'Iran-Israel Tensions To Derail Oil Supplies Globally': Peter Mcguire | NDTV Profit - video Dailymotion

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00:00Peter McGuire is joining us, he's CEO at XM Australia.

00:03Peter, very good morning to you from where we are.

00:05Pleasure as always to speak with you.

00:08What are you making of the kind of conflagration

00:11we've seen between Iran and Israel

00:15from a market's perspective?

00:18And I'm not talking about the war itself

00:20or the geopolitics of it, but from a market's perspective,

00:22how much of a concern is that Iran's crude supplies

00:26or entire oil machinery will get hit?

00:30Well, good morning Tamana.

00:32I think that we've been down this pathway before

00:35and this really creates much angst from a supply side

00:39if there was to be an attack on those Iranian fields.

00:42We all understand geographically where they're positioned

00:44in the Strait of Hormuz on the Persian Gulf

00:47and the impact that that would have to shipping

00:50and of course, all the crude that flows through that region.

00:53So this would derail in a lot of ways

00:56a lot of crude being exported globally.

00:58So there's the first part.

00:59And the second part is a war premium

01:02would be quickly built into price

01:04and that could add five, 10, $20,

01:06depends on the severity of it,

01:08very, very quickly, if not more.

01:11Right.

01:12Peter, morning.

01:13You know, there were some reports

01:15over Tuesday and Wednesday as well,

01:18but there was some speculation with respect to OPEC

01:21going ahead and increasing production going ahead.

01:24Of course, since then,

01:25we've had certain stories being rebutted

01:27and this is a Wall Street Journal story

01:29being rebutted by the OPEC.

01:31There was still speculation that oil prices

01:33could potentially go down to $50 a barrel.

01:35That looks unlikely, yes?

01:37Well, again, perhaps the same.

01:38Good morning.

01:39I think a couple of things.

01:40First off, if you look at these,

01:42there are two very different processes in play.

01:45You've got, if you strip out the war

01:47and there was nothing happening

01:48and you were going to increase production,

01:50you would think that prices would fall in value.

01:53But now you've got a war premium

01:54that could be built in and escalating

01:56and you've got major conflict across that Mideast Basin.

02:00So that creates uncertainty

02:02and uncertainty is not what the market's like.

02:04The markets want certainty.

02:05So these are all factors that are going to,

02:08I think, unwrap themselves over the next matter of days.

02:14To understand, you know,

02:16the impact that Iran has on global crude supplies,

02:20the war and the uncertainty there, of course, remains,

02:24but the fact is that Iran is not such a huge supplier

02:28by itself and the fact that there's a glut.

02:31Do you think that tempers down expectations to some extent

02:34or tempers down at least the impact of this war

02:38on crude prices?

02:40Well, Tamana, it depends if there was a severe strike

02:43on the actual oil refineries and the whole Iranian oil,

02:50you know, the complex pipelines

02:52and everything that goes into the production of oil.

02:55So there's the first part.

02:56So if they would take out their infrastructure,

02:58that would create much angst

03:00because naturally are they going to be their counterparts

03:03or their allies coming to their support?

03:07And then the next part of it is what happens

03:09as far as distribution through the Persian Gulf?

03:11So, you know, these are factors that can quickly escalate

03:16and we've just got to say how severe

03:18that that particular process or scenario was to play out.

03:23This is all unknown

03:24because this is going to be into the future

03:26and we've just got to sit here

03:27and see what the retaliatory action

03:29is going to be from Israel.

03:32Moving on to, well, I'm going to talk about metals

03:34in this case because we've actually seen

03:36a lot of policy traction

03:37with respect to what China is doing there.

03:39And because of that, we've actually seen

03:40a little bit of resurgence in metal prices as well.

03:43How are you reading into things here?

03:46Well, Agam, I mean, you know,

03:47you've got copper now through 10,000 a metric ton.

03:50It's bounced very strongly to the upside.

03:52So is aluminium, nickel, tin, zinc.

03:55So all of them have had a really nice rally

03:57and, you know, it's on the back naturally

03:59of that China stimulus.

04:01And are we going to see an ongoing,

04:02I mean, the stock market has been mind blowing,

04:05which you've seen for the performance in September

04:07and certainly over the last week and a half

04:09across the Chinese equity markets.

04:12So if this is going to be the pathway forward

04:14and you're going to see continued uplift

04:16and really a concentrated effort

04:18from a stimulus perspective, as far as China's concerned,

04:23then that's a good sign because you're going to,

04:25but you naturally need to see consumption

04:27out the other side.

04:29That's global consumption.

04:30So again, it's early days, but at the moment,

04:33it's been a market that many traders

04:35have enjoyed terrifically in the sense of base metals

04:38and that quite bullish move to the upside.

04:42All right.

04:42Thank you so much for that, Peter McGuire there.

04:45And, you know, a lot of uncertainty out there,

04:48but remember that the kind of impact we will see

04:52from the Iran-Israel conflict, at least on crude prices,

04:55will be limited because of the huge glutton supply.

04:58And also we'll have to wait and see.

05:00I think what the market is waiting to see

05:01is what exactly is the shape and form of Israel's retaliation.

'Iran-Israel Tensions To Derail Oil Supplies Globally': Peter Mcguire | NDTV Profit

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