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Speaker 1: The price of oil hasn't gone through the roof, despite

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Speaker 1: what's happening in the Middle East. Brent crude oil is

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Speaker 1: actually down four percent of the day to seventy dollars

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Speaker 1: seventy cents a barrel. This is US and there are

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Speaker 1: a couple of reasons for this. We'll get to those

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Speaker 1: in a second. Terry Collins, the principal AA advisor with

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Speaker 1: US Petrol Expert oil expert on the program, Terry, good morning,

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Speaker 1: Good morning on Yeah, were you surprised to see or

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Speaker 1: did the markets just price in trouble in the Middle East?

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Speaker 2: You're right initially what they did when their text were launched,

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Speaker 2: as they just twicted the risk. Everybody now was just

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Speaker 2: sitting back and seeing how the Uranians retaliate to the

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Speaker 2: US strikes. They've talked, well threatened to shut straight up

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Speaker 2: themors and that could take a variety of forms, everything

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Speaker 2: from just stopping some targeted ships of certain nationalities, putting

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Speaker 2: minds down, to directly attacking shipping, and each of those

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Speaker 2: would have an impact on the price of oil.

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Speaker 1: Interesting that the markets are only bedding on a twenty

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Speaker 1: five to thirty percent chance of that actually happening because

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Speaker 1: they've threatened to do this before and nothing came of it. Right.

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Speaker 2: Yeah, I think what everybody's sitting back and looking is

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Speaker 2: the Uranians know that they came to go full on

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Speaker 2: with the US and its neighbors, so they've got to

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Speaker 2: save face. They've got to be some form of recaliation.

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Speaker 2: Let's say to the world that we will defend ourselves

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Speaker 2: and if you strike us, we will strike back. But

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Speaker 2: I think they're scared about going too far because of

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Speaker 2: the consequences of that.

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Speaker 1: Also, the other thing about the Strait that I was

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Speaker 1: reading about yesterday, part of it is actually in Oman's waters,

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Speaker 1: with vessels actually able to go in their waters to

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Speaker 1: get through. So can they actually completely block it off?

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Speaker 2: Well, the straight that its scenarios is about thirty three

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Speaker 2: kilometers wide and for the cook straight of that scenarios

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Speaker 2: is about twenty two. But they've got these shipping rains

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Speaker 2: about three kilometers wide in both directions. One of them

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Speaker 2: will be in the Omar side, so that's in one direction.

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Speaker 2: Practicalities of it, if they're going to start shooting each other,

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Speaker 2: will laying mines, They'll just do it discuruent where they

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Speaker 2: has drop them. So what that happens is the shipping

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Speaker 2: companies because of the insurance issues, won't want to take

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Speaker 2: the ships in there. They'll do that voluntary. I'll think

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Speaker 2: the risk of being struck by a mine the environment

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Speaker 2: will clean up is too significant, and that's how they're

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Speaker 2: will slow down the supply of will all right.

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Speaker 1: And the talk of potentially doubling the price of oil

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Speaker 1: per barrel overblown.

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Speaker 2: Overblown, and probably if it did happen, it would be

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Speaker 2: a short term spike. What we saw after the Russian

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Speaker 2: invasion of Ukraine is the world did spike around the

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Speaker 2: one twenty one to thirty, but then as alternative roots

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Speaker 2: of will going back onto the market were established, those

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Speaker 2: prices drop down. We've seen from a number of these

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Speaker 2: geopolitical events that there's an immediate short term spike and

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Speaker 2: then the court of markets settled down as alternative arrangements

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Speaker 2: are made for delivering oil to the market.

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Speaker 1: Terry, appreciate you time this morning, Terry Collins from AA.

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Speaker 1: For more from earlier edition with Ryan Bridge, listen live

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Speaker 1: to Newstalk Set B from five am weekdays, or follow

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Speaker 1: the podcast on iHeartRadio.