Saudi east-west pipeline hit by Iraqi militias. Oil and refined products soar.

00:27 · Oil back over $100 — the east-west pipeline is out

• WTI and Brent back above $100 as "another front" opens: the Houthis on a "blitzkrieg ground operation" and Iraqi militias hitting the Saudi east-west pipeline and pumping stations — the bypass Saudi Arabia used to reach its Red Sea export terminal with Hormuz closed.
• "Will it get fixed? Yes. What stops it from being attacked again?" Asymmetric, "fifth, sixth generation warfare" — "these people are so far ahead of the Pentagon… it's a joke at this point."

02:44 · Mercenaries melt away; Trump declines to bomb before the midterms

• Saudi ground forces lean on Sudanese mercenaries paid "$500 a month" — "they just melted away."
• MBS asked Trump to resume bombing the Houthis; Trump declined because he "doesn't want this war in the headlines right before the midterms." The Iran war was "ill-conceived… the biggest own goal in history," with Trump at 33% popularity and affordability the top voter issue.

05:48 · Cheap drones versus a $1.5 trillion military

• "You're spending $1.5 trillion on this outdated fancy military… and you can knock out major economic installations with cheap drones."
• An unverified report that Anthropic or another AI firm complained its model was used for targeting — "garage band warfare": leveraging small cost asymmetrically against a higher-tier opponent's material advantage.

07:06 · The Houthis take Mocha and the Bab el-Mandeb islands

• The strait is 12 miles wide and carries 6.2 mb/d of oil and products plus 80% of the LNG shipped north to Europe; 2024's attacks cut Suez revenue 60%+ ($7bn to Egypt) even with US destroyers bombing.
• Houthi forces took Perim and Zuqar islands — a commander says anti-tank missiles and drones from the islands are enough to stop traffic. Saudi Arabia rerouted 70%+ of crude exports through Yanbu; that route is now threatened.
• For now only Saudi traffic is targeted — "but what stops them at some point from just stopping all traffic?"

12:10 · The advance on Marib — and a non-zero chance the kingdom falls

• The Houthis are moving on the Marib Governorate, one of Yemen's largest oil-producing areas, and defenders are "already pulling out."
• "I'm not saying it's going to fall but the percentage chance is not zero that they're in major trouble." Retaking the islands would need ground troops and a supply line within missile range.
• He reads the pipeline attack as Iran-coordinated: the goal "is to cause enough economic pain to destroy the Trump administration… in less than 60 days" — and a restored pipeline can simply be hit again.

14:09 · $6 diesel and Currie's $5 gasoline

• A late-Friday report of a defense authorization move over the refining shortfall; diesel "$6" in South Texas, "seven or $8" in California per viewers.
• Jeff Currie expects $5 gasoline by the midterms. Polomny expects Republican voters to stay home and a Democratic sweep followed by impeachments and gridlock.

16:40 · Refining capacity online at a modern low

• Normal global nameplate capacity online runs 94–96%; it collapsed after March when the Hormuz war locked in and damaged Middle East refineries — built as a value-add "especially when the West is shutting down refineries."
• Ukraine's strikes on Russian refineries add to it: "you can make the case… that they should do that. Okay, fine. But it has consequences." The Houthis have now hit Saudi Arabia's Jazan refinery too.
• Product demand is rising (air traffic, freight), and "you only need to take off four or 5% because… all these commodities… are priced at the margin."

20:34 · Scarcity plus debasement — wars of choice spiraling

• Currie's line "scarcity plus debasement equals higher prices" is "what our whole basis of Actionable Intelligence has been for the last couple few years."
• The wars were "of choice, not necessity"; Trump can't back out without being "the guy that lost the war to Iran." The US "is your buddy until it's not."
• Saudi Arabia has approached the World Bank for a loan; the "city in the desert" and the sports ambitions "all shelved. Now we're talking about survival."

24:38 · Energy → inflation → 10-year yields rising everywhere

• 10-year government yields in the UK, US, Japan and Germany have risen since 2020; past some level "it starts breaking the economy" because loans key off the 10-year — the US housing slump is the example.
• US interest expense now exceeds the defense budget "and going parabolic." Nicknames are a top signal: Greenspan "the maestro," Fauci "the science," Bessent "the house" — "the person is exposed as the buffoon that they are."

28:13 · Norges Bank cuts government bonds from 70% to 50%

• Norway's central bank recommends the wealth fund cut its government sub-index from 70% to 50%, saying a lower share "does not necessarily materially weaken the ability to reduce fluctuations."
• Not enough to crash bonds alone, "but it's the direction… the change of tone towards government bonds" — the 60/40 hedge is "out the window" as sovereigns reach "the end of this 100-year credit cycle."

31:53 · Deficits at WWII levels — the yield-curve-control playbook

• Deficits "going on 7%" of GDP, the same as during World War II; a free St. Louis Fed paper (linked in the September issue) shows how post-war debt/GDP was brought down "through yield curve control."
• Per Russell Napier, pensions (~25% in bonds) and insurers will be forced to hold them, and 401k administrators may be legislated to push them — "wrap a flag around it."
• Pension funds "should replace at least half those bonds with gold," but bureaucrats follow consensus to keep their jobs.

35:41 · "Diesel plus dirt" — Kroger and PepsiCo confirm pass-through

• Currie: "diesel plus dirt equals mining and agriculture." Kroger's CEO on the Q2 call: with gas and diesel prices rising, "you see it start to flow through."
• "Your grocery store is out of food in 3 days if the trucks don't come"; the freight cost "is going to be recovered by the grocer via higher prices." PepsiCo flags higher input inflation in 2H26.
• No famine in rich countries — they outbid poorer ones, as Europe spent half a trillion euros outbidding for LNG after Nord Stream.

38:30 · European gas on the march — and the AfD in Saxony

• EU gas storage may not fill before winter; one Nord Stream line could restart and won't. Europe pays "8 to 10 times, 12 times" more than for Russian pipeline gas.
• The AfD's ~44% in Saxony is interesting but not yet change: the firewall holds, Meloni was "absorbed back into the globalist thing," Le Pen dropped leaving the EU in 2017, and he doubts Alice Weidel ("former Goldman Sachs employee") will "lead the change." Putin at the SCO: "why do we want Western Europe?"

44:34 · McClellan: gold leads oil by ~20 months

• Tom McClellan's pattern: a big gold rise is followed ~20 months later by oil rising — it gives direction, not magnitude, and "the magnitudes can get warped by events gold did not know about" like the Iran war.
• Read-through: oil "moving extremely higher regardless of the Iran situation into like September 2027."

46:51 · Where his money is — and when to take profits

• "We're going to be looking forward to higher oil prices… that's kind of where I'm putting a lot of my money now and have been." Underinvestment plus the war "may just accelerate our timeline as far as how we're going to make a bundle in oil again."
• The exit rule: "we'll have to sell at some point because all of these big moves… caused by these political situations and wars, when they peak they go back down… don't be afraid to take profits." High energy prices triggered 2008 ($148 oil) and will cause a recession again.

48:42 · China keeps shedding Treasuries

• The PBoC's share of US Treasuries outstanding keeps falling — "what do you expect your declared rival or enemy to do? Buy your bonds?" China buys gold, hard assets and SPR barrels instead.

49:09 · Chile's copper power crisis — ore grades vs electricity

• Chile's mines use more electricity per ton as grades fall; over 20 years grade and power intensity show a Pearson correlation of −0.91. "Dirt plus diesel," and electrification makes it electricity too — with long lags to build generation.

51:03 · Global drilling still depressed — "very early in this mining cycle"

• Tavi Costa's chart: mineral drilling depressed despite high prices — "the I don't believe these prices stage." Copper and zinc at new highs; extractive businesses must drill or shrink.
• An (unnamed) AIA portfolio company that provides drilling services "has seen an upturn in their business… we haven't had a big move in the stock but it is positive for us," and management forecasts more.

52:51 · "The most European project of all time"

• A billion-dollar carbon-capture plant that costs ~$100M a year to run, earns nothing and pumps CO₂ to Norway's seabed — while Europe is short of energy and India and China burn record coal.
• The UK leaves North Sea oil and gas undeveloped under Ed Miliband. His warning (explicitly not a forecast or a hope): Sri Lanka-style upheaval is where impoverishment leads if voting can't change it.