00:00So Stephen, let's sort of try and talk through the implications of the proposed naval blockade,
00:05which starts Monday morning, New York time. We've been trying to work out what it actually means,
00:10right? Because essentially there's not been much traffic through the Strait of Hormuz. There's been
00:14sort of Iran linked to Friends of Iran type vessels being allowed to pass through. What does a US
00:21naval blockade actually mean then? Yeah, I mean, I think there are questions about how strong or how
00:30much the US is going to actually put this into a blockade and actually block ships from going
00:35through. When you saw Trump's Truth Social tweet over the weekend or yesterday, it really sounded
00:41like it was a full blockade, all ships. When you're seeing the official statements from US maritime
00:48officials, it seems like it's not. Maybe they'll only look at certain vessels. It is unclear.
00:55But let's take a step back and say, OK, maybe this will affect all ships that are paying the Iranian
01:02toll or are going through Iranian waters as part of the route that was agreed upon, or it's Iranian
01:08ships. All that together will basically mean the vessels that have gone through, right? There's been
01:13an uptick, you know, 5, 10 vessels going through on a daily basis compared to over 135 before the war.
01:21Still not nothing, but maybe those 5 to 10 vessels can no longer go through. Maybe you have to think
01:26twice. Will the US stop vessels that have gone through after they've paid? That's something that
01:30Trump has threatened. So basically the trickle that has gone through that had showed that maybe
01:36traffic through Hormuz would be easing and slowly opening up, that trickle might now halt is the risk.
01:42And I think the fear in the market. Does it change the supply demand or supply situation on the ground
01:48very much? Not exactly. Physically, the situation is still largely the same. But does it change the
01:56sentiment? Yeah. To a degree, you've seen oil prices, Brent prices jump. You've seen European natural
02:02gas prices also rise. We're not at the highs that we saw a few weeks back, but we are still
02:06higher than
02:07we're at the end of last week. So that does indicate the risk premium of less fuel going through Hormuz
02:14as
02:15well as the spiraling into a wider conflict. That risk premium is kind of being fed into the futures
02:21market. And obviously you need in order to go through the strait and transport any fuel, you actually need the
02:29supplies. But how bad have the energy infrastructure damages been so far from the drones and missile attacks in the
02:37past six
02:38weeks of the war?
02:41You know, I guess it depends on what type of energy asset you're looking at. So let's start from the
02:46worst. The worst, according to
02:48my view, and what we've seen from analysts is that Qatar's massive liquefied natural gas export facility is likely one
02:55of the
02:55hardest hit. They were shot early in March because of a drone attack, but then they were hit by missiles
03:01the evening of
03:02March 18 to 19, damaging about 70 percent of its production capacity. It's the world's largest LNG plant. So 70
03:09percent is
03:10quite a lot. And it will take three to five years for that portion to come back online. It's unclear
03:15how long it will take for the
03:17other part of the facility to come up in exports to begin. There has been some hits on refining assets.
03:23There have been
03:23some hits on oil field. Oil assets have also been been shut to some degree because they can't get the
03:30oil out. Saudi
03:32Arabia said that they had to reduce their production capacity by about 600,000 barrels a day. That's like roughly
03:3810 percent
03:39of their output. There was an attack on the east-west pipeline that sends the Saudi oil away from the
03:47Persian Gulf into the Red Sea and through the Bab al-Mandab Strait to Asian customers. It was hit, but
03:54they said
03:55over the weekend that that capacity that had been reduced earlier after the hit had been increased again
04:01to full capacity. So while the situation is is not great, if the Hormuz were able to open again, then
04:07potentially you could get a lot of oil barrels out.
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