00:00We're seeing oil dynamics change in real time, aren't we, Will?
00:02We are, and the problem that energy traders have is that on the one hand,
00:08the longer this crisis goes on and the longer the Strait of Hormuz remains blocked,
00:14the reverberations through the global energy system will be more and more felt
00:17and prices are likely to ratchet higher.
00:19But on the other hand, traders also have to be wary that this war could end at any time,
00:23in which case the straits open and a lot of the pressures come out of the market.
00:27So it's a very hard place to be as a trader.
00:30It's very hard to be on top of both of those dynamics.
00:34But what we got from the Qatari energy minister today was a really stark warning, as you say,
00:40that if this does carry on, the impacts on energy markets will not be counted in days,
00:45but perhaps in weeks and months, and that energy prices could keep going higher.
00:51That's where we are.
00:52Well, and every next piece of infrastructure damage also causes that deadline to shift back further and further, right?
00:59Will, these 11 million barrels that are at sea that India is now allowed to buy,
01:03I mean, when you think about the 18 million barrels that go through the Strait of Hormuz every day,
01:07it doesn't sound like that much.
01:08Does it bring some relief to India?
01:10What does it do to Russia?
01:11It does bring some relief to India.
01:13India is very reliant on oil that comes out of the Strait of Hormuz, and so it was really feeling
01:20the pinch.
01:21It had been a big buyer last year of Russian oil.
01:23That had stopped to some extent because of sanctions from the U.S. on Russian oil exports.
01:28Those have now been waived for a limited period of time, and so it will allow India to take in
01:32that Russian oil,
01:33and it will bring some relief, at least in the short term.
01:37For Russia, this whole crisis is a big boon.
01:41It had been really suffering from lower oil prices, especially for its own oil,
01:45which was trading at a very, very big discount because it was struggling to find buyers.
01:49Now India can become a buyer again.
01:51Prices are much higher.
01:52This will come as an enormous relief to Vladimir Putin and his budget and his war economy.
01:58Yeah, that discount is getting shaved off, right?
02:00It could even turn into a premium in the worst of cases.
02:04Just curious about what you think the president has in his toolbox to change the price of oil.
02:09The big thing that he has, and he hasn't done it yet, and I'm not sure it's on the cards,
02:14is the Strategic Petroleum Reserve.
02:16He can put oil from the SPR, these huge caverns that the U.S. have,
02:21which contain many millions of bottles of oil, into the market, and that could bring down the prices.
02:27It's the International Energy Agency, which is a group of developed economies.
02:32They have contingency plans to release strategic reserves globally into the market.
02:38So there are these relief valves that can be pushed or opened in the coming days and weeks.
02:45But if the strait stays closed, if those flows remain constrained,
02:50they probably won't be up to the whole task.
02:52Yeah, it's very binary, isn't it?
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