Doomberg's Four Horsemen of the Diesel Apocalypse, Tested Against Our Own Thesis

• Two men, one four-part claim, and the incentives in the room
• What a market is for, and why oil fell while refineries burned
• The four horsemen, one mechanism each
• Europe’s asymmetry, and the market data behind it
• Energy as the base layer, and the bargain that broke
• Private credit marks its own homework
• A tsunami of long paper, and the buyer who is not here
• All roads lead to printing, and the default that will not be called one
• Where their account converges with ours
• Where they refined us twice
• The sharpest disagreement, and the one claim that cannot fail
• The markers, and what survives

Doomberg and James Lavish describe four mechanisms tightening at once in the market for diesel, and the continent that imports almost all of it is the one that pays — so this episode states their case at full strength, reports where it agrees with what we have already published, concedes where it corrects us, and names the one claim in it that cannot be wrong.

DeepDives · 2026 · An AI–human collaboration that weighs every source, mainstream or alternative, under strict rules of truth and logic.

§Two men, one four-part claim, and the incentives in the room

Two men who spend their working lives inside the physical and credit parts of the financial system sat down on the twenty-second of September with the host of a bitcoin channel: Doomberg, the anonymous energy analyst who writes under the name of a green chicken, and James Lavish, a former hedge fund manager of thirty years who now writes The Informationist. The episode was titled The Four Horsemen Of The Diesel Apocalypse Are Coming For Europe, and the title is a claim rather than a metaphor — four mechanisms tightening at once in the market for diesel, and the continent that imports almost all of it is the one that pays.

This episode states that case at full strength, in the guests’ own terms, then reports where their account agrees with what this series has already published, where it refines us, and where the one part of their argument that cannot fail sits. Independent agreement between a practitioner with ground-level data and a series that triangulates documents is evidence for both, and the honest way to report it is plainly.

Our own stake, declared as always. Seven episodes have argued that the fiscal position is the constraint, that the marginal buyer of sovereign debt has left the long end, and that the stressor most likely to convert that erosion into an event is the energy shock, ranked first of fifteen at a hundred out of a hundred and twenty-five. This series holds hard assets and bitcoin, and has said on air that its framework concludes in the assets it owns; Lavish occupies that position more fully, because he co-manages a bitcoin fund.

Then the incentives, named where they land. Doomberg sells a subscription and is twenty-five thousand words into a book about energy, but his case does not need a single asset to rise for him to be right. Lavish co-manages a bitcoin fund, so when he says in the last third of the interview that gold and bitcoin are both going much higher, that is a position he profits from and he does not pretend otherwise. The show is punctured by sponsor reads for a hardware wallet and a mining host, one landing in the middle of the diesel segment, and the argument arrives in a room full of people who already own the asset it concludes in.

§What a market is for, and why oil fell while refineries burned

The guests’ framework begins with the most useful idea in the interview: every market on a screen has its own purpose, structure and participants, and you cannot interpret what it is telling you until you have identified all three. The oil market exists for one reason — to get crude to refineries at a price where the refinery can profit refining it — and it does not exist to reward speculation. Its structure follows from that purpose, which is why so many contracts settle by physical delivery, and why a speculator treating it as a casino works against the grain of the instrument.

The bond market has a different purpose, structure and set of participants, and the ten-year Treasury note is one of the deepest and most liquid markets in the world, to be respected rather than dismissed as mispricing.

That framework produces his best observation. The only customer of crude oil is a refinery owner, so remove every refinery on earth and the price of oil would not rise, it would fall: crude without a refinery is not merely useless but actively difficult, a toxic sludge expensive to store. A barrel of crude is worth something only because a refinery is expected to buy it at some price at some point, so what it represents is a probability. Take out enough refineries and the probability weakens while the product becomes scarce — diesel up, crude down, from the same event.

Which explains the puzzle the interview opens with. Russian refineries were being struck overnight and crude was falling, and the natural reading was that the market was broken. Doomberg’s reading is the opposite: the market was working as designed, and the war was destroying the customer rather than the supply. Big black plumes of smoke are not automatically bullish for oil; everything depends on what is burning, and if what is burning is a refinery then demand for crude and the capacity to make product have both been destroyed.

§The four horsemen, one mechanism each

The title is a list rather than a mood, and each of the four is a mechanism with its own trigger. The first is domestic to the United States: Doomberg expects pressure to build on the President to restrict diesel exports, because diesel at the pump is the price voters feel most directly. A restriction would redirect American barrels away from the export market and crater the price of diesel outside the United States in a way few in Europe are positioned for. He frames the piece he was writing with the line, heads nobody wins, tails Europe loses.

The second is the sanctions machinery. A bill signed into law, associated with Senator Lindsey Graham, sets up automatic pressure to sanction the large buyers and refiners of Russian crude, and the two largest names on that list are China and India. India matters most, and the number is checkable: India supplied about sixty per cent of the diesel that transited the Red Sea to Europe in August. If India is pushed out of buying Russian crude, or keeps its diesel at home, the barrel Europe has been leaning on disappears from the supplier filling the gap left by the Russian ban.

The third is escalation: if Gulf refining or export assets are struck hard enough to be hard to bring back, or the waterway becomes unsafe, the eastern supply Europe pivoted to is the supply that gets interrupted. The fourth sounds like engineering and is the sharpest. The world’s refineries are running at ninety-seven and ninety-eight per cent of capacity, and India has reportedly been running at about a hundred and eight per cent of nameplate, while refining still needs maintenance windows and turnarounds. Deferring those because the margins are the best in a generation is a decision with a date attached, and Doomberg’s example is the Joliet refinery in Illinois, which went down and turned a regional market into a headline.

The four threads are synergistic, which is his word: restricting American exports spikes prices outside America, which emboldens the actors who can threaten the Gulf, which pushes every refinery still running to run harder and hotter, which raises the chance that one breaks.

§Europe’s asymmetry, and the market data behind it

Then the asymmetry that makes Europe the subject of the title rather than a bystander, with one correction that matters. Doomberg says the twenty-seven members of the European Union consume and refine eleven million barrels of oil and produce about three hundred thousand, and the transcript garbles the units. The eleven million is a daily consumption figure for oil products across the Union; the three hundred thousand is what the Union produces from its own ground in crude, because Norway and Britain, the two countries that made the North Sea famous, are not in it.

So Europe is short both of crude and of the refining capacity to turn somebody else’s crude into the diesel that moves its trucks, its tractors and its military, and that capacity is shrinking: around half a million barrels a day of European refining shut in the last year alone, with more already scheduled, and European diesel has risen roughly forty per cent since mid-June. American retail diesel crossed six dollars a gallon in the second week of September, the first time on record, having set the previous record ten days earlier, and distillate inventories are about thirteen per cent below the five-year average.

§Energy as the base layer, and the bargain that broke

The second large strand of the interview is upstream of the diesel: the claim that energy is the base layer of everything else. Doomberg’s formulation is that money is a promissory note on energy — currencies exist to shuttle energy between the people who can afford to buy it and the people who extract and refine it, and you cannot eat a Treasury or heat your home with one. He endorses a line from another analyst, Luke Gromen, that had been sitting in our own notes without this framing attached to it: in an era of energy scarcity, countries sell Treasuries to buy energy, and the whole point of holding a reserve currency is to have it in reserve when you need it. The historical mechanism he supplies is the bargain struck after the dollar came off gold, in which the oil exporters would recycle their surplus into dollar assets with the purchasing power broadly preserved — a bargain he says broke down in the global financial crisis.

§Private credit marks its own homework

Private credit is where the two guests are most fluent. Doomberg’s mechanism is that private equity has bought insurance companies in volume, and an insurer has a natural appetite for long-dated paper because it must match long-dated obligations to policyholders, which gives the parent an obvious place to sell the debt of its own portfolio companies. When you mark your own paper, he says, you tend to round up, and he calls the structure mark my book and I will mark yours. Lavish adds the machinery: private assets are carried at what a sale would fetch, which is unknowable when nothing trades, or at the last price at which a deal was done, which the sponsor itself can influence.

Lavish is careful to say this is not a fraud and that valuations are done by paid professionals, and then he says, with the smile audible, that lawyers are in the litigation business after all. The vocabulary is exact: a rolling loan gathers no loss, which he credits to Kyle Bass, and pay in kind rather than trip a covenant, which converts a default into a piece of new paper and moves the reckoning forward. The limit they both return to is that nobody knows the price of an asset that does not trade.

Doomberg’s broader point is that the smoke is visible and serious people are writing about it, and he refuses to say it is the same crisis again. And this is checkable: a hundred and thirty-seven insurers in the United States are owned by private equity firms, controlling something like seven hundred billion dollars of assets, while offshore reinsurance arrangements in the structure have quadrupled to roughly four hundred and fifty billion. The insurance regulators have a framework for it, and the International Monetary Fund, the Bank of England and the Bank for International Settlements have all published warnings.

§A tsunami of long paper, and the buyer who is not here

The third strand is the crowding out of the long end, and it connects the diesel to the Treasury market. Doomberg’s image is a tsunami of long-dated paper arriving from the companies building artificial intelligence, competing for exactly the buyers who would otherwise be absorbing thirty-year government bonds — the pension funds and insurers who need long nominal cash flows, and of whom there are only so many.

A piece of paper yielding six or seven per cent that matches what you will have to pay a pensioner someday is a real alternative, and the market now describes the hyperscalers as reverse-crowding the Treasury, the same insight with the arrow reversed. Corporate bond issuance ran to about one and a quarter trillion dollars in the first five months of the year, up a fifth on the year before, on pace for the first two-trillion-dollar year of investment-grade supply in history, of which roughly three hundred billion is artificial-intelligence-linked issuance, about one eighth of the entire duration of the United States Treasury market. Which is why the question is the one this series has asked since June: if five per cent on a thirty-year bond does not bring the marginal buyer back, what rate does?

§All roads lead to printing, and the default that will not be called one

Both men reach the same destination by different routes, and it is the thesis in one phrase: all roads lead to printing. Nobody is going to default, at least not technically, and in spirit they will default in everything but the paperwork — a sovereign with debt in its own currency has an escape a household does not, and the escape is the quiet kind, in which the coupon arrives on time and buys less. He then makes one argument this series had not put on air and should: the freezing and proposed use of Russian central bank assets is a default, and the definition should not bend to the politics, because repayment was promised and the payment did not come.

Calling it frozen rather than defaulted is a choice of words rather than a difference of fact, and his comparison is Nixon closing the gold window, which was also not called a default by the people who did it. The question is live: European finance ministers have backed a reparations loan underpinned by the immobilised assets of the Russian central bank, in the range of two hundred billion euros, with legal architecture designed to survive a challenge. The Russian central bank has filed more than one challenge in the European courts, and under European capital rules a default is registered only after ninety days, which is a definition with a clock inside it.

§Where their account converges with ours

The first convergence is the one we did not expect restated this precisely. Our stressor ranking put the energy shock from the war at the top of fifteen, scored a hundred out of a hundred and twenty-five on transmission, severity and proximity; we arrived there by enumerating mechanisms and weighting them, and Doomberg arrives at the same place by counting barrels. When an analyst who counts tankers reaches the conclusion of an episode built from documents, the conclusion gets stronger, and the honest way to report that is to say so rather than to claim priority.

The second is the fiscal mechanism itself, the oldest thing this series has published. Our first episode rested on the nineteen eighty-one result that persistent deficits remove the central bank’s independence whether it wants it or not, because tightening now means inflating later. Doomberg’s endorsement of Gromen’s line, that in an era of energy scarcity you sell the reserve asset to buy the thing you cannot substitute, is the same argument with a physical motive attached instead of an arithmetic one.

The third is the missing buyer, and here the two accounts use almost identical language. This series has said on air that foreign central banks have not been net buyers at the long end for twelve or thirteen years, that foreigners hold about a third of marketable Treasuries, and that the buyer of last resort is now the issuer. Lavish’s answer, asked how high yields must go before buyers return, is that five per cent is not high in the historical record, that the ten-year touched the mid-teens in the nineteen-eighties, and that what matters is not the level but the debt stock it is levied on, a distinction this series has made in the same words.

The fourth is private credit, and this one we should concede cleanly because their version is better than ours. Our risk dashboard identified the private credit forced mark as the next transition, the event that converts insurers from frozen buyers into forced sellers and moves the buyer-of-last-resort role from the Treasury to the central bank. What we had was a mechanism and a set of instruments to watch; what they supplied was the structure with names and numbers attached, including the duration mismatch that turns a quiet portfolio problem into a forced sale. They did not contradict us. They filled in the plumbing.

This series has said repeatedly that in a credit event hard assets fall first, because leveraged holders sell what they can rather than what they want, and that this is where the debasement trade loses money on its way to paying off. Lavish says exactly that, and then adds the sentence that improves it: having described a correlation-to-one event in which everything falls together and gold drops thirty per cent for reasons that have nothing to do with gold, he calls that the opportunity rather than the risk, because when the thing you want to own goes on sale to meet somebody else’s margin call, that is the spot to be buying. We published the first half; he published the second, and it is correct.

§Where they refined us twice

The first refinement is the refinery mechanism, and it is a genuine gap in our energy episode. We scored the energy shock first of fifteen stressors, justified the score with transmission, severity and proximity, and did not explain the thing that puzzles most observers, which is how an attack on oil infrastructure can send crude down. Doomberg’s answer — the refinery is the only customer, so destroying refining capacity destroys demand for crude while destroying supply of product — is the missing mechanism, and it sharpens a marker: the variable to watch is not the crude price, which can fall while the crisis deepens, but the refining margin and the product inventories. This series has been watching the wrong number, and will stop.

The second refinement requires an admission of an error of emphasis, and it concerns the central bank. Our published position has been that the fiscal authority’s actions overwhelm the central bank’s signalling, that the capitulation would be subtle — a pause that becomes a cut — and that the central bank had not been captured and had not bought a single long bond. Our own newest episode then contradicted our own risk dashboard on whether the balance sheet is still shrinking.

The central bank raised rates in the middle of September, with its chairman naming persistent inflation risk, and the ten-year yield went back above five per cent after the decision. That is not a central bank capitulating to the fiscal authority; that is a central bank tightening into a government managing its own curve, which is the maximum-pressure scenario our own episode described and then set aside. The ten-year is now at four point nine seven per cent and the thirty-year at five point two nine, and the thirty-year matters because that is the maturity the government has been trying to support. Our stage-three marker, the central bank buying long bonds to support the Treasury, has not fired, and the recent evidence is moving away from it rather than toward it.

That is a difference in sequence rather than a dispute, because both accounts agree on the destination. Lavish expects the level of rates and the size of the debt stock to force central banks to step in and buy to hold long rates down, his argument being arithmetic: there is now more debt than the private market can absorb at tolerable yields. Our published position is that the mechanism is right and the clock is wrong, that the erosion is the British kind measured in decades rather than the Ottoman kind measured in months. He is not wrong about the pressure; he is early in a way that is expensive to act on, and our own debasement trade lost four consecutive quarters with its premise intact.

§The sharpest disagreement, and the one claim that cannot fail

There is also an honesty problem that cuts against the whole genre, and the guests walk close to it: if the central bank steps in, they were right, and if it holds firm and yields rise further, that is more pressure, which also confirms the direction. All roads lead to printing is a claim about a destination the road reaches in the end, which means no observation short of a sovereign that genuinely restructures in nominal terms can falsify it, so it should not be collected like a forecast. The version that can be scored is narrower and better: the central bank buys long bonds in size, and the balance sheet expands again, on a stated horizon, which is the marker that adjudicates between us.

The sharpest disagreement is on bitcoin, and it is internal to their own interview as much as it is between them and us. Lavish’s account of bitcoin in this market is that it is not behaving like a haven, that it was the asset chucked overboard last fall, and that it is now a hot ball of money chasing the next opportunity, with the rally explained partly by a large cluster of leveraged short positions sitting at a level that finally gave way. His conclusion is that both gold and bitcoin are going much higher.

Our published caveat is firm and we restate it rather than soften it. Bitcoin is a high-beta, long-duration risk asset that trades with the Nasdaq until the day it does not, which makes it an unreliable hedge in the specific scenario this series spends its time describing, and it has no structural central-bank bid, which is the difference between an asset with a floor and an asset without one. Seventy per cent drawdowns are within its normal behaviour, and in a credit event it falls with everything else because it is the most liquid thing in a leveraged portfolio.

Bitcoin was around eighty-six thousand dollars on the twenty-second of September, up about six and a half per cent in a day and about ten and a half per cent in a week, at levels last seen in January, with the move attributed in the market coverage to a return of risk appetite and to falling oil prices. That is a risk asset rallying on improved risk appetite, which is precisely the description Lavish gives it; it is not a safe-haven bid, and he says so himself while still concluding that it goes higher. The honest version of the claim is that bitcoin is the highest-beta expression of the debasement thesis rather than its most reliable one.

§The markers, and what survives

The markers, so this episode can be scored rather than remembered. First, the one both accounts agree on: does the central bank buy long-dated government bonds in size, and does the balance sheet expand again. Second, does the American government actually restrict diesel exports, their first horseman, which would show up as an export-licensing action rather than a speech. Third, do the refineries hold runs above ninety-seven per cent through the autumn turnaround season, because their fourth horseman is a maintenance hypothesis the data will answer within two quarters. Fourth, does the European ban on refined products made from Russian crude remove the Indian volumes that filled the gap, or does the trade reroute around the rule. Fifth, on private credit: the discounts on listed lenders, the redemption queues, and the share of interest paid in kind rather than cash. And sixth, the one that would prove the sceptics right: sustained real yields above two per cent with inflation falling toward target. Two of those have clocks attached; the others are structural, which is why this series says hold the mechanism and discount the dates.

Their strongest case at its best is worth granting, because it is stronger than the title implies. Doomberg explicitly refuses the apocalypse framing: America and Canada can draw a circle around themselves and be fine, Europe is the exposed party, and the correct response is not to be a doomer but to be aware. His allocation discipline is the tell — a rules-based portfolio with three legs, retirement accounts in gold, physical gold bought monthly like clockwork regardless of the price. When the host presses him on bitcoin going to a million, he does not take the bait: he is not criticising the view, and he declines to adopt it.

The verdict, in three parts. On the physical mechanism, they are right, and they have improved us twice: the refinery insight fills a gap in the episode that ranked the energy shock first, and the private credit structure supplies the detail we had been describing generically. On the fiscal diagnosis and the missing buyer, the accounts converge, which raises confidence on both sides and does not settle the timing. On the printing turn and on bitcoin as its beneficiary, this series holds its position, and the more rigorous of the two guests implicitly holds it too.

What survives is this. The fuel with no substitute is scarce, the capacity to make it is ageing and running hot, the continent that imports most of it has spent a decade closing the plants that would have made it, the holders of the reserve asset are being asked to choose between a coupon and a barrel, and the credit system that replaced the banks is valuing its own assets in a market that does not trade. Four of those five are physical facts. Only the fifth needs a theory, and the theory is the one both accounts share: a sovereign with debt in its own currency does not default, it dilutes, and the people who notice first are the ones holding the barrels.

This has been a deep dive into the four horsemen of the diesel apocalypse, and what they do and do not tell us about the year ahead.

Sources: this examination names its sources inline — the interview between Doomberg and James Lavish on a bitcoin channel’s mentor series, with each guest’s incentive noted; Doomberg’s own analysis of refinery economics, crude and distillate markets; Luke Gromen’s formulation on reserve assets and energy scarcity; price and inventory data on American retail diesel, distillate stocks, the diesel refining margin, Russian refinery outages, Indian diesel flows through the Red Sea, and European refining closures; European Union coverage of the reparations loan on immobilised Russian central bank assets; corporate issuance and duration figures for the artificial-intelligence buildout; the private credit and insurance data, and the published warnings of the International Monetary Fund, the Bank of England and the Bank for International Settlements; and the market tape for the Treasury yields and the bitcoin price on the day of the interview. Every source is weighed with the same skepticism regardless of politics or business model. The audio version of this article, read by DeepDives, is available on Wavlake.