Bloomberg Surveillance TV: March 24th, 2026

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This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along with Lisa Bromwitz and Amrie Hordert. Join us each day for insight from the best in markets, economics, and geopolitics from our global headquarters in New York City. We are live on Bloomberg Television weekday mornings from six to nine am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen, and as always on the Bloomberg

Well, that's a very good question. The report is that the United States was able to reach the speaker of Iran's parliament, who is quite powerful. He of course, has denied that any negotiations are going on. There's also some indication that the Egyptian Foreign Minister was able to reach

Steven, you know these countries really well, especially when it comes to Egypt, Pakistan, I know, Turkey, you spent a lot of time. And who do you think could be a real viable intermediary right now between Tehran and Washington.

Well, it seems that the Pakistanis are taking the lead with a lot of help from the Egyptians. The Egyptians have improved their relations with Pakistan. Pakistan has improved this relations with Iran, and the Egyptians have also improved their relations with Iran and the run up to this content. So those are the countries that seem to be playing the most behind the scenes role in trying to establish

Picking up in our point that they want that the US needs to re establish the freedom of navigation in the Strait of Hormuz or it is a strategic failure.

How do you perceive the.

Strait of Hormus will be basically operate in the future, Because the President said yesterday is a little bit tongue in cheek, but he did say maybe me and Iatola will do it together.

Yeah, this is a huge problem. The United States cannot come out of this war with the Iranian regime intact, the Iran's ability to fire on its neighbors, no clear verifiable limits on Iran's nuclear program, and the Iranians in control of the Strait of Remooves.

That would be a worse.

Position than the United States was in before the President started hostilities. On February twenty eighth. They're going to have to re establish freedom of navigation through the strait. That means that the Iranians will have no control over who goes through that waterway.

Isn't that genie already out of the bottle. The Iranians have control it is.

And it's going to be extremely difficult to put that genie back into the bottle. And it seems to me that the way to do that is going to be through military action. It's hard to imagine a negotiation given the position that the Iranians are in right now, where they have established essentially a new regime for passage through the Strait of Remoovese, that they're going to go back voluntarily.

Stay with US, Multilanpex, saveillance coming up off to this, This is what the Department of Energy has got to say bad things right now. The US Energy Secretary Chris Right down playing the market impact of the war, urging energy companies to ramp up production.

Marcus, do what markets do.

Prices went up to send signals to everyone that can.

Produce more, please produce more.

The prices have not risen high enough yet to drive meaningful demand destruction, but Americans and energy entrepreneurs around the world are in genius, so are things are being done. But these are mitigants of a of a situation that's temporary.

So Brent is holding there one hundred dollars a barrel as uncertainty linkers around the conflict's outcome. Vicus to a Ada of Macquarie, writing, if the stratiformers remains effectively shut until the end of April, Brent could still reach one hundred and fifty dollars a barrel. Vecus joints it's now before more Vecus, welcome to the program. Can I start with this? What is your base case at the moment, and perhaps more importantly, what informs that base caps?

Yeah, our base cases for Brent to revisit the one twenty range. You know, as you mentioned earlier, you know there is a big disconnect between the physical and the financial markets. We think that disconnect will close if the strait remains you know, largely shut. It's not completely shut, so we think one twenty maybe one twenty five is kind of the the most likely area that price will revisit.

We think that gap will have to close.

That's the base case if the strait of Hermose opens in the short term. What happens if it doesn't open in the short term and countries like Saudi Arabia or the UAE also engage in a more material way in this conflict.

Yeah, in that scenario, there are numerous mitigations that can come to the market to limit oil from going to two hundred on the futures market. You know, we've seen refined products go well above that already, but global strategic petroleum reserve releases we think could reach about three million barrels a day. The East West pipeline that crosses across Saudi Arabia to circumvent her moves.

You know, that could do another three and a half.

You know, you've got refining run cuts, which will then translate into even higher refined product prices, but it will alleviate some of the crude shortages. So there's a a bunch of big ones, right and OPEC also has about two hundred million of stores outside of the Middle East.

They can use that.

So we have If everything can come to the market in a timely way without all the normal bureaucratic friction, you can actually rebalance the market largely, not fully. You still are cutting refining runs, so that's a you know, Peter to pay Paul situation, But you can close that deficit from what we estimated about thirteen million a day, you can close it down to about three million, much more manageable. But you can't do that forever, right Like, even that has a time limit.

The East West Pipeline, I'm glad you mentioned it. It's looking very prudent of Saudi Arabia to have invested billions of dollars of this to bring their crew to Yanboo, to the Red Sea. But individuals I'm talking about are putting higher probability now that the Houthis would get involved and cut some of that production off. Are you starting to bake some of that concern in.

Absolutely. Yeah, we think that should be a big concern.

You know, we think where it's where, where Yambu is, the pipeline route, all of it is at risk. And to your point that who these have in strangely quiet, The Red Sea issues have been strangely quiet. We don't know any reason why those cannot flare back up again

Again, because I think we're all thankful we're not there this morning, and hopefully we don't experience that in the coming days and weeks, because what we hear a lot about on this program is that even after this war has resolved itself, that from here we will have structurally high demand through stockpiling. The countries will become conditioned to avoid this situation happening to them again, that particularly the nations in Asia, the big oil importers, like what we've

We do, we do? We think this will.

You know, if this didn't send the signal, then nothing would have to any country saying hey we need ninety days inside our own borders, right or whatever day they picked, But that nineties are typical, and now China looks extremely prudent in doing what they did. I know there are a lot of theories about, you know, are they doing it for an eventual Taiwan? But what they said is, look, we've imported an enormous amount of oil and as far away we have a fragile supply chain. We need the

That model because I know this is difficult to put a number on, but what kind of premium does that introduce? What kind of new flaw does that introduce for this market for the time ping.

Yeah, you know, we think it could add all lsequel about half a million a day of extra demand as countries refill and add new spr storage. You can translate that to somewhere between five and seven dollars a barrel to what your previous base case might have been. So that would move us, you know, kind of into the mid sixties instead of the high fifties low sixties.

But does that mean this is for the rest of the world barring the United States?

Yeah, yeah, you know, we think you know, there might be aggregation as well, right, where countries decide to have like a joint storage between themselves, right, so they don't necessarily all have to build new tanks in every single country.

But there's a cooperation in the US.

You know, we we're at four hundred million, four hundred and twenty million. We're a net exporter but of a petroleum so technically we don't need anything by that normal rule of thumb.

But there again it would be improved.

Right, we probably should be around the five hundred million range at all times.

Stay with US mult Bloomberg surveillance coming up after this, Emily Rodent of John Hancock Investments right in the following. We are trying to minimize geopolitics as an asset allocation input, especially now with talks moving markets so significantly. One thing we're sure of is that sentiment can change on a dime. Emily joins us now for more. Emily, welcome to the program. How avoidable is some of that at the moment.

It's so tricky right now, John, I mean my heart sank when I saw it was going to be on the show this morning. Only kidding, but it's just so difficult to determine what's going to happen next in this market. You know, yesterday we're watching really mixed messages across asset classes. You have you know, the dollar declining, You've got gaset's surging. It's back to the momentum darlings of the past twelve

Well, bonds are on sale, and I know you like the bond market coming into this. You like it more now we do?

I mean, we would you look at opportunities where yields are backing up as an opportunity to lean in. Obviously, the myopic focus here is on energy prices and the potential impact to inflation, but we're focusing on the old adage. The cure for higher oil prices is higher oil prices, and what I mean by that is that it will likely lead to demand destruction. We're hearing from Asian economies that there's hoarding of oil resources there. People are being

So at some point people are going.

To pull back in terms of demand as oil prices move higher.

Here.

The other element, John that we're watching is the bigger components of inflation, which we think are significant, especially around.

Shelter or howsing.

Nillo has home prices up zero percent year over year. Rental prices are down about one and a half percent year over year. We think that transmission into headline inflation and core inflation readings. There is going to be significant, and it could be enough to overcome any potential inflationary impact we see here from commodity prices. For that reason, we think eventually that bonds are going to our bond investors will kind of wake up and smell that disinflation coming.

Everything kind of just heard Emily was an argument for lower growth. It was a big argument for much lower growth, reflected in your call to buy the bond market. Now, this is where the stock market starts to get interesting. What's going to keep earnings insulated as you put a big bet on lower growth.

Yeah, you know, we're not saying that growth is falling off a cliff, but we're seeing it in places like the labor market.

It's not great. We had six negative jobs reports.

The labor market you know, is you know, holding in as it relates to things like initial claims.

It's not terrible, but it's.

Just difficult to see accelerating economic growth in this in you know, with a jobless backdrop.

So we want to be really mindful of that.

It's a key reason we still like quality in a decelerating growth environment.

Quality sectors. Quality stocks should hold up better.

Things like looking at return on equity, looking at cash balances, free cash flow, companies that can really maintain that earnings growth prospect even in the despite despite slowing growth. And that's not what we're seeing get rewarded in this market. It's been about lower quality. It's been about technical as momentum sentiment sort of driving these riskier parts.

Of the market.

And we want to trim into that strength and think about redeploying assets into more defensive parts of the market and higher quality areas. We're looking at areas like infrastructure related equities, utilities, you know, even alternative type strategies that can do well in that slow and growth environment.

Emily, when you mentioned the fact that when it comes to the energy market, the cure is going to be potentially demand destruction, do you have prices in mind about how high prices we need to go until that we actually see that demand destruction.

Yeah, that's the question of the day. You know, I look back at history in two thousand and eight and twenty twenty two were the last time is that we saw significant spikes and oil prices. It's right around one hundred and twenty eight dollars a barrel that we've seen that demand destruction set in.

You know, we're not there yet, but you know, certainly the.

War escalating could potentially bring us there. That's sort of the general price point that we'd be looking at.

This is the Bloomberg Surveillance Podcast, bringing you the best in markets, economics, angiopolitics. You can watch the show live on Bloomberg TV weekday mornings from six am to nine am Eastern. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen, and as always, on the Bloomberg Terminal and the Bloomberg Business app