00:00At what point do you get more traditional demand destruction just based on the level of pricing?
00:06I think we are actually seeing now demand destruction at a certain point, of course,
00:10not massive. We are seeing countries around the world implementing measures to reduce oil
00:17consumption, working from home, public transportation, et cetera, et cetera. So we are
00:21seeing now demand destruction. But I think that the moment that you have oil prices above $120,
00:26$130 per barrel, that is when really things start heating up and you will see quite a bit of demand
00:32destruction. Let me give you one interesting data point. Before the war, we thought that oil demand
00:37was going to grow by 1 million barrels per day in 2026. Right now, we think that oil demand is
00:43going
00:43to contract for the first time since COVID by around 100,000 barrels per day. And I think that
00:48the risk is due to the downside there. So we are seeing demand destruction at the moment.
00:53We do see, though, Diamondbacks saying they're going to raise output immediately because of how
00:58high oil prices are. Will we see more oil companies step in if prices continue to rise?
01:05It very much depends on how long prices will stay at these elevated levels. But let's assume that they
01:10stay for the next three to four months. We will see some supply reaction. But let's not forget that
01:15in the short term, supply is quite inelastic. Yes, we could see a couple of thousand barrels at the
01:22global level of additional supply, probably in the US. We could see more in Brazil. We can see a little
01:27bit more in Venezuela, probably. But it's quite inelastic supply in the short term. And also,
01:32let's not forget that the supply disruption is closer to 15, 10 million barrels per day. So
01:37whatever additional supply they might come, whether it's 200,000, 300,000 barrels per day,
01:42is minimal in the big picture, right?
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