00:00I would love to get your sense of just how much has changed given the truce that was announced last
00:05night.
00:07I think I completely agree with what Javier said.
00:10If you read the statements, they're actually two quite different statements.
00:13We're hearing from refiners and lifters who are trying to kind of get a ship in.
00:20Firstly, the cost is prohibitive.
00:22You know, you're talking about more than $40 a barrel, even if you can get insurance.
00:27There's a huge amount of confusion with regards to whether they need to pay the Iranians, how they're going to
00:32pay the Iranians,
00:33because payment to be made to the Iranians is not easy given the sanctions.
00:38The Iranians are actually sending out messages to vessels outside the strait saying that, you know,
00:44if you are actually going to pass the strait or if you're going to come in, you need our permission.
00:48So this is by no means a strait that's open for business, to be very clear.
00:52What I would say is that we are likely to see the ships that are within this strait right now,
01:00whether they're empty or whether they're loaded with crude and products.
01:03We've counted our cargo tracking team counts about 250 vessels.
01:07Those over time could potentially move out with Iran's permission.
01:11But I don't think you'll see vessels moving in.
01:14And I think that's going to be the critical thing unless you actually have a complete ceasefire,
01:20not just a two week one, but we know that hostilities have ended.
01:25Amrita, when thinking about the growth versus inflation tradeoff,
01:29I'm just wondering, have you seen any evidence of demand destruction in these last several weeks?
01:38Great question, because, you know, and you guys were just talking about the divergence
01:41between actual kind of physical prices and futures prices.
01:45The problem is everything is being reflected in the physical price, right?
01:48You know, dated Brent was trading above $140.
01:51Dubai traded back in a few weeks ago at $160 per barrel.
01:55And that's actually being reflected in products prices.
01:58If you look at diesel, if you look at jet fuel,
02:00they've been trading over $200 per barrel, even in the U.S.
02:03And yes, we have seen some demand destruction in parts of Asia,
02:08partly also because governments have stepped in and asked for rationing in advance,
02:12or as kind of the crisis has progressed.
02:15So we have definitely seen about a million barrels per day of reduction,
02:19mostly in jet fuel, also, you know, given the flight cancellations in the Middle East,
02:24but also in like NAFTA, LPG, so steam crackers, you know,
02:27things or units that would actually make plastics effectively, right?
02:32So again, the challenge we have in this is that because this is hitting Asia first,
02:37it's a really long time lag before it hits the West, right?
02:42Whether it's the products itself, jet fuel, gasoline, diesel,
02:45or the end products, it's, you know, the clothes we're wearing
02:48or all the kind of plastic goods that we consume.
02:50And that's why there's so much complacency in the market.
02:53But yes, we have seen the demand destruction,
02:55and I don't think it's over yet.
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