This is on an unprecedented level. If you ask consumers, they believe inflation will be 5% in one year's time. This is a huge experiment with the US economy, and I think it's going to go badly. We saw the OECD warning and I think the Fed is also aware. Then there’s the geopolitical risk with Iran; I'm really concerned that the US is going to do something similar to what they did in Yemen. If so, that’s what would really impact physical oil flows.
Is Germany’s planned increase in defense and infrastructure spending a big deal?’
The decision by Germany to boost expenditure is pivotal. It is Europe rising to the occasion, realizing that they are on their own and that they have to build their military, safeguard their own borders, and kickstart the economy. It’s a big benefit that Germany had such low debt until this point. This is an unprecedented amount of money and financial markets are buying into it. The DAX is up 18% this year, Nasdaq is down 10%, and the Euro is up 5-6% in March alone.
Could Germany turn back on the Nord Stream 2 pipeline if there’s a ceasefire in Ukraine?
My take is that there's not going to be any more Russian pipeline gas this year into Europe, but I would not rule it out. Russian gas through Ukraine to Europe could be a possibility if the Ukrainians see that they can get a healthy transport fee.