00:00First, I'd love to get your reaction to President Trump saying right now there have been some good talks with
00:04Iran, how you think this will affect the situation, the market and gas prices.
00:09Well, I think it's obviously it's driven everyone crazy, quite frankly, because, you know, it was a very rough Friday
00:15for people who are trying to trade the market already with with two conflicting truth social posts from the president.
00:21Obviously, we went through the weekend under the enormous threat that there would be attacks on energy infrastructure in Iran,
00:30which the Iranians then said would lead to the counterattack against the desalination plants in the Gulf, which is terrifying
00:37because obviously that becomes a humanitarian crisis very quickly if that would happen.
00:41So this was all the context of this morning there being an announcement, which in some ways was a true
00:47taco insofar as the president is now talking about negotiating.
00:51So in itself, that was a positive. And also, of course, suspending the bombing, according to him.
00:57And again, that's that's what we've been looking for, really, is just let's just start by stopping bombing.
01:02Unfortunately, subsequent to that, and we don't know really the full truth, there's reports that Israel is bombing today.
01:08And of course, there's been various different messages coming from Iran along the lines of either there's been no negotiations
01:13or there are some negotiations in Pakistan.
01:16You know, we don't really honestly know what's going on.
01:19So with all that going on, what is the market mispricing about this crisis?
01:23Well, the Chevron CEO this morning said that basically there isn't enough information to price things correctly.
01:28But at the moment, the future strip looks too low.
01:31I think the problem here is that there's such a devastating economic impact that it's very hard to believe that
01:36we'll sustain very high prices,
01:37because what you're effectively going to do is crush a lot of these Asian economies.
01:41You're already crushing the Gulf economies by the day.
01:46And so the demand impact could be very negative from all of this.
01:49So it's hard to outright state that, yes, you should be buying longer term oil simply because we could be
01:55into a global depression type situation.
01:57You know, you just talked a little bit about big oil CEOs.
02:00What do you think they are communicating to the White House right now during all of this uncertainty?
02:05Above all, don't mess with the free market for U.S. energy.
02:09So the big message that they're going to send very strongly is don't ban exports of crude.
02:13Don't ban exports of products.
02:15Let's, you know, at least leave our market open for free trading, because obviously with the straits of whole moves
02:20being shut,
02:21if you were to directly intervene in the market, such as banning gasoline exports,
02:26there would be a short-term major gain in terms of reducing the gasoline price.
02:30But you're just adding a further level of distortion and uncertainty to the market.
02:35Do you envision the straits really ever getting back to what we've known?
02:39No, quite frankly, I think this is because this is the first time it's ever been shut.
02:43It's a structural change because it's identified, you know, what is a major Achilles heel in terms of the potential
02:50to actually stop shipping.
02:51Up to now, you'd always thought, well, it would be hard to stop shipping because you can't put a chain
02:56across the strait.
02:58But what the Iranians, unfortunately, have demonstrated is that just by threats alone, they can shut the straits.
03:03And therefore, that risk has been introduced to the market as an ongoing structural risk.
03:08With all this risk and all of everything that we have seen, what do you think this effect,
03:13do you think this will have over big oil's investments appetite in the Middle East?
03:18Well, up until a month ago, they were getting excited about reinvesting in the Middle East.
03:23And they were actually praising President Trump for the openness that they were finding when they went to the Middle
03:28East in terms of investment.
03:29A good example would be Chevron getting into Iraq again on better terms.
03:34Now, unfortunately, because of what we're saying about the straits of Hormuz being structurally denigrated in terms of a much
03:40higher risk investment environment,
03:43we think that we're going to have to go to more domestic energy across the world.
03:48So that's going to be nuclear.
03:49It's going to be domestic gas and oil production to the extent that people can develop it.
03:53And that should fundamentally alter the amount of investment that goes into the Middle East.
03:58And also how much, for example, domestic energy infrastructure is invested in.
04:02With all of this going on, what's your expectation for Venezuela getting other U.S. oil companies to go to
04:07work there?
04:08Yeah, I think that's an obvious Western Hemisphere obviously benefits from any uncertainty in the Middle East.
04:14And the general situation in Venezuela is, you know, while uncertain,
04:19certainly being promoted by Chevron is one in which they're fairly aggressively planning to expand production and invest.
04:25And as time passes, I think you'll see more investment in Venezuela because it is such a huge resource, so
04:31close to the U.S. Gulf Refiners.
04:33Is that a 2027 story or later?
04:36I think it's ongoing. It's just a question of time and money.
04:39So, you know, I think that they are getting into it as we speak.
04:42And I think they will continue to do so, assuming the security situation stays OK, which seems to be the
04:48case.
04:49But again, the CEO of Chevron this morning at the plenary session was saying that it's just going to take
04:54time in terms of the ability to really redevelop what has been a sector that's been chronically underinvested and mismanaged
05:01for basically 20 years now.
05:03And so these things just can't be turned on overnight.
05:06So to answer your question, I would say more of a 27 and beyond change, but one which has enormous
05:12potential.
05:13There's absolutely no question.
05:14By some measures, as we all know, that Venezuela has the largest undeveloped oil reserves in the world.
05:19So, let's go.
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