1 00:00:05,720 --> 00:00:09,000 Speaker 1: Kiyota. I'm Chelsea Daniels and this is the Front Page, 2 00:00:09,320 --> 00:00:16,560 Speaker 1: a daily podcast presented by The New Zealand Herald. Iran 3 00:00:16,640 --> 00:00:20,680 Speaker 1: has cut off one of the world's most strategically important 4 00:00:20,840 --> 00:00:24,960 Speaker 1: choke points. About a fifth of the world's total oil 5 00:00:25,079 --> 00:00:31,120 Speaker 1: consumption passes through the Strait of Hormuz. Iran's Revolutionary Guards 6 00:00:31,200 --> 00:00:34,800 Speaker 1: commander in chief has warned that if anyone tries to pass, 7 00:00:35,159 --> 00:00:39,960 Speaker 1: they will set those ships ablaze. The narrow sea passage 8 00:00:40,200 --> 00:00:44,240 Speaker 1: sits between Oman and Iran. Experts have said a prolonged 9 00:00:44,400 --> 00:00:47,440 Speaker 1: conflict in the Middle East could lead to a sustained 10 00:00:47,640 --> 00:00:53,120 Speaker 1: rise in oil prices, fueling inflation and global economic effects. 11 00:00:53,520 --> 00:00:57,200 Speaker 1: Today on the front Page, geopolitical analyst doctor Jeffrey Miller 12 00:00:57,280 --> 00:00:59,920 Speaker 1: is with us to take us through why the blocking 13 00:01:00,120 --> 00:01:09,160 Speaker 1: of just over three kilometers of water can have global ramifications. Jeffrey, So, 14 00:01:09,280 --> 00:01:12,840 Speaker 1: tell me what is the importance of the Strait of 15 00:01:13,040 --> 00:01:17,000 Speaker 1: hall Moos? What has made it so critical to trade? 16 00:01:17,520 --> 00:01:19,399 Speaker 2: Yeah, the Straight of hor Moves is one of the 17 00:01:19,440 --> 00:01:21,840 Speaker 2: world's choke points. I guess you could put it in 18 00:01:21,959 --> 00:01:26,600 Speaker 2: the same category as the Sewers Canal, which flows into 19 00:01:26,640 --> 00:01:29,200 Speaker 2: the Red Sea, also in the Middle East. Or the 20 00:01:29,200 --> 00:01:32,959 Speaker 2: Strait of Malacca in Asia, where ships just have this 21 00:01:33,080 --> 00:01:36,920 Speaker 2: very narrow corridor to transit through, and it's where there's 22 00:01:36,959 --> 00:01:40,919 Speaker 2: a lot of geopolitical tensions at play. So the Strait 23 00:01:40,920 --> 00:01:46,520 Speaker 2: of hor Moos it is separates Iran in the north 24 00:01:46,680 --> 00:01:50,720 Speaker 2: from Oman and the United Arab Emirates in the south. 25 00:01:51,160 --> 00:01:54,200 Speaker 2: It is very narrow. It's only thirty three kilometers at 26 00:01:54,240 --> 00:01:57,320 Speaker 2: the narrowest point. The shipping lanes within it are even 27 00:01:57,560 --> 00:02:01,400 Speaker 2: narrower still, they're around three kilometers in each direction. I mean, 28 00:02:01,400 --> 00:02:06,640 Speaker 2: the Persian Golf is relatively shallow, but it is deep 29 00:02:06,880 --> 00:02:11,200 Speaker 2: in parts, so the ships can flow, can transit through 30 00:02:11,760 --> 00:02:15,440 Speaker 2: that straight without issues in terms of the depth. You 31 00:02:15,520 --> 00:02:18,560 Speaker 2: need that because you're talking about big oil tankers that 32 00:02:18,639 --> 00:02:22,640 Speaker 2: are very large and size, but the actual usable part 33 00:02:22,680 --> 00:02:27,000 Speaker 2: of that strait is actually very very, very very small. 34 00:02:27,639 --> 00:02:29,760 Speaker 2: And you just add the fact that the neighborhood that 35 00:02:29,800 --> 00:02:33,280 Speaker 2: it's in with a war going on. Now that is 36 00:02:33,280 --> 00:02:36,720 Speaker 2: the significance because a huge amount of the world's oil 37 00:02:36,919 --> 00:02:41,800 Speaker 2: comes through that through that narrow corridor. Twenty percent of 38 00:02:41,840 --> 00:02:45,040 Speaker 2: the world's oil transit through the straight upull moves I said, 39 00:02:45,040 --> 00:02:49,079 Speaker 2: Persian Golf is disputed. Persian golf. Arabian golf will distantly. 40 00:02:49,080 --> 00:02:52,120 Speaker 2: Golf is often the way it's referred to. Now those 41 00:02:52,120 --> 00:02:58,680 Speaker 2: golf countries raq Kuwait, Saudi Arabia and the UAE. They 42 00:02:58,680 --> 00:03:02,560 Speaker 2: account for roughly half of the world's oil production. So 43 00:03:03,040 --> 00:03:06,920 Speaker 2: that's the significance globally that if you choke off the 44 00:03:06,960 --> 00:03:10,160 Speaker 2: Strait of hor Moves, you're choking off a huge proportion 45 00:03:10,240 --> 00:03:12,800 Speaker 2: of the world's oil. And of course that is used 46 00:03:13,080 --> 00:03:15,960 Speaker 2: not just the vehicles all around the world, but for 47 00:03:16,040 --> 00:03:19,440 Speaker 2: all manner of production. So when the Strait of hor 48 00:03:19,480 --> 00:03:22,880 Speaker 2: moonves sneezes, the world really catches a cold. And that's 49 00:03:22,919 --> 00:03:26,800 Speaker 2: what we're really seeing at the moment with oil prices spiking. 50 00:03:26,919 --> 00:03:29,280 Speaker 1: Well, in terms of those countries that you mentioned before, 51 00:03:29,440 --> 00:03:32,720 Speaker 1: would they be a part of or are they OPEC members, 52 00:03:32,800 --> 00:03:36,840 Speaker 1: because usually when we talk about hor Moves or Swez, 53 00:03:36,920 --> 00:03:40,360 Speaker 1: we're talking about OPEC members. What kind of relationship do 54 00:03:40,480 --> 00:03:41,600 Speaker 1: they have to that channel. 55 00:03:41,920 --> 00:03:44,680 Speaker 2: OPEK is a cartel and it was set up in 56 00:03:44,760 --> 00:03:49,680 Speaker 2: nineteen sixty to control oil supplies, but not all oil 57 00:03:49,720 --> 00:03:53,760 Speaker 2: production countries obviously are members of OPEK. In the Gulf, 58 00:03:54,240 --> 00:03:57,640 Speaker 2: several of them are, notably Iraka Ruck was where OPEK 59 00:03:57,760 --> 00:04:02,080 Speaker 2: was founded back in nineteen sixty, so is Kuwait Saudi Arabia. 60 00:04:02,120 --> 00:04:05,320 Speaker 2: The UAE Katar is no longer an OPEQ member though, 61 00:04:05,400 --> 00:04:11,800 Speaker 2: and left back in twenty nineteen. So OPEK is significant. 62 00:04:11,840 --> 00:04:15,120 Speaker 2: Perhaps is not as influential as it once was, and 63 00:04:15,160 --> 00:04:19,240 Speaker 2: that is because in part of non OPIQU members, in 64 00:04:19,240 --> 00:04:22,440 Speaker 2: particular the United States pumping a lot more oil. The 65 00:04:22,520 --> 00:04:27,039 Speaker 2: United States has had its shale revolution where you can 66 00:04:27,080 --> 00:04:29,960 Speaker 2: pump a lot more oil using new technologies since the 67 00:04:29,960 --> 00:04:32,440 Speaker 2: early two thousands. That means a lot of oil has 68 00:04:32,480 --> 00:04:34,800 Speaker 2: come on stream in the United States, to the point 69 00:04:34,839 --> 00:04:38,000 Speaker 2: that the US is now a net oil exporter. But 70 00:04:38,240 --> 00:04:42,839 Speaker 2: still these countries are hugely significant. OPEQ still has a 71 00:04:42,880 --> 00:04:49,839 Speaker 2: significant sway over production. Around forty percent of oil production 72 00:04:50,160 --> 00:04:53,360 Speaker 2: comes from the twelve OPEK members. Not all of OPEQ 73 00:04:53,400 --> 00:04:55,239 Speaker 2: members are in the Middle East, some are in Africa. 74 00:04:55,880 --> 00:04:59,240 Speaker 2: Venezuela is also an OPIQ member, so forty percent of 75 00:04:59,480 --> 00:05:02,599 Speaker 2: oil product and around eighty percent of the world's proven 76 00:05:02,640 --> 00:05:07,200 Speaker 2: oil reserves found in OPEC country, so it still has 77 00:05:08,000 --> 00:05:11,200 Speaker 2: it still has a lot of importance. There is also 78 00:05:11,440 --> 00:05:15,200 Speaker 2: OPEK Plus that was founded around a decade ago. That's 79 00:05:15,320 --> 00:05:19,200 Speaker 2: wider grouping of countries notably including Russia, and those countries 80 00:05:19,240 --> 00:05:24,640 Speaker 2: coordinate oil supplies, but at the moment the way OPEK works. 81 00:05:24,480 --> 00:05:27,360 Speaker 2: In particular Saudi Arabia, which is the world's biggest oil 82 00:05:27,400 --> 00:05:30,440 Speaker 2: the exporter and has an outsized impact on the world's 83 00:05:30,440 --> 00:05:34,359 Speaker 2: oil supplies, they've been trying to pump more oil and 84 00:05:34,440 --> 00:05:38,520 Speaker 2: not less, particularly Saudi Arabia. It wants market share, it 85 00:05:38,560 --> 00:05:42,080 Speaker 2: wants the revenue, and it also wants to curry favor 86 00:05:42,120 --> 00:05:45,880 Speaker 2: with Donald Trump. So Saudi Arabia has tried to increase 87 00:05:45,880 --> 00:05:48,520 Speaker 2: supplies of oil into the market, which is also one 88 00:05:48,600 --> 00:05:53,080 Speaker 2: reason why oil prices there. They're certainly elevated now around 89 00:05:53,120 --> 00:05:56,840 Speaker 2: the eighty dollar eighty US dollar a barrel mark, but 90 00:05:57,000 --> 00:06:00,920 Speaker 2: they haven't perhaps gone up as much as some might 91 00:06:00,960 --> 00:06:02,839 Speaker 2: have thought. They haven't gone up to one hundred dollars 92 00:06:03,040 --> 00:06:05,480 Speaker 2: a barrel of mark yet. I would caution that with 93 00:06:05,839 --> 00:06:09,320 Speaker 2: the word yet. And there's still potential for oil prices 94 00:06:09,360 --> 00:06:12,039 Speaker 2: to go higher. But just in general, oil prices have 95 00:06:12,160 --> 00:06:15,280 Speaker 2: been held in check over the last few years just 96 00:06:15,440 --> 00:06:18,000 Speaker 2: due to a range of factors. The fact that the 97 00:06:18,080 --> 00:06:20,360 Speaker 2: US pumps more oil these days is one of them. 98 00:06:20,640 --> 00:06:23,200 Speaker 2: The fact that Saudi Arabia sees it's in its interest 99 00:06:23,240 --> 00:06:26,320 Speaker 2: to pump more oil is another. And the fact that 100 00:06:26,360 --> 00:06:29,880 Speaker 2: the world is shifting more to renewables, there's less demand 101 00:06:30,080 --> 00:06:33,240 Speaker 2: perhaps for oil than there was five years ago, ten 102 00:06:33,279 --> 00:06:35,240 Speaker 2: years ago. If you think of all the electric vehicles 103 00:06:35,839 --> 00:06:39,039 Speaker 2: now being used around the world, it's still small, but 104 00:06:39,160 --> 00:06:42,400 Speaker 2: it does take some of the demand away for oil. 105 00:06:42,480 --> 00:06:46,000 Speaker 2: But yet oil are still crucial. We're a long way 106 00:06:46,800 --> 00:06:48,400 Speaker 2: off from being oil independent. 107 00:06:48,520 --> 00:06:51,760 Speaker 1: Well, it's not just oil that is transported through the 108 00:06:51,839 --> 00:06:54,880 Speaker 1: straight Hey, and you mentioned Katar before as well. They're 109 00:06:54,960 --> 00:06:59,440 Speaker 1: among the world's biggest supplier of liquefied natural gas or LNG. Right. 110 00:07:00,120 --> 00:07:06,400 Speaker 2: Indeed, both Kuta and Iran huge producers of natural gas, 111 00:07:07,120 --> 00:07:09,880 Speaker 2: and a huge proportion of the world's natural gas comes 112 00:07:09,920 --> 00:07:15,520 Speaker 2: out of the Gulf region as well. And many European 113 00:07:15,560 --> 00:07:19,520 Speaker 2: countries became very eager to talk to Kutar, in particular 114 00:07:19,760 --> 00:07:23,280 Speaker 2: after the war in Ukraine began. If you recall, European 115 00:07:23,320 --> 00:07:27,800 Speaker 2: countries were very dependent on Russian gas supplies for heating. 116 00:07:28,600 --> 00:07:32,440 Speaker 2: Then after the war began, they cut off Russian supplies 117 00:07:32,520 --> 00:07:37,760 Speaker 2: and sought to gain independence there from Russian fuel and 118 00:07:37,880 --> 00:07:41,320 Speaker 2: instead they turned to the likes of Cutter for their 119 00:07:41,440 --> 00:07:45,320 Speaker 2: energy and for the lergy supplies, and of course New 120 00:07:45,440 --> 00:07:50,120 Speaker 2: Zealand is looking to build an LNG facility, some of 121 00:07:50,160 --> 00:07:53,160 Speaker 2: that may end up coming from Cuta this part of 122 00:07:53,160 --> 00:07:56,240 Speaker 2: the world. Australia is also quite a big producer of 123 00:07:56,480 --> 00:08:00,160 Speaker 2: lerg as well, so there are just a hand of 124 00:08:00,200 --> 00:08:05,120 Speaker 2: countries that hold outsized influence on oil and gas. When 125 00:08:05,160 --> 00:08:10,000 Speaker 2: it comes to oil, Saudi Arabia is obviously the biggest player, 126 00:08:10,240 --> 00:08:13,480 Speaker 2: the biggest the export, has the biggest proven oil reserves. 127 00:08:13,680 --> 00:08:15,800 Speaker 2: When it comes to natural gas, you're looking at the 128 00:08:15,920 --> 00:08:18,840 Speaker 2: likes of Katta, You're looking at the likes of Iran Australia. 129 00:08:19,280 --> 00:08:22,800 Speaker 2: It's a small group of countries, a surprisingly small group 130 00:08:22,840 --> 00:08:26,360 Speaker 2: of countries. Even if there are plenty of oil exporters 131 00:08:26,720 --> 00:08:29,760 Speaker 2: around the world, then the number that can really move 132 00:08:30,080 --> 00:08:33,600 Speaker 2: markets is actually quite a small number. And that's because 133 00:08:34,360 --> 00:08:37,760 Speaker 2: a range of factors, but just simply the amount of 134 00:08:38,080 --> 00:08:42,199 Speaker 2: reserves is a big one, and the caustic of producing 135 00:08:42,240 --> 00:08:45,720 Speaker 2: oil in Saudi Arabia that's a lot lower, the cost 136 00:08:45,760 --> 00:08:47,640 Speaker 2: of production is a lot lower. It's a lot easier 137 00:08:47,640 --> 00:08:49,800 Speaker 2: to get the oil out of the ground than it 138 00:08:49,880 --> 00:08:51,640 Speaker 2: is in many other parts of the world. 139 00:08:58,160 --> 00:09:01,920 Speaker 3: Most of our East Asian trading partners are heavily reliant 140 00:09:02,000 --> 00:09:05,000 Speaker 3: on oil coming out of those Middle East countries, which 141 00:09:05,559 --> 00:09:08,560 Speaker 3: where it currently can't flow at the moment. For example, 142 00:09:08,760 --> 00:09:12,599 Speaker 3: most of our refined petrol and diesel comes out of Singapore, 143 00:09:12,640 --> 00:09:15,320 Speaker 3: and that all comes basically from the Middle East. We've 144 00:09:15,360 --> 00:09:18,440 Speaker 3: got very low stocks of these sorts of things on hand, 145 00:09:18,480 --> 00:09:20,640 Speaker 3: only sort of two to three weeks depending on when 146 00:09:20,640 --> 00:09:23,200 Speaker 3: the boat last turned up. So you can kind of 147 00:09:23,240 --> 00:09:25,480 Speaker 3: see how it's not just going to be a question 148 00:09:25,520 --> 00:09:27,360 Speaker 3: of the price. It's going to be about how much 149 00:09:27,360 --> 00:09:28,840 Speaker 3: of it is actually available as. 150 00:09:28,720 --> 00:09:33,800 Speaker 1: Well when you look at what's happening at the moment. 151 00:09:34,040 --> 00:09:36,840 Speaker 1: I know, I've seen that India, for example, have gone 152 00:09:36,840 --> 00:09:41,520 Speaker 1: ahead with some contingency plans because it gets almost half 153 00:09:41,559 --> 00:09:43,640 Speaker 1: of its crude oil I think from the Strait of 154 00:09:43,640 --> 00:09:48,720 Speaker 1: hor moves in terms of contingency plans. Should everyone have had, 155 00:09:48,960 --> 00:09:50,280 Speaker 1: you know, have seen this coming? 156 00:09:51,000 --> 00:09:51,200 Speaker 4: Well? 157 00:09:51,280 --> 00:09:55,280 Speaker 2: Yes, and though I mean it's always been this geopolitical 158 00:09:55,520 --> 00:10:00,080 Speaker 2: choke point really since the days of the world starting 159 00:10:00,400 --> 00:10:04,720 Speaker 2: to consume oil in large quantities, But the reality is 160 00:10:05,280 --> 00:10:09,600 Speaker 2: that there isn't really a substitute for oil in many 161 00:10:09,920 --> 00:10:13,640 Speaker 2: production processes. You think of all the trucks on our roads. 162 00:10:13,840 --> 00:10:17,600 Speaker 2: They need oil. You can substitute oil to some degree 163 00:10:17,640 --> 00:10:22,400 Speaker 2: for small passenger vehicles with electric vehicles, but the reality 164 00:10:22,480 --> 00:10:24,480 Speaker 2: is the world still needs oil and will need oil 165 00:10:24,480 --> 00:10:28,320 Speaker 2: for many years to come. So there's little you can 166 00:10:28,480 --> 00:10:32,600 Speaker 2: do except in my view, trying to avoid conflict. And 167 00:10:32,880 --> 00:10:36,280 Speaker 2: that comes back to the political situation here that we 168 00:10:36,360 --> 00:10:39,920 Speaker 2: now have this enormous war in the Middle East involving 169 00:10:40,440 --> 00:10:44,200 Speaker 2: really a dozen countries now because all of the golf 170 00:10:44,240 --> 00:10:47,679 Speaker 2: countries have been hit by Iran's rechalitory strikes, and that 171 00:10:47,760 --> 00:10:55,959 Speaker 2: has led to of course many shipping country, many shipping companies, MASK, CMA, CGM, 172 00:10:56,040 --> 00:11:00,240 Speaker 2: all the big players have all told their tank to 173 00:11:00,280 --> 00:11:03,640 Speaker 2: avoid the area, and insurance premiums are going up massively. 174 00:11:04,080 --> 00:11:06,439 Speaker 2: We had three oil tankers were hit within the first 175 00:11:06,440 --> 00:11:10,480 Speaker 2: twenty four hours of this war getting underway on Saturday. 176 00:11:11,640 --> 00:11:16,079 Speaker 2: Even if Iran is not blockading the Strait of ms 177 00:11:16,120 --> 00:11:18,920 Speaker 2: and I don't think they're really undertaking a formal blockade 178 00:11:18,960 --> 00:11:22,040 Speaker 2: at the moment, they're certainly not mining the strait, which 179 00:11:22,080 --> 00:11:26,440 Speaker 2: is one option that's open to Iran to really create trouble. 180 00:11:26,760 --> 00:11:31,480 Speaker 2: They can drop mines that will stop shipping passing through 181 00:11:31,480 --> 00:11:34,280 Speaker 2: the region, it will blow them up. Basically, they're not 182 00:11:34,320 --> 00:11:36,800 Speaker 2: doing that at the moment, but just the fact that 183 00:11:36,840 --> 00:11:39,520 Speaker 2: there's a war going on and there are missiles flying 184 00:11:39,559 --> 00:11:44,720 Speaker 2: across the Strait of Formos attacking those Gulf states Bahrain, Kuwait, Oman, 185 00:11:45,120 --> 00:11:49,520 Speaker 2: Saudi Arabia, Kuwait and the United Arab Emirates. That's enough 186 00:11:49,559 --> 00:11:53,960 Speaker 2: to make anyone think twice about sending your oil tankers 187 00:11:54,160 --> 00:11:57,080 Speaker 2: through that region. Remember, these are just commercial ships. These 188 00:11:57,080 --> 00:12:02,040 Speaker 2: are just merchant ships. They're not warships. They don't have 189 00:12:02,160 --> 00:12:06,800 Speaker 2: air defense, they don't have anything. They're just commercial tankers 190 00:12:07,080 --> 00:12:11,079 Speaker 2: taking oil to markets around the world. They've got no 191 00:12:11,160 --> 00:12:15,640 Speaker 2: real defense. So you're going to avoid that corridor if 192 00:12:15,679 --> 00:12:18,120 Speaker 2: you can, and that means, of course, the oil is 193 00:12:18,160 --> 00:12:21,640 Speaker 2: not being brought to market. On top of that, you've 194 00:12:21,640 --> 00:12:26,080 Speaker 2: got the fact that Iran is also reportedly attacked Saudi 195 00:12:26,080 --> 00:12:31,439 Speaker 2: Aramco Facility to Order oil facility oil refinery on the 196 00:12:31,520 --> 00:12:33,840 Speaker 2: eastern coast of Saudi Arabia. That's where most of Saudi 197 00:12:33,880 --> 00:12:38,520 Speaker 2: Arabia's oil production is, on the Golf itself or on 198 00:12:38,600 --> 00:12:44,600 Speaker 2: the Golf coast, So that is that refinery alone refined 199 00:12:44,640 --> 00:12:48,360 Speaker 2: somewhere around half a million barrels of oil a day. 200 00:12:49,400 --> 00:12:52,120 Speaker 2: It's just I mean, some of the implications here are 201 00:12:52,240 --> 00:12:56,160 Speaker 2: just massive, and I just think we need to really 202 00:12:56,200 --> 00:12:59,760 Speaker 2: get across all the implications of what's going on in 203 00:12:59,800 --> 00:13:02,760 Speaker 2: this or because it is going to get, in my view, 204 00:13:02,760 --> 00:13:05,320 Speaker 2: a lot worse before it gets better, and it does 205 00:13:05,360 --> 00:13:08,400 Speaker 2: have real implications even down here in New Zealand. We 206 00:13:08,440 --> 00:13:11,680 Speaker 2: might be a long way from the Golf thousands and 207 00:13:11,720 --> 00:13:14,520 Speaker 2: thousands of kilometers away, but yet New Zealand is very 208 00:13:14,600 --> 00:13:16,560 Speaker 2: much affected by everything that's going on. 209 00:13:16,760 --> 00:13:18,280 Speaker 1: Well, that's what I was going to say, right, So, 210 00:13:18,320 --> 00:13:20,840 Speaker 1: New Zealand imports most of it's oil obviously, and I 211 00:13:20,920 --> 00:13:23,840 Speaker 1: understand that even if we don't import it directly from 212 00:13:23,920 --> 00:13:27,920 Speaker 1: the Persian Gulf, we're still vulnerable to these price surges. 213 00:13:28,440 --> 00:13:30,920 Speaker 1: What could be the knock on effect? And I suppose 214 00:13:31,000 --> 00:13:34,760 Speaker 1: how quickly will this be felt in consumers pockets? 215 00:13:35,000 --> 00:13:39,200 Speaker 2: Yeah. I recently completed my PhD on New Zealand's relations 216 00:13:39,520 --> 00:13:42,520 Speaker 2: with the Golf States and it was really interesting as 217 00:13:42,559 --> 00:13:45,880 Speaker 2: part of that looking at the trade figures, because you 218 00:13:45,920 --> 00:13:48,640 Speaker 2: suddenly see a real drop off in twenty twenty two 219 00:13:49,120 --> 00:13:52,760 Speaker 2: from in terms of the number of the amount of 220 00:13:52,800 --> 00:13:55,320 Speaker 2: imports from the Golf and you kind of think, well, 221 00:13:55,360 --> 00:14:00,079 Speaker 2: what happened then suddenly, why if imports are created? The 222 00:14:00,120 --> 00:14:02,760 Speaker 2: simple answer is that New z Edand closed the Marsden 223 00:14:02,800 --> 00:14:06,240 Speaker 2: Point oil refinery in twenty twenty two and it is 224 00:14:06,320 --> 00:14:15,280 Speaker 2: now simply an importer of refined product. But so in 225 00:14:15,280 --> 00:14:17,400 Speaker 2: the past, New Zealand did import the raw crew that 226 00:14:17,800 --> 00:14:19,840 Speaker 2: mostly came out of the Middle East. I mean, that's 227 00:14:19,920 --> 00:14:23,320 Speaker 2: just where most of the production is that was coming 228 00:14:23,360 --> 00:14:25,280 Speaker 2: to this part of the world, to the Asia Pacific. 229 00:14:26,320 --> 00:14:32,160 Speaker 2: Now New Zealand instead imports its fuel, its petrol and 230 00:14:32,200 --> 00:14:38,160 Speaker 2: diesel refined form from the likes of Singapore, from Japan, 231 00:14:38,960 --> 00:14:44,480 Speaker 2: from Indonesia. But these are not massive oil product producing countries. 232 00:14:45,200 --> 00:14:49,320 Speaker 2: Singapore is simply refining. The crew that still comes from 233 00:14:50,040 --> 00:14:52,440 Speaker 2: the Middle East, still comes from the Strait of Hormus, 234 00:14:52,520 --> 00:14:55,720 Speaker 2: comes from the Golf In. Three quarters of the oil 235 00:14:55,840 --> 00:14:59,960 Speaker 2: that comes out of the Golf countries goes to Asia 236 00:15:00,640 --> 00:15:04,440 Speaker 2: ultimately and ultimately to US. So while New Zealand is 237 00:15:04,440 --> 00:15:09,640 Speaker 2: not importing this rural crew directly, it's importing the refined 238 00:15:09,680 --> 00:15:13,640 Speaker 2: product that is coming in the end from the same place. 239 00:15:14,040 --> 00:15:17,320 Speaker 2: So it's more of a technicality. It means imports from 240 00:15:17,360 --> 00:15:20,040 Speaker 2: the likes of Singapore have gone up, imports from the 241 00:15:20,040 --> 00:15:23,400 Speaker 2: Gulf have gone down. But really it is just more 242 00:15:23,440 --> 00:15:26,640 Speaker 2: of a technicality in a sense, the oil is coming 243 00:15:26,640 --> 00:15:28,440 Speaker 2: from the same place. New Zealand is going to be 244 00:15:28,560 --> 00:15:31,360 Speaker 2: subject to the same impacts as everyone else. Oil is 245 00:15:31,400 --> 00:15:34,760 Speaker 2: a globally traded commodity. New Zealand pays the market price, 246 00:15:35,920 --> 00:15:40,040 Speaker 2: and the fact is also now versus twenty twenty two 247 00:15:40,280 --> 00:15:43,480 Speaker 2: when we had that last spike in oil prices after 248 00:15:43,520 --> 00:15:46,320 Speaker 2: the war in Ukraine began. The New Zealand dollar is 249 00:15:46,360 --> 00:15:51,640 Speaker 2: considerably weaker against the US dollar, so eighty US dollars 250 00:15:51,640 --> 00:15:53,720 Speaker 2: for a barrel of oil at the moment, it's probably 251 00:15:54,160 --> 00:15:59,000 Speaker 2: closer to the same the impact as ninety dollars or 252 00:15:59,080 --> 00:16:01,840 Speaker 2: one hundred dollars per apps back then, just because the 253 00:16:01,880 --> 00:16:05,880 Speaker 2: New Zealand dollar is probably weakened by around a fifth, 254 00:16:05,880 --> 00:16:09,440 Speaker 2: I would say, in that time. So we'll see that 255 00:16:09,480 --> 00:16:12,480 Speaker 2: at the pump later this week. No doubt that will 256 00:16:12,520 --> 00:16:17,960 Speaker 2: filter through to consumers. Exactly how much it goes up 257 00:16:18,000 --> 00:16:22,360 Speaker 2: by and how long that impact lasts, well, that all 258 00:16:22,360 --> 00:16:25,360 Speaker 2: depends on the outcome of this war, and if this 259 00:16:25,520 --> 00:16:29,160 Speaker 2: war drags on. Donald Trump is talking about weeks, not days. 260 00:16:29,560 --> 00:16:32,040 Speaker 2: Four weeks. We'll see what Iran has to say about 261 00:16:32,040 --> 00:16:35,080 Speaker 2: the matter as well. Could be ending, could end up 262 00:16:35,120 --> 00:16:38,160 Speaker 2: a lot longer than that, could be months potentially. I mean, 263 00:16:38,200 --> 00:16:40,720 Speaker 2: wars are very easy to start and they can actually 264 00:16:40,800 --> 00:16:42,480 Speaker 2: prove to be quite hard to stop and learning it 265 00:16:42,600 --> 00:16:45,360 Speaker 2: to look at say the war in Ukraine for an 266 00:16:45,360 --> 00:16:47,560 Speaker 2: example of that, which is now in its fifth year. 267 00:16:47,960 --> 00:16:49,840 Speaker 1: I was trying to think whether something like this has 268 00:16:49,880 --> 00:16:53,520 Speaker 1: happened before, because we know this conversation, We've already had 269 00:16:53,560 --> 00:16:57,120 Speaker 1: this conversation about there being these kind of trade choke 270 00:16:57,240 --> 00:17:00,800 Speaker 1: holds around the world and in these kinds of areas, 271 00:17:00,920 --> 00:17:04,160 Speaker 1: especially in the Middle East. And I suppose I came 272 00:17:04,200 --> 00:17:07,320 Speaker 1: to the Sewez Channel incident that was twenty twenty one 273 00:17:07,720 --> 00:17:11,480 Speaker 1: March twenty twenty one. I think, tell us what happened there, 274 00:17:11,760 --> 00:17:18,320 Speaker 1: and did we feel the ramifications of that incident as 275 00:17:18,480 --> 00:17:20,840 Speaker 1: a as much as we thought we would, and how 276 00:17:20,880 --> 00:17:22,920 Speaker 1: long did it take to recover from that. 277 00:17:23,560 --> 00:17:26,919 Speaker 2: Indeed, your viewers and listeners will probably recall the pictures 278 00:17:26,920 --> 00:17:30,359 Speaker 2: of the Evergreen, the ship that blocked the Sewers Canal 279 00:17:30,440 --> 00:17:33,440 Speaker 2: for six days back in March twenty twenty one and 280 00:17:33,560 --> 00:17:36,800 Speaker 2: stopped cargo flying through the Sewers Canal, and the Sewers 281 00:17:36,800 --> 00:17:39,920 Speaker 2: Canal is massively important to global trade because it connects 282 00:17:39,960 --> 00:17:43,840 Speaker 2: Europe with Asia. It's the fast route from the Mediterranean 283 00:17:44,359 --> 00:17:46,600 Speaker 2: into the Red Sea and then into the Indian Ocean. 284 00:17:47,400 --> 00:17:51,320 Speaker 2: So ten billion dollars worth of cargo ten billion US 285 00:17:51,400 --> 00:17:54,680 Speaker 2: dollars with cargo every day was stopped from flowing through 286 00:17:55,080 --> 00:17:57,680 Speaker 2: the Sewer's canal and ships were rerouting around the Cape 287 00:17:57,720 --> 00:18:01,480 Speaker 2: of Good Hope, the long way around run the coast 288 00:18:01,520 --> 00:18:07,399 Speaker 2: of Africa to get to Asia. Fortunately they managed to 289 00:18:07,400 --> 00:18:11,800 Speaker 2: get that ship refloated and it was only only six days, 290 00:18:12,440 --> 00:18:15,719 Speaker 2: and it was also not a war situation. It was 291 00:18:15,760 --> 00:18:21,520 Speaker 2: more mismanagement that the ship managed to block the canal, 292 00:18:21,600 --> 00:18:24,320 Speaker 2: but it showed the impact on global trade. This is 293 00:18:24,520 --> 00:18:29,840 Speaker 2: far worse than that because it's a war situation and 294 00:18:29,920 --> 00:18:32,600 Speaker 2: you know, it's out of control. In my view, it's 295 00:18:32,600 --> 00:18:35,760 Speaker 2: spiraled out of control with we're only we're not even 296 00:18:35,760 --> 00:18:39,080 Speaker 2: seventy two hours into this war as I speak. But 297 00:18:39,160 --> 00:18:41,400 Speaker 2: there have been others. You know, if you look back 298 00:18:41,440 --> 00:18:45,080 Speaker 2: in history, the viewers and listeners will who have studied 299 00:18:45,119 --> 00:18:48,439 Speaker 2: history will probably recall the Siviz Crisis of nineteen fifty 300 00:18:48,480 --> 00:18:52,560 Speaker 2: six when Britain tried, and Britain and France tried to 301 00:18:52,640 --> 00:18:56,760 Speaker 2: take back the Sewiz Canal that Egypt had nationalized, and 302 00:18:56,800 --> 00:19:02,160 Speaker 2: there was a war then was ultimately and the British 303 00:19:02,200 --> 00:19:06,720 Speaker 2: were told by Dwight Eisenhower, the US President, to get out. Now, 304 00:19:07,160 --> 00:19:09,920 Speaker 2: Egypt sunk a number of ships in that conflict that 305 00:19:09,960 --> 00:19:13,840 Speaker 2: blocked the canal, that caused massive delays and issues. There 306 00:19:13,840 --> 00:19:17,159 Speaker 2: was petrol rationing in the United Kingdom for months afterwards 307 00:19:17,160 --> 00:19:20,440 Speaker 2: as a result. It was a huge disaster of course 308 00:19:20,440 --> 00:19:23,919 Speaker 2: to British prestige. The Prime minist antinied and had to 309 00:19:23,960 --> 00:19:27,040 Speaker 2: resign over the matter, which just shows you just how 310 00:19:27,080 --> 00:19:32,239 Speaker 2: significant this part of the world can be. And then 311 00:19:32,280 --> 00:19:33,879 Speaker 2: when you come to the Strait up for moves itself. 312 00:19:33,920 --> 00:19:37,160 Speaker 2: I mean back in the nineteen eighties, the Irana Iraq 313 00:19:37,240 --> 00:19:40,000 Speaker 2: War was fought from nineteen eighty to nineteen eighty eight, 314 00:19:40,080 --> 00:19:42,800 Speaker 2: and as a subset of that war, there was what 315 00:19:42,920 --> 00:19:45,760 Speaker 2: was called the tanker War between Iraq and Iran, where 316 00:19:45,760 --> 00:19:51,520 Speaker 2: they started realizing the potential to target tankers as part 317 00:19:51,560 --> 00:19:55,480 Speaker 2: of their war strategies, and third countries ended up being 318 00:19:55,800 --> 00:19:58,880 Speaker 2: caught up in that as well. So the US intervened 319 00:19:59,160 --> 00:20:02,480 Speaker 2: ultimately to try and stop that, not without taking casualties. 320 00:20:02,480 --> 00:20:07,280 Speaker 2: I might add with that the two US ships were hit. 321 00:20:07,359 --> 00:20:13,160 Speaker 2: The number of US sailors died well over thirty died 322 00:20:13,200 --> 00:20:17,199 Speaker 2: in the first incident when they were hit by a 323 00:20:17,359 --> 00:20:21,000 Speaker 2: rocky aircraft. So as a sensitive part of the world, 324 00:20:21,080 --> 00:20:24,560 Speaker 2: it has been pretty much for the entirety of the 325 00:20:24,600 --> 00:20:27,720 Speaker 2: twentieth century then to the twenty first century. Ever since 326 00:20:27,760 --> 00:20:32,200 Speaker 2: the world became addicted to oil. We have known about 327 00:20:32,240 --> 00:20:35,240 Speaker 2: it for years and it's often been talked about what 328 00:20:35,320 --> 00:20:38,520 Speaker 2: would happen if this war broke out, an open war 329 00:20:38,600 --> 00:20:42,720 Speaker 2: between Iran and the United States, would around block the 330 00:20:42,760 --> 00:20:44,680 Speaker 2: Strait of hom moves. I think what we're seeing now 331 00:20:44,800 --> 00:20:48,040 Speaker 2: it doesn't even take that formal blockade for it to 332 00:20:48,080 --> 00:20:51,480 Speaker 2: have a massive impact. And that's simply because if you're 333 00:20:51,480 --> 00:20:53,680 Speaker 2: a shipping company, you're not going to send your ships 334 00:20:53,880 --> 00:20:57,639 Speaker 2: in an area, whether in missiles and drones or flying around. 335 00:20:57,920 --> 00:21:01,240 Speaker 2: And you know, this is the reality of the war. 336 00:21:07,760 --> 00:21:13,320 Speaker 4: We projected four to five weeks, but we have capability 337 00:21:13,359 --> 00:21:14,600 Speaker 4: to go far longer than that. 338 00:21:14,720 --> 00:21:15,159 Speaker 1: We'll do it. 339 00:21:15,200 --> 00:21:19,400 Speaker 4: Whatever somebody said today, they said, oh, well, the president 340 00:21:19,440 --> 00:21:21,800 Speaker 4: wants to do it really quickly. After that he'll get bored. 341 00:21:21,800 --> 00:21:25,200 Speaker 4: I don't get bored. There's nothing boring about this. Do 342 00:21:25,280 --> 00:21:27,560 Speaker 4: you agree with that, Pete? I don't think there's anything 343 00:21:27,600 --> 00:21:32,480 Speaker 4: mister General, there's nothing boring about it. Somebody actually said 344 00:21:33,040 --> 00:21:35,520 Speaker 4: from the media, I think he'll get bored after about 345 00:21:35,520 --> 00:21:37,399 Speaker 4: a week or two. No, we don't get bored. I 346 00:21:37,480 --> 00:21:40,040 Speaker 4: never get bored. If I got bored, I wouldn't be 347 00:21:40,080 --> 00:21:41,840 Speaker 4: standing here right now. I guarantee you that. 348 00:21:44,480 --> 00:21:47,920 Speaker 1: I've seen in response to the last seventy two odd 349 00:21:47,960 --> 00:21:52,920 Speaker 1: hours and the Iran strikes, that they could be ramifications 350 00:21:53,080 --> 00:21:58,720 Speaker 1: of global proportions, and some people calling it a potential 351 00:21:58,800 --> 00:22:02,160 Speaker 1: for a global eco economic crisis. Do you think that 352 00:22:02,160 --> 00:22:05,520 Speaker 1: that's putting it lightly or is that being over exaggerated. 353 00:22:06,280 --> 00:22:09,719 Speaker 2: Look, everything depends on what happens in this war. If 354 00:22:09,760 --> 00:22:14,760 Speaker 2: this war is short lived, and that's what Israel and 355 00:22:14,800 --> 00:22:17,280 Speaker 2: the United States think it will be, they think that 356 00:22:17,320 --> 00:22:22,000 Speaker 2: they can destroy the stocks of ballistic missiles and the 357 00:22:22,040 --> 00:22:25,480 Speaker 2: missile launchers, and the drone stock piles and all the 358 00:22:25,520 --> 00:22:29,200 Speaker 2: military infrastructure in their view, I mean, their strategy is 359 00:22:29,240 --> 00:22:33,560 Speaker 2: based on the fact that they will gain full air superiority. 360 00:22:33,640 --> 00:22:36,919 Speaker 2: They've already achieved that to some degree. And that they 361 00:22:36,960 --> 00:22:43,959 Speaker 2: will destroy all of Iran's offensive capabilities. They will annihilate 362 00:22:44,000 --> 00:22:46,399 Speaker 2: their navy, that was the word that Donald Trump used. 363 00:22:46,920 --> 00:22:49,879 Speaker 2: Then they won't have the ability to block the strait 364 00:22:49,920 --> 00:22:56,480 Speaker 2: of hormones and these attacks on the Gulf States will stop. 365 00:22:57,359 --> 00:22:57,639 Speaker 4: Now. 366 00:22:57,720 --> 00:23:02,040 Speaker 2: If that comes to pass, then that maybe we go 367 00:23:02,200 --> 00:23:06,280 Speaker 2: back to some sense of normality. But I just think 368 00:23:06,359 --> 00:23:10,000 Speaker 2: that everything's on the table at this point because Iran 369 00:23:10,440 --> 00:23:16,920 Speaker 2: is absolutely furious the Supreme leader Iatla Alejamine has been killed. 370 00:23:17,359 --> 00:23:19,840 Speaker 2: They've got nothing to lose almost at this point, the 371 00:23:19,920 --> 00:23:24,240 Speaker 2: United States and Israel on regime change. They're going to 372 00:23:24,280 --> 00:23:27,960 Speaker 2: throw the kitchen sink here. And Iran's power structure is 373 00:23:28,680 --> 00:23:32,440 Speaker 2: quite diffuse. It's more of a horizontal power structure than 374 00:23:32,480 --> 00:23:36,000 Speaker 2: a vertical one, and there are a lot of competing 375 00:23:36,040 --> 00:23:40,040 Speaker 2: power centers. The Islamic Revolutionary Guard called the IRGC, is 376 00:23:40,080 --> 00:23:44,760 Speaker 2: just one of them in Iran, and they've got all 377 00:23:44,840 --> 00:23:48,639 Speaker 2: kinds of I think, ideas and strategies up their sleeves 378 00:23:48,640 --> 00:23:50,320 Speaker 2: as well. They've had a long time to prepare for 379 00:23:50,359 --> 00:23:54,000 Speaker 2: this conflict, and so I wouldn't bet on this ending 380 00:23:54,359 --> 00:23:58,560 Speaker 2: anytime soon. Even if the war does end, the initial 381 00:23:58,640 --> 00:24:02,720 Speaker 2: conflict does subside, you've got the fact that Iran has 382 00:24:02,760 --> 00:24:05,159 Speaker 2: no leadership in place. The forty nine leaders have been 383 00:24:05,240 --> 00:24:10,520 Speaker 2: killed according to Donald Trump, and the supreme leader is gone. 384 00:24:10,800 --> 00:24:14,560 Speaker 2: Iran has to somehow rebuild. Do you end up with 385 00:24:14,640 --> 00:24:17,000 Speaker 2: a civil war? That's what happened in Iraq in two 386 00:24:17,040 --> 00:24:20,639 Speaker 2: thousand and three. For example, George W. Bush stood there 387 00:24:20,680 --> 00:24:23,640 Speaker 2: on the aircraft carrier with mission accomplished back in May 388 00:24:23,760 --> 00:24:27,160 Speaker 2: two thousand and three, that mission accomplished banner behind him, 389 00:24:27,520 --> 00:24:30,960 Speaker 2: but then the hard part started the civil war that 390 00:24:31,040 --> 00:24:34,400 Speaker 2: broke out in Iran, and it was chaos and destruction 391 00:24:34,520 --> 00:24:38,840 Speaker 2: and devastation for years in Iraq. Afterwards, do we get 392 00:24:38,840 --> 00:24:41,600 Speaker 2: the same thing in Iran? Well, what impact does that 393 00:24:41,760 --> 00:24:44,040 Speaker 2: then have on the likes of this trader for moves? 394 00:24:44,119 --> 00:24:47,199 Speaker 2: Does this trader will Moves become then caught up in 395 00:24:47,359 --> 00:24:51,959 Speaker 2: any civil war in Iran and the aftermath? So I 396 00:24:51,960 --> 00:24:56,600 Speaker 2: think chaos is far more likely than stability at this 397 00:24:56,720 --> 00:25:01,000 Speaker 2: point in this region. And that's what the reality of 398 00:25:01,280 --> 00:25:04,399 Speaker 2: what's happened Donald Trump and Menumunet, who have opened a 399 00:25:04,480 --> 00:25:08,600 Speaker 2: Pandora's box, They've ignited a powder caick across the Middle East, 400 00:25:09,280 --> 00:25:11,600 Speaker 2: and now we're all going to be dealing with the 401 00:25:11,640 --> 00:25:15,960 Speaker 2: fallout from that, and what happens at this point is 402 00:25:16,040 --> 00:25:16,840 Speaker 2: just anyone's guest. 403 00:25:17,040 --> 00:25:18,919 Speaker 1: Thanks for joining us, Jeffrey, it's. 404 00:25:18,760 --> 00:25:20,760 Speaker 2: A pleasure, Chelsea. Thank you very much for having me 405 00:25:20,840 --> 00:25:24,320 Speaker 2: on the program. 406 00:25:24,480 --> 00:25:27,600 Speaker 1: That's it for this episode of the Front Page. You 407 00:25:27,640 --> 00:25:31,400 Speaker 1: can read more about today's stories and extensive news coverage 408 00:25:31,440 --> 00:25:35,080 Speaker 1: at enzidherld dot co dot enz The Front Page is 409 00:25:35,119 --> 00:25:39,119 Speaker 1: hosted and produced by me Chelsea Daniels. Caine. Dicky is 410 00:25:39,160 --> 00:25:43,320 Speaker 1: our studio operator, Richard Martin, our producer and editor, and 411 00:25:43,359 --> 00:25:47,280 Speaker 1: our executive producer is Jane Ye. Follow the Front Page 412 00:25:47,320 --> 00:25:50,320 Speaker 1: on the iHeart app or wherever you get your podcasts, 413 00:25:50,640 --> 00:25:54,640 Speaker 1: and join us next time for another look beyond the headlines.