00:00A developing new situation. According to NBC News, U.S. forces securing a Russia-flagged tanker linked to Venezuela.
00:08The ship is currently sailing between Iceland and Scotland, with Moscow saying it's monitoring the situation with concern.
00:14Bloomberg's Simon Casey joins us now for more. Simon, welcome to the programme.
00:18What do we know about this tanker? Is it a Russian vessel or not?
00:22It's a Russian-linked vessel, I think we can call it that.
00:25It's part of the Shadow Fleet, which, as many of you know, it's part of this global fleet of tankers that are subject to sanctions.
00:34Frequently, they turn off their transponders. They literally try to fly under the radar.
00:39And this was a tanker that was chased away from the coast of Venezuela last month by U.S. ships when it was trying to dock in Venezuela.
00:48As I say, it's a sanction vessel. President Trump, in recent weeks, has implemented this blockade on Venezuela.
00:55To try to halt exports of oil from the country via sanctioned tankers. Part of putting pressure on the regime.
01:04This was just before the seizure of Maduro, of course.
01:08So this tanker has been chased across the Atlantic, essentially, over the past few weeks.
01:13And things have reached their head this morning.
01:15Simon, what do you think the consequences are?
01:17I know it's very early days. And I know it's maybe a little bit dangerous to go into the realm of speculation.
01:23But as you sit here and watch this play out, what do you think the consequences could be from a situation like this one?
01:28Well, it's not the first tanker to be seized, of course.
01:31We had another sanctioned tanker seized last month.
01:34That tanker was full of oil. This one is empty, by the way.
01:38That tanker that's full of oil now sits off the coast of Texas.
01:42We expect that in due course, the U.S. government will take the legal steps necessary to take ownership of that oil.
01:48In this case, the tanker that's just been seized today, it's empty.
01:52There are still questions why that particular tanker.
01:55As I said, there's a shadow fleet out there.
01:57There are many tankers on the ocean.
01:59Some still in the vicinity of Venezuela.
02:01Why the interest in this one?
02:03We don't know. Is there something aboard that tanker?
02:05We can really only speculate at this stage.
02:08In terms of further ramifications, this has been quite a spectacle.
02:13We'll see what the Russian response is in due course.
02:16But it doesn't really help relations between U.S. and Russia at this stage.
02:20There may be ramifications with the efforts to engineer some sort of ceasefire in Ukraine.
02:27So we'll see. It'll be very interesting to see what happens in the course of today.
02:31Simon, if the U.S. continues to go after the shadow fleets almost around the world, what would that do to the oil price?
02:38Well, Venezuela is a shadow of what it once was in terms of an oil producer.
02:44It produces currently less than a million barrels a day, probably substantially less than that right now, in a global market of over 100 million barrels a day of consumption.
02:53And we're in a glut at the moment. The oil price has declined quite a bit over the last 12 months.
02:59We think prices could even head lower this year, regardless of what happens with Venezuela.
03:02The world can live without Venezuelan oil.
03:06So there's no sort of significant market impact.
03:10Certainly consumers are probably not going to notice anything from this.
03:13Secretary Wright right now is saying that Venezuela can increase output by 700,000 barrels a day in the medium term.
03:20What do you make of that?
03:21How quickly could we see a ramp up?
03:23I think that's a pretty bullish assessment.
03:25If you speak to people in the industry who know Venezuela pretty well, we're currently, as I say, less than a million barrels a day.
03:33Its peak back in the 1970s was over three million barrels.
03:37It also reached close to that level in the 90s.
03:39But since then, the industry has gone and there in Venezuela has undergone real stresses, lack of investments, corruption, disrepair, you name it.
03:51There's a host of problems.
03:52And these are not going to be easy to fix.
03:54There will be some short-term fixes that if companies come in right now, spend a lot of money, maybe they can bump production a bit.
04:04But I think the significant kind of recovery, which is what President Trump was talking about on Saturday when he spoke from Mar-a-Lago, that's years away.
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