- 3 months ago
This edition of India First reports on the conclusion of Prime Minister Modi's five-nation diplomatic tour across Europe and the Gulf, focusing on strategic agreements in defence, energy, and technology.
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00:02Good evening, this is India First and I'm Maria Shakil.
00:06Prime Minister Narendra Modi has wrapped up his five-nation, six-day diplomatic tour across Europe and the Gulf.
00:11A visit which was packed with strategic deals, defence cooperation, energy partnership and high-level bilateral meetings.
00:19But it was the stop at Rome that has grabbed all the eyeballs when Prime Minister Modi met Italian Prime
00:27Minister Giorgio Meloni.
00:28Diplomacy once again came wrapped in charm, chemistry and viral moments, from selfies and sightseeing to dinner diplomacy and even
00:36a box of Melody chocolates.
00:38The Melody bond turned Rome into social media's favourite geopolitical stage. Here's the report.
00:45Parishrami safalta ki kun jiae, which means tough work is the key to success.
00:58Tosti and diplomacy. Bilateral and born homie. And not to mention, a Melody moment.
01:07Prime Minister Modi brought us a gift, a very, very good toffee.
01:13Math.
01:17In Rome, it was less of a summit, more of a blockbuster reunion.
01:22Two of the world's most talked-about leaders, Prime Minister Narendra Modi and Italian Prime Minister Giorgio Meloni,
01:30met once again, wrapping up Prime Minister Modi's five-nation, six-day diplomatic outreach on a high note.
01:38Prime Minister Modi and Meloni held bilateral talks focused on strengthening the India-Italy strategic partnership
01:45from trade and technology to defence and global cooperation.
01:50We will continue to design and develop in India and Italy and deliver for the world's power.
02:18But before diplomacy took centre stage, Meloni broke the internet first.
02:24The Italian Prime Minister welcomed Modi with a selfie and the caption,
02:28Welcome to Rome, my friend.
02:31And just like that, social media did what it does.
02:35Melody was back trending.
02:39Hello from the Melody team.
02:43From sightseeing to sharing a car ride.
02:47To dinner diplomacy and to a visit to the iconic Colosseum.
02:53The Modi-Meloni chemistry was impossible to miss.
02:58Every frame looked less like geopolitics and more like a travel reel the internet did not know it needed.
03:04And then came the sweetest twist.
03:07Prime Minister Modi gifted Meloni a special box of Melody chocolates.
03:11A cheeky note to the viral Melody memes fans simply can't get enough of.
03:16Meloni laughed, thanked the Prime Minister and social media got yet another meme-worthy moment.
03:23Prime Minister Modi brought us a gift, a very, very good toffee.
03:29Melody.
03:34Call it diplomacy, call it soft power, or just call it Melody magic.
03:41Because when Modi and Meloni meet, foreign policy gets a viral filter.
03:46Bureau Report, India Today.
03:51Let me bring in Pranay Upadhyay now.
03:53So, Pranay, what are the big highlights?
03:55If we were to sum up this five-nation tour of Prime Minister Modi coming as it does in the
04:01middle of Iran war and also another war which is happening between Russia and Ukraine,
04:06what would you say were the big takeaways?
04:11From energy security to food security, from technical cooperation to the employment security for Indians.
04:19Because if you see the last leg of Prime Minister Modi's five-nation tour,
04:22Italy is a country which has increased the quota for Indian laborers, both skilled and non-skilled,
04:29to give them long-term employment in Italy.
04:33And in fact, this is getting reflected in terms of the tangible gains here, Maria.
04:38If you see the remittance money, because we are very concerned about our foreign exchange reserves,
04:43and at a time, the remittance money which is coming from Italy has grown by 32%.
04:48So, clearly, if Italy opens up its economy, it gives, you know, the migration and mobility agreement signed between India
04:56and Italy in November 2023,
04:57and thereafter, a more number of jobs which are available and more professionals could travel to Italy,
05:04then certainly it brings good to Indian economy as well.
05:06And in fact, both the leaders have affirmed that the Joint Strategic Action Plan,
05:11which was agreed between Prime Minister Modi and Prime Minister Maloney,
05:15will be rapidly getting implemented by 2029.
05:19Both countries have set a very ambitious target of reaching 20 billion euro of bilateral trade.
05:26So, from energy security in UAE, to energy security-related issues in Norway,
05:34from getting more, you know, expanded scope for the Indian export in Netherlands to Sweden,
05:41to technological cooperation from Sweden, artificial intelligence, cyber security.
05:47So, a multifaceted, you know, agenda was there for Prime Minister Modi's visit.
05:52And if you see, 17 agreements were agreed in Netherlands, you know, $5 billion from UAE as an investment.
06:03So, if you see that this five-day visit, a five-nation tour of Prime Minister Modi was quite fruitful
06:09in terms of the tangible gains here.
06:11Okay, okay.
06:12Pranay, continue to be with us because there's a piece of breaking news coming in now.
06:16I will need your perspective also on that.
06:18Prime Minister Narendra Modi may be headed for another very important diplomatic moment next month,
06:25which is a possible meeting with U.S. President Donald Trump on the sidelines of the G7 summit in France.
06:32The meeting, if it happens, will come at a crucial time for the India-U.S. ties,
06:36with trade negotiations, tariff issues, and global geopolitical tensions all high on the agenda.
06:43Sources, in fact, say that both sides are keen to push forward discussions on a broader trade agreement,
06:50while also focusing on strategic cooperation in areas like technology, energy security, and supply chains.
06:57The summit itself comes amidst growing global uncertainty from the Iran crisis to energy concerns.
07:05Prime Minister Narendra Modi, remember, last met U.S. President Donald Trump in February of 2025 at the White House.
07:11So, an important meeting which can take place on the sidelines of G7, where India is a special invitee.
07:19Pranay.
07:24Absolutely, Maria.
07:25This will be a very important and a significant engagement, if that takes place, in France,
07:30because France has extended an invitation to Prime Minister Narendra Modi to participate in G7 summit,
07:34and you know that Prime Minister Modi has attended previous G7 summits as well.
07:40And therefore, there is a likelihood, there is a possibility.
07:42However, you know, if that happens, this will be the first meeting of Prime Minister Modi and President Donald Trump
07:47after February 2025,
07:48because the last meeting was in the White House in February 2025, and thereafter,
07:53they both missed a chance to meet each other, be it the G7 summit in Canada in June 2025,
08:00and thereafter, in the APEC summit in November 2025, also the ASEAN and APEC summit,
08:06that Prime Minister Modi could not travel to Malaysia for that, and President Donald Trump was there.
08:13So, both leaders couldn't meet, and therefore, this will be a big opportunity for both leaders to have,
08:20you know, have their engagement, have a meeting there.
08:23And in fact, if you see the next four-month, you know, diplomatic agenda for Prime Minister Modi,
08:27it is quite packed, because in August, he is likely to travel to Bishkek in Kyrgyzstan,
08:32where President, you know, Russian President and Chinese President would also be there.
08:37In fact, there is a likelihood of meeting with Iranian President if he travels to Bishkek,
08:44because Iran is also a member of the ASEAN summit, and in fact, you know,
08:48India would be hosting the BRICS summit in September 2020, 26.
08:54So, from June to September, there is a heavy diplomatic agenda,
09:00and even this month, later this month, after returning from this five-nation tour,
09:04there will be a co-ord foreign minister's meeting.
09:06For that, the U.S. Secretary of State, Marco Rubio, will be traveling to New Delhi.
09:12Prime Minister is likely to meet Marco Rubio as well,
09:14and after that, Prime Minister will be hosting the African nations,
09:18because during his meeting with Georgia Maloney,
09:21our Prime Minister mentioned that both countries have decided to take their partnership
09:25to third countries as well, and Africa did figure in the diplomatic engagement
09:29and talks between Prime Minister Maloney and Prime Minister Modi.
09:32All right, Pranay, I appreciate your time. Thank you for joining us.
09:36Shifting focus to another meeting now, and this time,
09:39a meeting which has kept the West on edge.
09:42Chinese President Xi Jinping and his Russian counterpart, Vladimir Putin,
09:46have met in Beijing against the backdrop of the West-Asia war.
09:51The two leaders have signed more than 20 agreements,
09:54spanning trade, energy, and technology,
09:56through key differences, though, you know, they remain,
10:00which is largely over a major gas pipeline deal.
10:04Xi Jinping not only rolled out the red carpet for Vladimir Putin,
10:08but also signed a united front against the U.S.
10:11So what's behind the smiles, the handshakes, and strategic agreements?
10:15And what does this growing China-Russia partnership mean for the U.S.
10:20and the wider global order?
10:22Before I ask these questions to my guest,
10:24and also our special guest who will be joining me from China,
10:28here's a report.
10:34Just days after U.S. President Donald Trump wrapped up his trip to China,
10:39now Russian President Vladimir Putin is in Beijing.
10:45Chinese President Xi rolled out the red carpet with full military honours,
10:50an official ceremony outside the Great Hall of the People.
10:59Putin received a guard of honour and a 21-gun salute at historic Tiananmen Square.
11:08These crucial visits of world leaders come at a time when wars are raging in Ukraine,
11:14while West Asia is in turmoil and oil routes through the Strait of Hormuz are blocked
11:18and Iranian ports are under U.S. blockade.
11:23Iran remains a close strategic partner of both China and Russia.
11:28China imports 90 percent of the Iranian oil, despite U.S. sanctions.
11:34Amid the visit, Putin and Xi held high-stakes talks on bilateral ties
11:39and key global issues and trade,
11:41but the focus remained on Iran and the Ukraine war.
11:47Putin and Xi Jinping signed a joint statement on cooperation.
11:53Putin grabbed global attention after he delivered an emotional remark to Chinese President.
11:58One day apart seems three autumns passed, signifying the close ties between both.
12:08The comprehensive partnership and strategic interaction between Russia and China in the new era
12:13is the model for intergovernmental relations in the modern world.
12:18It is based on the principles of equality and consideration of each other's interests,
12:23mutual support, friendship and genuine good neighbourliness.
12:27Our goal is the well-being and prosperity of the Russian and Chinese people.
12:31These unshakable foundations have enabled our relations
12:33to successfully withstand repeated tests of strength and resilience.
12:44The Putin Xi meet shows how Moscow and Beijing
12:47are building a partnership that is reshaping the world order.
12:58And let me go straight to Beijing from where CGTN correspondent Serena Xu Dong is joining us.
13:06Serena, Xi Jinping met Donald Trump last week.
13:10He's meeting Putin today.
13:26I think China has been one of the few major nations maintaining open diplomatic channels
13:32with all key parties simultaneously, including the United States, Russia and some regional actors
13:39in West Asia.
13:40And that is not a small thing in today's fragmented international environment, you know.
13:45And Beijing's position on Ukraine has constantly called for ceasefire and political negotiations.
13:52And Beijing has also outlined 12-point peace proposal, which has put forward in 2023.
13:58And for Iran, China has played a constructive role in de-escalation diplomacy in that region,
14:06including that China has facilitated the Saudi Arabia and Iran normalization in 2023.
14:12So the suggestion that the diplomacy must produce instant results to be legitimate applies a standard
14:18that no country, including the United States, has ever met.
14:22So sustained dialogue is the leverage, I think, and the alternative is just isolation and escalation.
14:29Fine.
14:29So Serena, my next question would be with Iran in active conflict and Gulf supply routes,
14:36the supply routes are unstable now.
14:39China is actually doubling down on Russian energies today.
14:43Doesn't that make Beijing a direct beneficiary of this prolonged instability?
14:49I think this framing gets the incentive backwards.
14:53You know, China is the world's largest trading nation and the biggest importer of Gulf energy.
14:57Instability in shipping lands, rising oil prices, and regional conflict
15:02directly hurt the Chinese economy as well and its trade partners across the global south.
15:08So diversifying energy sources, including Russian energy purchased at market rates,
15:13is a matter of energy security,
15:15something every major economy pursues, I think.
15:19And also India, I would note that has also significantly increased Russian oil imports since 2022.
15:26So the question of who benefits from a prolonged instability points more credibly toward armed exporters
15:33and those who have actively blocked ceasefire negotiations,
15:36not toward a country that has repeatedly called for dialogue.
15:42All right, Serena, I appreciate your time.
15:43Thank you for joining us.
15:45Joining me on the show tonight, Xenia, who's a senior journalist and Russia's foreign policy expert.
15:51She's joining me from Moscow.
15:53We have Daniel Silverberg, managing director at Capstone LLC.
15:59We also have Aina Tanjun, senior fellow of the Center for International Governance Innovation,
16:06joining me from Beijing.
16:07Xenia, I'm going to begin with you because, you know, there are thoughts about what Putin is saying
16:15and how the world is seeing this.
16:18Putin called this visit a very substantial step forward in energy cooperation.
16:23Is Moscow then looking at what will be the direction in which it will be going?
16:31Because let's be clear, Beijing still holds that card as leverage over Russia.
16:42Thank you for having me, Maria.
16:45I think what's important here is that Russia sees China as its important partner
16:53and the energy supplies, energy imports from Russia are secondary to the partnership.
17:01If you look at the declaration that was issued, you know, it's not about energy partnership,
17:07although, of course, we understand that the countries are exploring more agreements,
17:12more extensive agreements on the energy.
17:16You should read between the lines and see how the two leaders,
17:22how the two countries addressed what the thing of the world today.
17:27And you would see that they talk about multipolarity and they talk about the nations
17:33and trying to, I'll put it in my own words, of course,
17:38trying to, you know, teach the world whom to trade with and how to trade with
17:43and try to control the global energy flows.
17:47Zinia, you know, you've made an important point with regards to the joint statement.
17:51I'm going to read an important part from that joint statement
17:54because the joint statement, in fact, warned against a return to the law of the jungle,
17:59which is a clear shot at Washington.
18:02Yeah, exactly. Exactly. That's what I'm pointing out.
18:05And I think that's much more important right now and long term for Russia,
18:12both how Russia sees China and how China sees Russia.
18:18China is anyways the largest, you know, oil importer today.
18:22It's the largest Russia's trading partner, even before the U.S.-Israeli, you know, war on Iran,
18:31even before the Ukraine war.
18:33China was the largest trading partner.
18:36So, but that goes, again, both China and Russia and, like, I would bring in India here as well.
18:45These are not the countries that see itself just, you know, the kind of source nations
18:54because partnerships are much more beyond that.
18:58It's not only energy, it's security and it's the common view how to deal with, you know,
19:05with the bullies of the world.
19:06So, I think that's the main outcome of this visit.
19:10Okay, let me go to Washington, D.C. now and Daniel is joining me from there.
19:14Daniel, the joint statement called Golden Doom a direct threat to strategic stability
19:21and it has criticized Washington for not working on a replacement nuclear treaty.
19:26How seriously is the Pentagon taking this pushback?
19:33Thank you so much for having me.
19:34I got to tell you, there was a lot of head scratching from that joint statement,
19:38not only regarding the Golden Dome reference and that that was the major point of concern,
19:43but also the law of the jungle reference.
19:46Because for those of us watching the Ukraine war for the last three years,
19:52Russia directly targeting civilians and China giving direct military and financial support to Russia,
20:00gosh, that sure looks like the law of the jungle to us over here.
20:05And it just struck us as tremendously inconsistent for the two parties to make that a primary point of concern.
20:14I will tell you there's also a degree of consternation among national security experts here in Washington
20:23that President Xi is really the only leader in the world right now
20:28who is able to hold back-to-back summits with President Putin and President Trump.
20:34And that at this exact moment of when China is laying out a red carpet for Russia,
20:41you have the U.S. administration talking about potentially downgrading, if not withdrawing altogether,
20:48U.S. forces from Germany and from key European points.
20:54And what many people fear is that that signals at this exact moment of heightened Russian-Chinese cooperation
21:06that the U.S. is saying, we're going to be washing our hands of Europe.
21:10And that is exactly the wrong signal to be sending at this moment.
21:14Okay. So let me get a perspective now from Beijing.
21:17So Aynar, Putin is leaving Beijing with approximately 40 agreements signed and a near 10,000-word joint statement.
21:29Because, you know, as Daniel was pointing out, there are several phrases which have been used
21:35which is making everyone wonder.
21:37What does that contrast?
21:39First, which will be seen as no major breakthrough when President Trump was in Beijing to now,
21:47tell us about Xi's real strategic priorities
21:51and how is Beijing trying to manage its relationship with Washington
21:57and affirming and consolidating its relationship with Moscow?
22:04Well, you're dealing with two very different incidents.
22:08And I don't think it's a really good idea to, you can contrast them in terms of what to happen.
22:12But people are trying to put too much, read too much into the timing.
22:18It wasn't back-to-back summits purposefully.
22:20Remember, this was Donald Trump delaying for a month.
22:24And the fact is that Putin's visit was arranged last February
22:28in a phone call with Xi Jinping.
22:31This is to celebrate for Russia the 25th year of good neighborliness
22:36and friendship between China and Russia.
22:41So this certainly wasn't planned out 25 years ago.
22:44In terms of the substance, you have two very, very different actors.
22:48The United States has been hostile to China.
22:50It has been withholding not only exporting technology,
22:54but also pressuring others into either not trading with the U.S.
23:01or, you know, basically saying,
23:04look, you can't give them that kind of technology.
23:08They've also put a lot of companies on the blacklist, et cetera.
23:11But what Washington is doing is they're following a playbook
23:15that was written in 2021 by the current Secretary of War for policy.
23:21And what he did is he outlined this is the best way to get at China
23:26was to disrupt energy.
23:28So what have we seen in the last year?
23:30We've seen them attack Venezuela, Nigeria, Iran.
23:35What do they all have in common?
23:36They sell oil to China.
23:38They also talked, he also talked about denying China access
23:43to these choke points, the Straits of Malacca,
23:47obviously the Panama Canal, and now we already have the Straits of Hormuz.
23:52So this is a pretty deliberate strategy.
23:54It was taken from the military side,
23:56and it's now part of the domestic strategy, if you can call it that.
24:03So the U.S. is very different.
24:05From Putin, it is a long-term neighbor.
24:07They've been pushed together by the U.S.
24:09So this idea that somehow they got together to gang up on the U.S. is nonsense.
24:14There is a war going on in Ukraine.
24:17But, you know, my colleague should admit that in 2014,
24:20the U.S. and EU sponsored a push in order to remove somebody who was friendly to Moscow,
24:27and that started a series of events that put us where we are today.
24:30We'll talk about the other war, Ukraine war, in a bit.
24:34But, Aynar, she said directly, and I'm quoting him,
24:39that a comprehensive cessation of war brooks no delay.
24:43And he has called for an early end to the Iran war,
24:47linking it to disruption of energy supply, supply chains, and global trade.
24:52How much skin does China actually have in this game,
24:55and what specific pressure, if any, is Beijing applying on Tehran?
25:00Well, I don't know about a direct pressure on Tehran.
25:04I mean, they have been trying to set a table where there can be trust.
25:08Remember, it's the United States that broke the treaty, the JCPOA,
25:12and then twice, while negotiating peace terms, they attacked Iran.
25:16So very difficult for them to believe that the U.S. is sincere
25:21when it says they want to talk peace.
25:23So you have to arrange a different kind of table,
25:26and that's what China's been trying to do.
25:28I've been supporting countries that say, look, we can intermediate.
25:34But it's not a situation where, like in the U.S. there,
25:37you dictate the terms or you tell people, you know,
25:40I'll do something, but I've got to get something in return.
25:43China just simply wants the cessation to all of these things.
25:46Remember, China imports, you know, a huge amount of stuff.
25:51Why?
25:51Because they have very low levels of resources per person.
25:54And that's why Russia is so attractive and why Russia right now has as much leverage as Beijing does,
26:03because they can deliver this gas and oil over land, over a border that they share,
26:09so it cannot be interrupted or interfered with the U.S.,
26:13which is part of the plan that they have been hatching and moving on for these many years.
26:20So, Daniel, from a U.S. national security perspective,
26:26is Washington watching an axis solidify here, or is Beijing still playing both sides?
26:35Well, I don't think that the summit revealed any new strategy or a change to the status quo.
26:44China's fundamental interest is stability.
26:48It's robust and somewhat stalled recent economic growth.
26:55And in that regard, I wouldn't characterize it so much as playing both sides,
27:01as China aggressively pursuing its own national interest and recognizing that
27:09it needs to both have a degree of economic and military stability with the United States,
27:17that a trade war is to the detriment of both countries,
27:21and simultaneously China trying to leverage Russia's extraordinary natural resources.
27:31And the one major winner from the Ukraine war has been China.
27:37And I think my colleague and I can dispute the origins of the war.
27:41I would certainly argue vociferously against the characterization that it was a 2014 pooch that
27:48resulted in this war.
27:49I think it was far more naked aggression on Putin's part.
27:52But where I think we'd probably have common agreement is that access to discounted Russian
27:59energy has been a lifeline for China's economy over the last number of years.
28:06What I would like to see happen in terms of the U.S.-China dynamic
28:12is certainly a calming of the waters on the trade front.
28:16I would like to see the U.S. in whatever somewhat unpredictable or unconventional way Donald Trump
28:27might do it, but make clear that the status quo with Taiwan is going to remain in place.
28:35And then to the extent possible, work with China cooperatively to get us out of this current
28:44stalemate with Iran.
28:46And I do think China probably views that in its own interests as well.
28:52Let me bring in Zinia here.
28:55Zinia, Russia has influence with Tehran, which goes back decades.
29:00Is Putin being asked privately by anyone to play mediator between Iran and the West?
29:10The only thing I would say here, not privy to Putin's concession, of course, is that Russia
29:18already knows that Trump administration, despite Russia, publicly acknowledges their efforts into
29:27trying to bring Ukraine on to some Ukraine crisis, onto some path of resolution.
29:34Putin and his aides acknowledge the U.S. efforts in that.
29:41But at the same time, they realize that the Trump administration is not trustworthy, as simple as that.
29:50That's why for Russia to try to directly mediate any efforts in Iran, I would necessarily doubt that.
30:01But definitely that was one of the...
30:04China would be probably as not a direct part of the conflict and is not a country that is
30:12currently in the state of war with Ukraine that is supported by, you know, U.S. and other Western powers.
30:21Probably would be at a better place.
30:24But Chinese and my colleague here from Beijing would probably comment on that, are very, you know, very careful.
30:32So, Zinia, what is Russia's real strategic interest in the Iran file?
30:38Energy markets, principle, or simply keeping America tied down in another war?
30:43Russia is not a part of the conflict.
30:46Russia is not a part of the conflict, unlike U.S.
30:49So, if we speak about the strategic interest, we rather should speak about Washington's strategic interest
30:55to disrupt the energy markets.
30:58And that's the reason for the conflict.
31:02It's trying to remove all the big players from all the energy markets.
31:08And it's not just Iran.
31:10We started with Venezuela.
31:13Now it's Iran.
31:14You know, there are talks about Cuba.
31:16And this is why particularly Russia is engaging with, you know, with China, the point I was making earlier,
31:25because they need to understand how to deal with a power that uses, you know, all possible tools, sanctions, and
31:36direct war efforts.
31:37I'm surprised with my colleague on the panel from Washington, who doesn't acknowledge that, you know,
31:44he speaks about Russia's, China's support, as he called this, militarily and financially to Russia in its efforts in Ukraine.
31:54But he doesn't acknowledge that U.S. directly bombing in Iran.
31:57I mean, that's just amazing.
31:59So, if we talk about strategies, I think we should talk about a different country.
32:03But let me make a point.
32:05Let me make a point.
32:06I've seen a lot of analytics, particularly in the West, that says that Moscow directly benefits from hormones disruptions.
32:15Yes, prices of oil, of crude oil, have gone up.
32:19But at the same time, we will see that in April, Russia banned exports of petroleum products.
32:27Why is that?
32:28It could sell it in the market.
32:29It needs the dollars.
32:30The prices are going up.
32:32It's a very good, you know, opportunity for Moscow to earn some more.
32:38But it bans the export of petroleum.
32:42Why?
32:42Because it sees the long-term effect of this, of Iran, of Middle East conflict, of homeless disruption.
32:52And it wants to protect, you know, the local markets.
32:55I think Russia is rather interested in the stability of the region.
33:01Okay.
33:01Than in, you know, short-term games.
33:03Let me bring, let me give the last word to Daniel quickly.
33:06Daniel, go ahead.
33:10Sure.
33:10I, far be it for me to be in a place of defending the Trump administration.
33:17But I do think it's important for your audience to understand what is animating the Trump administration, what their primary
33:26goals are, and points of consensus in Washington right now.
33:32No question there is a vigorous debate in Washington about whether this war made sense.
33:41Democrats and a number of senior national security experts and former generals have said this was an unnecessary war of
33:47choice.
33:48The Trump administration obviously disagrees with that.
33:50But I can tell you this.
33:51The purpose of the Trump administration was not to disrupt global oil flows.
33:56It was quite the contrary.
33:57It was to affect the objective that China, Russia, and the P-5 had agreed to in 2015 of ensuring
34:09Iran is not a nuclear power.
34:11Now, there's a healthy debate of is this the right way to do it?
34:15And personally, I'm quite ambivalent about that.
34:19But to say that the objective was just…
34:23But the larger understanding is that this was a war which was thrust upon Iran and something that the U
34:30.S. should not have done.
34:31So, Daniel, really appreciate your time.
34:33Aina, Tanjin, and Xenia, appreciate your time.
34:35Thank you for joining us.
34:36In fact, U.S. President Donald Trump has now reacted to Vladimir Putin's visit to China.
34:42And he has said that the meeting between the Russian and Chinese president is a good thing.
34:47Listen in to what the U.S. president said.
34:54What do you make of President Xi meeting with Putin this week?
34:58Well, he told me he was going to.
35:00I think it's good.
35:01I get along with both of them.
35:03But I think it's good.
35:04I don't know if the ceremony is quite as brilliant as mine.
35:07I watched.
35:08I think we topped him.
35:10I think we topped him.
35:12Good team.
35:13But, no, I like, I get along with Putin.
35:15I get along with Xi.
35:16I get along with everybody.
35:18What do you make of President Xi meeting with Putin this week?
35:21Well, he told me he was going to.
35:23I think it's good.
35:24I get along with both of them.
35:26But I think it's good.
35:27I don't know if the ceremony is quite as brilliant as mine.
35:30I watched.
35:31I think we topped him.
35:33I think we topped him.
35:35Good team.
35:36But, no, I like, I get along with Putin.
35:38I get along with Xi.
35:39I get along with everybody.
35:46And another breaking news coming in now.
35:49And this is another accolade for Prime Minister Narendra Modi.
35:51Prime Minister Modi has received Food and Agriculture Organization's highest honor,
35:58the Agricola Medal.
36:00The Prime Minister was presented with the Agricola Medal in a ceremony
36:04that was held in the historic FAO Plenary Hall at FAO Headquarters in Rome.
36:10D.D. of the FAO lauded the exceptional leadership and vision of Prime Minister Modi
36:18in advancing the country's efforts to transform India's agricultural landscape
36:22through farmer-centric, innovative and path-breaking initiatives.
36:53Shifting focus now, for nearly 82 days now, the Iran-U.S. war has kept the global economy
37:00on edge.
37:01And nowhere is the impact more visible than in the energy market.
37:06Brent crude is now hovering around $108 to $109 a barrel, a massive spike of nearly 80%
37:14since the conflict began.
37:16Despite periodic talk of diplomacy and possible ceasefire efforts,
37:20Washington and Tehran remain far from any meaningful breakthrough.
37:25The fallout is already being felt worldwide.
37:28Volatile oil prices, nervous stock markets and growing fears of another inflation wave
37:34is actually hitting economies already struggling with slowing growth.
37:39From Europe to Asia, governments are scrambling to secure fuel supplies,
37:44stabilize prices and shield consumers from another major energy shock.
37:49And as fears grow over how long this conflict could drag on,
37:53the big question is how severe can this global energy crisis become
37:58and can countries like India weather the storm?
38:01To discuss that, I am being joined by someone very special,
38:05one of the world's leading energy market experts.
38:14And let me go straight to North Carolina from where Bob McNally,
38:19former White House energy advisor and founder of Rapid Energy Group,
38:24is joining me live.
38:25He has also authored a book called Crude Volatility
38:29and is one of Washington's most authoritative voices on oil markets
38:35and geopolitical risk.
38:36Bob, I appreciate your time here on India Today.
38:39When the conflict began, you flagged $147 per barrel
38:43as a realistic ceiling above the 2008 record.
38:50Brent is already up nearly 80% this year.
38:55Are we still on that trajectory?
38:57And has anything changed according to you?
39:00And what's your math right now?
39:02Yeah, it's very good to be with you.
39:05Rapidan still thinks that we are going to head toward the mid-$100 crude price range,
39:12at least, if not higher.
39:14But we have to explain.
39:15It's been 80 days.
39:17Why hasn't Brent gone that far?
39:20Oil only peaked at $144 a barrel for physical Brent in the very early days of the crisis.
39:28But as you noted, it's been very stable since.
39:30Why?
39:31Well, the most important feature of this entire episode, in my view,
39:37is that the market is extremely optimistic about an abrupt and clean reopening of Hormuz.
39:46They're treating this like a hurricane or a typhoon that is very damaging but only lasts for a short period
39:53of time.
39:54And as long as the market believes that, there are buffers or there were buffers in the oil market that
40:01contained the oil price spike.
40:02But SPR releases, India, Asia, other refiners reduced their runs, inventories of oil on the water.
40:11So there were shock absorbers that were used that combined with the market's extremely optimistic bias has kept oil prices
40:22from rising faster.
40:23But that is going to wear off.
40:26Some of those shock absorbers are gone.
40:29SPR releases will come to an end.
40:32Inventories are getting critically low.
40:34Yet the disruption in Hormuz persists.
40:38Therefore, while delayed, we still think that oil prices will rise sharply in the coming weeks and months.
40:46Okay, what is giving markets this confidence?
40:50Because there has been multiple exchange of, you know, supposed deal between Iran and U.S., and that hasn't really
41:00materialized.
41:01If anything, there is growing uncertainty about what will be the next action by Donald Trump.
41:08Yeah.
41:08So I think, again, it's very important to realize that before February 28th, no one could even imagine that a
41:18Hormuz closure would be prolonged like this.
41:21It was unthinkable.
41:22It wasn't even analyzed, except for my company, Rapid Energy Group, did a full analysis of an Iran war, a
41:29Hormuz disruption last June.
41:31But we were the exception.
41:33And so when human beings are exposed to a shock nightmare, something they never imagined or thought, I think the
41:42natural desire is to believe it will end soon.
41:46And there's this belief that Donald Trump, with just a stroke of his pen, can agree to a deal.
41:53And all of that 150 million barrels trapped in the Gulf will flow, and the fields will come back, and
42:00everything will be beautiful.
42:01There's this desire for the nightmare to come to an end.
42:05I think it's a human, really, psychological type of thing.
42:08Okay.
42:10And, Bob, you were among the first to call market complacency on this conflict, as, to quote you, boy who
42:17cried wolf syndrome.
42:19That call has largely played out.
42:23What's the next mispricing the market hasn't really woken up to yet?
42:29Well, I think that the next mispricing still, I think, is in the longer term.
42:36Because before we entered the Iran crisis, that shock, unthinkable event that will permanently attach a security risk to the
42:52region, to the Middle East.
42:53India, Japan, South Korea, China will be looking much more strongly at the Americas, North America, South America, for oil
43:03and gas.
43:04Because, again, for 50 years, no one believed anybody could do what Iran has done, prolonged interruption of flows.
43:12So I think there's going to be a higher pricing on assets in Canada, in the United States, partly because
43:20of the war.
43:21Or also, just before the war, this idea of peak oil demand due to climate policies was crumbling, was weakening.
43:29And if you connect these dots, that we're going to have stronger demand because EVs are not coming as fast
43:36as everyone thought a few years ago.
43:38And now the Middle East has this new, unimaginable risk that will not go away.
43:45Then I think you see Asia is going to look at the Americas.
43:48And there's going to be an uplift, I think, in pricing and assets for oil and gas and infrastructure in
43:55the Americas.
43:56The IEA is calling this the largest supply disruption in oil market history.
44:02Then why hasn't the price fully reflected the scale of the shock?
44:08It is the largest.
44:10And I think the reason the prices haven't yet reflected the shock, again, are, number one, optimism bias.
44:18There is a persistent belief.
44:20As we speak today, Brent oil prices are down a few dollars a barrel because I've lost count of how
44:28many times.
44:29President Trump has said we're close to a deal.
44:31We're having very serious negotiations.
44:33The market believes this.
44:34So there's that.
44:35Plus the shock absorbers, SPR releases, refineries dropped runs.
44:41China has been hoarding less.
44:44Asia especially has been doing without on the view that it's temporary.
44:48Let the typhoon pass and then we'll be all OK.
44:52The problem is the typhoon is not ending.
44:55It's going to be around for a lot longer.
44:57OK, Tehran controls the Strait of Hormuz.
45:01I mean, you were right.
45:02Nobody thought that the biggest choke point can be actually choked by Tehran.
45:07And through this, 20 percent of the world, oil trade passes.
45:13So tell me, how long can Iran then sustain that leverage?
45:18And does it actually believe it can outlast Washington?
45:23It does believe that.
45:26Rapidan's CEO is a former CIA field officer who specialized in Iran.
45:31He speaks fluent Farsi.
45:33And so we think we understand Iran pretty well.
45:36While their leadership has been decapitated, they planned for that.
45:40And the surviving leaders, while somewhat fractured, are functioning.
45:44They believe they are winning.
45:47They are dug in for months.
45:49They will eat grass.
45:52They will suffer things that many people wouldn't suffer, I think, because they believe if they can just hold on
46:00the choke, just keep the choke hold, oil prices will rise, equity markets will fall, and the United States will
46:07be forced to do a deal on Iran's term.
46:10So they are very dug in.
46:12I think they can go a few more months at least.
46:15You're saying that Iran can go through this for a few more months despite their own economy collapsing?
46:20Yes, yes.
46:22These are people who, in the 80s, were running as children across minefields in the war against Iraq.
46:30These are very tough, determined leaders.
46:33They have cowed the population.
46:36There's been no uprising.
46:37They have the guns.
46:39It's existential crisis.
46:41When human beings are fighting for their survival, they will go to great lengths.
46:45So, yes, we think Iran is prepared for months to hold this choke hold and this standoff.
46:52That's a fascinating assessment there, Bob.
46:55Saudi Arabia and the UAE, they have bypass pipelines, but capacity there is limited.
47:02What's the realistic ceiling on rerouting if Hormuz stays restricted, and how many barrels then a day simply can't be
47:13replaced?
47:15Right. So, with the Iran blockade adding to it, we think there's a net disruption on the order of 15
47:24million barrels a day of crude and products.
47:27That's 5 million barrels a day of crude, for which there are no workarounds.
47:3110 million barrels a day of—sorry, 5 million barrels a day of refined products, no workarounds.
47:3810 million barrels a day of crude.
47:39We've rerouted about 5 million barrels a day, mostly through the east-west pipeline to Yambu, which so far is
47:47not damaged.
47:48Saudi Arabia has done a great job with that.
47:50They've increased the flow of the Yambu pipeline, so that's very good.
47:55However, it's not enough.
47:56The net disruption is still about 15 million barrels a day.
48:00That's 15 percent of prior flow, and it's still the largest disruption.
48:06And finally, all the spare capacity.
48:08Normally, when we have a disruption in the oil market, the offset could be spare production capacity.
48:14The last biggest disruption in history was the 1956-57, 1955-56 Suez crisis.
48:24And there, the United States was the swing producer.
48:27We had spare.
48:28Now, there's no spare capacity.
48:31All the spare capacity is trapped up in the Gulf.
48:34It's in the UAE and Saudi Arabia and unavailable to the market.
48:37My last question, and this is in the context of India, because you're speaking to an Indian journalist and an
48:44Indian news channel.
48:45India imports 88 percent of its oil.
48:47Every $10 rise in crude adds roughly $15 billion to the import bill.
48:55Is there a credible hedging strategy for import-dependent emerging economies such as ours, or are they simply collateral damage
49:04in a war they have no stake in?
49:07Yes, there is.
49:09Yes, there is.
49:09There is.
49:10So, India has begun to build strategic stocks.
49:13One thing that's going to come from this is all importers are going to build inventories after this.
49:19When you realize, especially India, 90 percent of your oil is imported, half of that came from the Persian Gulf
49:26just a few days away.
49:28After this shock, I predict India will be very interested and should be interested in building their commercial and strategic
49:36stocks.
49:37Very important.
49:38Secondly, diversity.
49:40India has benefited somewhat and has been able to absorb the shock because half of its imports come from Russia,
49:46the United States, other countries outside the Gulf.
49:49That will continue.
49:50I think Indian officials and oil and gas companies will be part of that stream to the Americas and looking
49:58to get into long-term deals, help finance infrastructure to the coasts in the Pacific Ocean so you can diversify.
50:06So, inventories and diversity of supply, I think, are good hedging strategies that India will be employing after the shock
50:15of this event.
50:17All right.
50:18Bob McNally, really appreciate your time.
50:21Thank you for joining us here on India Today.
50:23Thank you for having me.
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