GM105: The Billion-Barrel Shock Has Not Arrived Yet ft. Adam Rozencwajg

**Adam Rozencwajg** (0:01)
I mean, it just doesn't make any sense, right? You can still benefit or protect your domestic market and not idle those refineries. And the only thing I can think of is that it's sort of like a signal to the world or a war game that, look, this is what China looks like if we're starved of imports. We're fine, and you guys have a real big problem.

**SPEAKER_3** (0:24)
Welcome to Top Traders Unplugged. In markets, success doesn't come from predicting what happens next. It comes from being prepared for what you can't predict.
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**Niels Kaastrup-Larsen** (0:57)
Welcome all, welcome back to another edition of our Global Macro Series where, as usual, I'm joined by my co-host, Cem Karsan, as well as a returning and very popular guest to the show, namely Adam Rozencwajg, whom we last spoke to about nine months ago. Adam, it's always a pleasure to have you back. How have you been?

**Adam Rozencwajg** (1:14)
Very good. And you guys? Nice to be back.

**Niels Kaastrup-Larsen** (1:16)
Good, good. And of course, it is an interesting time to talk about commodities and natural resources, so I'm sure it's going to be a fun and very educational hour or so. But also great to see you, Jim. I know we've done a few recordings the last couple of weeks, so it feels very familiar to be back with you.
And also look forward to some exploring further interesting deep dives that you have installed for today.

**Cem Karsan** (1:42)
Yeah, I have a lot of questions and a lot of thoughts given the current commodity situation. So excited to talk to Adam today.

**Niels Kaastrup-Larsen** (1:51)
Super. All right. So what I thought about, the way I wanted to kick off our conversation today was actually to go back to our first conversation ever, which was in May of 2022
So back then, we have just had the beginning of the Ukrainian conflict. And of course, as a commodity trading advisor, where we have exposure to the underlying markets, I distinctly remember that many of these commodities had seen a... They had already begun an up move, but they really saw some parabolic move higher at the time, especially things like base metals, agricultures, energies, and within energies, I think in particular, natural gas from memory. Anyways, and we saw lots of commentators, can't remember exactly.
I'm sure this is normal, but of course, there were some commentators out there who came out and said, yeah, this is the beginning of the commodity super cycle. Now, I know you have said, Adam, in the past, that there are reasons why you didn't believe it at the time and so on and so forth. Anyways, a few months ago, we had activity, you know, another confrontation starting in the Middle East, in Iran, and something on the surface, at least, looked sort of similar. We had already seen, last year, some commodity markets started moving higher, especially, like, precious metals, so on and so forth. Energy complex really didn't start until sort of February of this year, but, of course, took a massive move higher once the conflict started. And then we got kind of the classical group of people coming out. And again, Adam, I don't know, actually, what your public conversations have been like, but I do know some of our other previous guests that we have a lot of respect for came out and talking on other podcasts and shows, basically feeling that or expressing that there's almost like an inevitability that oil had to go to $150, $200 because of the importance of the straight of Homoose and the closure of that. So I kind of like to start there because obviously events in the last few weeks, markets have turned. We've seen some, definitely some corrections in many of the commodities and including the energy markets, albeit in the last couple of days, there's a little bit more support giving the new bombings. But maybe we just start with that and say, okay, what do you think, Adam, is going on? Are there any similarities to 2022? Is this a completely different situation? I know you've written beautifully about some of the differences in your updates, but I'd love for you to take us through that and then we'll see where we go.

**Adam Rozencwajg** (4:48)
Okay, very good. Well, look, lots to unpack there and we can definitely get started. So, I think first and foremost to really kind of zoom out and take the biggest picture that you can.