US Revokes Waiver Allowing Iran Oil Sales After Tanker Attacks

**SPEAKER_1** (0:02)
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**Carol Massar** (0:32)
The US Treasury Department revoking a waiver that allowed the sale of Iranian oil following new attacks on tankers in the Strait of Hormuz. We have seen, I'm thinking, look at WTI crude, that has popped up more than 5 percent. So it's pretty much at its highs of the session. So we're certainly seeing an impact in global energy markets. We want to get to it. It is time for a conversation on commodities brought to you by Golden Crest Metals. Inflation tariffs and volatility have some investors turning to gold for stability to get a free gold and silver info guide. Learn how to add metals to your IRA or 401K tax and penalty free. Just head to goldencrestmedals.com. That's goldencrestmedals.com.
We heard an earlier guest talk about the importance of gold in your portfolio. Hey, let's see what our next guest has to say about gold, other commodities, certainly global energy markets. Daan Struyven is back with us. He's co-head of global commodities research over at Goldman Sachs. He's here in our Bloomberg Interactive Brokers studio. Good to have you here. I think you walked in. It's good to have you back, Daan.
I think I said you walked in, I said, I feel like every time you walk in, there's something going on.

**Daan Struyven** (1:35)
Good timing on your side at least.

**Carol Massar** (1:36)
It is. It is. Thank you. Thank you. Sometimes we're just lucky. We are lucky to have you. What do you make of Strait of Hormuz seeing its biggest day of attacks since the year on and US peace deal with the US Treasury Department revoking that waiver that allowed the sale of Iranian oil? We've seen oil prices pop up on this. I get it. It's logical.
Is all not over when it comes to our concerns in the Middle East? How do you guys?

**Daan Struyven** (2:00)
It's an important reminder that the downside risks to Middle Eastern supply and the upside risks to oil prices remain very significant.
While the interim peace deal is an important step forward, and while oil flows from the Persian Gulf have picked up to about 75% of normal levels, if you include pipelines, a lot of outstanding issues are not resolved. Sanctions, management of the strait, including fees, investments in the region. So we'll have to see how the negotiations go. I think it's a reasonable base case for markets to price in a recovery in Middle Eastern supply, but the risks are still very significant. I think that markets had priced in, perhaps with excessive confidence, the recovery in supply and perhaps extrapolated to the base case of surpluses in 2027, but it's still a highly uncertain environment.

**Kate Gulliver** (2:55)
How are you thinking about supply? I think it was just yesterday.

**Carol Massar** (2:58)
Saudi Aramco that we talked about.

**Kate Gulliver** (3:00)
Is there a glut in the market or not?

**Daan Struyven** (3:03)
So I think in the short term, the fact that some of these oil futures curves are in contango, meaning that prices today are cheaper than the price to get a barrel tomorrow does suggest that temporarily, at least there is an excess amount of supply. Why is that? It's because we're exporting, we're seeing a pick up in export flows that's pretty quick, mostly oil that was produced before, while demand from China is still weak. If you look at import demand from China, it is still down a staggering 5 million barrels per year over year, which is a 50% drop year over year. So at least in the short term, because it will take time for China demand to recover.
And as it's easy to get previously produced oil out, I think temporarily you have a bit of an oversupply. But the pick up in exports doesn't mean that production is necessarily already back and will be higher on a sustained basis.

**Carol Massar** (3:57)
Are we right to assume China is going to resume all the oil production pre this war?
Because there's been some narrative around that they didn't love how vulnerable they were, right? We know that they don't produce their own. And so they are reliant on imports and oil. And they have been aggressively moving into alternative energy. So are we wrong to assume that they're going to come back and start buying like they were?