00:00You've got a decent understanding on where we are right now. How big is the deficit for the crude market
00:04at the moment?
00:05We have a pretty large deficit. We're running around 14-15 million barrels a day short.
00:1014-15% short of what we need to see for prices to stabilize go down to 60-70 dollars
00:16a barrel.
00:17So it's a big gap. And obviously measures like this will help ease market pressures.
00:24And of course we are going to peak demand season which makes the deficit potentially even greater.
00:30So I think obviously it's all about the Strait of Hormuz. Can it reopen soon or not?
00:36And we've been talking about this now I guess. I feel like we are into the 11th week, 12th week.
00:41First of all, the 11th year.
00:4311th year, 12th week, I don't know.
00:46But I think what's interesting is I think the news over the weekend are very good news also.
00:51What we heard on the agricultural side because at first it felt like the only agricultural discussion
00:58was rose seeds. But now it's actually corn and it's wheat and all of that I think it's going to
01:05provide market relief.
01:06So I think it's a sign of goodwill that China wants to cooperate.
01:10And I think it's important to understand. I mean, China is the world's largest exporter.
01:13The last thing they want is to see a global recession. They need that export market.
01:18Well, let's start with oil and let's assume a lot of things. Let's assume nothing changes.
01:22And the existing strategy of the U.S. is to maintain the blockade to get Iran to suffer because they
01:27believe we're very close to breaching storage capacity.
01:29Given the imagery draw that you're seeing globally at the moment, if I had to ask you, assuming everything else
01:34remains the same,
01:35what happens first? Tank bottoms in the West or tank tops in Iran?
01:39I think tank tops in Iran are pretty close. Then again, we think that Iran can survive roughly with one
01:48vessel a week,
01:50a quarter of a million barrels a day, that they don't really need that much money to pay their bills.
01:56On the other hand, also we've seen Iran basically shutting down exports for about four years after the repeal of
02:02the JCPOA initially
02:03during the Trump 1.0 administration. So I don't really think that the Iranians, because they have to shut down
02:11fields,
02:11they're necessarily, I mean, they've been there before kind of thing, right?
02:16Well, as in the West, the challenge is that obviously we're going to have a much more challenging summer season,
02:24right?
02:25And people are not going to be happy. So not only are you paying higher prices, but you may have
02:29availability issues.
02:30And that can be a problem. Are we at tank bottoms anywhere in the world right now?
02:34So some of the countries in Asia are really experiencing a lot of strain.
02:39If you're a large energy importer with a large current account deficit, say like India or others,
02:46you are running into a lot of problems, right? I mean, Japan's seen a collapse in inventories.
02:50We've seen a number of Asian countries as well in the same position.
02:54This is primarily a Pacific crisis. It's not an Atlantic crisis yet.
02:59And that's why we haven't felt as much pain in kind of Europe, US.
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