00:00On the Iran deal, we now have the MOU signed, it seems.
00:03Are you pleasantly surprised how the global economy has coped with this
00:08in the sense of how high oil prices got, how stocks managed to keep performing,
00:13or in any terms you define?
00:15A huge pleasant surprise.
00:16I thought we had probably six to eight weeks after the war started
00:20before we would start to see visible rationing in Europe once the ships stopped arriving.
00:27And the reality is household businesses market have made numerous incremental adjustments
00:34as a result of these supply dislocations and continue to expand production.
00:39The markets have passed a major test, right?
00:42I mean, if the Hormuz straight is going to be shut for three and a half months
00:44and the oil prices sort of peak at 120 and then settle at about 80.
00:48That's success.
00:49That's success. That's a major test passed, right?
00:52If this genuinely holds, look at earnings, right?
00:55I mean, it's certainly better than any of us around the table would have thought.
00:58Here we are with earnings having been upgraded and with corporate showing resilience.
01:03So, you know, we're thinking about this world where effectively the more chaotic
01:07the politics becomes, the more governments spend.
01:10Fiscal stimulus is driving growth.
01:12That's driving corporate profitability.
01:14Whilst the conflict has been occurring, fuel prices have been incredibly high.
01:19The short term we might see some sharper pricing,
01:22but I think that what we are going to see is that the market will normalise quite quickly.
01:26In terms of geopolitical tension, what is the price of that for crude, for brent?
01:30I'm not sure that we are going to see a return to the pre-conflict pricing.
01:35I think there will now be always an inherent risk premium attributed to gulf barrels.
01:42To any barrel that has to transit through the Strait of Firmas, Iran has shown how effectively it can use
01:48that mechanism
01:48to control the market and to affect not only supply but pricing.
01:52Some people note that the extremely low reserves we've got and that the need for future stockpiling
01:58combined with the risk of the deal holding means that it feels that the risk is very much the top
02:05side.
02:06There are other people kind of going that, hey, the fact that oil prices didn't kind of go much, much
02:12higher,
02:13given that the Strait was closed for so long, shows the excess supply out there,
02:16shows the resilience of supply chains.
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