00:00But Iran is letting tankers through with exemptions.
00:04They're also talking about a toll that Iran could use.
00:08What will that mean for the global economy?
00:11Well, that won't happen, and I'll tell you why.
00:14At the end of the day, unfortunately, now that this conflict has started,
00:18there's only one outcome.
00:20That strait has to get open.
00:22And so most market participants realise the duration may be longer.
00:26We don't know what the outcome's going to be of the Tuesday deadline or whatever.
00:31That's all noise.
00:32The signal is, what's it going to take to open up the strait?
00:35And then what's it going to take and cost to maintain it?
00:38Now, we've already, from markets, started to think about a multi-nation,
00:44almost a UN-like group.
00:47The UAE suggests it be led by the Americans.
00:50But let's say it costs $5 billion a month, US dollars, to keep the strait open.
00:56Yes, that's a lot of money.
00:57But it's a rounding error in terms of what the effects of the economy are
01:01if that strait is stabilised, not just for the US, for the pricing oil,
01:06but Japan gets 73% of its oil through that strait.
01:09Even China.
01:11I mean, there's so many countries that use this particular stretch of water
01:16that they have skin in the game, so to speak.
01:19So you've got all the participants of the region, the UAE, Saudi, Qatar, Bahrain.
01:24Everybody's going to pay from there, for sure.
01:26And then the Chinese and everybody else in Japan.
01:29So $5 billion, that's nothing.
01:32If that's what it's going to take to get a hold of Krug Island,
01:36maintain it, keep it open.
01:37And if the Iranians don't like it that way,
01:42they'll continue to have their infrastructure damaged.
01:46That's the threat.
01:47And at some point, that's not useful for them either.
01:51So while war is horrible,
01:53it's so obvious what the outcome's going to be.
01:56What's not obvious is when.
01:58And so, you know, that's the issue.
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