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In times of peace, insurance risk may account for just 2–3% of the overall picture. During periods of conflict, that figure can climb to 7–10% — potentially several times higher.

These rising risks add another layer of cost and uncertainty to global shipping, impacting businesses and supply chains around the world.

🌎 How much more expensive could global trade become as geopolitical tensions continue to evolve?

#Maritime #Shipping #Insurance #GlobalTrade #SupplyChain

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From food and healthcare to technology, defense, and security, nearly every industry relies on the movement of goods across the oceans.

As we’ve seen with the Suez Canal blockage, COVID-19 supply chain disruptions, and tensions around the Strait of Hormuz, when shipping is disrupted, the effects ripple across the entire global economy.

🚢 Why does maritime trade matter so much, and what happens when it’s interrupted?

#GlobalTrade #Maritime #SupplyChain #Shipping #GlobalEconomy

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In this conversation between host Steve Gruber and Rey Trevino III, President of Pecos Country Energy, the discussion centers on the complex factors driving global energy prices in an era of geopolitical instability. While diplomatic efforts to release millions of barrels of diesel onto the market offer hope for relief, the reality is far more complicated.

The real bottleneck isn't crude oil supply—it's refining capacity. With U.S. refineries operating at near-maximum efficiency and California continuing to shutter facilities, America faces a structural challenge that no trade deal can immediately solve. Add to this the soaring insurance and shipping costs for vessels navigating contested waters, and it becomes clear that breaking the energy price logjam requires more than political maneuvering—it demands infrastructure investment and strategic policy decisions to restore American energy independence.


1. Global Energy Markets & Geopolitical Impact
The conversation centers on how international conflicts—specifically the wars in Ukraine and Russia—are directly affecting global energy prices. The hosts discuss a diplomatic deal involving Russia and diesel fuel releases, and how Ukraine's military response (bombing the facility) undermined efforts to stabilize prices. This illustrates how geopolitical tensions create volatility in energy markets.

2. Refining Capacity as the Core Bottleneck
Rey Trevino emphasizes that the real problem isn't oil supply—plenty of crude is flowing from the Strait of Hormuz and other sources. Instead, refining capacity is the limiting factor. Key points include:

U.S. refineries are operating at 97% efficiency
Texas is building its first new refinery in 50 years
California has been shutting down refineries, reducing national supply
This infrastructure gap is preventing prices from dropping despite available crude
3. Shipping & Insurance Costs
Beyond refining, maritime logistics are inflating energy costs:

Insurance rates for ships transiting the Strait of Hormuz have increased 3-6 times
Shipping companies are charging over $1 million per day to operate these vessels
These added costs directly impact final fuel prices
4. Historical Context on Gas Prices
Steve Gruber provides perspective that current gas prices, while elevated, aren't historically extreme. When adjusted for inflation, 2011-2012 saw higher prices, and 2022's peak ($5.01/gallon) was the highest in nominal dollars but not in real terms.

5. Policy Solutions & Energy Independence
Trevino proposes using the Defense Production Act to lower prices and advocates for increasing refining capacity to achieve energy dominance and independence for America.

Hat tip to Seve Gruber and the Day Break team for doing a great job every day. We recommend watching them!

Subscribe to The Crude Truth for more conversations about energy, business, technology, and the future of Texas. https://pecoscrudetruth.substack.com/



For More information on Tax-Advantaged Investments: https://pecos.energy/info/

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