources in the world ought to be able to get along and then you cross the border in Canada and you pick up a newspaper and you see how Trump is portrayed

16:28and look a lot of it is an own goal on Trump's part. You just blown away at how like division can be created by a politicians between people who have every incentive to get along and so per your point, you don't think a shotgun out when somebody slaps you in the face, maybe you close your fist and for sure cutting off exports or putting an export tax on Albertan Crude would be a nuclear option, but we are just jumping ahead to the end game of escalation dominance in this trade war. Like Trump thinks he has all the cards, one of the great flaws of Trump is he always thinks he has all the cards and he always has escalation dominance when in some cases he doesn't now. Does the US military, is it stronger than a Canadian military? Sure. Does the US have nukes and could they use them in Iran? Sure. We rule out those two possibilities because ultimately they're just politically not palatable. Can you imagine a world where we wake up tomorrow, David, and we see in the New York Times or your pick your favorite periodical

17:28that the US Marines have invaded Toronto? Well, they're gonna take over Calgary and they've arrested, you know, Albertan premier Danielle Smith, what universe are we living in? I mean, I suppose it's possible. I wouldn't consider that a credible escalation dominant threat whereas putting an export tax, which is a trade, a traded good on Albertan oil is not all that different than taxing, milk or steel or aluminum or all, or bombardier jets as Trump was posting about on truth social yesterday. So it's still at least within the confines of trade. And so through isolated, just the trade Canada has escalation dominance in this argument. Yeah, I really hope that doesn't escalate to that point because then the concept of, you know, the idea of stopping US exports of energy to the US is just as absurd as the idea of conquering Canada. But I guess if you're putting down the table, then why not put Marines in Toronto?

18:30All right, let's go back to diesel. Are you of the view that the diesel crack spread is going to normalize in the foreseeable future? Oh, of course, look, the same numbers that caused this to be a problem prove just how solvable a problem it is. So if there's seven million barrels a day of competitive seaborn barrels of diesel, and the global refining capacity is 100 million barrels, every percent shift to diesel overall solves 15% of your problem. And so yes, refineries will invest to become more flexible, heavier grades, grades more amenable to producing more diesel in your slate will get a premium, they'll be drilled for more, over time this will of course, collapse the price of diesel. And this is a great time for refiner's until the party ends. Now, there is some significant risk

19:32if you go much higher from here. For example, when you run a refiner yet 98, 99% capacity across the industry, they blow up sometimes. And we are one major explosion, accident, sabotage, pick your favorite theory, cyber attack, we're one major explosion at a large American European Asian refinerie away from a real problem because you can't run these assets full throttle forever. They need maintenance, they need to do pit stops like a racing car. You'll eventually run out of gas, a tire will blow up if you run your threads too thin, and we're getting very close to the risk of that happening now. Okay, let me show you something from the EIA report from last week. So table one, line two, strategic petroleum reserve at 286.6 million barrels down 3.1 from a week ago. What's the danger level for you?

20:33There is no real danger level in the SPR interview. This is a bit of an artifact of a prior time when the US was net, was a huge net importer of crude. Now again, if Canada turns off the taps, well, then the SPR becomes really important. But if you drill a circle around kin in the US, you don't really need an SPR. An SPR is good for stabilizing international prices again. Where all those extra barrels are not helping to keep US prices down, they're helping to keep global prices down, which is a geopolitical trade off that Trump is making. Knowingly, certainly Chris Wright knows it. The US doesn't need an SPR in the way that it did in the 1970s when the Arab oil embargo caused the inflationary pulse that are so characterized the 1970s. Of course, people would argue it was a gold standard thing, but whatever, two sides of the same coin, if you ask me. So to your question then, the SPR levels,

21:35again, this is the buffer for the rest of the world. And if it keeps going down, this concept of the caverns will collapse or pick your favorite ghosts that goes bump in the night, storing oil is a solved problem. Like it's nothing more than a few bucks of capital to create tanks to put oil in. So I don't really get myself to worked up about that. If the US was a net importer of crude outside of Canada, that would be a much bigger challenge. But if the US or any other country were to decide at any point to fill up the reserves for whatever reason, would that be short-term bullish or bearish for oil? It really depends where they get it from. Presently, they buy it off the open market. Yeah, go ahead. It depends more on how quickly they want to do it. Okay. If you're going to spread it over five years, who cares, right? That's the whole point of the SPR is like, you could dump it out fast. You could band-aid a short two week long war in the Middle East.

22:38What you can't do is band-aid a years long war in the Middle East. And don't forget, we're coming up on more than a half a year already over there. And when this war first started, if you would have told the two of us that we'd still be talking about the closure of the Shredofore Moose in September, we would have had a different view for what the price of oil ought to be. And yet, here we are in September. The Shredofore Moose is still closed. The Houthis are still launching missiles into Saudi oil and gas assets. Qatar, Rosloff, and is not back online. Europe is hurtling towards yet another gas crisis. This is all kind of happening in slow motion. But the SPR was never meant to be a buffer that would last six months or a year. Now to your question about refilling it, presumably you would want more than a couple of month pause in any war or geopolitical crisis that triggered the need for the SPR in the first place. And if you have a few years of peace and runway, the war in Ukraine gets settled,

23:39some kind of detent emerges in the Middle East. Well, then I don't think that the refilling of the SPR is going to be, you know, it'll place a bit under the market. It'll be nice. It'll put a floor on the price of crude oil. But nobody's going to chase the price of crude into a crisis level in order to refill the SPR. Okay. Well, last year when we talked about the possibility of you rank closing the strata for Moose, we had discussed much, much higher prices. Now the unknown variable, I think that's a price a lot of people is that China stopped importing as much crude as they did before. The Wall Street Journal has an excellent article about this on August 28th. I'll just share the title with you right now. It's called How Shijing Pain Turn Oil From A Weakness Into A Chill Political Weapon. Now, stockpiles are finite, as you know. How much longer can China keep doing this? Well, it's a great question. We wrote about this a few months back ourselves when it became clear that China had in fact been the missing

24:43analysis we wrote it in June in a piece called Flex Capacitor. And the social preview was, well, nobody was looking China-harmonized global hydrocarbon fungibility. What do I mean by that? It's not just that they stored oil, David. They overbuilt coal to liquids. They overbuilt their Ellen's Gecapacity. They overbuilt electric vehicles. They've overbuilt solar. They've overbuilt everything in the energy space. And the product is, you got a bunch of factories that in isolation, the numbers look terrible. But in aggregate at the country level, China has figured out how to buffer a sudden drop of five to six million barrels a day of crude. That's a meaningful change to the, well, markets that nobody saw coming, including us. We raised our hand early, said there's something that we're missing. Let's find out what it is. We settled on it. Let's China back in June. As the data came in and made quite clear, it's not like we have any special set up anarchoers that let's us see what's going on in China. But something had to be going on because oil didn't do

25:44what you and I and everyone else thought was, what was going to happen, $150, $200 a barrel. And it could only be something as big and consequential as China. And so I wholeheartedly agreed with the Wall Street Journal piece that China is the Yopech of demand. And so Gigi Ping is allegedly coming to the US to meet Trump, right? Yeah. One of the things that could be causing the price of oil to go up that we saw over the weekend is China is re-entering the market aggressively. Maybe it wants to drive higher oil prices to spook Trump ahead of the midterm. So one of the signs of this that we saw over the weekend is that Shanghai crew is selling at a premium, which means that China is getting back in. So if China can toggle the price of crude for geopolitical reasons, it will. And so that's an entirely different potential hypothesis to explain the opening question you had for me at the beginning of this podcast is, if China can keep the prices from going down,

26:47it can catalyze the prices to go up when it's in their geopolitical interest to do that. When hypothetically, do you and I stop talking about the straight-off who moves as a focal point of geopolitical importance? What is the turning point for you? I just kind of wonder whether this isn't the new normal. I mean, where credit is due, a guy that I don't always agree with by enjoy his content. Peter Zahan wrote a whole book on this about how the decline of US Hedgehog Monty means that the US Navy is not going to be policing these choke points. And it's not just the straight-off or moves. Every choke point on the seas is now an open question. And that is actually an entirely different scrambling of the pieces that analysts need to ponder. So you have the disputed islands between Russia and Japan, and then you have Putin sitting on one of those disputed islands saying that the Russian Navy is prepared to board British ships who are interfering in the free commerce of Russian cargo

27:49and tanker ships. You have the, you know, all matters. The Panama Canal is an early embodiment of this and Trump's rather bombastic statements about the Panama Canal shortly after being reelected. Everywhere you see a choke point, you're going to see potential flare ups look what we saw in Spain, right? The whole entree into the Mediterranean, that area around Gibraltar. These are all choke points. So if the US military is on the decline, if the US Navy can no longer police these choke points, then all bets are off. And I'm going to see a return to piracy, a return to might as right. And that's inflationary. We haven't talked about it yet, but I think that could be part of the reason why we're seeing so much pressure on interest rates and so on. Yeah, that was my final question. Wow, you read my mind. That's such a good segue. US Tang here, I'm going to pull up a chart here. This is the US Tangier.

28:52Let me just share my screen. And I'm going to overlay this with, oh, let's pick her poison, I'll do WTI. It doesn't matter. US Tangier. Yield, not whatever I had before. Perfect correlation. You had the bomb price before, which is why I think it was related. Yeah, that one, that's what's confusing. Anyway, here's a yield versus the WTI. Is the yield simply just a derivative of WTI or Brent at this point? Is it simplistic as that? Well, there's an explanation for it that makes that feel like a plausible mental model to run with, which is countries that have to buy oil need to pay for it in US dollars, and they sell treasuries to buy oil. If you're sitting on a stack of long-term US dollar denominated debt, and you have to pay somebody in US dollars

29:52that creates demand for cash. And you sell your 10 year, your 30 year, and you produce shorter duration cash. And you give that to your provider of crude or diesel or jet fuel or gasoline. And so at a holistic level, there's an intuitive reason as to why high oil prices is bearish for US debt. Because if the US get the treasuries, treasuries, bonds, and bills are reserve assets, and they are still, alongside gold, the largest things people buy with their extra money. And when you have extra money and you need energy, you happily trade that money for energy because energy is life and money is just a conduit to get energy. And so one explanation for this near-perfect correlation that you're showing me on the screen is, people sell treasuries to buy oil because you can't run your car on treasuries directly.

30:56Does that explanation kind of disprove everybody who's been saying the petriot dollar is on its way out? Well, there's again, there's direction of travel and absolute measure. Nobody would argue that the petriot dollar is still not very powerful. A premise that predicts, as we would call it internally, just because a trend might be moving away from it, doesn't mean that you've already abandoned it. There's still a lot of punch left in that fighter, if you know what I mean, and you don't wanna step in front of a right hook of Scott Besson, look, we might think that's easy in the Russian assets and Bessons, using of the treasury to impede geopolitical objectives of the US opponents. We might think that in the long term, that's bad because it takes away the neutrality of US treasuries. It doesn't mean we wanna be sanctioned. It doesn't mean that we think being sanctioned by the US Department of the Treasuries is small. The oldest is huge deal. It's a catastrophic deal. It is a powerful weapon.

31:56Besson is using it. The more you fire that gun, the less powerful it becomes over time, but it doesn't mean that's, it's ever going to be a bullet you would voluntarily stand in front of. And so that's my way of saying, the US dollar hegemony is declining, but I wouldn't wanna be on the other end of a Tomahawk. And so here we are. I wonder how much of the bond yields moving up is a signal for higher inflation. That's one explanation. So let's put it this way. If you were to, if one were to create a model that were to predict the direction of the Fed funds rate where what the Federal Reserve is going to do, you put in a bunch of variables in one of regression, how much weight would you assign oil as a deciding factor for whether or not the Fed's gonna raise rates or keep it the same? I wonder. I would say a large one, but I would generalize it beyond oil. So let's walk through that logic. There's a competitive theory that says AI data center debt

32:57is competing against long-term US treasury debt and is in some cases, because they offer a higher yield, competing for limited investor dollars and crowding out US treasuries. Well, that debt is predicated on cheap natural gas. Right? And so it all traces back to energy eventually. It's just a measure of how direct that transfer function is. And so because the US has the sub-puns of cheap natural gas, we have this huge build out of data centers, these data centers need debt financing. They go to the market and there's an appetite for it because of the impressive yield. And there's a belief in the market that's starting to develop that ultimately the US will backstop this debt, wink, wink, much in the same way, the too big to fail banks. So you get this premium, you have to close that premium by yields and treasuries coming up. Well, if natural gas prices were suddenly to quadruple in the US,

33:58a lot of these data center projects wouldn't go forward, it'd be less demand for their debt and the yields would fall. So it's the same different aspects of the coin, but I think energy is an absolutely critical part of interest rates effectively because the purpose of currency, and that is just a currency with a different data attached to it, the purpose of currency is to enable energy transactions. And when you see swings in the price of energy, they're going to manifest into interest rates, either plus or minus in the examples I've talked about, but in ways that I think explain a lot of the variance, ultimately, it's just a matter of how directly. Okay, finally, let's talk about your work. You're writing about the Falkland Islands this week. Just give us a teaser of what's coming up on your sub-stack. Yeah, sure, there's a little burgeoning crisis between Argentina and Britain, Malay, the Falkland Islands, for those that don't know, are disputed territory currently, sort of mostly recognized as a sort of British special territory.

35:01They have their own currency, they don't trade on the pound, but it's a peg to the pound one. For one, they're predominantly British heritage, the 3600 people who live there. Argentina has claimed the Falkland Islands as their own. There was a war in 1982, Fatcher, you remember all of that. Well, there's oil that's been discovered near the Falkland Islands, and of course, anytime you have the riches of hydrocarbons, you can take simmering crises and bring them to a boil. The product is known as sea lion and Malay addressed the Argentinian people in a nationally televised address about how he was going to sanction all the companies involved. This is becoming a geopolitical hotspot, and we get into some of the questions around it, and what we think is really going on, as Malay tries to navigate politically, getting to the point where his own super-giant, shale resource, Vaca Merta, gets enough international investment dollars to reach escape velocity, and we think that's kind of what's going on.

36:02Here, he's juicing his popularity by taking this really divisive issue between Argentina and Britain and running with it for his own domestic political reasons, which gives him cover to get the reforms done that he needs to get the international investment that he needs to get Vaca Merta off the ground. That's the lateral analysis that we're putting out on the Falkland Islands. Tomorrow, the title of the piece is cheekily called Falkland around. Okay, well, hopefully we don't see another nuclear aircraft carrier sailing towards Argentina anytime soon. Thank you so much, Dumburk. Appreciate you all. You need to check out Dumburk's sub-stack, link down below. Where else can we go to follow you? Dumburk.com, one-stop shop. David, always great to see you, my friend, looking forward to the next visit. Always great to have you on. As always, thank you very much, Dumburk. Take care for now. And thanks for watching. Please do like and subscribe. Follow Dumburk in the links down below and use my code, Lynn, when you sign up to Kouchy. Remember, new users who use my code can get $25

37:04when you trade $25 for the first time. Link down below is scat the QR code here.