1 00:00:02,720 --> 00:00:07,240 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,240 --> 00:00:12,920 Speaker 2: We have the strongest and most powerful by far military 3 00:00:12,960 --> 00:00:18,280 Speaker 2: in the world, and we will easily prevail. We're already 4 00:00:19,040 --> 00:00:23,200 Speaker 2: substantially ahead of our time projections. But whatever the time is, 5 00:00:23,520 --> 00:00:24,920 Speaker 2: it's okay, whatever it takes. 6 00:00:34,520 --> 00:00:37,840 Speaker 3: I'm Stephanie Flanders, head of Government and Economics at Bloomberg, 7 00:00:38,120 --> 00:00:40,640 Speaker 3: and this is Trumponomics, the podcast that looks at the 8 00:00:40,760 --> 00:00:44,360 Speaker 3: economic world of Donald Trump, how he's already shaped the 9 00:00:44,360 --> 00:00:47,600 Speaker 3: global economy and what on earth is going to happen next. 10 00:00:50,080 --> 00:00:54,400 Speaker 3: One common element of that Trump shaped economy is there's 11 00:00:54,440 --> 00:00:58,560 Speaker 3: a wide range of possible outcomes. Recording this Wednesday morning 12 00:00:58,600 --> 00:01:02,320 Speaker 3: in Europe, the range of potential consequences from the conflict 13 00:01:02,400 --> 00:01:06,040 Speaker 3: underway between the US and Israel and Iran looks about 14 00:01:06,080 --> 00:01:08,800 Speaker 3: as wide as it could be. And we're focused for 15 00:01:08,840 --> 00:01:11,440 Speaker 3: the next twenty five minutes or so on just the 16 00:01:11,480 --> 00:01:15,160 Speaker 3: economic piece of that. The human and social impacts we 17 00:01:15,280 --> 00:01:18,520 Speaker 3: leave to others. But since America's first strike on Iran 18 00:01:18,600 --> 00:01:21,640 Speaker 3: on Saturday, oil and gas traders have watched us in 19 00:01:21,720 --> 00:01:25,319 Speaker 3: many ways, the worst case scenario unfolded for Middle East 20 00:01:25,400 --> 00:01:30,240 Speaker 3: energy supplies. That critical strait of Hormus is effectively paralyzed. 21 00:01:30,880 --> 00:01:35,240 Speaker 3: Saudi Arabia's largest oil refinery is closed, and Iranian missiles 22 00:01:35,280 --> 00:01:38,800 Speaker 3: and drones have shut down the largest liquefied natural gas 23 00:01:38,800 --> 00:01:43,520 Speaker 3: refinery on the planet in Katar. Predictably, oil and especially 24 00:01:43,560 --> 00:01:47,240 Speaker 3: gas prices have jumped, stocks have taken a hit, and 25 00:01:47,280 --> 00:01:50,360 Speaker 3: long term interest rates have jumped as traders see less 26 00:01:50,440 --> 00:01:53,720 Speaker 3: chance of further cuts from central banks. All of that 27 00:01:54,440 --> 00:01:57,960 Speaker 3: could deal a severe blow to the global economy at 28 00:01:57,960 --> 00:02:01,960 Speaker 3: an already uncertain time. But what matters, of course, is 29 00:02:02,000 --> 00:02:04,800 Speaker 3: what happens from here. As I record this, it still 30 00:02:04,840 --> 00:02:09,040 Speaker 3: seems perfectly possible that Washington and Tehran will somehow find 31 00:02:09,080 --> 00:02:12,280 Speaker 3: an off ramp, oil will settle back to its pre 32 00:02:12,400 --> 00:02:16,080 Speaker 3: conflict average of around sixty five dollars a barrel, and 33 00:02:16,120 --> 00:02:19,240 Speaker 3: the global economy will dodge a blow. But as you're 34 00:02:19,280 --> 00:02:22,160 Speaker 3: hearing this conversation I had on Tuesday with two of 35 00:02:22,200 --> 00:02:26,639 Speaker 3: Bloomberg's sharpest analysts, there are some much darker scenarios out 36 00:02:26,680 --> 00:02:29,240 Speaker 3: there which could be a lot more damaging, especially for 37 00:02:29,280 --> 00:02:32,519 Speaker 3: countries without a lot of backup plans. That's one lesson 38 00:02:32,680 --> 00:02:36,000 Speaker 3: I took from this discussion that the negative impacts of 39 00:02:36,040 --> 00:02:39,920 Speaker 3: this mess will not land evenly and may indeed land 40 00:02:40,040 --> 00:02:44,000 Speaker 3: especially heavily on some key American allies Europe for one, 41 00:02:44,400 --> 00:02:50,520 Speaker 3: but interestingly also South Korea, Taiwan. Russia, by contrast, emerges 42 00:02:50,560 --> 00:02:53,839 Speaker 3: as a big winner both its budget and its war 43 00:02:53,880 --> 00:02:58,760 Speaker 3: effort in Ukraine another lesson, It really matters how quickly 44 00:02:58,880 --> 00:03:01,120 Speaker 3: the US can reopen the straight of home. 45 00:03:01,040 --> 00:03:01,880 Speaker 1: Moves with me. 46 00:03:02,240 --> 00:03:05,480 Speaker 3: I'm delighted to say Javier blast is back Bloomberg opinion 47 00:03:05,480 --> 00:03:08,919 Speaker 3: columnists covering energy and commodities for Bloomberg and the co 48 00:03:09,000 --> 00:03:12,760 Speaker 3: author of the World for Sale, Money Power and the 49 00:03:12,800 --> 00:03:16,320 Speaker 3: Traders who barter the Earth's resources. Have you? Thank you 50 00:03:16,560 --> 00:03:18,480 Speaker 3: very much. This almost smoke coming out of your ears 51 00:03:18,520 --> 00:03:20,040 Speaker 3: because I know you've been working very hard the last 52 00:03:20,040 --> 00:03:21,360 Speaker 3: few days, but I really appreciate you. 53 00:03:21,600 --> 00:03:23,360 Speaker 4: Thank you for having me and did. 54 00:03:23,360 --> 00:03:27,800 Speaker 3: Dubai Zi Daoud, chief Emerging market's economists for Bloomberg Economics, 55 00:03:27,840 --> 00:03:30,880 Speaker 3: also a regular guest on this show, So yeah'd love 56 00:03:30,880 --> 00:03:31,360 Speaker 3: you to see you. 57 00:03:31,720 --> 00:03:32,600 Speaker 1: Wonderful to be here. 58 00:03:35,080 --> 00:03:39,320 Speaker 3: We're going to talk about the sort of shortish term 59 00:03:39,360 --> 00:03:42,920 Speaker 3: economic impact for the sort of broader economy around the 60 00:03:42,960 --> 00:03:46,080 Speaker 3: world and also for oil markets in particular, and then 61 00:03:46,120 --> 00:03:48,600 Speaker 3: maybe get into some of the sort of longer term stuff. 62 00:03:48,600 --> 00:03:51,200 Speaker 3: But zied I know we have what we call this 63 00:03:51,400 --> 00:03:55,880 Speaker 3: global shock model, which allows you to put different scenarios 64 00:03:55,920 --> 00:03:59,240 Speaker 3: for the global economy into the model and work out 65 00:03:59,240 --> 00:04:01,960 Speaker 3: what the impact is. For example, this kind of increase 66 00:04:02,000 --> 00:04:05,040 Speaker 3: in energy prices, what do we get if we just 67 00:04:05,480 --> 00:04:08,000 Speaker 3: feed in what's happened in the last few days and 68 00:04:08,440 --> 00:04:10,200 Speaker 3: assume that it sticks around for a while. 69 00:04:10,600 --> 00:04:12,760 Speaker 5: We'd publish a piece on this with my colleagues Jamie 70 00:04:12,840 --> 00:04:15,160 Speaker 5: Russi and Beyond fa Envoy and actually spend some time 71 00:04:15,200 --> 00:04:17,280 Speaker 5: before coming to the podcast playing some more of the 72 00:04:17,320 --> 00:04:17,919 Speaker 5: shock model. 73 00:04:18,440 --> 00:04:19,520 Speaker 1: And here's the conclusion. 74 00:04:20,160 --> 00:04:23,120 Speaker 5: It is very, very hard to generate a significant recession 75 00:04:23,440 --> 00:04:25,560 Speaker 5: in the US with all prices alone. 76 00:04:25,839 --> 00:04:26,719 Speaker 1: Yes, you can get. 77 00:04:26,560 --> 00:04:29,800 Speaker 5: Two consecutive quarters of negative growth, but the magnitude is 78 00:04:29,880 --> 00:04:33,119 Speaker 5: rather small. So for the US, the shock from oil 79 00:04:33,320 --> 00:04:35,679 Speaker 5: is not a growth shock. It's more of an inflation shock. 80 00:04:36,160 --> 00:04:39,039 Speaker 5: That is different to other countries in the UK, in 81 00:04:39,080 --> 00:04:42,360 Speaker 5: the Euro Area, in China and possibly and even in India, 82 00:04:43,320 --> 00:04:46,960 Speaker 5: oil prices would mean slower growth and it'd mean higher inflation. 83 00:04:47,440 --> 00:04:49,680 Speaker 3: You almost sound disappointed in saying you just haven't been 84 00:04:49,720 --> 00:04:51,560 Speaker 3: able to get a recession out of this. No, matter 85 00:04:51,560 --> 00:04:54,279 Speaker 3: how hard you tried with the model. We're very glad 86 00:04:54,279 --> 00:04:55,919 Speaker 3: obviously that we don't get a recession out of this, 87 00:04:56,160 --> 00:04:58,640 Speaker 3: But what are we looking at in terms of inflation, 88 00:04:59,000 --> 00:05:01,760 Speaker 3: say in Europe the UK as a result of this 89 00:05:01,839 --> 00:05:03,000 Speaker 3: and the impact on growth. 90 00:05:03,400 --> 00:05:06,480 Speaker 5: So if we plugging an extreme ore price increase, which 91 00:05:06,520 --> 00:05:09,200 Speaker 5: is one hundred and eight dollars all price, if you're 92 00:05:09,200 --> 00:05:11,640 Speaker 5: thinking about the euro Area and the UK, we're talking 93 00:05:11,680 --> 00:05:14,680 Speaker 5: about a growth shock which is like half a percentage 94 00:05:14,720 --> 00:05:17,719 Speaker 5: point at peak, and an inflation shock of around one 95 00:05:17,720 --> 00:05:21,160 Speaker 5: percentage point. These are not exigible numbers, but you know, 96 00:05:21,720 --> 00:05:24,040 Speaker 5: for the US is much smaller than what used to be. 97 00:05:24,200 --> 00:05:26,160 Speaker 3: So it's depending on where you are. It's a kind 98 00:05:26,200 --> 00:05:29,320 Speaker 3: of half a percentage point on the inflation rate, maybe 99 00:05:29,320 --> 00:05:31,280 Speaker 3: a little bit more in the US, and then a 100 00:05:31,360 --> 00:05:33,920 Speaker 3: sort of somewhat less than that on the growth rate, 101 00:05:34,000 --> 00:05:36,400 Speaker 3: at least if you're in the Europe or UK. And 102 00:05:36,440 --> 00:05:38,880 Speaker 3: I do notice one immediate result, which is a bit 103 00:05:38,920 --> 00:05:42,680 Speaker 3: closer to home, is vestors were expecting and economists we 104 00:05:42,680 --> 00:05:46,560 Speaker 3: were expecting a second interest rate cut this year in 105 00:05:46,640 --> 00:05:48,560 Speaker 3: the UK, which will obviously would feed into a lot 106 00:05:48,560 --> 00:05:54,080 Speaker 3: of people's mortgages, and as of today, there's almost no 107 00:05:54,160 --> 00:05:56,640 Speaker 3: expectations that's going to happen in the next month. In 108 00:05:56,680 --> 00:06:00,880 Speaker 3: the US is less affected because it might get the 109 00:06:00,920 --> 00:06:04,520 Speaker 3: higher inflation, but then that would stimulate lots of those 110 00:06:05,080 --> 00:06:06,839 Speaker 3: shale producers to get going. 111 00:06:07,839 --> 00:06:10,159 Speaker 5: Yeah, so I think there's a lot of analogies to 112 00:06:10,200 --> 00:06:12,320 Speaker 5: the Iraq War in two thousand and three. People are 113 00:06:12,360 --> 00:06:15,000 Speaker 5: comparing the twenty twenty six war in Iran to the 114 00:06:15,040 --> 00:06:18,240 Speaker 5: two thousand and three invasion of Iraq. One thing that 115 00:06:18,279 --> 00:06:21,520 Speaker 5: has changed significantly in the US since then is positioned 116 00:06:21,560 --> 00:06:25,640 Speaker 5: as a net oil exporter. In two thousand and three, 117 00:06:25,800 --> 00:06:29,680 Speaker 5: the US was a huge net oil importer. Today is 118 00:06:29,720 --> 00:06:33,080 Speaker 5: a small exporter. What that means is that when you 119 00:06:33,120 --> 00:06:35,719 Speaker 5: get an all price shock, some segments of the US 120 00:06:35,720 --> 00:06:39,480 Speaker 5: economy benefit from this. Now, I know the shock inaggurgate 121 00:06:39,560 --> 00:06:42,840 Speaker 5: may not seem so big, by in economics these days 122 00:06:42,880 --> 00:06:45,599 Speaker 5: we think about inequality as well, so it doesn't spread 123 00:06:45,600 --> 00:06:48,720 Speaker 5: out evenly. The segments of the US economy that benefit 124 00:06:48,760 --> 00:06:52,800 Speaker 5: from how all prices are energy companies. But there's a 125 00:06:52,880 --> 00:06:56,880 Speaker 5: whole segment of consumers in the US who will suffer 126 00:06:56,920 --> 00:06:59,600 Speaker 5: from how all prices. As fuel prices start to increase, 127 00:07:00,000 --> 00:07:03,160 Speaker 5: there is an inequality effect here, and it matters. It 128 00:07:03,320 --> 00:07:06,839 Speaker 5: matters because President Donald Trump when he came to office, 129 00:07:07,080 --> 00:07:10,200 Speaker 5: if you think about his economic agenda, lower interesturation is 130 00:07:10,200 --> 00:07:13,440 Speaker 5: definitely up there, and lower oil prices were there, and 131 00:07:13,480 --> 00:07:15,240 Speaker 5: this war that's a threat to both. 132 00:07:15,720 --> 00:07:18,160 Speaker 3: And we have certainly heard some concerns around that in 133 00:07:18,200 --> 00:07:21,200 Speaker 3: the US, have you. A Ziah has mentioned one of 134 00:07:21,240 --> 00:07:23,880 Speaker 3: the big things that means that we tend to say 135 00:07:23,960 --> 00:07:25,840 Speaker 3: all price shocks and not what they used to be 136 00:07:26,560 --> 00:07:29,120 Speaker 3: in their impact, namely that the US is now a 137 00:07:29,160 --> 00:07:32,480 Speaker 3: big exporter of energy, is not nearly as reliant or 138 00:07:32,480 --> 00:07:35,800 Speaker 3: at all reliant really on Middle East oil. But we 139 00:07:35,920 --> 00:07:39,560 Speaker 3: are seeing a reaction in markets to the disruption on 140 00:07:39,600 --> 00:07:41,880 Speaker 3: the straits of forem moves, which are still pretty important 141 00:07:41,920 --> 00:07:44,400 Speaker 3: to the global economy. So what are the risks there? 142 00:07:44,400 --> 00:07:45,360 Speaker 3: How are you looking at it? 143 00:07:45,600 --> 00:07:46,200 Speaker 4: So far? 144 00:07:46,880 --> 00:07:50,280 Speaker 6: So good or considered? I mean, you have asked me 145 00:07:50,760 --> 00:07:54,800 Speaker 6: decay the goo tomind the market reaction to what has 146 00:07:54,920 --> 00:07:58,360 Speaker 6: unfolded over the last few hours since Saturday. I will 147 00:07:58,360 --> 00:08:02,640 Speaker 6: have expected much much higher oil prices, certainly about one 148 00:08:02,720 --> 00:08:06,000 Speaker 6: hundred dollars by now. And I don't want to sound 149 00:08:06,000 --> 00:08:08,240 Speaker 6: this as a celeboratory that it has not happened. I mean, 150 00:08:08,720 --> 00:08:11,920 Speaker 6: the price of oil has increased quite significantly already. We 151 00:08:11,960 --> 00:08:14,720 Speaker 6: are talking about already a ten to fifteen percent increase 152 00:08:15,040 --> 00:08:18,080 Speaker 6: since the hostility started, and it's still early hours. 153 00:08:18,640 --> 00:08:20,560 Speaker 4: I have kind of chwer scenarios on my mind. 154 00:08:20,600 --> 00:08:24,440 Speaker 6: It's one that I'm not particularly concerned because we don't 155 00:08:24,480 --> 00:08:28,320 Speaker 6: get two one hundred dollars, and if we get thereabout that, 156 00:08:28,440 --> 00:08:31,920 Speaker 6: this is not like a long lasting price shock. We 157 00:08:32,000 --> 00:08:34,559 Speaker 6: are eighty to one hundred for a couple of weeks. 158 00:08:34,679 --> 00:08:37,680 Speaker 6: It's nothing for the global economy. I'm expecting still I 159 00:08:37,720 --> 00:08:41,080 Speaker 6: get a lower mortgage rate this year. But this is 160 00:08:41,160 --> 00:08:44,520 Speaker 6: a thing that the United States has four or five 161 00:08:44,640 --> 00:08:48,360 Speaker 6: days to reopen the Stralia hormos before it gets really 162 00:08:48,400 --> 00:08:51,520 Speaker 6: really ugly. I mean, we can all make worst cases 163 00:08:51,559 --> 00:08:54,400 Speaker 6: scenarios and best cases scenarios. I mean, the best case 164 00:08:54,440 --> 00:08:57,200 Speaker 6: scenario is that by the end of the week the 165 00:08:57,280 --> 00:08:59,920 Speaker 6: oil market is lower because the Australia hormos has real 166 00:09:00,640 --> 00:09:04,200 Speaker 6: The worlst case scenario is that these last three months 167 00:09:04,280 --> 00:09:06,520 Speaker 6: and we don't get a drop of Middle East and 168 00:09:06,600 --> 00:09:09,880 Speaker 6: oil on that period, in which case I don't want 169 00:09:09,880 --> 00:09:12,640 Speaker 6: to give ideas, but I think that Siad needs to 170 00:09:12,679 --> 00:09:14,960 Speaker 6: put an oil price on the shock model that it 171 00:09:15,000 --> 00:09:17,720 Speaker 6: starts with a two and probably followed by a five 172 00:09:18,120 --> 00:09:18,880 Speaker 6: and then a zerial. 173 00:09:18,960 --> 00:09:21,520 Speaker 3: So I think lots of people are familiar with the 174 00:09:21,559 --> 00:09:23,839 Speaker 3: shale revolution in the US and what that's done for 175 00:09:23,880 --> 00:09:25,400 Speaker 3: the US, But a lot of people in the last 176 00:09:25,440 --> 00:09:28,040 Speaker 3: few days have highlighted that China, for example, gets a 177 00:09:28,040 --> 00:09:34,000 Speaker 3: significant chunk of its oil from Iran and India. Other 178 00:09:34,080 --> 00:09:39,280 Speaker 3: countries also potentially quite reliant on straight to form moves 179 00:09:39,320 --> 00:09:44,920 Speaker 3: for their oil. They also have more alternatives, alternative roots 180 00:09:44,960 --> 00:09:48,560 Speaker 3: for the oil and also alternative sources of energy. 181 00:09:48,640 --> 00:09:49,480 Speaker 4: Is that the difference. 182 00:09:50,240 --> 00:09:52,000 Speaker 6: I think that we all have a skin on the 183 00:09:52,040 --> 00:09:54,040 Speaker 6: game on the straight of hormones and what is happening 184 00:09:54,160 --> 00:09:57,120 Speaker 6: just generally on the Middle East. Whatever you get the oil, 185 00:09:57,320 --> 00:09:59,400 Speaker 6: it doesn't matter because it's going to be priced on 186 00:09:59,440 --> 00:10:02,360 Speaker 6: a global market, and therefore you're affected by the same price. 187 00:10:02,400 --> 00:10:06,000 Speaker 6: Even you are important or your oil say from Brazil 188 00:10:06,440 --> 00:10:09,800 Speaker 6: far far away from the conflict across the Atlantic, you 189 00:10:09,880 --> 00:10:12,480 Speaker 6: will be still paying a global pride that is determined 190 00:10:12,480 --> 00:10:14,000 Speaker 6: by what is happening in the Middle East. 191 00:10:14,160 --> 00:10:16,400 Speaker 4: So effectively everyone has the skin of the game. 192 00:10:16,760 --> 00:10:19,400 Speaker 6: China is the largest buyer of crude oil from the 193 00:10:19,400 --> 00:10:22,280 Speaker 6: Persian Gulf, so it has a lot of interest in 194 00:10:22,320 --> 00:10:26,560 Speaker 6: that that remains open. And it was interesting that yesterday 195 00:10:26,640 --> 00:10:29,480 Speaker 6: the Chinese authorities were on the phone with the Iranian 196 00:10:29,600 --> 00:10:33,800 Speaker 6: authorities and this morning Beijing has pood estainment just basically 197 00:10:33,840 --> 00:10:36,560 Speaker 6: reiterating we want to see the street hormones open. Of 198 00:10:36,559 --> 00:10:38,560 Speaker 6: course it was a Chinese statement, so it was on 199 00:10:38,600 --> 00:10:41,079 Speaker 6: the one hand, on the other just basically as all 200 00:10:41,120 --> 00:10:44,080 Speaker 6: the parties, including the United States, to stop bombing each other. 201 00:10:44,400 --> 00:10:47,480 Speaker 6: But the focus on the shipping lanes from China was 202 00:10:47,520 --> 00:10:52,320 Speaker 6: not missed. And I wonder whether at some point we 203 00:10:52,360 --> 00:10:55,599 Speaker 6: are going to have I think that rather quickly, and 204 00:10:55,640 --> 00:10:58,080 Speaker 6: I believe that that's happening already behind the scenes. 205 00:10:58,280 --> 00:11:00,040 Speaker 4: We have a conversation that is going to. 206 00:11:00,080 --> 00:11:05,800 Speaker 6: Involved multiple navies, multiple regional players trying to keep the 207 00:11:05,840 --> 00:11:09,920 Speaker 6: hormones open for the sake of the global economy. Whether 208 00:11:09,960 --> 00:11:15,320 Speaker 6: we can see something similar to Ernest World, which was 209 00:11:15,360 --> 00:11:18,720 Speaker 6: an operation in the eighties where the US provided escort 210 00:11:19,000 --> 00:11:21,200 Speaker 6: to convoys of oil tankers in and out of the 211 00:11:21,240 --> 00:11:23,400 Speaker 6: Persian Gulf. I think that that is one of the 212 00:11:23,440 --> 00:11:25,520 Speaker 6: things that the industry is right now discussing with the 213 00:11:25,600 --> 00:11:26,280 Speaker 6: US government. 214 00:11:27,559 --> 00:11:30,679 Speaker 3: So yeah, I mean you're sitting in Dubai. We've had 215 00:11:30,760 --> 00:11:32,840 Speaker 3: quite a lot of discussion here, you know. Of course 216 00:11:32,880 --> 00:11:35,800 Speaker 3: it's been a sore point for the UK government. There's 217 00:11:35,840 --> 00:11:38,880 Speaker 3: a lot of talk, sort of anecdotal evidence of people 218 00:11:38,920 --> 00:11:41,600 Speaker 3: moving to Dubai, and it's more than anecdotal from a 219 00:11:41,679 --> 00:11:47,560 Speaker 3: Bloomberg standpoint, because we see clients hedge fund investors moving 220 00:11:47,559 --> 00:11:51,320 Speaker 3: their accounts from London to Dubai. But part of that 221 00:11:51,440 --> 00:11:54,080 Speaker 3: was that Dubai was felt to be not just very 222 00:11:54,080 --> 00:11:58,440 Speaker 3: low tax or no tax, but safe and secure. What's 223 00:11:58,480 --> 00:12:03,240 Speaker 3: at stake if economically for Dubai, which doesn't have relative 224 00:12:03,320 --> 00:12:06,040 Speaker 3: to its neighbors, doesn't have a huge amount of oil, 225 00:12:06,520 --> 00:12:10,439 Speaker 3: if you have a lot of tourism and air plane 226 00:12:10,600 --> 00:12:13,880 Speaker 3: disruption over the next few months, and people just generally 227 00:12:13,880 --> 00:12:16,240 Speaker 3: stop thinking it's a safe place to go, or at 228 00:12:16,320 --> 00:12:18,120 Speaker 3: least think it's a less safe place to go. 229 00:12:19,080 --> 00:12:19,360 Speaker 1: Yeah. 230 00:12:19,440 --> 00:12:22,000 Speaker 5: I think in terms of the business model, I think 231 00:12:22,400 --> 00:12:24,240 Speaker 5: Dubai and the rest of the GCC is trying to 232 00:12:24,240 --> 00:12:27,839 Speaker 5: diversify away from oil, and Dubai has basically succeeded in this, 233 00:12:28,600 --> 00:12:31,040 Speaker 5: and one sector where the whole region has succeeded is 234 00:12:31,040 --> 00:12:35,199 Speaker 5: moving into logistics, having big airports, big airlines, big ports. 235 00:12:35,480 --> 00:12:37,720 Speaker 1: That is obviously that model is under That business model 236 00:12:37,760 --> 00:12:40,080 Speaker 1: is under threat. Now my hunch for. 237 00:12:40,200 --> 00:12:42,960 Speaker 5: Dubai is it's probably going to be the business model 238 00:12:42,960 --> 00:12:45,200 Speaker 5: is going to be more resilient than we expect. And 239 00:12:45,240 --> 00:12:48,480 Speaker 5: it's more resilient because I think if you're a logistical hub, 240 00:12:48,480 --> 00:12:51,319 Speaker 5: it's hard to change geography. You're sitting somewhere between Asia, 241 00:12:51,960 --> 00:12:55,080 Speaker 5: Europe and Africa. You probably need somewhere in the middle 242 00:12:55,160 --> 00:12:57,600 Speaker 5: to be a hub. I think a lot of Dubai's 243 00:12:57,640 --> 00:13:00,600 Speaker 5: residents do like living here and they're for the more 244 00:13:00,640 --> 00:13:02,440 Speaker 5: stick event than we think, although a lot of them 245 00:13:02,480 --> 00:13:06,160 Speaker 5: are foreign. And I think also if the conflict ends, 246 00:13:06,160 --> 00:13:10,559 Speaker 5: whenever that ends, Dubai does tend to benefit from conflicts 247 00:13:10,559 --> 00:13:12,800 Speaker 5: and money that flows in from conflict zones. 248 00:13:13,120 --> 00:13:15,080 Speaker 1: So I think the business model I'm less worried about. 249 00:13:15,120 --> 00:13:17,560 Speaker 5: What I'm worried about is a security model of the GCC, 250 00:13:17,960 --> 00:13:19,559 Speaker 5: not just to buy, but the whole of the Gulf. 251 00:13:20,200 --> 00:13:22,360 Speaker 5: You know, one pillar of the GCC is the American 252 00:13:22,440 --> 00:13:25,679 Speaker 5: security umbrella, and that did fail in the past, and 253 00:13:25,720 --> 00:13:30,240 Speaker 5: that's definitely failing now. Let's remember under the current Trump administration, 254 00:13:30,320 --> 00:13:33,959 Speaker 5: the GCC hosted Trump for his first presidential visit. Excluding 255 00:13:33,960 --> 00:13:38,320 Speaker 5: the Vatican. They have pledged trillions of dollars to Trump 256 00:13:39,000 --> 00:13:42,439 Speaker 5: in terms of investment and purchases and even O PET plus, 257 00:13:42,440 --> 00:13:45,040 Speaker 5: which is about said the Arabia started to increase all 258 00:13:45,080 --> 00:13:49,120 Speaker 5: apps significantly short shortly after Trump took office after months 259 00:13:49,120 --> 00:13:49,600 Speaker 5: of delay. 260 00:13:50,080 --> 00:13:50,960 Speaker 1: And what did they get. 261 00:13:51,200 --> 00:13:54,160 Speaker 5: Other got attempt directly by is roll back in September. 262 00:13:54,800 --> 00:13:57,680 Speaker 5: When it came to lobbying between the GCC, which did 263 00:13:57,720 --> 00:14:00,559 Speaker 5: not want a ward to start with Iran and which 264 00:14:00,600 --> 00:14:03,520 Speaker 5: wanted to start the World Iran, the GCC came second 265 00:14:03,559 --> 00:14:06,800 Speaker 5: to Israel. And now it's the question about Iran. Whatever 266 00:14:07,000 --> 00:14:09,720 Speaker 5: system ends up happening ends up taking place in Iran, 267 00:14:09,720 --> 00:14:12,240 Speaker 5: whether it's a current system or a new one. They 268 00:14:12,280 --> 00:14:14,160 Speaker 5: know that if they want to lash out of the US, 269 00:14:14,200 --> 00:14:17,680 Speaker 5: the GCC is sort of a soft spot that is nearby. 270 00:14:18,120 --> 00:14:20,840 Speaker 5: And I think that security model will probably be a 271 00:14:20,840 --> 00:14:23,960 Speaker 5: revised in the GCC when this war ends, and which. 272 00:14:23,880 --> 00:14:24,520 Speaker 4: Just remind people. 273 00:14:24,560 --> 00:14:27,040 Speaker 3: So the GCC is the Golf Cooperation Council, which is 274 00:14:27,040 --> 00:14:28,880 Speaker 3: basically all of the countries that you would think would 275 00:14:28,920 --> 00:14:31,760 Speaker 3: be in a group of countries in the Gulf have you, 276 00:14:32,000 --> 00:14:33,920 Speaker 3: there's a few other pieces that we should unpack that 277 00:14:33,960 --> 00:14:36,680 Speaker 3: are also perhaps a little bit less familiar to people, 278 00:14:37,120 --> 00:14:39,440 Speaker 3: and gas was the one I wanted to ask you 279 00:14:39,480 --> 00:14:43,520 Speaker 3: about because a liquid natural gas, a liquified natural gas 280 00:14:43,920 --> 00:14:45,880 Speaker 3: has obviously been sort of one of the big new 281 00:14:46,040 --> 00:14:50,400 Speaker 3: newish players in the energy scene, and it seems like, 282 00:14:50,640 --> 00:14:54,960 Speaker 3: certainly from reading our coverage was much less prepared for 283 00:14:55,480 --> 00:14:58,440 Speaker 3: what's happened in the last few days than the ore markets. 284 00:14:59,320 --> 00:15:02,560 Speaker 3: So just talk through why do we get that significant 285 00:15:02,800 --> 00:15:06,040 Speaker 3: response and what's potentially the impact for countries that are 286 00:15:06,080 --> 00:15:08,000 Speaker 3: quite reliant on this gas. 287 00:15:07,920 --> 00:15:12,600 Speaker 6: LNG is dominated by Qatar. They produce twenty percent of 288 00:15:12,640 --> 00:15:17,480 Speaker 6: the walls LENG. And with oil, we have a couple 289 00:15:17,520 --> 00:15:21,400 Speaker 6: of bypass routes where oil can get out of the 290 00:15:21,560 --> 00:15:24,320 Speaker 6: Persian Gulf. There is a pipeline that runs from the 291 00:15:24,480 --> 00:15:28,480 Speaker 6: eastern coast of Saudi Arabia into the west coast, effectively 292 00:15:28,480 --> 00:15:30,880 Speaker 6: from the Persian Gulf into the Red Sea that is 293 00:15:31,120 --> 00:15:33,840 Speaker 6: a deep bottled neck in some oil will continue living 294 00:15:34,280 --> 00:15:37,760 Speaker 6: the area. There is a pipeline effectively from Abu Dhabi 295 00:15:37,920 --> 00:15:40,920 Speaker 6: area to Fujia which is in the Araby and c 296 00:15:41,120 --> 00:15:44,520 Speaker 6: outside the Strada hormos, so that that kind of provides 297 00:15:44,600 --> 00:15:47,400 Speaker 6: some relief for the oil market. It's not like shutting 298 00:15:47,400 --> 00:15:50,280 Speaker 6: down the strait of hormones does in shutdown completely the 299 00:15:50,360 --> 00:15:53,400 Speaker 6: sport capacity or some of the countries with LNG we 300 00:15:53,440 --> 00:15:56,440 Speaker 6: do not have that advantage. Everything has to go by 301 00:15:56,520 --> 00:16:00,080 Speaker 6: tanker through the straight of hormones. And I think that 302 00:16:00,080 --> 00:16:02,920 Speaker 6: that also there is a lot more concern about the 303 00:16:02,960 --> 00:16:07,720 Speaker 6: facilities themselves. I mean these are very concentrated facilities in 304 00:16:07,840 --> 00:16:11,760 Speaker 6: one single point in Katar. We have oil facilities all 305 00:16:12,000 --> 00:16:15,880 Speaker 6: around the person Gulf, multiple oil fields, multiple oil refineries, 306 00:16:15,960 --> 00:16:19,960 Speaker 6: multiple oil poorts. If one is attacked, we still have 307 00:16:20,000 --> 00:16:22,880 Speaker 6: some resilience. And here we are talking about something that 308 00:16:23,040 --> 00:16:28,560 Speaker 6: is an area of fifty by fifty miles where fourteen huge. 309 00:16:28,240 --> 00:16:30,800 Speaker 4: Allergy trains concentrate in Katar. 310 00:16:31,360 --> 00:16:34,760 Speaker 6: You attack that and it is goodbye for twenty percent 311 00:16:34,760 --> 00:16:38,400 Speaker 6: of the world's allergic capacity for years, not weeks, no months, 312 00:16:38,440 --> 00:16:39,239 Speaker 6: but years. 313 00:16:39,400 --> 00:16:41,880 Speaker 4: So that is what the concern is. 314 00:16:42,560 --> 00:16:45,120 Speaker 6: I mean, good news is we are in the shoulder 315 00:16:45,160 --> 00:16:48,360 Speaker 6: season for natural gas. You're going to have a problem 316 00:16:48,440 --> 00:16:51,360 Speaker 6: with natural gas supply. Right now is about the best 317 00:16:51,400 --> 00:16:54,120 Speaker 6: time of the year because in the northern hemisphere we 318 00:16:54,160 --> 00:16:56,240 Speaker 6: are getting out of the winter into the springs, so 319 00:16:56,280 --> 00:16:59,600 Speaker 6: the money is literally dropping by the day and in 320 00:16:59,680 --> 00:17:02,400 Speaker 6: a yeah, it's not yet the summer, so the air 321 00:17:02,440 --> 00:17:06,919 Speaker 6: conditioning nies are not really great. And we use natural 322 00:17:06,960 --> 00:17:10,560 Speaker 6: gus in Asia to fire power plans to produce electricity 323 00:17:10,600 --> 00:17:12,879 Speaker 6: to run air conditioning, so we are we have a 324 00:17:12,920 --> 00:17:15,600 Speaker 6: bit of time, and perhaps that's the reason why the 325 00:17:15,640 --> 00:17:18,520 Speaker 6: market has not reacted as much as you will expay 326 00:17:18,600 --> 00:17:22,040 Speaker 6: yes prices when I have fifty percent yesterday, twenty percent today. 327 00:17:22,760 --> 00:17:25,639 Speaker 4: But we're around fifty euros per megab the hour. 328 00:17:25,760 --> 00:17:28,960 Speaker 6: We reach three hundred and fifty during the crisis in 329 00:17:29,040 --> 00:17:32,000 Speaker 6: twenty twenty one, twenty twenty two, so it's not as bad. 330 00:17:32,040 --> 00:17:34,840 Speaker 6: But it can get really bad on LNG. And again 331 00:17:35,320 --> 00:17:38,520 Speaker 6: it's the duration of the disruption. A few days the 332 00:17:38,560 --> 00:17:42,640 Speaker 6: system can manage. There is not buffer everywhere. If by 333 00:17:43,680 --> 00:17:46,480 Speaker 6: kind of end of week, say Friday, the market starts 334 00:17:46,520 --> 00:17:49,400 Speaker 6: to get conveniced that actually we are really hitting into 335 00:17:49,480 --> 00:17:52,359 Speaker 6: a four or five week period, then I think that 336 00:17:52,560 --> 00:17:56,320 Speaker 6: things change a lot. What if this is actually four 337 00:17:56,400 --> 00:17:58,640 Speaker 6: or five weeks, we are talking about forty days rather 338 00:17:58,640 --> 00:18:02,320 Speaker 6: than twelve, that match really changed things. And in LNG 339 00:18:02,960 --> 00:18:04,440 Speaker 6: it will be dramatic. 340 00:18:04,280 --> 00:18:05,960 Speaker 3: And in a few days it should be said We've 341 00:18:05,960 --> 00:18:09,760 Speaker 3: had a lot more ordnance fired and I'm sure a 342 00:18:09,800 --> 00:18:13,760 Speaker 3: lot more damage on the ground in Iran and of 343 00:18:13,800 --> 00:18:15,960 Speaker 3: course human implications of that than we had in the 344 00:18:16,520 --> 00:18:19,320 Speaker 3: war last year. We're not going into that because that 345 00:18:19,400 --> 00:18:21,520 Speaker 3: is not the focus of this podcast. But it is 346 00:18:21,560 --> 00:18:25,840 Speaker 3: always a lesson these times in the connectedness of the 347 00:18:25,880 --> 00:18:29,320 Speaker 3: global economy and in some unexpected ways. So reading your 348 00:18:29,320 --> 00:18:32,720 Speaker 3: piece and reading some of the other analysis haveavier, you 349 00:18:32,800 --> 00:18:36,680 Speaker 3: discover it's not just China that is pretty dependent. China's 350 00:18:36,840 --> 00:18:39,800 Speaker 3: important about a third of its lerg from Katar last year, 351 00:18:39,800 --> 00:18:44,040 Speaker 3: but places like Pakistan ninety nine percent of its gas 352 00:18:44,080 --> 00:18:48,639 Speaker 3: came from Katar. You have Pakistan, India, Bangladesh. They're in 353 00:18:48,680 --> 00:18:50,600 Speaker 3: the frame. I mean, I take your point. Havevier that 354 00:18:50,760 --> 00:18:54,080 Speaker 3: timing wise is not heating up in those countries yet, 355 00:18:54,520 --> 00:18:59,199 Speaker 3: but are they potentially more significantly affected short term? They 356 00:18:59,200 --> 00:19:01,400 Speaker 3: don't have the same kind of buffers that China has. 357 00:19:01,600 --> 00:19:04,400 Speaker 3: They're gonna be very effective. In China has a lot 358 00:19:04,400 --> 00:19:06,919 Speaker 3: of buffers. First of all, in terms of lergy. It 359 00:19:06,960 --> 00:19:10,159 Speaker 3: can just literally shut down any use which is not 360 00:19:10,320 --> 00:19:13,240 Speaker 3: very large, any use of gas in the electricity system, 361 00:19:13,440 --> 00:19:16,360 Speaker 3: go to col can do call to chemicals to replace 362 00:19:16,359 --> 00:19:19,240 Speaker 3: one of the gas in the chemical industry. India can 363 00:19:19,280 --> 00:19:21,280 Speaker 3: do a bit of that, but I think that countries 364 00:19:21,320 --> 00:19:24,119 Speaker 3: like Pakistan Banglades, they do not have many other options. 365 00:19:24,160 --> 00:19:26,439 Speaker 3: And if this crisis last, it is going to be 366 00:19:26,480 --> 00:19:30,240 Speaker 3: really felt in Asia in terms of leng where where 367 00:19:30,320 --> 00:19:32,119 Speaker 3: things are gonna get very ugly. 368 00:19:32,800 --> 00:19:33,399 Speaker 4: You allow me. 369 00:19:33,800 --> 00:19:36,040 Speaker 6: There are two other commoities that I think that they're 370 00:19:36,040 --> 00:19:38,520 Speaker 6: going to be critical that we have not talked about, 371 00:19:38,800 --> 00:19:41,520 Speaker 6: and they're going to be inside the Persian Gulf. One 372 00:19:41,720 --> 00:19:46,680 Speaker 6: just generally is food. The region produces very little food. 373 00:19:46,760 --> 00:19:49,680 Speaker 6: A lot of it comes imported by ship and air, 374 00:19:49,960 --> 00:19:54,840 Speaker 6: and those supply chains have been disrupted. Yes there are stockpiles, 375 00:19:55,440 --> 00:19:59,520 Speaker 6: but this goes down four or five weeks. Some food 376 00:19:59,560 --> 00:20:02,560 Speaker 6: items will not be on the menu in the Persian 377 00:20:02,560 --> 00:20:03,360 Speaker 6: Gulf region. 378 00:20:03,880 --> 00:20:05,480 Speaker 4: The other one that I am. 379 00:20:05,520 --> 00:20:10,919 Speaker 6: Extremely concerned and can't really make a huge escalation that 380 00:20:11,000 --> 00:20:13,800 Speaker 6: I don't wish to see, but it's to me the 381 00:20:13,840 --> 00:20:17,440 Speaker 6: most important commodity in this world, and it could make 382 00:20:17,480 --> 00:20:22,119 Speaker 6: it and in hours is water. The region relies on 383 00:20:22,200 --> 00:20:27,159 Speaker 6: the salinization. Some countries ninety percent of their drinking water 384 00:20:27,520 --> 00:20:32,920 Speaker 6: come front plants that process seawater into drinking water. Shut 385 00:20:32,920 --> 00:20:36,960 Speaker 6: down those by attack, and it's three or four days 386 00:20:37,080 --> 00:20:39,400 Speaker 6: before the countries really get very thirsty. 387 00:20:39,680 --> 00:20:40,720 Speaker 4: They will not be water. 388 00:20:41,040 --> 00:20:45,600 Speaker 6: In Kuwai Bahrain, the eastern coast of Saudi Arabia, the 389 00:20:45,760 --> 00:20:50,359 Speaker 6: uie Katar READD itself relies ninety percent of its water 390 00:20:50,400 --> 00:20:53,080 Speaker 6: supply on a single desalinization plan. 391 00:20:53,480 --> 00:20:56,360 Speaker 4: In the course of the Persian Gulf. 392 00:20:56,920 --> 00:21:02,000 Speaker 6: Those are absolutely critical items. If Iran moves to attack that, 393 00:21:02,960 --> 00:21:06,840 Speaker 6: I will expect a massive retaliatory action by the Persian 394 00:21:06,840 --> 00:21:09,679 Speaker 6: Gulf countries and also the United States. But that to 395 00:21:09,760 --> 00:21:12,280 Speaker 6: me is something that has not been really as spoke 396 00:21:12,800 --> 00:21:16,199 Speaker 6: so far because it's almost taboo. No one one to 397 00:21:16,280 --> 00:21:19,640 Speaker 6: address that because it will really change the dynamic. 398 00:21:31,080 --> 00:21:35,520 Speaker 3: We tend to think about big cities in Europe and 399 00:21:35,560 --> 00:21:40,359 Speaker 3: elsewhere being very vulnerable in the modern world to a 400 00:21:40,400 --> 00:21:42,720 Speaker 3: power cust or not getting food for a few days 401 00:21:42,920 --> 00:21:45,959 Speaker 3: because of how tightly wired our economies are now. But 402 00:21:46,040 --> 00:21:49,000 Speaker 3: I get that seems even more true at a very 403 00:21:49,000 --> 00:21:49,800 Speaker 3: basic level. 404 00:21:50,000 --> 00:21:51,840 Speaker 1: For the golf, yeah, absolutely. 405 00:21:51,880 --> 00:21:54,560 Speaker 5: I mean a reductive model for the golf is that 406 00:21:55,400 --> 00:21:58,320 Speaker 5: it exports oil and gas and imports everything else. 407 00:21:58,480 --> 00:22:00,399 Speaker 1: Including food location. 408 00:22:00,840 --> 00:22:05,320 Speaker 6: The joke in the oil industry has been always that 409 00:22:05,400 --> 00:22:11,720 Speaker 6: the Middle East esports hydro carbons and imports carbohydrates. That's 410 00:22:11,760 --> 00:22:12,720 Speaker 6: the equation. 411 00:22:14,000 --> 00:22:15,920 Speaker 1: And we've seen a sample of this. I mean, it's 412 00:22:15,920 --> 00:22:16,520 Speaker 1: not a secret. 413 00:22:16,600 --> 00:22:21,320 Speaker 5: Every single Gulf country has a food security program, usually 414 00:22:21,359 --> 00:22:24,200 Speaker 5: part of this several wealth fund. We've seen a sample 415 00:22:24,240 --> 00:22:26,480 Speaker 5: of this when there was the blockade on Katar in 416 00:22:26,480 --> 00:22:30,840 Speaker 5: twenty seventeen and supply chains moved, except that was much simpler. 417 00:22:30,920 --> 00:22:34,239 Speaker 5: Then Ata had to import the dairies from Turkey and 418 00:22:34,240 --> 00:22:37,760 Speaker 5: Iran instead of getting the stairies from Saudi Arabia. You know, 419 00:22:37,800 --> 00:22:39,840 Speaker 5: if the straight performance is shot and you can't get 420 00:22:39,880 --> 00:22:42,159 Speaker 5: your input from anywhere else in the world, that's a 421 00:22:42,200 --> 00:22:45,520 Speaker 5: much tougher problem to solve. I guess emergency airlines would 422 00:22:45,520 --> 00:22:48,040 Speaker 5: be the solution, but it's obviously no ideal given the 423 00:22:48,080 --> 00:22:48,960 Speaker 5: size of the population. 424 00:22:49,920 --> 00:22:50,360 Speaker 4: Amazing. 425 00:22:50,760 --> 00:22:53,320 Speaker 3: Have you remember you when we talked about Venezuela a 426 00:22:53,359 --> 00:22:56,680 Speaker 3: few months ago, you also highlighted the importance of food 427 00:22:56,720 --> 00:22:58,679 Speaker 3: and the lack of food in that country. So I 428 00:22:58,680 --> 00:23:00,880 Speaker 3: appreciate that you're not always the thinking about oil. You've 429 00:23:00,920 --> 00:23:04,000 Speaker 3: also got your right to the other potentially more important commodity. 430 00:23:04,280 --> 00:23:06,800 Speaker 3: But another thing you said on that show was you 431 00:23:06,840 --> 00:23:10,919 Speaker 3: made the point that that operation in Venezuela, along with 432 00:23:11,040 --> 00:23:15,440 Speaker 3: the other policies in Latin America, were potentially greatly increasing 433 00:23:15,480 --> 00:23:18,720 Speaker 3: the US effective control over the energy market. I mean, 434 00:23:19,640 --> 00:23:22,720 Speaker 3: if there's a world in which the US is quote 435 00:23:22,800 --> 00:23:27,240 Speaker 3: unquotes running Iran in the way that it's running Venezuela, 436 00:23:28,520 --> 00:23:33,080 Speaker 3: how much does that increase that kind of that control 437 00:23:33,160 --> 00:23:34,320 Speaker 3: over the energy market. 438 00:23:34,480 --> 00:23:36,880 Speaker 6: It's quite funny, if I may put it that way. 439 00:23:36,920 --> 00:23:40,840 Speaker 6: I was talking to European a diplomat this morning who 440 00:23:40,920 --> 00:23:44,560 Speaker 6: said to me that the White House must be one 441 00:23:44,600 --> 00:23:48,160 Speaker 6: of the luckiest organization in this planet, because every time 442 00:23:48,320 --> 00:23:52,080 Speaker 6: that they go to our country to liberated it, they 443 00:23:52,160 --> 00:23:57,080 Speaker 6: find oil. And I thought that the diploma had a point. 444 00:23:57,640 --> 00:24:00,480 Speaker 6: I hesitate to make a parallel between Venezuela and Iran. 445 00:24:00,560 --> 00:24:06,720 Speaker 6: Oil is always part of American foreign policy, but maybe 446 00:24:06,800 --> 00:24:09,320 Speaker 6: the first time that I say this, but this war 447 00:24:09,640 --> 00:24:12,480 Speaker 6: in the Middle East is not about oil this time. 448 00:24:12,520 --> 00:24:15,000 Speaker 6: I do think that it's about the influence of Israel 449 00:24:15,160 --> 00:24:18,639 Speaker 6: in the US administration, and it's about the policies of 450 00:24:18,640 --> 00:24:21,520 Speaker 6: the Iranian regime or missiles and nuclear et cetera. 451 00:24:21,560 --> 00:24:21,960 Speaker 4: Et cetera. 452 00:24:22,240 --> 00:24:25,280 Speaker 6: I mean, obviously, will the US care about Iran the 453 00:24:25,280 --> 00:24:27,080 Speaker 6: same way that it cares if then't have oil. 454 00:24:27,440 --> 00:24:27,480 Speaker 5: No. 455 00:24:27,920 --> 00:24:30,919 Speaker 6: Will Iran be able to finance a nuclear program and 456 00:24:30,920 --> 00:24:33,560 Speaker 6: a missile program the way that has been able to 457 00:24:33,640 --> 00:24:37,480 Speaker 6: withow oil. No, absolutely impossible. But I don't think that 458 00:24:37,600 --> 00:24:40,160 Speaker 6: this is a war where the US wants the Iranian oil. 459 00:24:40,480 --> 00:24:41,080 Speaker 4: That's a fair point. 460 00:24:41,080 --> 00:24:42,879 Speaker 3: I mean, I think at the basic level, they clearly 461 00:24:42,960 --> 00:24:46,200 Speaker 3: want a change in the regime, in its policy. It's 462 00:24:46,240 --> 00:24:49,000 Speaker 3: interesting that even in that long sort of shopping list 463 00:24:49,040 --> 00:24:51,400 Speaker 3: of changes they want from the government, it doesn't talk 464 00:24:51,440 --> 00:24:53,760 Speaker 3: about who they're sending the oil to or anything up. 465 00:24:53,800 --> 00:24:56,480 Speaker 3: So I think you're probably right. You can't help thinking, though, 466 00:24:56,800 --> 00:24:59,600 Speaker 3: have you? And one of our columnists, Mark Champion, made 467 00:24:59,600 --> 00:25:03,600 Speaker 3: this point in a slightly different way this morning. Longer term, 468 00:25:03,680 --> 00:25:07,919 Speaker 3: one of the winners from this policy could be President Putin. 469 00:25:08,000 --> 00:25:09,679 Speaker 3: I mean, we've tended to see him as a loser 470 00:25:09,760 --> 00:25:14,199 Speaker 3: because Iran was an ally. He's been unable to support 471 00:25:14,240 --> 00:25:16,000 Speaker 3: that ally, So it sort of sends a message that 472 00:25:16,040 --> 00:25:18,800 Speaker 3: it's not so great being friends with Russia. It also 473 00:25:18,880 --> 00:25:24,080 Speaker 3: potentially could strengthen its hands and selling oil to places India, 474 00:25:24,320 --> 00:25:26,960 Speaker 3: China that are not able or don't find it run 475 00:25:27,040 --> 00:25:32,639 Speaker 3: a reliable source anymore. And crucially having more resources in 476 00:25:32,760 --> 00:25:34,720 Speaker 3: Ukraine at a time when the US is going to 477 00:25:34,720 --> 00:25:37,919 Speaker 3: be even less keen to provide things that can go 478 00:25:37,960 --> 00:25:38,520 Speaker 3: to Ukraine. 479 00:25:38,560 --> 00:25:40,480 Speaker 4: So is Russia a winner from this? I think that 480 00:25:40,600 --> 00:25:41,560 Speaker 4: Rassia is a winner. 481 00:25:41,840 --> 00:25:44,680 Speaker 6: You see some of the commentary emerging from the Kremlin 482 00:25:45,080 --> 00:25:48,760 Speaker 6: on social media. They barely can hide their satisfaction to 483 00:25:48,800 --> 00:25:51,760 Speaker 6: see the oil price going up. The traditional said an 484 00:25:51,760 --> 00:25:55,600 Speaker 6: American foreign policy has been that that Rasia is a 485 00:25:55,640 --> 00:25:58,880 Speaker 6: gas station mascaradeing as a country, and I think that's 486 00:25:58,960 --> 00:26:01,520 Speaker 6: largely true, at least the financing of the country. All 487 00:26:01,520 --> 00:26:03,280 Speaker 6: of a sudden, the price of oil is much higher, 488 00:26:03,359 --> 00:26:05,800 Speaker 6: and it was only a few days ago ten fifteen 489 00:26:05,800 --> 00:26:08,920 Speaker 6: to twenty percent higher. At the price of Russian oil 490 00:26:09,000 --> 00:26:12,600 Speaker 6: is even much higher because Russia was really struggling this 491 00:26:12,720 --> 00:26:15,520 Speaker 6: time to sell his oil in the black market, because 492 00:26:15,520 --> 00:26:18,440 Speaker 6: a number of countries the market, the global oil market 493 00:26:18,520 --> 00:26:20,879 Speaker 6: was so well supplied that some countries were able to 494 00:26:20,920 --> 00:26:25,520 Speaker 6: switch from Russian oil blacklisted oil to say the mainstream market. 495 00:26:25,840 --> 00:26:27,280 Speaker 4: India was a case in point. 496 00:26:27,600 --> 00:26:30,280 Speaker 6: Russia was keeping up his production, but it was filling 497 00:26:30,359 --> 00:26:33,840 Speaker 6: up loading tanker after tunker, and those tankers were sitting 498 00:26:33,880 --> 00:26:36,920 Speaker 6: in the high seas unable to dis charge because they 499 00:26:36,920 --> 00:26:38,760 Speaker 6: didn't have a client. They didn't have a customer for 500 00:26:38,840 --> 00:26:41,159 Speaker 6: that oil. All of a sudden, we are going to 501 00:26:41,200 --> 00:26:43,720 Speaker 6: see that oil that is floating around near the coast 502 00:26:43,720 --> 00:26:46,080 Speaker 6: of China, near the course of India's going to find 503 00:26:46,119 --> 00:26:46,440 Speaker 6: a home. 504 00:26:46,600 --> 00:26:49,520 Speaker 4: India and China are going to be taking those barrels, and. 505 00:26:49,960 --> 00:26:51,960 Speaker 6: Russia is going to be able to set a price 506 00:26:52,000 --> 00:26:53,480 Speaker 6: that is going to be much higher than a few 507 00:26:53,520 --> 00:26:57,240 Speaker 6: days ago where it had to be really salinated at 508 00:26:57,280 --> 00:27:01,600 Speaker 6: these stress levels because only by for in huge discounts, 509 00:27:01,720 --> 00:27:05,320 Speaker 6: it will entice the Indian refiners to buy and risk 510 00:27:05,560 --> 00:27:09,359 Speaker 6: the potential blowback from America and the White House. Now 511 00:27:09,680 --> 00:27:11,480 Speaker 6: I will expect that the White House is going to 512 00:27:11,480 --> 00:27:14,359 Speaker 6: be turning a blind eye to any Indian or Chinese 513 00:27:14,359 --> 00:27:17,919 Speaker 6: refiner buying Russian oil. Therefore, the Russian field that they 514 00:27:17,960 --> 00:27:20,399 Speaker 6: have been on a stronger hand, those discounts are no 515 00:27:20,480 --> 00:27:23,440 Speaker 6: longer there, and it's just basically I Yuana, weare oil, 516 00:27:23,520 --> 00:27:25,760 Speaker 6: which by the way, is the only oil of a 517 00:27:25,840 --> 00:27:29,320 Speaker 6: label right now to you Indian refiner. The price is 518 00:27:29,320 --> 00:27:31,359 Speaker 6: the market price, take it or live it, and they 519 00:27:31,359 --> 00:27:31,919 Speaker 6: are taking it. 520 00:27:32,720 --> 00:27:35,399 Speaker 3: And I guess last word to you, going back to 521 00:27:35,440 --> 00:27:37,479 Speaker 3: that global model, I mean one thing that is pretty 522 00:27:37,480 --> 00:27:40,919 Speaker 3: striking when you look at the way the impacts, the 523 00:27:41,040 --> 00:27:46,240 Speaker 3: economic impacts of this war are being distributed. It feels 524 00:27:46,280 --> 00:27:50,080 Speaker 3: like the biggest costs are often going to be felt, 525 00:27:50,160 --> 00:27:53,199 Speaker 3: or at least the risks are potentially being felt by 526 00:27:53,240 --> 00:27:57,800 Speaker 3: some of America's biggest allies, and the Gulf. In Europe, 527 00:27:58,680 --> 00:28:01,600 Speaker 3: the UK householders who aren't going to get their rake cart, 528 00:28:03,000 --> 00:28:07,640 Speaker 3: and Russia's one of the winners, and the US economy 529 00:28:07,680 --> 00:28:11,760 Speaker 3: overall relatively unaffected. Or do you think still you should 530 00:28:11,800 --> 00:28:13,520 Speaker 3: need to keep an eye on that gasoline price. 531 00:28:13,880 --> 00:28:15,240 Speaker 1: I think you need to keep an eye on the 532 00:28:15,240 --> 00:28:16,159 Speaker 1: gasoline price. 533 00:28:16,280 --> 00:28:17,639 Speaker 5: You know, if you think about the winners and losers 534 00:28:17,680 --> 00:28:19,320 Speaker 5: in the US, you have a few companies that are 535 00:28:19,320 --> 00:28:21,760 Speaker 5: winning and a large number of consumers who are losing. 536 00:28:22,440 --> 00:28:25,359 Speaker 5: And you know, in terms of if you're going into elections, 537 00:28:25,359 --> 00:28:28,560 Speaker 5: the numbers are not equal. There's a larger number of 538 00:28:28,560 --> 00:28:32,439 Speaker 5: consumers then there is a number of companies. And I 539 00:28:32,440 --> 00:28:35,040 Speaker 5: think even if you think about the winners in Russia 540 00:28:35,160 --> 00:28:37,840 Speaker 5: as economically a winner, every old producer is a winner 541 00:28:37,840 --> 00:28:39,640 Speaker 5: in this case if you're not part of this region. 542 00:28:39,680 --> 00:28:43,720 Speaker 5: Of course, I think also US remember that Russia shares 543 00:28:43,760 --> 00:28:48,680 Speaker 5: borders with Iran. It's already lost influence in Syria, and 544 00:28:48,720 --> 00:28:51,000 Speaker 5: it US applies it with Drunze for as war in 545 00:28:51,120 --> 00:28:54,520 Speaker 5: Ukraine and losing that government if it ends up losing it, 546 00:28:54,640 --> 00:28:58,440 Speaker 5: and that sort of ally might be a political loss, 547 00:28:58,560 --> 00:29:01,479 Speaker 5: which partly of says the economic game bag guests from 548 00:29:01,520 --> 00:29:02,480 Speaker 5: higher oil prices. 549 00:29:03,080 --> 00:29:05,240 Speaker 3: Well, I can imagine that we will have plenty more 550 00:29:05,240 --> 00:29:07,880 Speaker 3: to talk about on this in the coming weeks, at 551 00:29:07,920 --> 00:29:10,560 Speaker 3: least if it does carry on for those five or 552 00:29:10,600 --> 00:29:13,000 Speaker 3: six weeks that have been talked about. But z Dode, 553 00:29:13,200 --> 00:29:15,520 Speaker 3: Javier Blast, thank you so much for making the time 554 00:29:15,560 --> 00:29:28,040 Speaker 3: on a very busy day. Thank thanks for listening to 555 00:29:28,040 --> 00:29:30,880 Speaker 3: Trumpnomics from Bloomberg. It was hosted by me Stephanie Flanders, 556 00:29:30,920 --> 00:29:33,600 Speaker 3: and I was joined this week by Bloomberg opinion columnist 557 00:29:33,680 --> 00:29:37,240 Speaker 3: Javier Blass and Zia Dold, chief Emerging Market's economists for 558 00:29:37,240 --> 00:29:41,360 Speaker 3: Bloomberg Economics. Trumpnomics was produced by Summer Sadi and Moses, 559 00:29:41,400 --> 00:29:44,479 Speaker 3: and we've helped this week from Stephen Carroll, Andrew Gavin 560 00:29:44,560 --> 00:29:48,480 Speaker 3: and Amy keen sound design by Blake Maples and Kelly Garry, 561 00:29:48,800 --> 00:29:50,960 Speaker 3: and to help others find the show, Please rate and 562 00:29:51,080 --> 00:29:53,200 Speaker 3: review us highly wherever you listen