Javier Blas on China's Rare Earths Dominance

Summary

Odd Lots Podcast Summary Episode: Javier Blas on China's Rare Earths Dominance
Release Date: April 15, 2025
Host: Joe Weisenthal & Tracy Alloway
Guest: Javier Blas, Bloomberg Opinion Commodities Expert

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Introduction: A London Setting

In this episode of Odd Lots, hosted by Bloomberg's Joe Weisenthal and Tracy Alloway, the conversation begins with the hosts sharing their experiences in London. Joe, visiting the city for the first time’s exploration, mentions visiting the Imperial War Museum, setting a backdrop for the day's discussions.

The Myth of "Rare" Earth Metals

Timestamp [03:00]
Joe introduces the episode's primary focus: China's alleged halt on rare earth metal exports. He expresses long-standing concerns amplified by recurring headlines suggesting that China's export restrictions could cripple global markets. Tracy adds to this sentiment by highlighting the branding of these metals as "rare," questioning the authenticity and implications of such terminology.

Expert Insight with Javier Blas

Timestamp [04:50]
To delve deeper, Joe welcomes Javier Blas, a renowned Bloomberg Opinion commodities expert. Tracy encourages Javier to provide his unfiltered perspective on the prevalent fears surrounding China’s rare earth exports.

Timestamp [04:51] - Javier Blas:
"There’s gonna be a shortage of rare earth for a long period of my professional life, which is beginning to be more than 25 years... my default answer has been no, there is not going to be a shortage."

Javier challenges the sensationalist narratives, asserting that despite headlines, the actual impact of China's export restrictions is minimal. He presents compelling data to support his stance:

• US Import Data: In 2024, the United States imported a total of $170 million worth of rare earth metals, a figure representing merely 0.03% of the total trade between the US and China. To put this into perspective, Javier quips, "I'm pretty sure that the United States imported more olive oil from Spain."

Timestamp [08:00] - Javier Blas:
"About 80-85% of the world's rare earth metals come from China. The big difficult part is processing because it's very polluting and it's a reason why all the processing has moved from everywhere else into China."

Debunking the Rarity and Supply Concerns

Javier elaborates on the misconception of rarity, explaining that rare earths are not as scarce as portrayed. The term "rare" is more a branding exercise than a reflection of their actual availability. Moreover, he highlights that the primary challenge lies not in extraction but in the environmentally taxing processing required, which has centrally positioned China as the dominant player.

Timestamp [09:11] - Javier Blas:
"Prices could go higher and those applications will just pay the price. Rare earth metals are important for very niche applications, but their actual economic impact remains limited."

He further discusses the economics of mining rare earths outside China, emphasizing that current low prices do not incentivize alternative processing facilities due to the high environmental and financial costs involved.

Potential Strategies: Stockpiling and Domestic Production

Timestamp [15:45] - Tracy Alloway:
Tracy poses a strategic question regarding the US approach to rare earths: "Would the better approach not have been to just build massive inventories of these things? Just get them on the cheap from China..."

Timestamp [16:00] - Javier Blas:
Javier acknowledges that while some companies, particularly Japanese high-tech firms, have engaged in stockpiling, widespread government-led stockpiling in the US remains absent. He advocates for developing domestic processing capabilities, albeit noting that higher prices would be necessary to make this viable. Javier suggests that protectionist policies, such as tariffs on Chinese rare earths, could foster local industry growth but cautions about the broader economic implications.

Transition to the Oil Industry and US Energy Policies

Shifting gears, the conversation moves to the US oil industry and recent energy policies under the Biden administration.

Timestamp [17:14] - Joe Weisenthal:
Joe raises concerns about the administration's energy strategies, particularly regarding oil production and its impact on the economy.

Timestamp [18:39] - Javier Blas:
Javier explains that with oil prices hovering around $60 a barrel—near the break-even point for many shale companies—there is an anticipated slowdown in US oil production growth. He forecasts a potential contraction if prices remain low, challenging the administration's energy objectives.

OPEC Dynamics and Trump's Policies

The dialogue further explores the interplay between US policies and OPEC's production decisions.

Timestamp [29:43] - Javier Blas:
"The Trump administration is putting quite a lot of diplomatic pressure on OPEC countries to increase production... the United States wants the Saudis to increase production, to put prices down."

Javier observes that OPEC countries are perplexed by the unpredictable nature of US policy under Trump, making it difficult for them to strategize effectively. This uncertainty contributes to volatile oil prices and creates challenges for both producers and consumers.

Concluding Insights

As the episode wraps up, Javier reiterates his assessment that the panic surrounding rare earth metals is largely unfounded. He underscores the importance of nuanced understanding over sensational headlines and emphasizes the need for strategic approaches in both rare earths and oil sectors to navigate global economic landscapes effectively.

Timestamp [31:55] - Tracy Alloway:
Tracy and Joe reflect on the episode's discussions, highlighting the valuable insights shared by Javier and the importance of demystifying complex economic issues for their listeners.

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Notable Quotes

• Javier Blas [04:51]:
  "There is not going to be a shortage. And if there is a shortage, the consequences are not going to be nearly as material as people think that they're going to be."

• Javier Blas [05:38]:
  "The United States imported last year, in 2024, a grand total of $170 million of rare earth metals. Not a billion million."

• Javier Blas [08:00]:
  "About 80-85% of the world's rare earth metals come from China. The big difficult part is processing because it's very polluting."

• Javier Blas [09:11]:
  "Prices could go higher and those applications will just pay the price."

• Javier Blas [17:14]:
  "The Trump administration is putting quite a lot of diplomatic pressure on OPEC countries to increase production."

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This episode provides a critical examination of the fears surrounding rare earth metals and offers expert insights into the realities of global commodity markets. Javier Blas effectively demystifies complex economic phenomena, encouraging listeners to approach such topics with informed skepticism and strategic thinking.

Transcript

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Bloomberg Audio Studios Podcasts Radio News.

[Joe Weisenthal]

Hello and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

[Tracy Alloway]

And I'm Tracy Alloway.

[Joe Weisenthal]

Tracy, we're in London.

[Tracy Alloway]

Yes. How do you like it?

[Joe Weisenthal]

I love it so far. I'm having a great time.

[Tracy Alloway]

You know what I've realized? I always make the mistake. So I lived in London for a long time. I went to university here, I met my husband here and I stayed here for like over a decade. But I realized whenever I go back, I always make the mistake of doing it on that one glorious spring day where the temperature is like 75 Fahrenheit, like 21 Celsius, and everything's blooming in central London and it's sunny and it's beautiful and I think, wait, why did I leave?

[Joe Weisenthal]

But then the next day it's gray.

[Tracy Alloway]

Yeah, okay, there is that. But I really, I need to come back in like January when it's dark at 3 or 4pm and remind myself that there are in fact some downsides of living here. But it is very nice to be back for a visit.

[Joe Weisenthal]

This is actually my first time being in the city. Right. Because I haven't really stayed at this part of the city before. It's really nice, all the history and everything. Despite being here, we have no choice but to continue covering various repercussions, fallouts, updates, ongoing development in the trade war or whatever we're calling it the tariff whatever.

[Tracy Alloway]

You would rather be thinking of actual war history and going to the Imperial War Museum or something like that.

[Joe Weisenthal]

So on my, on my one free day here, I did the boomer thing and I went to the Imperial War Museum and I saw a lot of things that I only read about referenced in books anyway. All kinds of dimensions in the trade tensions and everything. But one thing that's going on is big impact on commodity markets. We've seen the price of oil plunge as recession fears get priced in. And there was this headline in the New York Times about China halting export of rare earth metals as a retaliation. And I just have to say I've been reading about China halting exports of rare earth metals in retaliation for my entire life. It never seems to matter. It never really seems to be a thing, but it always is a really scary headline. But I've never actually. Nothing in my, as far as I recall ever gets shut down or grinds to a halt as from these supposed export restrictions.

[Tracy Alloway]

This is one of the greatest branding exercises of all time. It's because it has the word rare in the title. Everyone can really easily apparently make the case that these are rare and you really need to snap them up, get the exposure before China starts limiting exports. And we all have to pay through the nose for these things. But, yeah, it's never happened. And the rare as I don't know if we've ever discussed on this show, but certainly other people have discussed it at various points in time, the rare actually isn't that rare. It turns out there's a lot of them out there. It's just no one really likes getting them out of the ground that much.

[Joe Weisenthal]

So since we're here in London, we can never talk to him enough about commodity things. And because they're commodity things going on, I'm thrilled to be in person with our colleague, Bloomberg opinion scribe Javier Blas, and knows everything about all things commodities. Javier, can you just rant for a couple of minutes about rare earths? I'm not even going to ask you a question. Just go on a rant about headlines about China limiting rare earth exports.

[Tracy Alloway]

Go, go.

[Javier Blas]

Joe. Tracy, thank you for having me. You have been listening to these headlines and getting very scary. There's gonna be a shortage of rare earth for a long period of my professional life, which is beginning to be more than 25 years. And it's a song Gray Hair. To prove it, I have to deal with editors will come to me and say rival publication Is saying XYZ Rare Earth Metals Panic?

[Joe Weisenthal]

No, it's great for clicks. So I get why editors like it.

[Javier Blas]

And then my editors will say, like, should we be writing something about it? And my default answer has been no, there is not going to be a shortage. And if there is a shortage, the consequences are not going to be nearly as material as people think that they're going to be. So a couple of numbers.

[Joe Weisenthal]

Okay.

[Javier Blas]

The United States imported last year, in 2024, according to US government data, a grand total of. Give me the theme music. $170 million of rare earth metals. Not a billion million. 170 million. I'm pretty sure that the United States imported more olive oil from Spain.

[Tracy Alloway]

I like that. Olive oil is your baseline. That's the benchmark value.

[Javier Blas]

And how much is that? As the second number we are going here, how much is 170 million? If you compare that to total trade between the United States and China, that is 0.03%. So it's not a lot. And the United States could face say a 10 times increase in the price of rare earth metals. And it still will have no impact whatsoever on the kind of the American economy or the global economy. And then what really drives me mad is that you are writing about rare earth metals. Look, they are important and they obviously for some very niche applications, you really need rare earth metals. But prices could go higher and those applications will just pay the price. But typically writer like myself, you want to sex up a bit of the story. You will say rare earth metals critical for the weapons industry, for missiles and high tech application. Do you know where every one of us have some rare earth metals at home? They are used in super permanent magnets and therefore on that absolutely critical instrument of economic warfare which is called the vacuum cleaner.

[Tracy Alloway]

I will say I sympathize with editors not wanting headlines about vacuum cleaners versus military equipment and all of those important strategic things.

[Javier Blas]

I just in mind the story. The price of rare earth metals may increase and making vacuum cleaners a bit more expensive. Okay, I don't know if you're gonna click, okay.

[Tracy Alloway]

Not to get all Judy Bloom on everyone but rare earths. They're not as rare as the name would imply. But walk us through where they actually come from.

[Javier Blas]

A lot of them come from China. About 80, 85% of the world's rare earth metals come from China. Is a question of digging them out of the ground and then processing. The big difficult part is processing because it's very polluting and it's a reason why all the Processing has moved from everywhere else in the planet into China because no one wanted to deal with how nasty the process is. And here is also the other question. You want to do rare earth metals processing in particular outside China, what you need is much higher prices. If anything, the problem today with rare earth metals, and if we want to develop an industry of rare earth metals outside China, is that prices are too low. We need much higher prices. And then everyone will do rare earth metals. The other thing that will happen is that if the price goes to a level that incentivize everyone taking a bit of care, well, a lot of engineers on the vacuum cleaning industry will find ways to do it with our rare earth metals. And also people will actually collect the vacuum cleaners and recycle the magnets for other use.

[Tracy Alloway]

But if rare earths are, there's such a small component of something like a vacuum cleaner, I imagine the prices would have to go up absolutely astronomically for that even to be a consideration for a company making these things.

[Javier Blas]

And most of the time, the prices don't go nearly as high. Prices are beginning to rise again now, but prices stay relatively low compared to where historically prices have been. And we have had the latest headlines about red earth metals and export restrictions. We have some similar headlines for other categories of metals that we call critical minerals. Another fantastic exercise of labeling. I mean, like, you want to sell something, call it critical minerals. And we have, you know, people were really concerned because China was imposing some export restrictions on Tucson. Tellurium, bismuth, molybdenum, and indium. This sounds to me like high school chemistry. And you will think, oh, my God, what is happening with the price of all of these? I mean, this was not announced yesterday. This was announced a couple of months ago. And prices move. And yes, the price of, say, Indian moved to $345 per kilogram. And you will say, well, is that a lot? Look, yeah, it's 20% increase from where we were at the end of last year. But about 10 years ago, that is cost today, 345 was worth $800 per kilogram. And did you notice 10 years ago that it was a crisis on the Indian market and everyone was a bit worried about it because I didn't, I didn't notice either.

[Joe Weisenthal]

You know, we're still going to give this a provocative headline even though, you know, then people will listen to the episode and reveal that there's why everyone's.

[Tracy Alloway]

Talking about the rare earth story.

[Joe Weisenthal]

Javier Blanche on the Truth about the Rare Earth. You know, we'll still make it exciting.

[Javier Blas]

You know What I want to say also is look, yes, it's a serious issue and yes, I mean depending by 80% of a single country is never a good idea. But there is an element of panic that every time and look, a lot of this panic comes from the handful of miners and processor or rare earth metals outside China. And you as a consultant on the rare earth metals industry, is this something that we should be caring about? Well, the answer is going to be yeah, hell yes.

[Joe Weisenthal]

Yeah right.

[Tracy Alloway]

Chamath by the way says he has access to rare earth minerals. He's invested in some companies so we're fine.

[Joe Weisenthal]

That fits so perfectly with this entire thing.

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[Joe Weisenthal]

You did an amazing video the other day. I think it was true art actually. Whether we're talking about rare earth metals or critical minerals, unquote, what are the economics of getting them in Greenland?

[Javier Blas]

Okay, let me just put my polar outfit and so on. No, there are no natural resources in Greenland period. Unless we are just mining ice. Yes, there are some small concentrations of rare earth in the south. There is a bit of uranium here and there, there is this and that, but the concentrations are very low and the cost of mining in Greenland is prohibitively expensive and you are not going to develop anything of even medium sized mining operation in Greenland. I mean, I think that here is the exaggeration. But you have better chance of finding some minerals on my back garden in West London that you have in Greenland. Now I fearing that I'm gonna become the 55 state.

[Tracy Alloway]

Yeah, that's fine. Joe's embraced his middle aged man destiny of becoming a military historian expert. So there's that. That's why he's at the Imperial War Museum. So no shame, no shame. But since we're talking strategy approaches and maybe acquiring Greenland could be one of them. The thing I don't understand is if we agree that rare earths, rare minerals are of some strategic importance for the US and they are something you would want access to, but on the other hand we actually have plenty of them. It's just we don't necessarily historically want to get them out of the ground. Would the better approach not have been to just build massive inventories of these things? Just get them on the cheap from China, Let China tear up its countryside and we could buy those things from China and then once supply starts running out, or if relations really start to deteriorate, then we could start our own industry. Or is that, is that difficult? What's the startup process like for something like that?

[Javier Blas]

No, and that's what some companies, I mean governments have not done the stockpiling, but some companies have done their stockpiling themselves. They are Japanese high tech companies that they are running more than a year worth of their demand for rare earth as a stockpile. And again this in certain ways makes sense because if you think about Japan, a country that probably imports 50 to 75 million dollars a year of rare earth metals importing and stockpiling say a year or a couple of years worth of the stuff is not that expensive. I mean for Japanese companies this is going to be like completely random error on their huge balance sheet. So we have seen a bit of a stockpiling and companies that really require some particular rare earth metals for a very particular application, they will have done it. And then governments, what they can do is that look, this is critical. We are going to support our domestic industry. The United States has rare earth accumulations. There is a mine called Mountain Pass. We can develop that. The government can get into the business on developing that. The price is going to be that we need higher prices. So you are going to have to protect either you effectively. I mean, here is the irony. The best way to develop an industry in the United States and develop the local mining supply of rare earth will be to impose some huge tariffs on red earth from China so the Chinese don't dump their rare earth into the market. Protectionism.

[Joe Weisenthal]

I mean, this might be the vision more or less across a range of industries, which is sort of like, take a wrecking ball to a lot of, you know, elite things or comfortable jobs in government and finance and media, et cetera, and send, you know, free up that workforce to mine.

[Tracy Alloway]

Molly Denham, we're all going to be working in the mines.

[Joe Weisenthal]

I mean, this is kind of, kind of the vision. All right, let's talk about something that may actually be real and substantive now that you've convinced me not to worry too much. And also, like, if we're ever a crisis, government could just come door to door and demand your vacuum cleaner. Right. Like, if that's for the missiles and whatever. Like, at the end, they're like, all right, we're going to confiscate your vacuum cleaner.

[Javier Blas]

If it's really, how you call the manual, the broom. So the government comes, knocks at your door, you return your fancy Dyson vacuum cleaner, and they give you a broom.

[Tracy Alloway]

The government will pry my Dyson out of my cold, dead hands, saying that right now.

[Joe Weisenthal]

Let's talk about a commodity that really actually has real significance. Part of. We've mentioned this a couple of times on the show. Secretary of the Treasury Scott Besant had, in the run up to the election or post election, talked about his three, three, three plan. Three, get the budget deficit down to 3%, grow GDP by 3%, and increase 3 million more barrels of US oil per year. It seems like we're going in the opposite direction of that.

[Javier Blas]

Yeah. At current prices, certainly we are likely to see lower American oil production than higher. I mean, Secretary Vested was quite clever on the way that he expressed it. He Talked about growing 3 million barrels a day of energy. He didn't say specifically oil. I mean, when you talk about barrels, you think that he's talking about oil, but he means barrel equivalent. Barrel equivalent. So you could put anything there. At the moment, the administration is already including natural gas and that three. I have been hearing some officials in the administration saying, look, energy is energy. So we are growing electricity, we are growing uranium, we are growing coal. You put it on a basis of oil equivalent and there you get. I would not be surprised if we are also growing more Californian olive oil and we are adding it into the barrel. But look, West Texas Intermediate, the US oil benchmark is trading close to $60 a barrel. You are there borderline where is economical for shale on average for shale companies to drill new wells. So we should start to see a significant slowdown in the growth rate of the US Oil industry. And if prices to continue at this level or lower, that slowdown soon will be turning into a contraction and we will see lower American oil production.

[Tracy Alloway]

Yeah. I mean, even if we think the administration was talking about energy units rather than just oil per se, it does seem clear that there are a lot of people in the energy patch itself which seem to have had a different idea. Right. They thought the administration was going to be very, very friendly to the shale industry. And instead, Joe and I have mentioned this a few times before, but we've seen anecdotally some, you know, some statements from the Dallas Fed's energy survey where people are going like, this is not what we signed up for. At $50 per barrel oil prices, this is not only bad for increased investment in the industry, but could potentially be a sor. Existential threat.

[Javier Blas]

So absolutely. I mean, Chris Wright, the Secretary of Energy, is an oil person. He founded and run his own oil company, service company called Liberty Energy. And a lot of people in the industry thought that, to quote an executive I spoke recently in Houston, he thought, or the industry thought that Chris Wright was our guy, he was one of ours, one of us. And this executive said, what we have came to realize is that he's not one of us. He is Trump's guy. And that is a big difference. And yes, the comments in this anonymous Dallas Fed survey were quite shocking. And if you talk in private to executives in the oil industry, I almost have to pinch myself at times. It's like, hold on one second. Is Biden still on the White House? Because you guys seem to really dislike everything.

[Tracy Alloway]

Yeah, you could replace Trump with the word Biden and it would make sense.

[Javier Blas]

It's like when I was reading that series of comments from the Dallas Fed, I joked that you have been sleeping for six months and wake up, you will think that the Democrats are still running the White House and Congress and et cetera. I mean, this was a dream for the oil industry. It is a Republican at the White House, The Secretary of the treasury is a Wall street hedge fund manager, and the Secretary of Energy is the founder of an oil company. And here we are. Everyone in the oil pot, perhaps because of this, is absolutely mad with the administration.

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[Joe Weisenthal]

I have a really dumb question and I'm going to ask the real question. Why do we call it the oil patch?

[Tracy Alloway]

I don't know.

[Joe Weisenthal]

Oh, sorry, I didn't mean to stump you.

[Javier Blas]

No, this is. Can I use Google?

[Joe Weisenthal]

Oh, sorry. We can cut this. Can we keep this in? I stumped Javier. Can we keep this in?

[Javier Blas]

Yeah.

[Joe Weisenthal]

Okay. We're going to keep this in.

[Javier Blas]

I don't know why.

[Tracy Alloway]

I have a poetic license.

[Joe Weisenthal]

Wow. I thought for sure.

[Tracy Alloway]

Okay, Oil patch. It kind of. Speaking of gardening, it kind of sounds like, you know, you're growing vegetables on your oil patch. Except it's like liquid gardening.

[Javier Blas]

The oil patch, like the pipe that you use to drill, is called OCTG Oil County. Tubular. Good.

[Joe Weisenthal]

Oh, yeah, yeah.

[Javier Blas]

I have no idea why I'm proud of myself. My Oil county. But it's Oil Patch. Oil County. You know, it's the oil place.

[Joe Weisenthal]

All right, I have a real question.

[Tracy Alloway]

The Oil place.

[Joe Weisenthal]

The Oil place. What? The Oil place. I'm gonna start calling.

[Tracy Alloway]

We're all gonna go down to the oil place.

[Joe Weisenthal]

What people are talking about Thomas from the oil place. Okay, I have a real question, substantive one, which is one of these sort of like booming export industries for the US Was natural gas and this sort of LNG terminals. And I think Biden put a pause on them. And that pause is I don't know if it's been lifted, but it will be lifted, almost certainly construction of new ones. With the trade war, have the economics of LNG export changed at all or with the decline in oil prices? Like, has anything. Have any dials moved on that front?

[Javier Blas]

Not yet and potentially yes, because one big buyer of American LNG was China, and China has not bought any LNG from America in a long while. And also, if oil production start to decline, when you drill for oil, you usually get a mix of hydrocarbons out of the ground. You will get oil, you will get gas.

[Joe Weisenthal]

So I'm wondering, so if you have fewer wells.

[Javier Blas]

Yeah, so you have fewer oil wells, you're going to have fewer gas wells. So the input cost of gas is going to go higher. And you may have a bit of lack of demand on the other side from China. So far, all is good because the European Union and the UK still need a lot of natural gas from the United States. The big expansion of Qatar is still about 12 to 18 months away, and Russia is fighting with Ukraine and it's not exporting what they used to. But in a year's time, that could be a big deal. The other, to me, very important topic in trade and oil is that oil used to be almost the largest component of the American trade deficit in goods. You go to 2008, the US trade deficit was running around $800 billion a year. Of that, nearly 400 billion was oil. Today, we are in a surplus for oil.

[Tracy Alloway]

How times have changed. I have one more question just on oil specifically, but one of the hallmarks of the Trump administration is they tend to promise everything to all people. And arguably that's been a big component of their success. And I think when it comes to energy policy specifically, one of the promises was we're going to be good for the energy industry, for oil specifically, and at the same time, we're going to be good for inflation. We're going to bring down prices. You're not going to have to pay, you know, these exorbitant dollar amounts at the pump. Is there any way, you know, let's assume that the tariffs start working, maybe growth expectations start to pick up. Is there any way that the Trump administration can end up fulfilling its various policies when it comes to energy? To everyone involved here, is there a way where eventually maybe they make up with the oil industry, the shale industry, and maybe somehow they, I don't know, encourage energy from other sources and inflation still comes down? What's the best case scenario here?

[Javier Blas]

I think that the best case scenario, you're putting me here on the spot. But I think that probably something like, let's call it, I mean, let's call it the Goldilocks, the middle ground. What you know, the oil patch will love and a mainstream will be happy, say $75 a barrel. Okay, $75 a barrel is not breaking the budget of any middle class family or working class family when it comes to gasoline in the United States. And $75 a barrel. The American oil industry is making money. No problem whatsoever. Whoever is complaining at 75 probably doesn't have a very, very good business case. The main problem is to make everything work at 75. And just for the sake of the argument, let's say that the magic number is 75. You cannot get that running unless you get OPEC on board. And they keep restraining production and losing market share because $75 a barrel means that the consumers are happy and they continue to consume, but also that the US Shale industry continues to grow and at some point someone needs to produce less. So you can. Even if that magic number existed, and I think that 75 probably is about right, you need OPEC to play ball and accept that they're going to lose market share forever and ever. And I don't think that they're on that business.

[Joe Weisenthal]

So last question for me, but how has Trump, maybe his tariffs and his provocative actions towards literally or virtually every country in the world, how is it interacting with OPEC specifically?

[Javier Blas]

I think on one side, the Trump administration is putting quite a lot of diplomatic pressure on OPEC countries to increase production. And we saw Saudi Arabia increasing production. Secretary of Energy is in Saudi Arabia right now and is discussing mostly nuclear affairs about the Saudis want American technology for nuclear, civilian, or at least Siberian quote, unquote, nuclear technology. So there are a lot of things that the Saudis may want from the United States. And the United States want the Saudis to increase production, to put prices down. But just by large, if I can summarize, what is the feeling of my OPEC sources right now, I think it's very similar to what the bankers and traders that you guys are talking every day probably are saying. It's like, what on earth is going on here? Because no one really knows. I mean, how do you plan? You are an OPEC country and you are trying to decide oil production policy for the next three months. How do you plan that? Where you don't really know what tomorrow morning or maybe tonight brings.

[Tracy Alloway]

Yeah. And even if we assume that this was it, nothing else was going to change, now that uncertainty premium is in the Markets. And regardless of what Trump actually changes from now on, we know that it looks like global growth is going to slow. Right. So you're asking OPEC to basically boost production into a slowing global economy.

[Javier Blas]

I mean, that is. To me, that was because every other asset class was dealing effectively with one shock, and that was a demand shock. Everyone was just like, assuming, okay, we are going to slow down. Oil was dealing simultaneously with a demand shock and what I will call a supply surprise. I'm not going to. I mean, the increase in OPEC production is not yet enough to call it a shock, but let's call it a supply surprise. That can very quickly became a shock. So, you know, that is why oil prices went down so much. And that's also why oil equities really absolutely tanked.

[Joe Weisenthal]

Javier Blas, always great catching up with you. So great to do it finally here in your home court.

[Tracy Alloway]

Appreciate you on his home patch.

[Joe Weisenthal]

Yeah, in his home patch. Thank you.

[Javier Blas]

Thank you for having me. And I'm gonna be googling now. Oil pot.

[Joe Weisenthal]

Okay, great. That was fun. I can't believe I got to stump Javier on a energy related question.

[Tracy Alloway]

Yeah, okay, fair enough.

[Joe Weisenthal]

Highlight of my week.

[Tracy Alloway]

But I strongly suspect that's just like a literary term that someone came up with and it sounds kind of nice. It sounds kind of down home.

[Joe Weisenthal]

Yeah, it sounds down home down in.

[Tracy Alloway]

The oil pan and people went with it. But I do think there's so much. There's so much going on.

[Joe Weisenthal]

Can I say US only importing $170 million worth of. That is a very good stat, by the way. Everyone should stay listening. Hopefully they're listening. Odd Lots listeners can now repeat this at part like that is one of those good stats that, like, Odd Lots listeners can repeat at parties.

[Tracy Alloway]

It's good party trivia for oddlauts listeners, assuming that they're actually getting invited to parties with chat like that.

[Joe Weisenthal]

They are, they are. They are.

[Tracy Alloway]

Did you know?

[Joe Weisenthal]

Did you know?

[Tracy Alloway]

Actually, we should, because we all know.

[Joe Weisenthal]

That they're not rare. Like that part we knew. At this point, I did not quite realize how small the scale of the imports are.

[Tracy Alloway]

No. If a guy came up to me at a party and said, did you know in fact that rare earths were not, in fact that rare? I would be. What's that, you know, of the guy, like, whispering into a girl's ear? That would be my face, like, whatever.

[Joe Weisenthal]

What if you followed that up with the vacuum cleaners part, though?

[Tracy Alloway]

Yeah, that's mildly more interesting.

[Joe Weisenthal]

That's what I'm saying. There's a little something there.

[Tracy Alloway]

Although then I would be like why are you talking to me about vacuum cleaners? Do you think this is something that I'm especially interested in? Well, anyway, lots to talk about. I'm sure we will continue our spate of basically daily episodes at this point, but should we leave it there for now?

[Joe Weisenthal]

Let's leave it there.

[Tracy Alloway]

This has been another episode of the All Thoughts podcast. I'm Tracee Alloway. You can follow me at tracyalloway.

[Joe Weisenthal]

And I'm Jill Weisenthal. You can follow me at the Stalwart. Follow our guest Javier Blass. He's at Javier Blass. Follow our producers Carmen Rodriguez at Carmen Arment, Dashiell Bennett at dashbot, and Kel Brooks at Kel Brooks. And thank you to our producer Moses Andam who is here with us in studio in London. For more Odd Lots content go to bloomberg.comoddlod where we have all of our episodes and a daily newsletter that you should subscribe to. And you could chat about all of these topics 24. 7 in our Discord, Discord GG oddlots.

[Tracy Alloway]

And if you enjoy Odd Lots, if you like it when we talk about the oil patch on Javier's home patch, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad free. All you need to do is find the Bloomberg Channel on Apple Podcast and follow the instructions there. Thanks for listening.

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