Tucker Carlson interviews energy expert Morgan Downey on global energy markets, the Iran war, and food supply risks
Tucker Carlson speaks with Morgan Downey, author of Oil 101, about the realities of global energy production, the economic consequences of the war with Iran, and the coming impact on global food supply.
Summary
Tucker Carlson interviews Morgan Downey, an energy markets expert and author of Oil 101, in an extended conversation covering the fundamentals of global energy, the geopolitics of oil and natural gas, and the cascading consequences of the ongoing conflict involving Iran and the Persian Gulf.
Downey's central argument is that 90% of the world's energy still comes from oil, coal, and natural gas — the same proportion as 50 years ago — and that most people in Western countries are profoundly disconnected from this reality. He argues that Western sanctions on Russia, Iran, and Venezuela have not reduced those countries' oil output but have instead redirected their exports to China at a discount. Downey also details how disruptions to Qatar's LNG facility and broader Persian Gulf instability are driving up fertilizer costs in ways that will cause food shortages in poorer countries within the next one to two years.
The conversation covers Europe's self-inflicted energy crisis — caused by banning fracking, shutting down nuclear plants, and blocking pipelines — which has made Europe an energy-dependent vassal of the United States. Downey attributes the destruction of the Nord Stream pipeline to the US government, noting it doubled American LNG exports to Europe. He also discusses how the US became the world's dominant energy producer through fracking and horizontal drilling, and how unlocking natural gas production in the US Northeast would be the single most effective step toward genuine energy independence.
Downey explains the Haber-Bosch process and how approximately 80% of the world's food depends on nitrogen fertilizers derived from natural gas, meaning disruptions to Qatar's LNG production will translate into reduced crop yields and higher food prices — particularly in poorer countries — due to the lag in agricultural cycles. He warns this will drive mass migration as food prices reach critical thresholds in the developing world.
Key Takeaways
FULL TRANSCRIPT
The 90% reality: why the world still runs on hydrocarbons
Tucker Carlson: Morgan Downey, thank you very much for doing this. We have searched far and wide for people who understand energy markets and the energy business, and you came highly recommended. So I'm grateful. Where would you say we are globally with energy right now? Just give us the overview if you would.
Morgan Downey: To put a big perspective on things — because people have been living in a delusional world about energy over the past 20 to 25 years — the world gets 90% of its energy from hydrocarbons: oil, natural gas, and coal. It's 90%.
Tucker Carlson: Still?
Morgan Downey: Still. China, Europe, the US. The last 10% is nuclear and a little bit of solar and wind. And everyone talks about electrification of the world, putting solar panels up on your roof — that's the energy transition as it's being marketed. That is a marketing pitch. There has been additional solar and wind energy generation capacity put in place over the last 25 years, but that's been additional to that core underpinning 90% of hydrocarbons. 90% of energy in the world comes from oil, coal, and gas.
Tucker Carlson: 50 years ago and today in 2026?
Morgan Downey: Same percentage. Roughly, yes.
Tucker Carlson: And the other 10% is nuclear and then what we refer to as renewables?
Morgan Downey: Solar and wind. Yep.
Tucker Carlson: Wow. So solar and wind are not even 10%. What percentage?
Morgan Downey: Five or 6% globally. And you go back 10 years ago, it was around 5 or 6%. And so —
Tucker Carlson: Wait a second. We spent trillions of dollars on this and received endless lectures about it and we're still only at 5%?
Morgan Downey: Yeah. And in 20 years' time, it'll still be 5 or 6%.
Tucker Carlson: So the whole thing was a lie then, is what you're saying.
Morgan Downey: There's a reality to it. Additional capacity has been added, but global demand for energy is growing with global population. And the only energy source that's been able to keep up with that demand globally has been hydrocarbons. The three hydrocarbons are oil — a third of the world's energy — coal — a third of the world's energy, roughly — and natural gas — a third of the world's energy.
That realization is something people have lost touch with. People say, "Oh, are we living in a simulation?" People have no connection with base reality. And the base reality is that we're still living in a hydrocarbon world. We have been living in a hydrocarbon world. It's enabled amazing civilization developments over the last 150 years. But people are disconnected from that reality. If you ask anyone how China gets its electricity, people will say, "Oh, isn't it solar? They have the best solar industry and they have wind turbines." No. 60% of China's energy comes from coal. 80% of India's energy comes from coal.
Tucker Carlson: 80% of India?
Morgan Downey: Yeah. And they're growing rapidly and it's all coal. And so this holier-than-thou attitude — I can understand it. No one wants to pollute. Even people who work in the oil and gas and coal industry want to be environmentally conscious. But we also live in a world where you need energy to operate everything. And not just energy — you need plastics that go into everything, petrochemicals that enable modern civilization.
The oil industry started here in Pennsylvania in 1859. We're 150 years into the mass-scale hydrocarbon world. And this world that we live in is enabled by and paid for by hydrocarbons — 90%. You get people, especially in Europe — and this kind of annoys me, I'm from Ireland — complaining about why energy is so expensive, and even senior policy and political leaders have no base-level understanding of where it comes from. They think the answer is just putting up more solar panels. That's fine as an additive thing to have. But 90% of the world's energy comes from oil, natural gas, and coal. It did 50 years ago, it does today, and it will 50 years from today.
Tucker Carlson: So when you say we are living in a kind of simulation, the simulation you're describing is one in which people don't know that.
Morgan Downey: Correct. People have disconnected from where their energy comes from — the energy that enables everything — and where their food comes from. Everyone talks about the fertilizer crisis because of the Hormuz shutdown this year. 80% of the world's food that's grown everywhere across the entire world comes from natural gas. Natural gas — remember it's roughly a third of the world's energy — makes urea and ammonia and all of the fertilizers. If those fertilizers didn't exist, with a world population of 8 billion, we could only support maybe two billion.
Tucker Carlson: Wait, what?
Morgan Downey: Yeah. If you turn off natural gas production — which is very closely similar to the oil industry, it's one third of the world's energy — that produces nitrogen in the form of urea and ammonia. It is the essential fertilizer for growing crops globally, all crops. With the Hormuz situation this year, because natural gas production comes out of Qatar, you had a disruption in fertilizer production. That's going to result in consequences in 2027. Usually there's a lag because of crop cycles and seasons. That lag is going to be one of the more delayed effects of the Middle Eastern situation with Iran this year.
So it's not only energy, it's also food. The simulation that most people in the world are living in — especially in Western civilization — is that they have forgotten, or are just not aware, that hydrocarbons are nine out of ten portions of the energy they consume, and that most of the food they eat is also dependent on natural gas. It doesn't matter what kind of food. You might say, "Oh, I eat vegetables." Well, fertilizer goes into that as well. Fertilizer is used in every crop.
How natural gas feeds the world: the Haber-Bosch discovery
Morgan Downey: Why is natural gas used as a fertilizer? It was a discovery in Europe around 1910 — the Haber-Bosch process. Back in the 1800s, if you wanted to put nitrogen into a crop — nitrogen being one of the essential nutrients for growing pretty much any crop — you had to rotate crops. It was a very slow process. You had to plant nitrogen-fixing plants every few crop cycles to pull nitrogen from the air into the soil.
Tucker Carlson: Otherwise you would exhaust the soil.
Morgan Downey: You would exhaust the soil within a season or two and your yields would drop. Around 1910, it was discovered how to use natural gas — a hydrocarbon, meaning these molecules contain hydrogen and carbon from organisms millions of years ago, buried underground, turned by pressure and heat over millions of years into crude oil, natural gas, or coal — and you take the nitrogen from the air, use the hydrogen from the natural gas, and you can make fertilizer. You can put the nitrogen into the ground in powder form, and it increased crop yields by five or six hundred percent over time.
Five or six hundred percent. So everyone asks why did the population grow? Because of cheap energy and cheap food, because of natural gas. Those two reasons. That's how we live in this world today. It disturbs me when people are disconnected from that base reality. Base reality is that 90% of the world's energy today, 50 years from now, and 50 years in the past, and a similar proportion of food, comes from that hydrocarbon ecosystem.
New York's energy blindness and the political capture of environmentalism
Tucker Carlson: You're saying if we were to shut down natural gas production globally, 6 billion people would starve to death?
Morgan Downey: Pretty much. Yeah. And I was in New York yesterday. New York has banned drilling for that gas. New York State sits on top of a natural gas field that runs right through West Virginia, Pennsylvania — the Marcellus and Utica, those are the names of the hydrocarbon basins. New York City has, if you go to Manhattan, you'll see these big power stations on the east side of Manhattan — those run on natural gas. There's a big one in Queens and a few others. All of the electricity for New York City comes from that gas. New York State has banned natural gas drilling. They sit on top of a huge amount of natural gas. They've banned it. They've also banned new pipelines to deliver natural gas.
So they're cutting off their nose to spite themselves — denying the fact that all of the electricity in New York City comes from that gas, while banning the sourcing of that fuel and the piping of that fuel to the source of what turns on the lights. That is absurd. It's a distortion of what environmentalism is. Environmentalism should mean you have a sustainable environment where you don't create negative consequences and pollution. But you also have to be aware that you need energy to live in modern civilization, and you need natural gas for food.
The environmental movement kind of started in the US back in the 1960s —
Tucker Carlson: Can I just stop you right there? Just to be clear, our environment is disgusting. This country is much dirtier. Europe is much, much dirtier than it was 30 years ago. I visit a lot, I know. There's no actual concern for the environment — for trees and cleanliness and keeping graffiti off your buildings and cleaning up your streets. It is dirtier. The US is way dirtier. We've had unconstrained development. None of this helps the environment. I just want to be clear about terms — no matter what they tell you.
Morgan Downey: Yep. The modern environmental movement started in the 1960s in California. California had a real smog problem, and legitimately had an environmental issue. This is before the EPA existed as a concept or as an organization. California created the CARB — the California Air Resources Board — and they clamped down on the amount of sulfur and other pollutants that were really in oil back then. They also removed lead from gasoline. Lead had been added to gasoline from the 1920s. It's a neurotoxin, obviously, but it improves the octane of gasoline.
California was leading for legitimate environmental reasons. This was all a very good reason to start an environmental movement, and it did really clean up the air in California. They got ultra-low sulfur diesel, everyone had to put in catalytic converters. Lead in gasoline did reduce IQ levels back when it was in use from the 1920s to the 1960s or '80s. And the lead wasn't removed because of that reason — that's the dirty little secret of the business. It was removed because lead damages the catalysts in the catalytic converter. Anyway, California did clean up its air in the 1960s and was the leading edge of that movement. Then the EPA was established and there became a federal environmental movement.
But what happened was that movement was then captured by political agendas and social agendas and ideologies that were independent of environmental reasons. It became more about controlling how people think and behave. Environmentalism is a good thing and had a good origin story and a good impact in the 1960s and '70s, starting with California. But over the past 50 years it's been captured by political movements that want to have a controlling effect on society.
You can see it morph over time. In the 2000s you had a big movement against fracking. Remember that Matt Damon movie where someone turned on the faucet and flames came out because of natural gas? That doesn't happen. That was propaganda and myth. But that was when the fracking industry started — a portion of the US oil and gas industry — and it was a novel new technology. Fracking and horizontal drilling is the core reason the US has become energy independent over the last 20 years. But anyway, there was the anti-fracking lobby. Now it's the anti-data center lobby. There's a Stop Oil group. I look at that group and I think that's a social death cult, because if you stop oil, we all die. If we stop natural gas, we all die. And not just us in the west — everyone. India and China, that's where we get all our food from, from fertilizer.
All of these different movements have been about an element of control, because there's a feel-good aspect to it. Who is anti-environmental? No one. Even people who work in the oil and gas industry love the environment. They're just normal people. But the environmental movement has been captured by the carbon capture, net zero growth agenda in Europe and the UK. All these countries have destroyed their economies under the guise of taking care of the environment, ignoring base reality of energy production. And ultimately it's been about control — people who want to control how you live, how much energy you buy, what your carbon credits are, your welfare check from the government to make you dependent on the government, because then they can control you.
Even in New York, I was talking to a friend there yesterday in Manhattan and they get a $100 check from the government because their electricity bill was too high. And I thought, hang on. The government is giving you a $100 check while banning the pipelines that bring the fuel to New York, and banning the natural gas production that is the fuel burned in those power stations. Natural gas is a very clean fuel. By making people dependent on the government, by trying to shut down energy production, it makes people even more dependent on the government.
Europe has been far more ideologically captured. The reason for that is the centralization of power in Brussels and the EU. People don't know who they're voting for in Europe anymore. They're voting for the blob. If you ask your average person in Ireland, England, France, or Spain who their MEP is — their member of the European Parliament — they have no idea. They might know their local national parliament member. But the blob in Brussels can get away with a lot of these control agendas, especially around how people consume and use energy. And the net result is they pay ten times more for energy in Europe than they do in the US.
The economic consequences of expensive energy
Tucker Carlson: What effect does that have when a society begins to pay ten times more than it used to for energy?
Morgan Downey: You can't have economic growth. Everyone looks at Europe and says why is there no economic growth in Europe? Because they've killed their energy and industry.
Tucker Carlson: And that means people don't have families, they don't have houses —
Morgan Downey: Everything becomes expensive. Oil, gas, coal — it makes everything more expensive. People don't necessarily see where their energy is produced. That's kind of the reason it's so dangerous for people to be energy blind. People don't see where their food comes from or where their energy is produced. So they just think, oh, things are more expensive. Building a house is more expensive. Buying a car is more expensive. Everything becomes part of the background noise of life — that everything is a little bit more expensive. And the real reason is that energy in Europe has been deliberately made more expensive than it needs to be.
Part of it is control. Another part is that social agendas have pushed energy blindness, because people don't want you to know that 90% of your energy comes from oil, gas, and coal. They want you to think it's solar and wind, because you can kind of see those things spinning. It makes people feel like something's been done, but nothing's being done.
Where Europe's energy came from — and what happened to it
Tucker Carlson: Explain what you can't see. Ten years ago, Western Europe — the countries Americans vacation in — got its energy from where?
Morgan Downey: A third came from oil. And that oil came from a global market — it always has been. It comes from Russia, the Middle East, West Africa. Oil comes from a little bit everywhere. That's a third of European energy ten years ago, five years ago, even today. Then they've got natural gas. Europe used to buy a lot of its natural gas from Russia. They famously built the Nord Stream pipeline across the Baltic — two big pipelines. One never became active, Nord Stream 2. One was destroyed in unusual circumstances, I'll put it that way. Five months into the Russia-Ukraine war.
Tucker Carlson: And the US government took it out.
Morgan Downey: It made Europe dependent on the US exporting natural gas. There's a theory — one potential explanation — that it was a very difficult operation for someone to knock out an undersea pipeline. Did Ukraine really do that five months after the war started? I don't know if they have the skills to do something like that. So I would say it was the US, just for argument's sake.
Tucker Carlson: Just for the record, we were told at Fox News — and the whole world was told — that Russia took out its own pipeline, because Russia is so evil that having run out of people to hurt, they decided to hurt themselves. That was on the front page of the New York Times. I was encouraged to repeat that lie. I didn't. But —
Morgan Downey: Yeah. Wow. I mean, that just shows you how stupid they think people are.
Tucker Carlson: How stupid they think people are.
Morgan Downey: I don't know if it's stupidity. I think it's more about narrative setting. If you set a kind of dystopian view of information where everything is absurd, it makes people think, well, why do I believe anything? It's almost like they know you're going to laugh at the idea that Putin would destroy his own pipeline. But then it kind of makes people who read that think, well, why do I believe anything? It sets people into a mush of being more malleable.
Tucker Carlson: Right. They're turning the population into nihilists, because nihilists are easy to control.
Morgan Downey: Yeah. But say it was the US government — just let's put it out there. It did make Europe much more dependent on the US. And it goes back to Trump, who operates in a very transactional way — like a business. He's not ideological. He's also very personal. He takes things personally. He became president inspired by Seth Meyers mocking him back in 2011 at the Correspondents' Dinner. When he won the first time, Angela Merkel and all the European leaders openly laughed at him. They mocked him. There was a famous NATO meeting where they were laughing at him while he was warning them: do not be dependent on Russia for that gas, and at the same time do not threaten Russia with weapons on Russia's border via NATO. They mocked him openly. So I think Europe — was it the US that knocked out Nord Stream? I mean, the US benefited hugely from that situation. It was also a little bit of revenge on those European leaders who mocked him when he warned them about being overly dependent on Russia.
Tucker Carlson: So how much more LNG does Europe buy from the US than it bought ten years ago?
Morgan Downey: It's a huge amount more. It's at least doubled.
Tucker Carlson: Really?
Morgan Downey: Yes. Yeah. And it's growing every day. Europe is becoming a hugely energy-dependent vassal of the US. The US made a decision — or rather, it happened — starting around 2005, that the US oil and gas industry was transformed by two things. You had fracking, which basically pumps water at high pressure underground and fractures the rock — it became a new production method at scale around 2005. And then you had horizontal drilling, where you can drill down and then turn the drill bit and steer it sideways for three or four miles, producing a huge amount more oil and gas than before. US oil and gas production had been declining since the early 1970s to 2005. With fracking and horizontal drilling, it transformed the industry, and the US now produces roughly a quarter of the world's oil and a quarter of the world's natural gas. That's up from under 10%. It doubled over the past 15 years.
And it didn't happen because of government policy. This was the oil and gas industry realizing this new technology transformed the space. Fracking was banned in France, for example. It was a new technology 20 years ago in 2005. It transformed the US oil and gas industry. Now it's the default method of production — you frack and you drill sideways. That's the standard. And it's transformed the US into a global superpower in energy terms, which has also changed the US's view on foreign adventures and going up against foreign oil producers, because the US had been in decline since the early 1970s as an oil producer and now we're net exporting oil and making Europe dependent on natural gas.
Why the US has a booming energy industry and Europe doesn't
Tucker Carlson: There has been a lot of ideological capture. The environmental movement kind of started in the US back in the '60s. But let's just take the UK for example. The UK had a pretty robust oil and gas industry based in the North Sea. They're not extracting from the North Sea. Is that because there's no energy left there?
Morgan Downey: No, there is oil there. Look at Norway — Norway is still producing.
Tucker Carlson: Also from the North Sea.
Morgan Downey: Also from the North Sea. It's roughly the same oil and gas fields. What happened in the UK was that when you drill oil fields, they do decline — they're a non-renewable resource. So you've got to constantly go out and explore and drill, and you take some risk because you can drill a dry hole. There's a lot of capital to be risked. But in order to encourage people to risk that capital — say oil is roughly $100 a barrel and to produce that oil costs $60 to $70 a barrel in the US — you need some sort of profit incentive. There are periods of time where you can lose money for years as an oil producer.
The UK in the 1980s, 1990s, and up to today removed all that incentive. They're a country where you drill a hole in the ground — even offshore — and as long as you're in the UK, that money goes to the Crown, to the British government. There's no incentive. No one's going to risk money in that environment. They call them windfall taxes and whatnot. No one's going to risk money to build a rig offshore, helicopter everyone out there every few weeks, and maybe drill a dry hole.
The Norwegians understand how it works and they've created more profit incentive for the oil and gas industry to take that risk. But the US has proven — like Ireland proved the Laffer curve, that low taxes create an economic boom — the US proves that if you stand out of the way and give private individuals the rights to the profits if they risk capital, look what happens. The US becomes the largest energy producer in the world for oil and natural gas. Just by stepping back and letting these guys do what they're going to do. They are regulated, there are environmental controls, but the UK removed the profit incentive and oil and gas production just dwindled to almost nothing.
The Brent crude — you know, the price people quote on television, $110 a barrel — that field stopped producing a long time ago, 20 years ago. They changed the underlying way that pricing works such that US crude now crosses the Atlantic and sets the price for Brent. So Brent crude is actually now set by West Texas Intermediate, set by the US crude oil market. Even with Brent crude as a price benchmark, which historically it has been, it's now set by the US. The US barrels that move across the Atlantic, just like US natural gas moves across the Atlantic — we set the price of oil in Europe and by extension the world. And because the US government stepped back and gave people the authority to take the profit risk on production, it worked.
Parts of the US — Washington State, New York State, New England, Maine — banned natural gas production just like Europe did. California and New England have the same energy blindness as the EU at large. All the electricity for the Northeast is oil, natural gas, or coal. I was driving here this morning and I passed four propane tankers on the road. The regulations in parts of the US have crushed the energy industry in the same way as in Europe. And as I said, it goes back to a combination of ideology and — I don't want to say ignorance, because the information is available. It's more ideology than anything else.
The difference between US and European energy prices — and why it's just tax
Tucker Carlson: I filled up my tank here yesterday in Maine. It was $3.85 a gallon. In Europe it's $12 a gallon.
Morgan Downey: Yeah. Denmark is obviously a high price point in Europe, but roughly in Europe it's three or four times the gasoline price here.
Tucker Carlson: That's so weird, because in the region — in Scandinavia, famously off Norway — there are massive energy reserves.
Morgan Downey: Norway is very grounded in terms of energy economics. I'm glad they exist in that environment. They're not part of the EU. They never joined the EU because they knew they would have to join into that blob of no energy production and self-hatred in terms of energy production. Norway is in Europe but not part of the EU. They deliberately stayed in the European Economic Area — a junior version of the EU — because they realize that the blob in Brussels has no idea about how energy works. Norway produces a lot of oil and gas. Europe has a lot of energy resources. They just don't use them. And it's hurt them. That's why they have no economic growth. The difference between $3.85 here in Maine and $12 in Denmark is tax. It's not because the oil is different. It's the exact same molecules. They just tax the hell out of it there, and it's destroying their economy. Energy is the fundamental bedrock of everything.
Tucker Carlson: So you tax things in order to discourage their use. That's why cigarettes are $20 a pack.
Morgan Downey: Yeah. And in Australia they tax cigarettes something ridiculous — $20 or $30 a pack. The amount of illegal untaxed cigarettes in Australia is now like 80% or some ridiculously high amount. Tax has an impact.
I grew up in 1980s Ireland. Unemployment at the time was 22%. We joined the EU in 1973. Ireland had a protectionist environment back then. We made shoes and weird stuff. There was no economic reason for Ireland to do that. So we joined the EU and we had 3% unemployment in 1973. By the late '80s it was around 22 or 23%. It went up 20% because we had to drop all the tariffs. All these companies went bankrupt.
But what Ireland did — and it was one of the greatest government decisions I think in history for a Western European economy — is that Ireland, with an income tax rate of 65% or something ridiculous and a corporate tax rate of 40% or something very high, was so desperate it was going to go bankrupt in the mid-'80s. Ireland just said, let's cut tax to zero or as close to zero as possible. Corporate tax to zero. We're that desperate anyway — we're going to default next year. Let's see what happens.
Remember the Laffer curve with Reagan, where you cut taxes and growth takes off. Ireland cut its corporate tax rate to zero and cut income tax hugely as well. We had 23% unemployment. What happened the next year? Boom. And it's boomed for the last 40 years since. It was basically proof that tax has a real impact. There was no lag. It didn't even take 10 years or 5 years. It was the next year, as soon as Ireland made that pivot to become a low-tax environment. Economic growth took off and hasn't looked back since.
Tucker Carlson: So the reason you tax hydrocarbons is to get people to use less of them. But that hasn't worked.
Morgan Downey: Not at all. If you go back over time, global population is now 8 billion roughly. Today, every person per capita in the world consumes four barrels of oil. 50 years ago, it was four barrels of oil. 50 years before that, it was four barrels of oil.
Tucker Carlson: Is that true?
Morgan Downey: It's four barrels of oil per capita across the entire world — China, India, everywhere. Four barrels of oil per person. And that's never changed in the last 100 years.
Tucker Carlson: That's amazing.
Morgan Downey: What's interesting is that the US consumes around 20 barrels of oil per person per year. The global average is four. The US is 20. But the US has a very spread-out population — a lot of commuting, driving to and from school and offices. Europe consumes 10 — half — because it's a more dense place, people don't drive as much. China is around four, just over four. The world average is around four barrels per person per year.
Because Europe is more dense, you can build a lot more trains. Everyone thinks trains and bicycles are more popular in Europe because they're greener. No, it's because you have a lot of population living closer together. Europe is a very dense place. The US is not. And where is going to Denmark? Denmark is one of the most densely populated places in that portion of Europe. So there you can tax people heavily on gasoline because it's an easy thing to tax. And then politicians lie about it. They say, "Hey, it's the oil companies making that money." No. Of that $12, eight dollars is going to the government. Four goes to the industry that gets it out of the ground, refines it, produces it, transports it. Eight of the 12 is going to the government.
Most people in Europe are disconnected from the energy market. And I don't want to harp on Europe, but they are the most extreme example of that energy blindness, that complete unawareness.
The global oil market, fracking, and US energy dominance
Tucker Carlson: The US had been in decline since the early 1970s as an oil producer. Now we're net exporting. What changed?
Morgan Downey: Fracking and horizontal drilling. The US oil and gas production had been declining since the early 1970s to 2005. With fracking and horizontal drilling, it transformed the oil and gas industry and the US now produces roughly a quarter of the world's oil and a quarter of the world's natural gas. That's up from under 10%. It doubled over the past 15 years.
It didn't happen because of government policy. This was the oil and gas industry realizing this new technology transformed the space. And it's kind of transformed the US's view on foreign adventures and going up against foreign oil producers, because the US had been in decline and now we're net exporting oil and making Europe dependent on natural gas.
If the US shuts off — the US released its SPR earlier this year, and you know who benefited most from that SPR release? Not the US. Europe. They import 90% of their oil. So all those SPR crude oil releases went into European refineries, and Europe went, "Thank you, sir," to the US administration.
Europe is hugely dependent on the US for energy. And because of that — oil has steered every war over the past 150 years, it's been at the core of geopolitics — Europe is now kind of a dependent vassal of the US. They made that choice. They banned energy production pretty much in the North Sea. The difference between Europe and the US is very striking. In the US, if you buy a piece of land, you own that land all the way down to the core of the earth. All the minerals — if anything's in there, gold, oil, whatever — you own it. Everywhere in the world outside of the US, in Europe, the government owns it. You own the surface down to a few feet. Everything below that is owned by the government.
Are you going to risk your private capital to drill when the government's going to take it all? Why would you do that? So that's why the US also has a hugely booming oil and gas industry. The government just stepped back. There are environmental controls, and you can sue an oil and gas company if they pollute your water. But the government stepped back and let the oil and gas industry flourish. And look at the situation — natural gas is $3 here. I filled up my tank in Maine at $3.85 a gallon. In Denmark it's $12 a gallon.
Natural gas: the hidden fuel and the key to true energy independence
Tucker Carlson: Natural gas is the key to true energy independence?
Morgan Downey: Natural gas is probably the fuel that can most make the US truly energy independent. Oil production — one of the problems Trump's had this year was he dumped all the oil from the SPR, which went to Europe pretty much, because it goes into the international bucket of oil. The oil market is very global because you can ship it around. Natural gas is not as well connected. It's very expensive to ship — you have to cool it down and compress it.
But if you want the US to be truly energy independent, natural gas is that fuel. And it has not been unlocked in the US. Look at the whole Northeast — there's a huge amount of natural gas under there. There are also pipelines that are blocked, that people are not allowing. Just uncracking the natural gas production in the US — that will truly make the US such that it will not just disconnect the US from physical energy, it will also price-disconnect it. Remember, Europe is $31 for natural gas. The US is $3. If the US increases natural gas production, it can become energy independent as well as price-independent of the rest of the world. And the only fuel to do that is really natural gas.
No one talks about it because it's in pipes. It goes into the power station. People in Manhattan ban it and they don't realize that's the reason the lights work. They're banning the fuel that makes the lights work.
Natural gas production is growing at a rapid rate in the US even at $3. Cheap natural gas killed the coal industry — not Mike Bloomberg. Natural gas killed the coal industry. And natural gas can continue to transform things. We've got energy demand growth over the next five or ten years because the US is now learning — just like Ireland learned when you cut taxes — that if you increase energy production in a country and make energy cheap, your economy grows. It doesn't matter what it is. It just happens. The cost of doing everything becomes cheaper. Whether it be a data center or a factory making something — China is making things because they've got cheap energy. They use coal. That's their cheap energy. The US, if we increase natural gas production, that's how you get manufacturing back to the US, at least to a certain extent.
Coal: the world's cheapest and most abundant energy source
Tucker Carlson: How many countries have deep coal reserves? How much coal is there in the world?
Morgan Downey: There's a lot. We're not going to run out in the next 50 to 100 years. Australia produces a lot of coal. China itself produces a lot of coal. The US produces a lot of coal in Appalachia and Wyoming.
Tucker Carlson: What destroyed the coal industry in the US? Everyone thinks it was environmentalists.
Morgan Downey: What destroyed the coal industry in the US was fracking and cheap natural gas. It was undercut. Coal wasn't destroyed by environmentalists. It was undercut by the natural gas industry in the US that discovered fracking and horizontal drilling. That's what killed the coal industry in the US. Gas became cheaper than coal.
Tucker Carlson: Why is coal so cheap?
Morgan Downey: It's abundant, and it's easy. It's an easy material to handle. It doesn't require the complex handling that natural gas does — natural gas, if you want to ship it overseas, you have to compress it into a liquid or cool it down to a liquid, which is a very expensive process. That's one of the reasons why Europe is at $30 for natural gas while we have $3 natural gas.
Coal is one-third of the world's energy. It's the base load. And coal has got a bad rap. Back in the '60s and '70s when the smog issue was around, the coal industry did really transform. When you burn coal, the most immediately dangerous thing is sulfur going into the atmosphere — it turns into sulfuric acid, acid rain. And there's lead that comes out of coal also. But what the coal industry did, not just in the US but globally, is put scrubbers on the stacks where they burn the coal. Those scrubbers can remove pretty much most or all of the pollutants that come out of coal. The only downside is it's very expensive to put those scrubbers on. But coal gets a bad rap — it's cheap, it's abundant, and it's an easy material to handle.
China's energy mix and why it's building a strategic oil reserve
Tucker Carlson: What percentage of China's electricity is produced by coal?
Morgan Downey: It's around 70%. Overwhelming.
Tucker Carlson: Why coal?
Morgan Downey: It's cheap. That's the answer to why any of this. Why does India make 80% of its electricity from coal? It's cheap. Coal is the cheapest way to produce electricity. And not just anywhere — in the US, one-third of US energy consumption is coal.
If you look at the biggest buildout of solar in the US, it's in Texas, in oil country, because people are realizing there's a good case for it — it's sunny in Texas most of the year and solar panels are cheap from China. But we're basically importing coal when we buy those solar panels, because the energy to produce them was generated by China, which gets 70% of its electricity from coal. Those solar panels are really disguised coal. China is willing to do that for now in terms of building solar panels. No one else really builds solar panels at scale in the world.
Tucker Carlson: What about wind turbines?
Morgan Downey: Wind turbines — it's tiny in terms of global energy. A few percent. It's very difficult to scale. You've got issues with it being too windy, not enough wind — it's a very unreliable energy source. I'm not knocking them because they are useful in some parts of the world at some times of the day. They're an additional energy source. It's a good thing to have. But it's not a base load. We can't run our society off that energy source. For all intents and purposes, it's hydrocarbons we depend on and need. Maybe with AI we come up with fusion or some new technology over the next 40 or 50 years. But right now there's no alternative. We should just appreciate that and make peace with it.
Western sanctions: how they helped China and hurt the West
Tucker Carlson: It's interesting that the two wars in progress threaten the world's natural gas supply, or a lot of it.
Morgan Downey: 20% of the world's LNG — liquefied natural gas — comes out of Qatar.
Tucker Carlson: Which is the process by which the gas becomes liquid so it can be transported by ship.
Morgan Downey: Correct. You just cool it down into a liquid. It's the same fuel, just in a different form.
In the US, natural gas is around $2.50 per MMBTU — that's like the gallon equivalent of natural gas. In Europe it's $31 for the same unit. In Asia it's around $31. That discrepancy between the US being a major energy producer and Europe — Europe is paying ten times more for their electricity than the US is.
Tucker Carlson: Ten times?
Morgan Downey: Yeah. And you get the same situations where people in Ireland and all of Western Europe are confused about why their electricity is so expensive. You're paying ten times the price of natural gas compared to the US. The reason is that Europe shut down a huge portion of their energy system for ideological reasons. They turned it off because they kind of hate themselves in an energy sense. It's self-flagellation — let's shut down all the coal plants, shut down all the nuclear plants, try to move off gas and replace it with solar and wind. And then they turn around and go, "Why has our electricity gone up by 200% this year?" There's a disconnect there.
Tucker Carlson: What effect does that have on the sanctions question? Because the US and Europe have put sanctions on Russia, Iran, and Venezuela.
Morgan Downey: The sanctions on oil — Europe put sanctions on Russian crude oil exports and set the price at $60 per barrel. That didn't change hardly one bit what Russia produced in terms of crude oil. It was basically self-harm on Europe. They set the price at $60. The price went to $70 and Europe basically starved themselves of crude oil.
The US has also fallen into the sanctions trap, imposing sanctions on Venezuela, Iran, and Russia. What happened? Those three countries — Russia, Iran, Venezuela — the US and Europe tried to restrict by economics how much oil those countries could export. It didn't restrict one barrel of exports. You know who bought all that oil? China. They bought 2 million barrels a day from Venezuela, 2 million barrels a day of sanctioned crude from Iran, 2 million barrels a day of sanctioned crude from Russia. And they bought it all at a $10 to $20 per barrel discount, because Europe and the US transferred that money.
Tucker Carlson: So all you did was lower energy costs for China.
Morgan Downey: Yeah. And it enabled China to gorge on sanctioned oil from those three countries for the last five or six years. Just look at Russian, Venezuelan, and Iranian oil output — and then ask where's the oil going? It's being bought at a discount by our main geopolitical rival, China.
Tucker Carlson: You can't say they don't know that's happening. So at a certain point, if it continues to happen, you have to assume happening is the point of the exercise. Like, this is an effort to help China over the West. How is it not that?
Morgan Downey: I think it showed the limits of control of the blob — the deep state, the bureaucracy. They think they can control energy markets globally. They cannot. And these are not quick-moving entities. The EU makes a decision and it goes in place and stays there for 5 to 10 years. They're very slow-moving bureaucracies. The oil and gas industry showed the limits of the stupidity of those decisions. I think they thought they could somehow control the oil industry. We saw they can't.
And if those sanctions and things like that had worked, we'd all be in trouble. If they stopped Iranian production, Russian production, Venezuelan production, it would hurt us all. But China has been sitting there quietly buying up this $20 per barrel discounted crude from those three sanctioned countries, saying nothing, secretly saying thank you very much to the EU and US for these sanctions.
China has been building a strategic stockpile of oil ahead of Taiwan 2027. That's a publicly acknowledged plan — or at least it was the plan two or three years ago. As part of that, they needed to bolster their inventory of crude oil ahead of a potential 2027 invasion of Taiwan. They've been using sanctioned barrels from those three countries to fill their stockpiles. China went from almost no strategic storage four or five years ago to now having 1.5 billion barrels of oil in underground salt caverns. To put that in perspective, the US SPR has around 300 million barrels. China has 1.5 billion — five times more. And that storage was built almost entirely with sanctioned oil cheaply created by US and European sanctions on Russia, Iran, and Venezuela.
Tucker Carlson: Why would China want to stockpile energy before moving on Taiwan?
Morgan Downey: Because all of their ships are diesel. They do have nuclear-powered vessels, but all of their ships are diesel. All of their military equipment is diesel or gasoline. And they're importing 12 million barrels a day. If they didn't have a strategic reserve, they would be done within 20 to 30 days if they were blockaded. If you blockaded the Strait of Malacca and Singapore, or Hormuz — which is already blockaded — China wouldn't have the oil for their ships within three or four weeks. That's why they've built up a stockpile. They need that oil to power their navy and military equipment.
Tucker Carlson: What percentage of China's electricity is produced by coal?
Morgan Downey: Around 70%. Overwhelming.
Tucker Carlson: Why coal?
Morgan Downey: It's cheap. China gets 60% of its energy from coal, 20% from oil, 20% from natural gas, and then solar, wind, and nuclear are each under 10%. They're in the same 90% hydrocarbon world. That 20% oil is for all of their ships — diesel. And they're importing 12 million barrels a day. If they were blockaded, they'd be done within three or four weeks. So that's why they've built up that stockpile.
The Iran war and its effects on global energy markets
Tucker Carlson: So what effect have those wars had on global energy?
Morgan Downey: Because of the regions they're in, it's had an effect on crude oil and natural gas. Coal — put that aside, that's a third of the world's energy not involved in this situation. So it's oil and natural gas.
The energy market had kind of war-gamed out the shutting of the Strait of Hormuz for a long time. It kind of did happen a little bit in the 1980s — you had the tanker wars when Iraq and Iran were fighting, and there were a huge number of tankers knocked out in that war. The US was escorting tankers in and out of the straits at that time. So there was an awareness of the vulnerability.
The oil market immediately in late February 2026 assumed it was going to be a week or two. You can tell by the forward curve — the price of oil as you go out into the future. The market in the front of the curve was very high, but only a few months forward it was back down to $80 or $70. The oil market was predicting this thing would be quick. Trump went into this also thinking it was going to be quick. Everyone thought this would be a hit-and-done situation, over within two weeks — just eliminate a few politicians at the top layer, which I think was strategically a terrible thing to do.
Tucker Carlson: Yeah.
Morgan Downey: And the oil market very quickly rallied. Then once it wasn't over in two weeks — because Iran went to that mosaic structure where they basically distribute control of their military throughout the entire country, the IRGC and Basij — you can't slice off the onion layer by layer at the top. It just doesn't work. Iran has developed this method of working for the last 30 to 40 years since the late 1970s. That's when Iran started retaliating with drones. That's when the oil market said, okay, this is going to be a more protracted thing.
They started hitting Gulf production facilities. They hit Qatar's natural gas LNG plant, which is still out and will be out for the next three to five years. That's Qatar's main source of revenue. They knocked out half of its production. Qatar produces 20% of the world's LNG. That natural gas would go to Europe and Asia — it's gone now for three to five years. Again, who benefits from this? The US natural gas industry. Like Nord Stream, like Qatar — if you were to be conspiratorial about it, you could just knock out all of Qatar and the US would benefit even more. It's an interesting secondary effect that this situation has been very positive for the US economy, because the US is a huge natural gas and oil producer.
So you had the oil market initially pricing in a quick win. Then Iran started attacking all the production facilities, particularly refineries in the Persian Gulf. These refineries produce a lot of diesel. That was the second effect — the diesel price spiking. The spread between diesel and crude, or gasoline and crude, is called the crack spread. That blew out. Diesel used to be $10 refining margin above crude. It went to $100 and stayed there since.
Tucker Carlson: That's crazy. And that's because of reduced refining capacity.
Morgan Downey: They knocked out 2 million barrels per day of Persian Gulf refining capacity. And the world — the US — produces a lot more gasoline than diesel. The world had more gasoline capacity in refineries than it did for diesel. So diesel was tighter as a global situation than gasoline. And it's extremely difficult to switch a refinery's proportion from diesel to gasoline. You can move maybe 2 or 3% of the barrel from diesel into gasoline or vice versa. It's a very difficult thing to switch.
So everyone talks about diesel, but gasoline margins went from $10 to $15 up to $60. Diesel went to a $100 spread over crude. So with crude at $100, diesel was $200 a barrel. Gasoline, with crude at $100, was $160 a barrel. It did cause a rally in gasoline also. It was just that diesel was much tighter.
That was combined with Ukraine hitting Russian refineries. Ukraine started hitting all these Russian refineries coincidentally with the first half of this year when the Hormuz situation was happening. That knocked another 2 million barrels per day of refining capacity out of Europe and the world. The world is 100 million barrels per day of production. You knock 4 million barrels per day of refining capacity out — it does have an impact. It caused diesel prices to spike.
Tucker Carlson: Why would Ukraine do that? Because the CIA helped them target.
Morgan Downey: Obviously. Ukraine is not an independent actor. Everything in Ukraine that hits Russia is approved and signed off.
Tucker Carlson: That's factually true. Why would the US intel community want to reduce Russia's refining capacity when it affects the price of diesel fuel and gasoline in the United States?
Morgan Downey: I think that even though they're very sophisticated entities, the CIA and other entities in the US government — sometimes I don't think they think about the effect. They're energy blind to a certain extent as well. They thought that if we just target Russian refineries, we can damage Russia and it wouldn't affect global markets. They thought they could pinpoint-target these Russian refineries — and oil refineries are easy to target, they're big pieces of equipment — and they thought, let's create a little bit of pressure on Russia and Putin to come to the table. Trump wants out of Ukraine and Russia. That war should never have started, but everyone wants out except for a certain few vested interests.
The CIA or whoever was providing the targeting information didn't think about the impact on diesel. They thought it's just 2 million barrels per day of refining capacity out of 100 — it can't have that much of an impact. It did. It immediately did. So the blowback was in the energy market. It was a mistake. The CIA should never have targeted those refineries. They did. They provided all the targeting because they want to pressure Putin to come to the table, and they're trying to pressure Zelensky by Elon Musk flipping on and off the Starlink button every other day. These are the two pressure points being applied. They were surprised by how much diesel prices rallied.
And it happened at the same time as Hormuz. If they had done this when Hormuz was not happening, diesel would not have spiked as much.
Oil flows through the Persian Gulf: tankers, pipelines, and the East-West bypass
Tucker Carlson: How much oil and natural gas is making its way out of the Gulf now?
Morgan Downey: It depends day to day. There's a pipeline the Saudis built called the East-West pipeline, back in the 1980s because of the original tanker war — the Iran-Iraq tanker war. It goes from all of the oil production on the east side of Saudi Arabia, across the entire country — all desert — to the Red Sea. It has a 7 million barrel per day capacity. The world produces 100 million barrels per day. The Saudis produce 10 of that 100. Of the 10 the Saudis produce, they could get 7 out through this pipeline. But they used to run it at only 2 to 3 million barrels per day as a backup plan.
Tucker Carlson: Why is it cheaper to ship it through the Gulf?
Morgan Downey: You've got to pump it across all these pumping stations, and if you're a buyer from China or Asia, sending a tanker all the way into the Red Sea, past Yemen — it's a more dangerous, more confined area. It was a dollar per barrel more expensive to buy the oil from the Red Sea end of this East-West pipeline. It was cheaper to buy it from the Persian Gulf.
When the situation kicked off, the first surprise was the refinery issue. Then it came into tankers, because no one in their right mind would send a tanker through the Strait of Hormuz when there's an act of war and Iran is targeting tankers. These are civilian tankers. Iran was hitting them with $20,000 to $50,000 drones. So you had the spike in crude first. Then the spike in refined products — diesel was the most extreme, combined with the Russia refinery hits. Then you had a spike in tanker rates.
Super tankers — VLCCs, very large crude carriers — carry 2 million barrels of crude. These things you could hire for $50,000 to $100,000 per day before this year. Now it's $1.5 million per day.
Tucker Carlson: Per day?
Morgan Downey: Per day. From $100,000 per day to $1.5 million dollars per day. The reason tanker rates have gone up is that first of all you can't get insurance — or technically you can, but the insurance rates have gone up enormously.
The only people doing the speedrun through the Strait of Hormuz are the Saudis and the Emiratis, because they have their own tankers. They're not paying other people to do this. They hug the coast of Oman and speedrun. When I say at speed — these are supertankers full of 2 million barrels of crude, they can't move fast, but they're trying to move as fast as they technically possibly can. They go into the Persian Gulf, grab the oil, load it, and come back out. Usually before February they would then continue on to China or Asia. Now they stop outside the Gulf of Oman, they lighter — they load the crude onto another tanker — and they go back in again and do that loading. So those supertankers are doing this speedrun into the Persian Gulf and doing what's called ship-to-ship transfer, STS, outside in the Gulf of Oman.
The Persian Gulf produces 20 million barrels per day. The East-West pipeline was ramped up from 3 to 7 million barrels per day. There's another pipeline to Fujairah — they got another million barrels per day out of that. So they cranked up all the alternative bypass pipelines. That compensated a little bit for the Strait of Hormuz being shot. And then the big one is these tanker speedruns.
Tucker Carlson: What are they paying these crews to do that?
Morgan Downey: I think it was in the FT a few weeks ago — they're paying the captain around $100,000 to $120,000 per run, which takes a few days. They're taking their lives at risk. Right now today, Iran is hitting one to two tankers a day. Hitting the engine room. There are some spills as a result — these are carrying crude oil. One to two tankers a day. And that is the real thing that can't be sustained.
I know Bessent and Trump have got these economic sanctions and pain points — that's going to take too long. That financial operation goes back to the sanctions thing. It doesn't really work. It causes immediate pain, but it's not a long-term sustainable solution. And when I say long-term, I'm talking about we need to resolve this within 3 to 6 months max before things get worse. Things are already bad. They need to start recovering, because it's flowing through to food and fertilizers.
Iran is hitting one to two tankers a day right now, today, in November 2026. There are only 1,000 supertankers in the world.
Tucker Carlson: People are getting killed in these attacks.
Morgan Downey: Yes. Unfortunately, crews from India, the Philippines. These are just civilians. These are not military people. They're civilian tankers. Iran is treating them like military hardware. They're hitting them. And that can't be sustained.
What the US should do: triage, tit-for-tat, and accepting Iran as a regional power
Tucker Carlson: So what should the US do?
Morgan Downey: One of the things to stop the tanker hits — because Iran, the US reaction so far has been to do these mass fireworks-style campaigns, dropping the mother of all bombs, Trump talking about things like that. Iran is a very well-educated population, surprisingly. Historically they've been —
Tucker Carlson: Higher median IQ than we do. The most successful ethnic group in the US is Iranian-Americans, Persian-Americans.
Morgan Downey: Yeah. They actually may be number one. Everyone thinks it's the Asian population. It's the Iranian-Americans, Persian-Americans. And these guys are rational. There's a logic to what they're doing. They've also got a religious aspect to it. But I think that hitting one to two tankers a day — annualize that, that's going to knock out the entire global fleet of supertankers, because they can be repaired but the repair takes three or four months.
The US basically has to make every tanker hit matter. One way to do that: Iran has 150 power generation stations. This is an energy war. You say to Iran — and you don't do this secretly, you tell Iran — there's a direct price to pay. For every tanker you hit, we knock out two power stations. Start with Tehran. They've got five major ones. Make it incrementally painful to stop that tanker-hitting situation, because Iran is hitting civilian infrastructure on a civilian purpose. There's no military purpose for this. The US should just make every hit painful.
To stop that, ahead of negotiations and everything, that has to stop. And that's one way to do it. Iran has 150 power stations. If Iran continues to do that for another week, you hit seven tankers — we're going to hit 14 power stations. There should be some sort of tit-for-tat retaliatory strike. You don't tell them which power stations, but you make it economically and energy-painfully clear. That's one thing the US could do to stop those tanker hits, because that is the most important thing. You can do the economic war behind the scenes, but the physical tanker market can't wait six months. It has to stop today.
The other way is that you can stop the Iranian army, the IRGC. Iran has five refineries. Just knock them out. The CIA knows where they are. These are not hidden or secret things. Within 20 days, the Iranian economy — energy-wise — seizes. It stops operating. They can't run diesel trucks, gasoline cars, motorbikes. The entire economy physically can't operate. So the US has got options. All this talk about nuclear weapons — don't do that. It's not necessary. Iran is extremely vulnerable on the energy side. And these things are also repairable. You don't want to destroy civilian infrastructure in Iran just to be punitive. You basically want to say: stop. Let's stop. Let's parlay. Let's take a breath. You can't hit these tankers every day. We're not going to negotiate with you even as you do that.
And then the third thing — going back to the original sin of this war. Trump, the US government, killed the Ayatollah and his family back in late February or early March, and then tried to wipe out another layer. That kind of behavior is not conducive to getting a negotiated settlement.
Tucker Carlson: No. Murdering their religious leader. Endless murder. But here's the thing — Trump back in March said, "I got him before he got me." That's what he said about the Ayatollah.
Morgan Downey: I'm sure there were people whispering in his ear that —
Tucker Carlson: For a fact there were.
Morgan Downey: Yeah. And so —
Tucker Carlson: There are all kinds of flatterers and whisperers and liars around him, mostly in the Israeli lobby, all telling him this lie that they're trying to kill you and you have to kill them first.
Morgan Downey: As a sign of good faith, the US should have a policy — revert back to it. It used to be a policy in the US not to intentionally kill or assassinate foreign leaders. That needs to be —
Tucker Carlson: That was our policy up until we did this. I mean, we have assassinated foreign heads of state, but we always lied about it and pretended we didn't. And I think there's some value in upholding the standard even if you don't meet it.
Morgan Downey: There you go. And it does matter, because every leader in Iran — and as I said, they've got that mosaic structure — you can't negotiate with someone under that kind of threat. And it wasn't just —
Tucker Carlson: It was during a peace negotiation that we did this, as you know. It was a surprise attack.
Morgan Downey: That was just wrong. Is it right or wrong to kill anyone? But just as a strategic negotiating tactic, that just doesn't work.
Tucker Carlson: You send in fake negotiators into a fake negotiation and then you kill the elderly head of their religion and his family in the opening salvo. And then, in case they didn't get the point, you double-tap a girls' school. That's not the kind of — and then you demand unconditional surrender, which our president did. Unconditional surrender, whatever that means. You went all in and you failed. So where do you go from here?
Morgan Downey: I think there needs to be a restatement of US policy. Trump could do one of his executive orders — just sign it — saying that the US, and no one endorsed even secondarily via the US like the CIA, should get back into that business of killing politicians, elected politicians, even if we don't like the election or whatever reason. Stop that. That is not good ethically and morally, but it's also basic military strategy. You would never kill the generals — you would negotiate with them. It destroys things for a whole variety of reasons.
That should be a key component of this stage. One: stop the daily tanker hits by saying you hit one, we knock out two power stations. Let's see how long that takes to stop. If it doesn't, Iran is making a rational decision to wipe out their own power grid. You need to have some tit-for-tat escalation there because that needs to be stopped right now. That's triage.
Two: tell the Iranians we are no longer going to endorse, even on a secondary basis with other entities, that kind of thing. We're not going to support it, endorse it, or promote it. The US doesn't do that. Go back to that doctrine, because you can't negotiate on that basis.
Then once the situation is triaged, we can go back and talk about all these other issues. Iran wants this toll on the Strait of Hormuz. We're not doing the toll. They want their money. You know who owes Iran more money? China. They've been buying all this discounted sanctioned crude over the last five years. They have $60 billion locked up in yuan. The Iranians were perhaps unwise to sell their oil for yuan, but they've got it locked up in China — $60 billion, way more than the US has locked up in assets for Iran. So if Iran wants someone to pay that toll, China can pay the toll. Take it out of China's money. They're the guys who have been taking advantage of Iran over the last five to ten years.
Put the toll as a GCC toll — managed by the Gulf Cooperation Council plus Iran. Have an equal share of a dollar a barrel and get them all sharing that toll. No other party outside of the Persian Gulf is going to contribute to that toll. Get your money from China first. They're your biggest debtor. Make the toll a GCC toll. Put that in place.
We're not going to target your political infrastructure — and make it a real thing, where even secondary parties are not going to target that. And let's come to some sort of agreement on the nuclear situation. We're not — Trump talks about bombing Fordow mountain and all this nonsense. Go back to the prior UN inspections situation with Iran. Treat Iran as if it's a nuclear power, because even if you take all that out, do you think they aren't going to now try with every means possible to get one of those nukes from North Korea or Pakistan? Treat them as if they are a nuclear power. Constrain it, if you will.
Tucker Carlson: Iran is a major power in the Middle East. Accept that as a reality. You can't crush it. You're not going to defeat it militarily. It's just too expensive. Let's come to an agreement where we treat them as if they're a nuclear power.
Morgan Downey: Ideally — and this is me personally — I hope they don't go back to the Ayatollah regime and all of that. I would prefer Iran to have a different government. They tried the civilian rebellion back in January. It's probably going to end up being a military junta like Pakistan, controlled by the IRGC. They'll have the Ayatollah — they're keeping that guy out of sight. People speculate why they haven't shown the son of the Ayatollah. He's been maimed, or he can't speak, or legitimately they're afraid for him, afraid he'll be killed by the US or Israel.
The US should remove itself from that game and say we don't play that game. Normalize the entire situation. Triage the tanker situation. Normalize Iran as a proxy nuclear power — it's sad to say, but it is what it is. You can knock out the enrichment facilities, but put some guardrails around it, like Pakistan. The US supposedly controls Pakistan's nuclear weapons. Yeah, that would be it. Just those things. You don't need to do a large, escalatory, showy thing. No. These are small incremental things that can be done.
Iran is looking for an out also. They don't want this situation to escalate. I remember 10 years ago when Instagram kicked off, they had the Rich Kids of Tehran — all these rich kids driving Ferraris around Tehran. They're just normal people like you and I. They want to deescalate the situation as much as we do. And they've been great at their media game throughout this whole war. They put out that document — whatever number of pages it was — saying, here are the legitimate reasons for their grievance. They said, "We don't have a problem with the people of America. We have a problem with the government." And I'm thinking, hang on — for 50 years, or 47 years since the revolution, they've been saying "Death to America." So you only meant the government? You didn't mean the people of America?
In other words, Iran is not the innocent party in this whole escapade either. They've done some terrible, horrible things. And then they say, "But what about the Shah? The regime before the current one was even worse." No, not really. The Shah supposedly had people tortured and killed — maybe 2,000 to 3,000 people over his time. There's a great book I read recently called The Cauldron that talks about the Shah. He was a dictator, pretty much a king figure, US-supported because the US just needs someone stable in that environment. But the IRGC killed 20,000 to 30,000 people in January of this year. The Shah over a 40-year period tortured and killed 2,000 people. So no one is innocent in this whole situation.
Let's stabilize it. From the energy markets perspective, there's a way out of this. It doesn't involve nuclear weapons or doing these weird showy things. It revolves around accepting that Iran is a rational player with legitimate concerns. The US has kind of adopted the Israeli-Mossad style — kill all the politicians first. No. The US should just back away from that. Go back to 1980s style. And yes, there were some behind-the-scenes things happening, but as a policy, make it as close to a crime as possible to kill or assassinate a foreign leader, or especially their family.
Tucker Carlson: It's not a Western understanding of justice at all. The family didn't do anything. It's not a crime to be someone's child.
Morgan Downey: And Trump said again, "I got him before he got me." George W. Bush used the same logic back in Iraq — Iraq Two. He said they tried to kill my daddy. And you know —
Tucker Carlson: Well, in fact it was the Israeli government that plotted to kill George H.W. Bush, and that came out in a memoir. I think that's a fact. So, whatever. It's a complicated world. A lot of bad players in it. But stability has got to be the goal.
Let me ask you though — do you think the United States and Israel can accept an ending to this war in which the current Iranian government, or some version of it, remains in control? With no, or certainly fewer, American bases on the Gulf. America is not keeping the peace in the Gulf going forward. We can't even keep the strait open.
Morgan Downey: I don't think the loss of those bases is a bad thing. They were exposed targets for years. They don't — they shouldn't exist in the modern drone warfare environment. So Iran kind of did the US a favor by shutting those bases down. The US should still — when I say everyone talks about the US walking away from the Middle East — the US is not going to walk away from the Middle East. The US still needs to be there and protect those countries because we need energy prices to remain low. That's at its core level. But also for general stability as the hegemon globally, and to stop China becoming the hegemon, especially in the Middle East.
So the US is not going to walk away from the Middle East no matter what Iran wants or thinks. Those bases — okay, whatever. They're sunk cost, they're written off. The US is going to have to come up with a more mobile, mosaic-style base structure to defend the Middle East, the non-Iranian side. But the US and Israel have to accept that Iran is there. It can't be defeated. And Iran — good on them. They shouldn't be defeated. They can do whatever they want as long as they don't assault the rest of the world with nuclear weapons. They're an independent country.
Tucker Carlson: But accepting what you just said — which seems demonstrable, I mean the geography of Iran is ultimately its power, and the fact it's a cohesive country basically and an ancient civilization — just saying that out loud is so contrary to what we have been told for 40 years and what even policymakers are saying now. Like, we can't accept this government, we can't accept Iran as a nation. I mean, they're going to have to, right? But do you think they can?
Morgan Downey: I don't know. I don't think it's a matter of if they can — they have to. They have no choice. We have no choice but to accept Iran as it is. Sometimes it's like North Korea. Would the US love to — they have nuclear weapons in North Korea. Would everyone around them, the Japanese and South Koreans, love to destroy North Korea? Yes, of course. But it just is what it is. Sometimes you take the draw and you walk away and just allow it to exist. It's sad, but that's just reality.
Tucker Carlson: There's a limit to your power because you're not God.
Morgan Downey: Yeah. And that's not a bad thing. Everyone thinks the US has to intervene everywhere. No. There's a payoff structure here where sometimes it's not worth intervening. It's just not in US interests. Iran is a classic case of that. North Korea is another case where you do as much as you need to, but you stop when the payoff stops working.
Iran is one of those situations where we need to get to a point where we walk away from the situation — and when I say walk away, we're going to walk away from those bases, okay. But we're going to still highly defend the western side of the Persian Gulf. The US still needs to be there and defend oil production and natural gas production. One, as a bulwark against China and what they're doing. Two, because it does affect global energy prices and all of our allies as well as our own needs. We need to defend that side.
And even if you take Israel out of the equation, we still need to be in the Persian Gulf. Even if Israel didn't exist, the US unfortunately still needs to be there.
The coming food crisis: fertilizer, Qatar, and the 2027 lag
Tucker Carlson: My last question is about global food supply and prices. You said at the outset that there's a huge lag because of the growing cycle — between the constriction of certain inputs like fertilizers and the outputs. You don't see the consequences right away. What are we going to see in the next couple of years?
Morgan Downey: Two of the big things that were knocked out this year — most fertilizer is natural gas in a bag. Natural gas is one-third of the world's energy. Qatar was knocked out this year, half of its production. It's a big natural gas producer. And because of that, the thing that makes the fertilizer — natural gas — has gone up in price. It's only $3 in the US, but it's $30 in Asia.
Tucker Carlson: What percentage of global food supply is directly traceable just to the nation of Qatar?
Morgan Downey: Qatar is one of the biggest LNG producers — 20% of the world's LNG. So it's a decent chunk. In terms of LNG and ammonia production, it's like a fifth of the world's food, in terms of LNG.
Tucker Carlson: It's just funny. A country of 400,000 people, one of the smallest countries —
Morgan Downey: And responsible, indirectly but kind of directly really, for a huge percentage of global food supply.
Yes. And also not just natural gas — you have sulfur. A lot of heavy crude oil produces a lot of sulfur. You have to remove that sulfur, and sulfur is pretty much free. You can buy the sulfur — someone will give it to you. If you go up to Canada, they desulfurize those oil sands they dig up. They have mountains of this yellow brick sulfur. The problem with sulfur is that the actual material itself is kind of free — they would love to give it to you. But the challenge is that it's not produced in all places around the world. A big source of sulfur is also the Middle East. And getting sulfur out — the fertilizer industry has been hit by natural gas out of Qatar being shut down, and sulfur.
The problem with sulfur is that Canada has a huge amount of it, but it takes a while for the supply chains to turn — a huge industry to pivot to Canada, because Canada has to rail it out and get it to fertilizer production facilities. So the net effect is that fertilizer prices have gone up by three or four times this year. It doesn't really have a big impact in developed economies or even places like Russia and Ukraine, which produce a lot of wheat. The US produces a huge amount of grain and is a huge food exporter, especially to places like China. But it has a huge impact in places like India and poor countries. For those people, the main variable on their crop yield is fertilizer, and that has just gone up by 300%. That will impact a lot of countries next year when crop cycles come through. There will be less food produced next year.
It's not going to affect the West like America — it'll just become slightly more expensive food. But you will get a lot of the world, which is still living at the breadline, having a real impact. And that impact is going to be on — you know what's going to happen? No one will talk about it. It'll just happen under the radar. People will be hungrier, especially in poorer countries — places like India, Africa. No one will really talk about it. It'll just be in the background for the next year or two. But that's actually already unfortunately baked in.
Tucker Carlson: Well, you'll see people move. In the 19th century, Finns moved to Sweden. You saw the Irish move to the United States.
Morgan Downey: Food reasons.
Tucker Carlson: Yeah. And so you're going to see mass migration every time food prices reach a certain threshold — people move.
Morgan Downey: Yep. It goes back to this thing I began with — everyone is so disconnected from where their energy comes from. 90% of their energy, people have this misconception about where it comes from. But also in terms of food, people don't realize how — the oil industry and natural gas, everyone thinks they're fragile. They're not. They're very robust, as proven by this year in the Persian Gulf. They're not a fragile space. But they do have a price — market price sensitivity. The global market for food and the global market for energy have impacts, and some of those impacts are very bad for especially poorer countries.
I hope that people can have a realization — people in Europe, people in the US who rail against reality, who rail against how food is produced, how energy is produced — should kind of have a moment of appreciation. Remember when JD Vance was complaining to Zelensky, "You're not grateful"? I think the world as a whole is kind of not grateful for where its energy comes from and doesn't appreciate it. Because it should be something that people learn more about and understand and appreciate. It will affect how people deal with their own lives and reality.
It's a very fundamental part of the world we live in — oil and gas and coal and food. We didn't leave that world. It still exists, underpinning modern civilization. It's just that people have disconnected themselves and are living in this simulated world where it's all solar panels and wind turbines. That's not reality. That's still four or five percent of the world's energy. People need to anchor themselves, however they do it, into understanding where their food and oil comes from. Sometimes they're forced to, because of the situation in the Persian Gulf this year. But it's a kind of interesting blind spot — energy blindness.
Tucker Carlson: Morgan Downey, one of the great experts on the topic, author of Oil 101. Thank you very much. That was great.
Morgan Downey: Thank you, Tucker.