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thoughts on the outlook for the market and where it intersects with the opec plus impasse well i mean uh first of all we have to recognize that opec plus is basically you know our geniuses and they’ve managed to engineer the market and all this kind of stuff but now we found out sadly that basically saudi and uae massive fight and things might unravel which would not be as genius basically so i still refer to my view of opec and opec plus as basically the inspector clouseaus of oil markets you know kind of moving along haplessly banging their noses against uh brick walls and then saying well you know can’t go this way so might as well go the other way uh and i think they do things out of out of need than uh quote unquote strategy so if you look at the market right now we’ve moved from that april 2020 low uh which can be characterized anywhere between minus 40 to plus 10 dollars uh to about on wti about 77 so i think basically the easy money is done that’s where you had people saying that you know seventy dollars sixty dollars fifty dollars forty dollars all those who are impossible we’ll never get there everybody who’s talking variant covert we’re all gonna die we’ll never be recovered we’ll never live the same lives again nobody will ever travel we’ll you know live at home and not move and all this kind of stuff now all that stuff we’re at 77 everybody’s like we’re going to get 200 uh you know everything’s coming back again here we go yes ready blah blah blah so we are basically out we sit on the sidelines that’s not to say i don’t think that the market can’t pick a little bit higher maybe get from you know the high at 76.98 maybe to 77 78 even 85. but i think the kind of quote-unquote easy money uh is done when you start having basically people who are bearish become bullish i think basically that’s a negative sign for the market having said that i think the rest of the markets whether you look at equities um or a measure of risk appetite which is basically bitcoin i think those will rise uh so it’s a funny thing if you look at oil on its own i think that’s pretty much uh done if you look at oil um in with the rest of the markets those are just basically starting their kind of last legs up whereas all you can actually say it’s actually finished that last leg up so it’s going to be very interesting to see what happens so you’re saying regardless of the opec stance at the moment this was already going to reach its sort of peaking point yeah i think basically you know whatever happens with opec and opec plus and those discussions i mean seriously it’s like um you know the these are markets this is this is real money this is uh profit and loss this is a multi-billion not to say trillion dollar you know uh market and really what happens between the uae and um and uh and saudi arabia and a fight between whatever you want to call it personalities egos all this kind of stuff nobody gives a i mean to be honest well perhaps somebody in lebanon gave us a little bit of a one in order to give us a comment nonetheless lori hitayan meena director natural resource governance institute uh a well-respected commentator on the geopolitics of the middle east laurie what’s going on do you think within saudi arabia and the uae my as ultimately the sort of question mark seems to be is this purely an opec plus oil quota issue or is the latest sort of standoff between riyadh and abu dhabi part of a wider trend line that’s been going on for the last two years your thoughts on its outlook so for the time being i guess it’s all about oil and the future of oil globally and in the region uh as you know the energy we can we cannot deny anymore the impact of energy transition on anyone even on the low-cost producers as uh as the producers in in the region everybody knows that this energy transition is real the impact is real and everybody wants to think about the future and this is where this whole issue comes in you know everybody saudi arabia uh uae kuwait all the rest and the region want to make sure that even though they’re the last man standing in this oil business they are low cost producers they have vast reserves they can stand till the end to provide the markets but at the same time they need to uh fast enough diversify their economies have a stronger economy that is that is not based on oil and gas more sustainable for the future generations optimize the revenues now until they can until 2013 35 40 50 2050 so that they are able to live beyond the oil era and you’re saying in essence that the energy transition given the uh need to build a new economy is putting uae and saudi more into competition than into allies which they were through the oil era is that so today it is uh today it is putting the uh today uae is putting that on the table like we need guys to optimize our revenues we need to make benefit now we cannot wait another year where we do have this control over quotas we want to uh to optimize and to maximize our capacities production wise making money put it in the right place to build our economy stronger for the future for whatever it is coming in the future so today the uae timing wise today they felt that this is the right time for them for saudi arabia they see that let’s continue rescuing whatever we’ve done let’s benefit from all the the uh if you want the sacrifices that we’ve done last year and let’s continue for a couple of months more and then we we can think of what will happen i think it’s timing uae does want to deal about to deal with this uh now and not later so uh and put it on the table basically uh now that the extension issue came up and they wanted to extend beyond april 2022 uh so this is this is we shouldn’t be reading it beyond that we shouldn’t be reading it as a rivalry between the politics of the uae and politics of saudi arabia i think more than anything today saudi arabia uae they want to have this strong economy in their countries that would go beyond the oil oil era so i just looked in that in that context now okay let’s uh go across to venezuela this morning to jose shalhoub political risk and oil analyst of course venezuela the world whole still i believe regarded as holding the world’s largest oil reserves but of course we know has been spectacularly suffering as an industry over the last decade or so but jose of the different challenges facing opec at this time and the oil market is the idea of new supply and it would appear that venezuela seems to be able it’s starting to add incrementally more and more barrels over recent months what’s the state of play in the venezuelan oil industry thank you sean thank you for the invitation uh well uh yes well since the last time we spoke uh things haven’t changed much you know yes uh according to recent news and reports and all that he has the you know federeza petroleus venezuela the fatal company has been able to lift up a little bit of its you know current you passed oil production rate but it’s not rate it’s not even reaching the million barrels per day okay uh if you will their rate of production today hardly reaches the 500 000 barrels per day from being producing like in 2004 or even before that be before the onset of the bolivarian revolution three 3.5 3.8 millions of barrels per day i mean it’s it fails in comparison to those but to that amount of barrels you know but yes i mean today the the average of production it’s around 450 490 maybe 500 000 but that’s it i mean uh is there anything to point towards a conversation between caracas and washington that there could be any way to rehabilitate that relationship to allow investment to come back into the oil industry during the biden administration not likely for not not likely i mean in recent weeks it was known that the us was to you know keep the sanctions in place for six more months and it’s good to remind you and the and the panelists that we’re gonna have uh municipal elections regional regional elections in the next november 21st uh it you know they’re going to be a cross a crucial election because maduro and the government has been uh insisting in trying to push for the this new biden administration to lift sanctions promoting new you know political measures and and trying to show more openness to the opposition you know even though if they are cosmetic or trying to uh reflect some minor changes but not likely i mean i think the byron administration is trying to wait for more visible change political area and i think the crucial moment will be this this next elections to try to see uh what uh the maduro government will be will be doing but i don’t think that pedophiles will be able to to lift you know to recover its production unless there’s i mean there could be massive investments which i don’t think it would be likely for the next i don’t know two years or so omar some of the challenges to the demand question ultimately we’ve talked a little bit about the supply issue uh clearly venezuela may or may not add a few barrels uh the shale producers may or may not come back but from a demand side it does appear that covid is making a return in 70 countries now since the end of june infection rates are rising and there is a big demand for expected recovery of the oil price built on a big demand recovery in the second half what are your views on where those two things go together that the oil price has a baked in demand recovery in the second half and it doesn’t arrive because research is your thoughts on that well first of all you know let’s say covered researches how that has has an effect or a measurable effect on demand i don’t really see so is it that people will drive less is it that economies will basically uh you know go into complete lockdown and all you know businesses will shut like they did before i don’t think so um are we seeing basically more reopenings did anybody watch the football at wembley and you know all these people you know in the crowd and all this kind of stuff uh so no is it possible that we get basically a new deadlier covid uh strain that will come and decimate the world yes is it possible that we get struck by a meteorite yes but is it probable to both those the the answer is no is it possible definitely is it probable no so basically i think people put their money where things are probable as as opposed to where things are are possible and if you go back to the uh the question about oil and you know the transition or this kind of stuff sadly the the middle east has been trying to transition from oil-based economies since i think at least 1970 if not 1950. they haven’t done so and they won’t do so the other question is if oil is basically cheap to transition you have to basically spend the money in terms of subsidy you have to subsidize all this uh green energy you’ve got to pay people to buy electric cars or make them extremely cheap by subsidizing them you’ve got to pay people to you know use solar panels or whatever it is it’s it’s basically a subsidy game so i don’t see this kind of you know oil uh uh disappearing um i mean it’s very interesting but you can actually oil his energy you could use energy in a million in one ways the only question is is it in vogue or is it not you know in terms of the point that lori was making and i’d welcome your thoughts on it that the transition propels let’s say saudi arabia’s announcement six months ago all multinationals operating in the middle east who wants to do business with the saudi government has to put the regional headquarters in riyadh which in essence is a direct competition to dubai which has ultimately been the commercial hub for 30 years that type of sort of incremental steps towards building a new economy can bring what were aligned economies saudi and the ua into now being slightly more competition do you see that as playing into what is behind this current decision that it’s a little bit wider man sure but but at the end of the day what happens between the you you the uae and the and the uh and the saudi economy at the end of the day who cares they’re so tiny one’s got a population of i think 30 million the other one has a population of um i mean a local population of maybe like i don’t know 500 000 a million i don’t know what it is well i’d argue you care because 4 million barrels of idle supply sits in between those two countries and there is very few countries left within the opec 20 opec plus 20 that are relevant at this stage saudi arabia uae maybe kuwait maybe one or two others that are actually in the ability or willingness to adjust supply in order to affect price from the point of view of that position they they’re perhaps important yeah i mean definitely they can basically move the price down but that’s like saying that you know i could i could basically cause trouble for my family by jumping off a cliff yeah sure if they want to jump off a cliff nobody can stop them but it’s a irrational thing to do will they do it i think not but the point is that if oil prices get cheaper you will find it much more difficult to do this kind of quote-unquote energy transition because the amount of money that you would have to pay to incentivize or or pay for that transition is going to be absolutely gigantic and there will always be a demand for cheap energy always whether it be in you know uh the far east whether it be for mining uh bloody bitcoin or whatever it is it’s it’s not you can’t legislate again you can’t tell people that there’s product aim product b you have to use product b because it’s more expensive everybody will use product a unless you pay them to basically go with with product pizzas well that’s what’s happened in the news overnight lori in saudi arabia they are capping uh the the price of gasoline at the pump but gloria what did your thoughts the other area of obviously supply potential in the second half that could sort of curtail i’m trying to get at the answer to the question as to why the oil markets have reacted rather mutedly rather calmly to this opec impasse and my sense is that there’s a lot of supply available even if you take it from inventories but the other area is will they do a deal with iran or will they not what’s your outlook on those talks at this point with the new administration coming into tehran yeah so i think basically as you said like everybody thinks first that there will be a deal not swiftly but in due time with the with the uae and saudi arabia so that is calming the market that definitely they will come up with the solution in due time and definitely the other as you mentioned the supply issue because everybody was saying end of year definitely will be having iranian oil coming back so we’re not sure if end of year this will be coming what we know today it’s like um there is no set date for the next round of uh meeting they were saying early july now we’re in early july next week as a read so everybody will be going for it and after that it will be very short maybe before the fourth of august when uh rajisi comes in and that takes over so i’m i’m not sure unless they have been doing like under the radar talks and agreeing which i i’m not sure i doubt so that’s why i think that this deal will be left to the raising government administration to to negotiate and there were a lot of discussions that everybody even the the the new president wanted this current government the rouhani government to do the deal so that they can blame them if it didn’t go well or if it went well they would benefit from all the good things happening and opening up of the economy etc so i i’m not sure that we will be able they will be able to come up with a solution before the fourth of august so that will be left for after the fourth of august so i think that it might take time so that’s why i’m not sure and you see in the region end of year we might have iranian uh oil coming back i’m not sure today if that will happen by end of this year in the region uh there’s obviously been a lot of uh opposition to the rehabilitation of the jcpoa from obviously israel saudi arabia the gulf states not very keen washington obviously has those on the republican side against it is there that force against biden’s sort of initiative starting to weigh on its likelihood of happening do you think just the politics on this side rather than the politics on iran’s side you know you know there are other factors as well like when the uh when in iraq the bases the american bases are constantly being attacked so this is another uh another alarm alarming factor for the for the uh for the americans to think of is is this helping the negotiations or this is escalating it’s an escalation move so again like this is what they’re seeing so if we give away easily and uh so the end the iranians are back and they have more money are they going to continue supporting the proxies which is like many many in the region are seeing it that way so an iranian come back to the economy and the oil oils uh iranian all coming back that means a lot of money that means proxies will be supported again so this is one factor that is really being that is uh on the table or this is like the the concerning factor on the uh but but at the same time you know that we we all remember that there were discussions bilateral discussions between iranians and saudi arabia so now there are talks that maybe oman will be taking over from uh from iraq uh to take over the discussions you know oman has perfect relations with iran well they were the the sort of the midwife of the first round of jcpoa it seems to me the longer it goes on and if it drifts towards the end of the year into january that the u.s politics cycle gets back to the midterm elections it’d be very difficult for biden to make anything that resembles a concession so if this deal isn’t done soon i wouldn’t be too optimistic jose south america a place we don’t hear about very often in our neck of the woods ultimately been challenged by covid like everybody else what’s the current outlook at the moment for the economies of south america to step up and recover like we’re seeing slowly but surely in north america and europe you’re on mute jose sorry you’re on mute i’m sorry about that well south america certainly is in a very problematic situation i mean because of this code with 19 because of the low vaccination rates in most of the countries uh unlike chile for example chile has had uh you know the highest vaccination rates in all the region uh we have seen brazil which has been hardly hit by the code 19 and especially due to the political unrest uh going on and i mean that started even before the covet 19 on on set in 2019 in different countries in the region now we are seeing in cuba that you know according to recent news and many protests going on in the island in haiti the recent killing of the president i mean the the outlook for the region is not really good at least for the rest of the year and because you need to recover as a region mainly dependent become out and commodities experts mainly of oil gas does this create an opportunity in the vacuum of the u.s involvement that the chinese can make further inroads into their commercial and political relationship with south america yes depending on the you know on the position to be taken by the by the administration maybe some redirection redirection of its for foreign policy now we are seeing that the you know divide the this current administration is retiring from afghanistan for example uh so it will be you know it will be depending on the priorities setting by by this current white house but yes this this you know creates a an opportunity for for for washington to relaunch its relationship with the region it would be interesting to see if they take that because clearly the chinese see that as a great opportunity and obviously a very big market with lots of resources and also apparently ready to pour into afghanistan let’s go to the survey and give everybody a chance in the room to comment on the themes we’ve been discussing this morning particularly interested in this issue of covet 19 infections rising in 70 countries we’re seeing daily infection rates appointing accelerating high in 10 days in holland they went from under a thousand a day to a ten thousand a day uh the big question of course is will these infection rates convert into hospitalizations and mortality and then impact economic recovery so my will this curtail the expected demand recovery in q3 will this resurgence of covet impact the massive demand recovery that has to come in the second half of this year in order to uh meet that uh i think to a certain extent the baked in oil price omar monday morning the week ahead opec plus ahead of eid any thoughts where does the market go this week yeah so basically we started uh we started rising in april 2020 when covid was not coming off but covert was surging yes if you imply a correlation that cases are rising and therefore markets go down um i think that’s i i think that’s a difficult one to uh to carry okay because well cases rising economies may be forced into further lockdown postures again when we were in april 2020 and everything was locked down tighter than whatever what did the stock market do and what did oil prices do they went up it’s because oil prices and markets look forwards they look for basically the worst and basically say right it can’t get any worse right so now what you have is people having been lots of people having been infected some people having unfortunately died and a lot of people having been vaccinated so to expect now that it’s going to get really bad again would again be possible but not very probable so i think you know you’ve heard that same you’ve had the alpha beta delta gamma lambda blah and it’s just going to keep going and they’re going to keep it’s like it’s like the iran story are we getting are they going to do a deal it’s just it’s a done deal in march then in april and may then june then before they turn in july then august and september the next year well and what are they negotiating about iran has said accept all our demands all nothing so there’s no negotiation there’s no talking there’s no back room there’s no nothing and the same with opec opec is the same are they gonna do will they say are they gonna and the market just keeps going and kind of focus on basically numbers economies stuff that makes sense and if you want to talk about you know who’s the better person is it is it you know saudi arabia’s crown prince i don’t know and the ruler of i don’t know where and who’s better i mean you know i don’t really mind they can do whatever they want as long as the market does whatever as long as they keep eight million barrels a day off the market and keep it nice and healthy to manage it into upward motion laura your thoughts the week ahead anything you’ll be paying particular attention to so the week ahead i guess this week nothing in particular and i think everybody’s looking for the idea to take a break i guess so uh nothing nothing in particular no particular optimism that there’ll be a rush to a solution here at opec plus and that saudi or rather russia apparently are going to be the the moderating force look and no news is good news right so as long as they don’t go on tv and uh talk to each other through media i think it’s a good sign it means that something is cooking behind the door so and just laurie a quick update on lebanon going it seems increasingly into more difficult circumstances yes so i’m lucky today that i didn’t have an electricity cut yet so maybe in like in a couple of seconds i might have the electricity cut and generators are cutting as well because it is being really difficult to complement than the short short the the shortages of the electricity uh yeah so it is really becoming very hard to live in beirut and in lebanon actually so hopefully uh will hopefully the people in charge of this country will become more responsible people and save the lives of the people living here because it’s really becoming unbearable for the people and there’s no obvious savior coming over the hill the imf the world bank the americans the saudis look we need to save ourselves first right help yourself so that we can help you this is what ledria had said like months ago help yourself so that we can help you nobody here no politician wants to save anyone so they only trying to say to survive and save their seeds and their positioning in the country unfortunately so uh so worse before it gets better it’s i mean you always think in some ways that the lebanon has hit the low and it finds somehow a new low let’s go to the survey result and give jose the last word today from caracas uh the answer to the survey on a sort of three to one is will this curtail expect a demand recovery in q3 yes is an overwhelming sense in this particular room and that might be a buy for omar but a sell for others uh jose your closing thoughts obviously the u.s north america south america outlook for this week is rounding particular on the horizon you’re on mute again jose we don’t get to hear from you often but when you’re on we want to hear you you’re still on mute maybe it’s uh the authorities have decided they’re going to mute that jose guys how is that enough have we lost you jose can you unmute there you go the final word with you thank you okay i will keep uh regarding the region i will keep my my my watch in cuba and the latest developments in cuba and of course the rest of you know the rest of the region how the us will react to to to the latest developments in the island and of course how how the venezuelan government will be watching these latest developments as you know just brief us quickly on what the latest developments you’re referring to this assassinated in haiti no in cuba in cuba there are later protests in uh across the islands demanding more you know a better treatment of the covet 19 veteran right against uh ds canal government so yeah and map in the most the most massive protest like right in in cuba and uh i don’t know in the last 50 years so i will keep my my my my special watch on that on these developments do you think there’s more to the assassination of haiti is there some sort of bigger story here or yes kind of kind of there could be there could be like a bigger picture linking you know the the assassination of the former president juvenile moyes and the protests in cuba and the late you know the the recent protests across south america so so dark forces as work maybe in the corridors of sort of reminds me of the 1980s perhaps listen we’ll wrap it up there oil markets in asia opening a little bit down today i think wandering in the search of wind as long as opec plus uh isn’t moving forward and i suppose opec plus isn’t moving forward because the markets aren’t compelling them to do so because they’re sitting still so it’s like this perfect still storm nobody’s forcing the other to take any action so let’s all go and eat holidays which we will be doing next week ourselves but lori thank you so much always praying for the better advancement of beirut and the lebanese people find their way jose thank you for joining us from caracas today and omar is always anchoring monday mornings to kick off the week in dubai all the best have a great week we’ll catch up in the coming mornings thank you thank you thank you


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