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- [00:04]
Sophia Yan
The telegraph. Melasma Aging skin Menopause symptoms Hair loss
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- [01:14]
Ambrose Evans-Pritchard
the thing about this crisis, it's a kind of full spectrum crisis across a whole lot of different commodities. This time it's an oil crisis and a gas crisis. It's a fertilizer crisis. We're going to have a food shock basically in a year's time. A short military began major combat operations in Iran. If you kill Americans, if you threaten Americans anywhere on earth, we will hunt you down without apology and without hesitation and we will kill you.
- [01:47]
Roland Oliphant
We were not involved in the initial strikes on Iran and we will not join offensive action now.
- [01:55]
Musely Advertiser
Today, President Trump says Iran's supreme leader,
- [01:57]
Sophia Yan
Ayatollah Ali Khamenei, was killed in the attacks.
- [02:06]
Roland Oliphant
I'm Roland Oliphant.
- [02:07]
Sophia Yan
And I'm Sophia Yan.
- [02:08]
Roland Oliphant
This is Iran. The Latest It's Friday, March 27, 2026, the 28th day of the Israeli American war with Iran. On today's episode, we'll be speaking to the Telegraph's World Economy editor, Ambrose Evans Pritchard, about the global economic impact of this war. But first, here is the latest news. As of our recording time around about
- [02:32]
Sophia Yan
lunchtime On Friday, the US is considering sending 10,000 more troops to the Middle east, supported by fighter jet squadrons and armored vehicles. This comes in addition to the thousands of other Marines and paratroopers ordered to the Gulf earlier this week. Donald Trump has postponed his plan to, quote, obliterate Iran's energy facilities, extending his deadline by 10 days. Now that deadline goes to Monday, April 6, 8pm Eastern in Iran that will be early morning, April 7. Tuesday, Washington and Tehran are engaged in early peace negotiations. Trump has said they are progressing, quote, very well at the moment. Egypt, Pakistan, Turkey, their foreign ministers continue talking.
- [03:17]
Roland Oliphant
Donald Trump's clearly trying to message optimism about peace talks. He also said that IRAN has allowed 10 vessels, 10 Pakistani flagged tankers through the Strait of Hormuz and a gesture of goodwill to show that they are serious about the talks. It has been pointed out elsewhere that he made that announcement about 10 minutes after the stock market closed following its worst single day of the war so far. And it is clear that he is trying his best to use his public interventions to quell market anxiety. We've seen that several times. Turning to the war itself, we've seen the second Iranian attack on a port in Kuwait that has targeted a Chinese affiliated infrastructure project. Turning to events on the ground in Iran, the human rights activist news agency rana, that's a American based human rights group run by Iranians. It's generally considered independent and reliable. They are putting total civilian fatalities since the start of the war inside Iran at 1,492 people. That includes 28 killed yesterday. Thursday, they're putting military fatalities at 1167. And there is a further 670 people who've been killed inside Iran during the war who may be civilian or military. They are unclassified. Bombing continues today. The latest targets that we know are hit include an Iranian electronics manufacturer in Isfahan, Optics Industries, that was apparently a subsidiary of Iran Electronics Industries and is affiliated with the Iranian military. The Israelis say they also hit a factory that produces Iran's marine mines, those mines that they would want to put into the Strait of Hormuz. And there's been a debate at the United nations about the war and particularly about the bombing of the primary school in Minab on the first day of the war. Iran's foreign Minister, Abbas Arachi has accused the Americans of carrying out a calculated deliberate strike on the school which killed at least 175 children. Should say there's no evidence at the moment that was a deliberate targeting of a school. The evidence we've seen so far, which is not conclusive, points to the use of outdated targeting data. But that attack still remains a key grim marker of this war.
- [05:47]
Sophia Yan
So just before we came into the studio, Iran has now launched a fourth round of attacks at Israel for the day that's since midnight that's triggered sirens across the country. One missile reportedly carried a cluster munition warhead that spread bomblets over a wide area. Another Missile hit an open area. Hezbollah in Lebanon also renewing its attacks on the north of the country, firing at the city of Nahariya near the border. No injuries have been reported.
- [06:14]
Roland Oliphant
And the FT reports that the United Arab Emirates has allegedly told Washington and other Western allies that it would join a multinational maritime task force to reopen the Strait of Hormuz. The the Emirates are apparently trying to convince other countries to create a Hormuz security force to defend the str. Several countries have meanwhile said they have no immediate plans to send ships to the Strait. So we're pretty short on the details of what that would actually look like or whether that would, where that would go, really.
- [06:43]
Sophia Yan
On Reuters today, an exclusive. The US deploying uncrewed drone speedboats for patrols as part of its operations against Iran. So this is the first time that the US government has confirmed using this kind of vessel in an act of conflict. This is unprecedented. They can be used for surveillance or kamikaze strip strikes. All of this previously unreported. The Telegraph. I'm sure we'll be looking into this ourselves. And this comes after many years of the US military trying to manage something like this. Roland, you've been in Ukraine, apparently this kind of explosive laden speedboat has been used in Ukraine against Russia, apparently to some significant degree.
- [07:24]
Roland Oliphant
Yeah, absolutely. So what we're looking at here is the garc, the Global Autonomous Reconnaissance Craft. And that is basically the American answer to the Ukrainian Magura drone boats which the Ukrainians pioneered and have used to great effect against the Russians of the Black Sea over since the Ukrainians started doing that bow. Oh God, it's past four years now. All kinds of countries have been trying to imitate them, learn from them. The ghark is the American version of the American arms. I saw some of these being exercised against the Ukrainians back and against them some British boats at an exercise in Portugal last summer. This is apparently the time the Americans have used them in combat or in a war situation. So a military, a landmark moment in American military history. We're not told exactly, as far as I can tell how many have been used or what exactly they did. They've used them for patrols. That's what it says. So perhaps the, the ISR variant doing the reconnaissance rather than the, the kamikaze variant.
- [08:29]
Sophia Yan
This is interesting because this could change the stakes for what the US might be able to do in terms of reopening the Strait of Hormuz, maybe using much more aggressive tactics. Iran's use sea drones too.
- [08:40]
Roland Oliphant
Well, this is it. So this is this is interesting. So when you talk to naval professionals about. About this topic, they'll point out that for years and years, the US Navy and the Royal Navy were exercising in anticipation that when the war came eventually, in the Straits of Hormuz, it would be the Iranians who were pioneering fast drone boats and. And fast, perhaps, you know, boats crewed by suicide bombers. Perhaps eventually, in the event, it was the Ukrainians who pioneered that because of the war in Russia. But this is fascinating. Now you've got the Americans using this technology which they thought the Iranians would be leading on in this conflict. It'll be very interesting. I'm not enough of a salty sea dog to be able to tell you how that's going to play into the naval battle or the conflict in the Strait of Hormuz, but I think it's really interesting to see the Americans bringing these things to the table as well.
- [09:33]
Sophia Yan
Do you have a sense of what makes it so hard to build these? The US has tried for many, many years to test these, to build them.
- [09:39]
Roland Oliphant
I think they're not, so. I'm not sure they're that difficult to build. I think part of it is a lot of it's about range and control. So one thing I learned was that the thing that made the Ukrainian boats finally work impossible was Starlink, because Starlink gives you a range that nothing else does. So ordinary radio waves will not allow you to operate these things at the rang that at least that the Ukrainians are in the Black Sea, certainly. And the other things that, you know, the usual kind of the rapid advances in tech, so the huge amounts of data that have to go back and forth, the evolution of control, very difficult to control these things bobbing up and down on the waves remotely with a kind of computer handset, battery power, all these things, these are very much items of modern warfare. But there's a real arms race on at the moment to perfect these things, and amongst global arms companies, an arms race to be the one that get the contract. And so if you go down to. I was at a NATO exercise, I said in Portugal, all about this kind of technology in summer, and it was full of navies learning how to use it. It was also full of arms companies. All of them, they were told very firmly, this is not. This is not a bid, this is not a competition for contracts. But they all knew if they did well, and, you know, the US Navy or the German Navy or the Royal Navy was watching them, then there might be a contract in it down the line. So really interesting part of the evolution of military technology. And lastly, this very interesting thing, Sofia, about the terminology and reporting. The Associated Press have made an announcement about how they're going to report the war. What's this all about?
- [11:26]
Sophia Yan
Well, the Associated Press is now calling Israel's attack on Lebanon an invasion. So the change in terminology is very important because many news outlets, including ours, do receive updates from wires like the ap. The AP is an industry standard. This is a little bit in the weeds of journalism, but they put out a style book. They have for many years set the tone for how many other news organizations will refer to events. You know, one issue to point out here is that with the AP, they make very clear that it's important to use detailed language to describe what exactly is happening. To say, for instance, attack incursion. I mean, these can mean different things. And this is a reminder too of how stories continue to shift. We are in this breaking news environment, headlines every other second, if not every second. And this is a story that is moving very quickly.
- [12:16]
Roland Oliphant
Words also become subject to culture war as well, do they not? As we know in their statement, they seem to say that this is a, is kind of a question of scale. So they say, why are we doing this? What changed? Well, Israeli officials now say they want to take control of the entire area south of The Latani River, 20 miles north of the border. And the army said on Thursday it deployed another division to Lebanon, adding to the force there, although the IDF won't say how many troops exactly are operating there. And so they're saying that this is, it's kind of a question of scale.
- [12:53]
Sophia Yan
It's still worth noting that the perspective between Lebanon and Israel is different on what's going on. The Lebanese say that their sovereignty has been violated, that the Israelis are seeking to occupy Lebanese land. Israel continues to say that their actions are defensive. So it's worth noting still that the two nations involved, and also Hezbollah have a different view of what's happening. And so the AP taking the stance and explaining to its readers, to the outside world why it's doing this is very important because we are, of course, in the age of misinformation and disinformation,
- [13:23]
Roland Oliphant
information warfare and propaganda gone mad. Thank you, Sophia, for those updates. Now turning to today's guest. Ambrose Evans. Pritchard is a Telegraph's world Economy editor. He's been following the or the economic knock on effect of this war which seemed to mount by the day ever since it began. He has. His latest is a fascinating piece about the likely impact of the war on Global food supplies. Ambrose explains that there is serious implications for farmers around the world and ultimately all of us who eat their food. Here's our conversation. Ambrose, thank you so much for joining us on Iran. The latest, as you know, because you've been writing about it, there's a huge amount of debate and discussion about the global economic impact of this war. And you've been covering it for the paper brilliantly since it began. I thought we might as well start with your piece in the paper today about the impact on global food supplies, which I found interesting because we often think about the Straits of Hormuz, where 20% of the world's oil comes from. We think about. You've written a piece talking about how potentially this is bad news for global food supplies around the world for the coming year. Potentially. Could you just talk us through that
- [14:38]
Ambrose Evans-Pritchard
maybe for two years? I mean, the thing about this crisis, it's a kind of full spectrum crisis across a whole lot of different commodities. The OPEC Crisis in the 1970s was basically an oil crisis. This time it's an oil crisis and a gas crisis, which is a feedstock for all the petrochemicals. It's a fertilizer crisis because roughly a third of the world's urea used for nitrogen fertilizers comes from the Gulf, mostly from Qatar, and basically none of it's moving at the moment. 50% of the world's traded sulfur comes from that area too, which you need to make fertilizers as well. And furthermore, China, Russia and Turkey have all imposed curbs on exports of fertilizers from their countries. Now China is the biggest producer in the world. It imports the feedstock, the gas into China and then, and then makes the fertilizers and then exports them back out. And so we basically lost about 45% at the moment of the world's nitrogen fertilizer supply in one form or another. It's either disrupted or lost. And that's pretty serious. And it's just, it's just hitting as the spring planting season begins in, in Europe and then there'll be a bit later in America, the winter planting season in Australia. They basically need the supply chain functioning. They need that in place when they do the planting. And then you've got a narrow window of a few weeks when you have to basically lay, they lay the fertilizer and if you miss that, you know it's very serious. And the crop yield falls dramatically.
- [16:12]
Roland Oliphant
Is this a just in time supply chain?
- [16:14]
Ambrose Evans-Pritchard
Exactly, it's a just in time supply chain. Unlike oil, where you have a kind of international energy agency, which has these huge stockpiles and it coordinates releases in an emergency, there is no global stockpile of fertilizers. The only country that really has any serious stockpile is China. Again, always it's China that seems to be the one that's prepared for these crises. And so if you miss it for a season, it creates a whole sort of cascade effect through the global food system, essentially. And you won't see the full effects of this until the autumn and into next year. It's going to have a long, long tail effect.
- [16:50]
Roland Oliphant
What is the long tail effect then, Ambrose? Is it simply a matter of the price of goods in the supermarket is going to go up on your, I don't know, your strawberries and your broccoli and bread.
- [17:02]
Ambrose Evans-Pritchard
People will use less fertilizer, the farmers will use less of it, they spread it thinner or not at all. I mean, some places they can't even get it in time. The crop yields will be lower. Therefore, the end of the day, the food will be more expensive in the supermarkets. Plus there's all the extra cost of transport and all the extra costs of tractor, diesel fuel, all the things that go into it. So, yes, we're going to have a food shock basically in a year's time.
- [17:26]
Roland Oliphant
Is that already locked in at this stage or if the war was to stop now and the strait reopens kind of today or tomorrow?
- [17:33]
Ambrose Evans-Pritchard
Yeah, the first part of it's locked in in because already there are countries where they're not getting what they need right now because the boats aren't turning up. You've got 24 boats sitting in the Gulf, vessels in the Gulf stranded that can't get out, full of fertilizer sitting there and probably, probably slowly decaying as well. So you've got countries in Southeast Asia and so forth. They're places where it's just not arriving. So you're beginning to get the effects. And it's a kind of chain reaction through the whole global system. You get a problem in one place, it kind of affects prices somewhere else through very complicated interrelationships. The longer it goes on, it gets much more serious. So Trump may have delayed by 10 days. Well, that's 10 days later the fertilizers are going to get through to the international system. And if this goes on for a month, then you've really clobbered spring planting in the Northern Hemisphere. Maybe basically a month or six weeks after that, it's basically too late. I'm sure there are Agricultural specialists who know more about this than I do, and I may have the dates, timing slightly wrong here, but there is a really big problem. So you're going to lose some of that production. So, yeah, basically food prices will be a lot higher. Rich countries will be able to outbid poor countries and simply, you know, corner the market if you like, so that there's real, real suffering in poorer countries in the world. I mean, you know, people will, people will die. That's basically the consequence of it.
- [18:54]
Roland Oliphant
So that's the question I was coming to get to. Is it just a matter of higher prices or a food shortage at cause of famine kind of levels?
- [19:03]
Ambrose Evans-Pritchard
Yeah, it pushes up the number of people deemed by the U.N. you know, the Food and Agricultural Organization and various experts who monitor this. Probably up towards, you know, 400 million people are sort of critically exposed. It pushes up the numbers into that, into that ballpark. So that, that's the human cost of messing around like this. And I don't suppose that crossed anybody's mind when all this began, but that's where we're going. And the longer this goes on, the worse it gets. And there's one other thing I might add. You know, the atmospheric scientists mostly agree that, you know, there's a very high likelihood we're going into another El Nino weather pattern this year and a full one by in next year. And that means hotter weather, record global temperatures, longer droughts and lower crop yields. And if it's a really bad one, which some people think it could, could, there will be, I mean, a Columbia University saying it could be a 1.7 degree world and in 2027, above pre industrial levels, which would be, you know, smash the records by far. And then you're really, really testing the system because you then get droughts that have. We don't know what they'll do, but there'll be potentially really serious damage to crop yields in certain places. So these two things could collide in the same year. It's. So you kind of get a perfect storm.
- [20:20]
Roland Oliphant
We stand warned. Thank you for that. I'm not sure thank you is the right word. Just on a point of specifics. The urea and the sulfur, does that come from the Gulf because it's derived from hydrocarbon products or do they mine it?
- [20:35]
Ambrose Evans-Pritchard
Yeah, but they basically use gas as the feedstock. And because gas is so abundant there and so cheap, basically, Qatar in particular, they made a decision a long time ago. I remember talking to the Qatari economy minister and he was saying, well, we don't want to be the Blackpool of the Middle East. We'll leave that to Dubai. We want to be the Rotterdam of the Middle East. By that he meant, you know, we're developing all these petrochemical industries. We want to use what we got here and do it properly, you know, not mess it up as we did in the 70s when they wasted all the money. So they built this huge sort of industrial sort of complex there and they use, they use their gas and they make all these products and it turns out a lot of these are very important for the global system. The Gulf has become a major, major industrial center and that's kind of what was missed coming into this. So they're critical in supply chains through whole lots of industries that people didn't think about. A large percentage of the world's helium comes from the Gulf and that's needed, you know, in MRI scans, it's needed to build advanced semiconductor chips. You know, it's basically critical for the whole rollout of the AI industry. Again, nobody thought about this when they launched the invasion. I mean, I don't suppose for one moment anybody in the White House thought about any of these consequences. I'm sure there were very clever people in the CIA who thought about it and warned. They were just ignored.
- [21:58]
Roland Oliphant
So that, that I think is really illuminating because I suppose I didn't even know any of that.
- [22:02]
Ambrose Evans-Pritchard
Roland, we're all on a fast, we're all on a fast learning curve here. We're learning all the time. I mean I didn't know that so much of the world's helium came from, from the Gulf industrial states.
- [22:13]
Roland Oliphant
We're going to take a short break now. When we come back we'll be talking about what all this means for you, the ordinary punter in the street as you struggle to live from paycheck to paycheck. How bad is it going to get?
- [22:31]
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- [23:45]
Roland Oliphant
Welcome back. You're listening to Iran, the latest from the Telegraph with me, Roland Oliphant. I'm speaking to Ambrose Evans Pritchard, our world economy editor, about the global economic impact impact of the war. Let's turn to the oil and gas you wrote, actually in a piece this week. In fact, I've got the quotation. The paper market that we all follow does not capture the drama. Physical deliveries are under far greater stress than Brent futures suggests. Now, when we say Brent futures, that's the price we always say, when we say oil is, I don't know, 110 a barrel. That's that figure. Can you explain to listeners why you say that's a broken barometer?
- [24:23]
Ambrose Evans-Pritchard
What was actually happening was the physical deliveries in Asia in the worst point last week, they were going up to 1, 6, 570 dollars a barrel. So that's what you had to pay to actually get the physical stuff. The futures markets, the Mid Atlantic futures markets, if you like, were trading to a totally different sort of rhythm. The problem is that we're going to converge upwards towards the physical barrels that Asia had to pay for.
- [24:49]
Roland Oliphant
When you say Asia, which parts of Asia? Big place.
- [24:52]
Ambrose Evans-Pritchard
Basically, the way to think of this is that, you know, it's about 10 to 12 days or something for the 15 days to get, to get from the Gulf, all states to India and countries like that, you know, it's 20 days to Japan, it's about 25 days to 30 days to Europe through Suez and as long as around the Cape, which some of them are having to do. So basically they got hit first by the lack of physical deliveries we're still getting, or we were until recently. We were getting the. The oil already sort of booked and paid for some time back. So we hadn't felt the physical shock. Now, right now, a whole lot of barrels that were sitting on water and as you know, all those Russian barrels, storage on water which they're having trouble selling, and the uranium barrels, all this sanctioned oil, they've had waivers. So suddenly all this stockpile of oil are sitting on tankers in the Ocean, basically, or offshore is suddenly pouring into the, into the market and it's temporarily suppressed the price or brought it back down to more manageable levels in Asia. So today, you know, the Morban price, which is the Omani price for delivery, the physical price for delivery that everybody's watching is around about 100, 1600 $17 or something like that. It's not 170 anymore. That's because you suddenly got a gush of a sugar rush of oil just hitting the market from these, from these floating barrels that were sanctioned. That's very short term, that lasted barely days. And then you're back to the situation. We've got a crunch. If this thing just goes on, eventually, you know, you're going to get to 200, 250, because what, what we, we've lost roughly 13 million barrels a day, which is rough, nearly 30, 13% of world supply of oil. It's just not getting through at all. The Saudis have managed to get some through a pipeline to the Red Sea. They're now getting through almost 5 million barrels a day through that route. So they're quite a lot of their roles getting out, but the others are completely locked in and they've had to shut down a lot of fields. So there's another. Roughly 10% of world supply is they've actually had to stop drilling.
- [27:02]
Roland Oliphant
They're not taking out of the ground anymore.
- [27:04]
Ambrose Evans-Pritchard
Yeah, they've run out of storage. Nowhere to put it. When you do that, you start damaging the welds, all kinds of problems with well pressure and the tubes and, you know, experts will know a lot more about it than me. If it lasts, you know, for several weeks, it gets worse and worse and worse and the damage becomes, you know, the permanent and a higher level of damage. And the Iraqis were in bad shape anyway. They're OPEC's second biggest producer, but they're in really bad structural shape because their fields have not been, well, well maintained. They hadn't put in the investment and it's going to take them ages to get this back up, up. So they've basically shut down almost all of their production and it's going to be, I don't know, I mean, to get back to the full level they were at before. Well, they weren't, in fact, get back to that level, but it's going to be, you know, it could be six months.
- [27:47]
Roland Oliphant
Okay, so you're saying once again, this is locked in. A degree of this oil shock is already locked in, even if the war ends now?
- [27:54]
Ambrose Evans-Pritchard
Yeah, and I would Add that, and you probably know more about this than I do. But, you know, the Houthis haven't yet joined in Yemen, haven't yet joined the fight. That's the dog that hasn't barked. But if they do, we're going to lose another 5 million barrels a day because they, they can strike the Saudi port on the Red Sea at Yambu, where the five million barrels a day are coming through. They can basically make the Red Sea impossible for tankers. And I, I read this morning the speech by the leader of the Houthis, Abdul Al Houthi, which I read to be a cry to arms and preparing the country to intervene. I don't know. It seems to me this needs watching very, very closely, because if that happens, this crisis is going to escalate dramatically.
- [28:46]
Roland Oliphant
Embrace. Could those Saudi tankers not go through the Suez Canal, go the other way?
- [28:50]
Ambrose Evans-Pritchard
The problem is that the Yambu port is within range of the Houthi.
- [28:56]
Roland Oliphant
Right. The port itself is within range of the Houthis. It's not just the ships. Yeah.
- [29:01]
Ambrose Evans-Pritchard
It's quite a long way from Yemen, but it is in range. And they have hit it before now, you know, they, they were badly pummeled. A lot of the leaders were killed, so they're kind of chastened. But there's been a big discussion amongst people following this closely about whether they will or they won't intervene. You know, we'll see. I know that people in the market we've got, who got intelligence connections are very worried about it, and that would be a really catastrophic development. And the next catastrophic development, which I don't rule out at all, is the US Cuts off exports of oil. I think it's in Trump's character just to do that. He'll simply say, well, we have low natural gas prices in the US because we trap it inside our country. We don't have the means to export most of it. Why can't we trap our oil in there and have nice low oil prices? Now, it's a very simplistic solution. It wouldn't work because America needs to import a lot of oil to balance its own refineries. And furthermore, the real stress in this whole thing is not the oil price, it's in all the refined products. It's in jet fuel, it's in fuel oil, it's in diesel. And in America, these prices are reflecting the global price. They're not reflecting the internal US Oil price. So America will get hit by this. But I wouldn't put it past Trump doing that. And then we lose suddenly 8 million barrels a day of oil, of American oil comes onto the market.
- [30:22]
Roland Oliphant
Well, none of this is very comforting, Ambrose. I was expecting you to wrap us in cotton wool and make everybody feel better.
- [30:31]
Ambrose Evans-Pritchard
The markets have been quite. Not want to use the word complacent, but they've wanted to see the glass half full the whole time through this. And I think there's an over. There's too big an assumption that Trump can do a taco and it's all over. But as you know, there are two sides to this, and it takes two to taco. The Iranians have to agree. Well, it takes three to taco because the Israelis also have to agree.
- [30:55]
Roland Oliphant
You're using the anachronym there. For those who want to throw a taco is in. Trump always chickens out. I believe both sides need to back off. In other words, even if Trump decides he's had enough, the Iranians also have to decide they've had enough and reopen the strait.
- [31:10]
Ambrose Evans-Pritchard
No, he can declare victory and say, we've degraded their munitions, we sank their navy, we destroyed their air force, blah, blah, blah. We call it today victory. The Iranians may not settle for that because they have demonstrated they could have total control over the straight of Hormuz, and that's a very powerful weapon. And they may wish to make him pay a higher price before they let him get away with it. Then we get into a military judgment about how degraded are they, and we get into political judgment about is the regime split. What it looks like is that by getting rid of Larijani, who was the one person who, who basically the west could deal with because he spoke pretty good English, he was author of three books on Kant, he was pretty sophisticated. He was the kind of person who knows his way around Davos. Instead, they replaced him with the hardest of hardliners in the Revolutionary Guard. And so you've got a consolidation of the Revolutionary Guard within Iran. Whereas before power was to some degree, sort of, there were various power centers, now it's very heavily concentrated in revolutionary gardens. So, you know they'll go down fighting.
- [32:17]
Roland Oliphant
You wrote a piece earlier this week, and we are now speaking on Friday, and I think roundabout Wednesday. You'll correct me if I got this wrong. You wrote a piece saying Trump had better do a deal with the Iranians by Friday or soon after. If the Strait of Hormuz is closed for another month, it's game, set and match to the Russo Chinese Axis. What did you mean by that? Why is this such good news for Russia and China.
- [32:42]
Ambrose Evans-Pritchard
The most obvious point is that Russia's had a huge windfall in the form
- [32:45]
Roland Oliphant
of this massive surge in oil prices. So suddenly they've got a lot more going to the budget. Yeah, yeah.
- [32:51]
Ambrose Evans-Pritchard
And furthermore, it's not just the headline price. They were only getting about $46 a barrel before because it was about a $25 discount, because they were a distressed seller. There was sanctioned oil, they were selling kind of oil through the shadow fleet and the buyers knew they had them over a barrel, so to speak, and they were pushing a hard bargain. And now they're getting a premium over Brent. They were getting 110 barrels.
- [33:14]
Roland Oliphant
They've got this windfall, obviously. And why is it so good for China? Because you talk about China, China buys, I think, 90% of Iran's oil. They're huge consumers and importers. How on earth is any of this good news for China?
- [33:28]
Ambrose Evans-Pritchard
Well, I don't think it matters to China where it comes from. I mean, China's got, got $3 trillion of FX reserves, by far the biggest foreign exchange reserves, by far the biggest in the world. They've spent the last year building up their Strategic Petroleum Reserve. They probably got 1.5 billion barrels stored. Whereas the Americans, they depleted their Strategic Petroleum Reserve after the invasion of Ukraine and they didn't fill it up again. So they went into this with below what is regarded by the US Energy Department as the safe level.
- [34:00]
Roland Oliphant
There's a safe level even in peacetime.
- [34:02]
Ambrose Evans-Pritchard
In peacetime. And now with this release, they've done the joint release with the IAEA, they'll be down to levels about 250, which you can't go much lower before you start actually damaging the structures of the salt caverns in which the oil is kept. So basically they're running out of those strategic stories.
- [34:19]
Roland Oliphant
Very, very last question, Ambrose, and I know that you're a Macroman, you're our world Economics editor, you look at the very big picture, but I was wondering if you might try your hand at, I don't know, consumer affairs or something. What does all this, this very bleak picture you've painted us of soaring food prices, soaring oil prices, a lot of it's already locked in. Even in the best case scenario, where the war ends this weekend, what does that mean for ordinary listeners?
- [34:46]
Ambrose Evans-Pritchard
Well, we're going to get inflation, that's clear. It could be 4% inflation, maybe longer. This goes on, it could be 5% inflation. There's going to be a cost of living shock because you have spend a lot more on energy and gas utility bills, petrol less for everything else. So it's going to be quite a difficult period and that we we can't afford any more bailouts because the government is essentially we've hit the limits and the bond yields. So we need, we need a basically an emergency economic policy. That's a whole subject for another podcast. I don't think you can do it with fiddling around. I think we need a really serious shift in economic policy to restore credibility basically and to cope with this.
- [35:29]
Roland Oliphant
That was Ambrose Evans Pritchard, the Telegraph's World Economy Editor. That's all for today's episode of Iran the Latest. We'll be back on Monday. Over the weekend, keep a close eye on the streets of Hormuz via telegraph.co.uk where you will find all the latest news and best analysis. Until then, that was Iran the Latest Goodbye Foreign. The Latest is an original podcast from the Telegraph created by David Knowles and hosted by me, Roland Oliphant and Venetia Rainey. If you appreciated this podcast, please consider following Iran the Latest formerly battle Lines on your preferred podcast app. And if you have a moment, please leave a review as this helps others find the Ship show to stay on top of all our news, subscribe to the Telegraph, sign up for our Dispatches newsletter or listen to our sister podcast Ukraine for latest we're still on the same email address battlelinestelegraph.co.uk or contact us on X. You can find our handles in the show. Notes the producer is Peter Shevlin. The Executive Producer is Louisa Wells.
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