Qualm Before the Storm

And I said, “Hey kid, you think that’s oil? Man, that ain’t oil, that’s blood.” Bruce Springsteen, Lost in the Flood.

As “the founding director of the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs and a co-founding dean of the Columbia Climate School” (and a very serious Bruce Springsteen fan), there are few people who understand the global energy market better than Jason Bordoff. Thankfully, Jason also excels at explaining energy issues in clear terms that the rest of us can understand. Since energy, particularly the oil that used to travel through the Strait of Hormuz, is now at the core of the Iran war, it’s a good time to catch up on what’s happening and what’s at stake. Ezra Klein interviewed Jason Bordoff earlier this week on his podcast. NYT (Gift Article): What Happens if 20 Percent of the World’s Oil Disappears? “The Gulf — the Middle East — we all know, since the 1970s, is a huge energy producer: Iraq, Saudi Arabia, the United Arab Emirates, Iran, of course. All of that oil, most of it, flows by tanker through this very narrow strait that juts like a little triangle around a corner, and it’s right where Iran is. So it doesn’t take that much with some drones or explosives in a dinghy boat racing out to a tanker … You’re talking about a disruption of about 10 million barrels of oil, maybe a little bit more — so more than 10 percent of global supply. During the Arab oil embargo in 1973, in contrast, you saw about 6 or 7 percent of world supply disrupted. So this is by far the largest energy supply disruption we have ever seen.” (You’ll have to read or listen to the end for the Springsteen-related tips…)

+ For most of the world, the oil and energy wars are creating chaos, concern, and higher prices. For some people, the massive price swings, often driven by presidential tweets, present quite the opportunity. “Traders bet hundreds of millions of dollars on oil contracts just minutes before US President Donald Trump announced on Monday that the US would postpone strikes against Iranian energy infrastructure. Market data reviewed by the BBC shows the volume of trade spiked around fifteen minutes before a social media post by the president announcing the move.”

+ “Trump’s sudden climb-down was startling. Who could have seen this coming? The answer is, the person or people who bought large quantities of stock market futures and sold large quantities of oil futures around 15 minutes before Trump’s announcement.” Paul Krugman: Treason in the Futures Markets.

+ How will the market respond to the instability and madness spreading from the Oval Office across the globe? You’d think it would be concerned. But, as I explained yesterday, it’s a Bull—- Market.

“Senators Adam Schiff (D-CA) and John Curtis (R-UT) introduced a bill on Monday that could prevent prediction market platforms Kalshi and Polymarket from allowing users to wager money on sports events or play casino-style games.” Don Jr. has financial relationships with both leading prediction markets, so it’s unlikely that we’ll see them reined in anytime soon. Meanwhile, while people love sports betting, they’re quickly getting used to betting on everything. David Wallace-Wells on The Casino That’s Eating the World. “‘The long-term vision is to financialize everything and create a tradable asset out of any difference in opinion,’ Tarek Mansour, the chief executive of another major prediction market, Kalshi, declared in November. But who wants this future, besides perhaps inveterate gamblers and those people who profit off them?” (Bingo. And I mean Bingo as in that’s exactly right, not Bingo the casino game…)

Like many middle powers that used to be able to depend on the United States, Canada finds itself looking to establish its place in the new world order. There will be political challenges. There will also be challenges from Mother Nature. NYT (Gift Article): In Canada’s Frozen North, With Canada’s Frozen Soldiers. “Canada’s military ambitions in the Arctic hinged on a frozen door that wouldn’t open … ‘It’s frozen,’ said an air force detachment commander, ‘frozen shut.’ That left the force’s Chinook helicopter out in the cold. As Canada’s armed forces launched their biggest-ever Arctic exercise, soldiers blasted mobile heaters in an effort to open the hangar door and haul in the Chinook, which had been grounded by a mechanical problem and the extreme temperatures.” (It might be faster just to wait for climate change to open the door…)

Prince Charming King? “In a series of conversations over the last week, Prince Mohammed has conveyed to Mr. Trump that he must press toward the destruction of Iran’s hard-line government, the people familiar with the conversations said. Prince Mohammed, the people familiar with the discussions said, has argued that Iran poses a long-term threat to the Gulf that can only be eliminated by getting rid of the government.” NYT (Gift Article): Saudi Leader Is Said to Push Trump to Continue Iran War in Recent Calls. Meanwhile, “Pakistan’s military leadership has been attempting to broker negotiations between the US and Iran, after the White House confirmed that Pakistan’s army chief, Asim Munir, had a call with Donald Trump on Sunday to discuss the conflict.” JD Vance is being floated as a lead negotiator. Here’s the latest from The Guardian.

+ Mullin Mulled Over: Markwayne Mullin confirmed as the next secretary of Homeland Security. (On the plus side, he’s almost certain not to be the worst person ever to hold that job.)

+ Moonstruck: “NASA plans to invest $20 billion over the next seven years to develop a base on the surface of the moon, the latest major strategy shakeup aimed at enabling humans to live on the lunar surface long-term.” (That sounds like too much money to spend, unless we all get to decide who to send there first.)

+ Cheet Sheet: Can an entire political movement be summed up in one headline? Probably not, but we can try. Trump, Who Calls Mail-in Voting ‘Cheating,’ Just Voted by Mail.

+ Betrayed: “Mohammad Nazeer Paktiawal, 41, who was known to his family and friends as Nazeer, served alongside U.S. Army Special Forces in Paktika province – one of the most dangerous in Afghanistan – starting in 2005 … He and his family were evacuated when the pro-U.S. government in Kabul fell to the Taliban in 2021.” How an Afghan man who aided U.S. military forces died in ICE custody in Texas. And from Pro Publica: Trump Has Detained the Parents of More Than 11,000 U.S. Citizen Kids. (Feel safer?)

+ Foul Wind: “French energy company TotalEnergies has agreed to abandon two Atlantic offshore wind projects after the Trump administration offered to buy out its federal leases for close to $1 billion, with the money to be redirected into fossil fuel development.”

+ Cold Reception: “Americans have learned to live with ads on smartphones and other devices as a necessary trade-off of connectivity. They’ve also gotten used to growing intrusions in the physical world, where everything from bathroom stalls to taxicab seats have become fair game for marketers. But the kitchen remained largely off-limits.” Until now. Ads Are Popping Up on the Fridge and It Isn’t Going Over Well.

“A Maryland man who made history as the first quadruple amputee to compete in the professional, televised American Cornhole League has been arrested on suspicion of shooting and killing a passenger in his car during an argument.”