00:00Oil prices are edging higher after a tanker transiting the Strait of Hormuz was reported being hit by an unknown
00:07projectile.
00:08The attacks come as President Donald Trump is set to head to the NATO Leaders Summit in Turkey where the
00:14U.S. conflict with Iran is expected to be a major topic of discussion.
00:19But to discuss more on the events this morning, I'm now joined by Stuart Livingstone Wallace, Bloomberg's executive editor for
00:26the Middle East, North Africa and Russia.
00:30So we're seeing more of these attacks in the Strait of Hormuz. We're seeing two fresh attacks this morning. Is
00:36this the new reality of shipments through the waterway?
00:39Yeah, it certainly seems to be. And you're right. This is not by a long shot the first time it's
00:44happened.
00:44I guess what's surprising here is that it's happening during these this funeral week, shall we say, in Iran.
00:50And I think the assumption in the market was that there will be some sort of actual ceasefire as opposed
00:55to the rather patchy ceasefire that we've seen.
00:58I think the big readout from this is that Iran is absolutely determined to enforce its right to control the
01:04Hormuz.
01:04What was interesting about the location of this is that it appeared to be taking the southern route via the
01:09Armani coast,
01:10which Iran has clearly said is not acceptable as far as it's concerned.
01:14All ships must go through Iranian waters or hugging the Iranian coast and then the don't are subject to attack.
01:20So that reinforces that. Again, I think it makes it very difficult for negotiators going forward in terms of trying
01:26to get some sort of agreement
01:27about what actually happens to Hormuz in the future.
01:29And just sticking with the oil theme, Saudi Arabia, we also understand, is selling its oil at a discount to
01:35Asia.
01:36Why? What are the reasons behind that?
01:38Yeah, so a very unusual situation. I think the interpretation of the market seems to be that this is not
01:43a new price.
01:43war. So we have seen Saudi Arabia engage in a price war a couple of times in the last 15
01:48years.
01:48They don't think this is that. What they say is it's more reflective of this very messy situation coming out
01:55of the war
01:55and again into this rather patchy ceasefire in that that appears, at least in the very short term, to be
02:00a glass of oil
02:01and a lack of demand or anticipated demand in Asia. So in other words, what this appears to be is
02:07Saudi Arabia trying to tempt Asian buyers
02:09back into the market for prompt supply.
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