Transcription
DB Bee So Tao: Hello, Professor Theerachai.
Professor Theerachai: Hello, Mr. Thani.
DB Bee So Tao: Professor Theerachai Phunat Nannubal, you are a former Minister of Finance. Today, may I ask you to analyze a bit of the news headlines? Professor, you have written several things on Facebook, so I have brought up some of the topics you wrote about to discuss with you a little. That is, now that the ship in Singapore was shot, the Americans retaliated by saying that it was a matter of controlling the Strait of Hormuz, and that Iran cannot do this. So the US countered. And there is also the issue that Israel is still invading Ramallah, and they are killing and slashing each other. So I ask you, Professor, what is the latest situation of the negotiations that they said they would meet in Qatar, in Doha, this Tuesday, tomorrow, and so on? It seems very confusing and chaotic. Professor, please help sort it out for me: are the negotiations actually progressing, or is it just a play? Professor, please.
Professor Theerachai: Well, this is a big theater production indeed. Regarding the war with Iran, finding a way to end it is currently stuck on two major issues, and these are two issues for which finding a solution that is satisfactory to the US is difficult. One is the Strait of Hormuz, and the other is the issue of Israel. Let's talk about them one by one. Regarding the Strait of Hormuz, actually, we saw progress up to the signing of that MOU. Looking at the situation and the data, I think Trump has already come to terms with it, come to terms with the fact that Iran will definitely not let go. Therefore, when we look at the text of the MOU, it was written that Iran would allow the ships to leave, and for the first 60 days, there would be no charge for expenses, right? That means at least give me a face for 60 days. I saw that, and I interpret it that way. And Trump seems to have accepted it. Now, after the signing, and Iran released the ships, wow, the oil price dropped significantly. When the oil price dropped significantly, the person who was most pleased was Trump. He could then take this package and sell it to the political establishment in America, saying, "See, this is the right path." The American people are getting real benefits because the oil price has dropped. And looking at it from that perspective, he will try to come out and say that this is America's victory. Now, at a certain point, it appears that I need to explain the Strait of Hormuz a bit. Originally, the shipping lane for ships entering and exiting was in the middle of the strait. It was a lane where ships managed their own queues without needing anyone's permission and without paying anyone. There were two lanes: one for exiting, one for entering. They were used strictly for opposite-direction traffic. It so happened that Iran wanted to collect service fees. They placed mines in the central lane. After placing them, simply put, they said that if you want to leave safely, you must use the lane close to the northern shore of Iran. That means entering Iran's 12-nautical-mile territorial zone. They then have the right to claim that they are providing various services and can collect service fees. This can be done legally.
Now, after the MOU was negotiated, it appeared that the IMO, which is the United Nations organization related to maritime affairs, talked to Qatar. Inside, there were many ships stranded there for a long time, nearly 100 days. Their food supplies were scarce because they couldn't get enough food from the shore. Water, which also had to be requested from the shore, was also insufficient. And the crews on the ships inside, totaling 11,000 men, have been away from home for a long time. Every night, they had to witness if there was any fighting—rockets flying back and forth, planes crossing over. They would feel like they might die today or tomorrow. So they negotiated with Oman, saying, "At this time, there is a lower lane, below the area where Iran placed the mines, hugging the Omani coast. Can you open this lane to let these ships out, as a humanitarian operation?" Oman agreed. Once Oman agreed, the ships got out. The explanation for the ships on entering and what you must do, this and that, and the entry process, you must enter between this position and this position, then you must turn, then from this position to this position, etc. And it was written there that this was a temporary opening. It turned out that Trump must have seen this as an opportunity to poke back at Iran. He took ships and told ships of various countries, "Hey, you go through the Omani lane." Iran wasn't happy because the agreement with the UN to let the ships out wasn't meant to turn it into normal commercial traffic, which Iran wanted to control. Now, they could exit this way.
Then, on the day the problem with the Singaporean ship occurred, there were three ships. One was a normal cargo ship from Singapore that had already passed through. The other two were oil tankers, large tankers. Iran showed its power. The Singaporean ship that had passed was hit by a drone, causing damage that wasn't massive, but it still caused damage, though the ship didn't sink. As for the two oil tankers, Iran broadcast a radio message telling them not to use the lower lane. If you want to leave, you must come and get permission to use the upper lane, i.e., the Iranian lane. The two ships, one Saudi Arabian and one UAE, turned back. This time, Trump wouldn't accept it. He countered again, this time pushing the two ships to pass and saying, "Don't worry." When the ships were sailing through, it was a big show. He sent up various aircraft, including AAC planes, to survey the situation and see what was happening above. Small planes, big planes, all ready. And if a drone were sent, they would see it beforehand and shoot it down. Simply put, they were claiming they could escort the ships. So, when Iran shot at the Singaporean ship that day, Trump ordered bombings on some points in Iran. Iran attacked US military bases in those countries. Then, on day two, when the US said, "Hey, the oil tankers must pass," and pushed them through, as they passed, Iran hit one. America, under Trump, bombed Iran again. Iran bombed back again. There were reports of bombing back at various places. But America, they still didn't learn. Originally, they had bases in Middle Eastern Arab countries. Then they got attacked and destroyed. So, I guess, they used a different method. They used airports of those countries—Bahrain, Qatar, and Saudi Arabia. Therefore, the various aircraft they sent came from different bases. There were people tracking on radar, saying, "This one is from this base, that one is from that base." Iran then attacked those Arab countries. The Arab countries said, "Hey, I'm not involved." Iran said, "Don't be naive, because you allowed America to use your territory for military operations to attack Iran." After this back-and-forth, Trump, being cunning, tried to keep this within the weekend. Finally, when the weekend was over and the stock and oil markets were about to open, he said it was over. Both sides had an agreement that it was cleared up. At least it was put on hold. So I guess it had to end this way. The result is that Trump must accept going back to the status quo—that he can't do anything. Iran controls the Strait of Hormuz and will never let go. At the same time, if Trump tries to push a convoy through again, Iran will attack. And realistically, in terms of practical outcomes for commercial ships, oil tankers, or whatever, they can go through the Oman route, not pay, and leave without queuing. But suppose they get hit by an Iranian drone, and it damages the ship, requiring a month of repairs. For the shipowner, it's not worth it. At the same time, insurance companies are still not confident about all this. This is all because America, being the bossy one, tried to create a convoy to pass through. But I think at this point, it has calmed down. Now that it has calmed down, today, America put out news that there will be technical-level negotiations tomorrow in Qatar. But there was news that Iran refused, saying, "Right now, there are no negotiations." So, to summarize, the situation in the Strait of Hormuz is still tense, and it remains Iran's tool to apply pressure on various matters continuously. Right now, no matter what form Trump uses, he cannot pry it open.
DB Bee So Tao: That is one problem. Another problem, which Trump is also stuck on and unable to solve, is the issue of Israel and Lebanon. Israel entered Lebanon over 40 years ago for the first time. They entered and refused to leave. They established a foothold, seized territory, and have been gradually driving the people out of the area. Later, in the Sharon era, they expanded, continuously adding more territory. In these areas, once controlled, they tried to make them safe zones, free from Hezbollah groups. Now, we see that Iran's strategy, and Hezbollah similarly, have come out and said that the negotiations and ending the war must end wars everywhere. Therefore, in Lebanon, this means America must pressure Israel. I think Hezbollah's leaders have explicitly stated that Israel must not just cease fire, but withdraw completely from all areas in Lebanon because their presence there is illegal. This is the point Israel is most unhappy and worried about. On one hand, they think that if they withdraw from southern Lebanon, then Hezbollah will approach the border. Once they approach the border, launching rockets or drones from Lebanon into northern Israel will be able to penetrate much deeper. This has led the Israeli people to demand a halt to this. Now, we see that the negotiations before you see... you might remember that during one period, Israel's attacks in Lebanon seemed to be divided into two levels: one was attacking the southern area, which was done routinely; another was suddenly sending planes up to bomb Beirut, the capital, targeting Iran. Before the MOU was signed, Israel bombed as far as Beirut. Actually, before the bombing, they announced that people in southern Beirut should evacuate because it wasn't safe, implying they were going to bomb. At the same time, Iran also announced that people in northern Israel should evacuate because it wasn't safe if Israel attacked. Israel sent planes to bomb Beirut, and Iran sent missiles to Israel. When the missiles hit Israel, Israel sent planes to bomb and shell Iran. This time, Iran sent missiles not just to the north but into major cities. Finally, Trump had to intervene. Once he intervened, things progressed to the point of signing the MOU. If we observe Israel's activities in Lebanon after that, in the past week, they are still advancing, but only in the south. They are still pushing forward continuously. And not just advancing with troops and tanks or shelling with artillery, they are also using planes, but only bombing the south. This time, Iran is quiet. Iran is still quiet. So, it seems that at least this time, it has become like Iran has to see what it will do. Besides that, just yesterday, America brought Israel and Lebanon together to sign an agreement. They signed an agreement stating that the southern area, which Israel has been holding, has a purpose. Now, Israel intends to return it, but it will only be returned when Lebanon develops and builds its own army, which will then come in to take over the role of defending the country instead of Hezbollah. Who knows when that will be? Then, Netanyahu also put out news saying, "If this is the case, we will withdraw only when we see that Lebanon has genuinely deployed its military forces." But Lebanon has no money. When they say it's okay, the US will act as a host to request money from Arab countries to finance the establishment of the army for Lebanon. In summary, at this time, the issue between Israel and Lebanon is a problem that has only been solved to a certain level. I see there is a chance that it could explode at any time. Therefore, both issues—the Strait of Hormuz and Lebanon—are fuses that could flip at any moment and become major problems.
DB Bee So Tao: Listening to you, Professor, it feels like the situation is now stuck at two impasses. And I think Donald Trump is probably no longer the key factor that will cause trouble in the Strait of Hormuz or Lebanon. It now depends on Netanyahu—whether he will retreat or not. Looking at the game, I think Netanyahu will likely retreat in terms of the election. If he can gain votes and win the election, which I think is difficult as well, Professor. Right now, his approval ratings are quite poor in Israel. He is also old, and there is a strong opposition party. We'll have to see what the future holds for Netanyahu. If Netanyahu is gone, Professor, do you think Israel will change?
Professor Theerachai: Not at all. The opposition is led by a doctor named Bennett. I've heard him give interviews. He said outright: "Iran, you wait. When I become the leader of Israel, you're finished." They threaten each other like this. And the opposition's popularity in the polls right now is leading because of their tough stance. If they have such a tough stance, Netanyahu has to come out and be tough too.
DB Bee So Tao: Hmm.
Professor Theerachai: At this moment, coming out, it's like, "Okay, we still control the south of Lebanon. Now, go do this agreement with Lebanon." In that agreement, it's written that each party has the right to use force to defend themselves immediately. Then, this evening, they struck the south again, as if nothing was signed at all.
DB Bee So Tao: Ah.
Professor Theerachai: Now, he comes out and shows the Israeli people that he is the one who won, the one who bravely stood up to America, and is taking care of the interests and safety of the Israeli people in terms of Lebanon. But I am thinking, why is Iran now… I ask myself, why is Iran holding its cards close regarding Israel and Lebanon? Why isn't Iran doing anything? Perhaps because, right now, Iran has a full plate. They have to look at this and that. There is news that Qatar is preparing to release frozen funds. I think Qatar will release 9 billion dollars. There will be a first installment and so on. This might be part of it. So, Iran is waiting to get the money first. But after they get the money, it's not certain. If Iran sees what Netanyahu is doing, they might start pressuring America to pressure Israel further. This needs to be monitored. I think many people can see that if they can pressure America to pressure Israel on Lebanon, then one day it will lead to the issue of Palestine in Gaza, which Israel is still bombarding, killing civilians, on a daily basis.
DB Bee So Tao: Speaking of election trends in America, Professor, do you think they will use the issues of Iran and Israel in their campaigns? I mean, if the majority of Americans think that the war with Iran this time was a failure and a mistake, they might come back and vote for the opponent of Donald Trump, and Trump might lose the votes he had to the opponent. If a third of the US population's consensus from electing representatives comes out, Professor, do you think it would prevent Trump from starting a war with Iran again? Or conversely, if Trump wins the election in a landslide and comes back fully, would Trump have the motivation to go back at Iran?
Professor Theerachai: This is exactly why Trump is trying to dance around now. Deep down, I think he knows today that he made a mistake by getting involved and meddling with Iran. But how to withdraw while still having a political selling point? The ones who will pick up the Iran issue are the Democrats. The person who has been criticizing him heavily all along is Obama. Because Obama says, "In my time, I made a deal. I got more, I got better results. Trump cancelled it, and now he gets less and has also lost the Strait of Hormuz." When this is said repeatedly, in the campaign, when it gets to the final stretch, the Democrats, the opposition, will pick up this issue. Trump will try to act as if everything is working out and America is benefiting. It depends on the oil price. If, suppose, based on what I see, the source of cheap oil immediately is from the ships that are full of oil and ready to go. When Iran released many of them, the volume that came out… But when there are clashes with America, Iran restricts them. Simply put, Iran, when it controls the strait, and ships must pass, they open the tap, turn it down, or open it wide, according to their whim. Besides this, there are now internal voices, from the military faction and the non-political faction, the negotiators, who are trying to say that the people who negotiated gave in too easily, opened too quickly.
DB Bee So Tao: They went too fast with the opening, right? That exists. So, looking at it this way, the chance that Iran will open up fully to help Trump bring down the oil price may not happen, unless Trump agrees to pay something. But based on the current situation, it seems difficult. Right now, even though there is about a hundred billion dollars, and it's frozen, even though it's Iran's money, their right, America has put a hold on it. But now there is a problem. People in America, especially politicians, say that if the money is released, Iran can use it to develop more advanced weapons. So, what to do? This has led to a line where Trump says, "In that case, if the money is released, it won't be cash; it will be in agricultural goods." Simply put, he will try to make the release of money by America be in the form of humanitarian aid. This is guaranteed to be a long stalling tactic because Iran has come out and said they won't accept this, they won't agree to that. If Iran doesn't agree, they will let the oil tap through the Strait of Hormuz be quiet. So, right now, I think the future of American politics, the midterms, is still uncertain. I can't guess which direction it will go.
DB Bee So Tao: Simply put, they have a trump card that can pressure America at any time.
Professor Theerachai: They can't do anything about it. In summary, it's all in Iran's hands. If we say this, Trump tries to squirm, but he squirms and can't get loose. He might give up a bit and do something else.
DB Bee So Tao: Not sure, not sure. Because when he has to save face, he has to hold on, at least to get through the midterms.
Professor Theerachai: So, what he's doing every day is saving face?
DB Bee So Tao: Saving face? Like, "We've found a way out, can we? Let's just bomb them," that's saving face?
Professor Theerachai: Yes, yes.
DB Bee So Tao: But saving face hasn't worked, Professor. So, he's trying... within America, there are still voices demanding toughness, to do this and that.
Professor Theerachai: Right.
DB Bee So Tao: He probably has to do it. Once he's done it, I think the people in America who demanded it will see for themselves that he did it, but Iran didn't give in.
Professor Theerachai: Right, right.
DB Bee So Tao: And if he bombs more, it still won't stop.
Professor Theerachai: Hmm.
DB Bee So Tor: Like, it's necessary for him to move along as a test, so that the majority of people in America can see that it's difficult, so don't demand any more than this. I'm looking at it from a Thai perspective, looking into the battlefield between the US and Iran. Looking at it fairly, Professor, the Strait of Hormuz is a trump card they cannot release. Everyone knows that. But if America looks at it from their perspective, they lose face and lose prestige if they lose the Strait. So, it's stuck right there. It will be stuck for a long time, Professor. Do you think this will be like this forever? Or will it stop? Or is there no way to change it? Has it been going on forever, or will America come back?
Professor Theerachai: Well, asking how America can make Iran's influence in the Strait of Hormuz stop... it's difficult.
DB Bee So Tao: It's difficult.
Professor Theerachai: It's difficult because, as I said, the ships. If now Iran says: "One, if you want to leave, you must get my permission 48 hours in advance. Two, you must use only the lane I specify. Three, if you secretly use another lane in the middle, you risk mines. Next, if you try to exit via Oman, I will send a drone."
DB Bee So Tao: And this drone, Mr. Thani, has a range of 1,300 kilometers.
Professor Theerachai: It doesn't have to be right next to America for them to see it.
DB Bee So Tao: Right.
Professor Theerachai: So, it can come from anywhere.
DB Bee So Tao: Yes.
Professor Theerachai: Looking from this perspective, how can America protect these ships? And as I said, they don't need to shoot every ship. Suppose 10 ships pass. I shoot one. Tomorrow, another 10 ships pass. I shoot one more. Like that. Just this, and the ships won't pass anymore.
DB Bee So Tao: Yes.
Professor Theerachai: Because, as I explained earlier, the shipowner can see: "Wow, right now, the cost of the ship has increased a lot. And then my ship has to go into dry dock for repair for one or two months. I'm finished. I'm not doing it." Paying Iran a small fee is better. The people who dare to do this are being pressured by America.
DB Bee So Tao: Yes.
Professor Theerachai: Therefore, at a certain point, I think America will have to see this and say that they have lost their innocence, and I didn't even have to fight.
DB Bee So Tao: I understand what you're saying, Professor. It means they tried it and saw it wasn't possible, so they backed down. It's been proven that they tried but couldn't do it.
Professor Theerachai: Correct. I think it makes the American people, their voter base, see that, "Hey, we tried our best."
DB Bee So Tao: It's the right thing to do. He had to try, otherwise he would look weak, like he was only scared. He had to try other ways. Simply put, it's not just about losing face. But, Mr. Thani, you must understand that we are guessing here because we don't have access to internal information. This is a summary and analysis, a guess. It could be wrong.
Professor Theerachai: Yes, we guess wrong, we guess wrong often.
DB Bee So Tao: But sometimes we're right. Professor, you've been right many times.
Professor Theerachai: But the listeners can take it and combine it with other information, and weigh it to see if it's credible. I've listened to your analyses many times, Professor. You're not often wrong, Professor. Not very often, but you have to be wrong sometimes. We're not gods. Mostly you're right, Professor. But anyway, it's up to us. We'll keep watching. Initially, I thought I would move on to other things, but I still find this topic interesting. Iran is interesting.
Professor Theerachai: Oh, it's not over yet.
DB Bee So Tao: It's not over, it's not over. There's still more to come. I think people still need to follow it.
Professor Theerachai: Keep following the news.
DB Bee So Tao: As long as there's no major war, I'll be satisfied. And then everything will go on, and problems will be solved. After about a year, it might ease up. Professor, I would like to talk to you about some impacts that are not related to oil. The Iran war has some other impacts happening now. The global economic situation is changing. Wow, iPhone prices went up 20%, Professor! Laptops too. And they said the iPhone 18 will be more expensive. They claim it's because of a memory chip shortage. I studied it, sat and talked, and asked knowledgeable people. So, I want to ask you today: why is there a memory chip shortage? And when it's short, it disrupted the stock market too. Wow, everything was red! And there are winners and losers. I mean, it rebounded very quickly. The Korean stock market crashed for two days, then it came back to normal. Why is there a memory chip shortage, Professor? And why did it cause problems in the stock market?
Professor Theerachai: One thing is helium gas. It's produced as a byproduct of gas-related processes. Helium is used in computer chip manufacturing. The chips are manufactured inside machines, and lasers are used to etch them. Helium slows down the process a bit to allow time so it doesn't go wrong. Without helium, the manufacturing of computer chips is disrupted. If I remember the numbers correctly, the helium that is stuck represents over 20% of the world's supply. That's a lot. The ones short of helium are the chip manufacturers, especially those in China. China doesn't produce helium because it comes from oil refining. That's one thing. Second is sulfur, which also comes from industries related to oil. Sulfur is needed for manufacturing things related to copper. That's another. Therefore, in electronic and electrical equipment, there is a lot of copper and various related materials. This is now stuck because of sulfur. They call it, in English, "sulfuric" or something. There's a problem. And another thing is aluminum. Saudi Arabia has a big aluminum smelter because aluminum smelting consumes a lot of energy, requiring high heat. It relies on heat from oil extraction processes. This is also gone. This production represents about 7-10% of the global supply. These important raw materials are primary raw materials related to green manufacturing, electrical appliances. And next, I think it will affect the price of cars as well. All of this is starting to be reflected. We are just beginning to see the symptoms.
DB Bee So Tao: This is something we need to watch closely, to see what will happen next in the global economy. Because of the break in the supply chain. I look at the big picture: it's the global supply chain. Right now, the world's shipping routes or bottlenecks are all interconnected, Professor. Cutting any one route causes a break. When it breaks, it prevents some goods from reaching their destination. When they don't arrive, other things cannot be produced. The supply chain is all interconnected. The world is now very fragile, like someone who falls with just a little push. Because of this interconnectedness, no one can be missing. So, it makes our world much easier to fall into crisis, Professor. Looking at it that way.
Professor Theerachai: And it's not just consumer goods. Right now, food is having a big problem. As I told you, about one-third of the world's urea fertilizer comes out of Hormuz. And if I remember correctly, there's another one, phosphate. During this past period, it was the planting season for the Northern Hemisphere, Europe, Russia, India, Japan, China, and Thailand. All of them had to start planting. It turned out that the fertilizer didn't arrive. If we don't manage it well, after this, it will be the planting season for countries in the Southern Hemisphere, Brazil, Argentina, which will start maybe around September onwards. So, the fertilizer that didn't come out, including liquefied natural gas because many countries import LNG from Hormuz to produce fertilizer, that's also gone. A 20% global deficit. This is causing a problem of high food prices and insufficient food. But it hasn't shown symptoms yet because there is still stock for each commodity. The symptoms will show in the second half of the year. Therefore, in the second half of the year, we are going to face problems with both consumer goods and food. It will be a big problem.
DB Bee So Tao: Professor, you make us feel like another domino is about to fall. Oh, chips are expensive, appliances are expensive, computers are going up, food is going up. Oh, everything is going up. But it's okay, Professor. Now we can be relieved that the Strait of Hormuz is open. It might only be temporarily expensive, right, Professor? Can we feel relieved? It's open now, Professor.
Professor Theerachai: We can only be relieved to a certain extent, only to a certain extent. Because right now, if America is still hesitant… I myself have been thinking: the Trump team said they would arrange 300 billion dollars to invest in Iran. I believe Iran just listened to that. It might be good information for them to sell to their people, saying, "Hey, we benefit from this." But before it materializes, it's guaranteed that they will have their tactics. Because after that, it was clear that someone asked Trump, "Hey, about that 300 billion dollars?" Trump said, "It's not from America at all. They will get the money from the Arab countries and invest it."
DB Bee So Tao: But at the same time, he also said, "But it's not certain yet. It depends on their behavior."
Professor Theerachai: Hmm.
DB Bee So Tao: So, he will use this as a chain.
Professor Theerachai: Right.
DB Bio So Tao: To hold them.
Professor Theerachai: "If you behave well, you'll have a chance. But if you don't, it won't happen." I think Iran can see that too.
DB Bee So Tao: Hmm.
Professor Theerachai: Similarly, regarding the return of the frozen money, I think it's clear. Right now, what Iran got immediately was selling oil. They had prepared tankers full of oil. As soon as they signed the MOU, they released it. The first few ships were entirely Iranian. Iran led the way.
DB Bee So Tao: They lined up, led the convoy, ready. Others weren't fast enough. They released their goods first. So, they already have this, and now they have money coming in. This is something they can definitely get their hands on: selling oil. Originally, America stopped others from buying. Now America has opened up. Anyone can buy. But their main customer, China, still needs to be managed. If China doesn't take it, they might negotiate with others. This is money they will definitely get. But regarding the frozen money, I think Trump will be hesitant. At first, he said it depends on this and that, and they'll do KPIs.
DB Bee So Tao: Yes.
Professor Theerachai: It will become like Trump is playing football, and when the Iranian side gets close, he moves the goalpost further away.
DB Bee So Tao: So they can't score. It's all up to Trump, isn't it? Iran can see that.
Professor Theerachai: We will keep watching this game, Professor. There are still more episodes. Please contribute more in the next clip. Today, I thank you very much. Goodbye. Don't forget to like, share, and subscribe to Bee So Tao's channel to not miss interesting clips and to watch new clips first.