“it's an acceleration of deglobalization”
War accelerates deglobalization, so energy stays bid through year-end on chokepoint disruption
“Europe was depending on access to all the LNG capacity coming online … they're going to pay higher spot prices for these things”
Europe pays higher LNG spot prices as Mideast capacity it relied on goes offline
“We already missed the window for many farmers throughout the world to apply fertilizer. So you can book in now lower yields in many parts of the world.”
Missed fertilizer planting window locks in lower crop yields and rising food prices in 6-9 months
“these are products for which there's no strategic reserve. … those are the things where things are very lean.”
Resin shortage with no reserve buffer steepens the global cost curve; gas-fed US producers get pricing power.
“usually it's your emerging markets, your countries that have lower buffers, that don't have strategic reserves…”
Supply and commodity shocks hit low-buffer EM sovereigns first; their dollar bond spreads widen and prices fall.
“China's got Russia right next door … they have more reserves, more renewable capacity online, and a relationship with Russia.”
China relatively wins from the disruption with reserves, renewables, and a Russian energy backstop
“That's not the story of France. That's not the story of Spain. … those countries are going to have to look at each other and say…”
Europe is left for dead too often, France and Spain can use the crisis to stay relevant
“The energy transition is real and it's not going to be like the switch from coal to oil. That's a layup... we're not going from oil to something else.”
Energy goes deflationary by 2030-35 as oil gives way to wind, solar, geothermal, nuclear