George Johnson: 'He was extraordinary'

**Leanna Byrne** (0:01)
The ceasefire is over, and oil is up.

**George E. Johnson** (0:04)
As far as I'm concerned, it's over. I'll speak to our negotiators.

**Susan Schmidt** (0:07)
They want to negotiate.

**Leanna Byrne** (0:08)
They're good people.

**John Kilduff** (0:09)
Steve Woodcuff, Jared Kushner. But they have to come back to me.

**Leanna Byrne** (0:14)
It's World Business Report from the BBC World Service.
I'm Leanna Byrne. Oil prices have jumped after President Trump says the US-Iran ceasefire is over. We'll also ask why one of the world's biggest energy exporters, Russia, is now facing fuel shortages at home. And we remember George E. Johnson, the businessman who built a beauty empire by putting black consumers at the heart of it.
So just when we thought it was all over, oil prices have swung right back up again after US President Donald Trump declared that the ceasefire with Iran was over. The US military says it has carried out a second night of airstrikes on coastal targets. Needless to say, tensions are running high. It was only last week that Brent Crew, the international benchmark, was down as low as $71 a barrel, but now it's shot back over $80. Prices remain well below the peaks in May, but the fresh spike is clearly dampening appetite and probably causing headaches among investors. With me now is John Kilduff, founding partner of Again Capital in New York and a long-time oil markets analyst and trader. John, thanks for joining us.

**John Kilduff** (1:30)
Thank you. Thank you for having me on.

**Leanna Byrne** (1:31)
Johnny, we've spoken several times over the course of this crisis. How did this news find you yesterday and today?

**John Kilduff** (1:42)
Well, obviously, this is a setback in terms of trying to get oil prices back lower and reduce inflation risks here in the United States and around the world.
President Trump, as we all know, can be fickle or mercurial at times. Certainly the actions by the Iranians over the weekend pushed him into canceling the sanctions relief that Iran had and have now sent a second night now, we know, of military strikes on Iran. This could quickly resolve as quickly as it erupted again here. So that's what we're on guard for. But if this is going to become a renewed kinetic conflict, then oil prices will head right back higher.

**Leanna Byrne** (2:30)
John, I want to step into your shoes for a moment. When a headline like this flashes across your screen, you're in the desk or the chair, whatever it is, what happens? What do you have to do?

**John Kilduff** (2:41)
Well, we refer to these as tape bombs when they hit like that. We're constantly monitoring the various news services and truth social, the president's preferred social media outlet.
Whether it's us or others, you buy now, ask questions later. This whole episode has had really such volatility that it's caused position trading to be really reduced. We've seen lower volumes, we've seen lower what we call open interest or basically general activity in this market because of this volatility. But basically, you're scrambling and you can't really leave yourself vulnerable to a big move one way or the other, which is what we get from these headline moves. So it's a bit of a bit of a craft, if you will, in terms of managing the risk really significantly these days. I will say the market went from being very long or expecting higher prices to flipping into a very significant short or lower price position. So a lot of folks did get caught on this news and these actions by the United States.

**Leanna Byrne** (3:55)
I imagine also with me, Susan Schmidt, Portfolio Manager at Exchange Capital Resources in Chicago. Susan, busy day for you too?

**Susan Schmidt** (4:03)
Absolutely. It's been an adjustment for managements as they figure out how does this impact their prices. We're right back to where we started. And it causes a lot of confusion in the supply chains.

**Leanna Byrne** (4:15)
Now, John, I mean, I imagine a couple of weeks back, you were breathing a sigh of relief. You were thinking, hey, this might all be over.

**John Kilduff** (4:24)
Well, it certainly was, and partly because President Trump seemed to indicate just a loss of interest and not wanting to prolong this. And also, you know, this political heat for him with US gasoline prices surging well above $4 a gallon. Something had to be done.
And, you know, all the efforts that he undertook in terms of sanctions relief, giving the Iranians money, it seemed like they were going to try to generate or create a new paradigm here for Iran to maybe exist among the nations of the world here and be able to engage in commerce. But for now, that has been scuttled.