"It takes time for things to, for this kind of a shock to play out into the market because people have storage capacity so you don't really feel it," Hochstein said. "But now we're so far into it that you're starting to feel it. So as you said, consumers are feeling gasoline price pinch with $4 a gallon today on average, which means some are getting it a lot more than that. Diesel prices are going up dramatically in the United States and around the world, which means that our food and all the stuff that we that comes to us on a truck, whether it's from an Amazon delivery truck or through our shopping, is all going to go up in the next several days and weeks, and a lot and fertilizer and all kinds of other chemicals."
"What happens when you have a disruption is that when it goes on for a while, when you turn it back on, it's not like flipping the switch and the light goes back on," Hochstein added. "You now have to start restarting all the production of the oil, the restarting of the production of the gas. Then you have to refine it, then you have to deliver it. So it will take a while for that to enter into the market. We have some airports around the world that may run out of jet fuel in the coming days, and planes will have to be grounded."
Bolduan interjected to make sure she had heard him correctly.
"Wait – so full stop, like, airports are going to run out of jet fuel," she said.
"Full stop," Hochstein repeated. "In about a week or so. There'll be airports around the world that will run out completely, and we're already seeing it because airports, some airports in the world are restricting how many flights can take off. So in some Asian countries, we're seeing them limiting the amount of flights already in order not to get to the point where they run out."
The Iran-backed Houthis are targeting the critical Bab el-Mandeb Strait connecting the Red Sea to the Gulf of Aden, and Hochstein explained the downstream effects of both those critical shipping lanes being closed to commercial traffic.
"Every day of delay costs more money, so any product that's on those ships, whether it's oil or container ships, now gets more expensive," he said. "When ships take longer to voyage, that also means they're not available as often because they reach destinations later, so they can't turn around. So the whole system is getting bogged down. This started as a crisis in Asia because of how reliant they were on the Middle East. It's now spreading to Europe, where jet fuel prices are now double the price they were a month ago, double, and they will run out of fuel, and then it's already starting to come to the United States. Any American that is thinking about traveling this spring and summer is going to have a rude awakening if they haven't bought their tickets yet. Those plane tickets are going to cost a lot more money, and it's going to take a long time for that to happen."
"There's one other point, Kate, that you have to always think about when you get so tight, like in the United States, where we're almost self-reliant, we're not really – any one accident can take us off kilter," Hochstein added. "Last week there was an accident at the Valero refinery in Texas that took out a significant part of the facility. Accidents like that will now hurt us and hurt our ability because we now don't have the ability to import anything from the outside."
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