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The great fuel crisis is here, oil executives warn · DEEP INSIGHT

• 0:00
  Speaker 1: Staggering rise in gas prices across the United States, and
• 0:03
  Speaker 1: experts are warning it's about to get even worse. This morning,
• 0:07
  Speaker 1: gas is up another 7 cents. Only from yesterday, according
• 0:11
  Speaker 1: to the AAA, the national average price for a regular
• 0:14
  Speaker 1: gallon of gas is nearly $ 4. 44. That's today. Prices have
• 0:21
  Speaker 1: soared since the start of the Iran war, and they're
• 0:24
  Speaker 1: up almost $ 1. 50 since the end of February alone.
• 0:28
  Speaker 2: So take a look at this. This shows the massive
• 0:30
  Speaker 2: increase we're seeing with the price of diesel fuel, and
• 0:33
  Speaker 2: that's having a major impact on your wallet. Most of
• 0:36
  Speaker 2: what you buy, from groceries to clothes to electronics and toys,
• 0:40
  Speaker 2: they're all shipped on trucks that run on diesel. The
• 0:43
  Speaker 2: national average price today is $ 6. 40. That is the highest
• 0:49
  Speaker 2: it has ever been. Speaker Mike Johnson says it's all
• 0:51
  Speaker 2: tied to the Strait of Hormuz.
• 0:54
  Speaker 3: Of course gas prices are too high. When we get
• 0:57
  Speaker 3: that The Wall Street Journal is reporting the startling headline,
• 1:00
  Speaker 3: oil executives say the great fuel crisis is here. And
• 1:02
  Speaker 3: that's going to impact everything from the price you pay
• 1:05
  Speaker 3: at the pump to the cost of heating your home.
• 1:06
  Speaker 3: Experts are warning.
• 1:08
  Speaker 1: That we might see a 30% jump in heating oil
• 1:10
  Speaker 1: costs alone this winter. As the Middle East conflict continues
• 1:30
  Speaker 1: to drive up prices.
• 1:31
  Speaker 2: When will the conflict be resolved and will it be better?
• 1:34
  Speaker 2: I mean, those are two big.
• 1:35
  Speaker 4: Questions, right?
• 1:36
  Speaker 5: Yeah.
• 1:36
  Speaker 6: Yeah.
• 1:37
  Speaker 5: Four weeks or six months later.
• 1:39
  Speaker 4: Right.
• 1:39
  Speaker 5: I mean, the president said this would just be a
• 1:41
  Speaker 5: four week conflict. So obviously this is a very, very
• 1:44
  Speaker 5: difficult problem. to solve. So just that aside, he is
• 1:49
  Speaker 5: right that gas and oil prices probably would fall once
• 1:54
  Speaker 5: the conflict is finally resolved. How do I know that? Well,
• 1:57
  Speaker 5: we saw that happen.
• 1:58
  Speaker 4: In mid-June, the.
• 2:00
  Speaker 5: Strait of Hormuz reopened, and we saw oil and gas
• 2:04
  Speaker 5: prices both fall. But here's the thing. Diesel is a
• 2:07
  Speaker 5: completely different game. Not only does it you know, sit
• 2:12
  Speaker 5: in every single truck that takes every single good across America.
• 2:17
  Speaker 5: But it is becoming a bigger problem because Ukraine continues
• 2:21
  Speaker 5: to bombard Russian diesel facilities. And Russia is responsible for
• 2:27
  Speaker 5: about 12% of global diesel exports. So now we have
• 2:31
  Speaker 5: a record high in diesel with no sign of that
• 2:35
  Speaker 5: resolving at all. And everything that goes on a truck,
• 2:38
  Speaker 5: including all the food you buy, all the goods you buy,
• 2:40
  Speaker 5: those are getting more expensive. And even if the situation
• 2:44
  Speaker 5: is resolved, those prices probably aren't ever going to come
• 2:47
  Speaker 5: back down.
• 2:48
  Speaker 6: I will end the devastating inflation crisis immediately, bring down
• 2:52
  Speaker 6: interest rates and lower the cost of energy. Starting on
• 2:56
  Speaker 6: day one, we will end inflation and make America affordable again.
• 3:01
  Speaker 6: And your prices are going to come tumbling down. Your
• 3:04
  Speaker 6: gasoline is going to come down. Tumbling down in your
• 3:07
  Speaker 6: heating bills and cooling bills are going to be coming down.
• 3:10
  Speaker 6: When I win, I will immediately bring prices down. We
• 3:13
  Speaker 6: will defeat inflation quickly. Your energy prices will be cut
• 3:18
  Speaker 6: in half within 12 months from January 20th.
• 3:23
  Speaker 1: Now, one of the president's most fervent former supporters is
• 3:27
  Speaker 1: saying this.
• 3:28
  Speaker 6: Listen.
• 3:30
  Speaker 7: This is ridiculous.
• 3:31
  Speaker 2: Look, everything you buy, your food, your supplies, all of
• 3:36
  Speaker 2: your goods gets delivered by diesel.
• 3:39
  Speaker 4: The war in Iran has got to stop. This is
• 3:42
  Speaker 4: Trump's fault. This should not be this high. It needs
• 3:45
  Speaker 4: to end.
• 3:46
  Speaker 5: Ridiculous.
• 3:49
  Speaker 1: Let's go back to Kevin right now. Kevin, gas prices
• 3:52
  Speaker 1: are up. Inflation is up. Interest rates are up. How
• 3:55
  Speaker 1: is the White House now responding?
• 3:57
  Speaker 8: Yeah.
• 3:58
  Speaker 9: And what you've stopped hearing from the president is this
• 4:00
  Speaker 9: promise that gas prices are going to come down in
• 4:03
  Speaker 9: the near term. That had been what they were saying
• 4:06
  Speaker 9: before it was clear that their projections for the length
• 4:08
  Speaker 9: of this war were just wildly off. Now what you
• 4:11
  Speaker 9: hear from the president is trying to level with the
• 4:14
  Speaker 9: American public and with his voters in particular, saying that
• 4:18
  Speaker 9: the cost of the war that they are bearing at
• 4:20
  Speaker 9: the pump is worth what he's trying to accomplish in Iran.
• 4:24
  Speaker 9: This is what he said last night in North Carolina.
• 4:29
  Speaker 4: You have a little higher.
• 4:30
  Speaker 6: You have a higher gain. It's a very inexpensive price
• 4:33
  Speaker 6: to pay for what we've done. Remember that.
• 4:36
  Speaker 8: It's a little more.
• 4:37
  Speaker 6: It's even if it was, frankly, even if it was
• 4:39
  Speaker 6: a lot more. But that's going to come tumbling down.
• 4:42
  Speaker 6: That's going to be like a rocket ship in reverse.
• 4:46
  Speaker 9: Now, it's become pretty clear that that message is not
• 4:49
  Speaker 9: being particularly well received by the American public. The last
• 4:53
  Speaker 9: CNN poll, it was in July, when asked about whether
• 4:57
  Speaker 9: Americans approved of the president's handling of gas prices, it
• 5:00
  Speaker 9: was wildly underwater. 21 percent said they approved compared to
• 5:04
  Speaker 9: 79 percent who said that they disapproved.
• 5:07
  Speaker 7: Protests that are erupting around the world and, of course,
• 5:10
  Speaker 7: a source of many of those tensions are the rising
• 5:15
  Speaker 7: costs of fuel prices. In the U.S., for example, Americans there,
• 5:20
  Speaker 7: they are facing this rise in energy prices and also
• 5:24
  Speaker 7: warnings that the cost of heating oil could even jump
• 5:27
  Speaker 7: about 30% this winter. And all of this in countries
• 5:31
  Speaker 7: where incomes are lower, where the strain is even greater,
• 5:34
  Speaker 7: with some people there saying that they simply can't afford
• 5:36
  Speaker 7: to put fuel in their car or to even keep
• 5:39
  Speaker 7: their businesses running. And crude oil futures, you may recall,
• 5:43
  Speaker 7: they jumped to more than $ 100 a barrel last week,
• 5:46
  Speaker 7: first time in about four months. And you see right now, though,
• 5:50
  Speaker 7: that not only Brent crude, but also the WTI crude
• 5:52
  Speaker 7: oil index all down, trading at anywhere between $ 104 and
• 5:56
  Speaker 7: $ 101 a barrel at this hour. Let's go to Robin Mills,
• 5:59
  Speaker 7: the CEO of the energy consultancy Kamar Energy. She joins
• 6:04
  Speaker 7: me from Dubai for more. He joins me live for
• 6:07
  Speaker 7: more on this right now. Robin, thank you so much
• 6:09
  Speaker 7: for joining us as we try to just get a
• 6:11
  Speaker 7: better sense of what's happening and, of course, what the
• 6:14
  Speaker 7: future has in store for us.
• 6:19
  Speaker 4: Yes, thank you.
• 6:19
  Speaker 8: Well, you know, you showed all these fuel protests around
• 6:22
  Speaker 8: the world, and I think that's a reminder of where
• 6:24
  Speaker 8: the challenge is. Crude oil, yes, that is certainly a problem,
• 6:28
  Speaker 8: but we have seen some more crude oil escaping from
• 6:31
  Speaker 8: the Gulf over the past few weeks. But this pressure
• 6:33
  Speaker 8: is very much on the refined products and particularly on diesel,
• 6:37
  Speaker 8: also on gasoline products. Diesel is a key industrial fuel,
• 6:40
  Speaker 8: key transport fuel, and that's helping drive inflation. And if
• 6:44
  Speaker 8: we think that crude oil is only just over $ 100
• 6:46
  Speaker 8: per barrel, but diesel right now is effectively selling at
• 6:49
  Speaker 8: more than $ 200 per barrel.
• 6:51
  Speaker 4: So that's really where the crisis is.
• 6:53
  Speaker 7: Robin, diesel costs have risen more than 55% since the
• 6:57
  Speaker 7: start of the war with Iran. Those numbers coming from AAA.
• 7:01
  Speaker 7: And just for some comparison here, diesel actually outpaced the
• 7:05
  Speaker 7: 40% jump in gasoline prices. So that alone is telling.
• 7:08
  Speaker 7: In addition to the factors that you just told us
• 7:10
  Speaker 7: about right now, do you at all see any potential
• 7:14
  Speaker 7: relief in sight? And I think obviously the answer is no.
• 7:16
  Speaker 7: I mean, you just heard from Lenny say that only
• 7:19
  Speaker 7: five ships were able to successfully transit to the Strait
• 7:22
  Speaker 7: of Hormuz recently.
• 7:25
  Speaker 8: Right.
• 7:26
  Speaker 4: And we've seen more efforts by the U.S. to help escort.
• 7:28
  Speaker 8: Ships out of the Gulf, most of those carrying crude oil,
• 7:31
  Speaker 8: a few of them carrying the refined products like diesel.
• 7:34
  Speaker 8: The Gulf was a very important exporter of diesel before
• 7:37
  Speaker 8: the war. And also the Saudi Red Sea refineries, which are,
• 7:41
  Speaker 8: of course, not inside the Gulf, but on the other
• 7:43
  Speaker 8: side of the country. But their supplies are cut off
• 7:46
  Speaker 8: because of the attacks by the Houthis and the Iraqi
• 7:50
  Speaker 8: forces that have damaged the pipeline and damaged Saudi.
• 7:53
  Speaker 4: Refineries as well.
• 7:55
  Speaker 8: So, you know, maybe some relief there in the Gulf
• 7:57
  Speaker 8: if the U.S.
• 7:58
  Speaker 4: Effort on escorting ships is successful. But otherwise, no.
• 8:01
  Speaker 8: You know, Russia, a major diesel exporter, the Ukrainian attacks
• 8:05
  Speaker 8: on its refineries have been very successful. And all other
• 8:09
  Speaker 8: refineries around the world are running as hard as they can.
• 8:13
  Speaker 7: Robin, let's explore more of this issue of how consumers
• 8:15
  Speaker 7: around the world are being impacted right now when it
• 8:19
  Speaker 7: comes to diesel. Of course, for most, they don't necessarily
• 8:23
  Speaker 7: use diesel. However, it's used to power trucks, tractors, ahead
• 8:27
  Speaker 7: of the harvest season, trains, boats. How are these incredibly
• 8:34
  Speaker 7: high diesel prices affected? trickling down to consumers around the world?
• 8:41
  Speaker 8: Well, as you say, they affect all industrial activity. So
• 8:44
  Speaker 8: lots of factories are running on diesel-powered generators.
• 8:48
  Speaker 4: You have all of the transport. You have trucks, of course,
• 8:50
  Speaker 4: as you say. You have rail. You have also some shipping.
• 8:54
  Speaker 8: And then you have also bear in mind that diesel
• 8:57
  Speaker 8: is chemically very close to jet fuel.
• 8:59
  Speaker 4: So the two, jet fuel and diesel prices, tend to
• 9:01
  Speaker 4: move together.
• 9:02
  Speaker 8: So also air travel And of course, all kind of
• 9:05
  Speaker 8: cargo through air also going up. And the harvest season,
• 9:09
  Speaker 8: the autumn harvest season coming, pharmaceutical uses huge amounts of diesel.
• 9:13
  Speaker 8: The mining sector, which I'm not hearing people comment on,
• 9:15
  Speaker 8: but the mining sector is a huge consumer of diesel, too.
• 9:18
  Speaker 8: So that pushes up prices for metals and so on.
• 9:21
  Speaker 8: So this is just an inflationary shock pretty much wherever
• 9:23
  Speaker 8: you look.
• 9:24
  Speaker 7: And of course, the price also to heat homes with
• 9:27
  Speaker 7: winter around the corner for so many And then just finally,
• 9:31
  Speaker 7: perhaps your thoughts on what we've heard from President Donald Trump,
• 9:36
  Speaker 7: essentially hoping to shit focus, claiming that the target, Ukraine's
• 9:40
  Speaker 7: targeting of Russian refineries was a major factor in influencing
• 9:46
  Speaker 7: diesel prices. In your view, though, I mean, how much
• 9:48
  Speaker 7: of a factor is it really?
• 9:52
  Speaker 4: It's an important factor, but the main factor is the
• 9:56
  Speaker 4: war in the Gulf. That's pretty clear. That's where we've
• 9:58
  Speaker 4: lost most of the refined product. supplies.
• 10:01
  Speaker 8: And I also think the Ukrainians, they're under attack from
• 10:03
  Speaker 8: the Russians. Their own energy facilities are attacked. They rightly
• 10:07
  Speaker 8: think they have the right to strike back.