7/20/26: 4 US Troops Killed, Houthi Red Sea Blockade, Mearsheimer Dire Warning

23:34If the U.S. takes a couple islands in the Strait of Hormuz, Iran will fire ballistic missiles at those islands. People will be killed in those attacks. There will be a question of how to resupply people on the islands, how to keep them there, what they'll be doing while they're there, how to keep them safe and so forth. Those questions won't go away. and that escalation will lead further escalation because then if you hold the islands, you may need to hold part of the coast to keep the soldiers there safe. And then when you're on the coast, you'll be hit by drones and ground attacks. You'll have to invade further inland.

24:06And really the logic of it is eventually you'll have to invade the country all the way to Tehran to depose the government by ground because that's the only way of even theoretically keeping people, making your previous gains sustainable. And that, if you look at the size of Iran, it's a country of 92 million people. It's the size of Western Europe. You really need a draft to be able to even think about doing that. And even a draft itself would probably not be generate enough brigades to hold the entire country and pacify it and so forth. And I don't think anyone in America really wants that. If you mentioned earlier, the war is the most unpopular war since polling has been done before a draft, before a crown campaign and so forth, really at the early stages.

24:45So it seems politically impossible. But the U.S. and Trump himself has kind of boxed himself into this situation, whereby he can either walk away, which I think he still can do, or he can be trapped in the situation of greater and greater escalation, which will mean much more casualties without any guarantee of a victory at the end. Right. Maz, we've got some significant developments I want to get to in just a minute. But I wanted to get your sense of what you read into the targets that were chosen, both on the Iranian and the American side. So first, let's start with why are the Iranians hitting Jordan so hard at this point, which is a relatively new development here.

25:21What do you think is the strategy at play? Well, you know, there are two things here. First of all, in the early phases of the war, Iran hit really hard the bases which are closer to Iran. And a lot of those bases have been disabled now. So they can't really be used. They're not deemed safe enough to be used for air campaigns. A lot of the infrastructure there has been destroyed and so forth. And what they also did was they hit a lot of the radars and air missile defenses, which were between itself and Jordan. So Jordan is basically the next domino in line. And what the U.S. did was when the bases closer to Iran became unsafe or destroyed, they moved more of their assets to Jordan.

25:56So Jordan became the primary hub, one of the major and most important hubs for waging the war against Iran. And now it's at the front line. And now it's being hit really hard. And now those bases are going to probably most likely be deemed unsafe or disabled for the fight going forward. And the aircraft have moved further away. So they'll have to move probably to Israel. Israel is further, obviously, from Iran. It's also more defensible from the air because more compact and the air defense density is greater around its critical sites. So, you know, I think that's probably the next step. What Iran is doing is trying to disable all the bases in the Middle East, which can be used to attack it, which are close to it, render them unusable for the war.

26:40And if you have to fly from Israel, you'll have to fly. There'll be fewer flights. There'll be longer distances. and so forth. And the effectiveness of an air campaign fought at a long distance is much, much less than those which are fought all on Iran's borders. So it'll be for their benefit. And I think that the strikes against Jordan will probably continue until that base is abandoned or not used for active operations, or the Jordanians make some sort of deal with Iran to that end. And I think that's kind of the only way out of the war at this point. If the Arab countries around Iran decide to make deals with Iran to end the war and say they won't use the territory and airspace to be used for attacks against Iran.

27:21Absent agreements like that in the region, I think that the war will probably continue and it won't continue in a way which is favorable to anybody.

27:32My first guest is Paris Hilton, Shakira, Luke and Yerin, Samira and Gracie. I'm so excited. On a bouncy bed. You have surprises. I have many surprises. Welcome to Sweet 305, where the group chat comes to life. What up,. It's like a way to say, hello, friend, hello, best friend, hello, brother. What up? Look, I've never talked to anyone. Except with my children. My children know. Yes. Be my love. Oof. Punch. How incredible. The telenovela. You're the only person I know that loves a yellow starburst. It's lemonade. There's no one missing you. Like you say, I'd like to collaborate with this person.

28:17This is Sweet 305. Listen to Sweet 305 with Lele Pons as part of my Cultura podcast network on the iHeartRadio app, Apple Podcast, or wherever you get your podcasts. This is Chelsea Handler from Dear Chelsea. Every week the news gets worse, the world gets crazier, and Yamanika is here to tell whoever's responsible you're the problem. If you come over here to play games, I'ma check you, okay? If you do some in the news that don't sound good, I'ma play you. Join Yamanika Saunders as she breaks down the week's most problematic stories on her new podcast, You're the Problem with Yamanika. Do you know I just found out who Sidney Sweeney was?

28:58New episodes weekly every Wednesday as part of my new network, the Dear Chelsea Network. If he got a bunch of women, then I should have a bunch of men. Do better or do less so I don't have to do so much. So join Yamanika each episode as she answers one question. Who's the problem? I'm Yamanika and I'm out. Listen to You're the Problem with Yamanika on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

29:29What's up, fam? I'm sports journalist Ari Chambers. Hey, what's up, y 'all? It's your girl, Sam J. And we're the hosts of Everyone Watches Women's Sports, a new podcast from Together and I Heart Women's Sports. Because let's be real, women's sports is giving us way too much to talk about these days. So Kelsey Finler, she became the first female solo rower to go from California to Hawaii. My first thought is just like, what's up with the snacks? Like, what are we eating? The highlights, the rivalries, the breakout stars, the moments that take over your entire timeline. And the conversations that start during the game and somehow keep going all week.

30:03Every week, we're breaking down the biggest stories across women's sports. Naomi Osaka showing out. She beat Sabalenka. Shout out to you, Naomi. You get the palm, Naomi. You get the palm for that. Because we're not just interested in what happened. We're interested in why everyone's talking about it. Because everyone watches women's sports. Listen to Everyone Watches Women's Sports on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

30:31Turning now, significant breaking news. Literally happened moments before we just started. So let's go ahead and put this up here on the screen. Breaking. The Houthis of Yemen have announced a maritime embargo against Saudi Arabia. Quote, effective immediately. Saudi Arabia has until now exported about 4.5 billion barrels per day from Yanbu in the Red Sea, most of it heading south through the Bab al-Mandeb Strait between Yemen and Djibouti. So this means, Maz, this has been the literal nightmare scenario. This has been a significant way for Saudi Arabia's economy to remain at least somewhat resilient through the Strait of Hormuz blockade.

31:09With both the Strait of Hormuz blockaded and the Bab al-Mandeb Strait for Saudi Arabian oil, this will significantly impact, as we said, 4.5 million barrels per day that we're currently transiting through the Bab al-Mandeb Strait and actually keeping the oil market at least somewhat afloat throughout this last fight. month period. Your reaction to the significance of this and then, of course, building on the strategic problems for the United States and the world coming out of this announcement. Well, absolutely. This is close to a worst-case scenario for how the war could escalate because, you know, the reason the global economy is not imploded to the degree it could have because the war is because there was this pressure valve in the Baba Mandib and the Red Sea, but which a lot of the oil, not all of it, but many much of it from the region could have been pumped from this pipeline across Saudi Arabia and then through the Suez and so forth or down through Asia.

32:02That's now, theoretically, if this announcement holds and they really do enforce it, that option is closed now. And what also is happening is Saudi Arabia is being brought into war much more directly, whereas they've been somewhat more aloof from the conflict to date. And, you know, I think this is now a situation where the global economy, economies in Asia and Europe will be very existentially threatened on a short time frame. And the U.S. also will be impacted very greatly. So the fact that the war even got to this point is very, very alarming. And the fact that the Houthis and the Iranians are now taking this step is very, very dangerous because it suggests they themselves have now decided that the prospect of a negotiated solution is unlikely or almost impossible at this point.

32:50And they're using their own nuclear option here or their own one of the highest escalatory options that they had on the table that they had not deployed in the first few months of the war. And I think that the calculation is that if the U.S. cannot make a diplomatic agreement, if it can't be trusted or they can't have a consensus in the U.S. system strong enough to push forward with the deal, then the only other option is to basically send a very, very strong deterrent message by destroying the global economy, destroying the U.S. economy, and basically laying down a marker that no president will ever want to do this again because it was so painful.

33:29If you can't make a deal, you can at least inflict that lesson. And it's a very painful lesson for people around the world, for people in America, people in Iran as well will suffer a lot. But it seems like if they're closing the Bab al-Mandib, they've decided that that's the only way out of the situation. Now, I still always hold out hope that every escalation will result in some sort of rapid diplomatic shifting. And there's some talks about proposals for a new 10-day deal between the U.S. and Iran, a pause and strikes to talk again. We'll see how those play out. But I think that the move by the Houthis suggests that the odds of that are quite slim.

34:08And really, everyone is looking now towards the deterrence option, which will be very, very painful for everybody and could see some of those worst-case scenarios with oil take place within the next month. Well, and part of the strategy is the global economy through the oil market. And part of the strategy for Iran as well is making life unlivable, making, you know, punishing their own neighbors who have hosted U.S. bases, who have allowed the U.S. to use their terrain to launch strikes, in some instances who have launched strikes themselves. And as part of that, you know, the U.S. is striking civilian infrastructure inside of Iran.

34:42They're striking a desalination plant, for example. and the Iranians also struck a Kuwaiti desalination plant. Talk about that aspect of things and the significance here of these water plants and what it means for the region. Sure. So in the Gulf Arab states, the countries are basically not habitable without these water salination plants. It's a very arid, very hot environment. You need packaged goods in large numbers. You need these water treatment plants which separate the salt from the water and make it drinkable. They need those. If they didn't have them, effectively, you'd have to abandon these countries.

35:20So they're very, very important. In Iran, in southern Iran, it's extremely important to have these plants, and some significant amount of the population relies on them. In total, viewed of the country, it's probably just a few percentage points. Iran's a very, very large country. There are other sources of water. They do have water problems, but they have access to multiple bodies of water. And a lot of their water problems are really due to mismanagement, it seems like, as long as with climate change. But, you know, in the Gulf states, it's a much more existential problem for all the entire country.

35:49So if these plants were destroyed, you would have to see, you know, abandonment of major urban centers. You'd have to see maybe some countries will be literally not habitable anymore in the short term. So it's really a very serious escalation. I think that's also something that the Iranians have said, that if you go for us with the nuclear option in some fashion, we can escalate to the highest level with you. So they said that if you target our civilian infrastructure, we will hit back proportionately. And they did do that in Kuwait after their desalination plants were hit in southern Iran. But I did see in the last 48 hours, at least, the U.S., as far as we've seen, has not hit major civilian infrastructure in Iran after that.

36:31They have been hit significant numbers of bridges. No desalination plant has been hit again, at least in that time. So the deterrent message of the Iranian strikes may have been effective in that sense. So I do hope that we don't see any more civilian infrastructure strikes because that would trigger really, really catastrophic scenarios. And if you had a situation where Dubai or Qatar or Kuwait is being literally evacuated and rendered uninhabitable, the knock-on effects for the global economy and the U.S. economy, even in the short term, would be very, very catastrophic because of the linkages there financially and resources and so forth have been developed.

37:09So really it's a threat to the entire world if that were to happen. Let's put B2 up there. This is an interview that the foreign minister Arachi gave to local Iranian media. Here he says that the U.S. made two miscalculations. They started the war. They didn't account for resistance. Quote, the Zionist regime thought that with a short attack, they could destroy everything. When that didn't happen, they were forced to stop the war. Something that he expounds on pretty extensively here is specifically about the lead up to the negotiation process and about zero enrichment and what the goalposts that were constantly moving.

37:48We obviously covered that extensively at the time. But given that this can only truly end with a deal, what do you make then of their position being where it is? And you said previously that it's very unlikely that we actually could be able to get a deal from your assessment so far. Yeah, you know, unfortunately, it's hard to see it in the short term. And I would like to be surprised in that term on that point. But if you look at the situation in context, Iranians signed a deal with the U.S. about a decade ago. It was a huge risk. The people in the system who were the reformers camp took a real big gamble and they were hit really hard when the deal was violated by Trump in 2018.

38:27And then again, last year and this year, they took part in negotiations with the U.S. Aragji himself delivered a deal to the U.S. side, which was much more generous, actually, than the JCPOA in terms of U.S. interests. And both times in the middle of those negotiations, Iran was attacked. And attacking someone and killing negotiators is something very extreme. That was not even done by belligerent parties in World War II because it was known to be how damaging it is, the idea of having a deal going forward. Even if it's a country you have far more enmity with than Iran, you wouldn't do that because you may need to talk people in the future and you need to have a degree of trust to make those talks happen.

39:08So that specific principle was attacked during these conflicts. So despite all that, they still somehow got the MOU after a few months of fighting. And then the MOU immediately fell apart because it was perceived that the U.S. immediately after signing it didn't actually implement the terms and then started doing things which undermined Iranian leverage in Lebanon and then started surging more troops in the region. It may really seem like they were just preparing to the ground to attack again in the short term or medium term. And then from the Iranian perspective, you might as well just initiate the war now rather than let your leverage be depreciated.

39:43So for all those reasons, it's hard to see how the trust gap between the two sides gets remedied here. But I do think that there's one specific variable in between, which is not really promising, but could work. And I think it's what's working right now or attempting to be put into effect is if the Gulf Arab states issue a veto and say, no, we will not allow our bases to be used for war anymore. We won't allow airspace to be used because we're going to be destroyed if the war continues. And the whole premise of their relationship with the U.S. was that the U.S. will protect them at all times. They'll make sure that there's basically Switzerland levels of peace going on here so that the global economy, people can invest here, people can come and live here and so forth.

40:25And if they can't defend us, then the relationship doesn't really work anymore. And what's happening is the U.S. keeps escalating the war with Iran. And these countries are taking a million missiles to the face and drones to the face every single day the day after. the attacks in Kuwait are a really huge warning to Dubai and Qatar and other countries in the region, what could happen to them. So if those countries issue a veto, think really strongly that they will not let the war continue, it would make it very difficult for the U.S. to continue. And they would take a lot of the incentive for continuing out.

40:56I don't think we're necessarily there yet, but that's the only path that I could see that could help. And, you know, there are people in the U.S. system, like the more advanced camp of people who may not have the upper hand, they could use that such a shift to gain advantage and push forward their view of how the war could end. Because if you look at the way the MOU fell apart, it seems like the U.S. administration was not working on the same page. Vance seemed to be in favor of pushing the deal forward, creating a structure with Iran, which were allowed to continue. And then Rubio went to Lebanon and did something which really undermined and worked across purposes of the deal almost automatically.

41:34So I think that that dynamic could be shifted if the Gulf Arab states were to take a very firm, unequivocal position that the war cannot continue because they will not survive if it does continue. Lastly, Maz, I was wondering if you could help out our friends over at Fox News who are a little bit confused about the way things have been going. Let's go ahead and take a listen to Fox host Maria Bartiromo here and her confusion about the situation. You know, CENTCOM says that there will be outsized action in retaliation. But I don't understand how it's possible that Iran has the capabilities to fight this way and continue to try to lash out at Gulf countries and U.S.

42:15military bases. Because the U.S. has obliterated Iran's military and the president continues to reiterate that. Yes. And if you look at the numbers of missiles that they've been able to fire off from the beginning of this war, you know, late February, early March, and what they're able to do now, it is very seriously degraded. As they say, Maz, she's so close to getting it. So close. Yeah, you know, it's so funny because they keep, and Victoria Coates there was saying that the missile capacity has been degraded. You know, they're actually firing missiles at a steady rate after the first few days of the war continuously.

42:53Because their whole strategy of the war is they need to fight for a very long time. It's a war of attrition. So the amount of missiles used will be conserved and calibrated at a certain level to preserve the ability to fire for like a year or two years or something like that indefinitely. indefinitely. The Iranian military capacity was not obliterated by the war. They did significant damage to leadership personnel. Many dozens of people were killed. They destroyed a lot of civilian infrastructure. Schools were destroyed, bridges and so forth. And some military bases were hit. But Iran's primary, and also the Navy was hit very hard, which Rubio and so forth have been talking about a lot too.

43:32But Iran was not primarily known as an air power or a naval power. It's a missile power and asymmetric warfare power. So what they did was they built their missile bases into these mountains, into the country. So they knew that they didn't have the ability to develop a large, sophisticated airport because they're under sanctions. They don't have access to the huge supply chains you need to build F-35s or F-16s. They also can't really build high-tech air defenses for the same reason. But they did know that they had geography as a tool and they had a very, very large educated population of engineers and so forth.

44:06So they relied on tunneling and nearing build bases into these mountains, underground and so forth that would be impervious to U.S. air attacks. And they've been firing from those bases throughout the war. And that's where they're firing from today. And the U.S. air attacks, it's really unfortunate if you think about U.S. conservation and U.S. power because what they effectively did was in the early days of the war, they fired very expensive, very rare standoff munitions which take years to produce. And they fired them basically into solid granite. And at most what they did was they disabled the entrances to these bases.

44:40But then within 48 hours or a week, bulldozers came and reopened the entrances and those bases are operating again. So basically, you fired extremely valuable missiles you need to deter China and to deter Russia and so forth. Fired into Iraq, basically, just to delay Iranian missile capacity. And what the Iranians did over the past month during the ceasefire, more than a month, they excavated all the bases. So the bases are operating at the level they haven't been operating at since the start of the war now. So that's why you see these missile strikes being so effective. And now also the U.S. capacity, I mentioned earlier, the radars in the region have been destroyed or rendered inoperable.

45:20So the missiles are getting through further. So what they're saying in the conversation, it's really they've been lied to about the actual reality of how the war has been fought, how much damage was done to Iran, how much capacity Iran had, and how much waste was actually done during the war. They just spent a lot of very vital U.S. critical assets to delay and temporarily suppress Iranian missile fire, did not destroy it because it's deep underground, where it really cannot be neutralized from the air. Yeah, there's a lot of American arrogance at play here, not recognizing Iran as a significant industrial power and Iran as a significant scientific and technological power as well.

45:59And that is certainly coming back to bite us now. Murtaza, great to see you. Thank you so much. Thanks, man. Thanks, guys. Good to see you.

46:09My first guest is Paris Houghton, Shakira, Luke and Yerin, Samira and Gracie. I'm so excited. On a bouncy bed. You have surprises. Many surprises. Welcome to Sweet 305 where the group chat comes to life. What up, ****? It's like a way to say, Hello friend, hello best friend, hello sister. What up, ****? Look, I've never talked to anyone. Except with my children. My kids do know. I'm my love. Oh, my gosh. That's incredible. The movie. You're the only person I know that loves a yellow starburst. It's lemonade. There's no one missing you. You say, I'd like to collaborate with this person. This is Sweet 305.

46:57Listen to Sweet 305 with Lele Pons as part of my Cultura podcast network on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. This is Chelsea Handler from Dear Chelsea. Every week, the news gets worse, the world gets crazier, and Yamanika is here to tell whoever's responsible, you're the problem. If you come over here to play games, I'ma check you, okay? If you do some shit in the news that don't sound good, I'ma play you. Join Yamanika Saunders as she breaks down the week's most problematic stories on our new podcast, You're the Problem with Yamanika. Do you know I just found out who Sydney Sweeney was?

47:36New episodes weekly every Wednesday as part of my new network, the Dear Chelsea Network. If he got a bunch of women, then I should have a bunch of men. Do better or do less so I don't have to do so much. So join Yamanika each episode as she answers one question. Who's the problem? I'm Yamanika and I'm out. Listen to You're the Problem with Yamanika on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

48:06What's up, fam? I'm sports journalist Ari Chambers. Hey, what's up, y 'all? It's your girl Sam Jay. And we're the hosts of Everyone Watches Women's Sports, a new podcast from Together and iHeart Women's Sports. Because let's be real, women's sports is giving us way too much to talk about these days. So Kelsey Fendler, she became the first female solo rower to go from California to Hawaii. My first thought is like, what's up with the snacks? Like, what are we eating? The highlights, the rivalries, the breakout stars, the moments that take over your entire timeline. And the conversations that start during the game and somehow keep going all week.

48:40Every week, we're breaking down the biggest stories across women's sports. Naomi Osaka showing out. She beat Sabalenka. Shout outs to you, Naomi. You get the palm, Naomi. You get the calm for that. Because we're not just interested in what happened. We're interested in why everyone's talking about it. Because everyone watches women's sports. Listen to Everyone Watches Women's Sports on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

49:08So let's dig in deeper now to the global market and oil-specific perspective. We brought the news earlier that the Houthis have announced a blockade of Saudi Arabia. John Mearsheimer was just speaking to Chris Hedges about how significant it would be if this action were taken to the global markets. He, in fact, predicted just days ago that the Iranians would be very interested in moving this direction. Let's take a listen to what he had to say. There were about 20 million barrels per day coming out of the Gulf on February 27th. You know, when people talk about 20 % of the world's oil came out of the Gulf, that 20 % represents about 20 million barrels.

49:49And since the war started, we've devolved to a situation where 7 million barrels are still coming out of Saudi Arabia and the UAE combined. So it's only, in my opinion, about 13 million barrels that have been bottled up in the Gulf. Now, where are those 7 million barrels coming out of? One is that Saudi Arabia is sending probably somewhere on the order of 5 million barrels out through the Red Sea, not through the Strait of Hormuz. And I would guess that the UAE is sending out close to 2 million barrels from Fujairah, which is a UAE port on the Gulf of Oman. In other words, it's outside of the Strait of Hormuz.

50:45So you have this roughly 7 million barrels of oil, 7 million out of the original 20 million that are still coming out of the Persian Gulf. I think the Iranians have a vested interest in shutting down the flow of oil through the Red Sea. That's the Saudi Arabian oil and shutting down Fujairah. And there's some evidence they've already shut down Fujairah. So, Sagar, we've been talking about why there hasn't been a complete disaster in the oil market. I mean, prices are already pretty high. They're back up over four dollars a gallon for American consumers today. But one of the reasons why there's been a bit of a cushion is because Saudi has been able to export some through the Red Sea.

51:33That plus China has reduced their imports significantly. We'll talk more about that in a moment. But if that piece is going away, that could be highly significant, especially as we're sort of scraping the bottom of the barrel here in terms of our strategic petroleum reserve. Yeah, let's just like lay out the picture. There's like two main reasons why gas is still not at catastrophic levels. Although let's put C1 up here on the screen. I mean, as of this morning, gas is right back to$4 a gallon nationally. So it's not like people got a little bit of a reprieve around, I think the lowest we saw was like$3.80, maybe$3.90 per gallon.

52:05I wonder how the Freedom Fuel Network is doing this morning. Yeah, we should check in. We should check in on the Freedom Fuel Network. But we have$4 a gallon here nationally. And that's where things are now when things have been cooled off. So there are two primary reasons that things did not go absolutely catastrophic. One was Saudi Arabia, as you just said, approximately 4.5 million barrels per day that were coming out of the Bab al-Mandev Strait that they were able to export. That's roughly three to 4 % of the world's oil supply, which the Houthis now say they will blockade. And I do think it's worth meditating on this.

52:35Like, why should we even take it seriously? Immediately, you know, I was looking here for the reaction. I was like, wow, this is a literal nightmare scenario. Of course, there's a lot of people. They're like, well, that would only assume that they have the ability to do so. And I'm like, they do have the ability to do so. They did it. They literally did this. Years ago, we bombed the living hell out of them, and we still were not able to stop the blockade. We both, Biden and Trump, expended a serious amount of munitions. And you know how the Houthis responded? They were able to do so, and they even clipped an F-35.

53:04Let's not forget about that. So these are not just some guys, you know, with RPGs in a cave. Like, this is some seriously capable guerrilla force. It also doesn't take that much because you're relying on commercial shippers. I mean, you've had sailors on these cargo ships who have been killed. Yeah, many. And then you have the insurance companies that are also saying, no, we're not going to insure your cargo ship going through this active war zone where a blockade has been imposed. So you kind of have capitalism working against you here as well. They're just not going to be willing to take the risk.

53:37And who could blame them? I mean, if you're a sailor, one of these like working class men from around the world who are staffing these ships, you want to risk your life to run the blockade? I don't think so. Not at all. And you've had captains who have actively been their companies that, hey, you're going to take this route. And they've said, no, I'm not doing that. So we will see some of that as well. Exactly. And then secondary is China. And this is one of the main focuses that we want to show everyone. Let's put C2 up here. for example, Chinese imports are beginning to rebound sharply. So why does this matter?

54:10As you guys can see from this chart, if you're watching, is that China was importing roughly 12 million barrels per day right before the beginning of the war. That plummeted below 6 million barrels per day after the outbreak of the war. Nobody really knows why. The general theory is that when oil was cheap. They stocked up. They have a massive strategic petroleum reserve. But one of the things that we kept hammering home here is eventually they will have to buy some oil. They may not resume the full 12 million barrel per day purchase that they were at, but a resumption in their price because of their sheer size for a massive oil importing nation means it will put significant, significant pressure on the global oil market.

54:57Oil is a global commodity, at least for now before things get totally catastrophic and you have to start doing crazy stuff. Well, with the Chinese imports, let's put C3 back there on the screen, it is the single most determinative factor whenever it comes to the global oil market. And so if you have two primary shocks that are already coming into a shock system, and what I mean by that is the five-month closure of the Strait of Hormuz, or at least disruption of the Strait of Hormuz, then you have the Red Sea, and then you have China, that is primarily why oil is not at$200 per barrel. But if it resumes buying, it will, if it's quote, if China buys oil again with gusto, and this is when prices were in the$60 range, he predicted, this is Javier Blas, who's the chief energy commodities analyst over at Bloomberg.

55:46He said it would push the price to$80 a barrel. So$20 a barrel rise, just a resumption of oil. So just to give a picture, we are currently around 90 as of this morning. Things are fluctuating, obviously, because of the Houthis announcement, because of the resumption of war, or at least seeming like there's no memorandum of understanding, and of course, a reduction in what's happening. 90 is where put things, gas, right around$4. But if you go to 110, 120, 130, 140, 150, things can get catastrophic very quickly. And then finally, really, why we should pay attention is, and I said, guys, I sent this this morning.

56:26I'm not sure which element it is, is that what we have currently is an incredibly low stockpile, which I know we've talked about from the Strategic Petroleum Reserve. But secondary to that is not just the Petroleum Reserve, it's crude oil inventories of what's left in the United States, the slack in the system. So if you take a look at this picture, you can actually see crude oil only has about 43 days of supply left in the United States. That is the lowest inventory in the 45 years of history of taking inventories. That lack of slack is exactly why Trump buckled in the first place. Remember, he said, I don't want to be Herbert Hoover.

57:06That was higher than where we are today. So 43 days left of supply. Again, I'm not an oil commodities guy. I've tried to learn as much as I can over the the last several months. The reason I understand it is that obviously there's a fluctuation in how you produce oil. It's not exactly like a one-to-one business. So you need that slack to have confidence in the market that it'll be there when you order what you have. When all that gets taken away, and if it runs to zero, that's when stuff gets absolutely bonkers. That means just like for delivery time, just-in-time delivery. It would be basically no confidence in the market.

57:46That's when export bans and all those other things might come into play, literal shortages, people just running out of stuff. And maybe this is all hyperbolic. I can understand why someone would say that after the five months of us talking about it. But I mean, at a certain point, it's like, this is the reason the Strategic Petroleum Reserve existed in the first place. And to now be at the lowest level since 1983, you would just have no runway. And so, I mean, we'll see. That's really Because you can't look at the current situation and say, oh, yeah, Trump is going to blame. He definitely could at any moment like he did last time.

58:16I still think he probably has to just because of the logic of where we are. But you've got four Americans now who were killed just in the last 48 hours, 72 hours, something like that. You have low inventory. I mean, what if they do a ground invasion? It's possible. And if they do that, it's over. There is no coming back from a ground invasion of any kind. You can't just withdraw them and then we take more casualties. So if we don't talk at least some point in the next two, three weeks, that's where we're going. Well, and here's the other piece we haven't even mentioned, which is Ukraine is hitting Russian oil infrastructure as hard as they possibly can to try to, you know, create pain for the Russians.

58:56But inherently, that's going to create more pain for the global economy because these markets are all completely intertwined. So, again, Javier Blas says, chart of the day, Morgan Stanley reckons more than half of Russian oil refinery capacity is down due to Ukrainian attacks. Typically, Russia is the world's second largest diesel exporter, normally around 11 percent of global seaborne trade. And so just when we say it's a global commodity, what we mean is even if you have a country that is not directly buying oil from Russia, the fact that Russia is producing and exporting oil is creating less pressure in the market and keeping prices more in check because it's being bought by somebody.

59:37So when you have also these Ukrainian attacks paired together with it looks like China's increasing their buying paired together with now we've got a full blockade in the in the Strait of Horbus. Now we've got Yemen saying, hey, we're going to blockade Saudi Arabia in the Red Sea. This is all looking very grim. Now, I don't think there's anyone in the world who could say this is the moment when the shit hits the fan. Right. But I keep coming back to what Trump said when he did taco, when he said we've got a few weeks left. He has access to presumably the best information in the world. So if you're thinking to yourself that there's some other rabbit that he's going to be able to pull out of a hat to lessen the pressure in the oil market and forestall what we know eventually at some point is going to happen.

1:00:24that would be an indication to you that he does not have another rabbit in the hat that he can pull out, that all of the things that could be done to keep prices as low as possible, which ain't that low to begin with, but as low as possible without things going to$200 a barrel, that has all already been done. All of those levers have already been pulled. So, you know, we know certainly that the clock is ticking. And when you go back to the Iranian strategy, This is what when when they decided to move forward with negotiations and sign the MOU. This was the logic that they put forward, Sagar, that they thought even if, you know, we have some pressure release now, as long as the clock is ticking, we are getting closer to the time and pressure is building to the time when there will be massive global economic fallout.

1:01:11fallout. And I think if we look at that, if we look at the fact that they were able to, you know, they were able to sell a bunch of oil, refresh their coffers in terms of their finances, they were able to dig out a bunch of their missile cities and be able to prepare for the next escalatory attack. We were not able to do the same. You know, we didn't spin up manufacturing. We didn't refurb the bases that had been destroyed throughout the region. They come into this new phase of the conflict, actually relative to the U.S., much stronger than they started the war between all of those pieces. So, you know, that's the landscape that's facing all of us right now.

1:01:49I'm just looking even at the more recent strike information. So Kuwait is getting hammered in the last like three days. So they've had huge oil hits, water desalination and energy. There's pictures of backup generators that are all being driven around. Like when you start to see the government bring out the backup generator? Not where I want to be, on the back of an 18-wheeler truck. Well, this country exported zero oil for 30 days. That's 3 % of the total supply of the world, 5.6 % of the entire global oil reserve, much of which the production had to be taken offline because they literally couldn't export anything.

1:02:26And now they're getting completely hammered and struck in terms of their infrastructure, where even if the war ended now, they have to rebuild it. They have to do all this stuff to get it out there. That's just Kuwait. And then we talked about Saudi Arabia. That's another four to 5 % of the world's oil. Will it be blockaded? We'll see, right? Obviously, we'll cover it here for a couple of days. The Strait of Hormuz is basically closed. Yesterday, literally just yesterday, another tanker is on, or sorry, overnight. So while we were all sleeping, a tanker, a Greek ship got hit. Apparently, there's like one Greek company, which continues to try to run the blockade.

1:02:58Everybody else is like, yeah, we're good, And so you have a trickle of the number of ships that are coming through. You've got ships that are being struck. You've got oil infrastructure, water, desalination, and then Iran has a nuclear power plant hit. I mean, how can you not look at all this and say we are on the precipice, right, to the Trump and Hoover point whenever he was talking about the slack? I mean, this is one at least benefit to the world. Oil inventory and petroleum reserve and all that is heavily documented. You can go, as we have preparing for the show, just go to the International Energy Agency's website.

1:03:32They will show you what the Strategic Petroleum Reserve of all the participating nations is, how much they've released, and how much is left. We have a few weeks left for what that initial Strategic Petroleum Reserve release is. There's basically no more oil left in it for the critical operating levels. So there's nothing left between crude oil inventory and the Strategic Petroleum Reserve. We know exactly where it will all come from. You can dial things up maybe in the U.S., but a part of the problem, too, for Saudi Arabia, the closure, and for now, the stoppage of Strait of Hormuz oil is that means that this inventory will go faster because the Trump administration brags a lot about how we export all this oil.

1:04:12We have been exporting an absolute shit pot of oil. But that has got to – that is going to be made up for in terms of orders from Japan, from Korea, from all of these other nations around the world all competing for our oil. And then you add Russia on top of that for all this diesel and the natural gas in terms of Qatar and their inability to get – so like all of the ground is set for a genuine – I mean we're already living in a crisis but even more of a crisis in my opinion. And I think especially this is just – and I try to emphasize this in our shows, but it is genuinely important. A black swan event like a hurricane will break us.

1:04:50Or not just us. Somewhere around the world. Who knows? Some nation, tsunami, tornado, whatever they call it, cyclone or something, it's over. Because if you take something like that off, then the slack for Japan, for Korea, for any of these other countries, that's when you're broken. You have nothing left to ship you, right? All of the naval assets are in the Gulf. We didn't even bring this up in the A Block in terms of a potential crisis. A bunch of warplanes from Germany and from the rest of the world, they're going to the Middle East, which means if some stuff kicks off in Ukraine and Russia, we got nothing there.

1:05:26It's gone. Same with all the carrier strike groups and all the munitions have all been basically stripped from PACOM or from Korea, from all these Air Force bases. There is nothing that is currently there that is not nailed to the ground. And so that just means like, you know, everyone thinks things will kick off with just because of Iran. It definitely might, you know, is what we're saying. But I actually think there will be some Katrina style event that maybe either here in the United States or somewhere else in the world or potentially some sort of, you know, Taiwan situation. Nobody knows.

1:05:56North Korea. It could be anything. And that is what actually will break the entire system, because that's when when you have nothing left, that's when the whole world will change. We are redlining the global economy right now. We are pushing it to its absolute limits. We are taking out any sort of slack or buffer so that if, you know, if I mean, if we just continue in this direction, it's unsustainable. But if we have some sort of a catastrophic weather event or other event that is unforeseen, although the weather events are kind of foreseen because we are in this massive El Nino cycle. But in any case, something that is unforeseen, then we will be in a world of trouble.

1:06:36Last one I'll put up on the screen, C6, Brent crude crossing$90 a barrel. It has now gone down to like it's at like 89 this morning, 88. And this is the thing that I'm like, it makes no sense to me, right? I mean, I'm looking at all of these numbers. They're living apparently off of the hopium of this like, oh, there's some 10-day negotiation that's going on. And so the stock market is up and the oil prices have ticked back down a little bit. I don't know. I hope their hopium is justified, but they seem to ignore every other indicator. If there's even one thing that's slightly positive, they'll be like, I think this is going to work out.

1:07:13And I guess they're in part betting on, you know, that all the other traders and all of the other players will also seize on that hopium and act accordingly. But at some point with oil, you know, there is a reality here of what exists and what doesn't exist and what is getting into the global economy and what is not. So there has to be a reckoning at some point. It's not like, you know, SpaceX where you can just have the theory of the possibility indefinitely, although SpaceX is not doing all that well either. Right. But and even if we do get out of this, we're just all going to be paying 350 a gallon for forever.

1:07:45I mean, at this point for the rest of Trump's presidency. So it's not going down, you know, significantly any time soon. Actually, we even saw with the memorandum of understanding how low did it get? 380. Right. I mean, that's a preview of what it's going to be like for a long, long time.

1:08:30We'll see you next time. pulling back the curtain on how it all got made. And we'll also be joined by the people who helped bring it all to life. Guest stars, collaborators, and friends, including director Jonathan Kreisel, the mayor himself, Kyle McLaughlin, legendary musician Amy Mann, and many more. Kyle is going for it here. You fully improvised, not just words, but a song. Well, I thought you were all going to write a song. I remember you thinking that. Listen to Podlandia, AAO Rewatch on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. My first guest is Karis Hilton Shakira Luke and Yerin We have surprises Many surprises Welcome to the Sweet 305 podcast where the group chat comes to life What up?

1:09:17You're the only person I know that loves a yellow starburst It's lemonade This is Sweet 305 Here, oversharing is encouraged Listen to Sweet 305 with Lele Pons on the iHeartRadio app, Apple Podcast or wherever you get your podcasts What's up, fam? It's sports journalist Ari Chambers. Hey, what's up, y 'all? It's your girl, Sam Jay. And we're the hosts of Everyone Watches Women's Sports, a new podcast from Together. We're breaking down the biggest headlines, the viral moments, and the stories everyone's talking about across women's sports. From game-changing performances to culture-shifting conversations, we'll give you our takes, our debates, and a few laughs along the way.

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