What is the status of the Strait of

Hormuz as we can possibly understand it

as we speak?

>> Well, it's it's still in the same

physical location where it was at the

start OF THE WEEK.

>> [laughter]

>> SO

SO [laughter] FAR SO FAR THAT HASN'T

MOVED. Um if if you are following Iran's

rules for transiting the strait, the

strait is open.

Provided that you're not an Israeli

affiliated ship.

Uh now, uh what about uh so all the that

means all the other ships are lining up

to come out? Well, no.

Uh because uh ships that are not that

are insured by Lloyd's of London or uh

some other insurance company, they're

not allowing those ships to go through

the strait yet because there's still

questions about are there land are there

sea mines? Uh explosive mines floating

around in the water.

Now, we we heard throughout the first 4

months of this war that Iran had quote

mined the Persian Gulf. But, you know, I

in looking at it and

we haven't seen a single instance of a

ship hitting a mine that I recall in the

last, you know, month or two. So, I'm

just wondering if that was uh an

information operation that Iran put out

to scare uh the insurance companies, but

it wasn't actually followed up with on

the threat.

Um the if you look at the number of

vessels that people can go to

marinetraffic.com.

Uh it's marinetraffic.com.

I'm I'm not getting paid by them. It's

just there's no

economic affiliation with them. But, it

shows you actually what the ships are,

where the ships are located, what's

going on in that middle part of the the

Strait of Hormuz is empty.

Or there's one or two ships going

through. The ships that have actually

gone through uh look like they're all

they you know, 99% are headed to to

Asia. None. I have not seen a single

ship designated as heading for the

United States or for Europe. And so that

that's important because that means none

of the kind of crude oil that the United

States needs to make diesel and aviation

fuel is flowing to the United States

notwithstanding Trump's declaration that

the straits are open.

>> Then why is the price of gasoline going

down? Slightly, not a lot, but slightly.

Is it because these oil traders bet on

the futures market?

>> Well, actually I you know, I had assumed

that oil, gas, and aviation fuel were

all one ball.

Boy, I was wrong.

Separate gas out. Gasoline is something

the United States can easily produce

that because we we we are we have a lot

of what's called sweet crude, light

crude. That that that is

we we produce it in the United States,

we produce it in excess of what we can

consume, and we send some of that

overseas. The the one that is the

critical that's going to be the real

issue on a supply front is the heavy

crude, the sour what they call sour

crude. What comes out of the Persian

Gulf, what the United States is imported

as well from Canada, from Mexico, and

from Venezuela. But what's coming out of

Venezuela can't make up for what was

lost out of the Persian Gulf.

And that that crude

they call it middle distillates. And and

this middle distillates it it's like you

get a whole barrel of oil, but when they

start processing it, it's only about 30

30% 20 to 30% of it can actually be used

to make diesel and aviation fuel.

The problem these refineries have or

what we confront is they can't do both

at the same time. They they are

different processes to produce diesel as

to produce aviation fuel. So let's go

back to just, you know, 2 days before

the start of the war, you had this much

diesel and you had this much aviation

fuel.

Then, all of a sudden the Strait of

Hormuz is closed. The supply for both of

these dropped 20% and yet what happened

on the aviation side is the demand went

way up cuz we were launching all these

combat operations in the Middle East.

So, you've got a real disparity that has

a split that's developed where we don't

have enough of the supply of diesel,

aviation fuel, the oil that does that to

to meet existing demands. And it gotten

down to the point that's called a a

13-day buffer. Which means essentially

we're we're close

in a week or two, we're going to be on

the verge of anything happens like a

hurricane that takes out a refinery,

we're going to be out of some critical

fuels.