Latest / Worldview Matters With David Fiorazo / Britt Gillette: Why Iran War Will Break The Global Economy

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Britt Gillette: Why Iran War Will Break The Global Economy · Worldview Matters With David Fiorazo

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  Welcome to World View Matters, discussing controversial issues, discerning current events,
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  defending biblical Christianity, no topic, off limits.
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  And now, here's your host, David Firazzo.
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  Brother, Sisters in Christ, thank you so much for tuning in to another episode.
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  I can't believe, you know, we've got a lot of guests, we just did our 500th episode last month.
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  So we've been blessed to talk to a lot of expert speakers and guests.
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  And when I'm going to introduce this next guest, he's been on with us before, but I can't believe
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  it's been so long. I mean, a year. Let's bring him in, Britt Gillette is back with us
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  with another important topic. Brother, good to see you.
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  Thanks for your time today.
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  Oh, it's great to be here. Thanks for having me back.
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  Yeah, and we've got to do this more often.
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  And I need help connecting sooner, but it's been a while.
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  I want to give you a sub-stack to everybody.
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  It's the main place to get a hold of Britt.
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  It is Britt Gillette.substack.com.
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  He's also got ETBEP, and times I will probably see with Britt Gillette on YouTube.
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  You can look him up there. There he is.
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  Nice picture there, Britt.
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  Oh, thank you.
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  Okay, so and on your sub-stacks, just some of the topics you tackle.
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  I was sharing before we got on the podcast here.
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  We don't cover it a lot. And so when I look at these and go on, boy,
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  how the Iran war leads to the mark of the beast, how to prepare for an energy shock.
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  Three reasons. A Middle East energy shock is unavoidable.
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  And you have so many of these on your sub-stacks.
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  So many, you do a lot of prophecy roundtables with other friends of the podcast,
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  brothers that are so knowledgeable in this and other areas.
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  So thank you for all you do, friends.
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  You can find whatever topic you want to keep up to speed on on his sub-stack.
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  But the one we're going to do today is one that came out a little over a month ago.
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  It's called three reasons were in a crisis worse than the COVID lockdowns.
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  We're going to focus on the reasons and what's happening.
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  So my first question, Britt, is the fact, well, I just want to ask you,
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  because you talk about oil and gas production.
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  And we don't really think through these things.
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  And the media doesn't do a service and report, you know, accurately and with the right
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  perspective a lot, it's always they want to put the bat on Donald Trump and Republicans, right?
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  Well, there's more to it if you look at what you're walking through here.
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  So let's go through this this article and talk about just the importance of what's happening
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  over there. The straight-of-home was being shut down and oil tankers not being able to get through.
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  And kind of like the the backlog that that causes.
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  So start and then I'll just ask a follow-up question.
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  Sure. Yeah, what you said is absolutely true.
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  The media does a very poor job of educating the public on this topic.
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  It's a lot more complex than it seems.
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  It's their strengths. There's there's different grades of oil.
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  There's it's very complex topic of very complex supply chain globally, not just locally.
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  And so when we look at what's happening in the straight-of-home moves,
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  it's really one of the most significant events probably probably at the most significant
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  global impacting event since World War II. This is going to be bigger than COVID.
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  The international energy agency chief Fadda Bierro came out just yesterday and called it.
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  He said we're facing the biggest energy security threat in history.
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  He says this is worse than the 1973 Arab oil embargo, the oil shock in 79,
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  and the 2022 Russia Ukraine oil shock all combined.
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  So the straight-of-home moves on a daily basis prior to this war had about 20% of the world's oil
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  production traveling through it. That's even bigger on an export basis. That was about 40%
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  of the world's exported oil and over 20% of the world's liquefied natural gas production.
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  So this is production in the whole world and this has essentially been cut off and we're on day
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  54 at this point. Very little is traveled through about 95% of the traffic over that time has been
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  cut off. So a little bit of that has been able to be rerouted through a pipeline in Saudi Arabia
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  called the East West pipeline and offloaded in the Red Sea and taken out. But for the most part,
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  a lot of this energy production has been just lost. So we have Iraq, Kuwait, United Arab Emirates,
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  Qatar have had to shut down oil production. Saudi Arabia is shut down over two million barrels
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  a day. When you shut down an oil well, it's not like flipping a light switch or pushing a button on
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  your computer. You can just push the button and turn it back on again. It takes time to do that and
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  we don't know what damage has been done to those wells and how quickly they'll come up
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  it they'll produce what they did before. So what's happened is once the straight was effectively closed,
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  they began to continue to put what they could on tankers to all the tankers were full then they put
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  what they can into storage facilities and once those were all full they they had to cap those wells.
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  And so we know that there's a minimum of 11 million barrels per day of oil that's been
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  shut off. That production has been shut off. And in addition to that we have damaged facilities
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  throughout the Middle East. In the case of the Ross Lafon industrial city and Qatar,
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  which is responsible for producing 20% of the world's liquefied natural gas. About 17% of that
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  facility was damaged to the point where they've said it will take three to five years to repair.
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  So that that section is equivalent to almost 3% of the world's annual liquefied natural gas.
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  Taken off line for three to five years. So these are very significant long-term issues.
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  And we hear in the media, oh it's no big deal the stock markets fine, oil prices are down as with
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  they tell us and this is not going to last for long. This is going to be a big deal as people
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  are going to see because once let's say that the war comes to an end today everything goes back
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  to normal. It takes time to reroute the ships logistically to go back into the golf to get
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  resupplied. You may have mines that need to be swept so we don't know what that timeline looks
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  like. But then they would begin to empty those storage facilities. And until those storage
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  facilities are empty they can't begin to bring the production back up online.
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  And the case of Iraq they're saying six to eighteen months before those oil wells can reproduce
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  again. So to get out to maybe 70 or 80% of where we were before the war started is going to take
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  a minimum of about 17 weeks or minimum of about 11 or 12 weeks to bring that online. But we've already
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  been missing over seven weeks of this production which is a massive amount of oil to put it in
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  perspective. We've lost over 600 a minimum of 600 million barrels of oil to the global
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  market supply. To put that in perspective the strategic petroleum reserve in the United States had
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  about 438 million barrels prior to this conflict. So that's all of our strategic reserve
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  and almost 50% more of that. So you say you say that this will have catastrophic consequences
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  for the global economy and financial markets. There's been fluctuation in stock market and in the
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  price of oil. Can you explain that because as you're saying that we're going to see some long-term
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  consequences and results but so why has the the prices already been fluctuating?
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  My belief is my personal belief is that the United States government as well as the Japanese
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  government because Japan imports about 97% of its oil and it buys those that oil and dollars
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  and the yen is at an all-time high relative to the dollar so it makes it extra expensive for them.
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  They have been shorting oil futures in order to drive the price down
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  but this isn't going to last forever and I think they were hoping the conflict would wrap up
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  rather quickly but it is not and I think the key problem what people are most missing is I think
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  intuitively people understand when they hear this well this means higher gasoline prices this means
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  higher diesel prices and both of those things are true but what many people do not understand is
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  this 12% of minimum of 12% of the crude oil produced and 21% of the liquefied natural gas produced
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  has not come to the global market and therefore is not available at any price because it never came
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  to market someone somewhere was using that for either gasoline or diesel or in some cases fertilizer
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  propane butane there's there's all sorts of different things that come out of the Gulf that
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  9% of the world's aluminum production comes out of the Persian Gulf over a third of the world's
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  helium supply comes out of the Persian Gulf and these are essential for things like semi conductor
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  fabrication for think of all the the petro chemicals that go into the plastics about 20% of the
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  world's supplies off market now let's go into all sorts of aspects of the supply chain so we
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  saw what happened with covid when they said well we've got these products on a pallet but we don't
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  have the shrink wrap to put around them and it's messing things up so we're going to see a lot of
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  that where factories don't have the component they need to continue to operate or they can continue
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  to operate but it 70 80% of their previous capacity which means you're going to see shortages to
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  varying degrees it's so complex the economy we can't know what at this point but I would encourage
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  people to if if you're dependent on anything critical for your daily life that contains plastic
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  or anything go go on google and say will the straight-of-war moves impact the supply of whatever
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  that critical thing you need in your daily life is and if that's the case try to get a little bit
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  extra because don't depend on it always being available on a store shelf when you need it
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  because as this works its way through the supply chain and it'll take several months in many cases
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  may all the way up to a year in some cases we're not going to know exactly what this impacts or
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  people aren't going to be realized the impact of this until that time frame but in the meantime this
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  has impacts on jobs because if the factory produces less it needs less workers or if the factory
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  can't produce at all it lays off its workers and then those workers can afford to buy more products
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  in the economy so there's a direct correlation between energy use and economic activity and when
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  you take away this big of a percentage of the world's energy supply you're going to see declining
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  economic activity depression level declines economic activity the only question at this point
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  is how severe and long lasting will this be and this is this is this is all good because we need
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  to think about this and consider this and and not freak out and worry because we don't need to worry
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  we have a god who is sovereign who sees this coming knew this was coming but we need to do what we
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  can to prepare and I like one thing you said in your article Brit first I know most people don't
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  understand that all that that has happened in the Middle East will lead to directly affecting
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  their lives you say the war and this is in from your article the war isn't simply resulting in
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  higher energy prices it's resulting in less energy and then you say nothing moves without energy
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  so we're trying to connect the dots here can you help us walk through that point a little bit
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  more in depth so to put it put things in perspective a third of the world's fertilizer because a lot
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  of this liquefied natural gas other products from the golf go into creating synthetic fertilizers a
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  third of the world's fertilizer is exported from the Persian golf that's been cut off
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  because that there's less supply of that we've seen China restricted its exports and Russia
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  restricted its exports they're the number one and number two exporters of fertilizer in the world
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  why would they do that they're protecting their domestic supply for their own people because if you
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  apply less fertilizer to your crops you get fewer of them and so what and and this isn't something
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  that you can make up for lost time yeah you have to apply the fertilizer at the correct time
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  in the production cycle otherwise you don't get the yield you want and so if this is a temporary
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  issue with the straight-of-war moves this probably just leads to some moderately higher food prices
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  if even that over time but at this persist then you're going to have lower crop yields
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  and we're going to eat into food inventories that we have and it's going to lead to
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  severe problems throughout the world skyrocketing food prices and in extreme cases famine
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  so this is some of the second third-water effects of this that people haven't really thought about
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  and the same is true of pretty much every product if you if you take the time to look around your
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  home and every product you use in everyday life almost all of it begins with fossil fuels
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  anything with plastic in it is touch that fossil fuel supply chain and here in the I live in the
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  United States here I've heard a lot of people say well this won't affect us because we're energy
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  independent but that's simply not true we produce energy and abundance of energy for instance we have
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  probably the most abundant natural gas supplies anywhere in the world the problem is we have
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  different types of energy and so pointed out before it's a very complex supply chain we have
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  lots of propane and butane and natural gas we don't have the ability right now to turn all of
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  that into liquefied natural gas and ship it everybody that needs it and while we've been told
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  were a net exporter of petroleum we are a net importer of crude oil and many people do not
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  realize that so this is going to impact the United States especially California which has
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  different standards think about 80% of the diesel and gasoline in California is brought it is
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  imported from foreign nations based on the laws that they've put in place there and so this
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  is going to lead to higher prices and it's going to lead to shortages not as bad in the United
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  States as some places like say Bangladesh and the Philippines and Pakistan but everybody on the
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  face of the earth is going to be impacted by this because everything in our economy begins
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  with fossil fuels and so from the food we eat to the plastics that are in the products we have to
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  the jet fuel that powers our planes all of this and a huge portion of this has just simply been
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  taken away so again it's not a matter of yes there are higher prices on what's left but what never
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  got to market cannot be used and that means the global economy has to shrink it's this is basic math
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  there's there's no no other way to get around this why the market has not realized this yet
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  I do not know other than we we know the Treasury Secretary Scott percent said in the first few
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  days of the war he floated the idea of shorting oil futures in order to bring the price down and we
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  saw on March 8th Sunday night that Sunday night the oil futures went up to $120 a barrel the next
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  morning they were down at 90 and President Trump came gave a press conference and he said gas
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  prices are going down we've done that and I think what he meant was what Secretary Bescent had
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  mentioned had been done because there's no other explanation for why this wouldn't happen I mean
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  we saw oil prices go much higher during Russia Ukraine when there was the idea the the theory that
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  two to three million barrels per oil per day might be taken off the market it ended up being about
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  two to three hundred thousand in reality now we know for sure at least eleven million barrels
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  and one thing that I have not mentioned is quietly in the backdrop of all of this
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  Ukraine has been carrying out attacks against Russia through the whole month of March and continuing
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  into April against Russian oil facilities and specifically Russian oil export facilities
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  so much so much so that 40% of Russia's oil exports have been taken offline behind Saudi Arabia
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  they're the number two exporter of oil in the world so we're looking at another two million barrels
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  of oil per day on top of that yeah then we also have the current blockade the naval blockade
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  against Iran by the United States to keep them from sending oil to China and other nations to try
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  to put economic pressure on the Iranian regime the reason that wasn't done from day one of the wars
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  that makes the problem worse now we're taking another two million barrels of oil per day off of the
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  market and if that blockade persists then Iran will also have to shut down its oil production
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  capits wells which means once this conflict comes to an end it will take that much longer to bring
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  that supply back to market so this is a real crisis it's not an exaggeration when the IEA chief says
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  this is the greatest energy security threat in history it really is the biggest
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  most impactful global event since World War II when you think about all the people that are
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  going to be impacted by this there really isn't anything else on that scale that we've seen
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  other than the pandemic and this is going to be worse than that because that was in many cases
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  voluntary partial shutdowns versus here the oil was not there and therefore it cannot be used
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  right okay so we talked about helium we talked about fertilizer but right in between there one
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  thing that caught my eye in your article very thorough article that walks us through these steps
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  our article from the Guardian and the headline West Point Analysis warns that straight of
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  Hormuz blockade will strangle US defense industry why is that Brit and why is this under
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  sulfuric acid right so one of the big byproducts of oil and gas production is sulfur and about 90%
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  of the world supply of sulfur comes from the petroleum industry and oil and gas production
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  and then from that we create sulfuric acid which is critical to the mining process for a number
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  of metals whether it's copper or nickel or silver whatever it may be and all of these
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  different elements are found within defense products so if they are unable to mine these metals
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  then what's available is going to become higher in price it's going to become harder to find
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  we'll have shortages of those as well so this really just it does trickle down into every single
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  aspect of the economy so a good whack at the envelope projection is if you if you take away 10%
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  of the world's energy it's about 10% less economic activity it's about 10% less stuff created as a
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  result of it and this is going to be unevenly distributed through the global supply chain so
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  that's why I say it's so complex we can't know really where the biggest problems with all of this
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  are going to be until this process plays out yeah there will be big problems as a result of it
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  I mean you mentioned a lot of the obvious possibilities that are that make a lot of sense you
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  mentioned metals like copper, nickel, cobalt and lithium but what was that reading in your article
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  copper is used in electrical wiring plumbing electronics industrial machinery solar panels
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  wind turbines batteries motors braking system metal equipment and a lot more and so we just don't
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  think about how this can have this domino effect but so Brett we've got four minutes left I knew
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  this would go by fast as they always do what else can you share I know you tell people not to panic
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  but to prepare and we need to keep our faith in God but what other point maybe from the article do
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  you want to just just share that we didn't get to or obviously some encouragement just help us
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  understand this a bit more yeah well as as you just mentioned we we if you don't have certain
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  prop components you can't make certain products so we saw examples of this during COVID if you
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  remember there were pictures of fields of I think it was Ford F-150s all they were missing was a
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  single semiconductor micro chip oh my goodness it was out of supply and so you had the
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  whole rest of the truck bill but it was missing this one component and so we're looking at
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  that times a whole bunch because it's going to be it's going to be a whole lot of different things
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  missing in the supply chain so again I would encourage people not there's no need to panic
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  but simply think about what your personal vulnerabilities are you know if you are dependent on
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  you know some critical component for for your health for your everyday life it'll get a little
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  bit extra if you've got you know prescriptions go to your doctor and say is there a way that I
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  can fill this for 90 days instead of 30 days just a little extra to give yourself cushion
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  in case you find that it's not available when you want it because as we saw during COVID the
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  just in time delivery supply chain broke down under those conditions so don't panic but
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  prudently prepare as the Bible teaches some Proverbs and I would encourage everybody you know
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  there's no need to be filled with it be brought down by any of the snooze the things we see going
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  in the world there's a lot of bad things going on there's a lot of bad things coming but Jesus
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  told us I tell you all these things so that you may have peace in me there will be in this world you
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  will have many trials and sorrows but take heart I have overcome the world and if you're faith if
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  you're trust is in Jesus he is the rock that we can stand on confidently when the storms of this
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  world come along they'll sweep away everyone else that's standing on the shifting sands and
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  unfortunately we're going to see that happen to our friends our neighbors our loved ones who have
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  maybe put their faith in their career or their retirement account and this these are going to be
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  hard times for them but if they look to you if you're an ambassador for Jesus Christ and they see
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  that you have a piece that surpasses all understanding while all of this is happening
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  it may open the door to a conversation where they say how is it dear so calm in the midst of
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  this I want that so guys we should be filled with joy as Christians knowing all this points to
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  the return of Jesus but we should be filled with a sense of urgency to share the good news with
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  as many people as possible go go go what I just heard you say gospel opportunities all around us
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  because people are going to look at us why aren't you panicking our faith Jesus is Lord God is
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  sovereign and I thank you for quoting John 1633 one more I can share is Romans 8 18 for I consider
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  that the sufferings of this present time are not worth to be compared with the glory that is to
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  be revealed to us so friends we've got so much to look forward to but we've got to get through the
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  now and there are a lot of people who need to hear about this good news about our Savior Jesus
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  and that's we have placed our faith and trust in and we're just so thankful that this life is not
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  all there is but a lot of people are panicking because to them they don't have a future hope so
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  Brit thank you so much Brit Gillette dot sub stack dot com we've got to do this again soon or brother
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  all right let's let's do it absolutely anytime all right thanks for your time brother god bless
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  your friends thank you so much for sharing this is another good one to share we don't talk about
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  this topic enough but again it's to prepare and get that perspective not to cause any panic of course
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  trusting God thank you so much again God bless you and as always keep speaking the truth about things
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  that matter