00:00Four months into the war, and the tit-for-tat continues, yet oil is still hovering at about 90 bucks
00:05a barrel. What's going on?
00:07Well, the reality is that the markets are moving based on sentiments, not on physical fundamentals.
00:14There is going to be a pressure point when the inventories get to the minimum operational levels, probably by mid
00:23-July, latest by end of July.
00:26And that is where you're going to see huge increases in the price.
00:30At the moment, the markets move on whatever Trump says or whatever the Iranians say is all on sentiments, nothing
00:37to do with the fundamentals of the flows of oil.
00:39So talk to us about the fundamentals in terms of the physical market. How is it looking?
00:45Well, the flows inside from the Strip of Hormuz, about 20 million barrels per day, 15 million of crude and
00:51about 5 million barrels per day of refined products.
00:54At the moment, the total flow until today has been about 1 million barrels per day.
01:00So there is a huge shortage in the market. And the way the market responds is by demand destruction.
01:06China's imports have fallen by 4 million barrels per day.
01:09There is a huge demand destruction taking place because of the higher prices and because people are worried about the
01:16supply sources.
01:17But there is a trigger. The trigger would be the minimum inventory levels in the heat of the summer and
01:26the driving season that we'll get to that in six weeks, eight weeks time.
01:30Before we get to that, Bloomberg ran a story yesterday talking about how some vessels have gone dark.
01:38And because of that, we've seen more capacity, more flows out of the Strait of Hormuz than what's been reported.
01:44Instead of one million, it's perhaps two million barrels a day. Still not enough.
01:49But we're seeing more of that. Is that what you're seeing as well?
01:52These days, because the tanker trackers, they look at these tankers by satellite.
01:58They're not only depending on the satellite, not only on the information coming from the ships.
02:06But there is, you know, if it's not one million, it's one and a half million, two million at the
02:12outside.
02:13But, you know, you have two triggers. One is the Iranian side and then is the double blockade of the
02:18U.S.
02:19So if the Iraqis are sending something to China, probably the U.S. will let them go through.
02:26If the Iranians want to send something to China, they won't let it through.
02:30So it is very, very sort of disorganized, not clear.
02:35The Iranians say that the Saudis cannot send anything out, but the Iraqis can because they are our friends.
02:40The Saudis are not. So there are no rules here.
02:43It's a hodgepodge, mishmash of confusion.
02:47And both sides are lying all the time.
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