1 00:00:13,320 --> 00:00:17,079 Speaker 1: Hello, and welcome to What Goes Up Weekly Markets podcast. 2 00:00:17,120 --> 00:00:19,680 Speaker 1: My name is Mike Reagan. I'm a senior editor at Bloomberg, 3 00:00:20,040 --> 00:00:23,279 Speaker 1: and I'm Baldonna Higher across asset reporter with Bloomberg. And 4 00:00:23,400 --> 00:00:25,520 Speaker 1: this week on the show, well, as the name of 5 00:00:25,560 --> 00:00:28,200 Speaker 1: the podcast implies, we like to talk about what's going 6 00:00:28,320 --> 00:00:31,480 Speaker 1: up in price, and lately that's been energy prices and 7 00:00:31,800 --> 00:00:35,919 Speaker 1: obviously that has potentially huge implications for the economic rebound 8 00:00:36,320 --> 00:00:39,279 Speaker 1: and the values of stocks and other assets. We'll get 9 00:00:39,320 --> 00:00:42,320 Speaker 1: into it with an expert on the global energy industry 10 00:00:42,560 --> 00:00:45,479 Speaker 1: and uh, you know, Vildonna. As journalists are instinct, is 11 00:00:45,479 --> 00:00:48,199 Speaker 1: always to find some of the smartest people we can 12 00:00:48,320 --> 00:00:50,360 Speaker 1: to explain the world to us. Luckily we didn't have 13 00:00:50,400 --> 00:00:52,880 Speaker 1: to go too far this time. Yeah, we're very fortunate. 14 00:00:52,960 --> 00:00:55,800 Speaker 1: We're joined this week by Javier Blass. He's a Bloomer 15 00:00:55,880 --> 00:00:59,560 Speaker 1: columnist and he's the author of the World for Sale. Javier, 16 00:00:59,560 --> 00:01:02,120 Speaker 1: I want to comming to the show. Hello on great 17 00:01:02,200 --> 00:01:04,840 Speaker 1: week with you. Yeah, thanks for doing the Xavier. We 18 00:01:04,880 --> 00:01:07,480 Speaker 1: know you must be busy this week, Javier. Obviously, this 19 00:01:07,600 --> 00:01:10,759 Speaker 1: story has so many different facets to it. I actually 20 00:01:10,760 --> 00:01:13,120 Speaker 1: wanted to just take a brief step back and have 21 00:01:13,280 --> 00:01:16,000 Speaker 1: you maybe layout what exactly all is going on and 22 00:01:16,120 --> 00:01:19,559 Speaker 1: what you're watching. Obviously, earlier this week we had news 23 00:01:19,680 --> 00:01:23,440 Speaker 1: of the US and the UK imposing certain bands on 24 00:01:23,640 --> 00:01:27,680 Speaker 1: on Russian oil imports. So maybe just layout for our audience, 25 00:01:27,959 --> 00:01:30,880 Speaker 1: what are you watching, what all is happening, and potentially 26 00:01:30,920 --> 00:01:33,040 Speaker 1: maybe even you know, what's the one next thing that 27 00:01:33,120 --> 00:01:36,959 Speaker 1: you're looking for. So we can just basically go about 28 00:01:37,040 --> 00:01:40,280 Speaker 1: two weeks ago, and the oil market was already quite tight. 29 00:01:40,800 --> 00:01:45,600 Speaker 1: The recovery from COVID nineteen had been stronger than expected. 30 00:01:46,280 --> 00:01:50,440 Speaker 1: Demand here in Europe was really booming. The same thing 31 00:01:50,600 --> 00:01:54,320 Speaker 1: was happening in the United States, where demanding January probably 32 00:01:54,520 --> 00:01:59,080 Speaker 1: was the best January ever for oil consumption. Everyone kind 33 00:01:59,120 --> 00:02:03,360 Speaker 1: of came back round Christmas, COVID was improving and and 34 00:02:03,520 --> 00:02:06,320 Speaker 1: and things started to look quite good in terms of consumption. 35 00:02:06,800 --> 00:02:08,480 Speaker 1: So that was the kind of the demand side of 36 00:02:08,520 --> 00:02:11,799 Speaker 1: the market. The supply side was quite tight. We have 37 00:02:11,960 --> 00:02:14,920 Speaker 1: a couple of years of very low prices. I mean 38 00:02:15,040 --> 00:02:18,079 Speaker 1: remember two years ago we were talking about negative prices 39 00:02:18,120 --> 00:02:21,280 Speaker 1: at some point. And for West Texas, intermediated is the 40 00:02:21,480 --> 00:02:25,520 Speaker 1: American crude oil benchmark. So companies have not been investing 41 00:02:25,600 --> 00:02:29,120 Speaker 1: a lot and and supply was struggling, and then the 42 00:02:29,280 --> 00:02:33,760 Speaker 1: oil cartel with Saudi Arabia, Russia and other countries were 43 00:02:33,880 --> 00:02:37,920 Speaker 1: really keeping the market under control. So things were looking 44 00:02:38,040 --> 00:02:41,720 Speaker 1: quite high and prices were rising, and then Russia launched 45 00:02:41,760 --> 00:02:45,880 Speaker 1: the invasion of Ukraine. And Russia is the world's third 46 00:02:46,080 --> 00:02:50,040 Speaker 1: largest oil producer, the second largest oil supporter only behind 47 00:02:50,160 --> 00:02:54,520 Speaker 1: Saudi Arabia. And what happened immediately was the market prepared 48 00:02:54,560 --> 00:02:58,639 Speaker 1: for the worst cases scenario, a complete cutoff of supplies 49 00:02:58,680 --> 00:03:01,880 Speaker 1: from Drassia. These are millions of barrels of oil used. 50 00:03:01,880 --> 00:03:07,240 Speaker 1: To put a few numbers, Russia sports about eight million 51 00:03:07,320 --> 00:03:11,079 Speaker 1: barrels a day between crude oil and refined products. That is, 52 00:03:11,680 --> 00:03:14,040 Speaker 1: that's quite a lot. That will be enough to supply 53 00:03:14,520 --> 00:03:20,040 Speaker 1: the whole of Germany, France, the UK, Spain and Italy together, 54 00:03:20,600 --> 00:03:23,160 Speaker 1: and you will still have a bit of extra barrels 55 00:03:23,200 --> 00:03:28,200 Speaker 1: to supply another smaller European country. What happened was the 56 00:03:28,320 --> 00:03:30,960 Speaker 1: fear of sancience. We didn't have at that point any 57 00:03:31,040 --> 00:03:34,639 Speaker 1: official sancios on Russia, but companies were fearing that that 58 00:03:34,840 --> 00:03:38,760 Speaker 1: was coming and they started to take actions themselves. They 59 00:03:39,120 --> 00:03:42,440 Speaker 1: boycott Russian oil, They imposed what we call in the 60 00:03:42,480 --> 00:03:47,040 Speaker 1: oil market self sancions that started to reduce the flow 61 00:03:47,120 --> 00:03:51,040 Speaker 1: of Russian oil. Some companies started to announce that they 62 00:03:51,080 --> 00:03:54,080 Speaker 1: were not gonna buy any Russian oil, and then more 63 00:03:54,200 --> 00:03:58,160 Speaker 1: recently it was the United States President by then here 64 00:03:58,200 --> 00:04:01,920 Speaker 1: in the UK Prime Minister Johnson who announced official bands 65 00:04:02,080 --> 00:04:05,800 Speaker 1: you cannot buy any Russian oils and that really has 66 00:04:06,400 --> 00:04:12,680 Speaker 1: tightened the supply picture significantly and the market will use well, 67 00:04:13,200 --> 00:04:16,040 Speaker 1: it went up quite a lot. We touched a hundred 68 00:04:16,080 --> 00:04:19,600 Speaker 1: and thirty nine dollars apparrel, which is choose under the 69 00:04:19,800 --> 00:04:22,760 Speaker 1: peak that the record all time high that we said 70 00:04:23,000 --> 00:04:25,400 Speaker 1: um in two thousand and eight, that was hundred and 71 00:04:25,520 --> 00:04:30,640 Speaker 1: forty seven dollars. And then the market really started to think, okay, 72 00:04:30,760 --> 00:04:34,640 Speaker 1: what if it's a complete shutdown of Russian oil exports, 73 00:04:34,680 --> 00:04:38,200 Speaker 1: can we can we manage? And many people were while 74 00:04:38,440 --> 00:04:42,600 Speaker 1: that happened that really it's very difficult to manage, and 75 00:04:42,680 --> 00:04:46,279 Speaker 1: we're gonna see two hundred dollars, two hundred and fifty dollars. 76 00:04:46,560 --> 00:04:50,760 Speaker 1: So analys and traders were starting to really put very 77 00:04:50,880 --> 00:04:55,240 Speaker 1: high numbers. But at the same time, these very high 78 00:04:55,880 --> 00:04:59,720 Speaker 1: oil prices are beginning to have an impact on this 79 00:05:00,000 --> 00:05:03,360 Speaker 1: pectations of economic growth. We may have our recession kid 80 00:05:03,480 --> 00:05:05,680 Speaker 1: in Europe, and that's what at the same time, that's 81 00:05:05,760 --> 00:05:08,520 Speaker 1: copying the price. So you have the two pressures, and 82 00:05:08,560 --> 00:05:11,360 Speaker 1: the market is trying to to find out how he's 83 00:05:11,360 --> 00:05:13,720 Speaker 1: gonna play out in the next few months. But at 84 00:05:13,760 --> 00:05:16,559 Speaker 1: the end of the day, what everyone is looking, every 85 00:05:16,640 --> 00:05:20,080 Speaker 1: oil trade that is looking is the war in Ukraine. Yeah, 86 00:05:20,200 --> 00:05:21,760 Speaker 1: but I have here. I was sticking back to when 87 00:05:21,800 --> 00:05:24,280 Speaker 1: I was a kid, and um, you know, don't let 88 00:05:24,360 --> 00:05:26,280 Speaker 1: my boyish looks for you, but I was actually a 89 00:05:26,440 --> 00:05:31,279 Speaker 1: kid in the nineteen seventies. And I remember nineteen seventy nine, 90 00:05:31,520 --> 00:05:36,080 Speaker 1: after the Iranian Revolution, I picked up I was a 91 00:05:36,120 --> 00:05:39,120 Speaker 1: paper boy, and I picked up our local newspaper and 92 00:05:39,160 --> 00:05:40,880 Speaker 1: they're on the front page was a picture of my 93 00:05:41,040 --> 00:05:43,480 Speaker 1: best friend's mom. You know, it's the seventies. So she 94 00:05:43,560 --> 00:05:47,080 Speaker 1: had her bell bottoms on and smoking a cigarette and 95 00:05:47,200 --> 00:05:49,480 Speaker 1: she was sitting on a patch of grass outside of 96 00:05:49,520 --> 00:05:52,279 Speaker 1: a gas station. And and obviously the story was about 97 00:05:52,360 --> 00:05:56,360 Speaker 1: the gas shortages that the US experience back then. And 98 00:05:56,600 --> 00:06:00,760 Speaker 1: I'm thinking, now, you know, a rising prices is one 99 00:06:00,839 --> 00:06:03,160 Speaker 1: thing for the economy. It's it's obviously going to be 100 00:06:03,240 --> 00:06:05,320 Speaker 1: a headwind for the economy, But I'm starting to worry 101 00:06:05,360 --> 00:06:08,960 Speaker 1: about actual shortages. So I'm curious how you're thinking about 102 00:06:09,040 --> 00:06:11,760 Speaker 1: the potential for for shortages, whether it be in the 103 00:06:11,880 --> 00:06:14,960 Speaker 1: US and Europe, sort of where we might look for 104 00:06:15,040 --> 00:06:18,280 Speaker 1: those first? What what kind of products might be in 105 00:06:18,360 --> 00:06:23,919 Speaker 1: short supply? First, I'm reading about potentially um European factories 106 00:06:24,000 --> 00:06:26,320 Speaker 1: that won't be able to keep operating if if energy 107 00:06:26,400 --> 00:06:28,800 Speaker 1: prices get too high. How are you thinking about the 108 00:06:28,839 --> 00:06:32,000 Speaker 1: potential for shortages and where would you look for for 109 00:06:32,160 --> 00:06:34,640 Speaker 1: it first? Well, what we are seeing at the moment, 110 00:06:34,880 --> 00:06:37,680 Speaker 1: for for now is it's a huge price increase. I 111 00:06:37,680 --> 00:06:40,320 Speaker 1: mean a few days ago we went about a hundred 112 00:06:40,320 --> 00:06:43,840 Speaker 1: dollars a barrel for oil, and we went almost up 113 00:06:43,920 --> 00:06:46,560 Speaker 1: to a hundred and forty in a matter of just 114 00:06:46,800 --> 00:06:49,680 Speaker 1: a few days. It has come down juice a bit. 115 00:06:49,800 --> 00:06:54,040 Speaker 1: So whatever goes up also sometimes comes down. But if 116 00:06:54,120 --> 00:06:58,120 Speaker 1: we think about physical shortages, we have not yet seen them, 117 00:06:58,920 --> 00:07:02,840 Speaker 1: but they are certain corners of the energy market that 118 00:07:02,920 --> 00:07:07,400 Speaker 1: they start to look extremely tight, and as time goes 119 00:07:07,800 --> 00:07:10,400 Speaker 1: that's where we can see some of the shortages. I'm 120 00:07:10,480 --> 00:07:15,080 Speaker 1: thinking in particular about diesel in Europe, which is very 121 00:07:15,240 --> 00:07:19,320 Speaker 1: very tight, and we really qual lot on diesel important 122 00:07:19,360 --> 00:07:24,320 Speaker 1: from Russia, from Russian refineries. That market is quite tight 123 00:07:24,440 --> 00:07:27,200 Speaker 1: at the moment, and I would not be surprised if 124 00:07:27,880 --> 00:07:32,040 Speaker 1: the conflict in Ukraine continues that we may see at 125 00:07:32,120 --> 00:07:36,200 Speaker 1: some point that there are actual shortages. We have seen 126 00:07:36,240 --> 00:07:41,840 Speaker 1: already sound refineries in UH in Central Europe Northwestern Europe 127 00:07:42,440 --> 00:07:46,520 Speaker 1: is starting to impost caps on the amount of diesel 128 00:07:46,600 --> 00:07:50,280 Speaker 1: that they're selling to their distributors. So it's beginning to 129 00:07:50,360 --> 00:07:54,480 Speaker 1: be quite real. But um it has not yet happened 130 00:07:54,520 --> 00:07:56,840 Speaker 1: at the retail level, and I think it will take 131 00:07:56,880 --> 00:08:00,040 Speaker 1: a bit more time to that to emerge. Who be 132 00:08:00,120 --> 00:08:03,360 Speaker 1: the customers most affected there? I'm guessing trucking firms that 133 00:08:03,480 --> 00:08:06,920 Speaker 1: sort of thing. Yeah, I mean diesel is mostly about trucking. 134 00:08:07,040 --> 00:08:10,400 Speaker 1: I mean diesel is also very much consume in certain 135 00:08:10,440 --> 00:08:15,080 Speaker 1: European countries as as because the car fleet is very 136 00:08:15,160 --> 00:08:18,600 Speaker 1: much on on diesel countries like like France, and you know, 137 00:08:18,680 --> 00:08:20,480 Speaker 1: it used to be also the case here where I 138 00:08:20,560 --> 00:08:23,720 Speaker 1: am in the United Kingdom. But it's it's the trucking 139 00:08:23,840 --> 00:08:27,120 Speaker 1: industry which is going to suffer the most. And the 140 00:08:27,240 --> 00:08:31,080 Speaker 1: problem with that is that it means that everyone suffers 141 00:08:31,160 --> 00:08:34,360 Speaker 1: because we transport everything trucking is is the backbone of 142 00:08:34,400 --> 00:08:38,079 Speaker 1: our economy. So if if truckers have to pay and 143 00:08:38,160 --> 00:08:40,040 Speaker 1: the trucking companies have to pay a lot more for 144 00:08:40,160 --> 00:08:43,160 Speaker 1: the diesel, that means everything that we buy on the 145 00:08:43,200 --> 00:08:46,400 Speaker 1: supermarket is going to be more expensive because they're gonna 146 00:08:46,440 --> 00:08:48,719 Speaker 1: pass the cost increase. So we can see quite a 147 00:08:48,800 --> 00:08:54,000 Speaker 1: lot of inflation in you know, supermarkets, grocery shopping here 148 00:08:54,040 --> 00:08:58,560 Speaker 1: in Europe for sure. So happier um And for listeners 149 00:08:58,880 --> 00:09:01,760 Speaker 1: whenever you're listening to the we're actually speaking today. It's Wednesday, 150 00:09:02,360 --> 00:09:04,840 Speaker 1: March nine, and there was a big drop in oil 151 00:09:04,920 --> 00:09:08,439 Speaker 1: prices today. Part of the reason people are pointing to 152 00:09:08,960 --> 00:09:12,600 Speaker 1: is that there are some signals that some producers United 153 00:09:12,640 --> 00:09:17,280 Speaker 1: Arab Emirates and Iraq might uh you know, start producing 154 00:09:17,320 --> 00:09:19,079 Speaker 1: more to try to make up for some of the 155 00:09:19,200 --> 00:09:22,800 Speaker 1: lost Russian supply. How do you think about sort of 156 00:09:22,880 --> 00:09:26,640 Speaker 1: the whole geo politics of oil right now, the relationships 157 00:09:26,760 --> 00:09:30,360 Speaker 1: between Russia and the rest of the big expert in countries. 158 00:09:30,400 --> 00:09:34,400 Speaker 1: I mean, I get the impression that um, Russia has 159 00:09:34,440 --> 00:09:37,880 Speaker 1: a pretty significant influence on OPEC in general these days. 160 00:09:38,720 --> 00:09:42,280 Speaker 1: How do all the geo politics fit together as far 161 00:09:42,360 --> 00:09:45,120 Speaker 1: as whether we can expect some other countries to to 162 00:09:45,280 --> 00:09:49,400 Speaker 1: pick up the lost supply. Mike, You're absolutely right. And 163 00:09:49,480 --> 00:09:52,280 Speaker 1: this is what really gets very interesting from the mix 164 00:09:52,360 --> 00:09:56,439 Speaker 1: of politics and oil because for many years Rosa was 165 00:09:56,600 --> 00:10:00,319 Speaker 1: almost an enemy of OPEC. They didn't talk U Ussia 166 00:10:00,440 --> 00:10:04,080 Speaker 1: was completely independent um and they were at times fighting 167 00:10:04,160 --> 00:10:07,640 Speaker 1: the OPEC group and Russia will see the oil market 168 00:10:07,720 --> 00:10:12,200 Speaker 1: completely different. That changes about three years ago where Russia 169 00:10:12,320 --> 00:10:15,240 Speaker 1: and Saudi Arabia the site to work together in the 170 00:10:15,320 --> 00:10:17,480 Speaker 1: oil market, and that led to the creation of a 171 00:10:17,559 --> 00:10:20,840 Speaker 1: new group that we call OPEC Plass, and the Plass 172 00:10:21,040 --> 00:10:24,199 Speaker 1: is mostly Russia. There are other few countries, but the 173 00:10:24,320 --> 00:10:28,240 Speaker 1: Plass is Russia all the sudden, after fighting for so 174 00:10:28,360 --> 00:10:33,120 Speaker 1: many years, Read and Moscow were really working together in 175 00:10:33,200 --> 00:10:36,360 Speaker 1: the oil market. And now we have this tension because 176 00:10:37,160 --> 00:10:40,640 Speaker 1: in another situation, typically what the White House will have 177 00:10:40,760 --> 00:10:44,079 Speaker 1: done was go to Saudi Arabia and as the southeast 178 00:10:44,200 --> 00:10:47,400 Speaker 1: place can you increase production is a hundred and twenty 179 00:10:47,440 --> 00:10:50,040 Speaker 1: a hundred and thirty dollars a barrel, and the South 180 00:10:50,200 --> 00:10:53,439 Speaker 1: is most likely will have delivered because they are not 181 00:10:53,600 --> 00:10:57,120 Speaker 1: really interested. They are always the South is one high prices, 182 00:10:57,200 --> 00:11:00,160 Speaker 1: but they don't really want super high prices that get 183 00:11:00,160 --> 00:11:03,600 Speaker 1: a lot of inflation and potentially an economic recession. You're 184 00:11:03,640 --> 00:11:07,320 Speaker 1: selling oil. You really want a healthy economy, and these 185 00:11:07,360 --> 00:11:10,920 Speaker 1: prices are not good for a healthy economy. But now 186 00:11:11,000 --> 00:11:14,200 Speaker 1: it's different. The Saudist and the Russians are working together, 187 00:11:14,320 --> 00:11:17,680 Speaker 1: and the last thing I believe that Saudi Arabia once 188 00:11:17,800 --> 00:11:21,920 Speaker 1: is upset Bladimir Putin has been very interesting that through 189 00:11:22,000 --> 00:11:26,000 Speaker 1: this conflict, Bladimir Puttin has been talking to Muhammad bin Salman, 190 00:11:26,280 --> 00:11:28,800 Speaker 1: who is the Crown Prince of Saudi Arabia, and they 191 00:11:28,840 --> 00:11:32,199 Speaker 1: have been talking about energy and energy corporation. So I 192 00:11:32,280 --> 00:11:35,120 Speaker 1: think that OPEC may not come to the rescue this 193 00:11:35,280 --> 00:11:45,679 Speaker 1: time just because they're just working with the Russians. The 194 00:11:45,880 --> 00:11:49,719 Speaker 1: geopolitics of this, to me are incredibly interesting, and I 195 00:11:49,800 --> 00:11:52,640 Speaker 1: want to ask you to actually bring in two other players, 196 00:11:52,720 --> 00:11:58,120 Speaker 1: which is Venezuela and Iran, because there's talks potentially of 197 00:11:58,360 --> 00:12:02,319 Speaker 1: some of their oilso twice also coming online and potentially 198 00:12:02,360 --> 00:12:05,480 Speaker 1: helping to offset some of the squeeze that we're seeing. 199 00:12:06,160 --> 00:12:09,599 Speaker 1: And that is also the other hugely interesting side of 200 00:12:09,640 --> 00:12:14,760 Speaker 1: the geopolitics. We have sanciens on already two other countries, 201 00:12:14,800 --> 00:12:19,400 Speaker 1: as you mentioned, Iran and Venezuela. On Venezuela is mostly 202 00:12:19,520 --> 00:12:22,680 Speaker 1: lane to the oppression of the regime of Maduro against 203 00:12:22,720 --> 00:12:25,319 Speaker 1: the opposition. In the case of Iran is about the 204 00:12:25,400 --> 00:12:28,439 Speaker 1: nuclear program. So now the United States is working to 205 00:12:28,600 --> 00:12:31,040 Speaker 1: try to see if they can't reach some kind of 206 00:12:31,120 --> 00:12:36,320 Speaker 1: agreement with both countries that can resolve the outstanding political issues, 207 00:12:36,360 --> 00:12:39,640 Speaker 1: the national security issues, and then that will mean the 208 00:12:39,800 --> 00:12:42,400 Speaker 1: return of oil from both countries, and that could be 209 00:12:42,760 --> 00:12:46,520 Speaker 1: quite significant. Iran, there was a nuclear deal, probably can 210 00:12:46,600 --> 00:12:49,720 Speaker 1: put on the market between half a million and six 211 00:12:49,800 --> 00:12:53,400 Speaker 1: hundred thousand bars a day quite quickly, and then going 212 00:12:53,559 --> 00:12:56,280 Speaker 1: perhaps too about a million parars a day within one year. 213 00:12:56,800 --> 00:13:00,240 Speaker 1: Venezuela is less clear, but perhaps can put a few 214 00:13:00,360 --> 00:13:03,480 Speaker 1: hundred thousand extra, a few hundred thousand powers of the 215 00:13:03,679 --> 00:13:06,360 Speaker 1: extra into the market. But when you are in a 216 00:13:06,520 --> 00:13:09,000 Speaker 1: very tight situation and I'm fearing that you may lose 217 00:13:09,200 --> 00:13:11,880 Speaker 1: quite a lot of supply from from Russia, that will 218 00:13:11,920 --> 00:13:15,880 Speaker 1: be extremely helpful. But it gets very complicated for the 219 00:13:15,960 --> 00:13:19,640 Speaker 1: White House because now both Venezuela and Iran knows that 220 00:13:19,720 --> 00:13:23,280 Speaker 1: the United States really want to reach a deal. So 221 00:13:23,440 --> 00:13:26,880 Speaker 1: you don't have in a negotiation table the last thing 222 00:13:26,960 --> 00:13:28,880 Speaker 1: that you want on the other side of the table 223 00:13:29,000 --> 00:13:31,160 Speaker 1: is that the other that you know, they know that 224 00:13:31,280 --> 00:13:33,760 Speaker 1: you are in a bit of a weak position. So 225 00:13:34,120 --> 00:13:37,040 Speaker 1: it just getting extremely interesting to observe. And that's the 226 00:13:37,080 --> 00:13:39,400 Speaker 1: other thing that the oil market is looking. So it's 227 00:13:39,520 --> 00:13:45,079 Speaker 1: this massive kind of four dimensional geopolitical chess on oil 228 00:13:45,200 --> 00:13:50,600 Speaker 1: with Vasia, the Southeast Iran, Venezuela, and the White House 229 00:13:51,200 --> 00:13:54,520 Speaker 1: right and then here in the US Saviera. Obviously domestically, 230 00:13:54,960 --> 00:13:58,280 Speaker 1: it's a huge political football, as we say, um, I 231 00:13:58,320 --> 00:14:01,720 Speaker 1: remember a few years ago when oil prices were crashing, 232 00:14:01,760 --> 00:14:03,679 Speaker 1: there was a lot of talk about, well, what is 233 00:14:03,679 --> 00:14:06,400 Speaker 1: sort of the break even uh price for oil? To 234 00:14:06,520 --> 00:14:09,480 Speaker 1: make a lot of the fracking projects in the US 235 00:14:09,559 --> 00:14:12,319 Speaker 1: economically viable, I have to assume at over a hundred 236 00:14:12,320 --> 00:14:16,520 Speaker 1: dollar barrel. Basically every project in the US is viable now. 237 00:14:17,200 --> 00:14:19,360 Speaker 1: But there is a lot of debate about whether you know, 238 00:14:19,800 --> 00:14:24,120 Speaker 1: U Republicans claiming Biden is holding back production and the 239 00:14:24,160 --> 00:14:28,360 Speaker 1: White House pushing back saying, well, there's nine thousand approved 240 00:14:28,880 --> 00:14:31,200 Speaker 1: licenses that aren't being used. How do you see that 241 00:14:31,240 --> 00:14:33,520 Speaker 1: all playing out? I mean, has the US shale industry 242 00:14:33,760 --> 00:14:36,880 Speaker 1: sort of been you know, bitten once by by oversupply 243 00:14:37,040 --> 00:14:39,560 Speaker 1: and and and we'll be a little reluctant to to 244 00:14:39,880 --> 00:14:43,240 Speaker 1: turn on the spickets too much this time. Where is 245 00:14:43,280 --> 00:14:46,160 Speaker 1: this price is so high that it'll it'll be full 246 00:14:46,160 --> 00:14:49,400 Speaker 1: steam ahead with all the US projects. Mike. The price 247 00:14:49,520 --> 00:14:51,200 Speaker 1: is so high that I think that you could go 248 00:14:51,520 --> 00:14:54,120 Speaker 1: and drilling your back job and you can find oil. 249 00:14:55,480 --> 00:15:00,120 Speaker 1: It will be profitable. I mean, it's a d LD 250 00:15:00,160 --> 00:15:02,520 Speaker 1: as a barrel. It is more than an offer almost 251 00:15:02,560 --> 00:15:05,360 Speaker 1: every project to make money. But the problem is the 252 00:15:05,440 --> 00:15:07,520 Speaker 1: sailing industry in the US have gone through a really 253 00:15:07,600 --> 00:15:10,080 Speaker 1: tough time. The last couple of years have been difficult 254 00:15:10,920 --> 00:15:14,000 Speaker 1: investors and unhappy. They are focusing on returns. They don't 255 00:15:14,040 --> 00:15:17,960 Speaker 1: want companies to grow production because they think that they 256 00:15:18,000 --> 00:15:21,200 Speaker 1: will float the market and trigger another price collapse. And 257 00:15:21,280 --> 00:15:24,280 Speaker 1: they really want to focus on pay down there and 258 00:15:24,400 --> 00:15:27,880 Speaker 1: deliver big dividends to US buy backs, dividends. That's the 259 00:15:27,960 --> 00:15:31,160 Speaker 1: game in town. And that means that executives on the 260 00:15:31,440 --> 00:15:33,960 Speaker 1: on the U s sail industry are very reluctant to 261 00:15:34,000 --> 00:15:37,800 Speaker 1: increase production very fast. And then the whole industry fields 262 00:15:38,000 --> 00:15:41,680 Speaker 1: under attack by the White House, the Energy Transition, the 263 00:15:41,800 --> 00:15:45,000 Speaker 1: signaling from the Biden administration of the future that is 264 00:15:45,000 --> 00:15:48,640 Speaker 1: going to be fossil fuel, more focused on solar renewables, 265 00:15:49,320 --> 00:15:53,080 Speaker 1: electric vehicles, and they kind of feel that they are 266 00:15:53,120 --> 00:15:56,360 Speaker 1: not to make any favors to the administration. So you 267 00:15:56,480 --> 00:16:00,040 Speaker 1: have this tension going on right now, and I I 268 00:16:00,200 --> 00:16:03,680 Speaker 1: think that both sides will find a compromise. Prices are 269 00:16:03,800 --> 00:16:07,800 Speaker 1: high enough for anyone in the US industry to may money, 270 00:16:08,400 --> 00:16:11,160 Speaker 1: and I think that the administration, the Biden administration, some 271 00:16:11,320 --> 00:16:14,080 Speaker 1: point is going to realize that it has a big 272 00:16:14,160 --> 00:16:18,160 Speaker 1: asset at home that a provide security can produce oil, 273 00:16:18,560 --> 00:16:20,120 Speaker 1: and it will find a way used to kind of 274 00:16:20,200 --> 00:16:24,040 Speaker 1: work together with with the industry. I'm really curious if 275 00:16:24,120 --> 00:16:26,200 Speaker 1: maybe you can give us a time frame of how 276 00:16:26,320 --> 00:16:31,440 Speaker 1: quickly US supplies could come online. I'm you know, we 277 00:16:31,600 --> 00:16:34,320 Speaker 1: hear and read all of these different stories, but what 278 00:16:34,440 --> 00:16:37,120 Speaker 1: I'm uncertain of is how quickly any of this can 279 00:16:37,240 --> 00:16:41,480 Speaker 1: actually come online. Even with the case for Iran or Venezuela, 280 00:16:41,480 --> 00:16:44,720 Speaker 1: I'm hearing months or even you know later, way down 281 00:16:44,920 --> 00:16:48,080 Speaker 1: later this year. So what do the timeframes actually look like. 282 00:16:48,880 --> 00:16:51,480 Speaker 1: So in the case of it Ran in Venezuela, very 283 00:16:51,560 --> 00:16:54,360 Speaker 1: much depends. You need a political agreement with those countries 284 00:16:54,400 --> 00:16:56,720 Speaker 1: and it just we don't know when when that was 285 00:16:56,760 --> 00:17:00,320 Speaker 1: gonna be achieved. We we previously thought that there was 286 00:17:00,400 --> 00:17:03,920 Speaker 1: a firm deadline, a red line of last week for 287 00:17:04,040 --> 00:17:07,800 Speaker 1: our Iranian deal. That that that that ended, and we 288 00:17:08,080 --> 00:17:12,240 Speaker 1: we still are observing the conversations and the negotiations continuing, 289 00:17:12,359 --> 00:17:14,680 Speaker 1: so we don't really know when that's gonna happen. And 290 00:17:14,800 --> 00:17:16,520 Speaker 1: if there is a deal, it's gonna take probably a 291 00:17:16,600 --> 00:17:19,280 Speaker 1: couple of months before any extra oil could come from 292 00:17:19,400 --> 00:17:23,399 Speaker 1: from Iran. Venezuela is even more complicated. The conversations have 293 00:17:23,600 --> 00:17:25,960 Speaker 1: used started, and I don't think that we're about to 294 00:17:26,040 --> 00:17:29,440 Speaker 1: see a production increase in Venezuela also a country that 295 00:17:29,640 --> 00:17:32,480 Speaker 1: first of all will need to make investments on his 296 00:17:32,640 --> 00:17:36,680 Speaker 1: industry to growth. And then in the US, the shale industry. 297 00:17:36,760 --> 00:17:41,760 Speaker 1: We call shale in in oil short cycle because it 298 00:17:41,960 --> 00:17:46,760 Speaker 1: can really go faster than the traditional big, big projects 299 00:17:46,800 --> 00:17:49,400 Speaker 1: of big oil, which used to take five or six 300 00:17:49,560 --> 00:17:53,280 Speaker 1: years from finding the oil to to kind of starting production. 301 00:17:53,720 --> 00:17:57,359 Speaker 1: But short in oil means actually several months, it's not 302 00:17:57,680 --> 00:18:00,040 Speaker 1: a few days, and it's a bit more complete. It 303 00:18:00,280 --> 00:18:03,080 Speaker 1: that use, you know, the flick of a switch. It used. 304 00:18:03,359 --> 00:18:06,560 Speaker 1: The company's needs to drill, they need to find them workers, 305 00:18:07,000 --> 00:18:09,760 Speaker 1: and it's not very different to the rest of the 306 00:18:09,920 --> 00:18:13,920 Speaker 1: American economy. Workers are in sort of supply. They move 307 00:18:14,040 --> 00:18:17,320 Speaker 1: away from sail, they went somewhere else to work. Um, 308 00:18:18,000 --> 00:18:20,600 Speaker 1: they're making more money that they were making back, you know, 309 00:18:20,960 --> 00:18:23,080 Speaker 1: when they were working in Texas, so they don't really 310 00:18:23,119 --> 00:18:26,040 Speaker 1: want to go back. And in general, the industry is 311 00:18:26,119 --> 00:18:28,879 Speaker 1: finding that they have a lot of supply chains that 312 00:18:29,320 --> 00:18:32,000 Speaker 1: is affecting other parts of the economy and they're also 313 00:18:32,080 --> 00:18:35,640 Speaker 1: suffering them. So what executives are telling me is, look, 314 00:18:36,560 --> 00:18:39,640 Speaker 1: it's a hundred dollars pluss. Oil will drill more. We'll 315 00:18:39,680 --> 00:18:42,680 Speaker 1: try to increase production, but don't expect that tomorrow we're 316 00:18:42,720 --> 00:18:45,080 Speaker 1: gonna be pumping more than expect even next month or 317 00:18:45,160 --> 00:18:47,480 Speaker 1: on a couple of months from now. I think that 318 00:18:47,600 --> 00:18:50,160 Speaker 1: most people think that the first that we can see 319 00:18:50,280 --> 00:18:53,760 Speaker 1: a reaction from the U sil industry in terms of 320 00:18:53,920 --> 00:18:59,920 Speaker 1: extra barrels is probably around late summer. Right. I want 321 00:18:59,920 --> 00:19:05,080 Speaker 1: to ask you about the pipelines from Russia to Europe. Um. Obviously, 322 00:19:05,160 --> 00:19:08,040 Speaker 1: the nord Stream to project was canceled as a result 323 00:19:08,080 --> 00:19:10,360 Speaker 1: of the invasion, but if you look at a map 324 00:19:10,400 --> 00:19:13,439 Speaker 1: of Ukraine, there are a bunch of pipelines going right 325 00:19:13,520 --> 00:19:16,240 Speaker 1: through headed to Europe, and I can't help but worry, 326 00:19:17,119 --> 00:19:20,680 Speaker 1: UM if somehow they're disrupted, either a bomb hits one, 327 00:19:21,200 --> 00:19:24,520 Speaker 1: or the electricity is taken out, or the the people 328 00:19:24,560 --> 00:19:26,800 Speaker 1: who maintain them, you know, I know it's typically not 329 00:19:26,920 --> 00:19:28,879 Speaker 1: a huge staff needed to maintain one of them, but 330 00:19:28,960 --> 00:19:31,359 Speaker 1: you do need people to to keep the gas flowing. 331 00:19:31,800 --> 00:19:36,000 Speaker 1: How big of a risk are these pipelines to um 332 00:19:36,240 --> 00:19:39,440 Speaker 1: some sort of disruption because of the war? UM? And 333 00:19:40,040 --> 00:19:41,480 Speaker 1: I would I would tend to think that would be 334 00:19:41,520 --> 00:19:44,440 Speaker 1: a major crisis situation if for Europe, if something like 335 00:19:44,560 --> 00:19:46,720 Speaker 1: that were to disrupt that supply. What how are you 336 00:19:46,760 --> 00:19:49,760 Speaker 1: thinking about that? Well, we're keeping a very close high 337 00:19:49,800 --> 00:19:53,280 Speaker 1: on those four pipelines, is the main concern of the market. 338 00:19:53,359 --> 00:19:56,719 Speaker 1: Are exactly four pipelines. One is for oil we call 339 00:19:56,760 --> 00:20:00,920 Speaker 1: it Druzba, and three are for natural gas called Surd, Youth, 340 00:20:01,080 --> 00:20:05,280 Speaker 1: Progress and Brotherhood, and everyone is looking at them. There 341 00:20:05,320 --> 00:20:10,960 Speaker 1: are UM stations on the border between Ukraine and Western Europe, 342 00:20:11,080 --> 00:20:14,200 Speaker 1: so we can monitor the flows almost on real time 343 00:20:14,280 --> 00:20:17,480 Speaker 1: on the Bloomberg terminal, and I have monitors all the 344 00:20:17,600 --> 00:20:22,520 Speaker 1: time to try to see the flows there, and surprisingly 345 00:20:22,720 --> 00:20:25,560 Speaker 1: nothing has happened. I mean, we're talking about oil and 346 00:20:25,680 --> 00:20:28,080 Speaker 1: natural guys, that's two things that don't go well with 347 00:20:28,240 --> 00:20:32,160 Speaker 1: bombs and missiles and so on. And two weeks into 348 00:20:32,240 --> 00:20:37,120 Speaker 1: the war nothing has happened to them. Incredibly more gases 349 00:20:37,160 --> 00:20:40,880 Speaker 1: flowing through Ukraine today into Europe that there was flowing 350 00:20:40,960 --> 00:20:44,560 Speaker 1: two weeks ago before before the war started. But if 351 00:20:44,640 --> 00:20:47,320 Speaker 1: anything were to happen to those pipelines, it will be 352 00:20:47,680 --> 00:20:52,280 Speaker 1: really really bad. DRUSBA on oil prices will go high 353 00:20:52,800 --> 00:20:55,920 Speaker 1: and it would be complicated because sound refineries they don't 354 00:20:55,960 --> 00:20:59,399 Speaker 1: have much option to that pipeline. If we stuffered a 355 00:20:59,480 --> 00:21:02,680 Speaker 1: problem on any of the three natural gas pipelines, or 356 00:21:03,040 --> 00:21:06,240 Speaker 1: god forbid on the three at the same time, it's 357 00:21:06,280 --> 00:21:09,280 Speaker 1: almost game over for natural gas supply in Europe. That 358 00:21:09,359 --> 00:21:12,280 Speaker 1: will be really difficult. I mean, we can do it, 359 00:21:12,920 --> 00:21:15,800 Speaker 1: but it would be difficult and super expensive. Natural gas 360 00:21:15,880 --> 00:21:19,000 Speaker 1: prices will just fly and it will they will go 361 00:21:19,320 --> 00:21:23,000 Speaker 1: high and off that today's super high prices will look like, 362 00:21:23,400 --> 00:21:27,200 Speaker 1: oh gosh, do you remember when prices were low like that? 363 00:21:27,359 --> 00:21:30,040 Speaker 1: That's the kind of I mean, everyone is super nervous 364 00:21:30,080 --> 00:21:33,000 Speaker 1: about it, and is that there even enough US energy 365 00:21:33,200 --> 00:21:37,119 Speaker 1: to sort of get there in time? No, you, you 366 00:21:37,200 --> 00:21:39,720 Speaker 1: will not be able to to to to supply with 367 00:21:39,920 --> 00:21:42,359 Speaker 1: with allengy. You we will have to adjust that the 368 00:21:42,440 --> 00:21:45,760 Speaker 1: hard way. Super high prices. Everyone in Europe trying to 369 00:21:45,800 --> 00:21:51,440 Speaker 1: reduce consumption and the industry, the manufacturing industry, energy intensive companies. 370 00:21:51,480 --> 00:21:57,320 Speaker 1: Would you simply shut down? That's a scary prospect. I 371 00:21:57,440 --> 00:21:59,480 Speaker 1: wanted to ask you if you can maybe talk about 372 00:21:59,560 --> 00:22:02,879 Speaker 1: the con sumer aspect here, because we've heard some service 373 00:22:03,000 --> 00:22:05,760 Speaker 1: in the US and also in Europe of consumers saying 374 00:22:05,760 --> 00:22:09,479 Speaker 1: that they're willing to tolerate higher gas prices. But then 375 00:22:09,520 --> 00:22:11,760 Speaker 1: I'm wondering what you think happens when when we do 376 00:22:11,880 --> 00:22:14,560 Speaker 1: actually start to see higher and higher gas prices at 377 00:22:14,560 --> 00:22:16,200 Speaker 1: the pump, and how that plays into all of this. 378 00:22:17,000 --> 00:22:22,639 Speaker 1: I think that consumers generally understand that facing Bladimir Putin 379 00:22:22,880 --> 00:22:25,200 Speaker 1: is going to have an economic cause, and they understand 380 00:22:25,240 --> 00:22:28,840 Speaker 1: that is a big supplier of natural resources, particularly oil 381 00:22:28,920 --> 00:22:31,159 Speaker 1: and gas, so they are expecting that this is going 382 00:22:31,240 --> 00:22:34,439 Speaker 1: to have a cause. But we are in the early 383 00:22:34,600 --> 00:22:39,119 Speaker 1: days of the conflict, and the key question needs if 384 00:22:39,200 --> 00:22:42,440 Speaker 1: this continues and we are three months from now, six 385 00:22:42,560 --> 00:22:45,240 Speaker 1: months from now, and you know, let's hope that doesn't 386 00:22:45,320 --> 00:22:48,280 Speaker 1: happen because the human cause in Ukraine would be massive. 387 00:22:48,800 --> 00:22:51,440 Speaker 1: But if that continues for a long time, I don't 388 00:22:51,480 --> 00:22:54,560 Speaker 1: know if the public is going to be as accepting 389 00:22:54,840 --> 00:22:56,800 Speaker 1: as it is now At the moment, I think that 390 00:22:57,040 --> 00:23:01,720 Speaker 1: there is acute sense of acceptance that this is a 391 00:23:01,880 --> 00:23:04,919 Speaker 1: price that they're willing to pay. It depends also how 392 00:23:05,040 --> 00:23:07,320 Speaker 1: high prices go. One thing is that the oil price 393 00:23:07,440 --> 00:23:10,399 Speaker 1: goes to a hundred and twenty dollars a barrel. Another 394 00:23:10,520 --> 00:23:12,360 Speaker 1: thing is that goes to a hundred and seventy five 395 00:23:12,480 --> 00:23:15,280 Speaker 1: or two hundred dollars a barrel um. So that is 396 00:23:15,680 --> 00:23:18,480 Speaker 1: and then political leaders are going to have to do 397 00:23:18,600 --> 00:23:20,959 Speaker 1: a bit of education. They're going to have to address 398 00:23:21,080 --> 00:23:24,040 Speaker 1: the nation and and tell them what is going to 399 00:23:24,119 --> 00:23:27,320 Speaker 1: happen and why we are paying higher prices for gas 400 00:23:27,480 --> 00:23:31,240 Speaker 1: and and and and utilities. That has started and we 401 00:23:31,320 --> 00:23:33,720 Speaker 1: saw President by Them doing a bit of that this 402 00:23:33,880 --> 00:23:37,879 Speaker 1: week when he announced the export the import band on 403 00:23:38,040 --> 00:23:42,080 Speaker 1: Russian oil. Has not really happened as much here in Europe. 404 00:23:42,359 --> 00:23:46,520 Speaker 1: Has perhaps happened in France, but not elsewhere. And the 405 00:23:46,680 --> 00:23:50,080 Speaker 1: other thing that is associated with that is that at 406 00:23:50,200 --> 00:23:54,560 Speaker 1: some point, particularly in Europe, political leaders may need to 407 00:23:54,680 --> 00:23:59,639 Speaker 1: ask people to conserve energy, lower your thermal state a 408 00:23:59,720 --> 00:24:02,560 Speaker 1: couple of the Greek celsius, so you're consuming a bit 409 00:24:02,680 --> 00:24:07,159 Speaker 1: less natural guys. Perhaps making public transportation free on the 410 00:24:07,280 --> 00:24:10,400 Speaker 1: weekends so people leave their car at home and take 411 00:24:10,600 --> 00:24:14,320 Speaker 1: the bus or the underground. There are things that we did, Mike, 412 00:24:14,400 --> 00:24:16,760 Speaker 1: you you may remember this. We did this in the seventies. 413 00:24:17,240 --> 00:24:19,800 Speaker 1: Uh in some European countries you could not drive on 414 00:24:19,880 --> 00:24:23,520 Speaker 1: a Sunday because there was not enough gasoline. So they 415 00:24:23,520 --> 00:24:26,040 Speaker 1: are measures that we may need to take. But I 416 00:24:26,480 --> 00:24:29,480 Speaker 1: think that if it gets to that situation is when 417 00:24:30,160 --> 00:24:33,919 Speaker 1: it's just gonna be complicated for many politicians. And when 418 00:24:33,960 --> 00:24:36,680 Speaker 1: I have been speaking to some leaders over the last 419 00:24:36,720 --> 00:24:38,879 Speaker 1: few days, I can't tell you one thing that it 420 00:24:38,960 --> 00:24:42,960 Speaker 1: comes on every conversation. No one wants to deliver the 421 00:24:43,200 --> 00:24:47,320 Speaker 1: famous speech of Jimmy Carter with his cardigan, just basically 422 00:24:47,400 --> 00:24:49,960 Speaker 1: talking about energy sortages. They think that they have to 423 00:24:50,040 --> 00:24:53,760 Speaker 1: do that they lose the next election, so they're very 424 00:24:53,840 --> 00:24:56,680 Speaker 1: aware that it's not gonna be easy, right right. I 425 00:24:56,800 --> 00:24:59,000 Speaker 1: think the I feel like the notion of car pulling 426 00:24:59,119 --> 00:25:00,800 Speaker 1: was invented in the of these year and all that 427 00:25:00,960 --> 00:25:03,679 Speaker 1: and Vildanna. We had those giant station wagons. Back then 428 00:25:04,119 --> 00:25:06,440 Speaker 1: you can fit about the whole baseball team into the 429 00:25:06,480 --> 00:25:08,040 Speaker 1: back of one of those to get to UH, to 430 00:25:08,160 --> 00:25:11,159 Speaker 1: get to practice. So, UM, you know that there's always 431 00:25:11,200 --> 00:25:14,560 Speaker 1: something to some adjustments to be made. Have you you know? 432 00:25:14,600 --> 00:25:17,760 Speaker 1: I was looking at the oil futures curve, and for 433 00:25:17,920 --> 00:25:20,920 Speaker 1: listeners who are are not familiar with its typical shape, 434 00:25:20,920 --> 00:25:24,800 Speaker 1: it's typically what's known as backwardation, which means that UH 435 00:25:25,080 --> 00:25:28,600 Speaker 1: oil for immediate delivery or the next couple of months 436 00:25:28,800 --> 00:25:32,399 Speaker 1: is typically priced higher than for deliveries say a year 437 00:25:32,480 --> 00:25:35,400 Speaker 1: or two from now. Have your What really caught my eye, though, 438 00:25:35,480 --> 00:25:37,840 Speaker 1: is I I looked at the curve and then compared 439 00:25:37,880 --> 00:25:41,320 Speaker 1: it to where it was a month ago, and the 440 00:25:41,400 --> 00:25:44,720 Speaker 1: backwardation is obviously extreme now that the very near term 441 00:25:44,800 --> 00:25:47,760 Speaker 1: prices are way higher than say, later in the year, 442 00:25:47,920 --> 00:25:50,879 Speaker 1: next year. Well, what fascinated to me is looking all 443 00:25:50,920 --> 00:25:56,720 Speaker 1: the way out to UM, they're about I think it 444 00:25:56,800 --> 00:25:58,959 Speaker 1: was eighteen or nineteen dollars a barrel higher than they 445 00:25:59,000 --> 00:26:01,040 Speaker 1: were a month ago for for that far out in 446 00:26:01,119 --> 00:26:04,200 Speaker 1: the curve. Now, markets don't always get it right, but 447 00:26:04,640 --> 00:26:07,719 Speaker 1: it feels to me like, you know, traders are pressing 448 00:26:07,760 --> 00:26:11,760 Speaker 1: in sort of a permanent shift higher um at least 449 00:26:12,040 --> 00:26:15,280 Speaker 1: out six seven years. I mean, is that reasonable or 450 00:26:15,560 --> 00:26:17,119 Speaker 1: do you think the markets have it right about that 451 00:26:17,960 --> 00:26:20,560 Speaker 1: to that extent? Where is this sort of just such 452 00:26:20,600 --> 00:26:24,480 Speaker 1: an uncertain market that um, you know, you can't necessarily 453 00:26:24,560 --> 00:26:27,560 Speaker 1: take the market signals for um, you know, being the 454 00:26:27,640 --> 00:26:30,320 Speaker 1: best protector of the future. I think that we need 455 00:26:30,359 --> 00:26:34,159 Speaker 1: to wait a bit and see how things start to stabilize. 456 00:26:34,160 --> 00:26:36,080 Speaker 1: I mean, the market has moved a lot in in 457 00:26:36,240 --> 00:26:39,119 Speaker 1: really a matter of four or five days, and the 458 00:26:39,200 --> 00:26:41,440 Speaker 1: back end of the curve, as you you're told it 459 00:26:41,520 --> 00:26:44,240 Speaker 1: has also moved a lot, and it's not very yet 460 00:26:44,359 --> 00:26:46,879 Speaker 1: clear why he is moving that. I mean, one of 461 00:26:46,920 --> 00:26:50,119 Speaker 1: the reasons is that some consumers of oil, and I'm 462 00:26:50,200 --> 00:26:53,159 Speaker 1: talking about big companies have started to panic and they 463 00:26:53,200 --> 00:26:55,440 Speaker 1: have not covert, they have not hedged, they have not 464 00:26:55,560 --> 00:26:59,200 Speaker 1: both insurance for future delivery, and they're beginning to try 465 00:26:59,280 --> 00:27:02,200 Speaker 1: to say, hold on one second, we really need to 466 00:27:02,720 --> 00:27:04,720 Speaker 1: to have a bit of more insurance. And I'm talking 467 00:27:04,760 --> 00:27:09,160 Speaker 1: about airlines, tracking companies and and unsimilar and that has 468 00:27:09,240 --> 00:27:11,280 Speaker 1: really triggered this increase on the back end of the 469 00:27:11,320 --> 00:27:14,120 Speaker 1: cure because that's where this company is usually by their 470 00:27:14,240 --> 00:27:16,480 Speaker 1: their insurance, So that's one of the elements that it 471 00:27:16,600 --> 00:27:18,879 Speaker 1: triggered that movement. But I think it's a bit too 472 00:27:18,960 --> 00:27:22,520 Speaker 1: early to say we have seen an structural shape in 473 00:27:23,240 --> 00:27:27,560 Speaker 1: oil prices to the outside. But certainly, as I said, 474 00:27:27,600 --> 00:27:32,120 Speaker 1: at the beginning, even before the war started, the market 475 00:27:32,280 --> 00:27:35,639 Speaker 1: was feeling really tied and it was really a sense 476 00:27:35,800 --> 00:27:41,600 Speaker 1: that prices needed to move higher just from the demand side, didn't. Yeah, 477 00:27:41,760 --> 00:27:44,600 Speaker 1: mostly for the demand side. I mean, the demand recovery 478 00:27:44,680 --> 00:27:48,080 Speaker 1: has been remarkable. I mean only a few months ago 479 00:27:48,200 --> 00:27:50,919 Speaker 1: we were talking about peak oil demand and we all 480 00:27:51,000 --> 00:27:52,920 Speaker 1: were gonna be working from home that was going to 481 00:27:53,080 --> 00:27:56,920 Speaker 1: reduce permanently the consumption of gasoline and diesel. And where 482 00:27:57,000 --> 00:27:59,920 Speaker 1: we have found is that actually some of the chain 483 00:28:00,119 --> 00:28:03,359 Speaker 1: just on the economic structure that they came from, COVID 484 00:28:03,920 --> 00:28:07,440 Speaker 1: maybe more energy intensive. We are using a lot more 485 00:28:08,080 --> 00:28:11,560 Speaker 1: deliveries at home rather than going ourselves shopping, and actually 486 00:28:11,680 --> 00:28:14,840 Speaker 1: that it really increased the amount of castl in that 487 00:28:15,000 --> 00:28:16,480 Speaker 1: that you need to do. I mean, you are getting 488 00:28:16,520 --> 00:28:19,040 Speaker 1: the band of the track to your door with whatever 489 00:28:19,119 --> 00:28:21,959 Speaker 1: you're buying. I'm kind of embarrassed myself of the amount 490 00:28:22,040 --> 00:28:24,679 Speaker 1: of deliveries that I get every day at home. I mean, 491 00:28:24,880 --> 00:28:27,200 Speaker 1: you know, we really need to stop going online and 492 00:28:27,280 --> 00:28:32,080 Speaker 1: shopping and and and that really may have really lifted 493 00:28:32,160 --> 00:28:35,320 Speaker 1: oil demand higher on a partmanent basis, right, And and 494 00:28:35,359 --> 00:28:37,400 Speaker 1: then the efficiencies aren't there. You know, you can get 495 00:28:37,440 --> 00:28:40,280 Speaker 1: three different trucks from Amazon on any given day rather 496 00:28:40,360 --> 00:28:44,400 Speaker 1: than one one delivery exactly. And there are other things like, 497 00:28:44,680 --> 00:28:48,680 Speaker 1: for example, at the moment, I give you my personal anecdote. 498 00:28:48,720 --> 00:28:51,520 Speaker 1: At the moment, I'm working three days a week into 499 00:28:51,560 --> 00:28:54,440 Speaker 1: the newsroom and usually works a couple of days at home. 500 00:28:55,040 --> 00:28:58,560 Speaker 1: So what happened. The news room is permanently open, so 501 00:28:58,640 --> 00:29:01,440 Speaker 1: it means that it's heated, but I'm also hitting at 502 00:29:01,480 --> 00:29:04,840 Speaker 1: home for a couple of days, So we are consuming 503 00:29:04,880 --> 00:29:08,440 Speaker 1: more natural gas for hitting that previously. That's in the 504 00:29:08,520 --> 00:29:12,000 Speaker 1: gas market. They call it double hitting. We had not 505 00:29:12,160 --> 00:29:15,360 Speaker 1: really thought about the impact, but when you multiply that 506 00:29:15,520 --> 00:29:19,160 Speaker 1: impact for twenty five million households in the United Kingdom, 507 00:29:19,600 --> 00:29:23,000 Speaker 1: that really matters. So what we thought that probably was 508 00:29:23,320 --> 00:29:27,120 Speaker 1: a permanent drop in oil demand actually is resulting on 509 00:29:27,360 --> 00:29:31,080 Speaker 1: much higher, very strong oil demand. And also a lot 510 00:29:31,160 --> 00:29:35,600 Speaker 1: of people don't feel yet completely safe using public transportation, 511 00:29:36,120 --> 00:29:39,240 Speaker 1: so rather than pick up a plane to fly somewhere 512 00:29:39,280 --> 00:29:41,880 Speaker 1: a couple of hours. They will rather do this very 513 00:29:41,960 --> 00:29:45,000 Speaker 1: long or a long at least loan laundree for my 514 00:29:45,080 --> 00:29:49,320 Speaker 1: European standards, and then just drive and all the sudden 515 00:29:49,400 --> 00:29:53,760 Speaker 1: you have more gasoline consumption. Another big story this week 516 00:29:54,080 --> 00:29:56,480 Speaker 1: was that the you said it was going to look 517 00:29:56,640 --> 00:29:59,720 Speaker 1: to cut about I think it was of its gas 518 00:29:59,840 --> 00:30:01,880 Speaker 1: and words from Russia. I want to ask you how 519 00:30:01,960 --> 00:30:07,560 Speaker 1: realistic that is and how it would actually look in reality. Well, 520 00:30:07,960 --> 00:30:10,120 Speaker 1: as all of these targets, I think that there is 521 00:30:10,160 --> 00:30:13,720 Speaker 1: a lot of ambition that you set a very high target, 522 00:30:14,120 --> 00:30:15,960 Speaker 1: so you hope for the best, and then you you 523 00:30:16,200 --> 00:30:18,720 Speaker 1: kind of settled for something a bit lower. And I 524 00:30:18,800 --> 00:30:21,840 Speaker 1: think that the European Commission put a very embasical target 525 00:30:22,000 --> 00:30:24,000 Speaker 1: and I don't think that they're expecting to have to 526 00:30:24,120 --> 00:30:27,200 Speaker 1: hit it. But in a way, it very much depends 527 00:30:27,240 --> 00:30:29,720 Speaker 1: on what happened. I mean, perhaps Europe that doesn't have 528 00:30:29,800 --> 00:30:33,120 Speaker 1: the option. If Russia shuts down the natural gas flow, 529 00:30:33,600 --> 00:30:36,000 Speaker 1: well we will have to learn to live with no 530 00:30:36,680 --> 00:30:40,160 Speaker 1: gas from Russia whatsoever. If those pipelines that we were 531 00:30:40,200 --> 00:30:43,200 Speaker 1: discussing earlier just get blown up, it is more or 532 00:30:43,240 --> 00:30:47,400 Speaker 1: less the same thing. So it's possible to achieve, but 533 00:30:47,800 --> 00:30:50,720 Speaker 1: it's gonna be extremely difficult and it will mean much 534 00:30:50,840 --> 00:30:55,000 Speaker 1: higher prices for a longer period of time. I mean, 535 00:30:55,120 --> 00:30:57,720 Speaker 1: Europe at the moment, bias is still between thirty five 536 00:30:57,800 --> 00:31:02,000 Speaker 1: and forty of the gas. There is not enough llergy 537 00:31:02,480 --> 00:31:05,480 Speaker 1: facilities around the world to kind of fill that gap 538 00:31:05,920 --> 00:31:10,440 Speaker 1: without living current consumers of energy short of supply, so 539 00:31:11,680 --> 00:31:15,960 Speaker 1: very and busiess target probably unrealistic, but it kind of 540 00:31:16,080 --> 00:31:20,120 Speaker 1: signals the commitment of Europe to try to resolve the problem. 541 00:31:20,160 --> 00:31:22,400 Speaker 1: And I think that this is one of the biggest 542 00:31:22,520 --> 00:31:26,280 Speaker 1: changes that we may see long term on GUS. I 543 00:31:26,400 --> 00:31:30,200 Speaker 1: don't think that whatever happens with Ukraine, even if you 544 00:31:30,280 --> 00:31:34,320 Speaker 1: know a settlement was achieved next week, I don't think 545 00:31:34,360 --> 00:31:37,880 Speaker 1: that Europe will free ever comfortable relying of natural gas 546 00:31:37,960 --> 00:31:40,360 Speaker 1: from Brazia as you did in the past. That is 547 00:31:40,440 --> 00:32:00,000 Speaker 1: just that has changed forever. Well along that line of things. 548 00:32:00,080 --> 00:32:03,280 Speaker 1: King about the longer term, um, I'm curious what you 549 00:32:03,360 --> 00:32:07,760 Speaker 1: think about the prospects for nuclear power because, uh, you know, 550 00:32:07,920 --> 00:32:11,200 Speaker 1: on one hand, you have this situation that sort of 551 00:32:11,320 --> 00:32:15,720 Speaker 1: argues in favor of you know, building more plants at home, 552 00:32:15,880 --> 00:32:19,560 Speaker 1: being more self sufficient for electricity generation. With with nuclear 553 00:32:20,040 --> 00:32:22,840 Speaker 1: On the other hand, you've got fighting around Chernobyl and 554 00:32:23,000 --> 00:32:25,959 Speaker 1: the power plant in the south, kind of reminding us 555 00:32:26,000 --> 00:32:28,680 Speaker 1: all of the dangers of it um and the risks 556 00:32:28,760 --> 00:32:31,320 Speaker 1: to it. How do you think that balances out and 557 00:32:31,560 --> 00:32:35,640 Speaker 1: shakes out in the future. Is is this whole situation, um, 558 00:32:36,200 --> 00:32:39,880 Speaker 1: good or bad for the prospects of nuclear power? So 559 00:32:40,040 --> 00:32:42,640 Speaker 1: this is the first time that actually there has been 560 00:32:42,680 --> 00:32:45,920 Speaker 1: at war on a country with nuclear power, with nuclear 561 00:32:45,960 --> 00:32:49,760 Speaker 1: power stations, which is you know, um, it's quite shocking. 562 00:32:50,080 --> 00:32:53,360 Speaker 1: And and again if I was saying that, you know, 563 00:32:53,480 --> 00:32:55,800 Speaker 1: pipeline is full of gas and oil, don't react well 564 00:32:55,920 --> 00:32:59,760 Speaker 1: with you know, bombs and missiles, nuclear plants, even words 565 00:33:00,320 --> 00:33:03,160 Speaker 1: uh and and and certainly is worrying a lot of 566 00:33:03,280 --> 00:33:06,320 Speaker 1: faults in the in the nuclear industry. What could happen 567 00:33:07,280 --> 00:33:09,360 Speaker 1: so far? I think the both sides are trying to 568 00:33:09,760 --> 00:33:11,840 Speaker 1: are aware of the dangers and no one wants to 569 00:33:11,920 --> 00:33:16,640 Speaker 1: have another chernovil Um. But you know, here in Western Europe, 570 00:33:17,440 --> 00:33:20,400 Speaker 1: I think that has just prompted a huge rethinking about 571 00:33:20,520 --> 00:33:24,280 Speaker 1: nuclear power. I don't think that countries that were more 572 00:33:24,360 --> 00:33:27,520 Speaker 1: or less against nuclear power are just about to start 573 00:33:27,600 --> 00:33:31,800 Speaker 1: building nuclear stations. But the nuclear power stations on those 574 00:33:31,840 --> 00:33:35,800 Speaker 1: countries that they were a target for decommissioning. I think 575 00:33:35,840 --> 00:33:37,920 Speaker 1: that those are gonna run for longer as long as 576 00:33:37,960 --> 00:33:40,760 Speaker 1: it's safe, and that as long as all the upgrades 577 00:33:40,840 --> 00:33:45,200 Speaker 1: can be I think that countries like Germany, Belgiun, Spain 578 00:33:45,720 --> 00:33:48,960 Speaker 1: are gonna run the nuclear power plants for longer. France 579 00:33:49,200 --> 00:33:51,800 Speaker 1: they said, for sure, it's gonna be building more nuclear 580 00:33:51,840 --> 00:33:55,200 Speaker 1: power plants, the same thing for the United Kingdom. All 581 00:33:55,320 --> 00:33:59,200 Speaker 1: the sudden, even the green parties in continental Europe, which 582 00:33:59,280 --> 00:34:05,080 Speaker 1: traditionally against nuclear power, as saying, well, this is not great, 583 00:34:05,520 --> 00:34:09,239 Speaker 1: but let's be realistic. We really need to reduce our 584 00:34:09,360 --> 00:34:15,040 Speaker 1: dependence on Russia, and we really need baseload electricity supply 585 00:34:15,440 --> 00:34:19,200 Speaker 1: and nuclear dost so for now we're going to need that. 586 00:34:20,840 --> 00:34:22,840 Speaker 1: And then just to hit on one more big topic 587 00:34:22,880 --> 00:34:25,640 Speaker 1: which we haven't brought up yet, which is cyber attacks. 588 00:34:26,239 --> 00:34:29,680 Speaker 1: And I'm wondering how the prospect of cyber attacks on 589 00:34:30,320 --> 00:34:32,719 Speaker 1: you know, any of these facilities, how are you thinking 590 00:34:32,719 --> 00:34:35,200 Speaker 1: about How should we all be thinking about it? This 591 00:34:35,360 --> 00:34:37,880 Speaker 1: has been a huge concern of the whole energy industry, 592 00:34:37,920 --> 00:34:42,200 Speaker 1: not uice, oil and gas, but utilities. Um in general, 593 00:34:42,360 --> 00:34:47,279 Speaker 1: utilities were very worried degreed electricity greed and for now 594 00:34:47,719 --> 00:34:51,960 Speaker 1: nothing has happened that we know, but nothing has happened 595 00:34:52,040 --> 00:34:55,800 Speaker 1: linked to Ukraine or Russia. Obviously, last year we have 596 00:34:55,960 --> 00:35:00,040 Speaker 1: an attack on Colonial which is this big pipe and 597 00:35:00,200 --> 00:35:03,239 Speaker 1: transporting gasoline, diesel and jet fuel all the way from 598 00:35:03,280 --> 00:35:06,440 Speaker 1: the US Gulf of Mexico area all the way up 599 00:35:06,520 --> 00:35:10,480 Speaker 1: to the New York area, and that was tracked to 600 00:35:10,760 --> 00:35:13,880 Speaker 1: hackers in Russia. So there was a lot of concern 601 00:35:14,040 --> 00:35:16,680 Speaker 1: that as Russia was invading Ukraine was going to see 602 00:35:16,680 --> 00:35:20,239 Speaker 1: a wave of cyber attacks across the European Union. We 603 00:35:20,360 --> 00:35:23,360 Speaker 1: have not seen that. The question is are we not 604 00:35:23,520 --> 00:35:27,880 Speaker 1: seeing that because Russian hackers are not launching the attacks 605 00:35:28,400 --> 00:35:32,520 Speaker 1: or because the companies have spent a really significant amount 606 00:35:32,560 --> 00:35:39,080 Speaker 1: of money really building defenses against cyber attacks, And probably 607 00:35:39,160 --> 00:35:43,239 Speaker 1: is a combination on both. But it remains a big 608 00:35:43,320 --> 00:35:46,239 Speaker 1: source of concern on everyone on the industry. And I 609 00:35:46,360 --> 00:35:50,160 Speaker 1: think that in particular areas like utilities and degree the 610 00:35:50,239 --> 00:35:54,600 Speaker 1: electricity degree almost is the main concern that they have heavier. 611 00:35:54,719 --> 00:35:57,680 Speaker 1: Plus we are so grateful to get your insights heavier. 612 00:35:57,840 --> 00:36:00,800 Speaker 1: The author of the world for sale any power and 613 00:36:00,920 --> 00:36:05,360 Speaker 1: the traders who barter the Earth's resources with Jack Farchie, 614 00:36:05,719 --> 00:36:09,239 Speaker 1: Have you are really insightful? Before we let you go, though, 615 00:36:09,480 --> 00:36:12,400 Speaker 1: we do have a trudition on this show where before 616 00:36:12,440 --> 00:36:15,520 Speaker 1: I let you go, we have to hear about the 617 00:36:15,640 --> 00:36:18,239 Speaker 1: craziest thing you saw in markets this week. I have 618 00:36:18,320 --> 00:36:20,719 Speaker 1: a suspicion what it is, but but tell us what's 619 00:36:20,760 --> 00:36:23,080 Speaker 1: the craziest thing you saw in markets this week? Well, 620 00:36:23,160 --> 00:36:26,320 Speaker 1: my I'm bringing you a treat because it's not the 621 00:36:26,520 --> 00:36:29,040 Speaker 1: craziest thing that I have seen in markets this week. 622 00:36:29,200 --> 00:36:31,400 Speaker 1: Is the craziest thing that I have seen in markets 623 00:36:31,680 --> 00:36:35,640 Speaker 1: on my whole journalistic life, which sadly already stands for 624 00:36:35,800 --> 00:36:39,279 Speaker 1: twenty four years. That was the price of nicol, and 625 00:36:39,480 --> 00:36:41,560 Speaker 1: nicole is this metal that you know. It used to 626 00:36:41,640 --> 00:36:44,320 Speaker 1: be a boring market and no one really pay a 627 00:36:44,400 --> 00:36:46,680 Speaker 1: lot of attention other than you know, journalist like me 628 00:36:46,880 --> 00:36:49,400 Speaker 1: and then the people on the nicol market. It used 629 00:36:49,440 --> 00:36:54,040 Speaker 1: to stainless steel. But now nicole has another big use 630 00:36:54,160 --> 00:36:57,759 Speaker 1: that these high efficiency batteries for the electric vehicles. I mean, 631 00:36:57,840 --> 00:37:00,759 Speaker 1: Tesla has a lot of nicol on free battery and 632 00:37:00,840 --> 00:37:04,759 Speaker 1: Elan Mans recently twitted that one of his main concerns 633 00:37:04,920 --> 00:37:08,640 Speaker 1: was the supply or of nickel. So what happened was 634 00:37:08,760 --> 00:37:11,040 Speaker 1: we have a sort of sort of squeeze in the 635 00:37:11,160 --> 00:37:17,320 Speaker 1: nickel market and the price went just ballistic. H A 636 00:37:17,400 --> 00:37:20,080 Speaker 1: couple of weeks ago, a ton or a metric ton 637 00:37:20,160 --> 00:37:23,719 Speaker 1: of nickel cost about twenty dollars at one point. This 638 00:37:23,880 --> 00:37:27,200 Speaker 1: week it costs more than a hundred thousand. The market 639 00:37:27,239 --> 00:37:30,320 Speaker 1: went up two hundred and fifty percent in two days, 640 00:37:30,840 --> 00:37:33,359 Speaker 1: and the London metal has changed. Here in London where 641 00:37:33,600 --> 00:37:37,520 Speaker 1: nickel trades have to take the extraordinary measure of shutting 642 00:37:37,560 --> 00:37:40,719 Speaker 1: down the market used to stop the madness, and we 643 00:37:40,840 --> 00:37:43,520 Speaker 1: don't know when trading is gonna restart. It's just gonna 644 00:37:43,600 --> 00:37:46,960 Speaker 1: be shut down for several days. It truly is one 645 00:37:47,000 --> 00:37:48,960 Speaker 1: of the wildest stories. I agree with you, one of 646 00:37:49,000 --> 00:37:52,520 Speaker 1: the wildest I think I've ever seen. Too. Oh do 647 00:37:52,880 --> 00:37:56,200 Speaker 1: you have you been holding nicol and your bunker there? No, 648 00:37:56,400 --> 00:37:59,160 Speaker 1: I haven't been. What the bank of reference for our 649 00:37:59,200 --> 00:38:02,439 Speaker 1: listeners is the recording room moment? But no, I wish 650 00:38:02,480 --> 00:38:06,400 Speaker 1: I had been. What a week? Well, how about you volda, 651 00:38:06,440 --> 00:38:08,600 Speaker 1: what's the craziest thing you saw this week? I don't 652 00:38:08,640 --> 00:38:10,520 Speaker 1: know if I want to call it the craziest or 653 00:38:10,600 --> 00:38:12,920 Speaker 1: the wildest or anything like that. But it's something that 654 00:38:13,080 --> 00:38:16,880 Speaker 1: just really struck me. And actually Javier already brought it up. 655 00:38:17,200 --> 00:38:18,960 Speaker 1: It was a story I read in the Wall Street 656 00:38:19,040 --> 00:38:22,520 Speaker 1: Journal which the title was Ukrainians risk their lives to 657 00:38:22,640 --> 00:38:26,120 Speaker 1: keep Russian gas flowing to Europe. So Javier had mentioned 658 00:38:26,160 --> 00:38:29,760 Speaker 1: that Europe right now is actually importing more Russian natural 659 00:38:29,880 --> 00:38:33,120 Speaker 1: gas than before the invasion, and there's actually a crew 660 00:38:33,320 --> 00:38:36,960 Speaker 1: of Ukrainians who are keeping it flowing. And the reason is, 661 00:38:37,080 --> 00:38:39,160 Speaker 1: and this is why I chose this one. I was 662 00:38:39,200 --> 00:38:40,960 Speaker 1: hoping to sort of explain it a little bit and 663 00:38:41,000 --> 00:38:45,440 Speaker 1: maybe Hoavier can give us more insights. But the more 664 00:38:45,520 --> 00:38:47,720 Speaker 1: gas flowing now because of a deal that was struck 665 00:38:47,760 --> 00:38:51,640 Speaker 1: actually years ago with gas prom where customers pay according 666 00:38:51,719 --> 00:38:54,600 Speaker 1: to the level at which gas traded a month ago, 667 00:38:54,960 --> 00:38:58,480 Speaker 1: and a month ago prices were lower. It is it 668 00:38:58,680 --> 00:39:01,200 Speaker 1: is one of their I know that's the right war, 669 00:39:01,320 --> 00:39:03,200 Speaker 1: but it's it's one of the ironies of the war. 670 00:39:03,800 --> 00:39:07,440 Speaker 1: We we we we were thinking that the guys was 671 00:39:07,480 --> 00:39:10,840 Speaker 1: going to stop flowing through Ukraine, and actually European utilities 672 00:39:10,880 --> 00:39:14,879 Speaker 1: are buying more gas from Russia through Ukraine and paying 673 00:39:14,960 --> 00:39:18,280 Speaker 1: more money to gaspron which is ultimately controlled by bloody 674 00:39:18,320 --> 00:39:22,239 Speaker 1: mill putin just because what a bit of corporate greed. 675 00:39:22,440 --> 00:39:26,000 Speaker 1: I mean, it's cheaper for these utilities to buy through 676 00:39:26,080 --> 00:39:28,640 Speaker 1: the long term contract with GASPRON and then they can't 677 00:39:28,680 --> 00:39:31,840 Speaker 1: resell the gas at the spot price, which is much higher, 678 00:39:32,320 --> 00:39:35,480 Speaker 1: So they are maximizing their contract with GASPRON in the 679 00:39:35,560 --> 00:39:39,800 Speaker 1: middle of a war. I call it capitalism in times 680 00:39:39,840 --> 00:39:43,320 Speaker 1: of war. I know that some people will be less 681 00:39:43,800 --> 00:39:50,440 Speaker 1: sympathetic than than that. That that that comment absolutely absolutely 682 00:39:50,680 --> 00:39:52,360 Speaker 1: all right, well I'll give you mine before we go. 683 00:39:52,560 --> 00:39:55,680 Speaker 1: And this is UM. I think the one thing that 684 00:39:55,960 --> 00:39:59,279 Speaker 1: has struck a lot of people about this words there 685 00:39:59,320 --> 00:40:02,400 Speaker 1: have been moments of comic relief. You know, Voldimir's Lensky 686 00:40:02,440 --> 00:40:05,600 Speaker 1: obviously started out as a comic actor, and I feel 687 00:40:05,640 --> 00:40:08,719 Speaker 1: like his spirit sort of trickles down UH to the 688 00:40:08,800 --> 00:40:11,120 Speaker 1: rest of the country. Um. For example, there are all 689 00:40:11,160 --> 00:40:15,440 Speaker 1: sorts of videos of farmers UH stealing Russian tanks with 690 00:40:15,560 --> 00:40:18,120 Speaker 1: their trackers hooking, hooking them up on a tow rope 691 00:40:18,160 --> 00:40:22,280 Speaker 1: and stealing them, to the point where the tax authority 692 00:40:22,320 --> 00:40:25,879 Speaker 1: in Ukraine issued a statement saying, UM, if you steal 693 00:40:25,920 --> 00:40:27,680 Speaker 1: a Russian tank, you don't have to declare it has 694 00:40:27,800 --> 00:40:32,440 Speaker 1: income on your on your tax return. But anyway, someone 695 00:40:32,800 --> 00:40:36,760 Speaker 1: put up a listing on eBay for a used Russian 696 00:40:37,040 --> 00:40:41,440 Speaker 1: T seventy two tank and uh. This was alerted to 697 00:40:41,520 --> 00:40:44,279 Speaker 1: me by the Twitter user financial Gambler, who I know 698 00:40:44,360 --> 00:40:45,880 Speaker 1: is an avid listener of the show. I had actually 699 00:40:45,920 --> 00:40:47,120 Speaker 1: seen it, but I never thought of it for the 700 00:40:47,200 --> 00:40:50,960 Speaker 1: craziest thing. Now, it turns out the listing was boguscutting 701 00:40:51,000 --> 00:40:53,520 Speaker 1: the snopes. It wasn't a real listening. But I think 702 00:40:53,600 --> 00:40:56,239 Speaker 1: the fact that many of us were wondering whether or 703 00:40:56,280 --> 00:40:59,000 Speaker 1: not this was real and thinking it possibly could be real. 704 00:40:59,800 --> 00:41:03,440 Speaker 1: Uh shows you how crazy things have gotten. But just 705 00:41:03,640 --> 00:41:05,839 Speaker 1: for fun, even though it's a fake listening, we're still 706 00:41:05,880 --> 00:41:09,080 Speaker 1: gonna play prices right because I think it's a reasonable 707 00:41:09,160 --> 00:41:14,000 Speaker 1: price for a used Russian T seventy two tank. Data. 708 00:41:14,080 --> 00:41:16,600 Speaker 1: What do you think the buy it now price on 709 00:41:16,760 --> 00:41:19,879 Speaker 1: eBay was for this fake listing for a Russian tank? 710 00:41:20,360 --> 00:41:22,920 Speaker 1: I can't give There's no way I would never who 711 00:41:22,960 --> 00:41:26,560 Speaker 1: would ever consider buying it. There's no way I can 712 00:41:26,640 --> 00:41:29,080 Speaker 1: even come up with it with a number. All right, havevier, 713 00:41:29,120 --> 00:41:30,640 Speaker 1: what do you think that the buy it now price 714 00:41:30,719 --> 00:41:33,040 Speaker 1: for a used Russian TEA seventy two tanks should be? 715 00:41:33,640 --> 00:41:35,960 Speaker 1: I I don't know it was a T seventy two, 716 00:41:36,080 --> 00:41:38,719 Speaker 1: but I have seen one in action Russian tank in 717 00:41:38,920 --> 00:41:41,600 Speaker 1: in in um saddly in the Middle East, so I 718 00:41:41,680 --> 00:41:43,919 Speaker 1: know how it's scary they look, and I don't really 719 00:41:43,960 --> 00:41:46,640 Speaker 1: want to bid, but okay, if I have to guess 720 00:41:47,000 --> 00:41:50,800 Speaker 1: the twit went wild, so everyone would be bid in 721 00:41:51,120 --> 00:41:54,759 Speaker 1: UM half a million. That's pretty good. It's pretty good, fo, 722 00:41:56,320 --> 00:41:59,600 Speaker 1: so you're you're you're pretty good, pretty close, and uh, 723 00:42:00,000 --> 00:42:01,680 Speaker 1: who knows what it takes to fill that thing up 724 00:42:01,719 --> 00:42:04,719 Speaker 1: at the pump, though you know I was gonna be expensive. 725 00:42:04,920 --> 00:42:06,920 Speaker 1: I wonder what they must run on diesel? I guess huh, 726 00:42:08,520 --> 00:42:11,160 Speaker 1: they run on decent but you can't funny enough some 727 00:42:11,320 --> 00:42:14,360 Speaker 1: of those thanks, they really run on almost anything. But 728 00:42:14,440 --> 00:42:16,879 Speaker 1: you could run then on jet fuel almost the same 729 00:42:17,000 --> 00:42:19,120 Speaker 1: the same product cast as you would put on a plane. 730 00:42:19,520 --> 00:42:21,879 Speaker 1: Can I imagine they're real guest coustlers though I can't 731 00:42:21,880 --> 00:42:27,480 Speaker 1: imagine they're very They're not gonna be cheap, so factor 732 00:42:27,560 --> 00:42:30,960 Speaker 1: that into your price. But again, have your such a 733 00:42:31,480 --> 00:42:33,879 Speaker 1: privilege for us to get your insights at this time, 734 00:42:34,080 --> 00:42:36,800 Speaker 1: and I know you've had a busy week, so we 735 00:42:36,960 --> 00:42:39,920 Speaker 1: we really appreciate it. My pleasure. Thank you for having me, 736 00:42:40,320 --> 00:42:50,840 Speaker 1: Thank you for joining us What Goes Up. We'll be 737 00:42:50,920 --> 00:42:52,799 Speaker 1: back next week and soil. Then you can find us 738 00:42:52,840 --> 00:42:56,160 Speaker 1: on the Bloomberg Terminal, website and app, or wherever you 739 00:42:56,239 --> 00:42:58,759 Speaker 1: get your podcasts. We love it if you took the 740 00:42:58,840 --> 00:43:01,040 Speaker 1: time to rate and review the show on Apple Podcasts 741 00:43:01,080 --> 00:43:03,560 Speaker 1: so more listeners can find us. And you can find 742 00:43:03,600 --> 00:43:07,520 Speaker 1: us on Twitter. Follow me at Reaganonymous. Bilbona Hierrich is 743 00:43:07,680 --> 00:43:11,160 Speaker 1: at Bilbona Hierrich. You can also follow Bloomberg Podcasts at 744 00:43:11,280 --> 00:43:15,200 Speaker 1: podcasts I. Thank you to Charlie Pelleta Bloomberg Radio. What 745 00:43:15,360 --> 00:43:18,760 Speaker 1: Goes Up is produced by Magnus Hendrickson ahead of Bloomberg 746 00:43:18,800 --> 00:43:22,759 Speaker 1: podcast is Francesco Levy. Thanks for listening, See you next time.