00:00So we're trying to piece together really the situation across the Strait of Hormuz and we're
00:03looking at various data sets. I'll get to this vessel, this Iron Maiden vessel. I'm sure you've
00:09probably seen the story on the Bloomberg Terminal and elsewhere as well. Number one is let me tell
00:13you about Vortexa. Fantastic set of numbers. They've dropped these daily updates in our inboxes and I
00:18think the latest one here coming through in terms of relative vessel volumes through that part of
00:26the world. So whether you're talking tankers or dry bulk, it's dried up substantially in recent days
00:34or so. So we're looking at, for example, transits fell from a January average of 40 ships per day
00:40to just a few on March 2. By March 3, Vortexa data recorded only one tanker making that trip. So
00:47that's as of about at the peak of it, at the start of it earlier in the week. Now, what
00:53are we showing
00:53here? Bloomberg map, right? That is Strait of Hormuz. This is, there's the Gulf. This is where we are
00:58and as far as Iron Maiden is concerned. So Feb 18, about three weeks back, it was docked in one
01:04of
01:04Dubai ports here at Jabal Ali. What happened was it then transited through, spent a couple of days
01:13on different paths, of course, within the Gulf, got stuck in and around that time in about the Feb 20s
01:21or so. And then we understand. We understand it changed its signaling. And at this point in time,
01:29this was taking place, if I'm talking from an Asia perspective in terms of time, because this was
01:34last seen UTC about an hour back at about this time. This was around, I would say, about midnight
01:40Asia time. It's then managed to cross. This is dry bulk, by the way. And we understand it is headed
01:45towards the Asia Pacific. And we understand it's not information that's sated on the vessel itself.
01:51It's headed toward China. Now, is that a route literally and figuratively we can take in order
01:59to alleviate the supply crunch we are seeing right now? We know, of course, China is friendly
02:08to players in that part of the world. And might that be actually one of the things that makes
02:13Safe Passage safe, given, of course, the connections?
02:17You mentioned the change in the signage, right? When it was around that kind of Omani coastline,
02:22right?
02:22Yes, where we are right now currently.
02:23So it's interesting to know, before that, it was called, it was labeled,
02:26Four Orders.
02:28Four Orders, yes.
02:29Once it got to there, it changed to China owner. And then we was able to kind of safely
02:34go through. There's a lot of questions, obviously, on what this means. I mean, they're claiming
02:38that they are a China order here. Let's bring in our owner here. Let's bring in Nicholas Lua,
02:44who maybe kind of pieced things together for us. So they're claiming to be Chinese-owned,
02:50Nicholas. Tell us a bit more. I mean, why would a ship claim to be Chinese as it crosses the
02:57industry? Well, I think it's a really useful strategy in order to bypass a very dangerous
03:03choke point right now, Yvonne. And I think one thing to note about the Iron Maiden, and
03:07what a great name for a ship that had the guts Iron Constitution to go through Hormuz yesterday,
03:12right? It's a terrific idea. And I think, to be fair to Iron Maiden, it's not completely not
03:19Chinese-linked, right? It's operated, at least according to the intel we have, by a Chinese
03:24operator. And I think there are some links to a Japanese owner. So that's kind of why the picture
03:29is a little unclear. That's it. Iron Maiden isn't unique in that ships passing Hormuz on a normal
03:36day do routinely switch their ownership. They switch their for-order sign to something like
03:41Chinese owner or Russian owner. And I mean, you can figure out, right? It's a good strategy for
03:46trying to get around some of the dangers. Even on a normal day, it's worth reporting those are
03:51dangerous waters. So finding a way to make yourself more protected, like, even if it's not
03:56insurance, that's something. It's not nothing. Yeah, that's a good point you bring up because
04:03people tend to forget that ownership can actually change in the same way. I think it's just trying
04:11to piece together the timing, where it was and when it actually took place and whether or not
04:15it actually took place. That's a good qualifier there. But the broader context here, so we're a
04:19few days into this, Nicholas. What do we know in terms of how badly hit the region is in terms
04:25of
04:25the fuel shortage? What are we not receiving that we would have ordered at this point in time?
04:32I'm not going to be cagey about it. It's in some ways a fuel trader's worst nightmare right now,
04:39right? Like, basically, as good as nothing is passing through Hormuz. We've already seen China,
04:45the Asia-Pacific's third largest oil exporter, say that it's not going to export anymore, right?
04:52Now, to be fair to China, a lot of its production is meant for the domestic market. It supplies
04:58outside of China on a quota basis, so there are some limits on what it can supply. But I think
05:03the rest
05:03of the region's also really edgy, right? Like, the Japanese refiners, as we reported yesterday,
05:09have actually approached the government asking for strategic stockpiles to be released to them.
05:14And I think Japan is particularly under threat because unlike some of the other, like, merchant
05:19refiners in the region, Japan is a very conservative country, once upon a time safety man buying almost
05:25all its flows from the Arab Gulf. Guess where it's been hit? The Arab Gulf. So I think that's why
05:30some of the major exporters are in trouble. I think some of the other refiners have a little
05:36less, a little more room to wiggle. I'll give you an example, like South Korea, right? A lot of its
05:41refiners are mega producers. They're designed to take advantage of the need for supply here in Asia.
05:48So they produce to sell, right? And they have a relatively diversified supply compared to Japan.
05:53If you look at Korea, they buy from the US, they buy from the AG. So even if some barrels
05:58are lost
05:58coming out of the Persian Gulf, there are ways to get around it. And of course, I think you might
06:03have seen the headlines already, like the US is also letting Indian refiners have a pass on like
06:09Russian oil, at least for the time being, for a month, so that the current like supply shock can
06:14be tamed a little bit. I'd like to point you, of course, to oil prices, My Bread and Butter,
06:18those are coming down a little bit, even in a week. So we're sort of ending the day slightly down,
06:24starting the day slightly down. But not to forget, this is still the biggest surge since 2022,
06:28right? So there is an escalation. There is real concern about supply shocks. We've seen producers
06:34lose some of their barrels. We've seen people start hoarding fuel in certain markets, including
06:39Singapore. But at the same time, I think Trump is aware and the global balances are very tight. And
06:45there are ways that we're trying to, the global market, geopolitical players are trying to ease off
06:51some of those supply shocks.
06:54Nicholas, I think that that's a good point as well, that, you know, China does have options,
06:59a lot of options in terms of being able to manage its energy mix temporarily. And of course, I think
07:04one of the things you mentioned, too, is they're telling some of the refiners to not export and just
07:08keep the supply in. What do we know specifically about what China is trying to do? And how has that
07:13affected domestic energy prices?
07:18I think it's clear that domestic energy prices have come up a fair bit, I think, because even as
07:24there is no, even as like a lot of the supply that's produced is meant for the domestic market,
07:29it's not immune to global supply shocks. I will say, look closely at what China does with its strategic
07:36petroleum reserves, right? The SPR. We spent a whole, like a good chunk of the second half of last year
07:41talking about how China's been stockpiling barrels, it's been trying to build its crude supplies
07:45in order to bolster its energy security, right? And let's not forget that that came last year in
07:50a year when the geopolitical environment was becoming more uncertain. In a time like now,
07:56things have gotten absolutely crazy, right? So it's precisely this kind of shock that a strategic
08:03petroleum reserve is meant to protect against, right? So I keep an eye on what China decides when
08:08it comes to that, although even then we acknowledge, of course, that's a very opaque
08:11conversation and it would take, you know, you have to keep your ears really close to the ground
08:15to figure out what's going on.
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