Transcription
The big thing that is emerging here from the G7 meeting is President Trump's statement, and will we really see the Strait of Hormuz officially opening on June 19th without any further obstacles? To shed light on this, renowned global and domestic market expert Ajay Bagga Sir has joined us on the show.
Bagga Sir, so far, fingers crossed, everything seems to be going alright. But how are you viewing the statements made by Mr. Trump regarding Hormuz at the G7 meeting?
Absolutely, Trump has been very optimistic. He is saying that it has almost partially opened and will fully open on Friday. The markets are not quite believing it, and the other G7 countries, who are giving official source-based reporting, are all saying that they don't have that much confidence. Europe is ready, but to remove the mines, a fleet will have to be formed. The entire world will have to come together and deploy mine sweepers. What is happening in Hormuz is that tankers can only pass from the sides, either from the Iranian coast or the Omani coast, with mines laid in between by Iran. So, even if it opens on Friday, the movement of 100 tankers a day will not happen. It was already a very narrow passage, and with the mines now in between, tankers will be able to pass very slowly. So, first, the 600 stranded tankers will get out, and then new tankers will go in.
Secondly, the discussion is that Iran is saying they will impose tolls, while Trump is saying it will be free. And yesterday, a very big controversy is happening in America that $300 billion will be given to Iran for reconstruction. JD Vance, the Vice President, confirmed this in a conversation with CBS News. Trump said this is wrong information being spread by the Democrats, even though his own Vice President was saying this. He said America will not give anything to Iran. JD Vance said $300 billion will be given. Then it was rumored that the Gulf states would give it. Now, there is enmity between the Gulf states and Iran. Why would they give $300 billion to Iran?
So, Neha Ji, there will be that much volatility because they are not making the MoUs public. Nobody knows what is going to be signed. There are also some speculations about Friday. Trump is saying it will come by the weekend. Some US official said we will make it public in the next two days, before Friday, and some said it will take weeks to come out. This is a matter of negotiation. So, some volatility is visible today. The price of oil is also slightly up because US inventories have come down to a 40-year low. Inventories are decreasing. And I'll tell you an interesting thing, Brent crude futures are showing a premium. So, normalization is quite far away. Normalization is not something that will happen on Friday. This is a wake-up call for the markets.
Yes, Sir, you have said that absolutely correctly. When such aggression has been seen here continuously for 100 days, for things to normalize all of a sudden, you could say that is a different matter altogether. It will also take time for this to normalize. But thank you so much, Bagga Sir, for explaining this issue in such depth.