LIVE: Daily Energy Markets Podcast

追加: 2026-05-07

[00:00:00]Today is uh what the market is telling us and what the market is not telling us and keeping us confused and and volatility. Uh and also we would like to really understand some of the geopolitical and the fundamental signal.

[00:00:14]And at the end of the day, what are some of the tradeable micro convictions we can build while we can all try to build a macro bias. And yes, uh I think that uh everybody's top-of-mind question is how will China ignoring US sanctions?

[00:00:28]So, uh I guess this is the the earliest survey, I guess.

[00:00:35]Okay. So, I want to start with the confused market uh point uh I mean, you had you were mentioning earlier about the market and you said that UAE uh exit from OPEC should have been a big news.

[00:00:48]Uh a lot of M&A projects and the short-term and the long-term are not happening. So, tell us a little bit more about what specifically you think the market is actually confused about.

[00:01:00]Um good morning, Mukesh. Um I think uh you know, my expectation was um you know, UAE exiting OPEC and what will happen with OPEC in the short, medium, long-term um oil markets, OPEC plus, right? Uh because, you know, UAE always had a sort of a a passive role, relatively passive role. It wasn't, you know, hawkish in OPEC. It it historically allowed uh you know, Saudi Arabia to lead the line and uh did its own business, right? And um you know, unlike other uh countries in if you like in the Middle East like, you know, Kuwait and Saudi Arabia where, you know, the upstream was uh you know, it's sort of dominated by the NOC. There were international oil companies working there. So, you know, people were really interested in UAE sort of upstream market and of course downstream and midstream but you know I think it happened what around announced what around 2 weeks ago and since then so many things have happened Mukesh it's a I feel like you know the the oil industry is like a boxing in a ring you know it's it's it's it's had so many punches that it is really confused so a lot of the projects in Europe um and other places have been put on the back burner you know everybody's waiting to see of course I look at more medium sort of to long term and I know my other colleagues on this panel are actually more concerned about the short term but for me what's interesting is that um you know there are a couple of milestones coming up in the short term like US China you know summit you know first US president visiting China how's that influencing maybe some of the decisions right now um and of course you know sort of G7 coming up but the reason I'm saying you know the oil industry is like a boxing in the ring because while people were digesting what's happening with UAE exiting OPEC suddenly couple of days ago out of the yeah another punch and then you Iran you could say unannounced unprovoked um attacking Fujairah which of course put shockwaves through so it is a very very confused market really in terms of you know how it's making its its decisions Gentlemen I'll come back to a question a little bit later I want to really ask also about specifically on the UAE the data tells us a lot of the Iranian crude is actually building up in UAE ports in Jebel Dhanna Fujairah and other places.

[00:03:53]And I'm quite confused what's happening in the Persian Gulf inside the Hormuz, whether the Iranian barrels are going toward the UAE and then you have the attack. That's very confusing. So, spare that thought and I'll come back to you.

[00:04:06]Shadia, I think in this confused sort of a state of the market, the oil prices, the Brent curves have moved in a very interesting direction. The front is kind of getting a bit of a dump and the deferred months is kind of getting a bump, right? So, how do you read? Do you read this as market is going into a bit of a crisis, stock draws, panic? Is it a short war signal? Is it a long war signal? How do you read this shift that now, earlier the front was very high, but the few months down the lane it was down as if things will kind of get better. What's your thoughts?

[00:04:45]Yeah, I think in particular with the Brent curve, we are receiving more barrels this month uh for loading than we had the previous month and this is going into the summer.

[00:04:55]Um so, that part affects the very, very fragment and that's affecting the dated Brent price.

[00:05:01]Um when we look further back, this is where we do see that the market is realizing this war is going to last longer and in our view OECD stock draws, you know, they should be more than 3 million barrels per day. So, this is the visible commercial inventory should be larger than 3 million barrels per day in the month of May and then in June we really experienced the product draws because there is of course the delay.

[00:05:27]So, you process the crude and then, you know, we have that demand bump coming forward and of course this is second quarter where we're supposed to build inventories.

[00:05:38]Um so, as a result when we get to July, we hit what I would say in my experience, that critical level of OECD commercial inventories where they're less than 2,600 billion barrels, million barrels. And this as a result creates this protracted environment that every other time we've hit that, we're able to maintain oil prices above $100 a barrel. This is what we saw in leading into the great financial crisis.

[00:06:14]This is what we saw in terms of the draws after COVID when OPEC didn't have the spare capacity. Now, of course, OPEC has the spare capacity, but they can't clear that spare capacity. And and get it into the market. So, this is where I do believe the market is starting to recognize that oh, this could be really a a big effect for a lasting amount of time. And when we look at the crude flows, we've lost in in March-April around 8.3 million barrels per day of exports out of the Middle East despite all of these workarounds. And the Atlantic Basin, you know, it is shy of 2 million barrels per day in terms of flows to the Middle to to Asia Pacific. And those 8.3 million barrels, that's about Asia Pacific flows. And so, the market is realizing and it and it's 60 days sailing to go from you know, Guyana or the US to India instead of four days sailing, right?

[00:07:12]>> [laughter] >> This is a massive problem that is going to last. And that that's why the back end is coming is coming up. And finally, I would say from the investment side because of course we are investors, we're not physical players at Spelling Capital.

[00:07:27]The volatility in the front is just insane to manage. Last month, we were down off of a rumor of the Strait of Hormuz being open from from expiry the previous month. So, so we came off $30. And then at the next expiry, we were back up $30.

[00:07:45]I mean, that kind of volatility is just extremely difficult to manage. So, the longer dated uh investments are a little bit easier to manage the volatility being further out.

[00:07:59]I think you're right. So, I think very clear picture stock draws happening. We got the shock. We adapted with stock draws, but I think that's not sufficient because the loss is huge, and this will bite in June a bit more, and I will add that we will also not get the refined products because the refined is Middle East are damaging. So, the rest of the world needs more crude to refine, which we might not get, and that's why the curve is lifted.

[00:08:26]Well, the answer to these puzzling questions, I sometimes think lies in China. Right, what happens in China? So, Victor, my question to you is why is China changing its strategy? It was earlier thinking of, you know, we will keep buying, we will not export, we'll restrict the products. Now, we are you know, seeing the evidence that China wants to run again, and maybe wants to they have sold crude into the market. Is there really some some challenges on logistics or tank tops happening in China? How would you read what's changing in China, Victor?

[00:09:05]Well, a thing distracted to is due the same, which is by cutting the final run rate and suspending some exports. Of course, there's still some exports now, which is say mainly exports to some countries in Southeast Asia, and to Hong Kong, Macau, and bonded exports of jet fuel and bunker fuel. They remain, but they're still very low.

[00:09:37]And this is is one of the countermeasures taken China has taken saying lower refining run rate.

[00:09:45]Much lower export.

[00:09:47]And number three, it can still ensure supply. The mean domestic gasoline and diesel supply. As you may know, after the price surge, China's gasoline and diesel demand actually plunged. So, it has no problem meeting domestic demand now.

[00:10:07]And this will continue into the coming months.

[00:10:11]As As for the reselling of some crude you might have heard of, well, it's it's because some crude which are too heavy to be refined without light crude, they can be resold. Say, for instance, some crude from South America, from Canada, and if some refiners had trouble getting light crude from the Middle East, then they had to resell this heavy crude for some profit at the moment.

[00:10:43]And now they do not have trouble with their I mean, feedstock.

[00:10:51]So, maybe one follow up with her and then I'll come to remain again explore the UAE China link. My follow up question is that uh is there a situation with the five refineries sanctioned by the US and China telling, you know, don't worry too too much? Is this a good sign for rest of the Asian refineries that now rest of the trading world will not sell the the barrels to Chinese refiners and maybe Korea, Japan, and India could get still more barrels or China will continue to attract refineries will continue to attract the the barrels despite these sanctions. How do you see that?

[00:11:29]Well, as you know, China the US has imposed sanctions on quite a lot of Chinese refiners. This is a notice this time.

[00:11:38]And they managed to to carry on.

[00:11:43]Yes, I suppose there were some difficulties at the beginning, but later on they managed to to operate their business as basically as usual. And now China has stepped up saying that if a bank, for instance, follows the United States and sanctions Chinese refiners, then it will sanction this bank. And this will have some We made some difference. It's quite different from the past. So, it can ease the difficulties on Chinese refiners and Chinese companies too. This can well enable them to carry on their business quite as as the before. Yeah.

[00:12:24]Okay.

[00:12:25]So, business as usual, some repercussions.

[00:12:29]Uh maybe let's bring the survey question at this point of time as we continue our discussion. And uh Ramin, I'm going to ask and explore the linkages that uh uh you know, Venezuela was a discounted barrel to China, lost it, Iran lost it.

[00:12:46]What is the next partner? Is UAE the next partner that's going to come? Uh I will explore that, but let's go to the survey question. Do you expect US-Iran to reach an agreement that would formally end the war prior to US President and she visit next week? Yes and no. I think uh not a difficult question to answer. Let's wait uh what answer we get, but uh Ramin, tell me in this confused state as you described, do you see that UAE posturing to trade in yuan uh as well and could and getting out of the OPEC, could UAE become the next supplier of barrels to China? Is there something UAE China brewing? Is there something you see or not?

[00:13:34]I think UAE and China have have always had good relations, right? And um is that going to deepen in the future?

[00:13:42]It's it's quite possible. And I think you know, UAE of course you know, we've had we've had countries coming out of uh OPEC before, yeah, Qatar for example, Indonesia.

[00:13:52]But none of them were significant producers. So UAE is a is a heavyweight.

[00:13:57]But in the short term um really there's not much UAE can do, as you know. I mean, like Fujairah's getting I mean, there's a reason why Iran is bombing Fujairah because that's the only way UAE can really bypass the Strait of Hormuz. And of course, UAE I know it got one LNG ship out and uh but it it's I think other Adnoc ships got attacked.

[00:14:22]So So IRGC's is watching it. And we're we're not talking about a a normal country. I mean, effectively in Iran there's been a military coup, right? Um since you know, for the past 50 years Iran has had a supreme leader who managed to keep things in check and balances. But you know, the current supreme leader is Ayatollah Khamenei is not not there or dead, who knows? So basically IRGC's in charge. Um now, would they allow uh you know, anything from UAE flourishing with China or any other country? I doubt it. Um and you can see that sort of the the if you can call it a um surprising or unprovoked attack confirms that that you're not you are dealing with effectively IRGC running the country. The president is as effectively powerless, so diplomacy is out of the window. Um and okay, in the long term, yeah, of course, once things settle down, I can see China really coming in and and and sort of providing you sort of a lot of business with UAE certainly upstreaming involvement and investment potentially. But but right now, you know, sort of I think UAE is cornered in a at the moment.

[00:15:48]Okay, so with that kind of frame of reference, kind of here UAE is cornered and one of the bigger suppliers in the market kind of not there.

[00:15:59]The thought I want to explore kind of with you next is that there is lot other things happening away from Hormuz. We've been hearing a lot of attacks in the Ukraine-Russia side. And now I call that they are cease-firing at each other, right? My ceasefire versus your ceasefire. This is kind of a war.

[00:16:17]Ceasefire is also a bit, you know, kind of a bit of a war. How do you see Europe? Asia is suffering for sure and pain will grow more. Do you see Europe again going into big suffering and finally the suffering will it reach the US shores or you think it won't?

[00:16:34]Well, starting with the ceasefire between Ukraine and Russia, I mean this really came out because uh Putin wanted a ceasefire during his victory parade and I think the Ukrainians are under pressure especially by the Americans uh to to not interrupt that.

[00:16:54]Uh and now uh are hoping to have some ceasefire ahead of that. You know, to have some calmness and and regrouping.

[00:17:01]And of course ceasefire from a humanitarian perspective is the best thing possible. However, before the ceasefire, you know, the Ukrainians managed to hit Kurychiv. They hit two tankers that were loading in Novorossiysk uh, filled with oil, but they're really effectively attacking Russian infrastructure.

[00:17:21]And, uh, on on the energy side.

[00:17:23]>> Even to Russia this time. Right? Yes.

[00:17:26]And so, that is tightening things up.

[00:17:28]And this is where I think when we look where we really have the tightness in the market, it's been on the light ends. And it's been on the fuel oil. And this is what Victor was talking about with bunkering and stuff like that. So, we have this global naphtha shortage right now that is quite severe. We need more naphtha to have more Venezuelan crude flowing on ships. Um, and [snorts] this part is, I I think really critical.

[00:17:55]And you can see it in polypropylene prices, plastics prices. I mean, they are up more than 100%. So, much, uh, a much higher effect, uh, than what we've seen in Brent. And it's, you know, suddenly recycled plastic is absolutely necessary, uh, you know, to have us, uh, continue going forward. So, I think this ceasefire helps things for a week, but surely when that ceasefire ends, we're we're going to have these attacks on Russian infrastructure continue because this is the chance that the Ukrainians have. So, I think on that part of the market, it will continue to affect things. And it will continue to affect things in Europe, uh, specifically, um, because of this products part of of the curve. Um, and also on the LNG side because Europe is no longer taking spot cargoes of LNG from Russia. So, that part, uh, continues, uh, to move forward. And it makes Russia much more dependent on China, which again, the sanctioning of refineries, that is an important part. And we go into this Xi meeting, and the product exports, they're still, yes, we have some loosening, but we're still seeing around 80,000 barrels per day of less gasoline exports coming out of China this month and you normally have 250,000 barrels per day coming in March which we didn't see. So we're in a much tighter picture going into the summer and when we go finally to get to your point on the US markets where will they feel it?

[00:19:31]I think they will feel it in the summer driving season because it's not only finished gasoline, it's gasoline components that the US is very dependent on coming from China. So these talks between Xi and Trump are critical and what Victor is saying on this crude blending, it's so important that we we had this reselling of Canadian crude because they don't get their lighter uh Middle East oil but surely Trump wants them to take shell which is of course even lighter and it doesn't work that way that easily. But I mean what he really wants to achieve is more crude imports from the US into China, more product exports out of China not only to the near neighbors but everywhere around the world and that I think is going to be tricky um if he [clears throat] has not solved any of this Strait of Hormuz problem because right now he's very directly inflicting a lot of pain on China and Xi clearly didn't like that.

[00:20:34]So I think in the summer it will start to hit the US very much so.

[00:20:38]>> I think you have said it very well. The answer problem is not in the crude barrel, the problem is probably in the fine barrels, right? And I mean in Australia we had a fire in a refinery where we stopped producing alkylate and yesterday we also learned that Reliance refinery, the export oriented refinery would also maximize LPG domestically and not send alkylate outside and interestingly Reliance refinery is one of the biggest source of US alkylate and which is needed for summer blending and RVP control in the US market. So, I guess a lot more happening in octane blending component gasoline side of the market. I think diesel is probably shown its fireworks. Gasoline fireworks might be on the way.

[00:21:21]Well, in all of these, I think there are so many points, but I want to come back with her. What's your final take on Xi Trump meeting? Do you really see first that meeting happening? Because nobody wants to travel such long distances when they don't see the outcome. So, what's your take on why the meeting will happen, and why the meeting may not happen? Maybe good to hear some both sides.

[00:21:48]Well, it's kind of weird that in China we do not see official reports about Donald Trump wasting China. I myself do not see such report. And but in foreign media, there's been a lot of reports even earlier this year about Donald Trump visiting China.

[00:22:10]So, we do not see actually we do not see much passion from the China side. I mean, about Donald Trump visiting China.

[00:22:20]And there I do not expect them to well, to come to a deal. Deal I mean, a real real deal.

[00:22:30]I mean, there's so much difference between the two countries, and they as you said, the number one difference might be Sorry to interrupt. What's the number one big difference in your view?

[00:22:45]Well, as you know, China the United States has actually stepped up is you may say sanction or everything else well against China. Not just about technology, but also well, including trade war, technology, and oil purchase, and everything basically can name it.

[00:23:08]Well, of course, earlier there was also military actions to I mean say by say supporting some countries, I mean around China to come up and confront China.

[00:23:20]But now it's more on other sectors, well.

[00:23:25]And they have different interest. Of course, there are some sectors they can cooperate with, but the demand gap is so huge, I mean, for the United States and for China. So, I do not really expect them to come to an acceptable deal for each other yet.

[00:23:44]Yeah.

[00:23:44]Fantastic. Now, I think that's how I also have my macro bias that this is not ending soon.

[00:23:51]Uh and if this was to end soon, probably China would have, you know, given Iran some signals. Now, the only thing is that the Iranian foreign minister went to Russia, probably going to China or already in China Yes, has been. Yes, has been in China.

[00:24:09]Yeah. Yes, has been in China already.

[00:24:11]Yeah, so I think we need to find out what happens there.

[00:24:16]Last round of questions I want to go one by one quickly is that, you know, uh Hormuz is like an on and off switch, sometimes on, sometimes off. Uh is there a danger like in that situation when sometimes you accelerate and a lot of ships start going in, and then suddenly you get an attack? A more dangerous situation can happen within the Hormuz where ships can break down, can sink, and actually choke Hormuz. We had the Suez Canal Hormuz, you know, choking situation. So, I want to understand from Ramin first, is there in this confused market something big you expect in Hormuz that might provide clarity or because or it will just continue with the confused market. So, there can be a breakdown or a black swan event in Hormuz. What's your view on it?

[00:25:10]Um yeah, Mukesh, I I I don't see really clarity. I think the way you've described it is correct. And I I think it's more off than on.

[00:25:21]I don't think it's on and off. I think it's more off than on for for general shipping for like, you know, independent shippers. Of course, Adnoc or, you know, US Navy can, you know, escort one or two US flagships, but we're talking about in general, it is definitely off. And it's not just off for things getting out.

[00:25:41]It's off also for things getting in.

[00:25:43]Now, but, you know, you you've used the analogy of that incident that was in the Suez Canal. I mean, what you what people need to realize, of course, they know, I'm sure, but, you know, Suez Canal at the end of the day is a canal. I mean, if you've been there, it it's it's not very wide, of course.

[00:25:59]Strait of Hormuz is much wider. The the problem here, Mukesh, is that you know, you're not dealing with a, you know, sort of organized, centrally controlled. I mean, IRGC has come out saying proudly, "Look, we've got this mosaic, this, you know, you know, the you know, sort of dissipated control, you know, sort of decentralized."

[00:26:20]It is what it is. So, basically, you suddenly see the, you know, sort of you local guys getting on a few speedboats and attacking a ship. So, you are dealing with sort of effectively uncontrolled situations that may not be centrally controlled by by the foreign minister who's telling them, "Look, open it or don't attack."

[00:26:45]Anything can happen. And I think that uncertainty will exist until something gives, either a complete peace, which I doubt can happen, or removal of IRGC. So, I think it's sort of very much black and white.

[00:27:02]This sort of gray area, I don't think it can continue much longer.

[00:27:06]Hey, Nadia, agree, disagree, any other takes on something big that can happen and provide clarity? Otherwise, we will stay in this stalemate.

[00:27:17]I think that the main pressure valve on the Iranians, of course, can come from China.

[00:27:23]But, it does not appear to me that China is likely to get militarily involved.

[00:27:29]And so, that is where I think the military side for the US is is tricky.

[00:27:35]And the fact that that Trump has halted Project Freedom one day in, makes me wonder, is it because it's too costly?

[00:27:43]Is it We We don't have any kind of detail that that Iran is actually going to be more willing to give in to what Trump wants just because they're halting Project Freedom.

[00:27:58]You know, that is of course the PR campaign, but we haven't heard anything from the Iranian side on that. And the US demands are so big. You know, Iran doesn't even want to engage in nuclear discussions so long as the US blockade is on. So, one of them has to give, and China, I think, holds the keys to maybe having things work. And that's what got us to the ceasefire in the first place was a China put the pressure on Iran. At least, that's the perspective I'm hearing from the Americans. What is very interesting is analysts are wondering if Trump can handle this being reopened by the Chinese, which is quite ironic [laughter] if that's the only if that's the only way out of this, because we have a lot of China hawks sitting in that administration, um especially in the Department of Defense. And so there this this meeting is so important.

[00:28:56]But I'll leave it to Victor to have >> [laughter] >> the final word on the Chinese side.

[00:29:01]Yes, Victor, go get the last word on this. Will China do something and will change the market?

[00:29:09]And we have the answer?

[00:29:12]Yeah.

[00:29:13]I do not expect clarity anytime soon, yes, well, it's quite difficult. As Nader says, you know, it's almost unacceptable for the US to take if it's all up to China to get it open, yes, well. And unless the United States withdraws from the golden the straits of Hormuz, otherwise, well, it's not likely to happen anytime soon yet. No.

[00:29:37]Okay, so we started with confused a state of the market, but I think the convictions are very clear. It's a longer war. Market is telling the same, and I think the stalemate until China will not take a different posture, probably will wait till mid-term, or might wait till 2028, who knows, right?

[00:29:54]China has waited for 10 years, and China prepared well, in my view, for 10 years by building the barrels. I think that's the strategic advantage China has to continue the war, and let's see whether the pain reaches the US markets. And and as Nader mentioned projects, I probably would should call them experiment rather than projects because they they turn them off and on. And so thank you very much, all three of you, and I think the survey question was very clear.

[00:30:23]We do have good clarity on some of the answers while the market stayed confused, and that's the aim, I believe, which Shawn always wants to bring clarity to the market. So thank you for joining the Gulf Intelligence podcast.

[00:30:36]Thank you. Thank you. Thank you. Thank you.

[00:30:40]Thank you.

[00:30:41]Thank you very much.

[00:30:43]Okay. Bye-bye. Thanks, Madeline.