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Ceasefire, Oil Tankers, & Jet Fuel Prices with Delta CEO 4/8/26
00:39:32
After the U.S. and Iran agreed to a two-week ceasefire, energy prices dropped. CNBC’s Brian Sullivan is watching the flow–or lack thereof–of ships through the Strait of Hormuz to monitor progress of the world’s oil supply. CNBC’s Dan Murphy reports on the ceasefire from the UAE, and CNBC’s Phil LeBeau gets the impact on jet fuel and air travel prices from Delta CEO Ed Bastian. Plus, Anthropic is holding the public release of its newest model Mythos over concerns about its capabilities to exploit digital weaknesses. Dan Murphy 2:52 Ed Bastian 22:02 Brian Sullivan 32:45 In this episode: Dan Murphy, @dan_murphy Phil LeBeau, @Lebeaucarnews Brian Sullivan, @SullyCNBC Andrew Ross Sorkin, @andrewrsorkin Becky Quick, @BeckyQuick Joe Kernen, @JoeSquawk Katie Kramer, @Kramer_Katie
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- [00:00]
Dr. Horton Sales Announcer
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- [00:30]
Dr. Guy Winch
Men are struggling with their mental health at some of the highest rates we've ever seen. But most aren't getting the support they need. And that needs to change. I'm Dr. Guy Winch, your host for season three of the Visibility Gap, presented by Cigna Healthcare. This season we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever
- [00:58]
Commentator Rich
you stream your podcasts, bring in show music, please.
- [01:05]
CNBC Producer Katie Kramer
Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, a truce sort of. Markets rallying after President Trump announced a two week cease fire with Iran. CNBC reporter Dan Murphy in the Middle
- [01:19]
CNBC Reporter Dan Murphy
East, a down to the wire tactical victory, but ultimately one that resolves none of the issues.
- [01:27]
CNBC Producer Katie Kramer
And oil prices plunging. Iran says it will allow ships to pass through the critical Strait of Hormuz. Our Brian Sullivan on the global energy market.
- [01:36]
Energy Market Analyst
Watch that Marinetraffic.com chart when we start to see a lot of ships go through there every day, 20 to 30 tankers a day. Andrew is the number you want. Things could change. We're one social media post away from
- [01:49]
Andrew Ross Sorkin
right going the other way, from the other way.
- [01:52]
CNBC Producer Katie Kramer
Plus, Delta Airlines scaling back growth plans on volatile fuel prices. But CEO Ed Bastian tells us he is bullish about air travel.
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Ed Bastian
The last 30 days our bookings are up double digits. Corporate travelers back. This week alone, sales of corporate travel are up double digits again.
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CNBC Producer Katie Kramer
All that today and more. It is Wednesday, April 8th, 2026. Squawk Pod begins right now.
- [02:17]
Andrew Ross Sorkin
Stand Becky by in 3, 2, 1.
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Ed Bastian
Cube.
- [02:22]
Becky Quick
Good morning, everybody. Welcome to Squawk Box right here on cnbc. We are live from the NASDAQ market site in Times Square. I'm Becky Quick along with Joe Kernan and Andrew Ross Sorkin. And we could talk about where things stand right now. And then energy prices, which yesterday we saw WTI above $117. Those prices have collapsed this morning, down $18 and change, a decline of more than 16% for WTI which is now trading at $94 $57.57 a barrel and Brent crude down 13%.
- [02:53]
Andrew Ross Sorkin
Let's get straight to the Middle east right now. Dan Murphy is in Abu Dhabi for the latest developments following what is some remarkable news that is moving the markets in a very, very big way this morning. A two week cease fire in the Iran war. Dan?
- [03:10]
CNBC Reporter Dan Murphy
Andrew, good morning. I think remarkable is the right word. Global markets have rallied. Oil just saw its biggest one day reversal in six years. And this move has also been welcomed by leaders across the Gulf. From here in AB Dhabi to Riyadh and in Doha, and of course in the wider Arab world as well. From Egypt to Turkey and beyond, there is a sense of real relief that we are back from the brink. But this morning experts that I've spoken to are also sounding a note of caution and it's pretty clear the negotiations that are set to begin on Friday in Islamabad will not be easy. President Trump says this two week pause is contingent on the complete reopening of the Strait of Hormuz. And meanwhile, Iran wants to assert control over the Strait still potentially including transit tolls on certain vessels. That is a non starter for the Gulf states and of course an issue that was not included in Trump's cease fire post. Meanwhile as well, Israel says the deal doesn't cover Lebanon, which contradicts Pakistan's prime minister who said it does. And of course Iran's 10 point proposal also reads somewhat like a wish list here. It asks the US to accept its uranium enrichment program and the lifting of all sanctions. This is something the President has already said that he will not accept. So the gap between the two sides remains wide. And this coming weekend is really going to be crucial in determining whether the market can actually call this an end point or if it is just a first step towards further de escalation. What is clear though is that the President's escalatory rhetoric, including the threat to white wipe out Iranian civilization, ultimately provided the pressure that brought Tehran to the table and delivering the off ramp Washington had been seeking for several weeks. In fact, the New York Times this morning called it a down to the wire tactical victory, but ultimately one that resolves none of the issues that led to the war. Andrew?
- [05:12]
Andrew Ross Sorkin
Dan, I think the big question, you know, is what you think happens at the end of the next two weeks. You know, it depends, you know, in some ways you hope that, that this is the, that this is the end. In some ways I don't know if you think that's what the market is effectively saying. Or whether you think, you know, if you're in the Ray Dalio camp, whoever controls the Strait of Hormuz is the winner of this whole thing.
- [05:38]
CNBC Reporter Dan Murphy
Well, that's the big question mark, isn't it? We are seeing a huge relief reversal in oil prices. Of course, equity markets from Asia to Europe have been popping off the back of this, including equity markets in the Middle east as well. This rarely happens, these type of percentage gains that we're seeing in this region off the back of this news flow. But Andrew, I think you're exactly right. The question is who is going to control the Strait of Hormuz moving forward? And what type of Iran is the United States and the Gulf states ultimately going to be dealing with in the future? Iran's government is still in place. The IRGC is still in place. The nuclear stockpile, including this 970 pounds of near bomb grade material, which was the stated reason for this war, is still in place. And of course, what we've also seen over the last couple of weeks is Iran absorbing thousands of strikes that it was able to fight back for. And of course, Iran has also shut down oil supplies through the Strait of Hormuz. It hit Dubai, it launched attacks on American infrastructure, and now it's sitting down to negotiate with the president. So look, exactly what the war has achieved I think is ultimately a question mark as well. And for President Trump, the pressure is real too. In the last 12 hours, we've seen his own political base having voices coming forward accusing him and the vice president of dragging America into exactly the kind of Middle east war that they promised to avoid. So look, all eyes are going to be on this delegation that is preparing to meet in Islamabad on Friday. Trump is facing a couple of key tests now, of course, taking a victory lap for putting the conditions in place to create this cease fire. But of course he is going to need to reach a deal. That will be the first step and then the second is to ultimately convince Americans and the world that all of this was worth it.
- [07:31]
Commentator Rich
10 point plan that the United States has put forward and the 10 point demands that that Iran has put forward. If you do a Venn diagram, I'm
- [07:41]
Becky Quick
not sure nothing crosses.
- [07:42]
Commentator Rich
I'm not sure anything crosses. So I don't know what happens there. But you know, I don't want to look at this as too much of a half empty cup at all because we have a name. We know who the who Sharif is talking to. We know that it's real. There was finally a response from Iran other than there are no negotiations going on. And you know, all the hubris and the tough talk, that's all we were getting. And it was right there in plain English. You know, they even referred to Trump as POTUS and said we will reopen the strait. What do you know about not everybody. Not that there will still be certain restrictions in the strait. I read that that the United States might still have issues or a certain countries in the west and there's a $2 million toll now. What can you tell us about that?
- [08:39]
CNBC Reporter Dan Murphy
Well, this is going to be interesting to watch as well, Joe, because the President has also gone from using expletives to call on allies to open up the strait and call on Iran to allow the safe passage of ships, to also now saying on Truth Social in the last couple of hours that the U.S. is going to be hanging around to make sure that everything is, is okay. The question of who controls the strait is absolutely critical moving forward. Of course. The Gulf states, for example, have said that they would like to see something that goes beyond just a simple cease fire here. They want actual security guarantees. Of course, the US has hinted in the past that we could see naval escorts through the strait that appear to have gone out the window, at least for now. And of course, Tehran still commanding some sense of control over the strait as well. We've spoken a lot over the last couple of weeks about the Tehran toll booth and this idea that we could see the Iranians actually charging ships to move through again, that's likely to be a nonstarter for this president and certainly a non starter for the Gulf states as well. So this issue of the security inside the strait is absolutely key. And what type of conditions are going to be required in order to enable those ships to continue to pass is probably the biggest question mark at this point. Iran insists that it will have control over exactly how much. And what it looks like, I think is one of the biggest unknown unknowns at this point.
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Becky Quick
Dan, One of those 10 points though, not only was to maintain sovereign control of the strait, another was to be able to continue to refine uranium. I mean, it just seems like there are so many non starters in that. Is this just a list of crazy demands that, that, that maybe make a negotiation, you know, complicated, but maybe try
- [10:26]
Andrew Ross Sorkin
and get anchoring techniques for both sides?
- [10:28]
Becky Quick
Right, Exactly.
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CNBC Reporter Dan Murphy
Yeah. Becky, I like your description before about a Venn diagram here because if you were to overlap these points, there's no, no real crossover. Right. And I get the sense what has happened Here is that both sides have put forward a wish list and that wish list is now going to be whittled down and negotiated over the weekend. So two weeks of peace in the region, let's call it that, two weeks of a truce, ideally positioning both sides now to come forward with a deal. But again, what this looks like remains to be seen. And of course the risk is that we could see fighting resume, in fact, across the UAE and the wider Gulf states today. We've already seen reports of missiles and drones being lobbed towards the likes of the UAE and Saudi Arabia, for example. So Iran is still demonstrating a capability to fire back if necessary. And to quote senior Iranian officials as well, in the aftermath of the first Trump truth social post that said that we'll be reaching this cease fire. The Iranians are still saying they have their hand on the trigger. So this conflict is still hot. The pause is, is temporary at best and all eyes are going to be on exactly what this deal looks like, if we're able to even call it that by the weekend and into next week.
- [11:49]
Andrew Ross Sorkin
Two questions. One is obviously there's a stated cease fire. You're suggesting there's not a ceasefire, that there are still missiles in the air right now.
- [11:57]
CNBC Reporter Dan Murphy
Not right now. We haven't received emergency alerts in the past couple of hours. But in the immediate aftermath of that post, I did receive an emergency alert on my phone here in the uae.
- [12:07]
Andrew Ross Sorkin
And then, Dan, the other question just broadly, just on the ground is the sentiment that this is a two week reprieve and that there will, that this is not over. I mean, look, if you really, if you were looking at the markets today, you would think that this is over, over, I mean, at the levels that they're at. Unless you think that you'd see WTI down at, I don't know, I mean, the president would tell you be down to $67, which is where this, where this was before. So the question is what, what is the, what is the feeling there about what ultimately happens? I know people last night who were saying, you know, they were going to basically take profits today and short everything because they thought we'd be back in the soup in two weeks. And then I know other people who think that this is directionally in the right way and that it won't, it won't get back to the end of civilization in two weeks.
- [12:54]
CNBC Reporter Dan Murphy
It's a really good point. The mood on the ground here is one of relief. And I think it's a temporary relief. There is a great awareness that this conflict may not be over and again to echo what the Gulf states have also been seeing, some of these Gulf leaders suggesting that the US Was indeed pulling out too soon, leaving the Iranian threat capability intact. And I think that's one of the great fears in the region right now. It's that even if we did see the immediate conflict cooling off, this region is still going to be having to navigate what is a very uncertain new Iran as well. Of course, the wellness and whereabouts of the supreme leader still unknown at this point. And of course, if he does indeed come back, then this is something that the Gulf states will also also have to be dealing with into the future. We've spoken about regime change inside Iran. The question is regime change to what? Whether or not we will see the Iranians maybe even cooling off. On their own side is bigger. On their own side is a big unknown too. And you just get the sense that regional security has been upended by the last 40 days of war. And perhaps the region is not necessarily better off, not necessarily safer off as a result of what has unfolded here. And of course, lots of questions about what type of threat Iran is going to pose in the future and who's going to be dealing with that threat.
- [14:20]
Andrew Ross Sorkin
All right, Dan, thank you, want to thank you, appreciate it. We'll talk to you soon.
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Commentator Rich
It is Rich. The saw a lot of oh my God, he's going to nuke Iran. Time for the 25th Amendment. And then this happened. And the same people said Taco didn't have that, didn't have the cajones again to follow through. Same old, same old, same people.
- [14:45]
Andrew Ross Sorkin
Anthropic is going to limit access to a new advanced AI model to try to prevent bad actors from using technology to exploit cybersecurity flaws. That model, called Claude Maitha's Preview, is going to be rolling out to a select group of companies like Google and Microsoft and Nvidia as part of an initiative called Project Glasswing. Anthropic says that this new model is able to find software bugs, some of them critical, that have escaped detection until now. In one case, it found a 27 year old software bug in an operating system that's known for its security. This raises the possibility if the software were widely released or fell into the hands of hackers, however, they too could find these flaws before companies could fix them. In an ex post, Anthropic CEO Dario Amodei saying that cyber is the first clear and present danger from frontier AI models, but it won't be the last if we're able to collectively rise to the challenge and confront this risk could serve as a blueprint for addressing the even more difficult challenges that lie ahead of us. But we are going to get into an extreme game of chicken as folks get access to different versions of these models and are able to exploit the different sides of this.
- [15:54]
Becky Quick
You hear this and I think it'd be hard to be a company that hears this and doesn't want to sign up to have it check out their models.
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Andrew Ross Sorkin
Oh, I mean, this is why I think anthropic right now in the enterprise space is just so laser focused and people want access to that platform.
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Becky Quick
If you don't take advantage of this, have it check out. Because in one case, I think you mentioned that they found that 27 year old software flawless. If you don't do it, you're just waiting. It's a time bomb. When I hear this, all I can think of is, oh my gosh, if I'm a corporation, I better have this thing check out my models.
- [16:34]
Andrew Ross Sorkin
And if you're a hacker, I think you're thinking, I want to get access to this model. Tease will be next.
- [16:41]
CNBC Producer Katie Kramer
Coming up on Squawk Pod CEO of Delta Ed Bastian with our own Phil LaBeau from the Delta Flight Museum in Atlanta. How fuel prices amid a war might affect flight paths and your own travel plans.
- [16:54]
Ed Bastian
If fuel prices are going to stay elevated, we have to be responsible. We have to find ways to get our costs covered. One of the ways we're doing it in the in the second quarter is we're pulling capacity down.
- [17:10]
Energy Market Analyst
She loves it hot, he loves it cold. However you sleep, the Pod by eight Sleep adapts to you.
- [17:18]
CNBC Producer Katie Kramer
Personalized temperatures keep you in deep sleep.
- [17:20]
Energy Market Analyst
Sleep longer so you wake up refreshed.
- [17:23]
Dr. Guy Winch
Learn more@eightsleep.com Men are struggling with their mental health at some of the highest rates we've ever seen. But most aren't getting the support they need. And that needs to change. I'm Dr. Guy Winch, your host for season three of the Visibility Gap presented by Cigna Healthcare. This season we're focusing on men's mental health, bringing together real stories and expert insights to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts, not every sale
- [17:57]
AT&T Business Wireless Announcer
happens at the register. Before AT&T business Wireless, checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sail or two. Sometimes I do miss the bonding time.
- [18:20]
Dr. Horton Sales Announcer
Sometimes AT&T business wireless connecting changes everything.
- [18:29]
CNBC Producer Katie Kramer
Welcome back.
- [18:30]
Energy Market Analyst
This is Squawk Pod stand Andrew by
- [18:33]
Ed Bastian
3, 2, 1, up and Andrew cue Mike.
- [18:37]
Andrew Ross Sorkin
You're watching Squawk Box right here on cnbc. It's a big morning. I'm Andrew Os Horton along with Joe Kernan and Becky Quick. We have some news just out. President Trump just posting on Truth Social the following. The United States, he says, will closely work with Iran, which we have determined has gone through what will be a very productive regime change. There will be no enrichment of uranium and the United States will working with Iran dig up and remove all of the deeply buried B2 bombers nuclear dust. It is now and has been under very exacting satellite surveillance space force, he says with an exclamation point. Nothing has been touched from the date of attack. We are and will be talking tariff and sanctions relief with Iran. Many of the 15 points have already been agreed to. Thank you for your attention to this matter. President DONALD J. Trump so it appears. I mean that would be a remarkable amount of progress if true. And I think we have to wonder
- [19:40]
Commentator Rich
how much we do we don't know what we what they know about where everything, you know, where the £900 is and what's left. And I don't know if we know
- [19:49]
Andrew Ross Sorkin
everything but, but I have a couple of questions. There's the question about regime change. He says that regime, remember two weeks
- [19:56]
Commentator Rich
ago he, when I spoke to him,
- [19:58]
Andrew Ross Sorkin
he called it, there's already he called it regime change.
- [19:59]
Commentator Rich
Already been regime.
- [20:00]
Andrew Ross Sorkin
Okay, so this is not new regime change.
- [20:02]
Becky Quick
He just means dealing with the civilian
- [20:05]
Andrew Ross Sorkin
government head this access to this access to the uranium that is buried deep. He's arguing that we're gonna with Iran with Iran that we're gonna be able to go and get it.
- [20:18]
Becky Quick
Yes, that would be something.
- [20:20]
Andrew Ross Sorkin
That would be something.
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Commentator Rich
And that's pretty good carrot because their economy is long before this, the people were suffering mightily and sanctions and tariff relief.
- [20:32]
Andrew Ross Sorkin
And then the big question straight unresolved is the strait. Right. That is the biggie.
- [20:39]
Becky Quick
I think the other question is who are we negotiating with and is the Iranian, the irg, the Republican Guard on board with this? There had been some questions.
- [20:50]
Commentator Rich
The guy's name was I mean he was on the yeah, he was on yeah, he was the exact individual. Does he speak for the we don't
- [20:58]
Phil LaBeau
know if he's Incredible outcome.
- [20:59]
Becky Quick
This would be an incredible out outcome. If this is the point they've already reached on some of these issues.
- [21:05]
Commentator Rich
1300 points now.
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Dr. Guy Winch
Yeah.
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Becky Quick
The Nasdaq continuing to build it's now up almost 860 points. The Dow up 190 points too. So that's a three and a half percent gain for the NASDAQ at this point. 2.8% for both the S and P S and P and the Dow futures again that's happening as oil prices crash. He didn't mention the strait but obviously oil prices.
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Commentator Rich
I couldn't believe it was mentioned in the tweet. I don't know whatever we got from Iran yesterday they said we're opening the strait. Yeah, I couldn't believe that because everybody at the time said we don't believe what Trump is saying. But then it came directly.
- [21:39]
Becky Quick
Directly from Iran.
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Andrew Ross Sorkin
I hope they will and hacked.
- [21:49]
Becky Quick
Delta Airlines Just reporting quarterly results. Phillipeau joins us right now with the company's CEO Ed Bastian. Phil. Ed, good morning.
- [21:57]
Phil LaBeau
Good morning Becky. Ed, good to be here.
- [21:59]
Ed Bastian
Good to be.
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Phil LaBeau
Let's talk about the first quarter. You beat on the top and the bottom line but give us a paint a picture of what you are seeing right now when it comes to the market overall.
- [22:09]
Energy Market Analyst
Yeah.
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Ed Bastian
So I want to give our team a great shout out because the first quarter was a really strong start to the year. Even despite all of the external challenges that we've had we faced including the fuel run up in caused by the Iranian conflict, we still hit our number came in on guidance. A 40% EPS improvement on a year over year basis. Revenues up 10% year over year all time record high and the premium revenues were up double digits on a year over year basis. The demand is broad based. It's all categories, all products, all geographies. People, our consumers which sit at the top end of the K are continuing to invest in travel. It's their priority and they want to have that experience.
- [22:55]
Phil LaBeau
But having said that Ed, I fly a lot and a lot of people in the last two weeks have said I've seen the higher air fare customers across the board in the industry. I'm not crazy about the idea of a summer trip. Are you noticing any erosion at all in demand?
- [23:09]
Ed Bastian
We are not an anecdotally you hear that and obviously over time if fuel prices are going to stay at the really highly elevated, you know we, we snapped our fuel price obviously at the end of last week so we didn't take into account the overnight pull down. But if the fuel prices are going to stay elevated we have to be responsible. We have to find ways to get our costs covered. One of the ways we're doing it in the, in the second quarter is we're pulling capacity down to accommodate and try to get ahead of some of that potential weakness. But we're not seeing it. The last 30 days are, our bookings are up double digits every day for the last 30 days. The strongest period that we've ever seen.
- [23:45]
Phil LaBeau
And not to beat a dead horse here, but in terms of demand, corporate versus leisure, no change there.
- [23:51]
Ed Bastian
Corporate is back. I think when we were last together, I mentioned that TSA volumes were starting to impact some of the corporate travelers. When people are looking at lines, you know, three hours long saying I'm not going to go on a, on a one hour flight and wait in line for, for several hours. Now that the airports are back and lines are at normal levels, the corporate travelers back this, this week alone, sales of corporate travel are up double digits again.
- [24:15]
Phil LaBeau
Jet fuel, you're going to be paying, I think you're average. You're expecting 440 a gallon in the second quarter.
- [24:21]
Ed Bastian
I think less, but that was, you're
- [24:23]
Phil LaBeau
hoping for less, but that's, that's what your expectation is as opposed to when you began the year you planned at about 260. As you were managing this, you have a refinery. How much is that able to give you some insight into the flow of oil and how things are coming along in terms of the supply.
- [24:42]
Ed Bastian
Well, our supply is okay. We have access. We didn't get the majority of our, our crude off of the coast of West Africa. That comes in through the refinery. For us, the refinery helps. Not with respect to crude, obviously, but with respect to the correct spread. That's what's really elevated in the barrel that we're paying. Because jet fuel in toll for a barrel basis is well over $200 a barrel. On a refined basis, we're going to save in the second quarter about $300 million at these prices because of the refinery. So it provides a nice benefit in terms of relief, but it doesn't solve the issue. We have to take action just like everyone else in this industry needs to in order to get our costs covered.
- [25:24]
Phil LaBeau
Ed, Becky has a question for you. Becky, go ahead.
- [25:26]
Becky Quick
Yeah, Ed, we, this is kind of just digging into a little more about what Phil was just talking about. You're now anticipating $4.40 versus the 260 for jet fuel. Those numbers were based on what you were seeing before this huge drop we saw overnight in oil prices down 15%. Does that mean that the numbers that you've Given us are pretty conservative or do you look at the numbers we're watching today, down 16% now for WTI to 9453 and think that this may not last either. Is your expectation that we're in a much higher range at this point no matter what?
- [26:00]
Ed Bastian
I wish I knew, Becky. We did snap the fuel prices as the close of business last week, which is, is our typical pattern. We're happy to see the, the sell off and we hope that this is the end. Not the end, but you know, the start of an end to, to the conflict and a peaceful resolution is achieved soon. But the reality is, is that it's, it's a very volatile situation. We know we're going to be higher for longer off of whatever price you want to look at. And as a result of that, we're taking action. Not looking at it on a day by day basis, but over time.
- [26:35]
Commentator Rich
I remember it was a couple years ago, I think it was not just you, but United and others and you know, building out more pods and the front of the planes getting bigger. And I know that premium is not just pods, it might just be more room in the back of the plane, things like that. But you made a conscious decision not to go. Like people express, you're more going to, you know, giving people maybe more comfort in charging a little more. Is there a price where that would not look like the right decision? Is there a point where it becomes like Phil was alluding to that he's, you know, gets a lot of people, you know, saying wow, it's really expensive. Is there a point where that would be the wrong decision?
- [27:19]
Ed Bastian
Well, you never say never. But from what we've seen over years, what we see in terms of the health of our consumer, our consumers since COVID have accumulated close to $30 trillion of incremental wealth. That's households, as we define our consumer of $100,000 or more in annual household earnings. And that's 40% of the households in the country. So there clearly is a component to the industry that is under trouble and high oil prices for them are going to create a huge amount of duress. What I'll tell you, Joe, is in my many, many years, over 30 years, roughly 30 years of experience in this industry, the only thing I've seen that actually is a catalyst for real change is high oil prices. It's the most powerful catalyst we have. It separates the winners from the weaker carriers. And if you can't get your fuel prices covered, you're forced to either rationalize, consolidate or face elimination Potentially and it's happened over time. And so from our end, getting our cost paid, delivering a premium experience is not just trying to cater to the well to do. It's a reality that that's, that's the margin expectation in our business.
- [28:31]
Phil LaBeau
You set the table here by talking about the fact that when you have high oil prices and you have a number of carriers that are not going to turn a profit, it sets the table for possible consolidation. We were at the transportation Secretary, Secretary yesterday, he said, look, we would be open to considering a merger or two within the US Airlines. Are you interested in potentially buying a US Carrier right now?
- [28:53]
Ed Bastian
We're not going to comment on that question, as you'd expect. But there will be change and what that change will mean, I have no idea. I think however that change plays out though, it's going to benefit Delta whether it's the consolidation of other carriers, whether it's carriers candidly supplied leaving the industry. We see our long term earnings track, even though we're a bit off on fuel prices currently as being not just where we've been historically, but actually enhanced. I think we're going to have stronger earnings power longer term because of the situation we're going through currently.
- [29:28]
Phil LaBeau
Let me follow up with this. Would you expect some consolidation within the US Airline industry? Not saying it's going to be Delta. Would you expect that to happen within the next year to two years?
- [29:37]
Ed Bastian
I expect there's going to be at these fuel prices now, if things drop down and everything starts back to normal, then I think the carriers probably all can continue to limp along. You know, many of these carriers have not made a profit in years. Right. They can't sustain themselves. You know, their owners cannot let them continue to destroy capital at the rate they're doing. So. Yes, I think given the situation where we'll probably see some activity, but I'm not going to comment who or what I can speculate at.
- [30:04]
Phil LaBeau
Bastian, CEO of Delta on a day where they beat on the top and the bottom line. But more importantly, they give us some insight into what they're seeing with consumers. Guys, we'll send it back to you.
- [30:13]
Andrew Ross Sorkin
Phil, thank you for that.
- [30:16]
CNBC Producer Katie Kramer
Still to come on Squawk Pot, our resident energy expert CNBC's Brian Sullivan explains the flow of oil through the Strait of Hormuz and the big money at stake as the Iran war's next chapter plays out.
- [30:28]
Energy Market Analyst
There are going to be some commodity firms that we have never heard of that make fortunes where lives are changed forever because they made gigantic leveraged one way bets on these markets and there will be others who maybe this morning get their faces ripped off.
- [30:45]
CNBC Producer Katie Kramer
We'll be right back.
- [30:51]
AT&T Business Wireless Announcer
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Dr. Horton Sales Announcer
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CNBC Producer Katie Kramer
K Pop Demon Hunters, Haja Boy's Breakfast Meal and Hunt Trick's Meal have just dropped at McDonald's. They're calling this a battle for the fans. What do you say to that, Rudy? It's not a battle. So glad the Saja boys could take breakfast and give our meal the rest of the day.
- [31:36]
CNBC Reporter Dan Murphy
It is an honor to share.
- [31:37]
CNBC Producer Katie Kramer
No, it's our honor.
- [31:39]
CNBC Reporter Dan Murphy
It is our larger honor.
- [31:41]
Energy Market Analyst
No, really, stop.
- [31:43]
CNBC Producer Katie Kramer
You can really feel the respect in this battle. Pick a meal to pick a side.
- [31:48]
CNBC Reporter Dan Murphy
Ba da ba ba ba.
- [31:50]
Energy Market Analyst
And participate in McDonald's while supplies last.
- [31:52]
CNBC Reporter Dan Murphy
What made you confident that you could
- [31:54]
Becky Quick
do something that hadn't been done before? I have no fear of failure.
- [31:58]
Energy Market Analyst
Trailblazing women, changing the game.
- [32:01]
AT&T Business Wireless Announcer
One of my favorite pieces of advice, think about what your boss's boss needs.
- [32:05]
CNBC Producer Katie Kramer
Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday. Wherever you get your podcasts, you're listening to Squawk Pod with Joe Kernan, Becky Quick and Andrew Ross Sorkin, here's Andrew.
- [32:32]
Andrew Ross Sorkin
For more on the impact of the cease fire on crude, including a live look at ship traffic in the Strait of Ramos and what is going on there. CBC's Brian Sullivan is here at the desk at the table. What is all of this showing?
- [32:45]
Energy Market Analyst
Not much right now. Good morning everybody. Want to be unequivocally good news. Let's be clear on that. And I think you marked down the calendar. April 8th is the first real day of spring, at least when it comes to energy prices. Because they're crashing right now, which, you know, we were just talking, talking literally outside about the cost of gasoline. Becky, I think you made a good point earlier in the program. You talked about straight of four moves. You talked about what it actually means. We are seeing a big drop in the price of crude oil. And also look out the curve Guys, I brought up three different charts. It's not just the front month. You got June and July down as well because you always look at. We always show that current month, the so called front month. But look out a few months and you can see what we're called, backwardation, where prices now are higher than they were. All right, let's go to the only, maybe the only website and chart that matters right now. And that is a live look at the Strait of Hormuz. Because when ship traffic begins to flow back through that point, that's when we're going to see a real move in energy. We are not there yet.
- [33:43]
Becky Quick
Let me ask you, I've been thinking about this chart because you watch it so closely. We got that story about the Wall street analyst, the small Wall street firm.
- [33:52]
Energy Market Analyst
Katrini.
- [33:53]
Becky Quick
Katrini, right. About how Citrini. Citrini, right.
- [33:56]
Energy Market Analyst
It's like Citron, but not.
- [33:57]
Becky Quick
But not Citron. Yeah, I always want to say Citron. They suggested that these ships are just turning off their GPS and going through it wouldn't pop up on this, but I think there's still something like 800 ships that are kind of trapped in the Gulf waiting to get out. And that would show up on these maps, right? Everybody who it would.
- [34:14]
Energy Market Analyst
So it's a great point, by the way, and I admire them for doing that. But a lot of ships have turned off their transponder for lack of a better term. It would be like if you guys turned off your headlights, we wouldn't see the red dot. You wouldn't see it. So all this is Marine traffic by Kepler. They've been great partners, by the way, the last couple of weeks. Thanks to them, their teams working 24 7. Every one of those red dots or arrows are ships. Now the ones you're talking about that are sort of stuck in the Persian Gulf. A lot of other issues there found food and water and things like that. These big ships, they need to move that aside. You could see at the very tip top there, the Strait of Hormuzer. There's not a lot of ships going through there. Now. These are all tankers. I filtered out cargo freight. The red. Just tankers. No ships in there right now. So despite the good news, despite the positive commentary, and I think your point was well taken in the previous hour, Becky, where you said we're not really sort of sure who we're negotiating with. It's nice if Iran is saying things on social media, assuming that is the correct person or persons in Iran, who has the power to do that? That graphic right there is what's going to matter when you start to see a lot of red.
- [35:21]
Becky Quick
There's some rogue dots, some rogue group from the IRG or something that decides
- [35:26]
Energy Market Analyst
yeah, some guy with a missile on his shoulder.
- [35:28]
Becky Quick
Right.
- [35:29]
Energy Market Analyst
Because you got to remember and I've met with many high level military and counterterrorism officials. I know you guys all have your sources as well. These IRCG leaders are sort of like gang leaders. And that there is a belief that when there is regime change, assuming that comes these people's lives are going to be shall we put in danger because the people are mad at them. People who've acquired wealth and power by in some cases subjugating their own people. So we'll see what happens. But let's let the market tell the story. Here we go. Straight of Hormuz last couple of weeks the number of ships has trickled up now are many to your point Becky, are they running the straight by turning off the transponder? Yes, they are much that some of that sanctioned oil we could see their slight uptick this morning. Exxon, Chevron, ConocoPhillips all down about 5%. So oil is down, energy stocks are down and actually that live price right there, Chevron is $20 from its high price of just eight or nine trading days ago. So the stocks come down 20 bucks a share from its high of to 11. They all have. I'm not picking.
- [36:34]
Becky Quick
They all shot up as oil prices.
- [36:36]
Energy Market Analyst
Well most of them shot above their median price target. For example, Exxon's median price target, don't quote me, I think is about 160 bucks. It was at 163 with the move this morning. It's back below that. See if energy stock buyers step back in.
- [36:49]
Andrew Ross Sorkin
I've always thought in the commodities business in the oil space there's a lot of leverage in the business. And I just wonder for those who went long effectively they're going to get
- [37:01]
Energy Market Analyst
their faces ripped off. I think that also is this is because of that.
- [37:06]
Andrew Ross Sorkin
That's why that was the second that was a sort of secondary effect of all this. But there are people who were seriously long thought that thought that this, this would not get resolved. And I'm just sort of curious how you see that playing itself out.
- [37:17]
Energy Market Analyst
So there's a. There's a book called Too Big to Fail.
- [37:20]
Andrew Ross Sorkin
Yep.
- [37:21]
Energy Market Analyst
Have you heard about this book?
- [37:22]
Andrew Ross Sorkin
I heard about it. Is it.
- [37:23]
Energy Market Analyst
It's pretty good and it and it details the subpart prime crisis where there were fortunes made and fortunes lost. Right by People who bet big on subprime one way or the other.
- [37:34]
Andrew Ross Sorkin
Right.
- [37:34]
Energy Market Analyst
And I'm just going to tell you this right now and I'm not going to name names because I can't confirm anything because these are very closely held secrets at firms. There are going to be some commodity firms that we have never heard of that make fortunes where lives are changed forever because they made gigantic leveraged one way Betsy on these markets. And there will be others who maybe this morning get their faces ripped off and they face the call, the margin call, whatever it may be, because they were wrong. Now, things could change. We're one social media post away from.
- [38:07]
Andrew Ross Sorkin
Right. Going the other way.
- [38:08]
Energy Market Analyst
From the other way.
- [38:09]
Andrew Ross Sorkin
Right.
- [38:10]
Energy Market Analyst
Right. Or to Becky's point where one stray missile or speedboat with a bomb on it and another tanker exploding from this going the other way. But you are right. Leveraged bets. It's if you are a commodities trader in Singapore or New York or London
- [38:27]
Andrew Ross Sorkin
this morning or Switzerland, leverage in the commodity, maybe Switzerland.
- [38:31]
Energy Market Analyst
That way you're going to be in trouble. I used to trade commodities.
- [38:33]
Commentator Rich
It'll only put 10% down. Yeah. That's the definition of the control futures contract. Margin requirements go up and down depending
- [38:42]
Energy Market Analyst
on volume and they changed based on these prices. We could see.
- [38:45]
Commentator Rich
You know what, someone made the point if, if a drone chips the paint of a tanker insurance rate, insurance prices go up. So it's not just oil insurance rates.
- [38:54]
Energy Market Analyst
Do I think the question that needs to be answered and what I'll try to do maybe the next couple of days is do a little more work into this. How does what we're seeing, let's assume this leads to some lasting peace. You want to be optimistic. It's early in the morning. How does this change the market for weeks, months or years to come? Talked about it actually at dinner last night. We have not seen any impact in drilling activity in the Permian Permian Basin. There's been no increase in rig counts. In fact, Baker Hughes rig counts are down. There's been no increase in capital spending. You heard Ed Bastian on this show with Phil and you guys earlier talk about how some airlines aren't making any money. There's been no increase in U.S. drilling activity. Does this change that long term? And is 85 or 90 the new 65 for oil? We don't know.
- [39:45]
Andrew Ross Sorkin
I don't.
- [39:45]
Energy Market Analyst
Nobody I've talked to zero.
- [39:47]
Andrew Ross Sorkin
Nobody thinks it's going back to $67
- [39:49]
Energy Market Analyst
0.0 like Bluto's GPA.
- [39:53]
Andrew Ross Sorkin
Right.
- [39:54]
Energy Market Analyst
Nobody thinks we're going back. Thank you for Getting that nobody referenced, nobody thinks we're going back to that Blutarsky.
- [40:03]
Dr. Guy Winch
What's this?
- [40:04]
Energy Market Analyst
I gave my love a cherry.
- [40:06]
Commentator Rich
That's a zit.
- [40:06]
Energy Market Analyst
Yeah.
- [40:08]
Commentator Rich
During the food.
- [40:08]
Energy Market Analyst
But. But nobody thinks 6 or 2 million off.
- [40:11]
Commentator Rich
Are they charging 2 million?
- [40:13]
Energy Market Analyst
I don't know.
- [40:14]
Commentator Rich
During the two weeks.
- [40:15]
Energy Market Analyst
I don't know. We've heard of that toll.
- [40:19]
Ed Bastian
Right.
- [40:19]
Energy Market Analyst
The ships that aren't turning off their lights and running through because these ship crews, by the way, some of them were at risk physically. Like, there's a lot of food. Can you get a new. A tender to go out?
- [40:27]
Commentator Rich
The person we talked to earlier said if they're charging 2 million, they're pretending that it's their strait and it's not.
- [40:33]
Energy Market Analyst
And I, and I, and I, we've said that on this show. And I know the term open the Strait of Hormuz has become a euphemism in some ways. I hate that term because it gives. You know, I heard of somebody talking about how Iran wanted to, you know, re. Impose its sovereignty or something on. On the strait.
- [40:50]
Becky Quick
It's a public correct against international.
- [40:52]
Energy Market Analyst
They own a couple miles off their coast. Oman owns a couple of miles off their coast.
- [40:56]
Becky Quick
National water.
- [40:56]
Energy Market Analyst
And in the middle, it's international waters.
- [40:59]
Becky Quick
Right.
- [41:00]
Energy Market Analyst
It's international waters. Now, they can enforce their will on it.
- [41:04]
Becky Quick
Right.
- [41:04]
Energy Market Analyst
But like some guy at the Holland Tunnels wants to. Yes.
- [41:07]
Becky Quick
Take over international water.
- [41:08]
Energy Market Analyst
They can't. They cannot.
- [41:09]
Becky Quick
Right.
- [41:09]
Energy Market Analyst
They're going to claim it. They want to pretend it's theirs. And by the way, Michelle made this great point yesterday, Carissa Cabrera, that when she was on Car island, you know, there are people called the Arabian Gulf and it's the Persian Gulf. And the Iranians are very, they're very careful. They're like, no, it's the Persian Gulf because they're Persian. So there's a lot of naming stuff going on.
- [41:28]
Commentator Rich
International waters, the Gulf of America.
- [41:31]
Energy Market Analyst
Gulf of America. But either way, watch that Marinetraffic.com chart. When we start to see a lot of ships go through there every day, sort of 20 to 20 to 30 tankers a day. Andrew, is the number you want. We had about 7:20 before.
- [41:47]
Becky Quick
Yeah. Maybe six or seven now, but it was 120 before the war.
- [41:51]
Energy Market Analyst
That's total ships. Total ships, tugboats, freight, everything. Because all kinds of traffic there. I told you, I swam in it.
- [41:57]
Becky Quick
Fertilizer.
- [41:58]
Ed Bastian
Right.
- [42:00]
Energy Market Analyst
2016 was warm. Water was warm and it was. Wasn't refreshing.
- [42:05]
Becky Quick
Brian, thank you.
- [42:06]
Energy Market Analyst
You're very welcome.
- [42:07]
Commentator Rich
Half the size of Manhattan. That's so weird to me.
- [42:09]
Phil LaBeau
That's it. Car.
- [42:10]
Commentator Rich
Car.
- [42:11]
Becky Quick
Car. Oh, Carg island. The straight line.
- [42:14]
Energy Market Analyst
It's like Catalina. It's like but with filled with oil tanks as opposed to the rare.
- [42:18]
Commentator Rich
Exactly.
- [42:19]
Energy Market Analyst
That exists on Catalina.
- [42:20]
Commentator Rich
Nothing nice on Carg Island. I mean is there haven't been.
- [42:23]
Energy Market Analyst
Oh, but maybe now we can. You guys can do Squawk Box live from car. If things work out this morning, I think Dubai would be better nicer. Hang out with Dan Murphy.
- [42:35]
CNBC Producer Katie Kramer
And that is Squawk Pod for today. Thank you for listening. Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern. Follow squawkpod wherever you get your podcasts to get the best of our show anytime you want and tell us what you think you can rate or write a brief review of Squawkpod on Apple Podcasts or find us on xquawkcnbc. We love to hear from you. That's it. Have a great day. We'll meet you right back here tomorrow.
- [43:08]
Ed Bastian
We are clear.
- [43:10]
Andrew Ross Sorkin
Thanks, guys.
- [43:19]
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Energy Market Analyst
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