In this episode of “Intelligence Matters,” host Michael Morell speaks with Mark Finley, fellow in energy and global oil at Rice University’s Baker Institute, former senior economist for British Petroleum, and former analyst and manager at CIA. Finley explains the effects of Russia’s invasion of Ukraine on global oil and gas markets and why current Western sanctions may not immediately meaningfully curtail Moscow’s energy revenues. Morell and Finley also discuss how the rest of the world may experience price shocks stemming from growing commodities prices, including the risk of a recession.
- Global price shocks: “It’s important to note that in this context of Russia, we’re not only talking about a spike in oil prices, but also natural gas and other commodities – metals, foods. Russia and Ukraine are significant exporters of all of these. And so what’s unique about the shock that we’re going through right now is that it’s not localized to one commodity. This is not an oil embargo. It is a shock across the whole commodity space.”
- Discounted purchases of Russian energy by China: “The rumors in the recent trade press are that we’re hearing that Russian cargoes are being discounted as much as $30 a barrel. But again, with prices at $100 a barrel, that’s still giving Russia income. That is more than they need to balance their budget.”
- Counteracting disruption to Russian supplies: “In total, in theory, the spare capacity of producers like Saudi Arabia plus strategic stocks in places like the United States and other oil consuming countries could, in theory, completely offset a full disruption of Russian oil supplies temporarily. But the system has never been tested.”
INTELLIGENCE MATTERS – MARK FINLEY
PRODUCER: OLIVIA GAZIS
MICHAEL MORELL: Mark, welcome to Intelligence Matters. It’s great to have you on the show.
MARK FINLEY: Michael, thank you for the invitation.
MICHEL MORELL: It’s also good to talk to you again, too. We worked very closely together at CIA. So it’s a real pleasure to chat.
I want to say one thing right up front, which is that we’re taping this a week before it’s going to air. So I just want to let everybody know that, you know, Ukraine is a fast-moving issue. The energy market as it relates to Ukraine are a fast-moving issue. So I just want to give folks a heads up that something may happen that we may not cover in this podcast. And the reason is the taping dates, just everybody put that in the back of their mind.
Mark, I want to get right into the meat of the issue, the impact of Ukraine on oil and gas markets. But I’d first love it if you could walk us through your career, just take a couple of minutes to do that so that folks get a sense of who I’m talking to.
MARK FINLEY: I am currently the fellow in energy and global oil at Rice University’s Baker Institute for Public Policy. My time at the Baker Institute follows a long career at the intersections of energy, economics and national security. I was the senior economist for BP in the United States for about eight years, where I directed the company’s annual statistical review of world energy, as well as its long and short term oil market analysis and transportation, including in the BP energy outlook.
And prior to that, I had the privilege of working with you as an analyst and a manager at the CIA.
MICHAEL MORELL: And did you, Mark, did you come to the agency with a background in energy or did you learn all of that at the agency?
MARK FINLEY: I did have a bit of background. I had a graduate degree in economics and kind of stumbled into a job working for an oil trading company. All I knew when I applied was that it was a company based in Bermuda. I did not have a specific energy background coming out of graduate school, but got lucky to have that position.
And then I got further an additional piece of luck because in the late 1980s, the energy security analytic group within the agency said, “Huh, you know, there’s a whole industry out there and we should try to reflect the expertise of that industry’s value chain in our analysts, in our analysis.”
And so they were in a process when I joined of hiring people with backgrounds in the energy sector – geologists, engineers. And I had a unique experience working for an oil trading company that they also wanted reflected in the analysis that would serve policymakers in the U.S. government.
MICHAEL MORELL: OK, Mark, so let me start by asking about the state of the oil and natural gas markets before Ukraine, before the tensions started to build. So what’s the base that we were coming off of here?
MARK FINLEY: The base that we were coming off, heading into the crisis, was that the world’s energy complex, including oil and natural gas, was unusually tight. Prices were rising strongly even before Russia invaded Ukraine. And this is coming out of a very strong economic recovery after the COVID pandemic shutdowns in 2021; we saw the strongest growth in world oil demand ever recorded.
At the same time, we also saw weak supply. Partly that was due to a lack of investment here in the United States. But most importantly, it was due to the biggest coordinated national oil supply cuts the world has ever seen implemented during the pandemic by the so-called OPEC+ group, which includes not just the traditional OPEC members like Saudi Arabia, but also included ten other countries, including, importantly, Russia.
That group had cut production very sharply, and the result was that as demand recovered, inventories fell and prices rose. 2021 saw one of the biggest annual increases ever in world oil prices and also very large increases in natural gas, especially in Europe.
And we’ll come back to the differences between oil and gas as we talk.
MICHAEL MORELL: And how important is Russia to both of those markets or how important was Russia to both of those markets, pre-Ukraine? What was their share of production? What was their share of global exports? Kind of walk us through their importance here.
MARK FINLEY: Russia is actually the single biggest exporter of facet fossil fuels on the planet. They are the biggest exporter of natural gas. They are the second biggest exporter of oil. And significant producers of both oil and natural gas, as well as a producer and exporter of coal.
One of the reasons why this is important is because Russia is big. The other reason is that energy is big. You know, energy is central to our way of life. Oil is by far the world’s largest single source of energy.
Last year, the increase in oil prices drove the biggest single increase in gasoline retail prices in the United States ever. And I estimate that it costs – just the increase – costs the average American family an extra $1,000, and it accounted for 20% of all of the inflation in the entire U.S. economy last year. And that was again, before Russia invaded.
A key difference, however, is that oil is a global marketplace. And so while the United States doesn’t import a lot of oil from Russia, any potential disruption of Russian supplies would matter massively for U.S. prices, because it’s a global marketplace.
That is different from natural gas. Natural gas is primarily a regional marketplace, and in the Russian context, important for Europe. Russia by itself accounts for about a third of all of Europe’s natural gas consumption.
And the connections between the U.S. and regional markets for natural gas in Europe and elsewhere are pretty tenuous. And so prices for natural gas in Europe since the crisis broke, have been trading at the equivalent of $200 or $300 a barrel. While here in the United States, natural gas prices have been trading at the equivalent of about $30 a barrel.
So, a big disconnect between them for natural gas, whereas for oil prices, which are currently around $100 a barrel, have been going up for everyone all over the world.
MICHAEL MORELL: And give us a really quick sense of of where Russia’s oil exports go and where their gas exports go.
MARK FINLEY: Sure. So the the biggest market for Russia for both oil and natural gas is Europe. About half of Russia’s exports of oil go to Europe and an even bigger share of its natural gas exports.
By the way, Russia recognizes that vulnerability as well, and it has been trying to diversify its exports in recent decades, opening up a new oil pipeline to China, opening up a pipeline to export to Asian markets, and building capacity to export natural gas by liquefied natural gas tankers rather than pipelines to Europe.
It’s also important to recognize that when we talk about oil, it’s not just crude oil. Russia is the second biggest exporter of crude oil in the world after Saudi Arabia, but it’s also, importantly, the second biggest exporter of refined products in the world after, believe it or not, the United States.
And that matters because we’ve seen not only sharp increases of crude oil, but also very sharp increases in prices of diesel fuel, for example, for which Russia is a significant export market for Europe.
MICHAEL MORELL: So, Mark, I want to ask you a question about the the two markets you talked about – oil and gas – and how different they are. Does liquefied natural gas change that difference? Does liquefied natural gas make gas more like oil, more like a world market or not?
MARK FINLEY: So liquefied natural gas is an important development and the trade globally of liquefied natural gas has been growing in recent years, and that is going to make it more like a global marketplace.
I mean, the difference between a pipeline and a tanker is flexibility. Natural gas flowing in a pipeline from Russia to Europe can’t go anywhere else, whereas a tanker can literally stop in the middle of the ocean and turn around and go somewhere else.
But it’s not all the way there yet. And the reason is here in the United States, which has become one of the biggest exporters of natural gas in the world, following Russia, due to the shale revolution, all of the terminals that can produce liquefied natural gas for export in the United States are more or less running flat out.
And that is the key disconnect that prevents natural gas from being a global marketplace like oil – is just the limited connectivity and the constraints that we see in the system.
MICHAEL MORELL: Okay. Great. So that’s the base of where we were. What’s happened since the build-up in tensions, what’s happened since the invasion to the oil and gas markets?
MARK FINLEY: So since Russia invaded Ukraine, it’s been very interesting and we’ve seen unexpectedly strong financial sanctions by the U.S., Europe and its allies on Russia, but a deliberate effort not to interfere with flows of Russian energy exports.
Both President Biden and President Putin and European leaders have all been very clear that they don’t want to target, at least so far, Russia’s energy sector. And the reason is because A) Europe in particular is very exposed and vulnerable to a disruption of Russian supplies, but even here in the United States, consumers are already feeling the pinch. And changes in gasoline prices correlate very strongly with things like consumer sentiment and the president’s job approval rating.
And so President Biden has been very clear that he, at least so far, that they don’t want American consumers to feel the pain of any policy measures that are taken.
MICHAEL MORELL: The U.S. and the U.K., though, have both stopped importing Russian gas. That is one change, correct?
MARK FINLEY: Correct. So President Biden, under pressure, changed his stated policy to institute a ban on purchases of Russian crude oil into the United States. The United Kingdom and Canada have also announced such measures.
But those aren’t the main markets, and it doesn’t really stop Russia from supplying because those cargoes can go elsewhere.
But there’s another wrinkle here, which is that even without official sanctions targeting the Russian energy sector, companies have become reluctant to purchase Russian oil in particular due to the reputational damage, as well as the risk that they might wind up holding a cargo of Russian oil in a rapidly moving situation where sanctions could, at some point, be put back on the table. And so a few weeks ago, there were reports that Russia was having trouble selling up to a half of its total oil exports because its buyers were becoming reluctant.
Here’s where the global market comes into place. There’s 100 million barrels of oil that gets traded and a similar volume of refined products that the oil is made into.
And if Russia’s established buyers become nervous, all Russian marketers go through their Rolodex and find someone else to sell it to.
There have been reports that trading houses and countries like India and China have been increasing their purchases of Russian oil, albeit – able to extract large discounts in the process because of the additional risks and difficulties.
MICHAEL MORELL: So when you look at how much Russia is exporting today, particularly oil, is it much different than it was before the crisis?
MARK FINLEY: It is not much different. In fact, a couple of weeks ago, the market was in a panic because of reports that Russian oil exports were having trouble finding new homes. And about a week later – all it took was a week before the buzz kind of went around trading circles – saying, ‘Never mind. They’re finding new buyers. Even if they have to discount it by $30 a barrel, the physical barrels are still making their way into the marketplace.’
MICHAEL MORELL: Mark, how big a discount are the Chinese and Indians getting?
MARK FINLEY: The rumors in the recent trade press are that – we’re hearing that Russian cargoes are being discounted as much as $30 a barrel. But again, with prices at $100 a barrel, that’s still giving Russia income that is more than they need to balance their budget.
MICHAEL MORELL: And when you factor in the discounted prices, what’s happened to oil prices overall in the world as a result of the Ukraine crisis?
MARK FINLEY: So the global benchmarks have been exceptionally volatile.
When I say global benchmarks, I should qualify that. Crude oil is not a single homogenous product. You know, there are significant differences in quality of crude oil that gets produced in the United States, in Russia and Saudi Arabia. And so every barrel has its own price.
But to facilitate transactions at a global scale, most oil is priced based on a reference barrel here in the United States, the West Texas Intermediate. Globally, it’s the U.K. North Sea production crude oil called Brent. WTI and Brent prices have been exceptionally volatile.
Before Russia invaded, they were about $100 a barrel. Early in the crisis, they rose as high as $130, back down below $100. And even in just the last week have gone back up to $120 and back down to $100.
The general concept is that there is still tremendous uncertainty – and that’s what’s driving this volatility, is the daily news flow. But $100 a barrel is a pretty high price in the historical context. It’s not remotely the highest. We saw prices getting as high as $150 per barrel on the eve of the financial crisis in the middle 2000s. And moreover, we have to adjust that for inflation.
But it’s still a significant increase, and it matters for prices at the pump directly. In fact, you can almost perfectly predict the annual change in U.S. retail gasoline prices by doing nothing other than looking at the annual change in crude oil prices.
MICHAEL MORELL: Okay, Mark.. So what would be the impact of either Western sanctions on Russian exports of oil and gas, or what would be the impact if Putin made the decision to pull those products from the market?
MARK FINLEY: Mm hmm. If I could predict the price of oil, as we used to say jokingly, I’d be laying on a beach somewhere. So here’s the factors I would think about when I try to think about how to approach analyzing a question like that.
First is, what’s the form of the sanctions? Is it something like the U.S. has already done, saying, ‘Well, we’re not going to buy your oil,’ which means it can go someplace else?
Or is it going to be an Iran JCPOA-type of sanction that says any transaction that clears through the U.S. financial system that involves buying Iranian oil is going to be subject to sanctions. And since the entire world’s financial system clears through the U.S., that has effectively bottled up a significant share of Iranian exports.
And there’s lots of stops in between those two extremes. Europe, for example, has announced its aspiration to reduce its purchases of Russian natural gas by as much as 80% this year. How they can do that, we could talk about, but the form of sanctions matters. That’s one factor.
The other is, what’s the underlying state of the marketplace? We’ve already talked about how that’s very tight. Inventories are low. So the ability to cope by with a disruption by drawing on commercial inventories is pretty constrained.
Another classic coping mechanism in the oil market is spare production capacity in countries, for example, like Saudi Arabia and the UAE.
But given, strained relationships between the U.S. and those countries, we’ve seen that they have so far resisted entreaties from the U.S. and other oil consumers to accelerate their planned production increases.
MICHAEL MORELL: How much spare capacity is there in Saudi Arabia and the Emirates?
MARK FINLEY: So the U.S. Energy Information Administration estimates that there’s maybe 4 million barrels a day of spare production capacity in the world. The vast majority of that is in Middle East producers, most especially Saudi Arabia and the UAE.
Saudi Arabia is the only country ever that I’m aware of that has invested in building capacity with the intention of not using it. They’ve always, for many decades, had a policy of maintaining a buffer of spare production capacity for use in an emergency.
Now, again, the separate question is, will they be willing to use it? And, there was an OPEC+ meeting on March 31st – so by the time your listeners hear this broadcast, we’ll have at least some indication of whether they’re willing to open the taps to help consumers or whether they’re sticking with their original plans.
MICHAEL MORELL: So the other potential source of oil here is Iran. Should there be a new Iran nuclear deal, Iran could start exporting oil again. How much would Iran be exporting if that could start happening?
MARK FINLEY: Right. If their facilities have been properly maintained, which the Iranian government says is the case, their production now compared to what it was pre-sanctions suggests that they could increase production by somewhere, perhaps a bit more than 1 million barrels per day.
There’s also a possibility that Venezuela could increase production a bit, because the United States is also engaged in conversations for sanctions relief with that country – although most people think that their facilities have not been well-maintained.
There’s lots of reports of scavenge and cannibalisation of parts due to underinvestment. And so the prospect for Venezuela to increase production looks to be pretty constrained.
The other option perhaps is using strategic oil stockpiles – the United States, Europe, Japan, China and India hold more than one and a half billion barrels of government-owned strategic stocks for use in an emergency.
And members of the International Energy Agency have already announced plans to release 60 million barrels of oil into the market from their strategic stockpiles, half of which comes from the U.S. stockpile.
MICHAEL MORELL: But if you take those stockpiles and you think about a drawdown of them, how much oil could that put on the market on a daily basis?
MARK FINLEY: Great question. The U.S. Energy Department says that it could by itself release up to a bit over 4 million barrels a day, temporarily, for about three months. And then the individual storage terminals in the U.S. Gulf Coast start to go dry.
Also, it’s important to note that that system has never been tested. There are some analysts who doubt that the United States could release that much oil in a crisis. Other countries don’t have official profiles that we can tap into.
But in total, in theory, the spare capacity of producers like Saudi Arabia plus strategic stocks in places like the United States and other oil consuming countries could, in theory, completely offset a full disruption of Russian oil supplies temporarily. But the system has never been tested.
MICHAEL MORELL: So, Mark, at the end of the day, if the Russian oil comes off the market in an Iran way, with secondary sanctions, you’re talking about significant price pressures.
MARK FINLEY: Absolutely. Prices would certainly skyrocket in the event of a full disruption of Russian supplies, even with strategic stocks and even with spare production capacity. And sharply higher oil prices here historically have a real strong correlation with causing recessions.
And by the way, that’s the good scenario in a worst-case disruption. The world has had 50 years to practice oil supply security, and there is strategic stockpiles and spare capacity.
Other forms of energy don’t even have that amount of strategic planning and backup. So, for example, natural gas exports don’t have the benefit of strategic buffers of spare capacity in strategic stockpiles. And so the price pressures there could be even more significant.
MICHAEL MORELL: And that’s where I wanted to go next – to the gas market. Should that get disrupted, there’s not a lot of room to maneuver, correct?
MARK FINLEY: Especially for Europe, that is correct. And when I say gas, of course, I mean natural gas, not gasoline for a U.S. audience.
And so Europe, as I mentioned earlier, the price of natural gas in Europe has been many multiples of the energy equivalent price of oil. And that’s different from the rest of the world – or different from the United States, rathe – you know, because it’s relatively disconnected.
And so Europe in particular is vulnerable to natural gas disruptions from Russia. And while for oil, the implications are global but diffused, for natural gas, they’re concentrated and localized.
MICHAEL MORELL: So I mentioned earlier the possibility of Putin taking the oil and natural gas off the market himself. And I just want to ask you, how important are oil and natural gas to the Russian economy? How would that affect his thought process?
MARK FINLEY: What’s interesting is that Putin himself was writing papers 25 years ago about how to use Russian exports of energy and other commodities to restore Russia’s lost greatness. So this is not a new concept for him.
Oil by itself accounts for about half of all of the export revenues earned by Russia. It also accounts for about 40% of federal government revenues in Russia. Natural gas historically has played a smaller but significant role.
And so there is significant vulnerability on the side of Russia as well. Russia has been trying to diversify its markets, trying to build capacity to export oil to markets other than Europe and to do the same with natural gas, because it recognizes that while Europe is heavily dependent on Russia, Russia is also heavily dependent on sales to Europe.
MICHAEL MORELL: But the bottom line is, if he loses that revenue, the Russian economy is in deep trouble.
MARK FINLEY: Deeper than it already is, given the financial sanctions.
There is another wrinkle here, Michael, which is that Russia has control over not only its own exports. Production of oil from Kazakhstan, for example, flows to markets via a pipeline that transits Russian territory.
And just last week, there was a mysterious weather-related accident that damaged that export facility, bottling up as much as 1 million barrels a day of Kazakh oil production.
MICHAEL MORELL: So in addition to being an energy analyst, you were also the chief economist for BP in the United States. And given that, I’m wondering what you’re thinking about what the risks are for a global recession – including a recession here in the United States, because of where we are with Ukraine, because of where we are with the tightening of monetary policy, raising of interest rates, where we are with energy prices. What’s your sense as an economist of the risks we’re facing here going forward?
MARK FINLEY: Oof. Well, I would just add an energy price shock to a list of other factors. Like you mentioned, raising interest rate rates, the withdrawal of COVID-related stimulus spending.
It’s important to note that in this context of Russia, we’re not only talking about a spike IN oil prices, but also natural gas and other commodities – metals, foods. Russia and Ukraine are significant exporters of all of these. And so what’s unique about the shock that we’re going through right now is that it’s not localized to one commodity. This is not an oil embargo. It is a shock across the whole commodity space.
Now, it is true that oil prices, adjusted for inflation, are a lot less than historical peaks. It’s also true that the U.S. and world economies have gotten significantly more efficient with the way they use energy as an input over time. And so the role of oil is a lot less in the US economy than it used to be, but it is still a significant cost.
As I mentioned earlier, just the one-year increase of gasoline prices alone last year cost the average American family an extra $1,000. On top of that, it is the only commodity that is screamed at you from every street corner in foot high letters. And so it has an outsized role in in undercutting consumer confidence and business confidence when we see a price spike.
MICHAEL MORELL: Mark, let me ask you about U.S. policy, U.S. energy policy. How do you think the Biden administration has done so far on energy policy as it relates to the Ukraine crisis?
MARK FINLEY: I think the most important thing to recognize, Michael, is that there’s not a lot that any U.S. administration can do to impact U.S. oil production. This is a private sector gig that is where investment decisions are made primarily – exclusively – by private companies or corporations.
There are obviously U.S. policy matters at the margins. So the administration has kind of, I think, recognized that having a robust domestic oil and gas industry today is not inconsistent with its longer-term objectives of having a more aggressive climate policy.
The reality is we need to do both those things. Oil and gas play a leading role here in the United States – they’re more than half of total energy used today. So as much as we all want to transition to a lower carbon energy future, the reality is what gets the kids to school and what heats our homes and cools our homes and cooks our food and runs our businesses is predominantly fossil energy today.
And so I’m personally, I think, guardedly optimistic that the administration has recognized the centrality of oil and gas into our economic and strategic well-being today, while at the same time trying to accelerate a transition to a low-carbon future.
MICHAEL MORELL: So Mark, one thing we didn’t talk about – and what you just said raised in my mind was the degree to which there’s excess capacity here in terms of oil production. Is there?
MARK FINLEY: There’s not really any spare production capacity. No U.S. company, no for-profit business can afford the luxury of withholding oil from the marketplace.
So here in the U.S., growth needs to come from new investment. And what’s interesting is, you know, the Dallas Fed recently released a survey of U.S. oil and gas producers and they asked them, ‘What’s the single biggest thing holding you back from investing more, given these high oil prices?’
The single biggest answer by far was not, ‘government policy.’ It was, ‘Our investors are reluctant to allow us to invest more.’ Ten times as many companies said that than said government policy.
MICHAEL MORELL: Why?
MARK FINLEY: Because for ten years prior to COVID, the US shale industry didn’t make money. It was focused on breakneck growth. And after a decade of breakneck growth but not making any money, when prices collapsed during the pandemic, investors walked away and said, ‘We’re not we’re not going to do this anymore.’
Now what the investors have been telling them is, ‘We want you to focus on cash generating cash returns and making money, not on growing your business.’
And what’s interesting is that now we have the administration here in the U.S. actually reaching out not only to oil and gas companies saying, ‘Hey, we want you guys to invest more.’ They’re also reaching out to their investors and saying the same thing.
MICHAEL MORELL: So, Mark, I want to take take us a bit into the future here to close out our conversation. And I’m wondering to what extent you think that what is happening in Ukraine and the energy market consequences of it, will fundamentally change energy markets going forward? Or is this just going to be a series of short-term changes and we’ll eventually come back to where we to where we started?
And I guess a big question there, right, IS, is Europe going to actually move forward and reduce its dependence or not? How do you think about the the the possibility of long term change here as a result of this?
MARK FINLEY: I think it has the potential to do that in a couple of ways. But I think there’s also some limitations to it. So I certainly see renewed interest in Europe in trying to diversify its energy sources away from Russia. We’ve seen the German government, for example, say, ‘Yes,’ where they had previously said, ‘Oh, we don’t need natural gas storage because we’re going to do climate change,’ and, ‘We can buy from Russia; they’re reliable and we don’t need coal.’
Now they’re saying, ‘Oh, wait a minute, we’re going to turn back on those nuclear power plants we had planned to close due to environmental opposition. We’re going to start building natural gas storage. We’re going to build capacity to import liquefied natural gas from places like the United States. We’re even going to start building stockpiles of coal again because we recognize that all of that runs our economy today.’
And, you know, and and the urgency of trying to do all of that and have a functioning economic system today, overrides or balances, perhaps is maybe a better word, counterweight to some of the previous focus.
That said, it I think, also clearly has the opportunity to accelerate the move to a lower carbon future, to build up renewable energy, for example, both from a policy push, plus from the simple economics that higher prices of fossil fuels make the competition more competitive.
We also should note that the United States just last week – President Biden was in Europe and now signed an agreement to try to get more liquefied natural gas into Europe in the short term. And also that European leaders committed to significantly increasing their purchases of U.S. liquefied natural gas over the next decade or so.
MICHAEL MORELL: So you noted earlier the heavy dependence that the world still has on carbon. And I’m wondering, if we step back from Ukraine and if we look at our sources of energy and then we look out ten years or 25 years, how different do you think the sources will be?
Will we still be dependent on carbon in ten years, will we still be dependent on carbon in 25 years? What do you think?
MARK FINLEY: So I think the main thing to emphasize when we think about the long-distance future is the massive uncertainty.
The world is currently not on a trajectory to meet the net-zero aspirations that were laid out at the Glasgow summit. That needs significantly more policy and technology. For example, the IAEA, the International Energy Agency, says most of the technologies needed to get us to a net-zero future don’t exist on a commercial scale yet. So there’s tremendous uncertainty.
And so, as always in economics, the answer is, ‘It depends.’ Does this crisis cause countries to double down on their investments in fossil energy? Does it cause countries to double down on their commitment to a rapid transition? Does it do both? How do those things net out? Those are all great questions that I and many other analysts will be looking at very closely to try to read the tea leaves to see which way these these scenarios break.
MICHAEL MORELL: Mark, thank you so much for joining us. Fascinating conversation on a on a critically important issue. Thank you for taking the time.
MARK FINLEY: It’s my pleasure, Michael. Thanks for the invitation.