WEBVTT - Bloomberg Surveillance TV: March 30th, 2026

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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<v Speaker 2>with Lisa Bromwitz and Amrie Hordern. Join us each day

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<v Speaker 2>from our global headquarters in New York City. We are

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<v Speaker 2>anywhere else you listen, and as always on the Bloomberg

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<v Speaker 2>Terminal and the Bloomberg Business App. General Maston Robinson of

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<v Speaker 2>Academy Securities right in the following Irun's actions left don

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<v Speaker 2>address potentially sets an illegal new normal. General Robinson joins

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<v Speaker 2>us now for more. General, Welcome to the program Sir.

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<v Speaker 2>Can we pick up on Huthy Medicine's entering this war,

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<v Speaker 2>this conflict. What are the consequences of that?

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<v Speaker 3>I don't know. This it really changes you think. I

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<v Speaker 3>believe the Hoothis, who been involved the whole time. I

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<v Speaker 3>think what we're missing here is that the Huthis do

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<v Speaker 3>not make their own decisions. They're a proxy and they

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<v Speaker 3>act when Iran says, okay, we want you to act

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<v Speaker 3>and when Iran wants them to stand down and they

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<v Speaker 3>have them stand down. Nobody controls the Huthis except for Iran,

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<v Speaker 3>and certainly Yemen doesn't control the Huthis or those frontier

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<v Speaker 3>spaces that are within their border.

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<v Speaker 4>One individual, though, John Lieber of Your Asia Group, said

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<v Speaker 4>to me that the Huthis would rather be basically paid

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<v Speaker 4>off by the Saudis instead of getting involved. I think

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<v Speaker 4>the calculus is changing for the proxy.

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<v Speaker 3>I don't think it changed for the proxy because but

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<v Speaker 3>I think the Houthis are businessmen. Yes they'll take money

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<v Speaker 3>from the Saudis, and yes they'll promise A B and C.

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<v Speaker 3>But the end of the day, the Huthis are owned

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<v Speaker 3>by the Iranians. And the question is do the Huthis

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<v Speaker 3>really believe they're still sufficient supreme leadership authority in Iran

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<v Speaker 3>for them to be able to trust that that's where

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<v Speaker 3>they're calculus, their money, their direction is going to come from.

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<v Speaker 3>Or has this second or third generation of spreme leadership

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<v Speaker 3>authority dissipated sufficiently to where they start to doubt. I

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<v Speaker 3>have confidence that given the decades long relationship Iran has

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<v Speaker 3>with this proxies, although not decades along necessarily with the Huthis.

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<v Speaker 3>Iran still has a firm grip in my opinion on them,

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<v Speaker 3>largely not because of the Spreme Leadership Authority, but because

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<v Speaker 3>of the RGC that is below that but is intrinsically

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<v Speaker 3>connected to the Spreme Leadership Authority.

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<v Speaker 4>We do, though, have a recent killing according to the

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<v Speaker 4>Israelis of the IRGC Navy commander. Do you think this

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<v Speaker 4>breaks down their maritime command for the Iranians?

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<v Speaker 3>Now, I think you've got to get into the tens

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<v Speaker 3>of thousands, if not one hundred thousands of killings of

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<v Speaker 3>the of the RGC, if you're really going to have

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<v Speaker 3>an influence and effect. But I don't think we really know.

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<v Speaker 3>We know that they're you know, two hundred and fifty

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<v Speaker 3>thousand in theory strong. We know that they are just

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<v Speaker 3>etched in stone in relationship with the Spring Leadership Authority

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<v Speaker 3>and have been since the beginning. We don't know how

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<v Speaker 3>deep that etched in stone authority and loyalty goes, but

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<v Speaker 3>we surmise it goes pretty deep, which is why I

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<v Speaker 3>don't think what the goal here is how do we

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<v Speaker 3>destroy the RGC. The goal is how do we get

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<v Speaker 3>Iran to a point where they're willing to negotiate a

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<v Speaker 3>plausible non nuclear Iran in the future. And to me,

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<v Speaker 3>that's where the entire buck stops is, how do we

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<v Speaker 3>get around to where they are not pursuing a nuclear

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<v Speaker 3>capability that would be catastrophic for the world.

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<v Speaker 4>Well, how do you think we get there? We're not

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<v Speaker 4>there now today?

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<v Speaker 5>Are we?

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<v Speaker 3>We are not. But I think that's the reason you're

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<v Speaker 3>seeing more forces sent there. Everything is about leverage. Everything

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<v Speaker 3>is about how to create negotiation space. How do you

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<v Speaker 3>create enough not pain, but how do you create enough capability?

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<v Speaker 3>Threat and anxiety. That is all of this calculus combined

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<v Speaker 3>together of the killing of the supreme leadership authorities, the

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<v Speaker 3>reduction of their capabilities, particularly the destruction of their navy

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<v Speaker 3>and a lot of their air to say, how much

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<v Speaker 3>more are they willing to sustain and be able to say,

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<v Speaker 3>We're still an entity to be reckoned with in the

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<v Speaker 3>Middle East.

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<v Speaker 1>General and President Trump says that he wants to take

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<v Speaker 1>the oil in Irun. How do you understand that.

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<v Speaker 3>I see all this as purely negotiation strategy. If he

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<v Speaker 3>can see something that causes the Iranians to say, hmm, okay,

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<v Speaker 3>I didn't expect that that's a breef further than I wanted.

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<v Speaker 3>Then I think that gives the upper hand of what

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<v Speaker 3>the administration is seeking. What I don't see this being

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<v Speaker 3>is a ground invasion like Iraq. I don't see that

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<v Speaker 3>is where we're headed. I do see where we're headed

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<v Speaker 3>is where the leverage points that the administration believes are plausible.

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<v Speaker 3>It's really the leverage points that SITCOM believes are plausible

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<v Speaker 3>because all of them, there is any surprise that we're

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<v Speaker 3>doing something against Iran at some point, it's just the

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<v Speaker 3>timing to win. But every reasonal combatic commander has in

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<v Speaker 3>the can campaign plans and plans against certain scenarios that

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<v Speaker 3>they break out, dust off, update based on how these

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<v Speaker 3>situation has changed, and then they expand it based on

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<v Speaker 3>what the current administration will allow and authorize them to

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<v Speaker 3>do it. Most reasonal combatic commanders are willing to be

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<v Speaker 3>a little more aggressive than their electoral officials are telling

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<v Speaker 3>them to be. So there's always that calculus of the

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<v Speaker 3>military wanting to be a little more aggressive and confident

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<v Speaker 3>the administration and the elected officials and win a minute.

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<v Speaker 3>There's more stake here than just winning a battle.

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<v Speaker 2>On the battle to stay with US more Bloomberg surveillance

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<v Speaker 2>coming up after this. Brankrud on track for a record

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<v Speaker 2>monthly game. As the war with Around continues to intensify,

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<v Speaker 2>Bob mcnalley of Rapid and Energy Group writing fade speculation

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<v Speaker 2>on a near term US around cease fire. US force

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<v Speaker 2>posture points to escalation. Bob joined us. Now for more, Bob, welcome.

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<v Speaker 2>Let's start with that line. It's an important line. What

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<v Speaker 2>is it about the force posture of the US the

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<v Speaker 2>points to escalation?

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<v Speaker 6>Great to be with you, John. So, yeah, we're flowing.

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<v Speaker 7>We have one marine expeditionary units arrived, another one's on

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<v Speaker 7>the way, eighty second airborne and other forces are moving in.

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<v Speaker 7>We think we're likely to see some form of ground operation.

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<v Speaker 7>I'll doubt we'll go into carg Island. Most of the

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<v Speaker 7>military folks I talk with just don't understand the utility

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<v Speaker 7>of that. However, there are smaller islands that are more

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<v Speaker 7>defensible that are used by Iran to interdict shipping. Perhaps

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<v Speaker 7>it's those, but I think some form of US groundfores

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<v Speaker 7>insertion is coming.

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<v Speaker 4>But Bob, when we talk about the President saying things

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<v Speaker 4>like I want to take the oil in Iran. Inevitably

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<v Speaker 4>that would mean some sort of operation with carg Island.

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<v Speaker 6>No, you know it doesn't have to I don't understand.

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<v Speaker 7>I mean, back in twenty twelve, I wrote an ft

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<v Speaker 7>up ed and I said, just put a quarantine up.

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<v Speaker 7>You just stop all the ships in the Gulf of

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<v Speaker 7>Oman coming out of Carr Island. Carg Island's like five

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<v Speaker 7>miles from the coast. We could take it, but then

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<v Speaker 7>we'd be under constant bombardment from drones and artillery and

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<v Speaker 7>missiles and things. So again, I'm not a military guy,

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<v Speaker 7>but the military guys and gals I know don't really

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<v Speaker 7>see the need to occupy carg Island. We can still

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<v Speaker 7>choke off Iran's exports, we can do that, but we

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<v Speaker 7>can do it far away on the water.

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<v Speaker 4>Why would this administration want to choke off their exit

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<v Speaker 4>when they literally took Ran off of their sanctions list,

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<v Speaker 4>even including in the general license that Americans can now

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<v Speaker 4>buy Iranian barrels.

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<v Speaker 7>Right, So, right now, I Marie, you're right, right now,

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<v Speaker 7>the strategy the administration is put every barrel it can

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<v Speaker 7>into the market to try and break crudes assent. Okay,

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<v Speaker 7>And so that you're right, liberalizing access to Iranian barrels,

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<v Speaker 7>to Russian barrels, allowing Iran to export it will while

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<v Speaker 7>others are constrained, you know. But if we're going to

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<v Speaker 7>take carg Island by force, that strategy will obviously change.

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<v Speaker 6>I'm just saying you can do it in other ways, Bob.

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<v Speaker 1>There is a lot of uncertainty around how significantly oil

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<v Speaker 1>production has already been disrupted in some sort of significant

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<v Speaker 1>way that could lead to prolonged shortages. Do you have

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<v Speaker 1>an assessment of that.

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<v Speaker 6>We're starting to work that up.

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<v Speaker 7>The problem is this is still underway and the damages

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<v Speaker 7>are TBD. But right now, you know, I think it's

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<v Speaker 7>three to four more months before the major Saudi Arabia Kuwait,

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<v Speaker 7>probably maybe longer for Iraq Romelia that field. That one

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<v Speaker 7>million barrel a day outage there could could be much

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<v Speaker 7>longer term. So if you put a gun to my

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<v Speaker 7>head right now it's still underway, I'd say on the

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<v Speaker 7>order of two million barrels a day of crude that

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<v Speaker 7>could be lost for a long time here, and that's

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<v Speaker 7>before we get into any potential damage to above ground facilities. Again,

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<v Speaker 7>the silver lining so far on this cloud is we

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<v Speaker 7>haven't seen escalation to destroying the facilities we need to

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<v Speaker 7>process and export that crude. When those fields can be

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<v Speaker 7>brought back up, that would be disastrous. Ab Cake rostun

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<v Speaker 7>or a terminal carg island itself haven't been physically damaged,

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<v Speaker 7>so that's the other thing to watch for. If that happens,

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<v Speaker 7>then all the damage estimates, you know, get increased.

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<v Speaker 1>How much has the SPR release of the United States

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<v Speaker 1>and in Europe, as well as the unsanctioned Iranian and

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<v Speaker 1>Russian oil potentially cushioned some of what we're seeing in

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<v Speaker 1>terms of actual production absolutely destroyed.

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<v Speaker 6>Well, from a flow perspective, it's marginal. Right at the.

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<v Speaker 7>Most, when all the SPR barrels are flowing from the

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<v Speaker 7>IA countries, you're looking at maybe a little more than

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<v Speaker 7>two million barrels a day the deficit. And there's a

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<v Speaker 7>lot of math going around out there, but you know,

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<v Speaker 7>we estimate the deficit to be about cruder products twelve

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<v Speaker 7>a million barrels a day or so, so obviously from

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<v Speaker 7>a flow perspective, it's not that significant. It is, however,

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<v Speaker 7>helping keep WTTI down. It is cushioning the market a

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<v Speaker 7>little bit, but it's a speed bump kind of on

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<v Speaker 7>the way higher.

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<v Speaker 2>Well, can you translate a headline for me? Just help

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<v Speaker 2>me understand how important this is or not. This came

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<v Speaker 2>from the President speaking to the Financial Times. He talked

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<v Speaker 2>about this a few times now, about these Pakistan flagged

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<v Speaker 2>oil tankers that have been alopped through the strati formos.

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<v Speaker 2>Whether that number is ten or whether it's twenty, Can

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<v Speaker 2>you give us some context on that. How big is

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<v Speaker 2>that number relative to the amount of traffic that which

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<v Speaker 2>traditionally go through the strike?

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<v Speaker 6>Yeah?

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<v Speaker 7>John, So you know what we haven't even I mean,

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<v Speaker 7>it's these tankers were not even sure there were oil tankers,

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<v Speaker 7>and they have been dry cargo tankers. It's you know,

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<v Speaker 7>if each one at max would have been two million barrels,

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<v Speaker 7>ten million barrels, two million barrels.

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<v Speaker 6>So it's just not that much.

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<v Speaker 7>I mean, I think all of this really is verbal intervention,

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<v Speaker 7>you know, the term I learned in the nineties working

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<v Speaker 7>at Tutor and watching the central banks. This is activating

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<v Speaker 7>this reservoir of hope and confidence in the market that

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<v Speaker 7>this nightmare is going to go away. And the President

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<v Speaker 7>knows when he says things like this, we almost have

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<v Speaker 7>a deal. Ten cargoes went out it was a gift.

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<v Speaker 7>We're escorting tankers out. All of this I think is

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<v Speaker 7>mainly intended to try and keep oil prices down, and

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<v Speaker 7>that doesn't reflect the real return of barrels. Most on

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<v Speaker 7>a given day, maybe a half a million barrels a

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<v Speaker 7>day is getting out, but it's quite marginal.

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<v Speaker 2>Stay with us Inmberg surveillance coming up after this at Alhasani, Columbia,

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<v Speaker 2>threatned or writing it's in the fence interest to keep

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<v Speaker 2>markets on edge. Doubts is their most powerful tool to

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<v Speaker 2>keep inflation in check. At joint US Now for more

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<v Speaker 2>and good morning glory. Is that how you describe this?

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<v Speaker 2>Then the first phase is a big communication push.

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<v Speaker 5>I think that's right. You want to create the permission

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<v Speaker 5>structure for markets to price type monetary policy upfront. Then

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<v Speaker 5>as we see inflation, as we see growth developed later

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<v Speaker 5>this year, I think it opens up room for cuts.

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<v Speaker 5>But the initial stage you want to make sure that

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<v Speaker 5>the markets feel that the Fed's responding with sort of

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<v Speaker 5>a whatever it takes pasture.

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<v Speaker 2>How do you price that sequencing through this yield curve.

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<v Speaker 5>I think we've done a good amount of work. We've

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<v Speaker 5>taken out about two and a half cuts. We've taken

0:12:54.160 --> 0:12:57.680
<v Speaker 5>that pricing to roughly neutral, maybe half a hike in

0:12:57.760 --> 0:13:01.600
<v Speaker 5>the price. We've flattened the curve, right, If anything in

0:13:01.640 --> 0:13:04.920
<v Speaker 5>the extreme of this conflict continues, we could invert the curve,

0:13:05.640 --> 0:13:07.920
<v Speaker 5>and that would be very consistent with the FED tightening

0:13:07.960 --> 0:13:09.600
<v Speaker 5>policy in the background to make sure there are no

0:13:09.720 --> 0:13:10.800
<v Speaker 5>second round effects from this.

0:13:11.120 --> 0:13:12.760
<v Speaker 1>So then, how do you understand the back end of

0:13:12.760 --> 0:13:14.920
<v Speaker 1>the yield curve, the ten year, the thirty year, and

0:13:14.960 --> 0:13:16.800
<v Speaker 1>the fact that yields have moved higher. Is this a

0:13:16.880 --> 0:13:20.200
<v Speaker 1>lack of credibility that the market has that they truly

0:13:20.240 --> 0:13:21.319
<v Speaker 1>can contain inflation.

0:13:22.160 --> 0:13:26.160
<v Speaker 5>I think the answer is twofold one. Not yet. Most

0:13:26.200 --> 0:13:29.719
<v Speaker 5>of the repricing has been real rates. So it's been

0:13:29.720 --> 0:13:32.200
<v Speaker 5>a tightening of policy. It's been a tightening of posture.

0:13:32.920 --> 0:13:36.000
<v Speaker 5>The initial reaction to me is a couple of things. One,

0:13:36.520 --> 0:13:40.319
<v Speaker 5>there's some technicals behind this. The market was positioned for cuts,

0:13:40.480 --> 0:13:43.520
<v Speaker 5>with position for a steeper curve. At the end of February,

0:13:43.559 --> 0:13:47.760
<v Speaker 5>we've unwound all of that. We haven't had time to

0:13:47.800 --> 0:13:50.520
<v Speaker 5>price in the hit to growth in the labor market yet.

0:13:50.600 --> 0:13:52.760
<v Speaker 5>I think it's starting to get a look now as

0:13:52.800 --> 0:13:56.120
<v Speaker 5>we get thirty year yields to five percent ten year

0:13:56.160 --> 0:13:58.320
<v Speaker 5>yields to four and a half percent, Those things start

0:13:58.360 --> 0:14:02.319
<v Speaker 5>to become more durable ceilings. But I think the key

0:14:02.480 --> 0:14:05.640
<v Speaker 5>question for an investor today is which part of the

0:14:05.640 --> 0:14:08.400
<v Speaker 5>curve is overshot. Is at the longer end of the

0:14:08.400 --> 0:14:10.719
<v Speaker 5>curve or the front end. And I think I put

0:14:10.720 --> 0:14:12.959
<v Speaker 5>a lot more chips on that longer end of the curve, so.

0:14:12.920 --> 0:14:14.760
<v Speaker 1>You believe it's going to be a greater growth shock

0:14:14.920 --> 0:14:18.280
<v Speaker 1>than people previously expected. I'm just wondering how the fiscal

0:14:18.360 --> 0:14:22.240
<v Speaker 1>lever plays into this, given the fact that the previous

0:14:23.120 --> 0:14:26.440
<v Speaker 1>declines in growth have been met with huge fiscal responses,

0:14:26.720 --> 0:14:29.040
<v Speaker 1>and we see a similar type of impulse coming right now,

0:14:29.200 --> 0:14:30.960
<v Speaker 1>at least in the rhetoric from Congress.

0:14:31.160 --> 0:14:34.320
<v Speaker 5>Absolutely, so that's a little bit of a wildcard right now.

0:14:34.600 --> 0:14:37.920
<v Speaker 5>The fiscal posture right now in the background is roughly neutral,

0:14:38.400 --> 0:14:40.520
<v Speaker 5>not a lot going on. It's a little bit more

0:14:40.560 --> 0:14:46.480
<v Speaker 5>accommodative in China, in Japan, in Germany. To the extent

0:14:46.560 --> 0:14:49.920
<v Speaker 5>that there is room to really ramp up fiscal stimulus

0:14:49.920 --> 0:14:51.920
<v Speaker 5>the way we did after COVID, I think that room

0:14:52.000 --> 0:14:54.840
<v Speaker 5>is a lot tighter. I think Congress has learned the

0:14:54.880 --> 0:14:58.040
<v Speaker 5>fact that look, look, you really need a different rate environment.

0:14:58.280 --> 0:15:00.880
<v Speaker 5>You really need a different growth environment to drop stimulus

0:15:00.960 --> 0:15:05.360
<v Speaker 5>into the economy without basing significant consequences. So I'm seeing

0:15:05.400 --> 0:15:08.400
<v Speaker 5>a little bit of adjustment on the margin gasoline taxes

0:15:08.440 --> 0:15:11.680
<v Speaker 5>and the like, but large fiscal stimulas so far is

0:15:11.720 --> 0:15:13.520
<v Speaker 5>not part of the picture. But that's a massive risk

0:15:13.560 --> 0:15:14.360
<v Speaker 5>for bond investors.

0:15:14.440 --> 0:15:16.440
<v Speaker 2>Is is there a bond market you're worried about. I looked

0:15:16.440 --> 0:15:19.040
<v Speaker 2>to Japan High CEO. It's across some tennas since the

0:15:19.280 --> 0:15:23.360
<v Speaker 2>nineteen nineties, the UK since two thousand and I Germany

0:15:23.400 --> 0:15:25.560
<v Speaker 2>since twenty eleven. Is there a market you're more concerned

0:15:25.600 --> 0:15:26.600
<v Speaker 2>about versus souders?

0:15:27.480 --> 0:15:30.680
<v Speaker 5>I think some of the volatility you see in UK rates,

0:15:30.720 --> 0:15:34.160
<v Speaker 5>for sure, is symptomatic of the fact that there's very

0:15:34.200 --> 0:15:38.040
<v Speaker 5>little capacity for that market to absorb additional supply. That's

0:15:38.080 --> 0:15:41.040
<v Speaker 5>one to a lot of the participants of that market

0:15:41.040 --> 0:15:44.760
<v Speaker 5>are leveraged hedge funds. They moved their positions around very quickly.

0:15:44.800 --> 0:15:47.640
<v Speaker 5>You see that in the rate volatility. But if I

0:15:47.720 --> 0:15:51.120
<v Speaker 5>zoom out, I would be most worried about emerging markets,

0:15:51.320 --> 0:15:56.000
<v Speaker 5>particularly local currency emerging markets. This has put significant pressure

0:15:56.040 --> 0:16:00.360
<v Speaker 5>on them, both directly through the inflation, oil shock and

0:16:00.440 --> 0:16:03.640
<v Speaker 5>indirectly through a stronger dollar, so to the extent that

0:16:03.720 --> 0:16:08.240
<v Speaker 5>emerging markets were a real sweet spot last year, a

0:16:08.320 --> 0:16:11.920
<v Speaker 5>really nice runway for cuts that's gone and a lot

0:16:11.920 --> 0:16:14.320
<v Speaker 5>of them will have to tighten policy pretty significantly. So

0:16:14.360 --> 0:16:18.040
<v Speaker 5>from a growth perspective, that feeds back in a nasty way.

0:16:18.080 --> 0:16:18.800
<v Speaker 6>That is just great.

0:16:18.880 --> 0:16:21.760
<v Speaker 2>So they don't get just hit once, they get hit twice,

0:16:21.800 --> 0:16:22.680
<v Speaker 2>maybe three times.

0:16:23.040 --> 0:16:25.160
<v Speaker 1>And how many people were positioned for emerging markets to

0:16:25.320 --> 0:16:27.480
<v Speaker 1>perform heading into this year. They thought that they would

0:16:27.520 --> 0:16:30.720
<v Speaker 1>benefit from the tailwind of global growth continuing to expand

0:16:30.720 --> 0:16:32.360
<v Speaker 1>and potentially at a faster pace the rest of the

0:16:32.400 --> 0:16:34.560
<v Speaker 1>world out performing in the US. How much things have

0:16:34.640 --> 0:16:37.320
<v Speaker 1>been completely turned on their heads in just one month.

0:16:37.480 --> 0:16:39.880
<v Speaker 2>Forgive me for showing this down to about thirty seconds.

0:16:39.880 --> 0:16:42.360
<v Speaker 2>That's all I've gone. Do you think there's an underappreciation

0:16:42.400 --> 0:16:45.440
<v Speaker 2>still this morning about energy rationing in am and it

0:16:45.520 --> 0:16:47.080
<v Speaker 2>hits the growth for about c Yeah.

0:16:47.080 --> 0:16:50.600
<v Speaker 5>Absolutely absolutely. We're starting to see that in Asia, particularly

0:16:50.600 --> 0:16:53.400
<v Speaker 5>in East and South Asia. That's starting to play through

0:16:53.440 --> 0:16:57.920
<v Speaker 5>in the physical markets. It's the place where manufacturing is

0:16:57.960 --> 0:17:00.920
<v Speaker 5>concentrated and so most sensitive to to the inflation and

0:17:02.160 --> 0:17:02.920
<v Speaker 5>energy sharp story.

0:17:03.720 --> 0:17:07.280
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