00:00Iran's Revolutionary Guard said that they had attacked an allegedly U.S.-linked oil tanker in the Strait of Hormuz.
00:09And this is as part of a wave of strikes retaliating against a U.S.-Israeli assault.
00:16And I find it really interesting because, as you said, Strait of Hormuz, a choke point when it comes to
00:22oil.
00:23But, Jono, we can't forget that it also is trade.
00:27You know, 30% of the world's fertilizer also goes through the Strait of Hormuz.
00:32So this has a knock-on effect on everything and, of course, airlines.
00:36Of course it does. We ship it in general, but we see this a lot.
00:39The Suez Canal, if there's even the most minor of a rattle there, that causes a global supply issue.
00:44And the Strait of Hormuz is the big one.
00:45But the market price, indicatively, will have dropped straight away.
00:49Of course you'll see this. I mean, come on, is this really a news story telling you that oil prices
00:54are up because there's a war?
00:55Of course we hear this over and over again.
00:571%, that's what the FTSE fell by yesterday.
00:59And you might think that sounds quite dramatic, but if you look at the grand scheme of things,
01:04and like Rawi has said as well, it's actually not been as bad as previous conflicts.
01:08The Western world is relying less on oil right now.
01:11If you look at something like 2020, even 2021, when we saw Afghanistan,
01:15we were looking at potentially 40% to 50% of global energy was met by oil in the entire
01:22global supply.
01:23Now we're down at somewhere around 30%, and that's largely due to renewable energy,
01:26which has been fueled key by the West.
01:29And you will see places like India, however, and China will require that oil as well.
01:33But guess what? Oil isn't going from the Strait of Hormuz to go to China or India,
01:37so therefore it shouldn't interrupt that supply too much.
01:39So there will be less of a knock-on effect than we've seen previously, partially due to the fact that
01:43we're using renewable energy.
01:44But the issue with flights, of course, is that yes, we've seen a knock-on effect, and that's inevitable.
01:50Just look at the news.
01:51The airspace disruption was pretty immediate after impacts took place and after those missiles were deterred.
01:56So several Middle Eastern corridors have now been completely restricted or have been closed off partially in places.
02:02And we're seeing a gradual return. We're hearing that Etihad and Emirates in the UAE have had a gradual return
02:08to service this evening,
02:09which is very reassuring because you're not going to put commercial airliners in the sky if you believe there is
02:14an active threat.
02:15So that is a real reassuring news that's emerging this evening as well.
02:19Of course, the shares in airlines have dropped. That is inevitable.
02:23The schedules will resume. The shares will then resume afterwards. It will take some time.
02:27If you just look at COVID, it was a lot of a longer, protracted, drawn out, but then airline travel
02:32came back and then doubled, which was very impressive.
02:34And prices doubled.
02:36Prices doubled as well.
02:37But I do think we're in this.
02:38And with higher oil prices, we could be paying more for our flights.
02:42We could be paying more.
02:42Let's start again.
02:43But look, it will stabilize. There will be a rebound.
02:45Carriers have been, correctly, they're operating cautiously at the moment.
02:48I, for one, certainly as a passenger, wouldn't love to be in an airline aircraft right now.
02:54So I can see the reasoning behind it. It will bounce back.
02:57But it was inevitable that this was going to happen.
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