Great to be with you, Kaylee. We are. We're like a bunch of folks at the beach who've been hearing on the radio that a tsunami is coming but kind of questioning if it's coming or not. Now Rapidan is predicting or forecasting to extend the analogy a tsunami for quite a while and we're starting to see it on the horizon. But it's a good news story for consumers whereas a tsunami is a bad news story for others. We're about to cross through $3 a gallon and it's by some metrics we already have according to Gas Buddy. If you think about it, President Trump never was above $3 a gallon in his first term. We got close. So he enjoyed a $2 pump price in his term. The White House is just overjoyed because whether they deserve it or not, a sitting president gets the blame when gasoline prices go up and gets congratulations when they go down. Barring a geopolitical disruption, the way my colleagues and I at Rapidan look at the markets we think gasoline prices are more likely headed down further into that $2 range on a national average.

You're right. We are quite bearish in the near term, but I want to hasten to mention Joe, what we're telling clients is brace for the great crude steepener, like a steepening yield curve. Near-term we've got supply growth running three times faster than demand growth. That's only partly a US story. That's Argentina, Brazil, Guyana. But near-term, we have a glut. In the medium term, this market is going to tighten up. So we're telling clients prepare for this. Consumers enjoy it. We're going to go down, but then in the coming years we're going to go much higher. We think we're going to go into a tightening market. But politics is always about what's tomorrow, and tomorrow is likely to see a deluge of oil. We have to ask ourselves what stops crude oil prices falling in the 40s. We think either OPEC plus has to step up and cut production—they've been raising it—or President Trump has to follow through by restricting Russian or Iranian oil exports with tough sanctions instead of weak sanctions. If neither OPEC plus nor President Trump and sanctions remove a lot of oil next year, it's the US shale sector that will take it on the chin, with an echo of 2020 when prices fell further to shut in wells. That will not be a happy story.

We've learned with President Trump he has a modus operandi with these negotiations that you have to take seriously. Consider Iran as a template. He could have signed a deal with Tehran but instead ordered an aerial attack on the Fordo facility. He can go either way. With Russia it's the same. If Putin doesn't agree to a ceasefire, Trump will go to the last mile and beyond for diplomacy and doesn't want to figuratively drop the bomb here. If no deal in coming weeks, the White House along with Europeans is ready to impose tough sanctions on Russian oil, actually cutting into production and risking higher prices. Returning to the glut topic, if the White House sees a glut develop, it will be more willing to crack down on India, Turkey, and China and shut in Russian production more than his predecessor was in 2022. So either a deal with Putin or very tough sanctions down the road.

Absolutely, Joe. It's a shame. There is bipartisan consensus that we should be doing that. The problem is money. When I worked for President Bush we had authority to do a royalty in kind program—no need to ask Congress. We told oil companies producing in federal waters to pay us in oil instead of cash and filled the SPR to the top. Congress took that authority away. So Congress should work with the President to get it back or better yet appropriate money. We can't even open the government now, but if we could, it would be great to pony up money and refill the SPR.

I think they will. India took no Russian oil before the Ukraine invasion. Now it's their biggest customer. They've enjoyed cheap discounted Russian oil—a 15% discount on pump prices. However, if forced to choose between enjoying discounted Russian oil and having economic relations and trade and stable political relations with the US and EU (which has tough sanctions coming in January), I think India will side with letting go of the discount to avoid worse trade measures. They'll quietly move away, though they won't say so publicly.