00:00Two oil tankers off Iraq were hit and Oman has ordered its port outside the Strait of Hormuz
00:05to be cleared. What does this mean then for supplies coming out of the Gulf?
00:11It shows that Iran is making a concerted effort to impact the export of oil out of the whole region.
00:18It seems to have stepped up attacks on ships inside the Persian Gulf. These ships in Iraq
00:23are at the north of the Persian Gulf, so a lot away from the Strait of Hormuz. So
00:27the effort is against shipping through that whole area. And then separately, we've had this incident
00:32in Oman. Oman is not one of the biggest oil suppliers in the region, but a significant oil
00:37supplier. But importantly, it lies outside the Persian Gulf. So here you have Iran trying to
00:42impact supplies even outside the Strait of Hormuz. The big picture here is all of this means that
00:48the Strait of Hormuz is firmly closed, and that will be of huge concern to energy traders globally.
00:54Some of that impact has been offset in two ways. The announcement of this big stockpile
00:58release that we had yesterday from the IEA, and we've got more details about what the US is going
01:03to do there overnight. And it's also being offset by the ability of Saudi Arabia to export from the
01:10Red Sea. But the longer that goes on, these will not be enough, and concern will re-emerge about how
01:18much oil production exports we're losing. And we may see prices ratchet higher again.
01:24On the action by the IEA, as you say, it seems to have been reversed, at least the price move,
01:30based on what's been happening since then in terms of the attacks in the region. Does this mean that
01:34the IEA will have to go, or rather the countries holding strategic reserves will have to release
01:39more? Can they do more?
01:40I don't think we're there yet. There will, of course, be a concern that stockpiles,
01:45emergency stockpiles are finite, and you don't know how long this crisis is going to go on. You don't
01:49know what else is coming at you. So there won't be, there may be a reluctance to do too much
01:54too
01:55quickly, because you don't want to use up all the stockpiles. I don't think we're there at the
02:00moment. The priority will very much be on trying to find a way to get the trade of hormones over,
02:07and the oil market may bring some fresh thinking in the Trump administration about when and how that's
02:13going to happen. One other notable thing that we saw today, Stephen, is that China further
02:18restricted the exports of fuel from its refineries, jet fuel, diesel, gasoline, etc. And that shows
02:26that the impact on a country like China is real, even though China has some of the largest
02:32strategic oil reserves in the world.
02:34Yeah, and has been building those up for many months, as we have reported. I think there's also
02:40another word to mention, though, hoarding. I noticed that Carl R's Jeff Curry talked about that as he
02:47discussed this with Bloomberg only yesterday, keep hoarding down. That perhaps is the worry,
02:53as we're also seeing many people try to game out scenarios for where the oil price might peak now.
03:00This is always a problem at these times. The natural thing to do if you read the news,
03:05whether you're a company, whether you're a driver, whether you're a homeowner who heats your house
03:09with heating fuel, is to think, well, I should get ahead of this, I should fill up my tanks.
03:13And that's rational on an individual basis. But of course, if everyone tries to do that at the same
03:18time, you create a rush straining what are very complex and precise supply chains and sucking
03:26out inventories. And that can cause its own problems, even though supply is ample. So that will be
03:33something to watch. And that's something they're concerned. Just anecdotally, you hear here in the UK
03:38that people are filling their heating tanks, even though it's the end of winter, before prices go up.
03:43And it's very hard to find that heating oil and prices have more than doubled in some places.
03:47So it can be a really real thing, both at the micro level and at the slightly more macro level.
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