1 00:00:00,080 --> 00:00:01,880 Speaker 1: So what to make of the reports that South Korea 2 00:00:02,000 --> 00:00:04,400 Speaker 1: is considering stopping fuel exports as a result of the war. 3 00:00:04,440 --> 00:00:06,760 Speaker 1: They currently supply forty seven percent of our refined fuel, 4 00:00:06,760 --> 00:00:08,800 Speaker 1: which probably comes as news to you this morning, because 5 00:00:08,800 --> 00:00:12,080 Speaker 1: we've all we've done is talk about Singapore. Andreas Houser 6 00:00:12,240 --> 00:00:14,720 Speaker 1: is a partner in Senior Economic advisor at Hoyser Whittington 7 00:00:14,800 --> 00:00:16,360 Speaker 1: and is with US. Andreas morning to. 8 00:00:16,360 --> 00:00:18,680 Speaker 2: You, Good morning, Mike. 9 00:00:18,960 --> 00:00:22,080 Speaker 1: There's nothing official here. I'm finding it hard to believe 10 00:00:22,079 --> 00:00:24,919 Speaker 1: a country in this sort of global circumstance would suddenly 11 00:00:24,920 --> 00:00:28,520 Speaker 1: go no, we're not exporting anything again. Do you agree 12 00:00:28,600 --> 00:00:29,720 Speaker 1: or not? We just don't know. 13 00:00:30,960 --> 00:00:34,120 Speaker 2: I think we don't know at this point. Yeah, you're 14 00:00:34,159 --> 00:00:36,720 Speaker 2: right that South Korea supplies about forty eight percent of 15 00:00:36,760 --> 00:00:39,880 Speaker 2: our fuel. They get about sixty percent of their supply 16 00:00:40,200 --> 00:00:42,760 Speaker 2: through the Horn Mows straight. But they're also a member 17 00:00:42,840 --> 00:00:46,760 Speaker 2: of the IEA and you know, trusted trade partner of 18 00:00:46,800 --> 00:00:49,559 Speaker 2: New Zealand, and that'd be that would be a very 19 00:00:49,600 --> 00:00:51,760 Speaker 2: serious step if they did take that. 20 00:00:51,760 --> 00:00:54,600 Speaker 1: That's my argument between the IEA and I'm assuming the 21 00:00:54,640 --> 00:00:57,800 Speaker 1: American administration, the last thing they need is more oil trouble. 22 00:00:57,880 --> 00:00:59,880 Speaker 1: They would be if this was serious and they were 23 00:01:00,040 --> 00:01:02,280 Speaker 1: out to pull the trigger. They would be leaned on 24 00:01:02,440 --> 00:01:03,279 Speaker 1: not to, wouldn't they. 25 00:01:04,280 --> 00:01:06,080 Speaker 2: I'll expect that is okay. 26 00:01:06,319 --> 00:01:08,240 Speaker 1: Is it a surprise to most New Zealanders that forty 27 00:01:08,280 --> 00:01:10,399 Speaker 1: seven percent of oil comes from Korea because all we've 28 00:01:10,440 --> 00:01:12,520 Speaker 1: known about is Singapore apparently. 29 00:01:13,520 --> 00:01:16,480 Speaker 2: Well, it wasn't a surprise to me. I was involved 30 00:01:16,520 --> 00:01:19,840 Speaker 2: in the fuel Security study done over twenty twenty four 31 00:01:19,880 --> 00:01:23,039 Speaker 2: to twenty five, and that was exactly what we said 32 00:01:23,080 --> 00:01:25,400 Speaker 2: in that So the government's been well aware of it, 33 00:01:25,480 --> 00:01:29,800 Speaker 2: and you know that keep part of the fuel import market. 34 00:01:29,920 --> 00:01:32,560 Speaker 1: How honerable are we with the days of stock we 35 00:01:32,680 --> 00:01:36,319 Speaker 1: have plus the stuff that's on the water coming our way. 36 00:01:37,160 --> 00:01:39,520 Speaker 2: Well, I think we entered this crisis with a larger 37 00:01:39,560 --> 00:01:42,360 Speaker 2: buffer and better prepared than we have been in the past. 38 00:01:43,280 --> 00:01:46,840 Speaker 2: You know, we don't refine anything domestically anymore, but we 39 00:01:46,880 --> 00:01:49,360 Speaker 2: have a meaningful onshore buffer. You know, thirty three days 40 00:01:49,360 --> 00:01:51,960 Speaker 2: of petrol twenty eight days of diesel sitting in tents 41 00:01:52,000 --> 00:01:55,240 Speaker 2: in New Zealand. That is above the minimum that the 42 00:01:55,320 --> 00:01:59,680 Speaker 2: Fuel Security Plan requires. So we've entered the period better prepared. 43 00:01:59,800 --> 00:02:03,360 Speaker 2: But you know, the buffer buys us time and not immunity. 44 00:02:03,920 --> 00:02:06,400 Speaker 2: So the key question is what happens to replenishment. You 45 00:02:06,480 --> 00:02:09,799 Speaker 2: mentioned ships on the water, and you know, if there 46 00:02:09,880 --> 00:02:12,519 Speaker 2: is one of those major disruptions, so one of those 47 00:02:12,520 --> 00:02:16,440 Speaker 2: North Asian suppliers does what you've just mentioned with like 48 00:02:16,480 --> 00:02:19,600 Speaker 2: the Koreans for example, then the supply chain has to 49 00:02:19,680 --> 00:02:23,800 Speaker 2: reorient and they have to other refineries have to source 50 00:02:23,840 --> 00:02:28,399 Speaker 2: crude from elsewhere and may potentially come from the Americas. 51 00:02:29,600 --> 00:02:33,080 Speaker 2: So the stocks we've got and what's on the water 52 00:02:33,520 --> 00:02:34,400 Speaker 2: buys us time. 53 00:02:34,720 --> 00:02:38,480 Speaker 1: Right the Marsden question, I know it's retrospective, but is 54 00:02:38,520 --> 00:02:40,640 Speaker 1: it material? Is it still worth asking could it have 55 00:02:40,639 --> 00:02:42,520 Speaker 1: been different if we still had Marsden. 56 00:02:44,160 --> 00:02:49,000 Speaker 2: No, not really. Closing Marsden Point was the right economic 57 00:02:49,040 --> 00:02:52,280 Speaker 2: decision at the time. It's a privately owned asset and 58 00:02:52,320 --> 00:02:55,280 Speaker 2: even if it was still running the crew that it refined, 59 00:02:55,960 --> 00:02:58,880 Speaker 2: it comes from the same choke points. You know, crude 60 00:02:58,880 --> 00:03:00,480 Speaker 2: oil was on ships. 61 00:03:00,360 --> 00:03:02,639 Speaker 1: New Zealand re find Crelier barking at the moon here. 62 00:03:05,320 --> 00:03:08,680 Speaker 2: Not sure what they've said about it recently, but it 63 00:03:08,760 --> 00:03:12,480 Speaker 2: might but it might have brought a little bit more 64 00:03:12,480 --> 00:03:16,080 Speaker 2: resilience and in the fuel security study that went to 65 00:03:16,120 --> 00:03:20,800 Speaker 2: the government last year, you know, it was the most 66 00:03:20,919 --> 00:03:25,560 Speaker 2: costly resilient resilience option and only bought a little bit 67 00:03:25,600 --> 00:03:29,519 Speaker 2: more of resilience. There are much better resilience options, such 68 00:03:29,560 --> 00:03:34,960 Speaker 2: as increasing the tankage on in New Zealand and now 69 00:03:35,600 --> 00:03:38,480 Speaker 2: transition to EVS will also help us in the resilience. 70 00:03:38,640 --> 00:03:40,520 Speaker 1: I hope I'm still in your wheelhouse here, but helped 71 00:03:40,560 --> 00:03:43,040 Speaker 1: me out the the IEA thing this morning. Four hundred million. 72 00:03:43,080 --> 00:03:45,360 Speaker 1: We do one hundred million barrels a day globally. Four 73 00:03:45,440 --> 00:03:47,760 Speaker 1: hundred million is four days worth. The oil price has 74 00:03:47,800 --> 00:03:49,800 Speaker 1: gone up this morning. Does that mean they don't believe 75 00:03:49,840 --> 00:03:51,720 Speaker 1: that what Trump says is true and this thing's over 76 00:03:51,760 --> 00:03:52,520 Speaker 1: in a couple of days. 77 00:03:53,480 --> 00:03:55,320 Speaker 2: I'm not sure how to, you know, I don't want 78 00:03:55,360 --> 00:04:00,400 Speaker 2: to speculate on the sort of security and what may 79 00:04:00,480 --> 00:04:03,040 Speaker 2: or may not be thinking, but you know, four hundred 80 00:04:03,400 --> 00:04:08,960 Speaker 2: million barrels is unprecedented. That's the highest ever. So they 81 00:04:09,000 --> 00:04:13,760 Speaker 2: are taking it seriously, and we have seen it come 82 00:04:13,760 --> 00:04:16,320 Speaker 2: back from the peaks of one hundred and twenty one 83 00:04:16,400 --> 00:04:19,720 Speaker 2: hundred and thirty dollars per barrel back down to sort 84 00:04:19,760 --> 00:04:22,560 Speaker 2: of eighty, which is around where it was with the 85 00:04:22,680 --> 00:04:23,640 Speaker 2: Ukraine crisis. 86 00:04:23,839 --> 00:04:24,800 Speaker 1: Are you worried. 87 00:04:26,839 --> 00:04:30,279 Speaker 2: Now? I think at the moment we should be confident 88 00:04:30,360 --> 00:04:33,640 Speaker 2: that we've got the right settings in place. There are 89 00:04:33,760 --> 00:04:38,600 Speaker 2: some things to look at in terms of looking at 90 00:04:38,600 --> 00:04:43,440 Speaker 2: the diesel stockholding review that will the minimum stockholding obligation 91 00:04:43,520 --> 00:04:47,680 Speaker 2: will increase in twenty twenty eight. I think if it 92 00:04:47,800 --> 00:04:51,760 Speaker 2: gets really serious with rationing, then the Petroleum Demand Restraint 93 00:04:51,839 --> 00:04:54,200 Speaker 2: Act from nineteen eighty one is probably something that needs 94 00:04:54,279 --> 00:04:58,360 Speaker 2: updating to current settings where we import refined fuel only 95 00:04:58,400 --> 00:05:03,320 Speaker 2: and don't have a domestic refine So I think not yeah, 96 00:05:03,360 --> 00:05:06,440 Speaker 2: I think we need to be cautious but not particularly worried. 97 00:05:06,600 --> 00:05:08,680 Speaker 1: Good insight andres appreciate it very much, and if it 98 00:05:08,680 --> 00:05:10,159 Speaker 1: gets to that, I'll get you back on the program. 99 00:05:10,200 --> 00:05:12,800 Speaker 1: Andreas Heyser, who's a partner Senior Economic Advisor at the 100 00:05:12,800 --> 00:05:17,080 Speaker 1: Heuser Whittington Company. For more from the Mic Asking Breakfast, 101 00:05:17,240 --> 00:05:20,560 Speaker 1: listen live to news talks. It'd be from six am weekdays, 102 00:05:20,800 --> 00:05:22,839 Speaker 1: or follow the podcast on iHeartRadio.