00:00It is a fast-developing situation. We're hearing these headlines from Iran up until moments ago.
00:05So with this escalation of the rhetoric from the region, where do we go next?
00:12No, thank you for having me, Abir. Nice to be with you.
00:16It's difficult to tell because both of them are trying to see who kind of blinks first,
00:21and it's over the straits. This is contested over who controls the straits.
00:27So there is a lot of brigmanship, but also there is a lot of bravado that is going on.
00:32I think that they will de-escalate. This is not yet the time.
00:36I think that we will see a few more rounds of peace and war, a little bit of peace, a
00:41little bit of war.
00:42Again, the MOU is kind of structurally difficult and hollow in that sense,
00:47and we're going to see more of the same.
00:51But I do expect that there will be intervention from Qatar, Pakistan and others.
00:57Cooler heads will eventually prevail because oil is beginning to jump to close to 80 and then from there on
01:05higher than 80.
01:07So I think they will de-escalate, but it is a contested area, the strait.
01:14The strait, that was exactly going to be my next question.
01:17It does feel, and I was just talking to Stuart about how two things cannot be right at the same
01:22time.
01:23Iran has asserted dominance over the Strait of Hormuz.
01:26The U.S. is trying to help ships through the strait to carry their crude exports and other shipments as
01:32well.
01:33So when it comes to the Strait of Hormuz, who really do you think has the upper hand at the
01:37time being?
01:40Well, right now, neither.
01:42Both of them are trying to vie.
01:45They're trying to contest their sovereignty, meaning the good side versus the bad side, whatever is the pick you make.
01:54But Iran certainly is back on the table, and they're trying to make it obvious that they want to control.
01:59Well, it's not necessarily just the fees, but it's the issue of sovereignty and control and this sense of empowerment
02:05that Iran has in the regime over its population.
02:09So they want to demonstrate that by having control.
02:12On the other hand, the U.S. clearly has a way out, which is the Strait of Hormuz to be
02:19used through the Omani shore.
02:21And that has been working quite well.
02:23More than 600 vessels have gone through.
02:26But that is being contested.
02:27So if Iran continues to attack vessels that are using the Omani shore, I think the U.S. is going
02:35to attack them vociferously, and they're going to be pounding.
02:39And we're going to go back to 2.0, an invasion of 2.0.
02:45So is that actually a base case scenario?
02:49Do you think that we're going to go back to a state of full-on kinetic warfare where the entire
02:55region is dragged?
02:56We're seeing oil closer to $100 a barrel.
02:59Do you think that, given the current circumstances, that that is a possibility at the time being?
03:08Oh, I do see it, but not yet.
03:10This is on Iran's court.
03:13The ball is on Iran's court.
03:14If they do continue, I think the U.S. is going to go back, and they will do a lot
03:19of kinetic kind of 2.0 attack.
03:22So I think the Iranians are underestimating the ability of President Trump to go back.
03:30They believe that because of the November elections, there will be very little war going on.
03:35And they think that this is going to be pushed down the road.
03:38I think if you do underestimate President Trump, you end up losing.
03:41And this is where we're getting at right now.
03:46John, just to bring the GCC into this, because they have been bearing the brunt of all of this, even
03:52Qatar.
03:52I mean, again, we were just talking about how up until a week ago, Qatar was mediating, and yesterday it
03:57was getting attacked.
03:58So when it comes to their economic model, the state of play as it stands now, this war, but not
04:04really a full-scale war,
04:06what are the long-term disadvantages or what are the long-term damages to the economic models that these countries
04:13have been trying to prevail over the past few decades or so?
04:21Yeah, thank you. It's a great question.
04:23I mean, you want to diversify.
04:25You want to, in many ways, de-harmonize, so to speak.
04:29So you want to de-link your dependency from the strait.
04:33Very difficult, easier said than done, but the UAE will do it.
04:37Saudi Arabia will do it.
04:38Oman has been quite successful and doing quite well economically right now.
04:43The difficulty is confidence, investors coming in.
04:46And this back and forth, you know, a little bit of peace, a little bit of war is not working
04:51out quite well.
04:52So you need to have stability.
04:54But overall, I think for these countries, they will do well.
04:57For Qatar, it's more complicated.
04:59For Kuwait, it's more complicated.
05:01For Bahrain, again, it's difficult.
05:03So you need to have proper peace.
05:05Right now, we have neither, nor peace.
05:08Neither war, nor peace.
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