Tucker Carlson interviews British military strategist on Russia-Ukraine war, NATO's weaknesses, and the coming energy crisis
Tucker Carlson speaks with a British former naval officer and energy sector expert about Russia's military strategy in Ukraine, NATO's structural failures, and the looming economic consequences of the Strait of Hormuz closure.
Summary
Tucker Carlson interviews a British military and energy expert — a former Royal Navy officer who later spent fifteen years in the offshore energy sector — about the state of the Russia-Ukraine war, the West's strategic failures, and the growing risk of a broader conflict. The guest argues that Russia has been executing a clear, multi-phase military strategy from the outset, while the West has been operating on a political narrative with no coherent strategic logic. He presents a detailed scenario in which Russian hypersonic missile strikes on European weapons factories trigger an Article 5 invocation that NATO is wholly unprepared to honor. On energy, he warns that the closure of the Strait of Hormuz has already set in motion a supply shock whose full economic consequences — potentially a global recession or depression — will become visible by autumn. He predicts that economic pressure, not military defeat, is most likely to bring both the Ukraine and Iran conflicts to a close.
Key Takeaways
FULL TRANSCRIPT
Russia's Strategy in Ukraine: A Five-Phase Assessment
Tucker Carlson: Thank you very much for doing this. In the United States, I think most people, to the extent they're paying attention, are watching what's happening in Iran and have a sense that what's happening between Russia, NATO, Ukraine, and the United States — the festering war in Eastern Europe — is kind of a stalemate and nothing really is happening there. I don't know if that's true. Assess what you think is happening between Russia and Ukraine and its proxies right now.
Guest: I think you're right that it's not true, Tucker. The general sense in the West — and you'll hear it from some people — is that Russia is losing on the battlefield and that the Russian economy is about to fall apart. I've heard it time and time again and there's no evidence to support either of those things. The battlefield issue is poorly understood, and the reason is that people don't understand Russia's motivations and they don't understand what the strategy is.
In an article I wrote recently on the coming war with Russia, I cited Clausewitz — the great political philosopher of war — who said that the most important decision a military man and a politician can make is to understand the nature of the war. I don't think the West has understood the nature of the war with Russia, nor for that matter with Iran. What they haven't understood with Russia is that, as far as Russia is concerned, this is an existential war. They are fighting to make sure that Russia is preserved. And when you get people like Kaja Kallas saying that Russia must be broken up, who can blame them?
I think had we understood that, it would have been a start. Unfortunately, we're approaching the war as a negotiation — a negotiation with arms. The thinking seems to be that if we increase a bit of pressure on Russia, they'll eventually come back to the negotiating table. What they've missed is that Russia has a clear strategy. I can't be certain — I'm not in the Russian General Staff — but I think it has about five key phases.
We know that the run-up to the special military operation was preceded by so many warnings going back as far as 1996, and yet we ignored them all. Those warnings came not only from Russia but from some of our very best strategic thinkers — from George Kennan as far back as 1996 and from John Mearsheimer in 2014.
When the war kicked off — and I have to say I did not see the war coming; I was involved in the offshore energy sector at the time — the first thing that became obvious to me was that this was not a special military operation to invade Ukraine. The reason was simple: there weren't enough troops. Ukraine is about the size of half of Europe and you're not going to do that with 190,000 troops. I cannot for a moment think that the Russian General Staff advised Putin that they had enough troops to invade Ukraine. This was always about the Donbas.
The first phase of the strategy was really the use of military force to support a diplomatic engagement, and indeed that diplomatic engagement actually went quite well. The Russians had open negotiations with the Ukrainians after day one. As we arrived in March, both sides were ready to sign an agreement which would have stopped the war — no NATO membership, neutrality for Ukraine, self-determination for the Donbas. That was ready to be signed, and I'm almost certain it would have been signed if it hadn't been for Boris Johnson — no doubt with Biden's support — actually going across and persuading Zelensky to fight Russia, telling him he would have all the support he needed.
So that's phase one. Phase two: when it becomes clear to Russia that they are going to have to fight — and are likely to have to fight NATO given what they're hearing — what you then see is what I would call militarily a withdrawing contact. The Russians recognized that the Kyiv attack and the actions in the Donbas, although diplomatic in intent, would now require them to withdraw to a line. They withdrew back to what's known as the Surovikin line — a defensive line constructed by the general who was Russia's expert in defensive fortifications.
From about September onwards they moved into phase three after the withdrawal, which I call attritional defense. This meant meeting their two operational objectives — denazification and demilitarization — while the strategic objective was clearly to preserve Russia's security. What defensive attrition means in practice is wearing down the men and materiel of the Ukrainian army. And we helped them enormously in that, because we persuaded Ukraine to expend not one army but two armies against that defensive line without a single penetration.
By late 2023, Russia had mobilized, increased its forces, and built up the industrial capacity it needed. They were ready to move into what I call phase four — offensive attrition. Not necessarily securing territory, but continuing to wear down the men and materiel of the Ukrainian army. The Ukrainian army had no air superiority, none of the things you want when fighting either an offensive or a defensive war.
I think as well they were starting to clarify their ultimate objectives. I remember saying to Danny Davis about a year and a half ago that I thought Russia's minimalist objectives would be to secure the Donbas and the four eastern oblasts plus Crimea, and their maximum objectives might be to go further — to secure the whole of Novorossiya, which includes Odessa and the next four oblasts to the west. I wasn't sure which way they would go, but I've heard Putin say quite recently that he's talking about security — establishing what they believe to be a secure buffer protecting the Russian people within it. The question really is how long it takes them to get there, if indeed they keep going in that direction.
When you start to understand that, all of the commentary about Russia going slowly misses the objective entirely — it misses what they're trying to achieve. And when you understand what they're doing, what I think is a clear strategy, it helps you work out what they're doing, why they're doing it, and how the West should be thinking. At the moment we see on the one hand claims that the Russian army is not doing very well and isn't securing much territory. That's not true. Russia has actually been securing territory for at least the last thirty or so months. But they weren't securing territory initially simply to hold territory. They were doing it to wear down and attrit the Ukrainian army — with a high degree of success, as we know from the casualties.
Why the West Has No Coherent Strategy
Tucker Carlson: That has always made sense to me. If foreign leaders gave speeches calling for the breakup of the United States, I would of course do everything I could to support the defense of the United States. I would see that as existential. If someone said, "We're going to break up the UK," you'd probably take up arms in its defense. I've understood that since the first day. What I have never understood is the West's motive. Why would the United States and its partners in NATO want a war with Russia — a war that has hurt them? What is the motive?
Guest: It's a really good question, and I have said for quite a long time now that the Russian operations are being guided by a military strategy, while the Western operations are being guided by a political narrative with objectives that change quite a lot.
I think the initial objectives — and it depends which particular party on the NATO side you're talking to — were possibly to break up Russia. There's a very interesting RAND study written in 2018, I think, called "Extending Russia." The Russian intelligence chief Budanov actually, in a YouTube video, talked about the need to have a war with Russia to help Ukraine get into NATO. I think there's also what I would call lag in thinking, because a lot of the people who were proposing the expansion of NATO without thinking through the consequences did not anticipate this. I'm certain they didn't anticipate it because they weren't ready. If they had thought it through and said that if we keep doing this then Russia will respond, they would either have made defensive preparations or they wouldn't have done it. So I think we can say with a high degree of certainty that they did not think it through.
I think there's also — and this is probably more European than American, although you will know better — a high degree of Russophobia, which I find very difficult to understand. I think it's in part our press, in part the narrative we've built, and in part the nature of spin in modern Western politics, where an event kicks off and people spin to help those parties in power stay in power. What that means is that the population generally starts to get deceived — not lied to, but deceived, because they're presented with one side of the story. That really matters in war, because in war you need to be able to look at all sides of the story.
This is why I wrote the article on the coming war with Russia — because nobody seemed to have thought about what that war might look like. It's very difficult to fully understand the motivations, but I think within those factors, Tucker, you've probably got the answer.
Tucker Carlson: I understand why the European populations are Russophobic, because the propaganda has played upon their best qualities. Russia is seen as the aggressor, Ukraine is the underdog. Europeans in general root for the underdog — that's a sign of their decency. It's also the case that you're allowed to hate Russians because they're white, so you don't have to feel guilty about painting them as animals. You're not racist when you do that. I understand all of that. And they just don't know any better because Europe is a biosphere in its media — no outside information comes in. Same in the United States. What I don't understand is the motive of the liars. Why do European leaders seek a war with Russia? Why do American leaders seek a war with Russia? These are not stupid people, and yet they are hellbent on destroying their own countries in the service of this war against a country that doesn't need to be our enemy. It doesn't make any sense.
Guest: If I had to answer the question in one phrase, it's the lack of the ability to think strategically. There was a wonderful American general I studied when I was writing on strategy called André Beaufre, and he said that in war the loser deserves to lose, because his defeat will be a consequence of inadequate strategic thinking either before or during the conflict.
I think the institutional lag in entities such as NATO — which had done badly in Afghanistan; I was in Afghanistan and let's face it, NATO lost — means that the idea that NATO could prevail over Russia, having lost against the Taliban, is just extraordinary thinking. But it's embedded in NATO.
I think as well that the advice within the establishment — I used to call them the elites, but I've now realized they're not elite, because elites are about high performance, and we're not seeing that — is characterized by what I can best describe as institutional lag and blinkered thinking. When you look across the broad strategic context in which we're operating, and if you can be bothered to listen to what the Russians have been saying, the logic they present is, I find, fairly unequivocal. I've listened, of course, to your interview with Vladimir Putin and with Lavrov, and there was almost nothing I could think of that I disagreed with. The problem is that the West is not interested in listening.
So I think this is more about incompetence. It must be incompetence on the Europeans' part. There might be within the neocons and certain elements of the neocon-like establishments in the West — in the E3, that's Britain, Germany, and France — a determination to break up Russia. But that's obviously impossible. You hear Kallas saying that.
Tucker Carlson: Can I ask you — I was at a dinner with her not long ago in a foreign country, with a lot of foreign diplomats who are not mediocre at all. She got up to speak, and the feeling of contempt for her and bewilderment that someone this unimpressive could have a leadership position in Europe was palpable. People were shocked by just how uninformed she was, how childish, how girlish she was. Everything was a kind of grotesque and dumb moral generalization — Hitler versus Churchill kind of level stuff. How does someone like that, how does a structure like the EU, a continent with some of the smartest people in the world, promote someone like Kallas to a position of leadership?
Guest: It's a very good question, because you could ask exactly the same question about von der Leyen. You know, von der Leyen, when I was serving, was notorious for being the worst minister of defense that Germany had ever had. And suddenly we find that she has a leadership role in the EU. You could also say it about Rutte. I thought the last NATO Secretary General was bad, but he's got very good competition now.
I think it goes across Western leadership generally. In my experience — I started my naval career back in 1976 — this is the worst set of leaders that we've got collectively for as long as I've been alive. I can't answer your question other than to say it's an incredible weakness that we have in the West, and it explains so much of what's going wrong. The lack of high-quality leadership is the issue. I used to teach leadership, and I look at some of the ways these leaders are operating and it's extraordinary.
The issue is competence. I'm sure some of these are decent people doing what they think is right, but they're obviously not competent — and I say that strategically. For a strategic operation, the measure of success is: was the operation effective? Were the results enduring? Was it efficient? On all of the interventions of this century — Afghanistan, Iraq, Libya, Syria, Ukraine, and now Iran — we failed at every one. Some people will argue about Syria, although if you think recreating a caliphate within Syria is a good idea, that's an open question. It looks to me like Iran is being lost. It looks to me like Russia is being lost. So we've got a consistency in terms of capacity to think and act strategically.
This isn't just about the politicians. It's also about senior military officers, senior diplomats, senior intelligence officers. I've operated right at the top of British government as the executive assistant to our Chief of Defence Staff, so I've watched people operating at that level. Strategic thinking is the key shortfall, and it's caused us a lot of harm. It explains as well why we're going backwards while many other countries in the world are going forward.
The Scenario: What a War with Russia Would Actually Look Like
Tucker Carlson: At the point we're at right now, it seems more dangerous — the West's war against Russia — than it has ever been. Can you describe where you think we are and where this is going?
Guest: Let me do it through the tool of the article I wrote on the coming war with Russia. The reason I wrote it was that I was hearing a lot of people saying we're getting ready for war with Russia, we'll be ready to fight in 2030. I don't think that's true because we can't afford to be. But anyway, that's the narrative being sold to the European publics. And of course the Russians will be listening to this.
I thought it would be a good idea to say: if we're going to be ready to fight a war with Russia, what's it going to look like? The first thing I said in the article was: let's not assume that Russia is going to wait, doing nothing, until 2030 until we're ready. Let's assume that because of the way the E3 — Britain, Germany, and France — are promoting attacks deep into Russia, providing weapons with significant warheads, 250 kilograms, and significant range deep into Russia, the Russians are not just going to sit back and let this happen. The Russians have said they have not taken attacks on Europe off the agenda, which is a warning we seem to be ignoring.
So let's assume that the first attacks happen in September of this year, and the Russians destroy — with hypersonic missiles — the factories making drones and missiles in Britain, France, and Germany. The question then is: what does Europe do? The first thing Europe does is invoke Article 5. And as all of a sudden people realize what Article 5 really means — NATO, which when I was serving we used to say stood for "No Ability To Organise" — they realize that NATO isn't this great omnipotent coalition. People say it's the strongest coalition in history. That obviously isn't true. The strongest coalition in history, as far as I can see, was the Allied coalition in the Second World War: the United States, Britain, the Commonwealth, Russia, and China.
So NATO invokes Article 5. The three countries that have been attacked invoke Article 5. And they realize that what Article 5 actually means is that an attack on one is an attack on all, but it doesn't mean that the whole of the NATO forces have to respond — countries decide to respond as they think best. In the article I propose that Hungary says no, we're not getting engaged. Spain says no, we're not getting engaged. We don't think this is in our interests. Other countries might equivocate.
But the big issue, Tucker, is what does the United States do? My guess is that the Americans will not want to commit troops into mainland Europe to fight a land war against Russia on European soil. I wouldn't, if I were in the United States. So you're then in the situation: what do the Europeans do? Again, just to develop the scenario — I assume that the Europeans do the only thing they can do, because their land forces are not ready, which is to use air forces to respond to Russia. And that doesn't go very well. They find they're up against Russia, which has a lot of experience in air defense.
One of my jobs in the Navy was to be the captain of an air defense destroyer — what was known as the anti-air warfare commander — and I can tell you that we are in poor shape in Europe in terms of being able to defend our skies. We would struggle to respond to saturation drone attacks. We've got extremely limited responses to conventional ballistic missiles. I'm a great fan of Ted Postol, who is an MIT professor on this subject. He thinks the Patriot PAC-3 systems are possibly looking at about 3% effectiveness. And when it comes to hypersonic missiles, we've got no response whatsoever.
So suddenly we're making attacks that aren't very successful. But in return, because the E3 have decided to respond to Russia's attacks, Russia then takes the gloves off and uses hypersonic missiles — probably with conventional warheads — to do more damage. And the thing I would go after, especially as an energy expert, would be to do the same thing they've done in Kyiv and in Ukraine: surgically start to undermine our energy infrastructure. A Zircon missile landing in a liquefied natural gas terminal or an oil terminal in Milford Haven or Rotterdam would do extensive damage.
That would be bad enough, but unfortunately, because of the sanctions we placed on Russia about four years ago, we've switched ourselves off from Russian oil and switched ourselves off from Russian gas — that's 40% of our gas. We've also switched ourselves off from Russian diesel, which used to provide 40% of Europe's diesel. If you can explain to me how you run a modern industrial society without diesel, I'm all ears, but I don't know how to do it. Diesel is critical for farming, for fishing, for food logistics, for construction, for running the other two primary energy sources — renewable energy and nuclear energy. It is really the critical fuel, and we've switched ourselves off from it.
Having switched ourselves off and increased our prices in Europe — which is already having an effect on our economies, especially Germany's — we're now in a situation where the Strait of Hormuz is closed, so we've got a second wound on top of the first. It's an extremely weak position, not least because we import about 12 million barrels of oil per day into the European region. Norway is reasonably self-sufficient — in fact, completely self-sufficient — and we get about 45% or so of our hydrocarbons from the North Sea, although that's reducing. But Europe generally is extremely vulnerable.
What you've got is a situation where our energy infrastructure is being written down at a time when we have no chance of defending our skies against it. This is why I was trying to make the point to people who are prepared to think about this: what this war might look like, because the economic consequences would be profound.
Tucker Carlson: Mathematically, there's a really close relationship between the use of energy and GDP.
Guest: Extremely close. It's close to one — about 0.99 or something. So what that means is when you take energy out of the system, you are going to have a consequent effect of similar rough order of magnitude on your economy. If we take 10% of the world's energy away, then don't be surprised if we get a global reduction in GDP of 10%. Now that's getting close to a depression — indeed it's on the borderline of a depression.
Going back to Europe, it wouldn't surprise me at all if, were such an attack to happen, we would be in deep economic trouble. And I think that would lead to deep political trouble as well.
The point of the scenario was to help people really think about what such a war might mean and make sure we've done the risk assessment. At the moment, the Europeans' risk assessment of what they're doing, as far as I can see, is based on a guess. The guess is: we're going to keep firing long-range weapons into Russia, and we're going to guess that the Russians aren't going to respond. I think that's a very dangerous guess.
People say the Russians don't have red lines, and I keep saying to them: just a second. The Russians told us that if we tried to expand NATO into Georgia or Ukraine, it would result in a war. And indeed, all our clever thinkers told us the same thing. And surprise, surprise, when we did do that, a war happened. So Russia does have red lines.
The way that risk management works — and I'm not a great fan of risk management as used by the financial sector — is that you consider impact and probability. Even if the probability is low of Russia doing what I've described, the impact is profound. So to me, that's a risk you really need to work very hard to think through, and to make sure that the population who you're exposing to that risk has been taken on board, rather than just cracking on without really thinking about it.
There needs to be in Europe a political debate about this — whether we're prepared to let our politicians lead us into a situation where we're exposed to this risk. We've been here before in Europe. 1914 — Barbara Tuchman's famous book, The Guns of August — we fell into the First World War. People thought it would be over in four months, and four years later Europe was devastated. So let's at least try to do the thinking this time round. If we are going to poke the bear and ready ourselves for a war which we would lose anyway, let's at least have a public debate about that and see how the countries feel about it. I'm strongly of the view that if the country were exposed to what I'm talking about, the difference in terms of political support for it would be profound. The political support for it would fall away.
It doesn't matter what the moral issue is. I happen to think the moral high ground lies with Russia. What matters is the issue of power, and Russia has the balance of power here — overwhelmingly so. My suspicion is that if we were able to have that debate, Europeans would not continue to feel quite so Russophobic.
Nuclear Risk and the Limits of European Deterrence
Tucker Carlson: I think one disadvantage that the Europeans have is they don't understand how hated they are by the people planning these wars. I think it's true of all the wars of the last hundred years. The foreign policy strategists, the neocons who are driving all of this, truly hate Europe and would like to see it destroyed. The Israelis hate Europe, and Europeans can't seem to admit that to themselves. It's very obvious by the effects.
Let's say the Russians did lob a hypersonic missile into Rotterdam or into the UK. Everyone knows that Europe can't mount a conventional war against Russia — they would lose instantly. The one thing they do have, however, is nuclear weapons. So how much incentive would there be to use a nuclear weapon in response?
Guest: It's the $64,000 question, and I actually cover that in the article. If either Britain or France — the two nations with nuclear weapons — chose to respond with nuclear weapons, that essentially is committing national suicide. I would expect the Russians to respond. Let's not forget they've got nearly 5,500 nuclear weapons. Britain has, I think, around 200 — those sorts of figures. A prime minister or president of France who is prepared to use nuclear weapons to support a conventional war which we were likely to lose in the first place — that would be a suicidal call to make. So I cannot see it happening.
Tucker Carlson: Really? Because they cheered the destruction of their own energy pipeline. They enabled the invasion of their country by migrants from North and Sub-Saharan Africa. They seem suicidal, as an observer.
Guest: I think it's suicidal by incompetence. But I would like to think that within the establishment, there are enough people who would, by this stage — especially if we were starting to go to war — really start to think this through. I would also like to think there were Americans saying: this isn't very good. We were thinking we could help with a breakup of Russia. It's not happening. This war is starting to kick off. We need to get this to a close.
I don't know if that would happen, but I would like to think there would be some voices of reason in America. The sorts of people who would spring to mind for me would be people like JD Vance. Tulsi Gabbard is no longer there, but the voices of reason within the White House. I'd be curious to see what Donald Trump's view is as well, but I'm sure the Americans would not want to do anything which opens them to the possibility of a nuclear exchange with Russia.
Tucker Carlson: My sense is that Trump's views are irrelevant. I don't think he was for this war with Iran — he did it anyway. He's utterly controlled. JD Vance is the only person I'm aware of in American national politics with any real power who would oppose this. But I don't see anyone other than JD Vance.
Guest: I hope I'm wrong. There's no doubt that the voices of the independent media are starting to be heard. We've got a long, long way to go, but we're starting to be heard. This is why I think this debate needs to happen now rather than later.
When the attacks were conducted on the Russian strategic bombing force — those bombers were out on the airfields on the pan, visible by satellites as part of the START treaty — I thought that was an act of incredible strategic recklessness. Russian nuclear doctrine is such that if an element of the nuclear triad is attacked, their response is to respond with nuclear weapons. They chose not to do it — thank goodness — but we're playing with fire.
I think the nuclear response question is an open one not only for us but for the Russians as well. I could imagine the Russians saying: we've got people who are so incompetent in Western capitals that perhaps we don't want to respond this way. Or they might do it in a more measured way. Here's a very good question: what if the responses were not against Germany, France, and Britain, but against Germany alone? And what if they took out Germany's drone factories and Poland's drone factories? Would Britain and France be prepared to sacrifice their nations and tens of millions of deaths to support Germany in that situation? Very good question, and I don't know what the answer is.
To me, the answer is: let's at least think carefully about what we're trying to do with these long-range weapons and attacks into Russia, and let's also think about diplomacy. The fact that we can have meetings where the West is talking about solutions to the Russia-Ukraine war and triumphantly exclude one of the belligerents — it's diplomatic incompetence of the highest order.
In the very difficult British and Irish relationships during the Troubles in Ireland, we maintained very subtle diplomatic engagement throughout almost the whole of that conflict. And thank goodness we did. What we need is to at least think about an alternative pathway to peace. I'm sure it's there.
I often thought that one of the biggest problems is NATO itself. NATO at the moment is a bit of a self-licking lollipop. What I once said is: NATO exists to confront a threat which is created by its own existence, but doesn't have the power to confront the threat that its existence has created.
Tucker Carlson: What a beautiful formulation that is. NATO exists to confront the opposition it's created but doesn't have the power to successfully resist it. That's the truest thing I've heard today.
Guest: It was in a Quincy Institute — a Responsible Statecraft article — about eighteen months ago. It's so obvious, and yet people think that NATO is omnipotent. The NATO guarantee is much less comprehensive than people think, because it relies on military forces which are nowhere near as battle-hardened as the Russians are. The second best army in the world at the moment, in terms of battle-hardened experience, I would say is the Ukrainian army. The first is the Russian army. The Chinese will be watching extremely closely.
The idea that NATO — with a disparate group of countries with different levels of forces and different equipment capabilities — can be brought together into a coalition to defeat the most battle-hardened army in the world just doesn't stack up. You don't need to be a military man to understand that. Unfortunately, a lot of the military people don't understand this. They're not really interested, as far as I can see, in understanding Russia.
I was listening recently to one of our former chiefs of defence staff, and I said in a meeting: "What do you think about talking to Russia?" His response was: "Yes, I think we probably should do that — but not Putin." I thought, that's just astonishing that anybody could say that. It shows you the degree of Russophobia.
In my service career, I spent a lot of time preparing to fight the Russians. But when the Cold War ended and Partnership for Peace was kicked off and we started to engage with the Russians, most of us in my experience were delighted that we could be in that position. So quite how we've got back to this situation of seeing Russia as the enemy is a good question. A lot of it is to do with not listening to Russia and not hearing Russia, because when you listen to them and hear them, it's fairly obvious what they want. It's a bit like getting your team ready for a match and not bothering to study the opposition. How many football coaches would do that? How many American football coaches would do it? Everybody would be studying the opposition. And if we were studying the opposition, that would be a good start.
Tucker Carlson: They're much more serious than we are, and it's not close. That right there gives you pause. Why would you ever get into a conflict with people who are at least as smart as you and much more committed? You wouldn't.
The Energy Crisis: How Close Are We to the Edge?
Tucker Carlson: So where — after your military service and fifteen years in the energy sector — where is the West: the US, Europe, Australia, New Zealand, Canada — with energy right now?
Guest: I think it's a very good question. My strong sense — this is intuitive with some analysis to support it — is that we're on the edge of a crisis. If you take the Strait of Hormuz closure — it's about 13 million barrels per day — sooner or later that has to show up. What surprised me is how long it's taken.
When you start to see what's going on, you understand the lag. From the closure of the Strait, it takes about two months for ships traveling at 12 knots — about the same speed as a bicycle — to get to the United States and to places like Cushing. It takes about a month or so to get to Europe. So firstly, all the ships which had already left were still moving. The inventories were significant — there was a bit of an oil glut at the time. Those have been largely drawn down. The strategic petroleum reserves have also largely been drawn down. The American strategic reserve, I think, is now pretty low — the figure I have in my mind is about 20%.
Tucker Carlson: That's right.
Guest: Even when oil moves through pipelines — from Cushing up to New England, for example — it's traveling at between three and eight miles an hour. That takes time. And the oil in the pipeline needs to be there for the pipeline to work. The oil in the pipeline isn't working inventory.
Last, but by no means least, is China. What I don't think any of us understood was how China would respond to this. China reduced its demand by about 5 million barrels per day, which is a significant reduction. It's also home to the largest strategic petroleum reserve in the world — I think the figure I've got is 1.3 billion barrels. That's a very significant reserve.
I also suspect — and I don't know this — that one of the ways China was thinking about this was not just about self-interest. I suspect the Chinese were thinking that as an exporting nation, they were thinking long and hard about the impact that the Strait of Hormuz closure would have on the rest of the Far East, because there are other nations in the Far East which are much more vulnerable. Japan had a very large reserve, but places like Taiwan — where 90% of the world's semiconductors are made — were much more vulnerable. So I suspect one of the reasons China may have reduced demand is not just for tactical reasons but also for thinking about their export markets, because a reduction in oil in these other places could have a significant impact.
I would be surprised if we were not seeing consequences of this by August. I've certainly heard some very good analysts I follow talking about September as well. I'm a great fan of an American geophysicist called Art Berman, who is an exceptional analyst.
The other thing, of course, is that even when the Strait of Hormuz opens, there is a lag — a lag on the whole system getting going again. It's a bit like closing off the plumbing in your pipes at home and then expecting it to function perfectly. When the container ship blocked the Suez Canal, a very good merchant navy analyst called Sam Moginano said it was about six days for the whole logistics system to recover for every one day that ship blocked the canal. So even if it's three days, you could be talking about — as a minimum — the same amount of time that the Strait has been closed to recover. But it could be twice that or three times that.
So I'm expecting and forecasting that we'll be looking at a significant recession starting in the autumn, and that could tip into a deeper recession in the new year. Quite where that recession will play out globally is an open question. The country most insulated from it — surprise, surprise — is Russia. Russia is an autarkic nation. Although Putin's first degree is in law, his postgraduate work was in resource economics. I would be astonished if they don't understand this. I know that the Chinese have been looking at their own energy situation for decades — there's good evidence to say that in 2003, when the Americans with allies went into Iraq, the Chinese thought that was about oil and began increasing their own reserves.
As for places like Europe, we're incredibly vulnerable. So is a lot of the Far East. And there's an open question about the United States as well. The Trump line that the United States is an exporter of oil is true insofar as it's an exporter of refined product. But when it comes to crude, it's an importer of crude to the tune of about 6.5 million barrels per day. And even if you've got access — through Venezuela or Canada, for example — oil is a fungible commodity. So you may have access, but the prices are going to go up.
If those costs were to increase significantly in the next two to three months, I would imagine that would not be the sort of run you'd want into the midterms. And I would be surprised if they don't increase significantly. Even if the Strait opens, I would be surprised if the lag in the system is such that you're not still suffering from the consequences well into the midterms and probably into the new year.
Tucker Carlson: So oil — Brent crude — was priced at around $71 last week.
Guest: If you'd told me almost four months after the closure of the Strait that it would be $71, I would never have believed that. How did that happen? Were you surprised by it being so low?
Tucker Carlson: Yes, very surprised.
Guest: I was just as surprised as you, and I think most of the analysts were. I think a lot of it is to do with the lag. There's also this distinction between the futures markets and actual delivery. I was talking to a Singaporean colleague last month and he said that — and I don't know whether this is still the case — notwithstanding what Brent was at or what WTI was at, in Singapore they were buying crude for $200 a barrel. So the difference between the futures price and what people are actually paying on the day is the interesting one. There may be a short-term lag. Who knows? But that's the open question — the so-called crack spread between what you're forecasting to pay in the futures markets and what you're actually paying on the day.
Tucker Carlson: How does a country exist at $200 a barrel?
Guest: Fortunately, Singapore is an extremely efficient country. But that must be having political effects. It's quite a small country. I was so surprised when I heard $200 a barrel that I didn't ask much more.
If we get up to those sorts of figures, I think back to 2007 and 2008 and the great global financial crisis. I happened to be in Houston at part of that time and I remember vividly seeing the stock market red all over. I'll never forget it. I remember talking to an American who was working in the British consulate in Houston — he'd lost half his retirement savings in that crash.
If you were to get up to those sorts of figures — $150 a barrel — and if you've got a global economy which is already very precarious, it wouldn't surprise me if we have another great financial crash. Who knows — we might say it's a coincidence, but $150 oil as a function of that seems impossible to me. People will talk about synthetic collateralized debt obligations in the housing market. I think a lot of it has to do with the Eurodollar area and how funding in the Eurodollar area was actually tightening. But it seems impossible to me that oil — the primary resource — wasn't playing into that.
It's playing into things like Lufthansa, which I think canceled 20,000 flights about a couple of months ago. I don't know what bunker fuels are like — that's the fuel used for ships — but when I was talking to somebody recently about those, they had doubled. So again, it's what people are actually paying rather than the futures market. And it's when those two come back into alignment that we'll probably know more about what's happening.
The problem — and I've said this before — is that when Danny Davis said to me, "If you were the Tsar of the world, what would you do about solving the energy crisis?" I said: the problem is that the energy crisis has nobody in charge. The whole of the energy markets are run by the market. So there is no single entity that can say we need to do X, Y, and Z to sort this out. You can't just say we need to run more tankers through the Strait, because if the shipping companies say we don't like the look of that, thanks, we'll wait until it's safe — they will. So there are a whole load of issues here which are really run by the market, and there's nobody who really understands the thing itself. And even if they did understand it, there's nobody who can press five or six buttons to make the whole thing work again properly.
Tucker Carlson: That's right. I'm hearing the same thing from other analysts. I listen to this like a book, and I don't say I've got the answers, but what I do say is: you take this amount of energy out of the system, it's bound to have economic consequences. It's a mathematical impossibility that it won't.
Guest: And in a globalized economy, no nation can have real sovereignty. You can't act independently on behalf of your country because you're not in control of your country — because you don't control its economy. Nobody kind of thought about that obviously in the post-war era.
Prospects for Resolution: Ukraine, Iran, and the Role of Economic Pressure
Tucker Carlson: Let me just ask you a final question: how long are these two conflicts likely to continue? Do you see hope of resolution in Eastern Europe or in the Middle East?
Guest: If I take the Middle East first, I've got a strong suspicion — and I can't say for sure — that as the continued closure of the Strait comes home to the United States, and as the midterms go as I think it's almost impossible to avoid — badly — I suspect that will create a very different political atmosphere in the United States. If you've got very significant price increases and you're seeing lots of damage being done to the global economy, my suspicion is that that's the thing which might bring the Iran war to a closure.
The interesting thing as well will be to see the extent to which, if the situation were to improve between the United States on the one hand and China and Russia on the other, both China and Russia could actually have a hand in helping to bring that war to a close. What's for sure is that unless the United States is willing to deploy significant land troops — and when I say significant, we're talking tens or hundreds of thousands, because nothing else is going to make a difference — then the war cannot be won militarily. And I don't think I'm overguessing to say that there's no political appetite in the United States to deploy land forces into the Iranian war.
As regards the Russia-Ukraine war, that's a more difficult one to call. My guess is that what Putin will be thinking about is the coming economic crisis in Europe. One of the things he could be saying to himself is: I could respond as the Europeans start to ratchet up pressure on me, but actually I can see what's coming. By the time this economic crisis hits Europe, the Europeans will finally recognize that they simply can't afford the weapons — because they're actually tipping into recession. Germany is arguably already in recession. I think both Britain and France are probably on the edge of it. Suddenly they're in deep economic trouble, and the last thing they want to do is invite their countries to invest 5% of GDP in fighting a war which, by this stage, they'll hopefully recognize cannot be won.
If that happens, I would like to think it could be brought to a close by the end of the year if the recession hits. It's a slightly weird way to think about it, perhaps. A lot will depend on the midterms, on how the neocons see it, on the E3 and their policies. But sooner or later, people are going to recognize that the war cannot be won.
The one other thing that could bring it to a close would be a change in policy by Russia — specifically, a move on Kyiv. Not for military reasons but for political reasons. If the Kyiv government were to collapse, I think at that stage it would be game over. Russia has never mentioned it, but I wouldn't be surprised if it's been something they've thought through as a possible course of action.
Tucker Carlson: Putin has got to be under domestic pressure. He doesn't rule as an absolute dictator. He's got constituencies in the GRU, the military. Lots of people would like his job. How much pressure is he under to respond with greater force, do you think?
Guest: I think he's under significant pressure. But I actually took the time, when the war kicked off, to listen to Oliver Stone's interviews with Putin to get to know the man. I also took the time to read Philip Short's biography of him. I came out of that thinking: this is a man who is extremely strategic, and whatever you think about him based on what you've heard in the press, this is a person who deserves significant respect.
So if I had been thinking about this, I would say: we need to think very carefully, because this is a strategic leader who deserves significant respect. I think he is under pressure, but equally I think he's the sort of man who will be able to resist that pressure and do what he thinks best — which is what I think he's been doing until now.
I often hear people in the alternative media saying Putin hasn't responded, he should have responded by now. I have a strong intuition — supported by what I know of the Russian General Staff — that he won't be rushed. When I went to Afghanistan, before I went there I read the Russian General Staff's analysis of their Afghan campaign. They did a ten-year campaign and got out in good order after ten years. The structure they left there took two years before things started to deteriorate again. We got out after twenty years, with much more money expended, and things were collapsing around us as we left. I was really impressed by what the Russian General Staff had done.
So I would think Putin is very well advised by the Russian General Staff. He's the sort of man who will hold his nerve and do what he thinks right strategically. Although I've pushed that scenario as one to think about, I would think that if he were going to use weapons, the first thing he would do is ring up the White House and say: we are going to use weapons against the E3. Having done that, he would then ring up Merz, Macron, and whoever is in charge in Britain and say: we are going to use weapons against production facilities unless we have a clear response from you saying that you will stop providing Ukraine with these sorts of weapons. That's what I would guess he would do — escalate in a measured, graduated way. In terms of holding his nerve, I would think he will hold it for a while. But a lot will depend on how the war continues to play out, the economic conditions, and the extent to which the Russians become nervous that large weapons built in France, Germany, or Britain are going to start landing in the middle of Russia. If they do start to think that is going to happen, I would expect Putin to respond — but in a very measured way.
Tucker Carlson: That sounds exactly right to me. What a wise analysis. Thank you for taking the time to do this.
Guest: It's a pleasure, Tucker. Keep up the good work. In the independent media, it's important. I so often get people saying to me after the podcasts I've done with Danny Davis and Glenn Diesen and others: "Thank goodness, at last some common sense." We really need this common sense, because the danger otherwise is that we'll do a 1914 — which is the last thing we need to do.
Tucker Carlson: I spent thirty-five years in traditional media, and the second I went to independent media I thought: this is where all the smart people are. I wondered where they were — they're not in traditional media. So thank you, and you're a perfect example.
Guest: Pleasure.