00:00Things certainly worsened or went in the wrong direction over the weekend.
00:05What are the sort of convictions for a quick turnaround given there doesn't seem to be
00:10any sign of any sort of agreement being arrived upon between the parties in this war?
00:20That's right Heidi.
00:21So over the weekend we've seen signs of the war escalating.
00:25We see the strikes on Kark Island, we've seen drone attacks on this Fujairah oil exporting
00:32up for the UAE outside of the Strait of Hormuz and we have heard calls for things to de-escalate
00:40but they have no details for things to hit in the direction.
00:43So for now what we're seeing in oil prices is the reflection of that risk.
00:47It's not a flu blown out risk kit but we do see signs of this war not having a clear
00:53off-ramp
00:54as of now.
00:57We know that Asia imports a lot of energy from the Middle East, who are the most exposed here?
01:07We definitely see India and China as one of the biggest importers of Middle Eastern oil
01:12as being the most exposed to the risk from this war.
01:15And already we see today that we have Asian consumers having to pay higher prices at the
01:22petrol pump.
01:23We see from India to Singapore to Japan and a lot of these consumers are feeling the bite
01:30from the lack of oil that's coming out from the Middle East right now.
01:34And we do see the IEA calling for more reserves to be released to Asian consumers.
01:41And already some of the refiners in China and also in East Asia who are actually big exporters
01:48of these refined products that they take the crude oil from the Middle East to work on these
01:54products for, they have also cut back on the exports for the refined products.
01:58So the longer this war drags on, it's going to have a wider impact on the global consumers
02:06around the world.
02:06But for now, it's just the biggest, it's feeling the heat the most.
02:11And we do see some form of attempts at trying to get all of that crude from the Middle East.
02:17We do hear of India trying to get some of that oil by talking to Tehran to avoid having those
02:24ships getting hit as they pass through Hormuz.
02:27But those are more on an ad hoc and individual basis.
02:30And we wait to see further details on whether more ships can sail through the Strait of Hormuz
02:35so that Asian consumers and Asian economies can have that off ramp from this war.
02:42I do wonder in the meantime, should we expect to see more Russian crude being allowed to market?
02:47Are there any other workarounds?
02:51That's a very interesting question.
02:53We see Russian oil as being used as a buffer because we have seen the Trump administration
02:59allowing carve outs for sanctioned Russian oil to flow to Asian consumers, mostly to India
03:08because India is a very big taker of Russian oil.
03:11A lot of it has already floating around the seas nearer to Asia.
03:16And once these carve outs were issued over the past week, we do see ships entering India.
03:23And that's certainly some form of relief for the refiners.
03:27But the longer this war drags on, we may potentially see more waivers from the sanctions from the Trump administration.
03:35But one thing that's clear for now is that Russia, interestingly, has become one of the biggest winners from this
03:42war as we speak.
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