Daniel Yergin Sees a 'Different World' Emerging After the Hormuz Crisis

When it comes to the history of oil and energy, nobody is more famous or well respected than Daniel Yergin. He is the Vice Chairman of S&P Global, and the Pulitzer Prize winning author of both The Prize: The Epic Quest for Oil, Money, and Power and The New Map: Energy, Climate, and the Clash of Nations. So we had to get his insights on the war in Iran, and its historical significance. Yergin tells us that a "different world" will emerge from the crisis surrounding the closure of the Strait of Hormuz, regardless of the war's ultimate outcome. Iran's ability to control the Strait against a much stronger military is a demonstration that the balance of global power is changing, with profound ramifications for countries around the world. We discuss how different regions are being affected, and how it will change their calculus when it comes to energy security. We also talk about the AI industry's seemingly insatiable demand for electricity, and how this is rippling across the entire energy landscape. Read more:Oil Traders Warn of Recession Impact as Hormuz Hits DemandChina Aggressively Sold Oil in Recent Weeks, Mercuria CEO Says Only Bloomberg - Business News, Stock Markets, Finance, Breaking & World News subscribers can get the Odd Lots newsletter in their inbox each week, plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlots Subscribe to the Odd Lots NewsletterJoin the conversation: discord.gg/oddlotsSee omnystudio.com/listener for privacy information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Joe Weisenthal?

  There are some market stories where you want every detail. Tracy and I have made quite a few podcasts on that basis, but sometimes you've only got 10 minutes and need to know what's moving markets and why. That's the Barclays Brief Podcast. Every week, experts from Barclays Markets and research get you up to speed on what matters and what to watch next, about the time it takes to grab a coffee. So, search Barclays Brief wherever you get your podcasts.

• 0:26Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk, and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs, and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw, innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting and hiring practices, but according to recruiters, advisors,

• 1:11Speaker 01

  and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at chatgpt.com.

• 1:48Tracy Alloway?

  Hey there, all thoughts listeners. Joe and I are very excited to announce that we will be holding our first ever live show in London.

• 1:56Joe Weisenthal?

  That's right. We've done shows around the country, around the US a fair amount. Always a lot of fun. Made guests, record live episodes onstage. Fans of the podcast, get to meet other fans of the podcast and so forth. But this is our first time doing one of these outside of the US, in London, as you said.

• 2:12Tracy Alloway?

  So if you want to come hear some live recordings of Odd Lots episodes, if you want to hang out with me and Joe, if you want to hang out with other Odd Lots listeners, then you should definitely head over to Bloomberg.com/oddlots, where you can find all the info there and purchase tickets. It's going to be on the evening of May 7th at Wilton's Music Hall. Doors open at 6 and the recordings start at 7.

• 2:34Joe Weisenthal?

  Yep, there's still a few tickets available, so go look on the website. Go look through our Twitter's. The ticket link is also in the show notes to this episode. So go buy a ticket before they sell out.

• 2:43Tracy Alloway?

  Hope to see you there.

• 2:47Speaker 03

  Bloomberg Audio Studios.

• 2:49Speaker 01

  Podcasts, radio, news.

• 3:03Tracy Alloway?

  Hello and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

• 3:07Joe Weisenthal?

  And I'm Joe Weisenthal.

• 3:08Tracy Alloway?

  Joe, in the Odd Lots tradition of spring of 2026, I'm going to start this podcast by saying that we are recording on April 17th at 1:00 PM.

• 3:18Joe Weisenthal?

  1:01 PM, yes. And of course, the reason we have to specify dates is because this is yet another episode about commodities, oil, the war in Iran and so forth. And we've already had multiple mixed headlines today, but by and large, even with the mixed headlines, and again, who knows what's going to happen. But you know, the market is moving past the acute phase of the war pretty clearly.

• 3:41Tracy Alloway?

  Possibly, possibly.

• 3:43Joe Weisenthal?

  Right now, the market is moving past it.

• 3:45Tracy Alloway?

  Oh, the market, the market is certainly interpreting this as moving past, yes, absolutely. But again, things are very fluid. They can always change on a dime, which they have been. I'm convinced that one day in early 2026, we'll be able to record one of these energy-related episodes without saying exactly what time and date it is, but not yet. However, I think that no matter what happens with the status of the ceasefire, it seems very clear that what we've just experienced has been I'm not even sure if you could say a wake up call, but certainly an acute phenomenon that is being interpreted very differently by different players in the world.

• 4:20Joe Weisenthal?

  I would say three things that regardless of how this ultimately resolves itself are on my mind right now, and they all relate to past episodes. So of course, we did that episode with Bob Brackett. We talked about, okay, this is perhaps going to be a change in global inad gas flows, maybe to the benefit of American producers of LNG, depending on how much that can be expanded. We did that episode with Alex Turnbull, who said, in East Asia, there's going to be an appetite for restarting more nuclear plants. And also, we've seen this surge in EV buying there. So already a change in East Asia. And then I'm thinking back to our, and this was before the war, but our most recent conversation

• 5:02Joe Weisenthal?

  with Jeff Curry, who talked about this sort of, the story of global commodity hoarding and this being like a sort of real post 2020 story and generally. And so wondering whether this will accelerate structural shifts towards more resource nationalism, et cetera.

• 5:17Tracy Alloway?

  Resource guarding. Yeah. I mean, whatever you can say about the current environment, one thing seems very certain, which is if you compare where we are now to, say, I don't know, 2018 or 2019, before the pandemic, it just feels so different.

• 5:29Joe Weisenthal?

  Totally.

• 5:30Tracy Alloway?

  If you think about that energy environment, it was all about, you know, cheap US shale.

• 5:34Joe Weisenthal?

  Totally.

• 5:35Tracy Alloway?

  It was about lots of money flowing into green energy and ESG and aiding the energy transition. Russian gas was going to power Europe for pretty much forever. And now we are just in a very different world. So the long-term trajectory of the energy layout, let's put it that way, seems to have an alter, like no matter what happens immediately with Iran. And who do we call when we want to talk about longer-term structural changes in global energy market?

• 6:05Joe Weisenthal?

  Only one name.

• 6:06Tracy Alloway?

  Only one name. So I'm very happy to say that we do, in fact, have the perfect guest again. He's coming back on the podcast, Daniel Yergin. He is, of course, Vice Chairman of S&P Global. He's the author of The Prize: The Epic Quest for Oil, Money, and Power, basically the book on oil history, as well as the new book, The New Map: Energy, Climate, and the Clash of Nations. So Dan, thank you very much for coming back on the podcast. Really appreciate it.

• 6:32Speaker 04

  Well, thank you. And as you said, it could not be more timely, but things do change very quickly.

• 6:38Tracy Alloway?

  Yes. Okay, the caveat is right up front. But I guess if we go back to early March, I would just love to get a sense of what you were thinking as you saw some of these headlines about the Strait of Hormuz being closed. Because for anyone who's read the book, I mean, the closure of the Strait of Hormuz is basically kind of the nightmare scenario, which has been looming in a lot of energy analysts' minds for a very long time. And here you were, seeing it actually happen. What was going through your head?

• 7:08Speaker 04

  Well, it was that, in fact, the nightmare scenario that had been not only for energy, but for strategic planners for decades, had happened. I think it's one of those things that people looked at as a scenario, but thought it would never happen. But then it happened. And it does change the world, and it changed the way people think about energy. We've had supply chain shocks, but this was the mother of all supply chain shocks, in terms of the closure of the Strait of Hormuz.

• 7:34Joe Weisenthal?

  Look, if the ceasefire is durable, and the Strait opens up in a short period of time, and we're like, okay, it made sense that oil prices surged, but didn't go to, say, $200 plus. Because we'll be able to say in retrospect, it turned out to be a short war, we had buffer stocks, etc. Nonetheless, I think like in the middle of March, there was this feeling that something is weird, because you have the mother of all supply shocks, and what's like, and the aunt of all, what's like the aunt of like, what's like?

• 8:11Tracy Alloway?

  Oh, you mean, I thought you meant the actual insect and ant.

• 8:14Joe Weisenthal?

  The mother of all supply shocks, then the aunt of all like price spikes.

• 8:17Tracy Alloway?

  No, you should say like second cousin removed of all price spikes.

• 8:20Joe Weisenthal?

  Yeah, the second cousin removed.

• 8:21Speaker 04

  Well, remember, we had two different prices going on at the same time. We had the Brent, the futures price, which was always saying, well, this is going to end, and prices are going to come down. And then there was the dated Brent, the near term, which said, we are having a major dislocation, and prices are really going up. And we'd never seen that dislocation on that scale before. It was like two different visions of the world.

• 8:42Joe Weisenthal?

  So actually, why don't you, I've read like 10 explainers on some of these gaps between the front month price and the dated branch or the quote, physical price, et cetera. But how were you at the time thinking about this gap? Was it as simple as the market simply does not believe that the straight will stay?

• 9:00Speaker 04

  Well, I did think that there was a difference between how the financial markets, which were processing things like statements by the president, statements from Iran and so forth, looking at the future and the way the physical market, the industry market. And at CERAWeek, I remember one of the CEOs said in one of the dialogues that risk is being underpriced in the market because I think from the industry point of view, they saw there are major dislocations and those dislocations are playing out unevenly across the world. Asia hit the hardest, Europe feeling it, and then the US mainly seeing it in terms of rising prices at the gasoline pump, but no problem getting supplies. But in Asia, a big problem getting supplies.

• 9:43Tracy Alloway?

  So I'm glad you mentioned CERAWeek, and this is also one of the reasons we wanted to talk to you. So CERAWeek, which is the sort of annual energy industry gathering in Houston, right? Every year. That took place in sort of mid to late March, smack dab in the middle of all of these very changing headlines, which we've been discussing. What was the mood like over there when you were talking to, you know, actual participants in the market?

• 10:08Speaker 04

  I think in terms of actual participants in the market, particularly, you know, the CEOs of the companies on the interviews that I did on stage, platform, they were all feeling that there was a real dislocation, a real scramble. They'd worried about getting their employees to safety, worried about the safety of their colleagues, their facilities, and then just how these markets are going to be supplied and what would be the demand destruction, what would happen to price. So they were very concerned with the logistics of, you know, of having lost the biggest supply of oil that had ever happened in history. And by the way, it was not oil, oil, but also natural gas, Yeah. which people have focused on because I think there was less awareness of how significant it was in terms of LNG.

• 10:52Speaker 04

  And then I think the eye opener that maybe all these scenarios that people have been doing for the years about the closure of the Strait of Hormuz, people had not thought about fertilizer, they'd not thought about petrochemicals, they'd not thought about sulfur, they'd not thought about helium, which the semiconductor industry in Taiwan desperately needs. And so actually, what one of the other things that came out of this was the recognition of how the Gulf countries, Saudi Arabia, have become much more integrated into the world economy. And by the way, there were also exporters of one other extremely valuable commodity called money with the size of their, you know, their reserves.

• 11:26Tracy Alloway?

  Well, I'm glad you just listed a bunch of All Thoughts episodes, basically, so I feel like we've ticked each of those boxes

• 11:32Speaker 04

  Helium.

• 11:33Tracy Alloway?

  in separate episodes, including Gulf Capital, so that's good. But just going back to Joe's question, like, do you have a framework in your mind to explain why the physical market and the actual CEOs of energy companies are freaking out versus what's going on with the futures price or was going on with the futures price?

• 11:51Speaker 04

  Well, I think it's because the futures price is responding to so many forces there. And people investing in futures, a lot of them, they don't have to worry about supplying a customer. They don't have to worry about how do we get jet fuel to ensure that the airplanes keep flying. And as you know, in Asia, flights have been canceled. In India, you know, restaurants were closed because they use LPG for cooking and they didn't have enough cooking LPG for that. So for Asia, it was a real shortage situation. And I think that's what, if you have a global perspective, that's what you were coping with. In the United States, you know, one difference between this and previous energy crises, the famous energy crises of the past that I've written about in my, in the prize and the

• 12:32Speaker 04

  new map and so forth, is the position of the United States so dramatically changed. And that has been a huge buffer for consumers in this country and for the economy.

• 12:42Joe Weisenthal?

  Had it not been for the war. How much would a Zero Week in 2026 have been dominated by conversations about powering AI data centers and so forth? How much would that have been the story had it not been for the war in Iran?

• 12:58Speaker 04

  Well, it was anyway. We had the, you know, we had the president of Google, the president of Microsoft there. We had people from Nvidia, from, from other chip manufacturers. It was a real change. The focus was, you know, the tech industry meets the energy industry and how do we get along? And kind of this panic about, do we have enough electricity, particularly in the United States? And I would have said it then that energy security had shifted to, from oil and gas to electricity. But of course, with this crisis, it was backed also was about oil and gas. But that was, you know, the big discussion that ran through it and about particularly the role of natural gas. Because on the one hand, the US has built up this big LNG industry, which is, plays

• 13:42Speaker 04

  a much bigger role in our economy than people recognize. I mean, our latest numbers are 75% of the value of all semiconductor exports is represented by LNG. You know, twice the value of, of all Hollywood and television and entertainment exports. But now, natural gas is coming back into, it's already significant, but more significant for electric generation. And what a change from the Biden administration, which wanted to have hydrocarbons out of electric generation by 2035. So this question of, what are the supply chains to assure electricity to support this AI boom, which is, represents in the United States about half of GDP growth?

• 14:22Tracy Alloway?

  So what were people saying on that front? So, you know, we've had episodes of the show where we've talked about maybe overcapacity when it comes to building out energy for data centers. There are still plenty of people out there who think that the energy demands are just going to be so enormous that we're always going to be playing catch up. There's a debate over who should bear responsibility for building out that new energy supply. So should it be the tech companies themselves or, you know, someone else, given it's a strategic technology? What are you hearing on the ground?

• 14:53Speaker 04

  I think these tech companies are going to be much bigger players in electricity than they would have been in the past. I remember, again, the CEO of one of the, the president of one of those companies said in 2008, when they built their first data center, they didn't talk about electricity. They didn't worry about electricity. So it's been a huge learning. And as, as one of them said, we've had to learn to talk to the power industry. You know, a software engineer, maybe, I don't know, it's a month or two of work to do software. It's seven or eight or 10 years for an energy company for an engineer to get a project done. And that's the, the gulf between the two of them. And the sense that there is a race and it's, you know, it's always said it's the US-China race, but it's also a race very definitely among companies to build capacity. Now, one question I think

• 15:38Speaker 04

  you were getting at was that the sense that there is the contrarian view that chips will become more efficient and maybe electricity demand will not be as great as it is. But at this point, every time, you know, you talk to a, you know, a utility executive, they say, and we heard this at Sarah, we, you know, when they had years and years of no growth or very flat growth in demand, they'll say this year it's going to grow 5% or it's going to grow 8%. And there are only so many electricians, there are only so many transformers. So again, those supply chains are very important there, too.

• 16:25Joe Weisenthal?

  There are some market stories where you want every detail. Tracy and I have made quite a few podcasts on that basis, but sometimes you've only got 10 minutes and need to know what's moving markets and why. That's the Barclays Brief Podcast. Every week, experts from Barclays Markets and research get you up to speed on what matters and what to watch next. About the time it takes to grab a coffee. So search Barclays Brief wherever you get your podcasts.

• 16:51Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 17:33Speaker 01

  and hiring practices, but according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at ChatGPT.com.

• 18:14Joe Weisenthal?

  How much do you expect to be truly internalized or vertically integrated within the tech industry when it comes to energy? We see headlines from here and there, like, you know, like, Google will make an investment in a small modular reactor startup. I never know how, like, serious that is, or from time to time, it's like, oh, Meta hired an energy trader, and this is new, and this is different, et cetera. Like, what do you think that the big tech companies are ultimately going to internalize as we need to have this be as part of our core competency, rather than we are going to work with some third-party partner on it?

• 18:54Speaker 04

  Yeah, we can see that they've hired people who come out of the energy industry, either from the oil and gas industry or in electric power industry. So they're building up the capacity to do that, and their investments show it. You mentioned, you know, one company, but look at Amazon. They've invested in X Energy, which is a small modular reactor company. And I think the idea is that, and I hear from other of these tech companies too, will invest in them and help drive down the costs and see them as a part of the way of meeting the electricity demand. And I think I know, I wrote down, as you said, the themes that you had talked about on nuclear. I mean, this crisis is a boost to nuclear, but I think AI has been a big boost to nuclear

• 19:39Speaker 04

  in terms of the sense among tech companies that nuclear has to be part of the picture. And just this morning, I was talking with the head of one of the largest government funds and, you know, they're invested, you know, a non-US fund and they're invested in fusion. So, you know, there's just a different attitude towards nuclear. And I think the needs of the tech companies is one of the things that's really driven that.

• 20:06Tracy Alloway?

  Well, actually, on this note, I wanted to ask you about renewables and, you know, the green energy transition and all of that. It feels like in some parts of the world, recent events in the Gulf have maybe hastened some of that transition. Although I can't even call it a transition because as we discussed with Alex Turnbull, it's like, yes, people are buying a bunch more EVs, but those EVs are going to be powered by coal for, you know, the foreseeable future because there's an energy shortage. What exactly is going on with renewables now? Is, are people still seeing that as a substitute for traditional energy? Or is this more of an addition to bolster, I guess, diversification?

• 20:44Speaker 04

  Well, first, we have to note that over 90% of the new electric capacity worldwide that was installed last year was wind and solar. So it is a growing business. Secondly, like I've heard of an example of a project in Vietnam that was going to be done with LNG, they're buying solar panels. I think that wind and solar gain less about climate now and more about a part of diversification, part of energy security. So I think that dialogue, that has changed maybe, and certainly will hear it in Europe and will, I hear it at least, not from everybody, but from people in the United States as well. So it's a different way of looking at wind and solar as a way to be more independent, more secure, more diversified.

• 21:30Speaker 04

  Doesn't answer the question of how you power an airplane, or the fact that only about 6% of the new cars being sold in the US today, even with this crisis, are EVs.

• 21:40Joe Weisenthal?

  It's pretty crazy how little EVs have taken off.

• 21:43Speaker 03

  Yeah.

• 21:44Joe Weisenthal?

  You know, something just, you know, like, you know, here's something I think about, like, in the US, we are obviously, our lands are blessed with commodities, including abundant oil and gas, especially since we've gotten really good and high-tech at sideways drilling and all of these things like that. Could it be a curse in the sense that, you know, the world is going to electrify? One day, maybe not in our lifetimes, but one day there will probably be electric airplanes, right? Batteries will eventually get good enough, and airplanes will no longer need jet fuel, et cetera. Is the, is part of the story that the US is going to stay on this path of the internal combustion engine and so forth in part because we are just so blessed with fossil fuels?

• 22:29Speaker 04

  Well, I think that's part of it, that, I think I'm just reflecting on that. I think that's part of it. It's part of what consumers want. And just, I think that the notion that there would be this big pickup in electric cars hasn't occurred here. In Europe, I think it's about 20%. Then you go to China, and of course, it's much higher.

• 22:47Joe Weisenthal?

  Yeah.

• 22:48Speaker 04

  Because not only of the price point, but also government policies of all kinds. You know, you don't, you're not going to get a license for a new car in Beijing unless it's an electric car. But here's some numbers that may not be clear. I mean, we were looking at this when we were doing our copper study, because electric cars use almost three times as much copper as a conventional car. And it turns out that in 2025, about 23 million, 22, 23 million electric cars were sold worldwide compared to the entire US new car market of 16, 17 million new cars. So you see that it's happening worldwide. Now, a big portion of them are in China, but China is also really

• 23:29Speaker 04

  You know, they have reoriented their exports much more to outside the United States and even Europe, to the developing world, and they're going to really be pushing their electric cars. But of course, you do need reliable electricity supplies if you're going to have a penetration of electric cars.

• 23:48Tracy Alloway?

  I just want to go back to the situation in the Strait of Hormuz directly for a few minutes. So you mentioned initially that this was something that people thought would never happen because the stakes were so high. If you, if Iran-

• 24:01Speaker 04

  They would do scenarios about it, but assume that all these things could happen, but not that.

• 24:06Tracy Alloway?

  Right. So, I mean, this is the surprising thing. Like, it actually happened despite the stakes being so high and, you know, despite the world relying on the Strait for 20% of its oil and gas. What's your take on like, why this particular moment? Like, what are the conditions that allowed the closure of the Strait of Hormuz?

• 24:27Speaker 04

  Well, I think it was the war. Here's a war in which the United States, the mightiest military, was at war with a country, as somebody, I heard somebody remark the other day, half the GDP of Belgium, but with a lot of missiles and a lot of drones, and kind of leading to a standoff. And it was a moment for Iran to pounce, even though the very senior leadership was destroyed right at the beginning of the war. Clearly, they had decentralized. This was a war, when you look at the amount of drones and missiles they had, and they continue to have, this is a war that they had prepared for, for a long time, the struggle with the United States. And they seized the moment. And, you know, maybe it was, it's the advent of drones that was able for them to pull

• 25:09Speaker 04

  off, saying that the, we control the Strait, and when you send your ship through the Strait, you'll follow the route that we tell you. And by the way, it's actually a canal, and you're going to pay a toll, and the toll's going to go to the IRGC. Maybe it was, it was the capability of drones that enabled that.

• 25:26Joe Weisenthal?

  Let's say the Strait reopens, but as you mentioned, you know, all cheap drones, the Shahed drone may, may be enough, and Iran will, has a lot of them, and they'll probably keep producing a lot of them. Maybe that is enough to close the Strait even against the mightiest military in the world. Does that permanently change how the world thinks about energy security? We see that because they were capable of doing this, therefore, we know it could happen again, right? We know it could happen down the future. And does that change energy planning?

• 25:58Speaker 04

  Yeah, I was thinking, you know, the beta test for World War II was the Spanish Civil War. And in a sense, the beta test for the new world of warfare is Ukraine. And now we've seen it played out in the Gulf with what Iran does. And I think it introduces a sense of risks that wasn't there before. I remember I was in Kuwait in January when they were announcing new policy for investment, international investment in their oil and gas industry. And it felt very optimistic time. It felt, and you've had that excitement, you know, really the optimism around in Dubai and Abu Dhabi, Vision 2030 in Saudi Arabia. Well, it's not going to be as optimistic now.

• 26:39Speaker 04

  And I think there is going to be deeper thought about energy security and diversification and what kind of security premium. And by the way, also that you need to spend more money, more share of your sovereign wealth fund on defense. So I think all of those changes, I mean, you know, we don't know what the full outline of this settlement is, if it is a settlement. But we do know that it is going to be a different world than the one that existed before the war began.

• 27:10Tracy Alloway?

  Do you see the possibility, or I guess, in what sense would this particular eventuality like change oil routes and markets? But if the US maintains some sort of control or input in the Strait, collecting a toll, maybe alongside Iran at some, you know, at one point, I think Trump was talking about this being on the table.

• 27:30Speaker 04

  Right.

• 27:31Tracy Alloway?

  How would that change global oil flows if you had a sort of like US involvement in that particular area?

• 27:37Speaker 04

  Well, that would be a pretty dramatic expansion of the authority of the US. I mean, some have talked about a international authority which would be composed of Iran, Oman, and the UAE, which are the three countries that border the Strait, that some sort of international system. But I think also that for the Gulf countries, for Saudi Arabia. I don't think it's tolerable for them to be paying a toll to Iran and having Iran have that domination over supply and having those funds that they pay go to the IRGC, which apparently is what would be the destiny of those funds. So I think there are things here that are just unresolved.

• 28:20Joe Weisenthal?

  Yeah.

• 28:21Speaker 04

  And obviously, at the top of that list is the strait, along with what Iran is or is not going to do in terms of nuclear weapons.

• 28:29Joe Weisenthal?

  I'm glad that you said there's going to be a different world regardless after the war, because thank you for giving us the headline that we're going to use to run this episode. Always nice to get a nice clean phrase like that. But what else could we see in this different world? Maybe from the, you mentioned how the Gulf regions would react, or maybe completely find it unacceptable for Iran to take that toll. But what else do you see as some of the potential fallout in this different world after what we've seen? I like the way you put a beta test, too. I mean, Ukraine may have been a beta test for this. This, I don't want to be dark, but we see the incredible power of drones here.

• 29:09Speaker 04

  Right.

• 29:10Joe Weisenthal?

  What else do countries do for their own energy security in this different world?

• 29:13Speaker 04

  Well, one is drone capacity. And, you know, a year ago, we heard that Ukraine was told they had no cards. It turns out they do have cards, which is there. No country is more experienced in terms of dealing with drones. And there's the president of Ukraine in the Gulf doing drone deals with those countries to give them protection. I think there are other consequences, too. I think that the, I guess we'll call this the Hormuz crisis. It sounds like the Suez crisis, the Hormuz crisis.

• 29:40Joe Weisenthal?

  That worked.

• 29:41Speaker 04

  But I think it's also accentuates really a crisis for NATO, which really began with, of course, well, it has years in the making, but over Greenland. And, you know, now you have the Europeans talking about a NATO without the United States. And so I think the relationship, there's been less focus on that, but I think that's one of the lasting.

• 30:05Speaker 04

  Questions that come out of this, too. You know, one thing that you don't see and you don't think about unless it's not there is trust. And trust has been eroded, things have become more transactional. And yet, to solve, really, to deal with global energy issues, you need kind of global cooperation. That was the very fundamental idea that led to the establishment of the International Energy Agency as a way to coordinate so that you don't have sort of bruising competition among countries.

• 30:37Tracy Alloway?

  If I could ask you to put your sort of macro hat on for a second. If I think about the current world, you know, it seems like one where people are going to be more focused on energy security. Maybe they're going to be building out their own production capacity, their own stockpiles of oil. They're probably going to be increasing their defense budgets. Maybe it's also a world where smaller powers, because of drones, are able to mount, you know, their own offensive campaigns and sort of hold the line and create their own choke points in different geographies. When I think about that world, it strikes me as inherently inflationary. Does that seem to be the case for you? Like, is there a new term premium that like comes about, I guess, because of everything

• 31:21Tracy Alloway?

  that we've just seen in the Gulf?

• 31:23Speaker 04

  I think you're absolutely right. I think it really began, you know, what drove the, that incredible development of supply chains so complicated, I remember looking at one for automobile parts that looked like a bowl of spaghetti, was the fact that it drove down costs. It was all about efficiency. And increasingly, security, predictability, reliability, resilience has come to the fore in it. And I think, as you described, that is going to be even more true today. So spending more money on defense and trying to localize production, build security, and that inherently adds costs that were not there. It's reversing a trend that had been decades in the making. So I think that builds it in.

• 32:24Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 33:06Speaker 01

  and hiring practices, but according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at ChatGPT.com.

• 33:47Joe Weisenthal?

  You know, obviously, the AI industry needs the energy industry, or it needs energy expertise. And so either it'll be working more closely in partnership with companies, it'll bring some of it in the house. When you're down in Houston, do you hear anything about the reverse in terms of how AI is going to change the change energy in terms of the usage of artificial intelligence or robots in terms of production and mining and all that?

• 34:14Speaker 04

  Well, absolutely. Certainly, we had a big mining track there and more of that now. Robots, by the way, are also copper intensive.

• 34:22Joe Weisenthal?

  Yeah, oh, yeah, right.

• 34:23Speaker 04

  Which is, you know, goes back to this whole question about this kind of potential gap in copper supplies that you need for electrification. Again, supply chain's back on the table in a different version. But of course, the question there is, what does it do to jobs? What does it do to efficiency? And I think every CEO was talking about how we're applying AI in all these different cases in our, in our companies. And probably there's the same anxiety about jobs there, what the future of work will be that you see generally reflected. And we'll probably hear more about as we go into the November midterm elections.

• 35:01Joe Weisenthal?

  You know, there's a part in Landman where they're at, they're at an oil, they're at an oil industry gathering or something and they see a robot. One of the providers is there showing us like, you can replace some of your workers with robots. But also, as to Daniel's point, after we build humanoid robots, probably the first thing that they'll be used for is to go into the copper mines so that they can reproduce themselves and then build more robots. You know, that would be the.

• 35:28Tracy Alloway?

  I don't even think they have to be humanoid.

• 35:29Speaker 04

  I think, I believe that's the movie script that you're working on right now.

• 35:34Tracy Alloway?

  See, the thing is, Joe, if you keep talking about Landman, I'm never going to watch it because I'll feel like, like I know all of that already.

• 35:42Joe Weisenthal?

  I do think this is a real thing. It makes sense though, like it's going to be all about the copper to keep building robots for national security. So what are you going to do?

• 35:49Speaker 04

  I think, I see your movie where the robots go down there and they're reproducing themselves.

• 35:54Joe Weisenthal?

  Yeah, yeah. They gotta get that copper so that they can make more robots.

• 35:57Speaker 04

  Yeah.

• 35:58Tracy Alloway?

  Okay.

• 35:59Speaker 04

  I think there's one other thing that's important to talk about, which is, you know, assuming that we are going to go into a stabilization and a more ceasefire, et cetera, how long does it take to actually recover from this?

• 36:11Joe Weisenthal?

  Yeah.

• 36:12Speaker 04

  And I think this goes back to Tracy, to your comments about inflation. It's not going to, this is not something that's solved overnight. And at least it will take probably if peace breaks out, you know, maybe a couple of months before the oil markets are back in position because remember the last tankers had already left and had docked from before the war, inventories had been run down. So and that captains have to be sure and their crews have to be willing to go through the Gulf. And so it's a couple of months before the oil market starts to get, you know, get back into balance. And then I know one of the COs said that if you look at the overall disruption, including petrochemicals and everything and the destruction of refineries,

• 36:57Speaker 04

  it might be as much as two thirds of a year before things are really cleared up and back to normal. So it isn't, there's no light switch here. And so that will be reflected in prices.

• 37:07Tracy Alloway?

  Yeah. So just going back to AI and electrification for a minute. I mentioned in the intro that one of the things that's different to today is the almost complete absence of ESG investing in today's world. So we used to hear so much about it pre 2020. And I got the sense, maybe this was a bit of advertising, but you certainly got the sense there was a lot of money flowing into ESG funds for green energy or socially beneficial programs or whatever. You do not get that sense today at all. Is there a possibility though, that ESG sort of gets rebranded either under an energy security umbrella or under

• 37:49Tracy Alloway?

  a sort of AI electrification umbrella? And we start to see capital flow into it in a meaningful way yet again?

• 37:56Speaker 04

  Well, I think that I think that's a very reasonable expectation. And I think we'll see even the tech companies still have their net zero objectives. So they may be using gas, but then they'll be looking to invest in renewables as well to show that they're net zero. So one of the things that we've got to get used to in the United States is to have these 180 degree swings from one administration to another. And I do see that people, one way that people kind of invest in energy, but still maybe have ESG in the back of their mind or concerned about it. You rebranded as infrastructure and then you're not investing in energy. You're investing in infrastructure and infrastructure is generally considered very good thing to invest in as long as you get a return.

• 38:40Joe Weisenthal?

  You know, we mentioned some of these big mega trends that the war has brought to light, including obviously the resource nationalism. Is the potential for US LNG exports, is that tapped out? Like, are we already going as fast as we can to build out that capacity? Or plausibly, could it even, is there an even further, a higher gear that that could go into?

• 39:04Speaker 04

  Oh, there is much additional capacity in process.

• 39:09Joe Weisenthal?

  Yeah.

• 39:10Speaker 04

  That will, Gutter has a very big expansion plan, but we'll see the US coming on with it. If we had been having this call, you know, if in January, of course, and looking out on 2026, the big concern would be, is there going to be too much LNG capacity and market? But there is a concern too about demand destruction. Will people feel as confident about it? You know, in Southeast Asia, gone back to coal or will they push in other directions, renewables? But I think still we're expect, you know, roughly that by 2040, the LNG market could be 50% bigger than it is. But of course, that market has to be there and it has to be at a price that people are willing to pay and competent.

• 39:53Speaker 04

  And it also means, I think, countries, and this is a question, there are a lot of Europeans at CIRAWEEK who are there about tying up US LNG supplies long term and wanting to have those supplies. But, you know, there's always the question of, you know, wanting to be sure that the US is a reliable provider and you're not going to see something like the Biden administration where they put a freeze on LNG. But US LNG is by far the largest supplier now and with part of Gutter really damaged, at least for a few years out of, it'll be even more reliance on US LNG.

• 40:29Joe Weisenthal?

  You know, I have another question. So the US is just such an energy powerhouse now with both respect to oil and gas, obviously. And we're oil independent, although I know that these things are technical because of refining capacity and so forth. But we're an oil powerhouse, too. I'm just sort of curious, however, like, costs in the oil fields are rising. Is US oil self-sufficiency a guaranteed thing for decades to come? Or would it be plausible, like, with shale decline rates and rising domestic costs, et cetera, that the US ever, like, sort of returns to, I don't know, what it looked like in the 90s or something like that? Like, how guaranteed is our oil security

• 41:14Joe Weisenthal?

  just because we've had these sort of 20 really good years?

• 41:17Speaker 04

  You never want to say anything is for sure forever, because things really do change. And even, I think, tracing your remarks at the beginning about how the world looked in 2019, and here, seven years later, the world looks very different. So many changes could happen. I think there's been the general view, and this, you know, there was a debate, really, at CER Week among the CEOs about shale, that question. Some saying, well, it's plateaued, or going to plateau pretty soon. Now, it's plateauing at a very high number. I mean, almost 14 million barrels a day, and maybe going a little higher than that. Others say, no, technology's going to unlock. The recovery rate's now, like, 7%. And if you can get it to 10% or 12%, it will go on longer. So

• 41:59Speaker 04

  I think, at least if we look out a few decades, the US will continue to be a big producer of oil unless something dramatically changes, and even longer that we have very abundant gas. Forever, I, you know, things can change. Policy can change.

• 42:16Joe Weisenthal?

  Yeah.

• 42:16Speaker 04

  You know, if you have a Bernie Sanders administration, someday, you know, it will be a very different picture than what we have today.

• 42:24Tracy Alloway?

  Again, going back to the Strait of Hormuz and your book, I looked up how many times you mentioned the Strait of Hormuz in the prize, and it actually wasn't that much. It was like just four or five times. But then I looked up how many times you mentioned Iran, and it's like 500 times. And, you know, Iran is really central to the history of oil. And so you would say the situation is like very central to our thinking about oil. What's been most surprising to you in, you know, watching these events, historic events, really unfold over the past month or so?

• 42:58Speaker 04

  Well, I feel what I'm struck by is the continuity that the Iranian oil workers went on strike in 1978, and that was the beginning of the Iranian revolution, and then the second revolution where the Islamists captured the whole system and chanted death to America. So in a sense, it's like this war has been brewing for 47 years. But, you know, it is interesting because, of course, you know, oil was discovered in then Persia and Iran in 1908, and Winston Churchill made the decision to convert the Royal Navy from coal to oil, and it was going to be dependent on Iranian oil. And in Parliament, people were saying, you're going to be dependent on Persia. That's very dangerous. And he

• 43:40Speaker 04

  came up with, well, first of all, he said, the prize of the venture is world mastery itself. And that's where I got the title of the book from. And then he said, the basic axiom of energy security, which is on variety in oil, is variety is the source of safety, diversification. So that continues to be the principle, even though at that point, he was making the Royal Navy very dependent upon Iran, Persia. But so it is, you know, how central Iran has been to the oil story since 1908. And here it is today. We're in 2026, and it is still central. It's not the large producer it was. There was a day When Iran and Saudi Arabia vied with each other to be the biggest producer in OPEC,

• 44:24Speaker 04

  but its ability to influence what happens in the entire Gulf and to shut down the Gulf shows that it's, it too has a form of mastery which it has exerted with drones and missiles.

• 44:37Tracy Alloway?

  Yeah, for sure. I realized, I actually have one more question, which is, are you also watching Landman, Dan, alongside Joe?

• 44:44Speaker 04

  Well, yeah, I, listen, I watched it and there was that famous episode at the, at the Winterbin.

• 44:50Joe Weisenthal?

  Oh, yeah, yeah.

• 44:51Speaker 04

  The hero got in an argument with a young lawyer from Houston.

• 44:55Joe Weisenthal?

  The woke lawyer.

• 44:55Speaker 04

  Yeah, yeah, the woke lawyer, that's right, about how everything, including everything she was wearing, was made an oil product. And I thought that was really interesting. But then I stopped watching it because of the subplot got a little sidetracked. But then I started watching it again. So now I, I'm not up there with Joe, but I'm going to catch up with it because, you know, I got to find out how the oil industry really works. And what better way to learn that than by watching Landman?

• 45:19Tracy Alloway?

  You need to ask for a cameo, I think.

• 45:22Joe Weisenthal?

  They should. Yeah. In season three, they really should. You know who has a cameo in it?

• 45:27Tracy Alloway?

  Who?

• 45:28Joe Weisenthal?

  The owner of the Dallas Cowboys, who like comes, there's like a scene where like he comes in and he talks about-

• 45:33Tracy Alloway?

  The really important people in the oil market.

• 45:34Joe Weisenthal?

  Yeah, exactly. He talks about like the first, his first oil lease or something like, he actually tells a story about, I think his daughters went to college and he like paid for it by like doing an oil lease like around where their dorm was or something like, I don't know, it's really good. But I think like, I am, we're putting, we're putting this out there in the world that Taylor Sheridan-

• 45:51Speaker 04

  Would you put a recommendation to me? I'd love to go walk on it.

• 45:54Joe Weisenthal?

  The Taylor Sheridan needs to have, you know, it needs to happen.

• 45:57Tracy Alloway?

  Well, first of all, Taylor Sheridan also needs to come on All Lots.

• 46:01Joe Weisenthal?

  But this is the scene, okay? The scene is at Cerewake and it's you interviewing the head of MTEx Oil. Because that's the, that's, it's Dan Yergin interviewing the CEO of MTEx Oil, or what, or actually Billy Bob Thornton, I don't want to give a spoiler if you haven't got to the very end.

• 46:20Speaker 04

  No, no, no, no, no, no, no.

• 46:22Joe Weisenthal?

  About expansion plans live on stage. That would be such a, what do they call it? Easter egg for oil nerds to see.

• 46:30Tracy Alloway?

  That'd be great.

• 46:31Speaker 04

  Okay.

• 46:31Joe Weisenthal?

  Yeah. So we're putting that into the world through this episode of All Lots.

• 46:35Speaker 04

  I'm, I'm all on board with it. And if you could just make it happen.

• 46:38Joe Weisenthal?

  We're this is this is our

• 46:39Tracy Alloway?

  We're try we'll try.

• 46:41Speaker 04

  I know your show is very influential, but this is going to demonstrate the true power of your show.

• 46:46Tracy Alloway?

  Oh, God. Okay, so we actually need to make this happen now. Okay. Dan, that was fantastic. As always, really appreciate you coming back on Odd Lots and fingers crossed on the landman cameo.

• 46:58Speaker 04

  Thank you. Great to be on with you both. Thanks a lot. And we'll see how it all unfolds.

• 47:14Tracy Alloway?

  Joe, that was very fun. I really hope you're gonna get like, if there's anyone.

• 47:19Joe Weisenthal?

  That'd be a great scene. That'd be a great scene.

• 47:21Tracy Alloway?

  That would be fantastic. There's a lot to pick out of there. I mean, one thing I thought was that was really interesting, just in the context of geopolitics, was the point about the drones.

• 47:29Joe Weisenthal?

  Yeah.

• 47:29Tracy Alloway?

  And the idea of like this new technology being an enabling factor in allowing like some powers to assert control over areas that perhaps would have been much more difficult to assert control over before.

• 47:41Joe Weisenthal?

  Sometimes while we're doing episodes, you know, like I'll like browse on my computer and like look something up. I'm at the Wikipedia page 2011 Iran-US RQ-170 incident. Do you know what that is?

• 47:53Tracy Alloway?

  No.

• 47:54Joe Weisenthal?

  It's when Iran captured a Lockheed Martin RQ-170 Sentinel unmanned aerial vehicle. And it is believed that this is a pivotal moment in being able to reverse engineer the technology of that drone.

• 48:07Tracy Alloway?

  Oh, interesting.

• 48:08Joe Weisenthal?

  That then became an enabler of the Shahed-191. And then, you know, this idea, it's like, are we seeing like sort of the beta tests for World War III here?

• 48:19Tracy Alloway?

  Yeah.

• 48:19Joe Weisenthal?

  Or beta test for war, starting with Ukraine, this, this is like incredible leveller of the playing field or the ability of a non-

• 48:29Joe Weisenthal?

  You know, lesser power, lesser power is to inflict incredible, to put up an incredible fight in some respect. You know, that incident in 2011 could be like, sort of like a key moment in history that doesn't get enough, get enough attention.

• 48:45Tracy Alloway?

  Wait, since you're quizzing me on history.

• 48:46Joe Weisenthal?

  Oh, yeah.

• 48:47Tracy Alloway?

  Even though it's recent history, which oil company is descended from the Anglo Persian Oil National, can't remember the exact name, but Iran State National Oil Company? What is it now?

• 49:01Joe Weisenthal?

  BP?

• 49:02Tracy Alloway?

  Yes.

• 49:02Joe Weisenthal?

  Okay. Well, you gave it away with Anglo.

• 49:04Tracy Alloway?

  I did, didn't I? Yeah.

• 49:05Joe Weisenthal?

  Yeah.

• 49:05Tracy Alloway?

  Did I say Anglo?

• 49:06Joe Weisenthal?

  You did. You said Anglo. So there's like our Al Star from like.

• 49:09Tracy Alloway?

  Oh, I'm sorry. Yeah, I totally gave it away.

• 49:11Joe Weisenthal?

  Yeah.

• 49:11Tracy Alloway?

  I'm gonna have to come up with a better question.

• 49:13Joe Weisenthal?

  All right.

• 49:13Tracy Alloway?

  All right. Well.

• 49:14Joe Weisenthal?

  Next time.

• 49:15Tracy Alloway?

  Next time. Shall we leave it there?

• 49:16Joe Weisenthal?

  Let's leave it there.

• 49:17Tracy Alloway?

  This has been another episode of the Odd Lots Podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway.

• 49:23Joe Weisenthal?

  And I'm Joe Weisenthal. You can follow me at TheStalwart. Follow our guest, Daniel Yergin. He's at Daniel Yergin. Follow our producers, Carmen Rodriguez at Carmen Armin, Dashell Bennett at Dashbot, and Kale Brooks at KaleBrooks. And for more Odd Lots content, go to Bloomberg.com/oddlots, where we have a daily newsletter and all of our episodes. And you can chat about all of these topics 24/7 in our Discord, discord.gg/oddlots.

• 49:47Tracy Alloway?

  And if you enjoy Odd Lots, if you also want Dan Yergin to get a cameo on Landman, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad-free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.

• 50:37Speaker 05

  Congratulations, you've built a dashboard. But now comes the follow-up question, and the follow-up to the follow-up, and the dashboard for that. Meet Hex. Give everyone the power to ask their own questions, explore data, and build with AI, all in natural language. Because every answer should spark another question, limited only by your curiosity, not your data team's bandwidth. Go deeper than dashboards. Visit hex.ai.

• 51:08Speaker 06

  Empower is all about helping you invest well so you can go out and live a little. And their Free Empower Personal Dashboard shows you your full financial life in one place. You'll be able to see your net worth, monitor budgets, analyze your portfolio, set retirement goals, and more. Whether you're saving for something big, want to treat yourself, friends, or family, or meet long-term goals, Empower helps you see where you stand. You've worked hard for your money, and Empower can help you make the most of it. Download the Empower Personal Dashboard or visit empower.com. Not an Empower client paid or sponsored.

• 51:39Speaker 07

  With ChatGPT, you can do more than get answers. You can get things done. Whether you're leading a big project, planning an elaborate trip, or trying to balance work and life, ChatGPT can help. Give it a goal, plus things like files, notes, or project plans, develop a trip itinerary with daily updates, or create a prioritized schedule so you can spend less energy sorting out the details and more on bringing your biggest ideas to life. Get started at chatgpt.com.