Barrels, Boards, and Big Questions

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The Money Café with Alan Kohler 54 min 3 speakers 7 chapters transcribed 4 months ago
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What are the latest updates on Trump, Iran, and the oil market?

Unknown 0:00
The Money Cafe is proudly brought to you by Intelligent Investor, Australia's home of value investing. For a limited time, you can get Alan Kohler's weekend brief, in-depth economic analysis, CEO interviews, the latest market insights, a limited edition Money Cafe cap and more for just $297. Find out more at moneycafe.com.au.
Alan Kohler 0:35
Hello, I'm Alan Kohler, editor-at-large of Intelligent Investor and finance presenter and columnist for the ABC.
Stephen Mayne 0:41
And I'm Stephen Mayne, contributor at Intelligent Investor, founder of Crikey and shareholder activist. And we are The Money Cafe. The Money Cafe, Alan.
Alan Kohler 0:48
Good morning, Stephen.
Stephen Mayne 0:49
Good morning, Alan. Now, well, let's not waste too much time on Trump and Iran because, you know, we'll all be wrong tomorrow and it will change. But... After three weeks of 3% plus rises in the market, which is unheard of, and I think it was 13 days in a row of NASDAQ increases, we sort of had record highs with everyone thinking the war's over after the declaration of the Strait of Hormuz being completely open on Friday night. And of course, fast forward five days and it's not open. And there's an extension of the ceasefire. And are they going to Pakistan to negotiate or not? What's your take, boss?
Alan Kohler 1:33
Well, firstly, the market has more or less held on to those gains. It was an incredible rally of 12 or 13% over three weeks. One of the strongest rallies in history. over such a short period of time. And, you know, the market's easing a bit now. It was down 0.6%. This is the US market, down 0.6% last night. Oil was up 2.5%. So, you know, it's kind of down a little bit, but still holding on to... Yeah, so the ceasefire was extended this morning or last night by Donald Trump in a Truth Social post in which he said, based on the fact that the government of Iran is seriously fractured, not unexpectedly... And upon the request of Field Marshal Asim Munir and Prime Minister Shabazz Sharif of Pakistan, we've been asked to hold our attack on the country off of Iran until such time as their leaders and representatives can come up with a unified proposal.
Alan Kohler 2:34
I think that's not really the case, but anyway.
Stephen Mayne 2:37
He hasn't put a timeline on that, which I think is quite interesting. So it's now an open-ended ceasefire.
Alan Kohler 2:43
Yeah, that's right. So it's open-ended, but he's also extending... So he's extending the ceasefire, but continuing the blockade of Iran's own ports. So, you know, Iran has said they're not going to talk, basically, while they're blockading its ports, so...
Stephen Mayne 3:04
Yeah, so you'd think their position is you can't keep on commandeering our ships. So they took, you know, the US have taken over control of one cargo ship and they're not going to deal whilst the blockade is in place. So Trump probably needs to declare the strait completely open and lift the blockade and then have talks. And then, of course, they'll fall over on uranium. And Trump will say, give us it all. And the Iranians will say no. And the standoff will continue.
Alan Kohler 3:32
And also Iran has said that they've put mines along the Strait, the Strait of Hormuz, on the most frequently used routes. So before it can be used, those have to be cleared. That'll take a while. Bloomberg is saying this morning that process will take weeks to clear the mines, even once they start it, which they haven't started yet. They've got GPS jamming going on. And insurance companies just aren't interested in insuring the ships going through the strait at the moment. And, you know, I can't see that there's no sign that that'll change. So I think the strait's going to remain a problem for a long time. At the moment, the Asian refineries are going through their sort of stockpiles to try to keep prices down, hoping that the straight opens before they run out of their inventories.
Alan Kohler 4:27
But, you know... That doesn't look like happening. So I think there will be a crunch time sometime in the next few weeks.
Stephen Mayne 4:36
Yeah, that's right. So it's not sustainable. I mean, the most acute pain at the moment seems to be with jet fuel, which at its peak increased sixfold in price, went from 20 to 120.

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