00:00This is a situation that is orders of magnitude worse than it was a month and a bit ago before
00:06these attacks started. We've got 20 million barrels a day of oil that's stuck behind the
00:14Strait of Hormuz. Most of that now is stuck in the ground because there's no more ships or storage
00:19tanks to put it in. Saudi Arabia is exporting about 5 million barrels a day from the Red Sea.
00:26That's up by, what, 4.5 million from what it was doing before the war. So you've got 4.5
00:32million
00:32coming out on the Red Sea, 20 million stuck in the Persian Gulf. The world can't tolerate 15 million
00:41barrels a day of oil supply off the market without prices taking the strain and without shortages
00:49developing in time. Yes, there are strategic stockpiles. Yes, there are commercial stockpiles.
00:56But those are finite amounts of oil. And at some point, if this situation isn't resolved,
01:03and if we don't get oil flowing again through the Strait of Hormuz, those stockpiles are going
01:08to get drawn down. I know it's been discussed before, but I think it's always worth revisiting,
01:13Julian. Just how big of a disconnect is there right now between paper and physical markets
01:18in oil and crude? I think there is something of a disconnect. I mean, they are intrinsically linked
01:26to each other. But I think that there are certain parts of the world where refiners are finding it
01:33physically difficult to find sufficient crude to process. And there are parts of the world where
01:41companies that are looking to buy refined products are finding it very difficult to secure some of those
01:49specific products that they need. And it seems to be particularly things like jet fuel and diesel
01:55at the moment that are in physical shortage in certain parts of the world.
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