Ami Daniel, Founder and CEO of Windward, on Why 5 Million Barrels a Day Decide the World Economy, How Western Sanctions Left Russian Tankers Uninsured, and Why Force Can’t Fully Reopen Hormuz

0:00Nefarious actors have rediscovered the maritime area as a path to greatness. You don't have to really sink it, you just have to pest it. You were hit at sea by a missile. Yes, our families found out about it. They saw the ship burning live on TV. People think that space is the next space of war. I think space is very expensive to fight in. It's much cheaper to fight at sea than at space. Laying minds, the Iranians are also very sophisticated. They're really good at it. It doesn't feel to me like something is going away. Not now. I'll be tempted to say not ever. Wow. To your views, Iran wins.

0:41Welcome back to another episode of Invested. We have an invested record here today. My friend and CEO of Windward, Ami Daniel, is back for the third time. Third time. The third time. The first time we had Ami because of his heroism on October 7th when he set up a command center in his home to save people from the Gaza envelope. The second time we had him was at the beginning of the war with Iran, where we started talking about Hormuz. And he gave some predictions. And he gave some predictions. Which are right. Which, humbly, Ami will tell you, are correct. I'm sorry, I'm just saying, if you give predictions, you know if they're right or wrong, because time went by.

1:17They did. And so now we're having back a third time, because I don't think there's a more important issue right now, not just in Hormuz, But what is going on in the global energy markets? What is going on in Russia and Ukraine? What are they deal with political implications of what's happened in Hormuz, Iran, Babamandev, which the Houthis are doing, and the Houthis firing on Saudi Arabia? Amin, for those of you who don't have his background and didn't listen to the first two episodes, is the founder and CEO of a company called Windward, which is the leading maritime intelligence company, maritime AI company, the observer of the seas.

1:49That is how he got his start. And he's found himself, as the war has evolved throughout the Middle East, in a critical position, talking to decision makers, opinion leaders, market makers globally on what is going on, not just in Hormuz, but in global commodity flows more broadly. And so I'm thrilled to have Amir. This is going to be a deep dive into what's going on in the world of geopolitics, supply chains, maritime, and you name it. Amir, welcome back. Thanks. It's great to be here. Third time's a charm, I think. Ami, we were your investor early on in Windward. It then went public on the AIM and then got bought by people just when maritime became ridiculously hot.

2:26Timing is everything. Timing is everything. Tell us about Windward. So we're a maritime intelligence business. What we do is we try to figure out every ship and every cargo exactly where it's going and what it's doing. And we try to build our own vertically integrated network to do that. Our goal is to have full transparency of the oceans and provide information advantage to the good guys who fight to keep the world free. and for the traders who want to make a lot of money from that. Last time was on Zoom. Last time was on Zoom. This time is in person. This is better. Because you came back to vote.

2:54It's great. And I think you're chomping at the bit. You want to get started. Yeah, I want to get started. You know, first of all, it's great to be in Tel Aviv. It's just beautiful. I had a run on the beach today and yesterday. Just a beautiful energy vibe. As I told my team yesterday after the elections, I told them, you know, there are a couple of things that are not going to change. Number one, we're still going to be here. Number two, neighborhood's not going to change. Number three, if you look at the U.S., really AI and technology is really taking societies forward, even if politics is a bit difficult.

3:22So I think you can see this about the U.S. economy and you can see this about other economies. And I think Alex Karp from Palantir said last week, I think, or this week, that there are three really players in the world of AI, U.S., China, and Israel. So I think there's only reasons to be optimistic about it. I agree, too, about Israel, the United States, and... I was talking about Israel. Well, I think about the Israeli economy, about the resilience and about the story of building a true and just and successful society. Amen. I'm with you. Okay. I also want to point out, by the way, that in your personal history, you were hit at sea by a missile.

3:56Yes. You know what this is like. Hezbollah fired a missile on the ship that you were an officer on. On July 14, 2006, Einar Hanit, it's an Israeli Corvette, got hit by Hezbollah Misa about 12 miles northwest of Beirut in a tragic event. It was televised live on television on the Friday evening news. And this is how the world and my family and our families found out about it. They saw the ship burning live on TV. So, again, very tragic event. Four people were lost and about 12 wounded, but we kind of persevered, the rest of us. And I think so all this like sea and or moves and blockade, it all touches a bit deep.

4:41And I've done it myself. And I think I'm privileged to be in a position where suddenly that niche where I dealt with for many, many years suddenly is not very niche anymore. So one prediction you made back in March when we spoke was that Iran would copy the Houthi model. Correct. And that's happened. Yep. The Houthi model is? The Houthi model is using basically missiles and drones to disrupt maritime traffic in almost non-committal way. So it's not you have a full blockade. It's we're molesting you with or pesting you with missiles and drones and making you feel unsecure or unsafe. For some of you, like the Houthis are doing right now to Saudi exports.

5:23and I think also using low-cost munitions versus high-cost Western munitions. And I think that has been successful to them. I started using the term iPhone munitions. Nice. Yeah, iPhone munitions. Yeah. Okay, so let's dig in. I think in March you also said, you said your predictions were correct. Unfortunately. So why don't you tell us what was correct? Because I think I have one that was incorrect. Okay, I said that this is not solvable in a military way. I said you can't open Hormuz fully in a military way because they will always find another way to attack or pest or molest or disrupt traffic.

6:01And I think that has been correct. At the same time, I have to say, CENTCOM has done a fantastic job in allowing exports to go through. And to some extent, I think oil is pumping through nicely. However, the Gulf is not only about oil. I think in the last couple of weeks, we've seen 22 or 23 ships get hit, out of which two or three sink, with crew members saved and fleeing the vessels and a lot of containers spread. I think Iran has also expanded the range and they're attacking off Kuwait, Iraq, and Fujairah. That goes well beyond Hormuz. So I was correct that you can't solve it and just say, hey, just don't attack.

6:38But I was incorrect in saying that it will stop the flows of oil. I think CENTCOM has changed that in a significant way, although it does require extraordinary effort. So if I were to summarize what you just said, right now, Iran and the Houthis control, Iran controls the Strait of Hormuz and the Houthis control Bab al-Manda. I don't think they control it. I think they have an impact or effect over it. An effect over it. Control sounds like something absolute. I don't think anybody has absolute control over a piece of geography at sea. It's very hard. But I think absolutely they have a lot of impact.

7:15We can see that Iran has stepped up attacks in the last two or three weeks. And I expect them, by the way, to be able to keep doing that because you don't need to be near the straits to attack the straits. You can fire a drone from a thousand kilometers deep in Iran and it can just go around and then hit a ship. I think that's big. I think that also has a big knock-on effect on who ships out of the Gulf. Answer, mostly the national oil companies. I think Adnok, the Emirati oil company, has really did all the right things. They acquired a big company called Navigate, a shipping company. They can shuttle oil through that.

7:55I think they've done a fantastic job. And they've been very brave, by the way, and very proactive. They provide these services right now to Iraq and Kuwait, which has never happened. Before, ever. Like, it was always... Wait, let's just summarize that for a second. So United Arab Emirates buys all these ships prior to the conflict. Yeah. Conflict starts to happen, and now they've created this route. Yeah. There was something in the middle. A lot of people are afraid to do that. Right. I'm going to come to that in a second. Yeah. Yeah. So through the southern route, they're shuttling ships right now and also helping the Iraqis and the Kuwaitis get their oil and goods out.

8:31but most I think it's fair to say ship crews and ships and shipping companies are not brave enough to do that right now but the Emiratis have a big interest in that getting their own oil out and other people's oil yeah I think the two main types of like people who do that is either Greeks who are very greedy rightly so in this case by the way it's a lot of money we can talk about that I think it's like 60 times what you used to get what is 60 times? the freight rate so you should get pre-war you would have gotten maybe 60K a day for a big tank called a very large crude carrier. A VLCC, very large crude carrier, which carries 2 million barrels of oil.

9:07One and a half to 2 million barrels of oil. And today I've seen rates as high as a million bucks a day. 700K, 750K, almost a million bucks a day. Insurance rates are also up. I think we're looking at 7 % or 8 % of the hull value. The hull value could be 200 million. And normally it's what percent of the hull value? 1%, maybe a half percent. So insurance rates are up 7x to transit the Strait of Hormuz. Yeah, and freight rates are up 15 times. Now, you also don't pay just for the transit. You pay per day. And that has created a new phenomenon where there's an industrial level of a hub of ship-to-ship transfers of exports of oil off Fujairah in the UAE.

9:48Right. So Fujairah is the little tongue that sticks out, roughly, of the UAE towards Oman. Correct. On the east side. On the east side. And so that's kind of the exit point, roughly, of the Strait of Hormuz. And when you get to the other side of that there, there's, first of all, bunkering in Oman. Which is fueling of ships. Fueling of ships in Oman. And now you're describing the ship-to-ship transfer. And I think maybe it makes sense to take a step back and just talk just about how, just for listeners and the experts of oil. So the world makes about 80 million barrels of oil per day-ish. Okay, Russia is about 10.

10:27Iran used to be about two. Now Venezuela used to be 800K a day. Now it's up to 1.1 million, 1.2 million. So Venezuela is like up a few hundred K. Brazil is up a few hundred K as well. But Hormuz is about 20 million barrels a day. So a quarter of the world-ish of the world oil exports. Now, what has happened is over time, because it was a disruption of many months, the world has drawn down what's called strategic reserves for about 600 million barrels over the world. This is both the strategic petroleum reserve in the United States, which has been drawn down. This is beginnings of a strategic reserve in Europe.

11:10And no one knows exactly what happened in China, but there's an assumption that some of that was pulled down and then Japan too. Yeah, because you just didn't have fuel for your car, right, for a few months. Now, really, I think that what the world is getting to, and we need to talk about the Russian knock-on effectiveness in a second, is there's approximately 5 million barrels a day of oil, which are the swing factor right now of the world economy. So if CENTCOM succeeds in exporting 10 million barrels or 16 million barrels a day or 15, that is the swing factor. What does that mean? That means that the world needs about 80 million barrels a day.

11:50So if you don't provide 80 millils per day, what happens is over time, first of all, prices go up. You need to draw down on strategic reserves. So when prices of oil goes up, as you know, because energy is such a big thing, inflation goes up. If inflation goes up, interest rates need to go up. If interest rates go up, usually equities go down, which affects obviously all of us. Now, because of the AI revolution, they need to borrow so much money. if interest rates go up, capital to finance AI goes up, anthropic IPOs and investors are like, oh my God, they're going to pay 5.5 % or whatever. Interest on 600 billion.

12:27On compute. On compute. So there's a knockdown effect really. So a lot of - A knock-on effect. Sorry, knock-on effect, sorry. A knock-on effect on a lot of things and not really oil. That's why oil is so important. And that's why I think all eyes are really on how much is really export per day from the Gulf. and that's why Abu Dhabi National Oil Company and these shuttles are so important. That's why Iran's impact on the world is so important. And that's why the Houthis' impact is so important. So it's really that puzzle you need to understand in your head, which goes much beyond a local thing between the U.S.

13:01and Iran. So just also to back up historically, because I think this is important context, people have asked, why does the United States have military bases in the Persian Gulf with the Gulf countries? Why do they have military bases in Kuwait or in Saudi or in Jordan or in the UAE? In Qatar. In Qatar or wherever. Part of the answer to that is in the 1970s when the Arabs shut down the oil, there was an energy crisis in the United States. By protecting the free flow of oil in the Persian Gulf, which is, as you said, between 20 % and 25 % of the world oil supply, but not only something we have to come back to, supplies of other things, What they actually do is keep prices down and keep inflation down.

13:43As Iran chokes the Strait of Hormuz, which it does, they not only threaten the Strait of Hormuz and oil supply and their neighbors, they threaten the United States and the global economy. 100 % yes. Okay. So Iran today firing missiles and drones at ships in the Strait of Hormuz by a direct line that creates inflation and is a threat to the global economy. And the hoodies, which people think of as guys running around in sandals or flip-flops, They do. And firing missiles. They do run around in silence. But they just fire ballistic missiles while doing that. But they have iPhone munitions, iPhone missiles.

14:18Yeah. And I think the Houthis is also a good lesson because they were tiny, like several years ago. Tiny, tiny, tiny. And I think I know of specific proof that actually Iran has really armed the Houthis. So they really not just armed them, they also taught them and made them, I think, largely independent. Not fully independent, but largely independent. in terms of the missiles and drones they can build. And I think what happened is, over time, Saudi and the UAE, specifically Saudi, did fight the Houthis, but usually from air, from the air. Now, we all know from Israel, it's really hard to fight terrorism from the air because they just go somewhere else and they don't have uniform.

14:59So you really, kind of the only way I would say, I'm sorry to say this, it's like, by the way, the US army in Fallujah, in Iraq. If you know The Surge, the book that General David Petros wrote before, He took command of the forces in Iraq. Basically, that's what he wrote. He wrote a theory that says, how do you win the war in Iraq? Back then, he says, the surge, you push 300 ,000 or so soldiers into Iraq, you flood these tunnels, you flood these places, you wash them out, you clean it, you keep it for a year, then you're done. And the Saudis didn't do that. What they did is air attacks. These air assaults didn't really work.

15:29And over time, the Houthis became more and more and more powerful. And they also now have conquered more and more and more of Yemen, including right now, Bab al-Mandeb, which is a very important strait. Just to back up one second, Yemen, for those who don't know, is on the southern point of the Arabian Peninsula, and it borders Saudi Arabia basically to the south. Yeah. And it also looks over the Red Sea, which is a key point of transit that ultimately goes up to the Suez Canal. Between the Gulf of Aden and the Red Sea. And the Red Sea. And it's a key transit point to get goods to Europe. Correct.

16:07In particular, because then it goes out from the Suez Canal to the Mediterranean Sea. And it's also... And it's very, very narrow, Bab el-Mandeb. And so it's easy to threaten. Yeah, Bab el-Mandeb, I think, is about 10 or 12 miles. So it's about half as... Like, twice as narrow or half the size of Hormuz. So it's very, very, very narrow. And only recently, i.e., whatever, last month or so, the Houthis really took control of Bab el-Mandeb. Because there were like 100 clicks to the north. Now they're on Bab el-Mandeb. Yeah. So now they're saying, hey, Saudi, as long as you're fighting us, we're going to put on a blockade on Saudi or Saudi exports.

16:43So really, this is also very new. All this is new. It's pre-Hormuz war. Saudi exported that 9 million barrels or so they export a day, which is a lot. It's about 10 or 12 % of the world's export a day. We're only from the eastern side of Saudi. This is very geographical. From the streets of Hormuz. Out. Now, because Iran started stopping the Strait of Ramuz, Saudi kind of introduced a new pipeline they've been building for years, very smart of them, into a port called Yanbu on the western side of Saudi to the Red Sea. Right. So it's on the Red Sea. The other side of the Red Sea is Egypt in that spot.

17:21Correct. And there at Yanbu, which is this port, it's called the east-west pipeline. Exactly. Now they can export five million from the east and five million from the west. Now you have here the Houthis saying, we're not going to let you export that from the West. We're going to attack you. So Iran attacking Saudi exports from the East, and the Houthis attacking Saudi exports from the West, including Yanbu port itself, including ships with Saudi crewed, with Saudi owned and so forth. By the way, evidently, and I looked at the stats today as preparation for this, transits in Bab El-Mandeb are very consistent over the last month and a half, except Saudi.

17:56So basically they're saying, we're just putting a blockade on Saudi. Anybody else, you know, enjoy. So really, I think it's a new phenomenon where a terrorist organization really is putting, I don't want to say full blockade, but a lot of limitations on exports of countries. And you know, it could happen here. Like somebody could, you know, could take a piece of land and get the right missiles and, you know, limit imports to Israel. Equally, by the way, they could do it to the US from Cuba, for example. Not even from Cuba, you could, for argument's sake, take a shoulder missile and fire it on a port in the United States and you're from Mexico.

18:28It's not that far. I think that nefarious actors have rediscovered the maritime area as a path to greatness because it's very asymmetrical. You can have a drone that costs 50 ,000 and impact a ship that has oil for a couple hundred million and you don't have to really sink it. You just have to pest it and shoot at it and hit it. And scare the crews because they're all manned. Yeah, because it's like people getting$2 ,000 a day, sorry,$2 ,000 a month or something. So they don't want to die. So it's really complicated, I think. And also a lot of the Western society has pulled back from doing shipping themselves.

19:14So if you look at shipping crews, it's Filipinos, it's Thais, it's Russians. Sri Lankans. Sri Lankans. It's a lot of Asia. Some Pakistanis. Pakistanis, correct. But you won't see a lot of Israelis or Germans or Danes or so forth because you spend nine months at sea and you don't see a lot of people and you don't make a lot of money. So really that dependency on kind of third-party crews and that dependency on the ability, willingness for other people to export your goods is really a problem. And that's what ADNOK got right. They acquired their own fleet of ships. They did a vertically integrated oil supply chain, hundreds of ships, hundreds of Emirati sailors or captains, but there are a lot of Emirati crews.

19:57And I know the CEO of Adnok Shipping is a very good guy. He's a very, very talented leader and executive. And really, I think that is a new phenomenon. And I think the question is, what does this all mean? Yes, it means like right now we need to open Hormuz and Bab el-Manda, but what does it mean for the next 10 years of our lives? But we need to talk a bit about that. But first of all, let's finish up. Hormuz and Bob Lomondon. I want to come back to the next 10 years of our lives soon because at least one man's view, it's going to get a lot worse before it gets better. Yeah, I think so. But just to focus on Yambu one second.

20:29So 5 million barrels came out through Yambu, but there aren't a lot of loadings at Yambu. Do you see that in your data? Yes, of course. I think, first of all, everybody used to, that's another big change, used to rely on something called AIS, which is basically shipping ships transmissions, volunteering ship transmissions for safety. The problem is, if it's for safety, why transmit your location and get fired? What does AIS mean? Automatic identification system. It's a system that's based in the 1960s, and basically we're using it in a use. It's not planned to do that. It's planned to just prevent collisions at sea, but we're using it, and everybody's using it, to monitor shipping movements worldwide.

21:12Right, and to monitor ships locations. But right now with terrorists tracking it, nobody wants to share the location. Yeah, of course. So we have an 83 % drop in transmissions around the Gulf. 83%. So dark shipping used to be something that dark fleet or bad actors do. Now it's like everybody. So that really has hindered the world's ability to understand what's happening in exports. That's why I spoke about these 5 million barrels a day of the swing factor of exports. So actually, there is a way to do that, like we do, with kind of military-grade precision satellites. To do what? To understand exactly what's happening in every port and every terminal.

21:50And I can actually tell you, and buoy is pumping, I think there's a big gap right now between public assumptions or public numbers and real numbers. I think I count about 90 million barrels of difference between our number and public numbers. 90 million barrels? 90 million barrels. Yeah, over 12 days, I think. Okay, so... It's a lot. That's really 7-8 million barrels a day that you think the world is not counting. Correct. That is actually exiting either the Straits of Hormuz. Yeah, or Yanbu, yes. Or Yanbu. Yeah, and it's really - And how does that jive with what you said earlier, that the Saudis are not getting their ships in and out?

22:24Because the Saudis are exporting from Suhet, north. Yeah. So what happened is they're protecting Yanbu and they're just going around. So they're going from Yanbu north instead of south. So they're really going from north and then around the Cape of Good Hope into Asia. So they added about 35 days of journey because of the Houthis, which by the way take away ships with the world's map, because if you need to go 60 days per direction with the same amount of ships, you have less shipping days. It's called ton miles, so you have less shipping days. And the Emiratis are helping the Saudis and Kuwaitis and Iraqis get oil out of Hormuz.

23:08So actually, we're seeing a lot of exports of oil in the last month, and the world has been extremely resilient with CENTCOM's protection. But I think it's been very hard to follow that. I don't think we are seeing the same amount of LNG production in Ras La Fan in Qatar. We're not seeing any LNG production in Ras La Fan. Ras La Fan, for those who don't know, So Qatar sits like 60 miles away from Iran in the Strait of Hormuz. And Ras Lafant is the key natural gas production site in Qatar. And it's about 20 % of the world's LNG. Right. LNG, liquefied natural gas. Thank you. Sorry. And it's very flammable.

23:52So if you hit a missile with a shuffle of crude oil, you can have a big oil spill, but it's not going to explode because it's crude oil. It's not flammable. LNG is very flammable. So it's much more dangerous. And Iran did hit one Qatari LNG vessel, I think, a month ago, a month and a half ago. And it kind of shut down kind of the Qatari exports. So really, and I got to say, I was pretty surprised about that because Qatar was one of the big one, is, was, I don't know, one of the big brokers of a potential Iran-US deal. But they've kind of turned a tap off for Qatar. And they really can do it because it's enough that you blow that ship completely with one small drone.

24:30Then nobody tries again. Yeah, exactly. That's what happened. And then nobody tries again because it's much more flammable. By the way, equally, you have fertilizer because 20 % of the world's fertilizers come from Qatar because in the production of fertilizer, you need a lot of, it's kind of a byproduct of LNG in Qatar. Yeah, you don't need gas to make the fertilizer. The sulfur and other parts of it are byproducts. Correct. Urea and stuff are byproducts of the natural. Correct. So the world is missing about 20 % of the world fertilizer as well. Jabal Ali, which is the UAE container port, used to be one out of six or seven shipments used to be trans-shipped in Jabal Ali.

25:10It's like zero right now. Explain that, expand that. Yeah, sorry. When you ship containers, like let's say you want to relocate and you want to ship your container from, you want to buy a new cupboard from China and you live in the US. not always it will be shipped directly from China to your house in the US. Oftentimes, it will be trans-shipped, i.e. moved between two ships, somewhere in a hub. The big hubs are Rotterdam, Jabal Ali in the UAE, and Singapore. That's like the top three hubs in the world where things got trans-shipped, moved between different ships. It's just like airplanes. If you're flying London, New York, you're going to fly in a big plane.

25:50but if you're on the fine line to Oklahoma, maybe there's no direct flight. So you might take a small airplane from New York to Oklahoma. So same, we go with big ships to Jabal Ali, Singapore, Rotterdam, and you transship to small local ships. So all of the imports and livelihoods of Qatar, Iraq, Bahrain, UAE are really dependent upon imports as well. So these imports to Jabal Ali, which is in the Gulf, have been cut completely because of Iran attacking in Hormuz. So now they're importing more from Oman, which is outside of the strait. But still, it's not fun right now to live in Iraq or Kuwait because of that.

26:28So really, Iran, to a large extent, is putting a blockade on Iraq, Kuwait, Saudi, and the UAE, and Bahrain, not just on the U.S. and the world. It's really a big thing. It used to be called an act of war, by the way. It's not called an act of war anymore? It is, but you need to declare a blockade for it to be an act of war. And by the way, the U.S. also, as it was pushing back on Cuba, Cuba was limiting imports into Cuba, but it did not announce a blockade in Cuba. So there's a thin line over there, I think. And the Houthis did announce a blockade on Saudi, by the way. So today, I don't know what it means to announce anymore.

27:03Also, you have this, you know, the law of the seas, the freedom of navigation, but nobody's enforcing it. So in reality... Nobody's enforcing it. It's that the Houthis and the Iranians don't respect it either. Correct. Of course not. By the way, to be honest, also the Ukrainians and the Russians are not. We're going to come to them in a second. Yeah. So I think Ukraine, Russia, you know, the Houthis, Iran, and I know people think of the Ukrainians as good guys. I think they are good guys. But still, in terms of freedom of navigation, they're attacking ships. So you have four big countries right now, big entities, attacking ships day in, day out, and really hurting the freedom of navigation, which increases inflation, provides less goods.

27:41And I think the prices in the pump in the U.S. are an all-time high, I think, right? Certainly for diesel. Yeah, for diesel, which we need to talk about again, because it was a Trump-putting deal on diesel. So you mentioned the last time you were here that the mines could get cleared by the U.S., I believe you said. Yeah, I think they did clear them. There's still one ship that's sunk from, right, from a mine, or is that Iran's ship? I don't know. The answer is, I don't know. Iran said it. I saw the video. I don't know if the video is AI generator. It's real. It's really hard for me to say. I haven't seen CENTCOM clearly say if it is or it isn't.

28:19I know CENTCOM said they cleared the mines. I don't know if clear the mines is a one-time thing or it's an ongoing thing. Because the Iranians continue to lay mines potentially. I think so. It's more likely than not that laying mines, the Iranians are also very sophisticated. And they're really good at it. And they also had six months to prepare, right? So I think it's a fair assumption to say that if they keep attacking with drones and missiles, they want to keep attacking with mines and are finding ways to do it. And I think CENTCOM is probably finding a way to clear these. But it doesn't feel to me like something is going away.

28:53Not now. I'll be tempted to say not ever. Wow. Why not? So why would, if a mine is something that's easy to put and can blow up a ship, why would the Houthis not use that? Why would the Ukrainians and Russia not do that? You know, mines used to be a thing in the 1950s and 1940s, like naval mines, and they just went away for some reason. It feels like the big naval mines come back here. You know, I think so. So just to summarize this part, you think that of what used to be 20, 25 million barrels a day of oil, the U.S. and its partners, the UAE in particular, the Saudis via Yanbu and via the Strait of Hormuz and the Iraqis and the Kuwaitis by the good graces of the Emiratis are succeeding in getting out 15, 16 million barrels a day?

29:42I think it changes. I've seen the numbers. I think at some weeks they managed to do 140 % of 2025 numbers. I think last week I think it was 110%. And I think it's gone down a bit in the last two weeks. So I think... Because of the attacks. Because of the attacks. Yeah, yeah. I think the attacks have an impact on exports. It has an impact on an accumulating effect on seafarers' willingness to keep doing it because it's becoming more dangerous. There are 23 ships attacked in two weeks. It's a lot, man. It's a couple ships a day. And the Iranians and the Houthis are ratcheting up the pressure in advance of the midterms in the United States.

30:15I think so. I think it's connected to the midterms. By the way, it may be connected to the elections in Israel. I don't know. I don't fully get that because I think there's probably wall-to-wall agreement in Israel that Iran are bad people in the political system. I don't think, you know, Eisenkot was the chief of defense. None of these people, political people, say, oh, let's hug Iran and let's be friends forever. You said something earlier. I just want to question one second before we move on to Russia and Ukraine. So you mentioned that the Saudi ships are going north via the Red Sea, ultimately the Suez Canal, and then out to the Mediterranean, through the Straits of Gibraltar, and around the Cape of Good Hope.

30:51The Houthis fired on Israel in response to Israel's incursion into Gaza after October 7th, which means that they can fire missiles all the way up the Red Sea. Yeah, yeah. Why don't they fire on the Saudi ships as they're going up the Red Sea? It's a good question. I think, first of all, it's hard to fire because you don't know where they are, these ships. They're dark and just going. It's a big ocean, so it's really hard to fire. You need to see the ships to fire at them. When I was in Lebanon in 2006, they saw our ship from the shore. So because we were like 10 miles off Beirut, they could see us with a radar and with whatever, like a camera.

31:32And that's how they aimed the missile. So you need to see what to aim at. And Yenbu North, it's really far from the Houthis. Yeah, but we're further. Israel is farther. Yeah, but Israel is like a static location. They can look at a map and put a GPS location. So they can fire at Yenbu itself, but not at the ships leaving Yenbu. But I think, I'm not sure they need to. I think look at the Elath port. Effectively, there's a blockade on Elath port. Yeah. But the Houthis. By the Houthis, yeah. A Lat port in Israel, which is the southern port into the Red Sea, has not been active for three years now because of the Houthis.

32:10So effectively, which is a fact, it's not my opinion, the Houthis are imposing a blockade on the port of A Lat in Israel for three years now. It is what it is. It used to get all the cars from Asia, from South Korea and Japan and import into Israel, and it's not because of the Houthis. So I think it has been effective to that extent. And it has some effect on Saudis. Again, just increasing or doubling the time it takes Saudi to export oil into APAC reduces the revenue because if you can only use Saudi-related ships because other people are afraid and you have a certain amount of ships and you double the distance, effectively you have half the shipments.

32:50So it does have a lingering effect. And I think Pakistan, Turkey said they're coming to Saudi's help and Egypt as well. Let's see. I don't know. I haven't seen that. If you're interested in finding out ahead of time what's going on in Israeli tech, what the latest trends are, who's breaking not only news, but breaking the trend lines, then you want to subscribe to Aleph's newsletter. And you can sign up right in the show notes in the description of the show. Please subscribe to the newsletter. Let's move on to Russia and Ukraine for a second. You mentioned before we came on, you had a conversation with one of the leading banks recently.

33:25Share. So I think that it's all connected because at the end of the day, first of all, there's the midterms. For the midterms, for President Trump, it's very important that gas prices go down or at least don't go up. It's diesel prices which are impacted by Russia's participation in the world market. So reminder, Russia has been the most sanctioned country on earth following its incursion or invasion of Ukraine. So I think President Trump, President Putin agreeing on a deal to allow Russia to export, I think, 300 ,000 a day and then 500 ,000 and a million barrels a day from Russia to the oil market outside of sanctions is meant for taking the prices of diesel prices in the US down, or at least not up.

34:20Just back up, we'll have a second just for our listeners so we know. So diesel is downstream of oil. You can ship oil out. Oil is not itself very valuable. It's valuable, but it needs to be refined. In a refinery. The first distillate that comes out of oil is diesel fuel, which is the most used fuel basically on the planet. And there is a shortage of diesel right now in the world for a variety of reasons. One is the shortage of oil that's been coming out of the Strait of Hormuz. Two is that the Ukrainians have hit a lot of refineries in Russia. As a response to Putin. And the Houthis and Iranians have hit refineries in the Gulf.

34:59As well as have limited exports from the Gulf because of that. So again, on an aggregate basis, there's less diesel exported, and we're coming into the winter in Europe. So it looks like a very cold winter in Europe. Less diesel, to be clear. There's also less LNG in the world because 20 % of the world's LNG came out of Qatar. The U.S. has been making up for a lot of that and even supplying Qatar with LNG to fulfill its contracts. Nonetheless, there is a shortage of LNG. And there's more power needed because of data centers with AI. Right. So demand is going up and the winter is now coming. And the winter is coming.

35:37And it looks like because of El Nino. Sorry, this is very complicated. because of El Nino, it's going to be, I think the UK was the hottest summer on record ever. I think in 160 years. And that's probably El Nino because it makes the summer hotter and the winter probably colder. So the expectation at least is to be a very tough winter in Europe. Good for skiing, bad for energy prices. Correct. And generally speaking, I think we're seeing a bit of shifts. The winter is coming a bit later in the year. also in Israel right now, but also in Europe last year. Now, I think that's important because, again, it's all one global system.

36:19So although the U.S. theoretically does not need Russian diesel, effectively it needs Russian diesel to fuel at least be available. It has to be in the market so that prices come down. There's enough supply in the market, and also so that the expectation of future prices will also come down. There will be supply in the future, so you don't need to forward purchase and thereby drive up the price. However, I can say we have seen three ships full of Russian diesel on the way to the U.S. as of yesterday, which I'm surprised because, again, this used to be until like last week or something, sanctioned goods.

36:53You would not have touched them. You would never have imported them to the U.S. And I think that shows you also the spat between President Zelensky and President Trump because as Ukraine keeps hitting refineries, because Zelensky is looking for a pressure point for Russia, right? Because Russia is very big, they're smaller. And the pressure point they found is refineries. They have hit in quite an effective way refineries and have reduced refining capacity by Russia. And that is against US interests because if President Trump wants prices to go down, Zelensky, please stop attacking refineries.

37:30it went to the full extent of allowing Russia to export diesel. By the way, outside of EU and UK sanctions, which the US cannot impact. So you are seeing a bifurcation, I think, of the policy where the US saying in Russia, it's not going to be sanctioned. EU and UK, it's still sanctioned. So if you're a trader somewhere, or if you're a shipping company somewhere, or if you're just a bank somewhere, they need to finance it, you have a big problem right now because the US is saying no problem. the UK and Europe are saying there is a problem. Okay, you need to drill down another level to explain that.

38:04So I'm a bank. I'm going to try to do my best, okay? But I'm a bank, and almost all shipments are financed by banks. Correct. Through letters of credit and other things for ships. If an entity is sanctioned like Russia or Russian oil or Russian diesel, you cannot do business with it. Some of these banks are US banks. Some of these banks are European banks or UK banks. By the way, some of the insurers come out of Lloyd's of London. Correct. In the UK. Which we need to talk about, yeah. And some come out of the US. Well, the vast majority out of the UK. Right. I think the efforts of President Trump to allow US marine insurance are not going great.

38:44Right. And so right now, if the EU and the UK still sanction Russia, and by the way, Russia's on their doorstep at a threat to Europe, but the US has lifted sanctions on Russia. You can't get insurance. You can't get insurance, right? Nope. Because the sanctions still hold in the UK and Europe, even if the US has removed the sanctions, then you can't get letters of credit because the banks don't know how to operate in this environment. Correct. And I think it's pretty unprecedented because the US - Pretty unprecedented. Unprecedented because the US used to lead sanctions. Historically, the UK didn't even have sanctions.

39:19Yeah. The OFSI, the Office of Foreign Sanctions Investigation in the UK, is new. It's like four years old after Brexit. And generally speaking, the UK and the EU were used to be followers of US sanctions. So US was like the most sanctioning country on earth. And the UK and EU kind of followed like, bit by bit, and the EU to sanction something, an agreement of 27 countries. So by definition, you have 27 people agreeing, or one, you know, it takes longer. So they've been trying to sanction the Russian dark fleet and Russia over time to kind of limit its exports. And that US is opening up sanctions very quickly, and the UK and EU are not.

39:57That is not something people have seen. And I think also, to come back to your insurance comment, because I think we shouldn't talk about China here. I think over the last four years, what has happened is the West is new, but the rest of the world understood that oil trade and shipping and global trade have its own choke point. Not a physical choke point, it's a financial choke point. That financial choke point is basically marine insurance. To ship anything in the world, if you want a ship to go into a port, you need three things. A flag. You can flag a ship in the US or usually... Panama. Panama.

40:32Or Micronesia. Panama. It's usually like Panama, Marshall Islands. It's open registries. You pay$6 ,000 in the box and you can do it. Vanuatu is like a big thing. I saw Equatorial Guinea today. Anyway, a flag. Something called classification, which means once a year the ship has been tested for safety and you have a stamp of approval. And there's a bunch of class societies, but it's easier. Russia has a class society. India has a class society. China has a class society. It doesn't have a lot of implications, financial implications, because it's just like an approval. So you can do it. It's a good housekeeping seal of approval that's easy to get.

41:06Yeah, exactly. It's easy to get. And marine insurance. The reason it's hard to get marine insurance is because what happens if there's an oil spill? The biggest reinsurance policy in the world is marine. Why? Why? Globally, number one, for years, by the way. Because in 1989, the Exxon Valdez, which is an Exxon mobile ship, had an oil spill off Antarctica. And these are awful, awful pictures of these... The wildlife covered in oil. Yeah, like penguins with oil. It's like awful pictures. And that really changed completely the world of shipping and safety insurance. Because of that, they created all kinds of organizations.

41:45I'm not going to name the names, but they did also make tanker double-hauled. Tankers used to be single hauled. Now a tanker is like a hull within a hull. A crude oil tanker. It has to be. And because of that, there's much more safety attention than ever were in the last 35 years. What happened is because of Russia invading Ukraine, the West sanctioned the main insurers, which are all Western, by the way. It's called P &I Club. It's third-party insurance. They're all Western, except Japan, I think. But otherwise, you have West P &I, and you have Guard in Norway, and you have Swedish Club in obviously Sweden, and you have Skulden, Sweden, and you have London P &I Club and UK P &I Club and so forth.

42:29It's all Western. And the West stopped these insurers from allowing them to insure Russian ships. What happens is, if you have right now an oil spill because of these old Russian kind of rust buckets, same with Iran, by the way, even after the war, there is no insurance coverage. So there's nobody to clean up. So the biggest policy in the world to solve marine insurance if you have like a$10 billion damage does not exist for them. So let's just unpack this one second. Russia and Iran, you're saying, have older ships, less safe ships. Because the West is stopping maintenance and sales of equipment to them.

43:12Right, through sanctions. Through sanctions. And they're also uninsured ships. Correct. And as they begin shipping more oil. Correct, which they are. Or other products, which they are right now because there's a diesel shortage or whatever it is. Because the West doesn't want to do business with Russia. So Russia is just re-flagging its ships and having more ships under the flag of Russia versus asking Greece to do it. So Russia is taking the ad-nock page from their playbook and implementing that. And because of that, we have more unsafe and uninsured ships at sea that could cause a big disaster.

43:44if one of them gets hit or runs into an iceberg or God knows what else. Absolutely right. And it is a problem that right now has no solution. That's why China is really pushing into marine insurance. I've heard China is trying to replace Lloyd's of London as well. So just like President Trump is telling Chubb and others, I want American marine insurance because why would I depend on the UK? And he's saying, we should build our own marine insurance. Why should we be subject to Western sanctions? Because what happens if there's a war with the US and they're going to sanction all the shipping stuff to us.

44:15What, are we not going to import anything? So I think the implications of these blockade and these sanctions for sovereign policies is really huge. It's gigantic. Wow. So go back to, you said you had a conversation with this big bank. I feel it's like a lot to unpack in a podcast. It is a lot to unpack in a podcast. We're slowly getting there. Yeah, yeah, yeah. Sorry. No, it's good. And this big conversation you told me with a bank last week. Yeah. What was it about? So it was about the head of oil research of one of the biggest banks in the world. And we were talking about exactly this, what are the oil markets, the diesel markets, and the LNG markets and so forth.

44:52And I think the reality is that oil is such a big market that is really tied into equities. It's tied into the diesel markets. It's tied into futures. It's tied into AI. So really that question is very big. What is the impact? Like what's going on with energy prices and what's the impact? And think of, if you think about it for a second, if gas prices in the US are I think$6.5 a gallon or so right now, which is like all-time high. And there is talk, again, I don't know anything specific, but there is a talk about an attack maybe on Iran after the midterms. It's being discussed publicly. That could go up.

45:33I think in Israel, fuel is at an all-time high right now. I think it's nine shekels or something. So again - I think a liter. A liter, yeah, not a gallon. So it's about$3 a liter. So I think that question of, can you keep exporting during a war with Iran? And I've heard publicly people saying, oh, let's have a short and intense war. You can have one intent. You can intend to do one thing. The other side can do whatever they want. So if you attack them, they can expand attacks as well. I think there is a big worry about how much really are these exports from the east and the west, from Iraq, from Kuwait, from UAE, from Saudi of crude oil, from Yanbu of crude oil, which again, right now I said, I think it's 90 million barrels.

46:21We're seeing more than public numbers. And Qatar, can you get export out of that? Because I think they're trying to restart Ras La Fan in Qatar, whether or not they do it, I don't know, but they are trying to do that. Does that hold during war or not? and what does that do to crude prices and what does it do to prices of everything else, especially if interest rates are already going up. So I think that's why these five or so million barrels, if they manage to export 10 or 15 or 20 million barrels a day from the Gulf are really a big swing factor because it just means you need to draw down more in reserves.

46:54You have less feedstocks for diesel, for refineries, and then you have less diesel. Then these prices go up even more. So I want to go back to Russia and Ukraine, but I just want to follow your line of reasoning. It sounds like what you're saying, though, is damned if you do, damned if you don't. If there's an attack on Iran that could shut down all the shipping of oil and everything else from the Strait of Hormuz and the Red Sea via Yanbu, etc., because the Houthis will counterattack, etc. And at the same time, by not doing anything, what you have right now is an asymmetric war, which you described before, where the bad guys, the agents of chaos have figured out that you can run a war totally asymmetrically on choke points.

47:35quote a famous book, Death by a Thousand Cuts, where every day they'll ratchet up the price of oil by using some sort of drone to attack a ship, shoot a missile every once in a while, drop a mine, and that over some period of time will give them ever more power with no price. Correct, and I think even more, in the last couple of weeks we've seen Iran, because of CENTCOM, the good work CENTCOM's been doing in Ramos, expand the area of attacks. so they've also attacked in the anchorages of Iraq and Kuwait and the ship-to-ship areas of Fujairah, a tugboat. So instead of just... For our listeners, again, we'll put this on a map.

48:15So Kuwait and Iraq is further up. Up into the left. The Strait of Hormuz. It's northwest in the Strait of Hormuz. And that's farther... Well, Iran's a border with almost the whole thing. Actually, it's a border with the whole thing. That's farther up from where they were attacking before, which was further south in Qatar. It's like three-day sailing from there. It's not close. It's like pretty far. And Fujairah is outside of Hormuz. It's also very, very sensitive. So I think by expanding that, what they do is they also would make it much harder for CENTCOM to defend that. Because if CENTCOM needs to defend like a passage of seven hours in Hormuz, it's like a small tunnel.

48:54Meaning on the way out. On the way out, it's a small tunnel. But if you need to defend Iraq and Kuwait, and you don't have forces in the Gulf anymore because they're all out doing the blockade. And Fujairah, it's way more complicated. So I think that's also an evolution that I don't think has been covered properly in the media. I think Iran has, again, evolved again its tactics and attacking much more inside and in Fujairah. So I think, yes, it's death by a thousand cuts. Damn if you do, damn if you don't. I actually think it's like a stare-off competition a bit. It's a staring competition. The blockade, as far as I know, is working.

49:28I'm not aware that Iran is exporting oil. That's the next thing I was going to ask you. Iran's not succeeding in getting out oil based on your data. No, out of the south side. Out of the sea. Out of the sea. I do hear in the grapevine that imports, because it's also an imports to Iran, right? Just to be clear. Except humanitarian things like rice or something, if the U.S. approves to import into Iran, which I hear they are. I don't know if other goods like containers are not being imported via Karachi in Pakistan for example and then shipped from Karachi across the land into Iran so I think there's a worry that a lot of duly used goods from China and a lot of other things from China might go in via Karachi and there are some pipelines also that go from Pakistan and Turkey into Iran there are but not a lot but I don't know how much is exported so I think the blockade is working in that aspect.

50:26It is a staring competition where the U.S. and the other one side and the Iran other side are staring at each other. And the question is, how do you solve this? And that's what I said. I don't think there's any other solution, unfortunately, except diplomacy or like full-on attack like Iraq. So again, as I said last time, when the U.S. attacked Iraq, I think in Desert Freedom and in the second time, you had about 250 ,000 soldiers there. Yeah. Shock and awe. Exactly. Across Iran, last time I counted, it's like 50 or 60 ,000. So it's a fifth. A fifth. Now, Iran is way bigger. And it's also like, you know, they've been preparing for war for six months.

51:08More. More, yeah. One would say for 47 years. Yeah, yeah. You're right, you're right, you're right. But especially now for six months. Yeah. And they've learned a lot. So I think unless you go all in, which I actually don't think anybody will go all in right now. Maybe I'm wrong. Who knows, right? But the price will be, you'll see a lot of... So your view is Iran wins? My view is it's a tough situation. It's a tough situation. I don't know if they win because, again, they're on their knees in terms of economic pressure. I don't know if they can keep it up for three years. The question is, President Trump is two years more kind of into the clock, right?

51:45So I think my guess is they're trying to wait out President Trump until the next elections. And according to polls right now, again, who knows, the Democrats might win the next election. And if you look at candidates, again, it's unclear who will be the candidates of the... But let's say it's Kamala Harris, she doesn't have the same policy as Trump. And also, we are seeing a lot of democratic countries like a pendulum effect. So it goes from one side to the other side completely. So I think Iran is maybe hoping that that will be the situation. And the next president will just say, I'm done. Okay, I don't care.

52:22Let's sign something. Because he did do an agreement with President Obama. Let's go back to other shipments. I want to talk about supply chains. So you mentioned fertilizer before, basically, right? Urea and others, which is not exiting the Gulf. What else are you seeing on that front? I think imports of the Gulf has hit big time. So all the packaged goods from iPhones to clothes, to cupboards, to everything you need to live. And that's a big time problem right now. Into the Gulf. Into the Gulf. I think oil exports are down big time. And I think oil, that's the major exports. I'm not aware of any other big exports there.

53:02When you talk to the banking guys you talk to, are they worried about food shortages due to fertilizer shortages? I think fertilizer prices are going up a lot. There's still enough fertilizer in the markets right now. But it does depend also on Russia and Ukraine. because Ukraine is really a big export of wheat. And in the first six months of the war between Russia and Ukraine, the price of food went up a lot because of that, and then until they did a humanitarian quarter, if you will. So I think if that conflict becomes hotter versus colder, I think you might see a food shortage. Go back to your conversation with the bankers.

53:41Yep. They're not worried about that. What they're worried is really oil prices and diesel prices. I think diesel is a big thing, and winter in Europe is a big thing. I think the energy prices in Europe are very high right now, even higher than the U.S., I believe, because it's a net-net importer. And the U.S. is a net-net exporter of energy, so I think it's a big thing. And I think with the economy in Europe, I think that will push inflation up, which will put interest rates up. So I think that is worried. I think generally speaking, everybody in macro markets are a bit agitated right now. I would say also because of capital costs with AI, right?

54:20Like the big seven are spending a lot of CapEx. I don't know. I don't remember how many, much. A lot. A trillion or something. Something like that of CapEx on data centers in the expectations that that will work at some point. What other interesting insights are you seeing from your data that you find informative about the global economy or the markets right now? I think you're starting to look also at hyper-local markets. I think there is starting to be a lot of tension in the Middle East. Turkey has announced part of its exclusive economic zone to be part of Libya and Greece. Right. So they claim that now they have more rights at sea for gas and oil that they take away from Libya and Greece.

55:07I'm surprised to see that. I haven't seen that previously. So just to put a map on this again, so you go north from the Israeli coast, you pass Lebanon, and you get to Syria on the coast, and you get to Turkey. And for those of you who kind of follow the map, it also kind of bends west, Turkey, where it kind of runs into Greece to the west of it. And now Turkey has drawn a line, basically, that cuts through Greek islands. Correct. It goes all the way to a port in Libya. Correct. where they're claiming an exclusive economic zone, an E-Eazy. Correct. Exclusive economic zone for exploration, their own needs, their own economic needs.

55:43Correct. I think that's number one. I think number two is China. I think because so much of the attention of the U.S. is on CENTCOM, and I remind you the U.S. hasn't had a supplemental budget or in addition to the defense budget that the Trump administration wanted. I think they wanted like a trillion and a half dollars or something. A lot. So it's basically you have a... by the way, this is the opposite of Israel. I think Netanyahu, Prime Minister Netanyahu had maybe doubled the defense budget in Israel, I think, or something like that, maybe two and a half times. And he did multiple times. Last time in the last three weeks, he added, I think, about three or four billion shekels to the defense budget.

56:17The US couldn't do that politically. So the US defense establishment is operating like a full-out war almost for six or seven months. They need to replenish, I think, 60 or 70 % of the armaments I heard, like patriots and stuff like that, and Tad missiles, without additional budget. I think that is a problem to the US because they can't restock fast enough, but they also can't innovate and invent new armaments and new technologies fast enough because of a political problem. That is hurting the US. China does not have that. And as the US has to focus on CENTCOM, I think there's a bit less focus on PACOM with the Pacific Command, which is China, which I think China is, I think there's a lot of tension building up with Taiwan.

56:58There's a lot of tension building up with Vietnam and the Philippines. You see data that supports this or this is your analysis? No, I see data that supports this. What's the data that supports this? A lot more incursions. What's an incursion? Sorry, when Chinese ships go into exclusive economic zone and waters of another country. So I think there's like a peak of like three years in incursions to Taiwan by Chinese ships. I think there's a peak of four or five years with conflicts between Chinese and Japanese fishing boats. Same with the Philippines. There's like daily conflicts and daily like almost violence events.

57:29between China and the Philippines. Yeah, between China and everybody there. Vietnam, Japan, Philippines. This is like low-grade antagonism to see how many times you can poke the bear. Exactly. Or the bear poking the smaller bear, in this case. Because China is the big bear. They're poking the smaller bears, right? So I think that is another knock-on effect of the U.S. focusing on the Gulf. Because the U.S. can't do it all. I also think a lot of people are thinking about what does that mean for our longer-term strategy? Because the expectation and the worry is that the U.S. might, the next administration might pull out of AIPAC, might pull out of the Gulf and just focus on the U.S.

58:12right now after President Trump. And I think a lot of people are thinking about what does that mean for us? What does that mean in terms of who we buy from? What does that mean of who we do business with? What does that mean in terms of can they protect us from China? So I really think there's a big impact on, to some extent, and some people say that Venezuela, U.S. taking over, effectively taking over Venezuela in a day and taking out the President Maduro and effectively getting a lot of chunk of the oil industry in Venezuela and taking it a notch up in terms of production. there's a lot of people who think that is part of the western hemisphere focus which the defense establishment in the US published and that's connected with the play in Iran and both of them are to prevent or take away oil independence from China so if you say well we have sanctions or relationship with Russia to limit exports to China we are limiting Venezuela exports to China we're going to take it to the US we control the oil in Iran If you put these three things plus Greenland together, that could be a prep versus China, which is really the big threat to the US, not Russia, I think, obviously, because China has like whatever, 10 times the amount of ships the US already has or is building much faster.

59:26And I think I'm quite worried about what is the impact of the US ability to, because of a lack of budget, to focus on more than Iran and rebuild versus China. I want to shift gears for a few last questions. Yeah. So the Ukrainians really innovated factories for drones, like in this world. I think they build a million a year or something. Yeah, iPhone munitions, again. You take cheap parts and take them around. I saw they rescued a guy with a big drone. Yeah, I saw the video too. I have no idea what's real and what's AI these days, so who knows? This is real. This is not AI. Michael is in front of me.

1:00:04He's not AI. I can guarantee you that. What are we going to see in maritime drones? You already see like Saronic and SailDrone. Saronic seems to be deployed a fair amount. And SailDrone and Anduril as well. You know, one of their machines, one of their drones was captured. Or underwater submarine. Where's this going? So I'm actually in touch with a bunch of drone companies. I've seen drones at like 50K a pop already. And 40K a pop. Marine drones. Marine drones, yeah. It's like small surfboards that you can deploy. And it can be three, six months at sea. just with, they sail very slowly, one to two knots, and they have like solar power, and you can replace them.

1:00:43So you take a van, and you push them out of the van, and you let them sail in an area for three to six months, and then they do a bit of surveillance, and they come back. Okay, so those are like sensor drones, surveillance drones. But the Ukrainian stuff is like suicide drones on some level. They go and take out refineries. Yeah, but the sea is 70 % of the world, right? The problem is, I think I hear the U.S. saying, maritime is the next front of the next 10 years because military satellites are so exquisite and expensive. You need something on mass. That is only going to come from commercial sensors.

1:01:13So you can get commercial satellites or commercial drones or maybe other sensors at the shore or maybe a combination of those, which is probably the answer. So these sensor drones are actually quite important. I think suicide drones, you're seeing it big time. And I think Ukraine is the leader, but not necessarily the only one. I know of a lot of others that are building. I've met at least 10 companies which have like Series A or C and building like small drones that they can sell. For maritime? Yeah, for maritime, for maritime, for maritime, for maritime. Because I think the U.S. is looking to buy a lot.

1:01:44And I think that's exactly it. And so you think the theater of war and conflict is moving to the seas over the next decade. You also think that... 100 % yes. 100 % yes. Sea and undersea, by the way. Sea and undersea, which includes cables, for example. We didn't talk about that. Let's just talk about that one. There's a lot of cables that run under Bob Alamadeb, right? Yeah, there's other cables everywhere. There's other cables. Basically, 95 % of the internet is underwater cables, which are very expensive to lay, I think, and very easy to cut. And we've seen Russia and China cut them a bit across Taiwan and the Baltic, respectively, China and Taiwan and Russia and the Baltic.

1:02:22And Iran is explicitly threatened to cut fiber optic cables in the Gulf because there's also Amazon data centers in the Gulf and the UAE is a world leader right now in data centers and AI. So they're trying to take that out. I think it's a big threat. I know a lot of countries, which I mentioned, I think, in this chat, that are looking at it. And I think that becomes critical national infrastructure because you can cut the UK out of, like, internet easy. And one of the problems is that most of the countries are not sure who's responsible for protection of underwater cables. Now, is it the Ministry of Communication?

1:02:59Is it the internal security? External security is the Navy. And I think that's part of the problem. So they don't really know who's responsible. And therefore the answer is in good management, as I tell my team. First of all, identify the problem. Second of all, understand who's accountable. If you don't know how to do that, nobody's accountable. So I think it's a big threat that's coming up. And that's why I said, underwater and above the sea, that's the next space. People think that space is the next space of war. I think space is very expensive to fight at. It's much cheaper to fight at sea than at space.

1:03:27So at space, again, maybe China can fight the U.S. at space, but not many other people can. At sea, the Houthis can, the Russians can, everybody can. You build a small drone, it costs you 50 to 100K, you put a bit of explosives, and off you go. And you can't protect from that, really, from commercial ships. So given that you think the next war is maritime and the cost of attacking is going way down, And the U.S. and many countries are stretched right now. Who protects the seas, the underwater cables, defends against the drones? Are we going to like, those are Google's and Amazon's cables. Are they going to have their own navy?

1:04:07How is this going to work? Are we going back to the British East India Company? You know, I had a run today and yesterday here at the beach. and in Bukhoshov Beach, you go up and you have this big sign that tells about, says that 120 ,000 Jews came to Israel, the Ma 'apilim, in like ships. And it says, broken the British blockade. That's what it says. 120 ,000 Ma 'apilim have broken the British blockade on Israel. And it kind of threw me back and said, well, blockade has been there for like 75 years, okay? And you could do right now a blockade with drones. You don't need ships. You can do this remotely.

1:04:49Especially if it's lingering drones. They're very hard to detect and they're very easy to deny. So I don't think Amazon and Facebook will have their own navies. I personally don't buy it. I don't think it's part of what they do. I do think every country needs to do this. And again, maybe there will be private companies doing it. But there's a big legal problem here. Even if you want to deploy these small surveillance drones and you're a private company, you need to get approvals from places where you use. Otherwise, it's illegal. Or you do it illegally. Or you, yeah. But the good guys are not going to.

1:05:22The good guys never do it illegally. The bad guys do. Companies like us or somebody won't do it illegally. The bad guys will do it illegally. So there's a big problem in the legal space in the maritime regime of how you defend. Are you allowed to shoot at something? Do you have authority? Can they sue you? And I think you either have like government backing to do that. But again, then you need to do locally. So my best guess is locally. I think you're going to have a disparity between countries, proactive countries like US and Israel, which are going to defend themselves, and non-proactive countries.

1:05:53And non-proactive countries, I think, are going to be hit much more. And I think, again, Saudi, I have a lot of respect to Saudi, but, you know, the Houthis were small. You could take them out when you were small. They were not taking out. Now they're bigger. I think that's a fact. So I think maybe the lesson is deal with problems when they're small. Otherwise, they're going to be very, very big. and you need to have also political courage to do that. So we need to wrap up. I want to give you a chance to wrap up with one comment that you think will blow people's minds and then a prediction. So I can have you back for the fourth time and see if you were right.

1:06:32Oh my God. Okay, so my comment is, I think information disparity is starting to be an advantage. If you can get information advantage because you use satellites or use whatever sensors, I think that game has been reopened. AI has commoditized insight right now as an API, but data is a new oil. But because everybody has data - That's not a new insight. Say something. Everyone knows that. Data is a new oil. You don't invent that. I don't know. I think in the oil trading world and the shipping world, there was a bit of plateau in the last five years, until the last six months. Okay. So if you want to trade oil, or if you want to trade any commodities, work to get that unique insight from very niche areas.

1:07:09You need to work to get that. Okay. And since oil is related to equity markets, you need that for the equity markets, I think so, yes. You better know what's going on. I think you better know what's going on. That's your biggest insight? You better know what's going on? It's a good question. You're putting me here on the spot. My biggest insight is I think if you want to think big, think about the next space, which is going to be big. I think it's going to be maritime. Maritime. I think it's going to be maritime. I think I would look to invest in things that change that and deal with that space because...

1:07:40Because you're talking your own book. I don't know. Also because companies like Anthropica are eating everything else. That's fair. So you need to do something hardware which you can compete at and it's very far and Anthropica and these guys won't do. What's your most important prediction that we need to lay out here right now? I don't think it's going away. You don't think what's going away? I don't think the war with Iran is going away or the Houthis. I think it's going to continue after the elections in the U.S. And for years? I think at least for two years. For three years? At least for two years.

1:08:08At least until there's a different president in the White House because you need to concede to Iran. and I don't think President Trump is the conceding kind. Why? You think people should concede to Iran? No, I don't think. I think the only way to do a deal with them is to concede to them, and I don't think President Trump is the conceding type. Got it. So maybe the next president will be, and therefore I don't think it's solvable, so I think the crisis with Iran is here to stay at least for two more years. And Russia, Ukraine? I don't think it's going to get solved. I think Russia's Ukraine is going to keep running.

1:08:35So we're in a decade of war? I think so. Okay. Unfortunately. Listen, we get into those things every 80 or so years. Yeah. But we will emerge stronger. Thank you for having me. It's been a pleasure. On that note, thank you, Ami, for coming back. This was amazing. Thank you for joining us again on Invested. Please rate us five stars on Spotify and Apple Podcasts. Please subscribe to our YouTube channel. And please, please, please subscribe to our newsletter. And that way, you can get early insights on the incredible Ami Daniel. Thanks for joining. Thank you. Thank you.