00:00If we were to see the end of hostilities tomorrow, which is not what anybody is expecting and is not
00:05what President Trump has suggested is going to happen,
00:08but just to get a sense of how disruptive things already are, if we were to see the end of
00:12hostilities,
00:12how long would it take for us to get back to a situation that we would recognize as more normal?
00:18What kind of analysis can you do around that?
00:22Yes. So, so far, according to ship tracking, we've already lost around 500 million barrels of oil out of the
00:28market because of the closure of the Strait of Hormuz.
00:30I think the part we also need to focus on is not only a ceasefire and a peace, but who
00:36would have control of the Strait of Hormuz.
00:39Now, Trump suggested yesterday it could be jointly held between Iran and the U.S., which would suggest it would
00:45be a true peace.
00:47However, to have the flows resume and production resume, this would take a long time.
00:53We're talking about, you know, thousand ships that are stuck in a backlog.
00:58It would take time, I think, to secure that Strait.
01:02There is a big concerns about it having been mined.
01:05We would have to have a guarantee that there would be no drones.
01:09So it would really take an announcement by the U.S. Navy.
01:12We're in our view to have things come together and then we'd have to have the insurance come into play.
01:19It would be step by step.
01:21And we're probably looking at may loading really for things to start to resume.
01:28But when we look at pricing, especially in Asia and Dubai and Oman physical,
01:33the market is not believing that we're going to have may loading barrels for certain.
01:40OK, so the market doesn't.
01:42So you're suggesting that the market doesn't believe that we're going to be loading in the in the in the
01:47Persian Gulf in the month of May.
01:49I think, Nadia, and the market is skeptical.
01:51What? Why is the market still skeptical?
01:53But is it because of the disconnect between what we're hearing from Iran and what we're hearing from the U
01:57.S.?
01:59Yeah, that that is part of the disconnect and also what we're seeing in terms of flows in the market
02:06right now.
02:06The Strait of Hermuz is fully in control of the Iranians.
02:09We've had a few ships go through that have been allowed by by Iran to to flow through.
02:16So things have not changed in terms of the physicality.
02:20And then we also have to remember there will be a lag in terms of which ships go through the
02:24cheapest ones.
02:25The least valuable cargo will go first and then we'll have tankers.
02:30And then finally, LNG vessels, which are extremely flammable and extremely expensive.
02:34So the effect on commodity markets will be separated as a result of that shipping backlog.
02:41Finally, we have ships that were waiting to enter the Arab Gulf that have now relocated towards the Atlantic Basin.
02:49Sailing to the U.S. Gulf Coast takes 30 days.
02:52Now those ships would have to sail back after they've committed to try to buy much cheaper WTI based physical
03:00crude.
03:00And that's where we will have that disconnect in the shipping market in terms of deliveries from the Middle East
03:08back to Asia.
