1 00:00:02,480 --> 00:00:09,440 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. As the war in 2 00:00:09,480 --> 00:00:13,800 Speaker 1: Iran continues, global economies are bracing for the economic fallout. 3 00:00:16,280 --> 00:00:21,439 Speaker 2: The United States and its partners have launched Operation Epic Fury, 4 00:00:22,040 --> 00:00:27,160 Speaker 2: one of the largest, most complex, most overwhelming military offensives 5 00:00:28,000 --> 00:00:30,720 Speaker 2: the world has ever seen. Nobody's seen anything like it. 6 00:00:30,840 --> 00:00:35,640 Speaker 1: With oil and gas prices rising sharply, African countries could 7 00:00:35,720 --> 00:00:38,480 Speaker 1: be among those facing and inflation shock. 8 00:00:38,680 --> 00:00:41,800 Speaker 3: You have a major energy for the facility in Katar close, 9 00:00:41,880 --> 00:00:44,560 Speaker 3: the largest in Katar. You have, of course, that refinery 10 00:00:44,560 --> 00:00:48,080 Speaker 3: in Saudi Arabia at least closed temporarily. The inflation question 11 00:00:48,200 --> 00:00:51,479 Speaker 3: and the inflation shock is now being priced into these markets. 12 00:00:51,520 --> 00:00:54,440 Speaker 2: If it becomes prolonged, then all bets world Today. 13 00:00:54,720 --> 00:00:57,440 Speaker 1: On today's podcast, we'll look at what the conflict is 14 00:00:57,480 --> 00:01:00,840 Speaker 1: doing to energy prices and supply and what the hit 15 00:01:00,920 --> 00:01:08,120 Speaker 1: could be for African economies. I'm Jennifer Zabasaja and this 16 00:01:08,319 --> 00:01:11,760 Speaker 1: is the Next Africa Podcast, bringing you one story each 17 00:01:11,800 --> 00:01:14,800 Speaker 1: week from the continent driving the future of global growth 18 00:01:15,000 --> 00:01:20,279 Speaker 1: with the context only Bloomberg can provide. Joining me today 19 00:01:20,400 --> 00:01:25,920 Speaker 1: is Bloomberg's Asia Energy reporter Steven Stepchinski, and also Bloomberg Economics, 20 00:01:25,959 --> 00:01:30,040 Speaker 1: Africa Economists von Mango. Thank you both so much for 21 00:01:30,240 --> 00:01:32,120 Speaker 1: joining me. I know it's been quite a busy week 22 00:01:32,160 --> 00:01:35,080 Speaker 1: for the whole newsroom, but especially the two of you. 23 00:01:35,120 --> 00:01:37,800 Speaker 1: So appreciate your time. Steven, let's just start with you, 24 00:01:38,040 --> 00:01:42,160 Speaker 1: because you look very closely at the dynamics in the 25 00:01:42,280 --> 00:01:44,800 Speaker 1: energy sector. Give us a picture of what we had 26 00:01:44,840 --> 00:01:48,160 Speaker 1: been seeing with oil prices in the last few weeks 27 00:01:48,200 --> 00:01:51,960 Speaker 1: in the lead up to the eventual escalation that we 28 00:01:51,960 --> 00:01:53,560 Speaker 1: saw in the Middle East last weekend. 29 00:01:55,040 --> 00:01:57,840 Speaker 4: I think the oil market over the last few weeks 30 00:01:57,880 --> 00:02:02,320 Speaker 4: before this weekend was affecting something. You know, when you 31 00:02:02,360 --> 00:02:04,720 Speaker 4: talk to the traders, they were talking about the build 32 00:02:04,800 --> 00:02:08,480 Speaker 4: up of the military force, right the largest US military 33 00:02:08,520 --> 00:02:12,160 Speaker 4: force in the Middle East in decades. They were looking 34 00:02:12,200 --> 00:02:15,880 Speaker 4: at the rhetoric, they were looking at the negotiations happening 35 00:02:16,160 --> 00:02:19,160 Speaker 4: and the failure to make a deal multiple times. So 36 00:02:19,240 --> 00:02:21,280 Speaker 4: I think the oil market when you look at the prices, 37 00:02:21,800 --> 00:02:26,160 Speaker 4: oil prices kind of continuously rose from from late December 38 00:02:26,200 --> 00:02:30,240 Speaker 4: into January and into February were slowly kind of stepping 39 00:02:30,360 --> 00:02:34,400 Speaker 4: up higher and higher with this anticipation that if a 40 00:02:34,440 --> 00:02:37,639 Speaker 4: deal wasn't done, every time they went to the negotiating table, 41 00:02:38,240 --> 00:02:43,560 Speaker 4: then maybe you could see some sort of strike on Iran, 42 00:02:44,000 --> 00:02:46,480 Speaker 4: and no one knew exactly the level of the strike. 43 00:02:46,680 --> 00:02:49,320 Speaker 4: But especially I think when the State of the Union 44 00:02:49,360 --> 00:02:52,640 Speaker 4: happened and Trump said that he would never allow Iran 45 00:02:52,720 --> 00:02:55,840 Speaker 4: to have nuclear weapons. People in the market talked to 46 00:02:55,840 --> 00:02:58,480 Speaker 4: me and they said that's when they really saw, Okay, 47 00:02:58,360 --> 00:03:00,880 Speaker 4: maybe something would be happening. It was, of course a 48 00:03:00,919 --> 00:03:03,679 Speaker 4: lot of guesswork. But in the end, the market did 49 00:03:03,880 --> 00:03:05,800 Speaker 4: continue to rise ahead of all of that. 50 00:03:06,440 --> 00:03:11,120 Speaker 1: Where have we seen the prices really rising substantially? Because 51 00:03:11,160 --> 00:03:12,880 Speaker 1: I feel like for a while we had been talking 52 00:03:12,880 --> 00:03:16,480 Speaker 1: about incremental rises right, a bit of range bound in 53 00:03:16,560 --> 00:03:17,880 Speaker 1: terms of Brent crude. 54 00:03:17,880 --> 00:03:18,840 Speaker 5: But where have you. 55 00:03:18,840 --> 00:03:22,440 Speaker 1: Seen the most substantial rises and prices in the energy 56 00:03:22,480 --> 00:03:24,000 Speaker 1: market that we should be focused on. 57 00:03:24,360 --> 00:03:26,600 Speaker 4: There are a number of different places, right. Brent is 58 00:03:26,760 --> 00:03:30,280 Speaker 4: a global benchmark, It's trade has very liquid, it can 59 00:03:30,320 --> 00:03:33,760 Speaker 4: be sometimes quite volatile. But you're right, the prices haven't 60 00:03:33,760 --> 00:03:36,680 Speaker 4: been out of sight increases. You know, you've seen incremental 61 00:03:36,680 --> 00:03:39,840 Speaker 4: increases of seven for today it's up two point eight percent. 62 00:03:40,400 --> 00:03:42,840 Speaker 4: There are other markets that are a bit more crazy. 63 00:03:43,040 --> 00:03:46,640 Speaker 4: Jet fuel prices in Singapore have really searched the highest 64 00:03:46,720 --> 00:03:49,960 Speaker 4: level in years. You're also looking at different types of 65 00:03:50,000 --> 00:03:52,840 Speaker 4: prices for the ships themselves to rent to ship the 66 00:03:52,840 --> 00:03:55,520 Speaker 4: prices are rising to the highest level in years. And 67 00:03:55,600 --> 00:03:58,480 Speaker 4: then also look at natural gas. Look fight natural gas 68 00:03:58,520 --> 00:04:02,720 Speaker 4: prices have surged quite significantly, about more than fifty percent 69 00:04:02,840 --> 00:04:05,840 Speaker 4: over the last three days, and that's the European benchmark 70 00:04:05,880 --> 00:04:09,880 Speaker 4: and the Asian benchmark. And that increase is quite interesting 71 00:04:09,960 --> 00:04:13,320 Speaker 4: because unlike the oil market, which I think was anticipating 72 00:04:13,360 --> 00:04:17,160 Speaker 4: some sort of strike for Iran, had not actually been increasing. 73 00:04:17,320 --> 00:04:20,960 Speaker 4: The gas market, I think, interestingly enough, had somewhat discounted 74 00:04:21,040 --> 00:04:23,880 Speaker 4: that something would happen and wasn't expecting some sort of 75 00:04:24,000 --> 00:04:26,479 Speaker 4: large impact that we're seeing today with the Strait of 76 00:04:26,480 --> 00:04:29,640 Speaker 4: Horror moves getting shut and the closure of Qatar's largest 77 00:04:29,680 --> 00:04:33,440 Speaker 4: lique financial gas export facility. So all of that together 78 00:04:33,839 --> 00:04:36,039 Speaker 4: has made gas one of the more interesting parts of 79 00:04:36,080 --> 00:04:36,760 Speaker 4: the market. 80 00:04:37,000 --> 00:04:39,359 Speaker 1: You talk about the straight of horror moves, Stephen, is 81 00:04:39,400 --> 00:04:42,560 Speaker 1: that the route that the energy market is most fixated 82 00:04:42,600 --> 00:04:47,479 Speaker 1: on in terms of the risk to prices going higher. 83 00:04:47,760 --> 00:04:48,200 Speaker 5: What else? 84 00:04:48,279 --> 00:04:50,800 Speaker 1: What are the other routes potentially that we should be 85 00:04:50,839 --> 00:04:51,400 Speaker 1: focused on. 86 00:04:51,560 --> 00:04:54,240 Speaker 4: I think the oil market and gas market too, are 87 00:04:54,240 --> 00:04:56,880 Speaker 4: focused on two things. One straight of hor moos. Like 88 00:04:56,920 --> 00:04:59,239 Speaker 4: you said, it's it's the key conduit for a fifth 89 00:04:59,240 --> 00:05:03,760 Speaker 4: of both oil and gas seaborne supply, but also the region. 90 00:05:04,160 --> 00:05:04,360 Speaker 6: Right. 91 00:05:04,480 --> 00:05:08,080 Speaker 4: So what's been very different about this strike in this 92 00:05:08,200 --> 00:05:11,240 Speaker 4: conflict versus previous ones is that it isn't just a 93 00:05:11,279 --> 00:05:14,520 Speaker 4: tit for tat sort of thing between Iran and Israel. 94 00:05:14,839 --> 00:05:17,640 Speaker 4: This is spreading to the wider region, and Iran is 95 00:05:17,720 --> 00:05:20,560 Speaker 4: hitting countries that many thought where they're you know, sort 96 00:05:20,600 --> 00:05:22,800 Speaker 4: of their allies or their friends in the region. I'm 97 00:05:22,800 --> 00:05:28,800 Speaker 4: talking Qatar, UAE and also Saudi Arabia. They're antagonizing their neighbors. 98 00:05:29,120 --> 00:05:31,360 Speaker 4: So the market is looking at okay, if there are 99 00:05:31,360 --> 00:05:36,080 Speaker 4: some drone strikes on Saudi Aramco's largest refinery, what is 100 00:05:36,120 --> 00:05:38,600 Speaker 4: the impact there? They've shut it down? How long will 101 00:05:38,640 --> 00:05:40,839 Speaker 4: be shut down? Is it damage? Can it come back quickly? 102 00:05:41,160 --> 00:05:44,600 Speaker 4: Same with Katar. They hit their largest Lick Fi natural 103 00:05:44,640 --> 00:05:47,960 Speaker 4: gas export facility. It supplies twenty percent of global LNG supply. 104 00:05:48,440 --> 00:05:50,760 Speaker 4: That was shut down. How long will that shut out? 105 00:05:50,800 --> 00:05:55,160 Speaker 4: How long does it take to restart fourteen LNG production trains? 106 00:05:55,440 --> 00:05:59,320 Speaker 4: So what's kind of interesting about this conflict is that 107 00:05:59,600 --> 00:06:02,400 Speaker 4: the straight of Hormos. Theoretically, if there was a piece deal, 108 00:06:02,960 --> 00:06:05,920 Speaker 4: you could kind of resume traffic pretty quickly if there 109 00:06:05,920 --> 00:06:08,320 Speaker 4: were assurances from the US, if something happened, and then 110 00:06:08,360 --> 00:06:11,599 Speaker 4: the trade could resumes and everything's back to normal. But 111 00:06:11,960 --> 00:06:14,680 Speaker 4: if infrastructure is hit, if a pipeline is hit, if 112 00:06:14,760 --> 00:06:18,720 Speaker 4: i Raq is taking offline their largest oil field, suddenly 113 00:06:18,800 --> 00:06:22,440 Speaker 4: things get a bit more complicated. Actual barrels aren't making 114 00:06:22,480 --> 00:06:25,480 Speaker 4: its way into the market, and if there's damage, how 115 00:06:25,480 --> 00:06:29,120 Speaker 4: long does that repair take? Are we talking days, weeks, months? 116 00:06:29,240 --> 00:06:31,920 Speaker 4: There are a lot of unknowns and as every day 117 00:06:32,000 --> 00:06:35,960 Speaker 4: that this continues, the risk premium kind of chugs along 118 00:06:36,040 --> 00:06:36,840 Speaker 4: and gets higher. 119 00:06:37,360 --> 00:06:39,440 Speaker 5: And Ivon, I'd like you to jump in here. 120 00:06:39,520 --> 00:06:43,440 Speaker 1: You've been looking at the impact that this could potentially 121 00:06:43,520 --> 00:06:47,080 Speaker 1: have across the African continent, especially as it pertains to 122 00:06:47,120 --> 00:06:50,400 Speaker 1: higher energy prices. As Steven was just mentioning there, what 123 00:06:50,520 --> 00:06:52,720 Speaker 1: has been your focus over the past few days. 124 00:06:52,880 --> 00:06:55,719 Speaker 6: So a few things divide the African continent, like a 125 00:06:55,760 --> 00:06:57,599 Speaker 6: surge in the ore price, and the reason for that 126 00:06:57,760 --> 00:07:01,599 Speaker 6: is because we're primarily export as commodities and we import 127 00:07:01,640 --> 00:07:05,560 Speaker 6: almost all our refined petroleum needs on the continent. So 128 00:07:05,600 --> 00:07:08,760 Speaker 6: such a significant increase in your price, of course, will 129 00:07:08,800 --> 00:07:12,920 Speaker 6: benefit our all exporters in particular countries such as Nigeria 130 00:07:12,960 --> 00:07:16,200 Speaker 6: and Angola. Angola in particular, we've looked. We estimated what 131 00:07:16,240 --> 00:07:19,600 Speaker 6: a twenty dollar increase in the barrel increase in your 132 00:07:19,640 --> 00:07:22,280 Speaker 6: price could mean, so in the case of Angola, that 133 00:07:22,360 --> 00:07:25,200 Speaker 6: could improve its current account balance by as much as 134 00:07:25,200 --> 00:07:28,760 Speaker 6: three percent of GDP, so it's quite significant. However, the 135 00:07:28,800 --> 00:07:34,520 Speaker 6: majority of African countries are net all importers, so unfortunately 136 00:07:34,520 --> 00:07:37,840 Speaker 6: this is negative for the majority of the continent. Countries 137 00:07:37,880 --> 00:07:40,320 Speaker 6: like South Africa and Kenya will be hit on the 138 00:07:40,360 --> 00:07:43,200 Speaker 6: external balances side by as much as one percent of 139 00:07:43,280 --> 00:07:47,120 Speaker 6: GDP on their current account as a result of such 140 00:07:47,120 --> 00:07:50,040 Speaker 6: a significant searche in the old price, assuming of course 141 00:07:50,320 --> 00:07:54,440 Speaker 6: prices remain at these levels. Aside from the trade channel, 142 00:07:54,560 --> 00:07:57,440 Speaker 6: we're concerned about what it means for inflation. Africa generally 143 00:07:57,640 --> 00:08:00,160 Speaker 6: enjoyed this inflation new trend over the past couple of 144 00:08:00,240 --> 00:08:05,040 Speaker 6: years that's allowed countries to reduce their inflation targets or 145 00:08:05,040 --> 00:08:07,360 Speaker 6: contributed to that in the case of South Africa, it 146 00:08:07,520 --> 00:08:11,240 Speaker 6: supported reduction of interest rates across the board. This is 147 00:08:11,280 --> 00:08:14,720 Speaker 6: of course, following that shop tightening when we had Russia 148 00:08:14,760 --> 00:08:18,080 Speaker 6: attack Ukraine and grain prices went up. So now since 149 00:08:18,120 --> 00:08:21,720 Speaker 6: then we've seen inflation come down nicely and interest rates 150 00:08:21,880 --> 00:08:25,160 Speaker 6: start to follow. Unfortunately, such a huge search in your 151 00:08:25,200 --> 00:08:29,480 Speaker 6: price does imply that this inflation trend will be halted 152 00:08:29,520 --> 00:08:32,840 Speaker 6: and interest rates may also come back onto the table 153 00:08:32,880 --> 00:08:34,600 Speaker 6: as an option for central banks. 154 00:08:35,520 --> 00:08:37,880 Speaker 5: And Von Stephen stick with us. 155 00:08:37,960 --> 00:08:39,560 Speaker 1: We're going to take a quick break and when we 156 00:08:39,640 --> 00:08:42,600 Speaker 1: come back, we're going to dig into more about what 157 00:08:42,679 --> 00:08:46,160 Speaker 1: this could mean for African economies and how long lasting 158 00:08:46,320 --> 00:08:47,960 Speaker 1: this shock could actually be. 159 00:08:48,320 --> 00:08:49,120 Speaker 5: We'll be right back. 160 00:08:52,800 --> 00:08:55,480 Speaker 1: Welcome back. Today we're looking at the impact of the 161 00:08:55,520 --> 00:08:59,240 Speaker 1: war and Iran on energy prices. Steven Stepchynsky and Evon 162 00:08:59,360 --> 00:09:03,600 Speaker 1: Mango are still with me, Yvon. Let's just take South Africa, 163 00:09:03,880 --> 00:09:07,120 Speaker 1: because of course we know that has been the country's 164 00:09:07,120 --> 00:09:09,800 Speaker 1: been in focus recently came out with their budget just 165 00:09:09,840 --> 00:09:12,480 Speaker 1: a few days ago, had talked about turning around the 166 00:09:12,559 --> 00:09:16,079 Speaker 1: corner on a lot of the past troubles for the economy. 167 00:09:16,160 --> 00:09:18,200 Speaker 1: Is this going to undo a lot of the work 168 00:09:18,520 --> 00:09:21,360 Speaker 1: that the SARB and the government has really done to 169 00:09:21,440 --> 00:09:22,920 Speaker 1: get inflation under control. 170 00:09:23,160 --> 00:09:26,360 Speaker 6: So yes, you raise a good point in that and 171 00:09:26,600 --> 00:09:28,800 Speaker 6: we are at a positive point in terms of the 172 00:09:28,840 --> 00:09:32,720 Speaker 6: macro turnaround that we're anticipating. The growth is lagging. However, 173 00:09:32,880 --> 00:09:35,240 Speaker 6: I do think the buffers that have been put in 174 00:09:35,280 --> 00:09:38,480 Speaker 6: place will help in terms of mitigating the impact of 175 00:09:38,520 --> 00:09:40,600 Speaker 6: a high old price. An example of such a buffer 176 00:09:40,720 --> 00:09:44,800 Speaker 6: is the primary budget surplus that the government has accumulated 177 00:09:44,840 --> 00:09:47,559 Speaker 6: over the past three years, so first time in several 178 00:09:47,600 --> 00:09:49,920 Speaker 6: years that we actually have a primary surflus and that 179 00:09:49,960 --> 00:09:53,960 Speaker 6: should help in terms of mitigating the impact on the 180 00:09:53,960 --> 00:09:58,000 Speaker 6: fiscus on the current account. The upside that's to show 181 00:09:58,040 --> 00:10:00,600 Speaker 6: that the upside of having a free floating currency at 182 00:10:00,640 --> 00:10:03,440 Speaker 6: SO Africa does, which is a minority on the continent, 183 00:10:03,600 --> 00:10:06,640 Speaker 6: is that it behaves as a shock absorber. So what 184 00:10:06,720 --> 00:10:10,839 Speaker 6: you should see is that demand for imports should compress 185 00:10:11,240 --> 00:10:13,280 Speaker 6: as a round weekends on the back of a weak 186 00:10:13,400 --> 00:10:17,240 Speaker 6: external position, and that should help mitigate the impact on 187 00:10:17,320 --> 00:10:19,360 Speaker 6: the external side of the economy. 188 00:10:20,400 --> 00:10:23,040 Speaker 1: Interestingly, we heard the DJ of the Treasury we talk 189 00:10:23,080 --> 00:10:27,040 Speaker 1: about how potentially commodity exports and gold could potentially also 190 00:10:27,080 --> 00:10:29,800 Speaker 1: provide some of that buffer for South. 191 00:10:29,600 --> 00:10:30,559 Speaker 5: Africa, Yvon. 192 00:10:31,280 --> 00:10:34,120 Speaker 1: When we look at let's just bruden it back out 193 00:10:34,120 --> 00:10:36,840 Speaker 1: to the continent and talk about so many impacts potentially 194 00:10:36,880 --> 00:10:42,600 Speaker 1: on the bond market. Have we seen any significant shifts 195 00:10:42,679 --> 00:10:46,240 Speaker 1: higher yields as a result of the increased escalation in 196 00:10:46,240 --> 00:10:48,240 Speaker 1: the Middle East across African bond market? 197 00:10:48,720 --> 00:10:52,000 Speaker 6: So following the initial strikes at the weekend and on Monday, yes, 198 00:10:52,080 --> 00:10:55,880 Speaker 6: we did see the spreads between bond yields for African 199 00:10:56,120 --> 00:10:59,800 Speaker 6: sovereign bonds and US treasuries widen as we saw risk 200 00:10:59,840 --> 00:11:04,080 Speaker 6: of sentiments take off globally. As we move forward, of course, 201 00:11:04,320 --> 00:11:06,160 Speaker 6: I think what you see as investors will become a 202 00:11:06,160 --> 00:11:09,240 Speaker 6: bit more discerning. I think you'll see when they look 203 00:11:09,280 --> 00:11:13,599 Speaker 6: at just at their Africa portfolio. That's the all exporters 204 00:11:13,679 --> 00:11:17,720 Speaker 6: that are bond issuers will see their bund ye olds ease. 205 00:11:17,880 --> 00:11:20,360 Speaker 6: And the examples of those are the likes of Nigeria, 206 00:11:20,760 --> 00:11:25,160 Speaker 6: debon the Republic of Congo. In this environment, those countries 207 00:11:25,160 --> 00:11:27,680 Speaker 6: should benefit on the back of a higher ol price. 208 00:11:28,120 --> 00:11:31,440 Speaker 6: Where you're going to see more skepticism or concern is 209 00:11:31,880 --> 00:11:33,320 Speaker 6: countries that are all important. 210 00:11:33,600 --> 00:11:36,160 Speaker 1: Steven, Let's just let's bring you back in because it 211 00:11:36,200 --> 00:11:39,880 Speaker 1: really seems like the energy sector, the oil brank crud 212 00:11:40,040 --> 00:11:42,000 Speaker 1: is really what to watch here. I've seen a number 213 00:11:42,040 --> 00:11:45,480 Speaker 1: of forecasts for how high this could potentially go. What 214 00:11:45,559 --> 00:11:48,920 Speaker 1: are you looking at in terms of the prices for 215 00:11:49,000 --> 00:11:51,680 Speaker 1: brank crud and potentially what the next catalyst could be 216 00:11:52,440 --> 00:11:54,560 Speaker 1: to creep higher if we are even headed to one 217 00:11:54,640 --> 00:11:57,440 Speaker 1: hundred or higher, as some analysts are pointing out, I. 218 00:11:57,400 --> 00:12:00,800 Speaker 4: Mean, I think anything is possible, right I think if 219 00:12:00,840 --> 00:12:03,760 Speaker 4: you asked me last week or two weeks ago if 220 00:12:04,040 --> 00:12:06,880 Speaker 4: we would see an effective shut to the strait of 221 00:12:06,880 --> 00:12:09,200 Speaker 4: her moves, I would say the likelihood of that is 222 00:12:09,280 --> 00:12:12,080 Speaker 4: pretty low. But now we're seeing it. So we're in 223 00:12:12,280 --> 00:12:15,640 Speaker 4: uncharted territories. This has never happened, and so I think 224 00:12:15,640 --> 00:12:17,360 Speaker 4: there are a few things to watch out for him. Yes, 225 00:12:17,520 --> 00:12:20,000 Speaker 4: with Brent right now around eighty three eighty four dollars 226 00:12:20,040 --> 00:12:22,840 Speaker 4: per barrel, so we're not at one hundred dollars yet, 227 00:12:23,000 --> 00:12:26,200 Speaker 4: but there is a chance where if this continues and 228 00:12:26,320 --> 00:12:28,800 Speaker 4: if certain things happen, we could be our way to 229 00:12:28,840 --> 00:12:31,880 Speaker 4: one hundred dollars or go above one hundred dollars one 230 00:12:32,160 --> 00:12:35,240 Speaker 4: if there is some major damage to infrastructure right now, 231 00:12:35,280 --> 00:12:39,040 Speaker 4: there have been some refinery shut some pipelines you know, 232 00:12:39,080 --> 00:12:42,760 Speaker 4: I think targeted, but overall oil is still largely pumping. 233 00:12:42,960 --> 00:12:46,040 Speaker 4: There has been some shutdowns in a Raq, but even 234 00:12:46,080 --> 00:12:48,640 Speaker 4: when you look at the ship tracking data and satellites, 235 00:12:48,920 --> 00:12:52,480 Speaker 4: some analysts are saying that Iran is still exporting oil. 236 00:12:53,000 --> 00:12:55,320 Speaker 4: So oil is still making its way into the market. 237 00:12:55,480 --> 00:12:58,439 Speaker 4: But if you were to see any major impact in 238 00:12:58,440 --> 00:13:03,000 Speaker 4: Saudi Arabia's ability to produce, or even Iran or other 239 00:13:03,000 --> 00:13:06,520 Speaker 4: countries in the region, I think that starts to creep 240 00:13:06,600 --> 00:13:09,360 Speaker 4: up a bit more if you start to see another 241 00:13:09,480 --> 00:13:12,040 Speaker 4: breakdown in the talks. Right I think yesterday the New 242 00:13:12,120 --> 00:13:15,559 Speaker 4: York Times reported that there were some back channels between 243 00:13:15,679 --> 00:13:18,080 Speaker 4: Iran and the US for a potential piece deal. You 244 00:13:18,120 --> 00:13:20,760 Speaker 4: saw Brent and gas prices kind of fall a little bit, 245 00:13:20,760 --> 00:13:22,840 Speaker 4: but then Brent kind of made up some of those losses. 246 00:13:23,000 --> 00:13:25,439 Speaker 4: If we now see that there's a total breakdown discussions, 247 00:13:26,160 --> 00:13:28,760 Speaker 4: or if rhetoric from Trump changes, you could see prices 248 00:13:29,080 --> 00:13:32,720 Speaker 4: rise again, and then you also see potentially a bidding 249 00:13:32,760 --> 00:13:34,840 Speaker 4: up of prices from Asia. Right now, I think Asian 250 00:13:34,880 --> 00:13:38,920 Speaker 4: customers are somewhat calm. Asia is the biggest buyer of 251 00:13:38,960 --> 00:13:42,000 Speaker 4: this Middle Eastern oil, but yet you're not really getting 252 00:13:42,000 --> 00:13:43,960 Speaker 4: the sense of panic that you're getting, for example, in 253 00:13:44,000 --> 00:13:46,720 Speaker 4: the natural gas market. So if you do start to 254 00:13:46,720 --> 00:13:49,600 Speaker 4: see people fighting over shipments. If you were to have 255 00:13:49,640 --> 00:13:52,520 Speaker 4: what I would call a price war over deliveries that 256 00:13:52,600 --> 00:13:55,040 Speaker 4: are on the market and taking up that spare supply, 257 00:13:55,120 --> 00:13:57,640 Speaker 4: and you see the oil on the water start to shrink, 258 00:13:57,960 --> 00:14:01,800 Speaker 4: then you could see again prices run. But what's interesting 259 00:14:01,840 --> 00:14:03,880 Speaker 4: about the oil market at the moment is we were 260 00:14:03,920 --> 00:14:06,320 Speaker 4: supposed to enter year of an oversupply. There's quite a 261 00:14:06,320 --> 00:14:09,960 Speaker 4: bit of oil available, so with the glut, you know, 262 00:14:10,080 --> 00:14:12,679 Speaker 4: still there. If there were a piece deal, I think 263 00:14:12,720 --> 00:14:14,320 Speaker 4: quickly you would see a lot of the ste fleet. 264 00:14:15,440 --> 00:14:18,320 Speaker 1: Which, Yeah, that's a really good point that you bring up. 265 00:14:18,360 --> 00:14:21,120 Speaker 1: We went into twenty twenty six talking about oversupply Ivon 266 00:14:21,480 --> 00:14:22,680 Speaker 1: Is that similar to you? 267 00:14:22,800 --> 00:14:24,479 Speaker 5: Is that sort of what you're focused. 268 00:14:24,080 --> 00:14:26,840 Speaker 1: On really the price of crude and where it goes 269 00:14:26,880 --> 00:14:29,600 Speaker 1: next and how that could trickle down to the African economies. 270 00:14:29,800 --> 00:14:30,000 Speaker 5: Yes. 271 00:14:30,200 --> 00:14:32,880 Speaker 6: I think our assumption, who you look at the fundamentals, 272 00:14:33,000 --> 00:14:35,320 Speaker 6: is that there's an abundance of supply and that we 273 00:14:35,920 --> 00:14:38,880 Speaker 6: expected in the absence of a conflict, we expected the 274 00:14:38,880 --> 00:14:42,080 Speaker 6: oil price to main flat, if not cool. So a 275 00:14:42,120 --> 00:14:45,200 Speaker 6: lot depends on the locativity of the conflict and whether 276 00:14:45,240 --> 00:14:48,640 Speaker 6: indeed the strait of almost remains shut for an extended period, 277 00:14:48,800 --> 00:14:52,200 Speaker 6: but the fundamentals outside the walls suggests that we should 278 00:14:52,240 --> 00:14:54,840 Speaker 6: have a cooler energy prices which would benefit the majority 279 00:14:54,880 --> 00:14:55,480 Speaker 6: of the continent. 280 00:14:55,920 --> 00:14:58,280 Speaker 1: Still quite a bit of unknowns, but we appreciate the 281 00:14:58,320 --> 00:15:00,360 Speaker 1: two of you joining us this week to break what 282 00:15:00,400 --> 00:15:03,320 Speaker 1: we do know at this point in time. Steven Stepchynski 283 00:15:03,480 --> 00:15:05,760 Speaker 1: and Ivon Mango, thank you both so much for joining 284 00:15:05,800 --> 00:15:08,560 Speaker 1: us this week, and you can, of course read all 285 00:15:08,560 --> 00:15:12,239 Speaker 1: of our coverage on the war in Iran across Bloomberg platforms. 286 00:15:12,280 --> 00:15:16,320 Speaker 1: Now here's some of the other stories we've been following 287 00:15:16,440 --> 00:15:20,880 Speaker 1: across the region this week. Dan Gote Cement, Africa's biggest 288 00:15:20,880 --> 00:15:24,640 Speaker 1: producer of the building material, will spend one billion dollars 289 00:15:24,680 --> 00:15:28,359 Speaker 1: to boost capacity over the next four years as infrastructure 290 00:15:28,480 --> 00:15:34,240 Speaker 1: construction spurs demand. And Nigeria brought the timetable for next 291 00:15:34,280 --> 00:15:37,880 Speaker 1: year's election forward and announced new rules that appear to 292 00:15:37,920 --> 00:15:42,920 Speaker 1: catch the opposition off guard. Presidential and National Assembly elections 293 00:15:42,960 --> 00:15:47,040 Speaker 1: will be held on January sixteenth, twenty twenty seven, roughly 294 00:15:47,160 --> 00:15:51,320 Speaker 1: a month earlier than was previously scheduled, the Independent National 295 00:15:51,360 --> 00:15:55,800 Speaker 1: Electoral Commission said, and you can follow these stories across 296 00:15:55,880 --> 00:15:58,280 Speaker 1: Bloomberg including the next African newsletter. 297 00:15:58,520 --> 00:16:00,160 Speaker 5: Will put a link to that in the show. 298 00:16:03,680 --> 00:16:07,120 Speaker 1: This program was produced by Adrian Bradley and tiwa Adebayo. 299 00:16:07,360 --> 00:16:10,400 Speaker 1: Don't forget to follow and review the show wherever you 300 00:16:10,520 --> 00:16:14,680 Speaker 1: usually get your podcasts. I'm Jennifer's Abisaja. Thanks as always 301 00:16:14,720 --> 00:16:15,280 Speaker 1: for listening.