Clara Gillespie

Good morning.

Thank you for having me.

They are, and they're fairly immediate in multiple ways.

So you have, for example, the Philippines is virtually fully reliant on imported oil to meet its needs for that fuel.

So this disruption hits fairly immediately and directly.

It's also one that has historically done less to subsidize the price of fuels, so it more directly and quickly hits consumers as well.

But it's going to start to show up in state budgets as well.

and have knock on effects on the health of different economies.

Asia is heavily reliant in a direct way on imports from the Middle East.

So when you talk about the flows of oil and natural gas that come through the Strait of Hormuz, about 80 percent of both of those end up directly in this region.

But we're also talking about some of the world's largest consumers of energy.

Different countries do have some fairly substantial stockpiles, but not all in this region.

So talking about below 50 days in some cases.

At the same time, you also do have a effort to look more globally and see where there is potentially additional cargoes available on the spot market or through other supply chains.

The challenge there is not always that there isn't that supply available, but different kinds of oil also have different grades and abilities.

So you have light and sweet versus sour and heavy, which can shape how different economies have built their refineries, their manufacturing capabilities to make use of this.

That's correct.

In the near term, a number of countries do have underutilized capacity in coal.

You also see a number of countries, and I'm thinking of the Philippines and Indonesia in particular, note that they're still continuing to prioritize and focus on those energy transition goals.

Thank you.