00:00Down the line, yes, Tom, agreed. I'm in New York right now, been seeing clients here. And that's exactly the
00:06question everyone's asking. You know, why are we not higher? What have we missed? People are misconstruing this as though
00:12demand must be super weak, because if we've lost 12 million barrels per day plus of production, then that's the
00:17only way to rationalize it.
00:18The reason is we had a really big buffer of oil, 400 million barrels of stocks that we are still
00:25running down and add to that 400 million of SPR. So we did have and we still have that buffer.
00:32You know, we forget this. I mean, people were talking about us being at $40 right now, remember, for this
00:38year, we were going to be 3 million barrels per day oversupplied.
00:41Right. So it's that overhang that we are running down. And that's what the market's almost forgotten about. Once that's
00:49true. Yes, of course, prices will be going higher. But then the question is, how long does this go on
00:53for?
00:53Well, with energy aspects rigor, do you have an X axis on this? Paul wants to go to the week
01:00when the Vespa becomes expensive.
01:04I'd say we still have a couple more weeks, right? It's more like weeks or months. It's in July that
01:10on our numbers, we start to get like, you know, critical levels between end July and end August, depending where
01:16you are, what you're buying and so on.
01:18Amrita, if we were to get an end to the hostilities today, do we have a sense of when the
01:24Gulf would be back up and running and the oil would be free flowing and we'd have it back to
01:30somewhat of a normalized market?
01:32That's actually the million dollar question. And I think the market there is getting very complacent.
01:37I've seen some reports that it was going to be much quicker to recover. I was just in the Middle
01:41East and everyone there said that the damage to infrastructure has actually been a lot more than people have let
01:49on because for obvious reasons.
01:51Right. And I think it is not an overnight thing. The tankers are in the wrong place. Half the tankers
01:55are here in the U.S.
01:56They need to reposition. Tankers, the owners are still very cautious because of casualty.
02:02You know, despite the ceasefire, you still get these occasional ships being hit, mines, the other issue.
02:07And production is not a light switch. It takes a few months.
02:11Now, some countries like UAE, even Iraq and Kuwait now are starting to kind of let some vessels, they're managing
02:18rather, to get some vessels out.
02:20That means they are going back in there, seeing what damages. So it won't be like too long.
02:25But, you know, officially, they've still come out and said months, not weeks.
02:28Like it's going to be three, four, five months before production fully recovers, if not longer.
02:34Is there a sense in that part of the world, Amrita, that they need to de-risk the Strait of
02:39Hormuz?
02:39I don't know if it's through pipelines or other ways to get the crude out of that region of the
02:44world.
02:45Is there any plan there to change how that works?
02:50Absolutely. That was probably one of the biggest points of conversation.
02:53And I think Saudi Arabia really stands out there, right?
02:56Like they already had invested in kind of alternative capacity.
02:59And they've always said, look, we don't get paid for it until we do. Right.
03:02And I think the kingdom is probably the least affected because of the east-west pipeline.
03:06They are coming up with four pumping stations that makes the flow of that pipeline actually sustained at 7 million
03:12barrels per day.
03:13Right now, it's more like six.
03:15They're twinning two gas pipelines to also flow crude.
03:19They're going to dredge the port so they can do more.
03:22Kuwait and Iraq are talking to them about new pipelines through Saudi Arabia.
03:26I think in two to three years' time, that entire region will look different.
03:30UAE has already got that second pipeline going.
03:33Yeah, absolutely.
03:34Amrita, one final question.
03:36And we know you've got to get off to energy aspect meetings this morning.
03:40Karg Island.
03:41Okay, I get it.
03:42It's a thousand miles from Israel and all that.
03:45But are we doing a sort of kind of like war because we don't want to easily take out this
03:52incredibly important oil hub for Iran?
03:57As in, are you asking why they haven't taken it out yet?
04:00I'll go with that or when or, you know, what's the Amrita Sen take on the importance of Karg Island?
04:09It's super important.
04:10You know, we've actually just acquired a company called Keros and they're satellite based and they're literally going through tank
04:17by tank.
04:18How much is there?
04:19And Karg is Iran's lifeline in terms of how much oil sits there.
04:23They have been managing to get oil down there because they're still getting ships through the U.S. blockade, right?
04:28That's been amazing to watch.
04:29I think, look, kinetic action is not something the U.S. wants to do or anybody wants to do right
04:35now because the Iranian IRGC in particular has shown their asymmetric powers, damaging infrastructure in the region.
04:42And, you know, they are the kind of people, you know, they really believe in scorched earth.
04:46If they can't have it, nobody else can have it.
04:48And I think there is some real risks to, again, kind of restarting kinetic action.
04:53And that's why the U.S. has backed off.
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