00:00And to talk more about this story, live on the line with me is Adi Imcirovic. He's a lecturer
00:06in energy systems at the University of Oxford in the United Kingdom. He joins us today
00:10from there. Hello to you and thank you for speaking to France 24.
00:15Thanks for having me.
00:17Look, from an energy perspective, just help us understand why these attacks on
00:21gas infrastructure in Iran and in Qatar, as well as elsewhere in the Gulf, are such a big deal.
00:30Well, quite frankly, to put it mildly, it's a bit of a disaster. I think it's important to say also
00:37that even though the war in Iran was seen as an existential war for Iran, there was an unwritten
00:46rule that the infrastructure, energy infrastructure, especially the important key infrastructure,
00:53would not be attacked. And both sides, I think for a while, abstained from that
00:59until yesterday, Israel actually bombed the South Pass. Now the problem with gas is it's difficult
01:06to store. The second thing is it's highly flammable, highly explosive. And what happens, just to give
01:14you an example, in 2020, there was a fire in a processing plant in Norway. It took one and a
01:23half
01:23years to repair it. So any damage in the gas infrastructure that's serious, like it is right
01:35now in Qatar, may set us back several years before, even if the Strait of Hormuz is opened, can be
01:43exported back into the markets. So the impact is immediate. And it's very, very long lasting. And it's
01:50really bad news unless it totally deescalates very, very soon.
01:55And you say, look, the impact is immediate. We've been reporting that countries in Asia are particularly
02:02dependent on gas, but oil as well from this region. In what way is that impact already being felt?
02:10Well, some refineries already, now let's move a little bit to oil. Some refineries are already
02:17cutting runs. And the problem is also the sort of policies, government policies that actually make
02:23it worse by saying, for example, China has banned distillate. Distillates are jet fuel and diesel
02:31exports. Some other countries have done the same, limited or at least limited those exports. Now,
02:37Asia depends very much on Chinese diesel, for example. And now with the ban on those exports,
02:46they're going to be cut short exactly in a situation where their refineries are actually
02:51short of oil that they expected to come, and their refineries are actually cutting runs. So
02:57there's a very real possibility of serious shortages in Asia.
03:02A possibility of shortages in Asia. What about here in Europe and in the United States,
03:08where clearly this is an issue that is animating Donald Trump?
03:12Absolutely. I think, look, I think we're losing right now at least 10 million barrels,
03:17all right? Let's call it roughly 10% of the world production of oil. We don't have that. It's not
03:22coming out. So short term, in the West, we're OK, especially OECD countries have at least 90 days
03:30reserves. We have strategic reserves in the United States, in China. We will be OK for several weeks.
03:38The biggest issue here is the traders in the market don't see the light at the end of the tunnel.
03:45There's no objective to this war, at least from the United States side. We don't know what it is.
03:50As it said, we'll fight until the end. What that means, I have no idea. So the people involved in
03:57the market just don't see the end of that. And this war continues. We will have this big gap in
04:03the
04:03market that will lead to some sort of demand destruction, i.e. somebody will have not to use oil
04:12to 10% level. So we will have less flights, less holidays, less miles traveled. And hopefully,
04:24the governments will not subsidize prices or cap prices, because that will probably lead to
04:28shortages. Hopefully, the governments will help the needy, but believe the price is high so that
04:35people stop traveling unnecessary travel or stop driving unnecessary driving. But there will be demand
04:41destruction. We will be needing that 10% somewhere.
04:46I want to ask you about something that we have heard within the last half an hour or so. This
04:52is
04:52a joint statement from six European countries, six nations rather, five European countries and Japan.
04:59And they say that they are ready collectively to boost efforts to ensure safe passage of ships
05:07through the Strait of Hormuz. Now, that isn't a confirmation as far as we understand it,
05:11that these countries are going to send the ships themselves. But they're talking about trying to
05:14help out in one way or another. Do you think that that will go some way to calming the oil
05:21markets that,
05:22of course, we've seen such turbulence on over the past few weeks?
05:25I think it's a very positive development towards calming the markets and calming the whole situation
05:32and deescalating the whole situation. I just don't see the results anytime soon because,
05:39firstly, I don't see any of these countries selling their own navy in there because it's very,
05:43very dangerous. Let's also remember that the Iranian regime has been crippled. So it's not quite,
05:51and it's very decentralized at the moment, and it does operate in a decentralized way.
05:56So it's not clear that everyone in the Iranian armed forces is going to follow the orders,
06:02whatever the agreement may be reached with the Iranian regime. So I don't see European countries
06:08sending their ships. I think they will probably thinking more in terms of negotiations, deescalation,
06:17possibly some sort of information sharing, possibly some help with the provision of
06:22war insurance or something like that. We haven't seen the detail yet.
06:27No, we haven't seen the detail yet, and we haven't seen the detail of something else.
06:30Forgive me for asking you things that are developing live as we're on air,
06:33but I do think this is rather interesting. This is from the Treasury Secretary, Scott Besson,
06:38today in the United States, that is. He has used the phrase unsanction. He says,
06:44we may unsanction Iranian oil that's already at sea. He says that's about 140 million barrels.
06:53How significant would that be? What kind of impact are we talking about if such
06:57oil from Iran is unsanctioned by the United States?
07:01Sadly, the current US administration don't seem to know what they're doing. They don't seem to have
07:07any experts to advise them. It's hilarious, to be honest with you. If it wasn't this tragic,
07:13it would be very funny. Because to unsanctioned Iranian barrels right now, it's a kind of contradiction
07:19in terms, right? Those barrels were on the water, and they were going most likely to China anyway,
07:26because China did not particularly subscribe to, especially independent refiners in China,
07:31were the main buyers of Iranian barrels. Prior to this conflict, most of those barrels were going
07:37to China anyway. They were going to China anyway. By unsanctioning these barrels, Iran will probably
07:45just be able to reach a higher price with their sellers, because now somebody else can buy those
07:51barrels as well, not just China. They're just basically giving more revenue to Iran, nothing
07:56else. Those barrels would have probably got sold anyway. Adi Imcirovic, it's been really
08:03interesting to talk to you. Thank you very much indeed for your analysis live for us here
08:06on the programme. Thank you.
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