00:00And let's get some more expert analysis on this, on the energy aspect of this story from Iran with Robin
00:06Mills,
00:06who's chief executive of Kumar Energy, which is an energy consultancy based in Dubai.
00:11First of all, I just want to ask you, Robin, and thank you very much for being with us,
00:15what is the situation there now in Dubai? It must have been a very disturbing time to be based there.
00:22Yes, I think, look, things under the circumstances are quite calm.
00:27I mean, we do hear explosions, which are interceptors being launched against the Iranian attacks.
00:35Some debris has fallen in various places, some damage and a few casualties.
00:39But on the whole, I think things are calm and people are coping OK.
00:44OK, good. Well, just switching then to the impact on the oil industry.
00:48I mean, the price is jumping 10 percent, Brent up around $80 a barrel in over-the-counter trade.
00:54Is this a short-term spike, do you think, or could we really see a sustained rally?
01:02Well, so far, you know, no serious disruption.
01:04And obviously, we'll see where the markets open on Monday.
01:09But, you know, dramatic events, of course, but no real disruption to the oil flows.
01:16Tankers are waiting outside Hormuz.
01:19Some are crossing into the Gulf, many are not.
01:22But that's more of a precaution at the moment.
01:24We haven't seen any real attacks on tankers yet.
01:28And I think we'll have to wait a few days and see if there are no serious attacks.
01:32At some point, tankers will start going into the Gulf again.
01:36If there are attacks, if there are mines or drone attacks or something like that,
01:39then obviously the shipping industry will have to think again.
01:42So you're sounding relatively optimistic that flows will continue through the Strait of Hormuz
01:48with nearly 20 percent of global oil going through that passage.
01:51But what would you say the worst-case scenario is
01:54and just how disruptive potentially the current risk environment is?
02:00It could be very serious, of course, yes.
02:02If we do see sustained attacks on tankers with mines, small boats, drones, missiles, you know, whatever,
02:09we've seen already in the Red Sea that a few attacks and only one or two ships actually sunk
02:15was enough to deter most ships from using that line.
02:18We've seen a couple of major shipping lines already suspending transit through Hormuz entirely
02:23until the situation is clearer.
02:24So, yes, we could have, you know, theoretically up to 20 million barrels per day or so of oil,
02:3020 percent of world's supplies through Hormuz cut off.
02:33There are alternative routes for perhaps 8 million of that or so,
02:37but a large part could be cut off.
02:40And that would include, I think, as you said, all of the supply from Kuwait, from Iraq, from Qatar.
02:45And not just oil, but modified natural gas.
02:4816 percent of the world's LNG goes through the Strait as well.
02:51And that would certainly be very serious if that was interrupted.
02:53Yeah, well, absolutely.
02:55Yeah, important to emphasise the LNG aspect of this as well.
02:58And which countries are most affected by this potential blockage of oil and gas?
03:03And is the United States perhaps shielded to some extent by its own supply of oil and gas?
03:11Well, in the case of oil, if oil supply is reduced and cut off, then the price goes up for
03:17everybody.
03:18So, you know, yes, the U.S. is a big producer and exporter, so the U.S. as a whole
03:22will do okay.
03:23And that's, in that case, may even benefit as a whole, but ordinary Americans would be hurt.
03:29Certainly prices would go up a lot.
03:31And the same goes for any big oil importing country.
03:33The same would go for Europe, would go for Japan, would go for China and India.
03:38If you look at the raw numbers, of course, China, India, other Asian countries take most of the oil from
03:44the Gulf.
03:45But that doesn't help too much if prices generally are going up.
03:48And if you speak gas, Europe gets not too much of its energy from the Gulf.
03:54But, again, if there's a shortage and prices go up, generally Europe is particularly unwell.
04:00Very early to say, of course.
04:01But could this crisis potentially accelerate the push towards energy diversification and renewables?
04:07Or would it reinforce reliance on fossil fuel?
04:12I think absolutely this will encourage everybody to look at alternatives.
04:16I think it shows the wisdom of the Chinese in developing their electric vehicle industry and in building up stocks
04:22of oil as well.
04:23The Chinese spent all last year accumulating oil in storage precisely for a crisis just like this one.
04:31But absolutely, it will, of course, encourage countries to turn to electric vehicles more aggressively,
04:37to turn to renewable energy to replace gas.
04:40Absolutely.
04:41Robin, really grateful for your time today.
04:43Thank you so much for being with us, Robin Mills, Chief Executive of Kamar Energy,
04:47which is a consultancy based in Dubai.
04:49Thank you and take care.
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