What’s Up with the Middle East: Saudi Oil Slips

Photo of black oil barells

Oil has been the secret sauce for the Middle East for ages, but that’s beginning to change.

The Chinese are now the top importer and consumer of oil, driven by all that energy-intensive industrialization. US oil consumption is dropping, although exports of refined products have masked this a bit. The US shale boom has also made American energy independent and competitive, which isn’t great for Saudi manipulation and control of oil markets.

Which means Saudi Arabia is losing some of its influence; the US doesn’t need the crude, Saudi Arabia’s costs are rising, and more competitors continue to pump oil regardless of market signals. But the Saudis aren’t completely out of options…they could always just use a little terrorism to destabilize their rivals.

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Transcript

Hey, all, Peter Zeihan here coming to you from Zion National Park. This is Zion Canyon. That is the infamous Angel’s Landing, which I will not be doing a video from. But we continue our coverage in the Middle East today talking about what makes the whole region matter. And of course, that is oil. We’ve got a lot of crosscurrents going on, and international oil markets right now. 

We’ll start with demand. Then we’ll go to supply. Demand is weird. The United States has largely completed its transition to a services economy. And so we’re becoming more and more efficient for every dollar of GDP that we make. And so in terms of actual oil demand, we’ve actually seen demand drop in the United States. I’d argue for the last 15 years. 

Now, you’re not going to see that in the data, because the United States has massively increased its production and export of refined products. So technically, we’re still absorbing crude turned into things like jet film gasoline and then sending it out for a profit. But in terms of our normal consumption, it’s actually gone down by quite a bit. 

The second big factor, of course, is China, which is pricing sensitive and factor insensitive. They basically expand their money supply in order to give everybody a job. Most of those jobs end up being in the industrial space, which is relatively energy intensive. And so they need every drop of the stuff they can get from everywhere. So China has overtaken the United States as the world’s largest oil importer by far. 

And if you look at the numbers the way I do, they’re clearly the world’s largest oil consumer as well. But unlike, the Chinese, the United States has an ace in the hole, and that’s the shale revolution. So now we talk about supply. The United States has gone from producing less than 5 million barrels a day as recently as 20 years ago to, now, something closer to 15 million barrels a day. 

Most of that increase has been in the shale fields, where it’s relatively light, relatively sweet, fairly easy to refine, but not necessarily geared towards the American preferences when it comes to refinery infrastructure. So we end up exporting a lot of that stuff as well, and then bringing in some heavier, more sour stuff from Canada in particular. From the Saudi point of view. 

All of the math is out of whack. The Saudis are completely incapable of defending themselves in a real war. And their plan has always been to lean on the United States for security support. And they do that by making sure that the United States always has as much oil as it possibly wants. But now the U.S. really doesn’t care on a systemic basis about oil markets at all, because everything that we need to either get at home or within our continent, or worst case scenario, within our hemisphere, and the Saudis are kind of left dragging, they would love to have a new security guarantor, but it’s not clear who that 

could be. The Chinese don’t have the reach or the longevity. The French and the Brits don’t have the punch. And the Turks may be closer, but they are on the wrong side of Mesopotamia to make it work. It leaves Saudis in quite a lurch. And the Saudis, from an economic point of view, are struggling with new problems. 

It used to be 20 years ago that OPEC could dominate oil markets by increasing or decreasing. The Saudis always had problems getting countries to follow their quotas. But because Saudi Arabia and their relatively close ally, the United Arab Emirates, always basically agreed on oil policy. You had this huge chunk of spare capacity that could be turned on or off relatively quickly. 

They’re facing two challenges to that now. First, the spare capacity is largely gone. Everyone’s been pumping full out for quite some time. And then second, with shale, you can bring on a new shale. Well, in a matter of weeks, as opposed to having pre invested billions of dollars into spare capacity in Saudi Arabia, which still takes months to turn on. 

So any time that the Saudis would try to flood the market. The shale folks just proved to be a little bit more competitive than the Saudis would have liked. And whenever the Saudis tried to push up prices by gutting the market, the shale folks would just take the market share. And that happened over and over and over and over and over again. 

Second problem the Saudis are facing are is the former Soviet Union, because while Saudi from time to time can bully some of the other producers, into changing their oil policy to meet with the Saudis, one and two, they’ve never been able to do that with the Russians. A lot of the Russian production is in Siberia. It’s very high cost to get out of the ground. 

The Russians have no intention of ever turning it off. A big problem these days is Kazakhstan, where a couple major projects called Tengiz and Kasha gone have really come into their own and made Saudi Arabia more important to oil markets than Kuwait. And they’re never turning that stuff off either. And then Azerbaijan has finally hit its stride with its offshore production. 

So you got three significant players that are just dumping more and more crude on the market. And there’s really not a lot that Saudi can do, which means it’s time for a different sort of strategy. Some people in Saudi thought they could build a giant linear city that everyone would come invest in. Well, that was a stupid idea. 

And so now the Saudis are probably going to rediscover some of their militant roots that they put down in the 1980s with al-Qaida. We have a lot of moving parts in the Middle East. Syria’s one. Iran is one. But what the Saudis really need is for some major oil producers to go off line. And the only tool the Saudis have that is even remotely reliable outside of Europe, opening the spigots is terror attacks. 

This is something the Saudis are very good at. Their own population is basically former horse raiders that decided to settle down and substitute mass rapes and killings for, domestic violence. And now they’re in a position where the only way in the midterm that they can drive oil prices up is to drive someone else out of the market. 

They haven’t decided what the target is yet. But we should expect significant policy change out of Saudi Arabia over the course of the next year, especially now that it’s become apparent to the Saudis that the American relationship really is over. 

When Donald Trump came to Riyadh, recently, he didn’t ask for crude. First time, an American president hasn’t had some conversation with the Saudi royal family about crude oil. He simply said, you need to invest money in the United States if you want us to be involved at all. $600 billion is my number. So I don’t have $600 billion. The idea of them being a cash cow for whatever project in the world is long gone. 

Their population is much larger, their subsidy system for their population is much larger, and their cost for just holding the line are much larger. So the U.S. will be lucky if it gets 150 billion. And the Saudis simply need to change the rules of the game if they’re going to continue with their system in its current form.

Ukraine Strikes Russian Strategic Bombers

Imagine of a drone firing missiles

Ukraine just did more to enhance American national security than any country since 1945. Here’s what went down…

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Transcript

Hey all. Peter Zeihan here come to you from Colorado where we’re about to get a storm. Anyway, it is the 1st of June. You’re going to be seeing this tomorrow, on Monday the second. And the big news is, a few hours ago, the Ukrainians launched what is the most significant strategic attack on Russian territory since at least World War two? 

What? It seems that they did is they took a bunch of trucks, some flatbeds loaded sheds on top of them and drove them deep into Russia, like, thousands of miles into Russia, and then parked them and remotely retracted the ruse and launched over 100 drones and sent them at two air bases where they took out strategic bombers by strategic mean long range bombers whose primary purpose is to nuke the United States and hit, naval convoys that are crossing the Atlantic to support the Europeans in case of a Russian invasion. 

The tradecraft of this, the defense craft, the audacity of this is immense. And the damage caused was immense. The simplest report I have seen, the lowest casualty report, suggests at least 40 of these long range aircraft were destroyed. There are some indications it was a lot more than that. It’s not just that. This is billions of dollars of equipment, that it would take the Russians literally over a decade to replace. 

It’s the nature of the weapons involved. 

What? The Ukrainians did not particularly sophisticated drone. The audacity was getting the drones into target and launching them from relatively close in the. The real importance is what was hit, these weapons can be used. They have been used in order to bomb Ukrainian cities and military sites. 

There’s no doubt there, but not from where they are currently based. The two locations in questions are acute, which is way out in Siberia, basically further from the Ukrainian border than Miami is from Seattle. And the other one was up in Murmansk. Basically at the Arctic Circle. These are not locations that the Russians would be using to do tactical in theater attacks on Ukraine. 

These are where you put your bombers when you’re getting ready to bomb the United States. And for those of you who are Russian apologists, the Russians have never stopped getting ready to bomb the United States. So fuck off. Anyway, this is the single biggest strategic achievement for American security since at least 1945. We have never had any ally deliver this sort of blow to someone who is targeting the American homeland and to take out so much military capacity that was designed around hurting the United States in this. 

So when I think of the political ramifications of this, I have to think of something that Donald Trump said when he had Zelensky in the white House. You don’t have any cards. You can’t hurt Russia. That is clearly now false. The question is whether there’s someone in the Trump administration who’s smart enough to realize what just happened and brave enough to make policy around it when it goes opposite of what’s been coming out of the white House for the last few months. 

Ukraine just proved in the day that they have what it takes to guarantee American security. And that’s probably going to take us some really interesting directions.

Coping Mechanisms 101: The “TACO” Trade

Newspaper photo of President Donald Trump

I won’t ramble on about Trump’s chaotic trade policy because you’re all aware of that. However, there are some interesting updates to share.

After most of America’s key trading partners have been subjected to the chaos, Wall Street has adopted a new strategy called the “TACO” trade – short for “Trump Always Chickens Out.” You know since most of his aggressive threats are walked back within weeks of announcing them.

We’ve also seen a court ruling state that Trump’s tariff actions may be unconstitutional. We’ll have to wait and see what the result is following the appeal, but convos regarding presidential trade authority have been sparked.

This all contributes to the stalling of industrial investment in the US, because if you don’t know the rules, how can you play? It would be nice to get some clarity here soon, but we may be in for four-year ride on this roller coaster.

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Transcript

Hey, all. Peter Zeihan here coming to you from Colorado. I am recording this over the weekend. You’re going to see it on Monday, June 2nd, which means we will undoubtedly have a few updates that are not being folded in. And because that’s just the nature of the beast these days. We’re talking about trade today, specifically, what is up with the Trump administration and the current status of the many trade wars the Trump administration has launched. 

If you remember, this is the most aggressive president we have ever had when it comes to issues of trade. We have already had a 132 documented trade policy changes by this administration, and things are getting a little out of control. Let’s start by talking about two of the United States is four biggest trading partners. So number one and two are Mexico and Canada. 

We’ve dealt with those bear for I’m sure we’re gonna deal with them again. But in the last few days we’ve had a lot of movement on Europe and China who are number three and number four. 

Let’s start with Europe. Trump decided that the Europeans are not serious with their trade talks. The primary reason is that there’s no one on the US side to answer the phone when the Europeans call. 

The Trump administration still hasn’t staffed up for really anything. Most notably for trade talks, normally takes several dozen, if not several hundred people to handle the negotiations. For one major trade deal. And the United States is attempting to do 200 deals at the same time. So everything is just kind of slogged. Anyway, Trump laid the blame on the Europeans and said that come July 1st, tariffs will increase by a factor of 5 to 50%. 

He then had a call with the commission president, Ursula von der Leyen, and said that, no, that’s going to actually happen on July 9th. By the way, these are not trade policy adjustments. So they don’t go to that 132 number. These are just, things that he said on Truth Social. And with the Chinese, we had a recent deal in Geneva where the Trump administration agreed to peel back the tariffs from 145% to 10% while talks continue. 

So it was just an agreement to talk. Trump has now said again on Truth Social that the Chinese had violated the deal to talk. And so tariffs are probably going to be coming back in soon. I have no idea what’s going on behind the scenes in the Trump administration. There are so few people that you can tap to find out. 

But it appears, at least from the Chinese and the European point of view, as well as the Canadian, the Mexican and the Japanese and the Korean and blah, blah, blah. Is that the Trump administration is basically making policy off of a whim, the normal flows of information that would inform the white House of what’s going on in the world don’t exist anymore. 

The Trump administration has fired the top 1400 positions in the federal government. Very few of those have been replaced with anyone. And those that have been replaced have generally been replaced with party loyalists, rather than anyone who knows anything about in this instance, trade. So we’re just getting things going back and forth and back and forth, not based on data, not based on reality, not based on trade flows, not based on national security concerns, based on whatever it is that Trump feels the issue of the moment happens to be. 

And the result is just this erratic nature of policy. As a result, now that we’re a few months in, Wall Street has had to deal with this, and they’ve developed something called the taco trade. Taco stands for Trump Always Chickens out. And the logic behind the trade is that Trump says these big things implement these big policies. 

And then he immediately backs down immediately within a few weeks. I’m not sure that’s entirely fair. Trump obviously finds it a lot less amusing than a lot of other people do, but it gives you an idea of just how everyone feels. We don’t know, day to day what the policy is going to be. We don’t know, day to day what the goal is. 

And so we don’t know day to day how Trump is getting from A to B, assuming there is a B and what information I’ve been able to clean out of the white House is that there was never a goal in the first place. This is just how Trump likes to run the show, and this is what we can look forward to for four years. 

Which explains in vivid detail why industrial construction in the United States is basically seized up because nobody wants to invest in an industrial plant if they don’t know what the rules of the game are, especially if the person who’s making up the rules of the game keeps making up the rules of the game. On top of that, we have now had a court case by a trade court in the United States that says that the Trump administration does not have the legal authority to do most of these trade policies. 

Now, according to the Constitution, the Congress is the only body in the United States that has any trade authority on tariffs. But over the last several decades, most notably in the 70s, the Congress submitted some of that authority to the US executive for emergency circumstances. And almost every tariff that the Trump administration has put in place to this point has drawn upon that emergency authority. 

So Trump declares an emergency and then defines the tariff. The court disagrees with the logic of that, saying, not that Trump is interpreting the statute incorrectly, but that Congress cannot unilaterally cede, tariff authority to the president. Now, I’m not a legal scholar. I’m not going to parse out. I just found a case kind of interesting that they were going after Congress with the ruling rather than the presidency. 

It’s already been appealed, and there’s already been a stay on that tariff suspension. So those are two of the 132 tariff changes that we’ve had now. And the Trump administration, of course, is going to appeal this all the way up to the Supreme Court. And since we’re already at the upper federal district court level, it’s not going to probably take too long to get there to get some legal clarity. 

But the bottom line is clear. We’re in a bit of an institutional crisis over the ability of Trump to do what he is doing. And now Congress has been roped into that discussion as well. From my point of view, the fact that Congress actually is being called to the carpet on some of these issues is actually great, because it’s going to force a degree of clarification about what is possible, what is not without an act of Congress. 

But between now and then, you should expect nothing but more confusion as everyone is trying to figure out what’s going on while the floor keeps shifting under all of us.

What’s Up with the Middle East: Syrian Dysfunction

Photo of a plaza and monument in Syria

Next up in the Middle East series is Syria. They’re enjoying a calm period right now, but the new President, Ahmed al-Sharaa, is walking on eggshells to avoid the deep-rooted problems that have plagued Syria for ages.

Those problems run the gamut, from ethnic to religious to geographic divisions. Think of Syria as a patchwork of groups that love fighting with each other. And maintaining stability in a place like that is hard, especially now that backing from Russia and Iran no longer exists.

Unfortunately for the Syrians, nobody is all that interested in helping them out. Western powers aren’t willing to step in, regional powers benefit more from Syrian dysfunction, and the Gulf states can’t figure out how to proceed. All that to say, Syria should enjoy this period of calm, because the storm is undoubtedly coming back.

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Transcript

Hey, all. Peter Zeihan here coming to you from Zion National Park, going down the old Conservation Corps path that they blew out of the side of a mountain, because that’s how we did things in the 30s. Anyway, we’re continuing our Middle East week, and today we’re gonna talk about Syria. We have a new government that controls most of the territory and has incorporated most of the factions. 

But, don’t expect this to last. We’re at a kind of the calm before the storm. Basically the new leader whose name escapes me. Yeah, that looks right. Isn’t going to last. I mean, I wish him the best, but he basically has inherited all of Syria’s core problems without any of its advantages. Syria is made up of a half a dozen completely different regions, different sectarian groups, ethnic groups, different religions in different geographies, and they don’t pull together. 

So you have your Druze on the mountain down in the South. You’ve got the Arabs and what we would consider the Fertile Crescent, the three big cities of harm Ham, Aleppo, and then the fortress city of Damascus. You’ve got the Alawites and the Christians in the mountains and the coastal enclave in the northwest. And then you have the Kurds and the kind of step back territory along the Euphrates to the northeast. 

And then, of course, ISIS is running around like mad in the desert in the middle, in the war before now, all of these factions were at one another’s throats to some degree. There were limited alliances, at least within specific geographies, but there was really no way for the single government in Damascus to exercise the writ over the entire territory. 

That doesn’t change. What has changed is that two of the powers on the outside, the Russians and the Iranians, are no longer providing a and I say this tongue in cheek, a little bit a stabilizing influence. You see, the Iranians and the Russians were backing the, Damascus government of Bashar al-Assad. To the hilt with equipment, with men, whether it was, Russian fighter pilots or Hezbollah fighters from Lebanon that were controlled by Iran didn’t really matter. 

All of it, was funneling in to help the central government hold the line in the Civil War. Well, that’s obviously stopped because the central government fell. And this new guy is now in charge. But it’s not like anyone else is stepping up to help him. The big news recently is that the European Union and the United States have decided to drop sanctions on the Syrian government to kind of give them a chance, but they need a lot more than that if they’re going to go anywhere. 

Also, we’ve had so let’s just say, some weird political bedfellows in the last couple of weeks, Donald Trump actually met the new Syrian leaders and shook his hand. This is a guy who was executing civilians under Sharia law less than a year ago. So, you know, apparently we’re doing that now. But the United States and the European Union made it very clear that any aid, was far in the future and would be contingent on a large number of factors that are mostly out of side of the central government’s control. 

So the Civil War is kind of at a pause, but don’t expect that to last. Oh, that’s kind of steep. We might hug the side a little bit more. The other players that would matter. You got two local and then two further abroad. The two that are local are the Turks and the Israelis. And they’re okay having Syria as a more or less failed state right on the doorstep, because it means that they can go in there and do whatever they want, bomb whoever they want, go after whatever surgeons they don’t like. 

Which in the case of the Turks, in the case of the Turks, it’s the Kurds who are America’s best friends in the region. And in the case of the Israelis, it’s pretty much anyone but the Druze. So if Syria was to consolidate into a functional state, they’d be able to resist these sort of punches. And the Israelis and the Turks are just fine the way things are right now. 

So having a semi failed government and a semi anarchic system that spins up its own internal violence for its own reasons, this is fine. Further abroad, the two big players. Well, this is called a cluster of players. The Gulf states of the Persian Gulf. Since most notably, the three most heavily involved are Saudi Arabia, which tends to support the Sunnis, Qatar and the United Arab Emirates, who are a little bit more freeform with their assistance. 

The three powers do not see things the same way. They backed different factions at different times for different reasons. And now that everything’s kind of in flux, they’re kind of sitting on their hands. Funny thing, when Donald Trump was going on his, make up of terrorists, campaign in the Middle East, he stopped in Saudi Arabia and basically asked for cash to invest into the American economy because the American economy is slipping into a recession that Donald Trump’s tariff policies have cost. 

And the Saudis basically said, yeah, you know, you’ll make up whatever number you want in your PR campaign. We’re not going to give you even a third of that. And we’re not giving anything to, Syria that is not specifically backing our interests until such time that you come up with the security plan for the place. So everyone’s just kind of sitting on their hands and waiting for the other shoe to drop. 

And in Syria, you probably will not have to wait soon. Just keep in mind that should this new government actually start to consolidate the two countries that are closest with the most military forces available and the most to lose, Turkey and Israel are certain to take actions. So anarchy. So I formed anarchy is probably the best. We’re going to get. 

And if it lasts through the summer, I would be very, very, very surprised.

What’s Up with the Middle East: Turkish Dominance

Image of a line of Turkey Flags with kids riding on the back of a tram in Istanbul

We’re moving onto the region’s most dominant country – Turkey. Sitting at the crossroads of Europe, the Middle East, and the Caucasus, Turkey’s military, economy, and political identity have all been shaped by this unique identity.

As deglobalization sets in, Turkey (and more specifically, President Erdoğan) is keen on seizing an opportunity at climbing the regional ladder. Thanks to solid geography, good demographics, and a long history of outlasting regional upheaval, the Turks have the perfect foundation. All Erdoğan feels he must do is continue consolidating power, amend the constitution, and his seat at the table will be cemented for the remainder of his life. And then he can project his ‘image’ of society onto the wider region.

It’s not all butterflies and rainbows for Turkey though. They’ll need to continue growing the industrial base to be globally competitive. And some of those outdated economic views could harm Turkey’s long-term prospects, despite the deglobalized world we’re heading towards.

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Transcript

Hey all Peter Zeihan here we are continuing this week series on the Middle East. And we’re going to now talk about the most powerful country in the region by far. And that is Turkey. Turkey is an industrial base that produces every other country in the region combined. It has a GDP roughly the same size as every other country in the region combined.

It has a military that’s more powerful than every other country in the region combined. In fact, it’s the second most powerful army within the NATO structure. Second only to the United States. And the first thing to remember about Turkey is that Turkey is Turkey. It is not Middle Eastern in the traditional sense. It is not European in the traditional sense.

It’s part of the Caucasus. It’s part of the Eurasian sphere. It’s part of the Balkans, it’s part of the Levant, it’s part of Mesopotamia, it’s part of all of this. But it is of none of them. It is its own thing. And if you start your understanding of Turkey by thinking it falls neatly into one or the other, you’re thinking about it wrong, which is one of the many, many, oh, so many reasons why the Europeans never understand the Turks.

Anyway, what the Turks are thinking right now at the top of the government is thinking right now is that they are at an interesting moment in history. There are two massive trends going on to the north that are colliding with one another, and both of them have limited time. The first one, of course, is the Ukraine war, because never forget the Crimea specifically and broader parts of the Russian and Ukrainian spheres at various times in history, have been part of the control of what today’s Turkey considers to be its normal birthright.

There are plenty of ethnic Turks throughout the Caucasus, in the southwestern Eurasian region. Of course, in Crimea itself. And so there’s no version of any future of the Ukraine war matter. Who wins, who loses where? The Turks are not going to be indelibly involved. And whatever that looks like. The second piece, of course, is the European resurgence and semi military unification that is happening both because of the Ukraine war, because of withdrawal.

The United States under the Trump administration, the Europeans are having to fight against decades of low birth rates and an industry that is designed around global exports, which is no longer functioning. And they’re having to find a new way of doing it. And part of the way they’re doing it is by converting some of their civilian industrial capacity to military production.

And for those of, you know, your European and especially your German history, you know where that can lead. But both of these trends are temporary. The demographic situation for both the Russians, Ukrainians and the Europeans is terminal. There is no version of a globalized world where Europe is still a single entity. There is no version of a globalized world where the Russians have the income that’s necessary to hold their own structures together.

As the United States leaves, both of these systems are doomed. And even if the U.S. stuck around the demographics are so bad, they’d be doomed anyway. The question is time frame. Is this five years? Is it 15 years? Is a 25 years? We really don’t know. History’s never been at this sort of turning point before unless you’re in Turkey.

The Turks have seen this all before. They’ve seen demographic decay on their borders. Going back to Roman times. They’ve seen a situation where wars on the periphery have flared as two forces fight off against each other and then both flare out. They saw this with the Persians, what is today the Persians against the Arabs. They are used to seeing other powers in the periphery rise and fall, because their demographics have always been good, their geography has always been good, and there’s always been a degree of insulation.

Doesn’t mean that it’s always perfect. Turkey has had its share of imperial rises. This falls as well. But the essence of what makes Turkey Turkey has always been there. And that brings us down to the personalities that are hoping to shape whatever’s next, because we have this many historical and geopolitical forces coming together at once, anyone who’s left standing on the other side is going to be able to kind of write their own ticket.

So that guy is the president, who goes by the name of Erdogan. Now at Iran has been at the top of the Turkish political heap since he kind of returned from an internal semi exile in 2000. Basically, the old government of Turkey tried to get rid of him, didn’t stick to being prime minister and now president.

And he’s now in the process of trying to amend the Constitution so he can be president forever. He refers to his enemies as traitors of the state. He lambast the educational system and the media and the financial sector is all being against him and against the will the people sound familiar to anyone at all? Anyway, Erdogan is hoping that he will be the dominant personality in all of your age.

In the not too distant future. And that he, as leader of Turkey, the most stable of the countries throughout this broader region, is going to be able to leave the Turkish imprint, the other one imprint on human history, from now on. And it’s not narcissistic egoism. That’s right. Well, it’s not it’s not just narcissistic egoism, because he too has done this before.

If you go back to the foundation of modern Turkey in the aftermath of World War One, we had a guy named Ataturk, who is generally considered the father of the modern incarnation of the state, which is something history hasn’t gotten around to amending yet. I’ll get to that in a minute. Anyway, Ataturk tried to drag the Turks out of the Ottoman Empire, which was semi religious.

The caliphate was headquartered in Istanbul. The Europeans saw the Turks as technologically backwards and neo hominids who had invaded from the plains Eurasia, descendants of the Mongols. All that good barbarous stuff, about half of which is true. Anyway, they were definitely more technologically backwards and say the European states were, as the Europeans were industrializing.

The Turks relate to that game out of Turk dragged Turkey by the ear, kicking and screaming into the modern age, introduced things like democracy and industrialization, took away their hats, changed the culture, and in doing so, he put the military as a secular force in charge of the country for the next couple of generations, ebbed and flowed when Ataturk was dying, he gifted, if that’s the right term, democracy to the country.

And a lot of the people in Turkey thought that they shouldn’t have given up their religion or their culture. And so we got this back and forth and back and forth and back and forth. It lasted until about oh, 2002 when, at Iran came in and basically grabbed both sides of that political argument by the ear and forced them into a single mishmash time.

He, I mean, sort of singular system that he now rules. So the secular military that used to throw coups, that has been completely brought under civilian control, all of the religious figures that used to issue, directives against the government, all those have been brought to heel and are under everyone’s control. So we have now one turkey.

That is a combination of the best and the worst of both sides of that old political argument. So from veteran’s point of view, he’s already the guy who’s been remaking Turkish history for a couple of decades. And the next logical step is to remake the entire region. So from his point of view and he’s got a point that if there’s anyone who knows how to navigate these particular waters, it’s him, because he’s already done it.

All he has to do is continue to shove all of Turkish society into a box of his shape, design and size. So he’s trying to force his political allies in the Parliament to allow him to run for president again. I think it’ll be like his 14th term or something. I mean, it’s not like fourth term. And if that’s successful, he will basically be president for life.

He’s already, I believe, 71. He’s not rumored to be in ill health. Doesn’t mean he’s a great modern manager in many ways. He’s like like Donald Trump. His idea of what industry should be is what it was 50 years ago when he was a kid. So technology is not something he understands. Modern society is not something he understands.

People who are young, you know, under 50 are not people that he understands. Again, it’s unfamiliar. And so he’s introducing what may well be some of the very problems that are going to plague Turkey for the rest of the century. For example, the Turks have a very solid industrial base, but it’s kind of middle tier for quality.

Anyone in the Middle East who can afford it doesn’t want Turkish goods. They want German goods. And anyone in the Middle East who can’t afford Turkish goods wants Asian goods because they’re cheaper. So Turkey has yet to define what it’s going to be in this new era. All we know for sure is Erdogan is committed to being the big man when everything breaks.

What’s Up In the Middle East: Israel’s Future

Photo of Israeli flag in from of some buildings

We’re kicking off a short new series on the Middle East. Of course, we must begin with the country on everyone’s mind – Israel.

The Israeli government is a fragile conglomerate of coalitions that have been led (and weakened) by Benjamin Netanyahu over the past decades. Netanyahu has managed to piss off Trump in recent times as well, with his requests for freedom to operate in Gaza, removal of US tariffs, and US strikes on Iran; Trump was quick to reject all three. But Netanyahu did get something from Trump – a nice seat at the top of his s**t list.

The situation in Gaza remains unsolved and is as complicated as ever. The US is disengaging from the Middle East, which means Israel is going to have to find someone else who carries a big stick and can help ensure its strategic future. Given Israeli reliance on imports food, energy, and tech, Turkey is the best option…despite the hoops and hurdles they’ll need to jump through and around to make it happen.

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Transcript

Hey, all Peter Zeihan here come to you from Zion National Park. We’re launching off a week in the Middle East today. And, as seems appropriate, when I. You’re in Zion, we’ll start by talking about what some people call the Zionist state, Israel. Israel is a multi-party democracy, that hasn’t had a majority government in years. 

This is not an electoral system like the United States, where if you get one more vote than the other guy, you get the seat. And and you knew if you get a certain percentage of the votes, you get a certain percentage of the seats. So we’ve got like 11 parties in the Israeli, parliament right now. And as a result, for the last 30 years, their governments have been, very weak because they have to, make all of their coalition partners happy. 

Because if a coalition partner leaves odds are you’re going to have a fresh election and you get started all over again. So, it’s a lot like how Italy used to be in the 60s, 70s and 80s and 90s and 90s. Now, in Israel, where governments very, very rarely last out their whole term. The guy in charge is Benjamin Netanyahu, who has been near or at the top of the Israeli political heap now for pushing almost 30 years, almost 40, not a long time, anyway. 

He is a populist conservative who has no problem throwing other people under the bus or sacrificing some of his, political, preferences in order to maintain power. And I don’t necessarily mean that in a condescending or condemning way. When you’ve got multiple parties in Parliament and multiple parties in your government, you have to make a lot of horse trades on a tactical basis day by day. 

And that means that a lot of the things you do care about get pushed to the side. And that’s part of his problem right now. Donald Trump, entertained Netanyahu at the white House a few weeks ago, and it went horrible, really. The only world leader who’s been to the white House since Trump has been in that had a worse time was Zelenskyy of Ukraine. 

If you remember, that ambush. Anyway, Netanyahu came asking for three things. Number one, he wanted a completely a free hand in Gaza to do whatever he wanted. Reminder that Gaza is that little strip of territory, that until recently was ruled by a militant political group called Hamas, kidnaped hundreds of Israelis still are holding a couple hundred of them. 

And the Israelis have now been spending about a year and a half trying to beat that and into some sort of shape that they actually think they can deal with in the long run. The second thing that Israel wanted was an end to tariffs. Trump put tariffs on pretty much everybody who wasn’t Russia And the Israeli project in many ways has been American subsidized since the beginning, back in 1948. And so the idea that the United States is now going to charge a pretty hefty, tariff, you can see Israeli’s really caught everyone of all political stripes and Israel off guard because they thought that Trump, being a populist conservative, was one of theirs. 

Apparently not to the degree that they thought. And then third, Netanyahu really wanted to get, Trump to bomb Iran into the Stone age and do Israel’s work for it. It didn’t go well. He basically got a firm, loud Trumpian no. One, all three. And, you know, there’s a lot of speculation on a lot of sides as to how this is going to shake out. 

But what it feels like to me is that, Trump has just done, what, the entire alliance structure. It’s not just the Germans or the Brits or the Australians. It’s everybody. And that includes Israel. And so the Israelis are learning that even when they have the most populist conservative government in decades, and the Americans have the most populist conservative government in literally centuries, they do not see eye to eye. 

And from Trump’s point of view, the problem appears to be Netanyahu. The way Trump sees the world, which is through a very specific lens that I would argue needs to be replaced, Netanyahu represents everything that Trump looks down on, came to the white House and he asked for things. That’s not what winners do. That’s what losers do. 

He hasn’t been able to clean up Gaza. And it’s been a year and a half. Why is this still going on? It’s entirely unfair. You’ve got over 2 million people basically living on a postage stamp. The idea that’s going to be anything other than a breeding ground for insurgency is silly, and there is no good solution for Gaza. 

You want to ship the Gazans somewhere else where apparently people are starting to talk about sending them into the middle of the desert in Libya. Now, whatever. There’s no infrastructure to move them. There’s no place that can take 2 million people in the Middle East anywhere, even including in the rich places. But Israel wants them gone. 

And Trump wonders why this hasn’t been settled on the tariff situation. You know, the Trump view that the world has been ripping off the United States economically. I have no respect for that. That’s just flat out wrong. We basically paid people to be on our sides for the Cold War. So we got something in return. We got security control. 

Israel, Israel’s different, Israel has basically occupied a soft spot in the American strategic formula. Since foundation. And when they say come after our IP, like the Chinese or the French do, we really don’t do a lot about it because we’re trying to make sure that Israel can exist as an island of democracy in a sea of problems.  

Anyway, so there was no change on the tariff situation. Third up is Iran. And while the Trump administration and Trump personally talks a big talk on Iran, Trump has made it very clear over and over and over again in both this administration in his first one, that he has no intention of getting involved in a meaningful war. 

I mean, he picked a fight with the Yemeni recently and then stopped after 30 days. And now the idea that the United States is going to get involved in a knock them out fight with a country that can influence militants across the entire region seems a bit of a stretch to me. Also, the Israelis very clearly have been pushing for the United States to do this long before Trump going back, five presidents. 

And it hasn’t really gone the way that the Israelis would like. And so when Netanyahu made his direct, almost arrogant plea to Trump, he was turned down flat. That doesn’t mean that the Americans and the Iranians are about to, like, kiss and make up. But Trump really does want a nominal deal that would allow him to say that he made a deal. 

And so those talks are continuing to grind forward. The bottom line is that Netanyahu can’t give Trump anything that he wants. Number one, there’s not a lot in the Middle East that the United States does want, especially now that the withdrawal after Iraq has been completed. And then second, anything that might produce movement of, for example, peace in Gaza, which is one of the things that, Trump campaigned on can only happen by rupturing Netanyahu, whose domestic political coalition because by the tenor of the right wing in Israel, Donald Trump is a hippie 

commie. And there’s just no version of any deal, in Gaza that would work. For who? This is nice. Let’s take a look at that. That would work for all of the factions. In fact, there are some members of Netanyahu’s coalition who are wondering why they haven’t kicked up the crematoria and just gotten rid of the Gazans directly. 

Anyway, so that’s where Israel is. That’s where Netanyahu is. He’s kind of stuck in a lurch. There’s no real good move for him. And Trump is tuning out. And that means the Israelis are going to have to figure out how to function in a world where the United States just really doesn’t care about the Middle East. 

So, obviously this has happened under Team Trump, but I would have argued that we’ve been edging this direction for a good 15 years already, and we’re always going to get to some version of this where the Israelis have to figure out that they can’t look after the security themselves. They’re too small, they’re too dependent on energy imports, the two independent food imports, the two dependent on technology imports. 

But there are partners out there that might work. They just have to figure out which one they can stomach. And the one that is most obvious, the one that is closest to one that could be a threat if it wasn’t a partner would be Turkey. And we’ll talk about them tomorrow.

The Future of Tourism: Part 2

Photo of tourists in Europe

We’re continuing our discussion on the future of tourism with a few new regions. Today we’ll be looking at some at-risk European countries, an unstable Middle East, and an uneven Southeast Asia.

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Transcript

Okay. Next is Europe. Europe faces two situations as well. The first is clearly demographic, with countries like Germany and Italy just aging into obsolescence. You’re looking at the complete collapse of their industrial model over the next decade, which will take the entire social model with it, because without people to pay for the welfare state, oh, angry Germans, who are willing to protest and get sketchy, of course they’re going to be really old. 

So it’s not going to have the same connotations that it might have, say, 50 years ago. The other piece of the equation. Yes. So, you know, got steep wobbling, financial collapse, industrial collapse, employment collapse. And on the other side, you’ve got the Russians who are going to push until the day that they can’t, obviously, unless you are into adventure tourism. 

Russia and Ukraine are already out of the tourist list. And if the Russians are successful in Ukraine, they will push further west. The whole line of states, going roughly from Estonia down to Bulgaria are in some degree of danger, which means that all of them, all of a sudden become only the type of tourist locations that very specific types of tourists go to. 

So if there’s anywhere in Central Europe that you are interested in now is absolutely the time. 

All right, let’s see. Next up, the Middle East. Who? Everyone in the Middle East basically falls into one of three categories. Either they rely on oil income directly. Number two, they rely on oil income indirectly from another state, or they are Israel. All three of these categories look kind of sketchy. Oil requires a significant trans national trans oceanic transport system. 

In any system where globalization is no longer a thing and no one is providing security on the water that is in danger. So the only oil producers that will continue to be oil producers are those that both can maintain control at home. Short list there, as well as cut a deal with a local or regional security guarantor in order to keep everything running from the oil point of view. 

To get to an end user that eliminates sales to places like Japan or Korea, Taiwan or China, which is kind of the bread and butter for most of the Persian Gulf countries right now. So this gets really dicey really fast. The North African say Algeria have a much better position because they just have to get over to Europe. 

But for the countries that are on the dole, you know, whether you are Morocco or Jordan or Yemen, the money’s just going to stop coming. So you should really count on that going away. And that just leaves Israel. Now, Israel imports three quarters of food, imports 90% of its energy, and there is no version of economic transformation that Israel is capable of where those two things go away. 

So the only way Israel continues to be a viable state, especially if it’s going to be a tourism destination, is if it manages to cut a deal with a new regional security guarantor. That will not be the United States. The U.S. won’t have the reach of the interest that will be Turkey. So watch Turkey very closely for the next decade. 

It’s probably going to be one of the fastest growing, most successful, most powerful countries, not just in the region, but in the world for decades to come. And how Israel makes its bed with the Turks will determine everything about the sustainability of the Jewish state. 

And finally, Southeast Asia. Southeast Asia is the part of the world that I expect to do the best. Is the world to globalize after, of course, a little adjustment period, because it can pick up anything that the Chinese drop and has the perfect mix of demographic structure, geographic accessibility, a history of basically not going to war with itself. 

It’s going to be a manufacturing powerhouse and kind of a globalization in miniature that the ten countries that are in the area, but not everything is the same for everybody. Some countries are going to do better than others. And kind of like with India, when you change the economic profile of a country really dramatically, you have people who win more than others. 

And that will be nowhere more extreme in terms of differences than in Southeast Asia. So what will be true for Luzon and Java and Bangkok and ho Chi Minh City and, Hanoi will not be true for Mindanao or Sumatra or Lao or other places that are a lot poorer. Basically, you have this huge split within the region, and then among the region between the countries and the locations that can do very, very well in this sort of environment. 

And those it can’t. And so, you know, this is going to sound really strange, of course, but when you want to go to another country, you need to do your homework first. And in the future, Southeast Asia is going to offer both the best and the worst.

The Future of Tourism: Part 1

Photo of tourists in Brazil

If you’ve followed me for a while, you’ll know that I take my travel very seriously. Unfortunately, it seems that my work keeps crawling its way into my personal life, because deglobalization is changing tourism as we know it.

Global tourism will decline; I suppose that’s a no-brainer if global trade and relationships start to breakdown. But the collapse of China could have an outsized impact on the developing world and tourism to these countries.

India is poised for long-term success, but the coming years will likely be much more unstable, making tourism in India less appealing in the coming years. Brazil is a country heavily integrated with China, and if that stops, the Brazilians will be looking at economic and social collapse. Which means Brazil will also be much less attractive for tourists.

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Transcript

Hello, Peter Zeihan here. Coming to you from arches. Today, since I’m on vacation, kind of, we’re gonna talk about tourism. The places you need to go while you still can. We are going through a period of massive economic change globally where demographics are basically smashing the old model before you even consider what’s happening in the United States with the globalization and populism. 

And the end result is there are a lot of countries that people like to think that they want to visit that aren’t going to be options for much longer. So the point of this video is to give you an idea of where you should prioritize, because time is very, very limited. 

All right. Quick reminder of what everybody is up against with globalization. Global trade is obviously going to collapse. That reduces access to things like finance and energy and food products. And so you’re looking for long term stability for a place does it doesn’t have the, the beauty that you’re after, physical or cultural, whatever happens to be, but has the ability to maintain a degree of stability itself. 

Big part of this is going to be when China collapses, which is not far off. A lot of the Chinese money that has been flooding into specifically the developing world to fund things, is going to go away. Keep in mind that a lot of the things that Chinese are funded were never funded before, because they were not necessarily great investment options. 

The Chinese view money as a political good. That’s why their money supply is so huge. Anyway, first country we have to talk about is India. India is a country that overall, I think is going to come out on the positive side of the globalization trend. But India is a big place with over a billion people. And to think that they’re going to go through a massive industrialization process that’s going to double their industrial plant and adapt to the collapse of China as a source of consumer goods and collapse to the international trade system, which has allowed them to reach out, without massive social upheaval, is being overly optimistic. 

India will still be there. India is actually probably going to be entering one of its greatest growth periods in its history, and India has been around a long time, but they’re going to be a lot of growing pains, and that’s going to generate a lot of social stress, which is going to change the profile of what you would do for tourism in India. 

Next up is Brazil. Brazil has a lot more exposure to the trends that are coming, and it’s a very high dollar producer for agricultural commodities because it needs so many inputs, most of which come from a different continent. So if anything happens to globalization, they lose access to those inputs on a reliable basis, and a lot of the land goes follow because it just has no innate fertility. 

In addition, they suffered a double blow from the Chinese number one. They’re one of the top investment targets for the Chinese who are trying to get that agricultural product to China. And without that investment, you should expect infrastructure spending to basically come to a standstill. And secondly, back in the 2000s under the Lula government, the Chinese formed all kinds of joint ventures with the Brazilians, which basically meant that they went into Brazil to set up joint production facilities, but they stole absolutely everything that wasn’t locked down, most notably, the intellectual property took it back to China, produced it at a bigger scale, and drove all of Brazilian industry out of business. So Brazil today has basically become a two horse economy, high cost agricultural product, high cost, industrial inputs such as iron ore, all of it underwritten by the Chinese that all goes away, which means that Brazil will have to absolutely invent itself again. 

That’s going to be, at best, a 30 year process. And in the meantime, the social breakdown and the economic breakdown that is going to plague the country is going to be immense, meaning that there aren’t going to be a lot of places in Brazil that are really worth going to. But the Copacabana, right on the beach is kind of the quintessential expression of Brazilian economic inequality. 

You basically have these really, really rich pockets that will still be beautiful and they’ll be surrounded by slums. For those of you who have been to Brazil before, you notice that that is not exactly a new concept, but it’s going to become much more concentrated and the disparities will be much more obvious.

America’s Processing Crisis: Racing China’s Decline

Photo of workers in a manufacturing shop

One of the biggest challenges to US reindustrialization isn’t the raw materials, it’s the lack of processing infrastructure to convert those raw materials into intermediate products. Let’s break it down.

The US needs to (roughly) 20x its processing capacity to support the industrial buildout; however, the tariffs from the Trump administration have complicated things a bit. Importing already processed materials has become harder and the buildout of domestic processing capacity still needs years to ramp up.

Sure, we’ve been content getting all this stuff from China for decades since it was cheap and easy, but all that is changing as the Chinese system collapses. If the US doesn’t have the processing infrastructure ready, we’ll be in for a rude awakening.

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Transcript

Hey all. Peter Zeihan here, coming to you from Dead Horse Point State Park. Weird name. Looking over here at the Colorado Basin. That is a potash facility, which means it’s time to talk about processing. One of the biggest problems the United States faces in its re industrialization effort isn’t necessarily mining the minerals. It’s turning them into something useful, putting them into an intermediate form that can then be used in manufacturing. 

One of the things that Donald Trump administration has done by acting tariffs on everybody is make it more difficult for us to get the intermediate and finish materials that we need in order to do the industrialization process. What should have been done first, and this is not simply a criticism of the Trump administration, but also the Biden administration and the Trump administration before that, the Obama administration before that, and on and on, is that, North America is very rich in any number of raw materials, but we need things like this in order to separate the ore, in order to get at the minerals that we are after. 

And then you turn them into an intermediate product like, say, semi-finished aluminum or copper, whatever it happens to be. We basically need to increase processing on the continent by roughly a factor of 20. It’s different based on whatever mineral you’re talking about. But the problem we have is that the Chinese have basically massively subsidized their processing industry. 

So China is not nearly as rich in the raw materials as we are here in North America or the Western Hemisphere writ large. But they’ve expanded their money supply. They’ve funneled everybody’s private capital into whatever projects generate employment. And so if there’s something that technically that they can achieve, even if they’re not the low cost producer, they subsidize the crap out of it in order to corner the market in whatever it happens to be. 

And then because no one can compete with these subsidized prices, they basically drive other processors around the world out of business. And that’s before you consider that the environmental regulations in China are significantly less intense than they are in any third world country, much less first world country. So cheap capital. Turning a blind eye towards environmental damage, they’ve tended to corner the market. 

Well, we only now have a few years to undo and rebuild, some of our mistakes in order to have these materials locally. And unfortunately, it’s very difficult to consider being a manufacturing power, much less an industrial power, without having these things in place first. So we are now set up to have kind of the worst of all worlds. 

The Chinese system is breaking. It’s going away. We’re losing access to everything that they’ve been subsidizing for us these last 30 years, and we have yet to build enough of that capacity at home to begin a serious re industrialization program, much less provide enough manufactured goods for our own population. So expect to see a lot more things like this in the future all over the continent, because without them we don’t have anything to work from.

The Future of Piracy (ARRRGH!)

Photo of a pirate ship on the seas

As the US withdraws from its position as global protector of the seas, will the age of pirates return once more? Okay, maybe Blackbeard won’t be making a comeback, but piracy will have a role in the future of trade.

Countries are likely to fall into one of two camps: combating piracy or embracing it. And it will largely depend on self-sufficiency. Places that need a little outside maritime help (especially for energy imports), like France, Italy, Japan, and Southeast Asian nations, will oppose piracy and protect shipping routes.

For places like Turkey, where trade happens over land, and they are largely self-reliant, more aggressive policies like protection rackets might become the norm. We could even see a bloc between Turkey, Israel, and Egypt form, leveraging the different strengths of each nation.

And of course, there will be some exceptions. A country like India might oppose piracy to its west but tolerate it to the east.

The decline of global maritime stability will lead to the regionalization of control, with different powers making the rules in each route. And if there was a place to watch, keep an eye on critical energy routes in and around the Persian Gulf.

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Transcript

Hey, Peter Zeihan here coming to you from Kodachrome State Park in Utah. And today we are taking a question from the Patreon crowd about piracy. Argh. And the idea is, as it becomes obvious to everyone that the United States is incapable of maintaining freedom of the seas for commercial shipping. What sort of states fall on which side of the divide? 

Pro pirate or anti-pirate? Great question. Okay, so, the dividing line between those two groups, those who will become pirates and those who will fight the pirates basically comes down to the degree of self-sufficiency that they have. So if you have your own food, your own energy, your own manufacturing capacity, and you’re not dependent upon the seas for transport for any of those things. 

Then all of a sudden, piracy looks like a really interesting option. And you can do this as a group with other countries that are like minded or part of a network. However, if you’re on the flip side where you are dependent upon cross seas transport to maintain anything, then all of a sudden pirates are the bad guy. So let’s start with the folks who are going to need to maintain a degree of connection. 

At the top of that list are going to be France and Italy. These are countries that are regional powers, have reasonably powerful navies that are about right size to their needs. But far more importantly, they are going to need at least limited degrees of interaction with other regions. In both cases, you’re looking at countries that, for example, need to import almost all of their oil and natural gas and that absolutely has to come, from the water. 

So the French Navy, the Italian maybe are going to look, very negatively at things like pirates when it comes to their national security. Let me continue with that list of countries, Southeast Asian Japan, countries that, for a mix of reasons, are going to maintain, a naval presence. Japan is pretty self-explanatory. 

It’s very poor in natural resources, most notably energy. Southeast Asia is a cluster of countries that I think are actually going to do really well moving forward. Their agricultural conditions are pretty good, their energy conditions are pretty good. And there a series of peninsulas and mountains and highlands and jungles and islands. That means that they have to integrate via water, as opposed to integrate via land. 

And so anyone who could be sand in the gears is going to be a problem. And I can absolutely see the Japanese and the Southeast Asians for any number of reasons, collaborating moving forward. Again, somebody who would be the sand in the gears. Now, the problems that these groups Italy, France, Southeast Asia, Japan are going to face are unfortunately fairly close to home because in both cases, you’ve got blocks of powers that really don’t fall into these categories. 

Most of their interests are on land. And at the top of that list, if you’re looking from the west side in the Mediterranean, that’s Turkey. Now, Turkey is already a massive industrial power, and it has been moving in the direction of a more coherent industrial policy for the last 20 years, as the Europeans have basically started to age out. 

The Turks know in their bones that over the next generation, any product that they’re going to need, they’re going to have to produce themselves. And they’re probably going to do this with some countries, like I say, in Southeast Europe, most notably Bulgarian Romania. But when it comes to say, energy Iraq and as a region are right there, you don’t need to sell to get to either of those places. 

So you can see the Turks being very, very aggressive in enforcing basically protection rackets in the eastern Mediterranean. The only real question is whether or not Israel and Egypt are going to join them or be hostile to that sort of effort. It would make so much more sense for all three powers to be aligned in a bloc, because Israel has the air power and the intelligence capabilities. 

Egypt controls the canal and just has a sheer mass, as well as not insignificant energy reserves of its own. The three of them together would be a very powerful bloc that be very hostile to anyone who is on the outside, most notably the French and the Italians. And if this starts to feel like Middle Ages political alignments, you’re not wrong. 

On this other side of the equation in the Indian Ocean. The power to watch, of course, is India. India is, self-sufficient in its food. It’s becoming a massive industrial power already that’s going to probably double as the Chinese system collapses. But the real fun thing to keep in mind is, while the Indians do need to import a lot of energy, they’re really the first major market out of sight of the Middle East. 

So I can see them being a hybrid position to their west. They’d really frowned upon piracy to their east. I think piracy is a wonderful idea. So I actually see India as being the country that’s most likely to get into privateering. And privateering is basically state sponsored piracy. They would just have a very geographic area where they would support it, and then a very specific geographic area where they would not. 

So that’s kind of the sum up. It’s all about how you regulate energy going to and from the Persian Gulf, because when it comes to big global manufacturers trade, that’s pretty much dust in the wind at this point. And anyone who is anyone is going to be looking for a more stable partnership. And if you’re in Europe, that means you have to basically make do with what you have. 

If you are in Asia, you might be looking across the Pacific towards the Americas, but you’re certainly not going to look at going through zones that are interrupted with places like Turkey or India who are going to be out for their own good. All right. That’s all I got. You guys take care.