00:00Look, you just heard what Stuart was saying about the moving parts and not back to square one, but not
00:06quite a good position.
00:08And so my first question is really about, do you think that we're worse off now with this stance of
00:13no war, no peace than when we first started this war at the peak of it?
00:20Well, I think no war, no peace is obviously not an ideal situation to be in.
00:25And Gulf leaders and policymakers have expressed very clearly how damaging this is to their economic prospects.
00:33It's very difficult to entice foreign investors or tourists or to even entice potential lenders to really put a stake
00:45in the Gulf when there is massive uncertainty hanging over the region.
00:51So I think this is clearly not a sustainable situation over the long term, but it's, I would still argue,
00:58better than a war situation.
01:00So much rather a no war, no peace than a full out, full blown conflict, which obviously has been extremely
01:08damaging as well.
01:12Hassan, what's your read on the postponement of this meeting that was set to take place today?
01:17Do you think the postponement came at the request of Gulf countries that just have red lines that they did
01:24not want to see crossed?
01:25Or what is what is your overall assessment of that postponement?
01:32So the press release that came out from the Omanis has very vaguely and broadly suggested that the right conditions
01:40were not were simply not in place for the meeting to be a constructive or productive one.
01:45We've already known that not all of the GCC countries were on board. Bahrain had signaled early on that it
01:52would boycott the meeting and sources close to the Bahraini government had broadly explained that they did not see any
02:02substantive outcome coming out of this summit and that Iranian aggression was still largely ongoing.
02:10But I think there may have been GCC reservations about the substance of the proposed Iran-Oman agreement over the
02:20navigation pathways in the Strait of Hormuz.
02:22But I think the broader escalatory context, specifically the targeting of Saudi Arabia's east-west pipeline, Houthi advances in Yemen's
02:32western coastline,
02:33and then the increasingly close coordination we're seeing between Iran-backed groups in Yemen and Iraq,
02:39all of these, I think, also create, I think, conditions that are not ideal for a substantive summit to produce
02:47a substantive and clear outcome.
02:51So, Hassan, does that mean that you think the Houthis are going to be the most successful lever, if you
02:58were, that Iran uses going forward without getting directly involved in the Gulf?
03:03Because they've seized multiple assets over in the Red Sea over the past week or so, and now we're seeing
03:09the shutdowns as well in Saudi essential energy infrastructure.
03:13Do you think the Houthis are going to start to play a way more vital role here?
03:21Potentially, yes, because I think at the moment, the Iranians are obviously under significant economic pressure due to U.S.
03:29sanctions and the U.S. blockade.
03:31We're seeing a fuel crisis and obviously inflation ramp up due to the poor state of Iran's currency.
03:38At the same time, Iran is slowly seeing its grip over the Strait of Hormuz slip away.
03:46We've seen data from tanker trackers, for example, suggesting that oil exports out of the Strait of Hormuz are now
03:55averaging at 10 million barrels per day.
03:57That's about 50 percent of pre-war capacity.
04:00And this is a significant record during the course of this war.
04:05And so, in a sense, I think Iran is seeing its main source of coercive leverage over the global economy,
04:12over the Gulf states, over the U.S.,
04:14which is its control ability to disrupt the Strait of Hormuz, be significantly contested by the U.S.
04:20And so I think the Houthis' ability really to assert control over the Bab al-Mandeb Strait,
04:26now that they've made those significant advances along Yemen's western coastline,
04:31is going to be all the more strategically significant for Iran.
04:34I think the only issue here is that the Houthis are arguably the most autonomous or independent Iran-backed group
04:43in the region.
04:44They will not necessarily and automatically act in total compliance with Iranian interests.
04:49So this is something that the Iranians will also have to manage quite dexterously.
04:56Hassan, just briefly, do you think that Saudi Arabia, with the shutdown of this pipeline now,
05:01has fewer options than the market had anticipated?
05:07Well, I think Saudi Arabia's options have been narrowing down ever since the flare-up in tensions with Yemen and
05:15Iraq
05:16because of these groups' willingness not only to target Saudi Arabia's energy infrastructure directly,
05:22but also because of the potential of a dual blockade, essentially,
05:28by Iran and the Houthis on the Strait of Hormuz and Bab al-Mandeb.
05:31So this does narrow down Saudi Arabia's options.
05:33But I think the Saudis have shown themselves to be quite resilient and fast-acting when it comes to repairing
05:42their energy infrastructure.
05:44So we'll just have to wait and see how quickly the Saudis are able to bring their pipeline online
05:51and to create fallback options and temporary buffers that will allow them to smooth over the effect of these attacks.
05:58And they have been quite good at this in the past, and so we'll just have to wait and see.
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