WEBVTT - Bloomberg Surveillance TV: March 13th, 2026 0:00:00.040 --> 0:00:06.720 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:37.360 Terminal and the Bloomberg Business app. It's the latest this morning. 0:00:37.400 --> 0:00:40.559 The Trump administration seeking to curb crude volatility, saying the 0:00:40.680 --> 0:00:44.400 US Navy willissis and escorting tankers through the stratiformers quote 0:00:44.640 --> 0:00:48.240 soon as a runds new Supreme Issues, Supreme Leader issues 0:00:48.280 --> 0:00:52.320 of statements, saying the crucial waterway should remain closed. Gene Soroka, 0:00:52.360 --> 0:00:54.680 the executive director of the Port of Los Angeles, joins 0:00:54.760 --> 0:00:57.280 us now for more. Gene, welcome to the program. Can 0:00:57.280 --> 0:01:00.360 we start with the operational consequences here and can you 0:01:00.400 --> 0:01:02.880 talk us through a picture of what you see the 0:01:02.920 --> 0:01:06.040 transit times that have had to be extended now because 0:01:06.040 --> 0:01:09.720 of the difficulties getting through that very tight straight offor moods. 0:01:09.760 --> 0:01:14.199 What's going on now, Well, good morning, John, not much. 0:01:14.720 --> 0:01:18.039 There are thousands of vessels that are stuck in the 0:01:18.080 --> 0:01:21.679 Arabian Gulf and just to the east outside of the 0:01:21.680 --> 0:01:25.720 Strait of Horror moves about one hundred and fourteen hundred 0:01:25.720 --> 0:01:30.600 and fifteen container ships, balance bulkers, tankers, and those energy 0:01:30.640 --> 0:01:34.080 ships that you've talked about in the previous segment. The 0:01:34.200 --> 0:01:37.880 companies do not have an interest right now, nor is 0:01:37.920 --> 0:01:42.920 there enough money for insurance to transit those ships through 0:01:42.959 --> 0:01:46.480 the strait. Risking the life and limb of crew is 0:01:46.640 --> 0:01:49.160 just not an option for the private sector companies today. 0:01:49.320 --> 0:01:51.720 So Gene, you're saying that for many they're just doing 0:01:51.720 --> 0:01:54.600 a hands off approach and have canceled a lot of transits. 0:01:55.560 --> 0:01:57.440 That's right on the container side, John. 0:01:58.360 --> 0:02:01.320 The Middle East and especially those countries in the Gulf, 0:02:01.440 --> 0:02:05.800 think of the United Arab Emirates, Bahrain, Kuwait, Iraq. They're 0:02:05.960 --> 0:02:09.079 consuming public much like we are here in the United States. 0:02:09.480 --> 0:02:14.000 So exports from Asia of furniture, footwear, clothing, electronics, and 0:02:14.080 --> 0:02:17.920 appliances have all but halted. Those factories in Asia are 0:02:17.919 --> 0:02:20.760 trying to segment that product, move it to the side 0:02:20.800 --> 0:02:24.000 so they can continue servicing us here in the United States, 0:02:24.080 --> 0:02:28.520 Latin America, European Continent, and the UK. It's a matter 0:02:28.560 --> 0:02:30.480 of time to see if that starts coming up the 0:02:30.560 --> 0:02:34.080 works at ports through Asia. But so far supply chains 0:02:34.080 --> 0:02:37.200 moving here to the United States are smooth. Yet the 0:02:37.360 --> 0:02:41.440 cost of the fuel has doubled over the last ten days. 0:02:41.760 --> 0:02:44.640 Has that affected Gene anything about the number of ships, 0:02:44.639 --> 0:02:47.440 the number of the scope of demand that you've seen 0:02:48.160 --> 0:02:50.120 at the port of Los Angeles, just based on the 0:02:50.120 --> 0:02:53.120 fuel costs alone. 0:02:52.400 --> 0:02:55.080 Not so much right now, Lisa. But we're watching this 0:02:55.320 --> 0:02:59.880 very closely. The cargo moving today following Lunar New Year's 0:03:00.000 --> 0:03:04.240 in our traditional slack season, so the flow of goods 0:03:04.240 --> 0:03:06.120 will be a little bit slow until we hit the 0:03:06.160 --> 0:03:09.400 middle of April. Then we'll start seeing spring and summer 0:03:09.480 --> 0:03:10.560 fashion arrive. 0:03:11.080 --> 0:03:13.359 But the fuel component right now is. 0:03:13.280 --> 0:03:17.240 About twenty five percent of the overall freight cost, almost 0:03:17.280 --> 0:03:20.160 double or much higher than it normally is. Yet it's 0:03:20.200 --> 0:03:22.280 not impeding purchase orders. From what I hear out of 0:03:22.320 --> 0:03:27.000 retailers and manufacturers alike. Those pos in Asia are remaining solid. 0:03:27.200 --> 0:03:29.960 We're not seeing a drove of cancelations how much. 0:03:30.040 --> 0:03:33.160 You also seeing supply chains start to regionalize in a 0:03:33.200 --> 0:03:35.480 more concrete way. I mean, we've been talking about this 0:03:35.520 --> 0:03:38.920 for a significant period of time. People trying to localize 0:03:38.960 --> 0:03:41.720 where they get things to avoid some of these disruptions. 0:03:42.200 --> 0:03:47.840 Is that accelerating, Yeah, it's interesting depending on hubs of production. 0:03:47.960 --> 0:03:50.640 Think of the automotive industry here in the United States 0:03:50.640 --> 0:03:54.320 with their tiered suppliers, as they're all within one hundred 0:03:54.400 --> 0:03:58.320 or two hundred mile radius of those oem plants. Folks 0:03:58.400 --> 0:04:02.840 are looking at scenario building around supply chains, whether it's tariffs, 0:04:02.880 --> 0:04:06.119 cost Now this war in the Middle East that's impacting 0:04:06.160 --> 0:04:09.320 the fuel costs across the board in a variety of areas. 0:04:09.640 --> 0:04:11.520 Not only do we see it at the pump here 0:04:11.600 --> 0:04:14.920 up sixty cents over the last two weeks, but that 0:04:15.000 --> 0:04:18.760 bunker fuel for the big container ships, cruise ships, and 0:04:18.880 --> 0:04:23.040 airline tickets have risen substantially over this period of time, 0:04:23.320 --> 0:04:27.040 adding to that fuel adjustment factor. On the manufacturing side, 0:04:27.040 --> 0:04:30.160 these supply chains can't move that quickly, and they've been 0:04:30.200 --> 0:04:33.880 designed in ways to allow for some adaptation, and that's 0:04:33.920 --> 0:04:38.080 why we typically see closed loop services in the Middle East. 0:04:38.320 --> 0:04:41.480 Those ships that are coming from Asia will offload the cargo, 0:04:41.600 --> 0:04:43.800 pick up a small amount of exports and a lot 0:04:43.800 --> 0:04:47.120 of empty containers, and head straight back to Asia. Here 0:04:47.160 --> 0:04:49.159 in the Transpacific trade, we don't see a lot of 0:04:49.200 --> 0:04:54.120 interdependence of crews, assets, or those vessels themselves. So the 0:04:54.160 --> 0:04:57.040 supply chain folks across the board are continuing to look 0:04:57.080 --> 0:05:00.600 for ways to refine. Yet it the inertia is not 0:05:00.640 --> 0:05:01.960 going to happen that quickly. 0:05:02.160 --> 0:05:04.080 Jane, you lived through a lot of crisises. You also 0:05:04.160 --> 0:05:06.560 worked in the Middle East. There was the pandemic, there 0:05:06.640 --> 0:05:08.799 was the Red Sea at one point shut for about 0:05:08.839 --> 0:05:12.279 six months essentially. On top of that, we recently had 0:05:12.480 --> 0:05:15.719 a lot of issues regarding tariffs. What does this remind 0:05:15.760 --> 0:05:16.280 you of the. 0:05:16.200 --> 0:05:20.560 Most, probably, Anne Marie accommodation of all of those. When 0:05:20.640 --> 0:05:22.720 I lived and worked in the Middle East, we were 0:05:22.720 --> 0:05:25.279 going through the Second Iraqi War, and while there was 0:05:25.320 --> 0:05:29.000 a lot of cargo flowing in to support the troops 0:05:29.000 --> 0:05:32.200 that were on the ground and help rebuild Iraq, there 0:05:32.279 --> 0:05:36.159 was always this fear of the Strait of Horror Moves 0:05:36.240 --> 0:05:42.160 being closed and that twenty one mile gateway that allows 0:05:42.440 --> 0:05:47.839 cargo product ag doll aluminum and of course the energy 0:05:47.880 --> 0:05:50.640 products going through there. That was a fear for many, 0:05:50.640 --> 0:05:52.839 many decades, and now we're seeing what it really looks 0:05:52.880 --> 0:05:56.880 like the price of these energy products is on an 0:05:56.920 --> 0:06:00.720 international level. So even though the United States now is 0:06:00.760 --> 0:06:04.120 a net exporter of energy, we're still feeling it right 0:06:04.160 --> 0:06:07.560 here at home. This is how important that geography is. 0:06:07.920 --> 0:06:10.520 And while it's only about eight to twelve percent of 0:06:10.600 --> 0:06:15.320 container shipping volume and assets worldwide, it's going to have 0:06:15.440 --> 0:06:19.440 knock on effects if this lasts longer than some experts 0:06:19.760 --> 0:06:23.960 had originally predicted. So it's adding all these pieces together 0:06:24.320 --> 0:06:28.160 and it's that continued unknown. What CEOs and executives are 0:06:28.160 --> 0:06:31.479 telling me and Marie is their planning horizons have shrunk 0:06:31.920 --> 0:06:36.359 two months, if not less than that right now, trying 0:06:36.360 --> 0:06:40.200 to understand how best they can move tactically because longer 0:06:40.320 --> 0:06:43.760 range strategy is very difficult at this point in time. 0:06:43.920 --> 0:06:46.039 Given your contacts around the world, have you heard of 0:06:46.120 --> 0:06:50.400 any companies asking the US directly for that naval escort? 0:06:51.760 --> 0:06:52.360 No, I have it. 0:06:52.480 --> 0:06:57.000 We just had last week the large Transpacific Maritime conference 0:06:57.520 --> 0:07:00.680 here in southern California that was by the S and 0:07:00.760 --> 0:07:03.560 P Global and Journal e Commerce groups over forty four 0:07:03.640 --> 0:07:06.760 hundred delegates, many of the shipping line executives, and as 0:07:06.760 --> 0:07:09.400 we started trying to plan or scenario build just a 0:07:09.440 --> 0:07:13.680 little bit follow on conversations this week, no one has 0:07:13.760 --> 0:07:15.640 raised their hands saying they want to start. 0:07:15.400 --> 0:07:16.360 Pushing through again. 0:07:16.760 --> 0:07:20.040 The safety of those crews is omnipresent in their thoughts, 0:07:20.360 --> 0:07:22.960 and then the risk of those assets containers. You're not 0:07:22.960 --> 0:07:26.800 going to be able to recoup that if anything disastrous happened, ever, 0:07:27.160 --> 0:07:29.080 and you're going to have to live with it. There's 0:07:29.200 --> 0:07:32.960 also this risk, a war risk insurance premium that's been 0:07:33.040 --> 0:07:35.600 levied by a number of carriers about three thousand dollars 0:07:35.680 --> 0:07:38.960 per container for any cargo that would be transiting in 0:07:39.040 --> 0:07:42.560 that region. And it's simply an outcome of the fact 0:07:42.600 --> 0:07:45.160 that they can't get insurance for the vessels or cargo 0:07:45.360 --> 0:07:47.800 or the protection of the crew. So to be at 0:07:47.800 --> 0:07:51.400 a standstill now, we'll continue for some time until we 0:07:51.440 --> 0:07:53.800 have some level of surety that that region will be 0:07:53.800 --> 0:07:54.320 safe again. 0:07:54.920 --> 0:07:56.520 Stay with us Multilemberg. 0:07:56.560 --> 0:08:08.880 Savannah's coming up off to this, the retired Lieutenant General 0:08:08.960 --> 0:08:12.200 Robert Walsh of Academy Securities, writing restoring normal shipping could 0:08:12.200 --> 0:08:15.600 take weeks if a significant number of naval minds are deployed. 0:08:15.880 --> 0:08:18.520 Lieutenant General Welsh joins us. Now for more, Lieutenant General, 0:08:18.560 --> 0:08:20.760 welcome back to the program, Sir. I want to give 0:08:20.800 --> 0:08:22.160 to you just the quote that we heard from the 0:08:22.200 --> 0:08:25.320 Supreme Leader, supposedly a quote from the Supreme Leader yesterday. 0:08:25.560 --> 0:08:27.760 The leader of the straight ofform mers must certainly continue 0:08:27.760 --> 0:08:30.360 to be used. Studies have been conducted on opening other 0:08:30.440 --> 0:08:33.040 fronts where the enemy has little experience and would be 0:08:33.120 --> 0:08:35.640 highly vulnerable. Now we're going to get to the ram 0:08:35.640 --> 0:08:38.200 of speculation, Lieutenant General, But what do you suppose the 0:08:38.240 --> 0:08:39.600 Supreme Leader is addressing there? 0:08:40.080 --> 0:08:42.440 Well, I think what the'se trying to say, And first off, 0:08:42.480 --> 0:08:44.959 thanks Jonathan for having me this morning. But I think 0:08:44.960 --> 0:08:46.720 what he's trying to say is, you know, they're trying 0:08:46.720 --> 0:08:50.439 to work against our strength. They're using asymmetric warfare. You know, 0:08:50.480 --> 0:08:55.520 it's one of the things the Chinese philosopher Son Sou said, 0:08:55.520 --> 0:08:59.000 don't work against an enemy strength, work against their weaknesses. 0:08:59.080 --> 0:09:00.720 And this is one of the those areas where they 0:09:00.760 --> 0:09:03.480 can work asymmetrically. And Iran feels like they want to 0:09:03.480 --> 0:09:06.599 get leverage whenever they go into whatever negotiations may be. 0:09:06.760 --> 0:09:09.040 This could go long term, and he wants to have 0:09:09.080 --> 0:09:11.560 that leverage, and he's going to get against our One 0:09:11.600 --> 0:09:13.680 of our key problems is trying to keep the straits 0:09:13.679 --> 0:09:14.440 over Moose open. 0:09:14.800 --> 0:09:17.520 Well, yesterday the Treasury Secretary said that his belief is 0:09:17.520 --> 0:09:20.520 that as soon as it is militarily possible, the US Navy, 0:09:20.559 --> 0:09:24.880 perhaps with an international coalition, will be escorting vessels through. 0:09:25.240 --> 0:09:27.320 Can you walk us through what this even looks like. 0:09:27.800 --> 0:09:29.280 Yeah, sure, am Marie. That's great. 0:09:29.360 --> 0:09:31.600 I think the one point you hit on was an 0:09:31.640 --> 0:09:36.439 international coalition trying to bring partners together to open the 0:09:36.480 --> 0:09:38.600 straights up, because this is an international problem. So the 0:09:38.600 --> 0:09:42.800 more the US can always leverage international problems, problems like this, 0:09:42.880 --> 0:09:45.800 the better off it's going to be. And we've got 0:09:45.800 --> 0:09:48.080 a lot of international partners that have a lot of 0:09:48.080 --> 0:09:50.760 capabilities in this. I think you can see right now 0:09:51.000 --> 0:09:54.600 that the US has a great ability right now to 0:09:54.760 --> 0:10:01.600 suppress Aroan's missile drone capabilities to kind of maintain air 0:10:01.679 --> 0:10:05.360 superiority over that. And now the real question would be 0:10:05.400 --> 0:10:08.240 would around start delay minds in there, because that's another 0:10:08.320 --> 0:10:10.960 opportunity they've got to choke off the straits of Hormuse. 0:10:11.200 --> 0:10:14.679 That's another asymmetric capability that if you look at the 0:10:14.720 --> 0:10:17.520 way the US Navy operates, they would rather just like 0:10:17.600 --> 0:10:20.960 we've seen the first parts of the air campaign, it's 0:10:21.000 --> 0:10:23.240 like they would rather stand off than stand in. When 0:10:23.240 --> 0:10:27.000 you start putting, you know, warships into contested areas like 0:10:27.360 --> 0:10:30.160 contested lottorals like we have in the Gulf in the 0:10:31.080 --> 0:10:34.920 Straits there, they would like to set the conditions first. 0:10:34.960 --> 0:10:37.240 And that's why I think you're seeing time before the 0:10:37.400 --> 0:10:40.800 escorts start to happen, setting those conditions right before we 0:10:40.840 --> 0:10:42.520 start conducting the operations. 0:10:42.679 --> 0:10:45.200 Well besides the UK Navy, who's signing up for this 0:10:45.320 --> 0:10:47.240 international coalition, I. 0:10:47.160 --> 0:10:48.800 Think that would be something that have to be worked 0:10:48.800 --> 0:10:52.320 with the international partners like Saudi Arabia. I think the UAE, 0:10:52.640 --> 0:10:55.240 we've had the French in there in Australia have mind 0:10:56.320 --> 0:10:58.880 color measures capabilities. They would be the ones and I 0:10:58.880 --> 0:11:01.200 think you'd have a better chance at performing that once 0:11:01.240 --> 0:11:03.280 the conditions are set where it's safe to go in 0:11:03.559 --> 0:11:06.920 to conduct escort and mind clearing operations, because these would 0:11:06.920 --> 0:11:09.520 really be more looked at by the International Committee as 0:11:09.880 --> 0:11:13.120 defensive operations and not offensive operations, and why you'd have 0:11:13.160 --> 0:11:15.320 a better chance of getting a coalition with those partners. 0:11:15.480 --> 0:11:17.840 Lieten in general, do you think that still there is 0:11:17.880 --> 0:11:21.320 the possibility of ground troops going into Iran, particularly to 0:11:21.360 --> 0:11:24.040 get the industry radium still there at least? 0:11:24.080 --> 0:11:25.520 That's a really hard question to say. 0:11:25.760 --> 0:11:29.840 I certainly don't see large ground forces going in there. 0:11:30.000 --> 0:11:33.360 There could be significant operations that would go into key 0:11:33.440 --> 0:11:37.840 sites like you just mentioned for nuclear capabilities, very dangerous operations. 0:11:37.840 --> 0:11:40.360 We have the capabilities to do it. Again, those conditions 0:11:40.400 --> 0:11:42.240 would have to be set for those forces to go in. 0:11:42.320 --> 0:11:43.920 But at the end of the day, I don't see 0:11:43.960 --> 0:11:47.320 any risk that the US wants to take by putting large 0:11:47.320 --> 0:11:50.160 ground forces in and putting them at risk into some 0:11:50.200 --> 0:11:51.800 type of long extended campaign. 0:11:51.960 --> 0:11:53.840 Lieutenant General, do you think you can end up in 0:11:53.840 --> 0:11:56.520 a long extended campaign even if you don't want to. 0:11:57.920 --> 0:12:01.880 I think this warfare change as it goes on, and 0:12:01.920 --> 0:12:03.960 what we're starting to see from the Iranians is even 0:12:04.000 --> 0:12:06.760 with the massive power the US has along with the 0:12:06.840 --> 0:12:10.360 Israelis bringing all this power to bear and taking down, 0:12:10.679 --> 0:12:14.760 you know, the missile capabilities somewhat the drone capabilities, we're 0:12:14.760 --> 0:12:17.960 seeing those numbers drop way down. We've seen them destroyed 0:12:17.960 --> 0:12:21.000 pretty much the entire navy of Iran. But at the 0:12:21.000 --> 0:12:24.200 same time, like I said, the Ranians have looked at 0:12:24.200 --> 0:12:26.240 this problem just as the US has looked at it 0:12:26.240 --> 0:12:29.120 for a very long time. They understand the strengths of 0:12:29.120 --> 0:12:31.280 what the US does, how the US comes to war, 0:12:31.720 --> 0:12:33.920 and what they have worked against is those weaknesses, and 0:12:33.920 --> 0:12:36.880 a weakness they see here is that regime is willing 0:12:36.920 --> 0:12:40.199 to hang on for a long long time. And then 0:12:40.240 --> 0:12:42.840 that's what we see as regimes like this are not 0:12:42.880 --> 0:12:45.319 willing to give up power. They're willing to entrench themselves 0:12:45.400 --> 0:12:47.800 for a long time. And what they're seeing is by 0:12:47.880 --> 0:12:52.160 using this asymmetric threats by firing the drones in particular 0:12:52.320 --> 0:12:55.480 the missiles also you know, at our allies and partners, 0:12:55.520 --> 0:12:59.040 and threatening the straits to keep them closed. That's an 0:12:59.080 --> 0:13:01.640 asymmetric way where they've got leverage, and they're going to 0:13:01.720 --> 0:13:04.199 use that as best they can to get in negotiations 0:13:04.440 --> 0:13:06.560 where they've got leverage to try to get the things 0:13:06.600 --> 0:13:08.440 they want coming out of it as the war comes 0:13:08.520 --> 0:13:08.920 to an end. 0:13:09.000 --> 0:13:11.199 When that comes to an end, stay with us. 0:13:11.520 --> 0:13:24.240 More Bloomberg surveillance coming up after this. Rachel's of the 0:13:24.320 --> 0:13:26.840 sense for a new American security right In the following 0:13:26.840 --> 0:13:30.000 traders will assume the US will continue such measures as 0:13:30.040 --> 0:13:32.320 long as Homer's is shut, and will be skeptical of 0:13:32.320 --> 0:13:34.840 post war pressure on Russia due to a widening gap 0:13:35.080 --> 0:13:37.719 between the US and the EU. Rachel joins us now 0:13:37.760 --> 0:13:39.760 for more. Rachel, welcome to the program. Thanks for having 0:13:39.800 --> 0:13:41.280 How much for mess are we in right now? 0:13:41.440 --> 0:13:44.920 I think we're in quite a mess and the issue 0:13:45.240 --> 0:13:48.640 now is I mean, the most charitable read on the 0:13:48.720 --> 0:13:52.240 decision last night was that Russian oil prices were already 0:13:52.320 --> 0:13:56.840 high and that if this lifting, if the sanctions easing 0:13:56.840 --> 0:13:59.480 didn't happen, that China would be getting all of all 0:13:59.559 --> 0:14:04.160 of the game. The challenges here that it's not enough barrels, 0:14:04.440 --> 0:14:07.960 and that at the end of the day, it's not 0:14:08.120 --> 0:14:10.960 clear that we're getting closer to the end of the 0:14:11.000 --> 0:14:13.520 war and reopening hormones, and at the end of the day, 0:14:13.640 --> 0:14:16.560 for the energy markets, that's what needs to happen, and 0:14:16.600 --> 0:14:20.360 it means but this uncertainty means that even US producers 0:14:20.440 --> 0:14:24.440 here can't really benefit because they don't want to start 0:14:24.440 --> 0:14:28.800 investing more in the risk that there's demand destruction ahead 0:14:29.240 --> 0:14:33.240 or that suddenly the war is over. And this fifty 0:14:33.320 --> 0:14:36.560 million barrels is back on the market. So you know, 0:14:36.760 --> 0:14:39.360 here in the US, we don't have lots of surplus 0:14:39.400 --> 0:14:41.680 capacity that we can flood the market with. 0:14:42.240 --> 0:14:44.680 So I think it's it's a very difficult situation. 0:14:44.840 --> 0:14:46.760 I'm sure you've seen the research coming out of the banks. 0:14:46.760 --> 0:14:49.240 This was Goldman deadly. Oil price is likely to exceed 0:14:49.240 --> 0:14:51.040 the two thousand and eight peak. It flows through the strain, 0:14:51.120 --> 0:14:53.520 remain to press through March. What's the day on the 0:14:53.520 --> 0:14:55.320 calendar that you're focused on. 0:14:56.040 --> 0:14:59.440 Yeah, I mean, I think right now it's hard. Everybody 0:14:59.480 --> 0:14:59.960 has their model. 0:15:00.240 --> 0:15:02.360 It's hard to think about where the prices go because 0:15:02.360 --> 0:15:06.000 at a certain point it's more symbolic than actually based 0:15:06.040 --> 0:15:10.120 on market models. But I am really watching, you know 0:15:10.160 --> 0:15:13.200 where we are in early April, right, that's when the 0:15:13.200 --> 0:15:17.160 physical supply risks of you know, sort of really mount, 0:15:17.360 --> 0:15:20.680 right because a number of energy producers, especially Ron but 0:15:20.840 --> 0:15:23.880 also Saudi Arabia they front loaded, they sent more vessels 0:15:23.920 --> 0:15:28.560 out and and that's so that's when I think, you know, 0:15:28.640 --> 0:15:31.440 things would start to bite. That's also when we'll be watching, 0:15:31.920 --> 0:15:36.160 are have these additional barrels from the G seven from 0:15:36.240 --> 0:15:40.360 the IA, you know, stockpile release are they coming to market. 0:15:40.720 --> 0:15:44.120 And I'm watching as much not just crude oil, but 0:15:44.360 --> 0:15:50.160 product markets, diesel, jet fuel, and also the cascading effects 0:15:50.400 --> 0:15:54.320 that we're seeing in Asia of chemical plants shutting down 0:15:54.840 --> 0:15:58.360 and the like. So I think if we're not at 0:15:58.400 --> 0:16:02.240 a point where they're ceilings are reopened towards the end 0:16:02.280 --> 0:16:05.920 of the month, we'll be in a well even more 0:16:05.960 --> 0:16:06.880 difficult situation. 0:16:07.040 --> 0:16:08.520 When does demand destruction kick in. 0:16:08.960 --> 0:16:12.240 I think we're starting to see it already, maybe more 0:16:12.360 --> 0:16:16.960 so in Asia. We're seeing mandated moves across Southeast Asia 0:16:17.680 --> 0:16:21.240 to reduce demand, when we're seeing it even in Europe. 0:16:21.280 --> 0:16:25.360 I think on the power side, the gas natural gas 0:16:25.400 --> 0:16:28.920 spiked even more quickly than oil just once the kateries 0:16:28.960 --> 0:16:33.360 started to shut in production and we saw TTF spike up. 0:16:33.680 --> 0:16:37.520 Was that last week and now we're sort of seeing 0:16:37.560 --> 0:16:40.200 it flat in part because at those prices, people. 0:16:39.960 --> 0:16:43.200 Don't want to buy, and that's going to kick in. 0:16:43.320 --> 0:16:50.200 Especially later this year, when normally producers would be injecting 0:16:50.240 --> 0:16:50.760 more fuel. 0:16:50.880 --> 0:16:52.240 It's at storage time. 0:16:52.600 --> 0:16:55.960 So I think we'll start seeing some switches to coal 0:16:56.200 --> 0:16:59.880 where that can happen. We'll start seeing some rationing, and 0:17:00.320 --> 0:17:02.640 you know here in the United States. We're a bit 0:17:02.680 --> 0:17:06.920 more sheltered on on especially the natural gas side, because 0:17:06.920 --> 0:17:10.919 we can't export a lot more capacity than we're already doing. 0:17:11.320 --> 0:17:15.360 But still we're already at a point where electricity prices 0:17:15.520 --> 0:17:18.200 we're a salient political issue in the midterms. 0:17:18.400 --> 0:17:19.560 There were a big issue in the. 0:17:19.480 --> 0:17:22.560 Off year elections last year, and so now we're looking 0:17:22.600 --> 0:17:25.240 at prices of the pump being more expensive as well 0:17:25.280 --> 0:17:26.639 as electricity bills. 0:17:26.680 --> 0:17:28.679 Well, I guess the key question for economists has been 0:17:28.720 --> 0:17:31.280 when does this end up suppressing growth in a material way? 0:17:31.440 --> 0:17:33.120 And most people seem to say not until it goes 0:17:33.160 --> 0:17:34.000 on for months. 0:17:34.040 --> 0:17:35.040 Or a longer period of time. 0:17:35.080 --> 0:17:36.679 And then I think of that spring break and how 0:17:36.680 --> 0:17:38.080 a number of people are saying, I'm not going to 0:17:38.119 --> 0:17:40.160 fly anywhere because the prices have gone up forty percent, 0:17:40.320 --> 0:17:42.560 thirty percent and it's not worth it. I mean, are 0:17:42.560 --> 0:17:44.760 we already seeing that start to trickle in on the 0:17:44.800 --> 0:17:46.919 margins in the US or is that mostly an Asia 0:17:47.000 --> 0:17:48.680 story a Europe story for now? 0:17:48.840 --> 0:17:50.679 I think it's mostly an Asia Europe story. 0:17:51.400 --> 0:17:54.000 I guess it depends how quickly how short term people 0:17:54.000 --> 0:17:57.240 buy their spring break tickets. I often sometimes I travel 0:17:57.320 --> 0:17:59.159 short term, but a lot of times. You know, I 0:17:59.280 --> 0:18:01.439 have I have some trips booked out through the spring. 0:18:01.800 --> 0:18:04.159 I'd be more worried about how people are going to 0:18:04.240 --> 0:18:05.680 travel and drive this summer. 0:18:05.880 --> 0:18:07.359 People are making those decisions. 0:18:07.359 --> 0:18:10.560 We're seeing airlines in Asia and elsewhere start to put 0:18:10.560 --> 0:18:11.800 on fuel surcharges. 0:18:12.960 --> 0:18:16.080 So those dynamics now here in the US. I think. 0:18:16.200 --> 0:18:19.280 You know, we've seen the drivers of growth be largely 0:18:19.320 --> 0:18:22.760 around AI and AI roll out imports have been driven 0:18:22.800 --> 0:18:23.240 by AI. 0:18:23.720 --> 0:18:25.400 Some of that will continue, but. 0:18:25.359 --> 0:18:28.040 That's where I start to worry about. You know, memory 0:18:28.119 --> 0:18:31.840 ship prices we're already going up, and now they're helium shortages. 0:18:32.119 --> 0:18:33.840 Helium's used in semiconductors. 0:18:34.160 --> 0:18:37.520 Taiwan is one of the countries that is quite high 0:18:37.520 --> 0:18:41.280 on a pain point schedule level, however you measure it 0:18:42.600 --> 0:18:47.240 not having a lot of reserves and the like, and 0:18:47.280 --> 0:18:49.200 then other countries like India. 0:18:49.359 --> 0:18:50.960 My senses in the US. 0:18:50.760 --> 0:18:52.840 The worry is more, are we going to be in 0:18:52.880 --> 0:18:54.920 some version of a growth slow down? 0:18:55.119 --> 0:18:56.240 And you know, the dread it. 0:18:56.320 --> 0:18:58.960 I'm not ready to call at stake inflation yet, but 0:18:59.480 --> 0:19:02.040 you know, we were seeing prices of other goods start 0:19:02.080 --> 0:19:05.879 to go up, especially you know, healthcare and the like 0:19:06.200 --> 0:19:08.119 and so I do think this puts the FED in 0:19:08.200 --> 0:19:10.960 a tricky you know, in a tricky position. That being said, 0:19:11.000 --> 0:19:13.920 the right thing to do from just a commodity shock 0:19:14.040 --> 0:19:17.000 like this is probably to look through it. But this 0:19:17.040 --> 0:19:20.680 is an economy where we're not adding jobs really right, 0:19:21.200 --> 0:19:24.920 and where prices are going up, and so I think 0:19:25.000 --> 0:19:30.440 globally this is more of a risk to growth rather 0:19:30.520 --> 0:19:34.480 than sign of some sort of recession. But you know, 0:19:34.880 --> 0:19:38.000 there's also a risk that investments slowed down as well, 0:19:38.359 --> 0:19:42.679 a long term investments infrastructure projects, both in the Golf region, 0:19:43.440 --> 0:19:45.720 but also questions internationally. 0:19:46.000 --> 0:19:48.800 Two months ago and ten days the United States captured 0:19:48.880 --> 0:19:52.680 Nicholas Maduro, we have seen companies like Chevron say they're 0:19:52.680 --> 0:19:55.399 going to expand production. Could that be a lever this 0:19:55.440 --> 0:19:59.399 administration leans more into given what's going on in the region. 0:20:00.080 --> 0:20:02.960 Yeah, I think it will reinforce their priority on that. 0:20:03.760 --> 0:20:10.000 We've seen a brow of different administration officials in Caracas, 0:20:10.080 --> 0:20:13.879 their investor trips I think going on this month, you know, 0:20:13.960 --> 0:20:16.919 and we've seen Venezuela and production go basically back up 0:20:16.920 --> 0:20:18.920 to where it was in the fall of last year, 0:20:19.119 --> 0:20:21.920 maybe getting close to where we were at the beginning 0:20:21.960 --> 0:20:25.959 of the second Trump administration one and change million barrels 0:20:25.960 --> 0:20:29.280 a day. The challenge is it's not easy to bring 0:20:29.359 --> 0:20:33.120 a lot of more supply online quickly, so it's more Again, 0:20:33.200 --> 0:20:36.080 we're back to this medium term question of is the 0:20:36.119 --> 0:20:39.120 demand going to be there a year from now, five 0:20:39.200 --> 0:20:43.800 years from now. So I think we'll see producers already 0:20:44.000 --> 0:20:47.640 present adding, you know, in the neighborhood of a few 0:20:47.720 --> 0:20:51.119 hundred thousand barrels a day. Every barrel helps to be clear, 0:20:51.600 --> 0:20:53.680 But I don't think we're going to see the kind 0:20:53.800 --> 0:20:57.040 of investment that takes. 0:20:56.800 --> 0:20:59.200 Us to, you know, that helps us fill this gap. 0:20:59.240 --> 0:21:00.679 This is ten millisian barrels a. 0:21:00.720 --> 0:21:03.760 Day gap of things that either are not going through 0:21:03.800 --> 0:21:08.439 the strait of hormones or can't be diverted through other pipelines. 0:21:09.240 --> 0:21:12.800 This is the Bloomberg Surveillance Podcast, bringing you the best 0:21:12.800 --> 0:21:16.360 in markets, economics, angiopolitics. You can watch the show live 0:21:16.480 --> 0:21:19.480