1
00:00:02,720 --> 00:00:07,200
Speaker 1: Bloomberg Audio Studios, podcasts, radio News.

2
00:00:09,800 --> 00:00:12,480
Speaker 2: This week, oil executives and officials from some of the

3
00:00:12,520 --> 00:00:17,160
Speaker 2: world's largest oil producers countries like Saudi Arabia and Nigeria

4
00:00:17,239 --> 00:00:20,919
Speaker 2: are gathering in Vienna, where OPAK, the Organization of the

5
00:00:20,920 --> 00:00:24,720
Speaker 2: Petroleum Exporting Countries, is headquartered, and the purpose.

6
00:00:24,360 --> 00:00:27,040
Speaker 1: Is to bring together is some of the biggest players

7
00:00:27,120 --> 00:00:27,720
Speaker 1: in the space.

8
00:00:27,960 --> 00:00:31,880
Speaker 2: Bloomberg's Germani Brassecci is in Vienna covering Ope's gathering, and

9
00:00:31,960 --> 00:00:34,400
Speaker 2: given what's been happening recently, there is a lot for

10
00:00:34,440 --> 00:00:35,400
Speaker 2: the group to discuss.

11
00:00:35,760 --> 00:00:38,760
Speaker 1: Remember, we are coming off the most volatile period for

12
00:00:38,800 --> 00:00:40,680
Speaker 1: oil in the last couple of years.

13
00:00:41,040 --> 00:00:43,960
Speaker 2: We're coming on the air with breaking news. Israel has

14
00:00:44,080 --> 00:00:46,080
Speaker 2: just launched air strikes into Iran.

15
00:00:46,159 --> 00:00:50,560
Speaker 3: Massive precision strikes are on the three key nuclear facilities

16
00:00:51,240 --> 00:00:52,919
Speaker 3: in the Iranian regime.

17
00:00:53,680 --> 00:00:56,600
Speaker 1: After that twelve day war between Iran and Israel, we

18
00:00:56,720 --> 00:00:59,800
Speaker 1: saw massive geopolitical premium get priced into the oil curve,

19
00:01:00,320 --> 00:01:02,920
Speaker 1: and here we are pretty much all of that geopolitical

20
00:01:02,960 --> 00:01:06,560
Speaker 1: premium was wiped out. Coming on the heels of another

21
00:01:06,720 --> 00:01:08,720
Speaker 1: big OPECH plus decision.

22
00:01:08,640 --> 00:01:12,640
Speaker 2: OPEK plus, which includes even more oil producing countries, made

23
00:01:12,640 --> 00:01:15,720
Speaker 2: a surprise move over the weekend, it announced plans to

24
00:01:15,800 --> 00:01:18,600
Speaker 2: boost oil production by more than half a million barrels

25
00:01:18,600 --> 00:01:21,720
Speaker 2: a day, a big production increase at a time when

26
00:01:21,760 --> 00:01:26,039
Speaker 2: investors are worried about oversupply. Now the world's largest oil

27
00:01:26,080 --> 00:01:29,640
Speaker 2: producers are at a crossroads, and what happens next could

28
00:01:29,760 --> 00:01:35,600
Speaker 2: ripple through the global economy. I'm David Gerret and this

29
00:01:35,680 --> 00:01:38,160
Speaker 2: is the big take from Bloomberg News today. On the show,

30
00:01:38,200 --> 00:01:41,280
Speaker 2: what OPEC Plus's production surge says about the influence it

31
00:01:41,319 --> 00:01:44,320
Speaker 2: has on oil markets. Today, we look at what motivated

32
00:01:44,319 --> 00:01:47,400
Speaker 2: the alliance's latest move, what it means for markets, and

33
00:01:47,480 --> 00:01:50,640
Speaker 2: who actually calls the shots in the multi trillion dollar

34
00:01:50,680 --> 00:01:59,320
Speaker 2: oil industry. The Organization of the Petroleum Exporting Countries is

35
00:01:59,360 --> 00:02:03,360
Speaker 2: a coalition that dates back to the nineteen sixties. At first,

36
00:02:03,440 --> 00:02:07,480
Speaker 2: its membership consisted mostly of Gulf states like Iran, Iraq

37
00:02:07,560 --> 00:02:10,519
Speaker 2: and Saudi Arabia, but over the years its ranks have

38
00:02:10,600 --> 00:02:15,400
Speaker 2: expanded to include countries like Ecuador, Indonesia and Nigeria, and

39
00:02:15,480 --> 00:02:18,640
Speaker 2: about a decade ago, an alliance called OPEK plus formed,

40
00:02:18,760 --> 00:02:23,320
Speaker 2: which includes an additional ten oil producers, including Russia and Kazakhstan.

41
00:02:24,360 --> 00:02:28,200
Speaker 1: The purpose is to coordinate oil production policy around the

42
00:02:28,200 --> 00:02:32,200
Speaker 1: world to keep prices stable and to ensure that you're

43
00:02:32,720 --> 00:02:36,360
Speaker 1: both maximizing potential revenue for producers but at the same

44
00:02:36,400 --> 00:02:39,399
Speaker 1: time keeping prices affordable for consumers.

45
00:02:39,800 --> 00:02:42,800
Speaker 2: For years, OPEK was the major player in the global

46
00:02:42,800 --> 00:02:45,400
Speaker 2: oil market, but it doesn't have as much influence as

47
00:02:45,400 --> 00:02:48,080
Speaker 2: it used to. The United States has become a major

48
00:02:48,160 --> 00:02:50,960
Speaker 2: player after it ramped up the extraction of shale oil

49
00:02:51,040 --> 00:02:54,600
Speaker 2: through a process known as fracking. The US is now

50
00:02:54,639 --> 00:02:58,120
Speaker 2: the largest oil producer in the world, and notably, it

51
00:02:58,200 --> 00:03:00,640
Speaker 2: is not a member of OPEC or o PECK plus.

52
00:03:01,200 --> 00:03:04,760
Speaker 1: So as it stands today, OPEK plus their decisions still

53
00:03:04,760 --> 00:03:08,520
Speaker 1: matter hugely, but of course they're not the only game

54
00:03:08,639 --> 00:03:09,040
Speaker 1: in town.

55
00:03:09,680 --> 00:03:12,400
Speaker 2: Still, what these countries decide to do when it comes

56
00:03:12,400 --> 00:03:15,280
Speaker 2: to how much oil they produce can send shockwaves through

57
00:03:15,320 --> 00:03:18,720
Speaker 2: the global economy. That happened back in twenty twenty three

58
00:03:19,080 --> 00:03:22,680
Speaker 2: when OPEC plus decided to cut production by an additional

59
00:03:22,680 --> 00:03:25,560
Speaker 2: one million barrels a day. The cuts were meant to

60
00:03:25,600 --> 00:03:29,560
Speaker 2: rebalance the global oil supply. Crude prices had fallen and

61
00:03:29,639 --> 00:03:32,480
Speaker 2: analysts were predicting a glut ahead, and.

62
00:03:32,480 --> 00:03:35,680
Speaker 1: Therefore they took the decision to withhold barrels ie, to

63
00:03:35,720 --> 00:03:39,360
Speaker 1: withhold production from the markets, and so called these voluntary

64
00:03:39,400 --> 00:03:43,440
Speaker 1: cuts because then a group of eight producers started withholding

65
00:03:43,520 --> 00:03:48,160
Speaker 1: production from the markets per and agreed schedule, and the

66
00:03:48,200 --> 00:03:51,400
Speaker 1: whole purpose of that was to introduce again some price stability.

67
00:03:51,920 --> 00:03:55,000
Speaker 1: Initially those cuts were meant to be around for say

68
00:03:55,040 --> 00:03:57,720
Speaker 1: six months or so, they kept getting extended, but then

69
00:03:57,760 --> 00:04:00,600
Speaker 1: at the beginning of this year, so around on spring

70
00:04:00,680 --> 00:04:02,800
Speaker 1: of twenty twenty five, they announced that they were going

71
00:04:02,880 --> 00:04:06,800
Speaker 1: to start slowly unwinding the cuts that were introduced in

72
00:04:06,840 --> 00:04:07,920
Speaker 1: twenty twenty three.

73
00:04:08,240 --> 00:04:11,680
Speaker 2: In other words, OPEC plus was shifting course and boosting

74
00:04:11,720 --> 00:04:12,520
Speaker 2: production again.

75
00:04:12,840 --> 00:04:16,960
Speaker 1: The plan was to do it gradually, bringing back slowly,

76
00:04:16,960 --> 00:04:18,680
Speaker 1: slowly a little bit more than one hundred and thirty

77
00:04:18,680 --> 00:04:21,400
Speaker 1: thousand barrels a day. But what has happened in the

78
00:04:21,440 --> 00:04:25,880
Speaker 1: last four months, they've accelerated the putback. So from May

79
00:04:25,960 --> 00:04:30,919
Speaker 1: June July they surprised the market by increasing monthly production

80
00:04:31,000 --> 00:04:32,800
Speaker 1: by more than four hundred thousand barls per day.

81
00:04:33,080 --> 00:04:36,119
Speaker 2: That's three times the volume initially scheduled in those first

82
00:04:36,120 --> 00:04:39,880
Speaker 2: three months. Jamana says there are a number of reasons

83
00:04:39,880 --> 00:04:43,120
Speaker 2: for the recent surgeon production, among them a desire by

84
00:04:43,160 --> 00:04:47,039
Speaker 2: opek's most powerful member, Saudi Arabia, to punish members like

85
00:04:47,120 --> 00:04:51,680
Speaker 2: Kazakhstan and Iraq which exceeded their quotas. Then there's the

86
00:04:51,760 --> 00:04:54,280
Speaker 2: growing influence of non OPEC producers.

87
00:04:54,600 --> 00:04:57,680
Speaker 1: You were seeing a huge pickup in supply from the

88
00:04:57,839 --> 00:05:01,640
Speaker 1: likes of Canada, Brazil, Guyana, so their non OPEC countries

89
00:05:02,040 --> 00:05:04,760
Speaker 1: bringing their extra production to the market, and that's obviously

90
00:05:04,800 --> 00:05:06,679
Speaker 1: got to be a concern for OPEC from a market

91
00:05:06,680 --> 00:05:11,960
Speaker 1: share perspective. So when analysts were analyzing this decision and

92
00:05:12,000 --> 00:05:15,560
Speaker 1: trying to, you know, put together the rationale for why

93
00:05:15,640 --> 00:05:19,280
Speaker 1: OPEC plus decided to accelerate the unwines of these vluntry cuts,

94
00:05:20,000 --> 00:05:22,479
Speaker 1: one of the clear rationals was because they felt that

95
00:05:22,760 --> 00:05:25,600
Speaker 1: they were one losing market share. Two of course they

96
00:05:25,600 --> 00:05:27,880
Speaker 1: felt that the market could handle it. And then three

97
00:05:27,920 --> 00:05:30,479
Speaker 1: and this probably isn't something that they would say explicitly,

98
00:05:30,680 --> 00:05:32,479
Speaker 1: but of course you do have a president in the

99
00:05:32,480 --> 00:05:36,279
Speaker 1: White House who repeatedly talks about his desire to see

100
00:05:36,520 --> 00:05:39,760
Speaker 1: lower oil prices. And I'm also going to ask Saudi

101
00:05:39,800 --> 00:05:42,640
Speaker 1: Arabia and OPEK to bring down the cost of oil.

102
00:05:42,760 --> 00:05:44,000
Speaker 2: You got to bring it down.

103
00:05:44,400 --> 00:05:49,760
Speaker 1: And perhaps they sense an opportunity both politically and economically

104
00:05:50,000 --> 00:05:52,479
Speaker 1: to put more barrels back into the market, but also

105
00:05:52,800 --> 00:05:54,080
Speaker 1: appease the United States.

106
00:05:55,320 --> 00:05:57,160
Speaker 2: Let me stick with that for a second. So as

107
00:05:57,160 --> 00:05:59,479
Speaker 2: you say, it's no secret that President Trump wants low

108
00:05:59,480 --> 00:06:02,000
Speaker 2: oil price and he's been pressuring OPEK to slash prices

109
00:06:02,000 --> 00:06:04,479
Speaker 2: for months now. He met with OPEC leadership on his

110
00:06:04,520 --> 00:06:06,880
Speaker 2: recent tour of the Persian Gulf. To what degree was

111
00:06:06,920 --> 00:06:09,360
Speaker 2: this a direct response to that? Of course, the US

112
00:06:09,440 --> 00:06:13,000
Speaker 2: not a party of OPEC or OPEC. Plus, how much

113
00:06:13,000 --> 00:06:15,040
Speaker 2: influence does does the US have and how much is

114
00:06:15,040 --> 00:06:16,719
Speaker 2: this attributable to what the President's been saying.

115
00:06:16,960 --> 00:06:19,279
Speaker 1: They will not tell you directly, but I mean, for

116
00:06:19,360 --> 00:06:23,039
Speaker 1: sure they're going to be motivated and influenced by the

117
00:06:23,160 --> 00:06:26,200
Speaker 1: US and by a very vocal president sitting in the

118
00:06:26,200 --> 00:06:29,520
Speaker 1: White House. But then also don't forget that if prices

119
00:06:29,560 --> 00:06:33,719
Speaker 1: go too low, then that also backfires on some of

120
00:06:33,720 --> 00:06:37,880
Speaker 1: the drillers and the US producers as well, because already,

121
00:06:37,920 --> 00:06:40,760
Speaker 1: if you look at say the riccounts, the active oil

122
00:06:40,880 --> 00:06:43,960
Speaker 1: riccounts in the US this year, they're back down to

123
00:06:44,040 --> 00:06:46,680
Speaker 1: low's not seen since September twenty twenty one. And why

124
00:06:46,720 --> 00:06:49,560
Speaker 1: is that the case? Because oil prices are lower and

125
00:06:49,600 --> 00:06:52,640
Speaker 1: so if you think about it from OPI plus's perspective,

126
00:06:54,040 --> 00:06:57,359
Speaker 1: maybe they're willing to tolerate lower prices if that also

127
00:06:57,440 --> 00:07:01,200
Speaker 1: means that they're building market share and they are reducing

128
00:07:01,240 --> 00:07:04,080
Speaker 1: the ability of some of their big competitors in the US,

129
00:07:04,120 --> 00:07:07,640
Speaker 1: these shale drillers to also bring production to the market.

130
00:07:08,000 --> 00:07:11,320
Speaker 2: So opek plus seems willing to deal with lower oil prices.

131
00:07:11,640 --> 00:07:15,320
Speaker 2: And this weekend's decision confirms that their members gathered on

132
00:07:15,360 --> 00:07:18,360
Speaker 2: a video conference call and it didn't take long for

133
00:07:18,400 --> 00:07:20,960
Speaker 2: them to announce that in August they will add five

134
00:07:21,000 --> 00:07:23,240
Speaker 2: hundred and forty eight thousand barrels of oil to the

135
00:07:23,240 --> 00:07:24,360
Speaker 2: market every day.

136
00:07:24,640 --> 00:07:27,280
Speaker 1: It was a ten minute meeting, so it was fairly quick.

137
00:07:27,440 --> 00:07:29,800
Speaker 1: Every one of those members who were part of the

138
00:07:29,880 --> 00:07:35,480
Speaker 1: voluntary cutting group were in unanimous support of this decision.

139
00:07:36,120 --> 00:07:39,040
Speaker 1: There really seems to be a desire to get these

140
00:07:39,080 --> 00:07:41,720
Speaker 1: barrels back to the market now. Their justification at the

141
00:07:41,760 --> 00:07:44,360
Speaker 1: time when they put out the statement on Saturday, they

142
00:07:44,400 --> 00:07:48,280
Speaker 1: said that the market fundamentals support it. They spoke about

143
00:07:48,400 --> 00:07:52,840
Speaker 1: lower inventory. It seems as though opek plus the voluntary

144
00:07:52,840 --> 00:07:56,600
Speaker 1: cutters did see a window of opportunity here to bring

145
00:07:56,720 --> 00:08:00,640
Speaker 1: back those extra bowels to the market without upsetting oil

146
00:08:00,680 --> 00:08:03,200
Speaker 1: prices too much. And actually, if you look at the

147
00:08:03,240 --> 00:08:07,280
Speaker 1: price reaction, say in Brent on Monday, it barely dipped

148
00:08:07,320 --> 00:08:09,440
Speaker 1: to we're down about half a percent and actually were

149
00:08:09,520 --> 00:08:11,720
Speaker 1: higher on the week now since they made this decision,

150
00:08:11,720 --> 00:08:14,280
Speaker 1: which does tell you that perhaps a certain extent the

151
00:08:14,360 --> 00:08:17,440
Speaker 1: market was ready to absorb these extra bellels. But then,

152
00:08:17,480 --> 00:08:21,240
Speaker 1: of course the question becomes, this is now what happens

153
00:08:21,240 --> 00:08:25,240
Speaker 1: in a couple of months time once the seasonal demand

154
00:08:25,320 --> 00:08:26,480
Speaker 1: drivers are out of the way.

155
00:08:27,640 --> 00:08:30,679
Speaker 2: That OPEC plus news broke on Saturday, and on Sunday,

156
00:08:30,800 --> 00:08:34,200
Speaker 2: global markets were surprised again by another move, this one

157
00:08:34,400 --> 00:08:37,520
Speaker 2: by opek's most powerful member and the world's second largest

158
00:08:37,559 --> 00:08:41,800
Speaker 2: oil producing nation, Saudi Arabia. We dig into that after

159
00:08:41,800 --> 00:08:52,840
Speaker 2: the break on Sunday, a day after OPEC plus decided

160
00:08:52,880 --> 00:08:55,160
Speaker 2: to boost production by more than half a million barrels

161
00:08:55,160 --> 00:08:58,439
Speaker 2: a day in August, Saudi Arabia's state owned oil company,

162
00:08:58,480 --> 00:09:01,880
Speaker 2: Saudi Aramco, announced it would raise oil prices in Asia

163
00:09:01,920 --> 00:09:04,319
Speaker 2: next month by more than expected. It would raise the

164
00:09:04,360 --> 00:09:07,200
Speaker 2: price of its most popular crude oil by one dollar

165
00:09:07,240 --> 00:09:11,960
Speaker 2: a barrel. Bloomberg'stremani Brassecci explains why that is so significant.

166
00:09:12,200 --> 00:09:15,280
Speaker 1: That was a bit surprising and does actually reflect the

167
00:09:15,360 --> 00:09:20,080
Speaker 1: fact that ARAMCO do see healthy demands coming from those

168
00:09:20,120 --> 00:09:23,000
Speaker 1: parts of the world, and for Saudi Arabia their biggest

169
00:09:23,000 --> 00:09:25,800
Speaker 1: buyers coming from the East and coming from Asia. That

170
00:09:26,040 --> 00:09:29,160
Speaker 1: was actually quite notable. And I will tell you I've

171
00:09:29,200 --> 00:09:32,720
Speaker 1: spoken recently to the aram COO CEO to Aminaser before

172
00:09:32,960 --> 00:09:35,880
Speaker 1: the open plus decision, before the Iran is there a

173
00:09:35,920 --> 00:09:38,959
Speaker 1: war even and he was saying that he actually does

174
00:09:38,960 --> 00:09:41,960
Speaker 1: see the market as pretty balanced. They still see healthy

175
00:09:41,960 --> 00:09:45,840
Speaker 1: signals coming through from Asia, despite the naysayers there and

176
00:09:45,880 --> 00:09:48,280
Speaker 1: the fact that many in the industry seem to think

177
00:09:48,320 --> 00:09:51,240
Speaker 1: that demand from China will be leveling off as there's

178
00:09:51,280 --> 00:09:54,160
Speaker 1: been more of a push towards electric vehicles. But the

179
00:09:54,280 --> 00:09:57,640
Speaker 1: signals that Iramko seem to be picking up are strong.

180
00:09:57,760 --> 00:10:00,520
Speaker 1: Otherwise they would not have been able to push through

181
00:10:00,520 --> 00:10:03,600
Speaker 1: those extra price hikes. So that is quite notable.

182
00:10:04,000 --> 00:10:05,880
Speaker 2: I wonder if anything stood out to you from that

183
00:10:05,920 --> 00:10:09,520
Speaker 2: conversation just about his perspective on the global oil market,

184
00:10:10,000 --> 00:10:12,360
Speaker 2: his confidence, I suppose, and they're being buyers for oil

185
00:10:12,400 --> 00:10:12,920
Speaker 2: going forward.

186
00:10:13,280 --> 00:10:16,560
Speaker 1: One thing that I learned was he said that because

187
00:10:16,600 --> 00:10:20,360
Speaker 1: they're sitting on a three million barrel's day of extra capacity,

188
00:10:20,440 --> 00:10:25,000
Speaker 1: So spare capacity every one million provides a cushion for

189
00:10:25,120 --> 00:10:28,160
Speaker 1: a ten dollars drop in the price of oil, which

190
00:10:28,200 --> 00:10:31,400
Speaker 1: is quite notable from a revenue perspective.

191
00:10:31,640 --> 00:10:36,079
Speaker 3: Other companies do not have that to push in any

192
00:10:36,720 --> 00:10:40,280
Speaker 3: drop and prices. For us, we do have that spare

193
00:10:40,280 --> 00:10:43,120
Speaker 3: capacity that is healthy strong.

194
00:10:43,600 --> 00:10:47,160
Speaker 1: What he was trying to say is Saudi Arabia Aroundco

195
00:10:47,280 --> 00:10:51,720
Speaker 1: can actually stomach slightly lower prices given how much spare

196
00:10:51,720 --> 00:10:54,400
Speaker 1: capacity that they're sitting on, They'll just pump more, but

197
00:10:54,440 --> 00:10:57,920
Speaker 1: at lower prices, so net net, from their perspective, it

198
00:10:58,040 --> 00:10:58,880
Speaker 1: sort of adds up.

199
00:11:00,080 --> 00:11:03,440
Speaker 3: Producers do not have that additional battles to put in

200
00:11:03,440 --> 00:11:06,679
Speaker 3: the market. We do have that additional battles and it

201
00:11:06,720 --> 00:11:10,880
Speaker 3: gives us strong benefit in terms of impact on our

202
00:11:11,000 --> 00:11:11,640
Speaker 3: net income.

203
00:11:12,960 --> 00:11:16,040
Speaker 2: My sense was that that Wall Street's expectation is there's

204
00:11:16,080 --> 00:11:18,960
Speaker 2: going to be a surplus of oil here in the

205
00:11:19,000 --> 00:11:22,199
Speaker 2: second half of this year. Maybe a dumb question, but

206
00:11:22,559 --> 00:11:24,400
Speaker 2: where does Sadi Rabe, where did these other producers think

207
00:11:24,440 --> 00:11:26,079
Speaker 2: that the market for this oil is going to be

208
00:11:26,120 --> 00:11:27,679
Speaker 2: How confident are that they're going to be buyers for

209
00:11:27,920 --> 00:11:29,160
Speaker 2: all of this oil that they're producing.

210
00:11:29,600 --> 00:11:32,320
Speaker 1: As of now, they seem to be pretty confident, unclear

211
00:11:32,440 --> 00:11:33,959
Speaker 1: how this is all going to pan out in a

212
00:11:34,000 --> 00:11:35,920
Speaker 1: couple of months time. So this is a time of

213
00:11:35,960 --> 00:11:38,240
Speaker 1: year where the seasonals do work in their favor. You

214
00:11:38,360 --> 00:11:42,920
Speaker 1: have global refineries operating at very high intensity, but that's

215
00:11:42,960 --> 00:11:45,320
Speaker 1: expected to subside by the end of the summer. You

216
00:11:45,440 --> 00:11:48,200
Speaker 1: have high energy demands coming out of some of these

217
00:11:48,200 --> 00:11:50,520
Speaker 1: Gulf nations because of the heat at this time of

218
00:11:50,520 --> 00:11:52,720
Speaker 1: the year, you know, operating air conditioning units. You have

219
00:11:53,120 --> 00:11:56,480
Speaker 1: high demand for transport fuel out of some of these

220
00:11:56,480 --> 00:11:59,240
Speaker 1: western nations. So once the seasonals are out of the way,

221
00:12:00,000 --> 00:12:03,200
Speaker 1: when you want to see what happens to demand. So

222
00:12:03,360 --> 00:12:07,040
Speaker 1: question of whether also some of the macro uncertainties in

223
00:12:07,080 --> 00:12:10,920
Speaker 1: the air, things related to terriffs, to global economy, to

224
00:12:11,080 --> 00:12:14,360
Speaker 1: China demand, the incremental fiscal boosts that you're going to

225
00:12:14,440 --> 00:12:17,120
Speaker 1: get from some of these big packages that being announced,

226
00:12:17,120 --> 00:12:18,520
Speaker 1: whether all of that is going to move the needle

227
00:12:18,559 --> 00:12:20,360
Speaker 1: on demand as well. Those are things that you want

228
00:12:20,360 --> 00:12:24,440
Speaker 1: to think about. Let's say you get a nuclear deal

229
00:12:24,640 --> 00:12:27,800
Speaker 1: between US and Iran, does that mean you get a

230
00:12:27,840 --> 00:12:31,680
Speaker 1: reduction and sanctions? Does that mean that this mancher of

231
00:12:31,720 --> 00:12:35,960
Speaker 1: maximum pressure will be released, and therefore Iranian oil, which

232
00:12:36,000 --> 00:12:38,319
Speaker 1: by the way hasn't taken a big production hits, I

233
00:12:38,360 --> 00:12:42,000
Speaker 1: should note, will be freer to be sold to all

234
00:12:42,040 --> 00:12:43,959
Speaker 1: of these other willing buyers around the world as well.

235
00:12:43,960 --> 00:12:46,840
Speaker 1: So these are questions that we just don't know. But

236
00:12:46,920 --> 00:12:49,800
Speaker 1: you mentioned Wall Street being pretty bearish, and it's exactly

237
00:12:49,840 --> 00:12:52,880
Speaker 1: because of that. The likes of Goldman, for example, see

238
00:12:53,160 --> 00:12:57,079
Speaker 1: supply growing at four times the speed of demand over

239
00:12:57,320 --> 00:12:59,480
Speaker 1: the next three to four quarters. And on the back

240
00:12:59,520 --> 00:13:02,880
Speaker 1: of that, and the likes of JP Morgan City are

241
00:13:02,920 --> 00:13:05,360
Speaker 1: pretty bearish on where the price of Brent gets too,

242
00:13:05,400 --> 00:13:07,640
Speaker 1: and most of them have their forecast around sixty five

243
00:13:07,679 --> 00:13:09,280
Speaker 1: sixty dollars by the end of this year.

244
00:13:09,920 --> 00:13:13,680
Speaker 2: OPEC plus has its next meeting on August third. Jamana

245
00:13:13,720 --> 00:13:17,000
Speaker 2: says she'll be watching for a few things, namely, will

246
00:13:17,000 --> 00:13:19,840
Speaker 2: the group stay the course, will it effectively get oil

247
00:13:19,880 --> 00:13:22,679
Speaker 2: production back to where it was before it imposed those

248
00:13:22,760 --> 00:13:24,200
Speaker 2: cuts in twenty twenty three.

249
00:13:24,760 --> 00:13:27,960
Speaker 1: The other thing to watch out for always compliance whether

250
00:13:28,080 --> 00:13:29,800
Speaker 1: or not some of those big producers, the ones that

251
00:13:29,840 --> 00:13:33,600
Speaker 1: have been over producing, we'll start cutting back ultimately for

252
00:13:33,760 --> 00:13:37,880
Speaker 1: the cohesion of the group, though all of these different countries.

253
00:13:37,920 --> 00:13:41,679
Speaker 1: These producers want to be producing as much as they

254
00:13:41,679 --> 00:13:45,640
Speaker 1: possibly can with prices as high as they possibly can, right,

255
00:13:45,840 --> 00:13:49,320
Speaker 1: and so this is the paradox for Opek. They're trying

256
00:13:49,360 --> 00:13:51,920
Speaker 1: to keep prices stable, but they also want to grab

257
00:13:51,960 --> 00:13:54,720
Speaker 1: on some market share. This is an environment where they

258
00:13:54,720 --> 00:14:00,320
Speaker 1: have a lot more competition than they've ever had in history.

259
00:14:03,280 --> 00:14:05,760
Speaker 2: This is the Big Take from Bloomberg News. I'm David Gura.

260
00:14:06,080 --> 00:14:08,520
Speaker 2: To get more from The Big Take and unlimited access

261
00:14:08,559 --> 00:14:11,880
Speaker 2: to all of Bloomberg dot com, subscribe today at Bloomberg

262
00:14:11,920 --> 00:14:15,440
Speaker 2: dot com slash podcast offer. If you like this episode,

263
00:14:15,520 --> 00:14:17,559
Speaker 2: make sure to follow and review The Big Take wherever

264
00:14:17,559 --> 00:14:19,960
Speaker 2: you listen to podcasts. It helps people find the show.

265
00:14:20,360 --> 00:14:22,320
Speaker 2: Thanks for listening. We'll be back tomorrow.