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[00:00:12] high for Republicans and Democrats Democrats and for the American people. people. For the latest, follow us
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[00:00:34] On BBC News. The latest
[00:00:37] business news from across the globe.
[00:00:40] globe. Business Today. MUSIC
[00:00:50] MUSIC Oil Oil under pressure. Energy chiefs chiefs pull out of a major gathering
[00:00:53] gathering in Riyadh as Iran backed backed Houthis strike the airport
[00:00:57] airport in Saudi Arabia yet again. again. Also tough choices. Finance
[00:01:00] Finance ministers are meeting in in Bangkok as the head of the IMF
[00:01:04] IMF warns countries to rein in spending
[00:01:06] spending as debt levels and borrowing borrowing costs surge. And we're
[00:01:10] we're also going to be hearing from
[00:01:12] from the Microsoft president on the
[00:01:14] the perils of self-regulation for
[00:01:17] for artificial intelligence. If it's
[00:01:19] it's left to the industry alone. alone. Frankly, the good companies
[00:01:23] companies will do what you want. want. It's the companies that are
[00:01:26] are not as responsible that you need
[00:01:28] need to worry about. Hello there
[00:01:32] there and welcome to Business Today Today with me Lukwesa Burak. Let's
[00:01:35] Let's start off with oil prices. prices. The big story in the business
[00:01:38] business world as markets have been
[00:01:40] been reacting to a weekend of major major international upheaval feeding
[00:01:44] feeding into those energy prices. prices. Now on Friday, President
[00:01:47] President Trump announced that controversial controversial deal with Moscow to
[00:01:51] to import Russian diesel following following a phone call with President
[00:01:53] President Putin. Ukraine's President
[00:01:56] President Zelensky condemned it as
[00:01:58] as a gift for President Putin. OK.
[00:02:01] OK. Then on Sunday, on True Social, Social, President Trump announced
[00:02:04] announced that Russia and Ukraine Ukraine had agreed to an immediate
[00:02:08] immediate energy ceasefire is how how he described it, but didn't provide
[00:02:11] provide any detail. Well, that seemed seemed to take Ukraine by surprise.
[00:02:15] surprise. Now just bear in mind that
[00:02:16] that Kyiv backs the idea. If the
[00:02:19] the Kremlin signs up. But it's since
[00:02:21] since accused Russia of hitting energy
[00:02:24] energy infrastructure in Ukraine. Ukraine. Meanwhile, in Saudi Arabia,
[00:02:27] Arabia, the main international airport
[00:02:29] airport in Riyadh was struck by those
[00:02:32] those Iran backed Houthis on Sunday.
[00:02:34] Sunday. Now this is the third such
[00:02:36] such attack in four days. And elsewhere
[00:02:38] elsewhere in the capital in Riyadh,
[00:02:41] Riyadh, a major international gathering gathering of energy ministers and
[00:02:44] and industry leaders began on Sunday.
[00:02:47] Sunday. But you can see the pictures pictures here. There are a few big
[00:02:50] big names that are missing. Energy
[00:02:53] Energy bosses have been pulling out
[00:02:55] out of this gathering. BP certainly
[00:02:57] certainly confirming its chief executive,
[00:03:00] executive, is not attending that that event. Let's take a look at
[00:03:03] at the oil prices then. Whilst all
[00:03:04] all of this is going on international
[00:03:07] international benchmark Brent crude crude futures are currently trading
[00:03:10] trading just shy of $106 a barrel.
[00:03:14] barrel. Let's take us through more
[00:03:16] more of the detail regarding all all of these developments. Amina
[00:03:19] Amina Bakari is head of Middle East
[00:03:22] East Energy and Opec plus research
[00:03:25] research at Kpler. Hello Amina, lovely
[00:03:26] lovely to have you with us here on
[00:03:29] on the programme. Now 106 we started started off I think this morning
[00:03:32] morning at about 103. It slowly crept crept up just shy of 106. I have
[00:03:36] have to say that you would have or or rather, you know, a couple of
[00:03:40] of weeks, months ago there seemed seemed to be a lot more volatility
[00:03:43] volatility when it came to the oil
[00:03:45] oil prices. Yes, it's high but steady.
[00:03:48] steady. What's going on? Yeah. We
[00:03:50] We have been seeing a lot of volatility volatility because prices still continue
[00:03:54] continue to trade on headlines. We We started the day off today for
[00:03:58] for example with a lower price given given President Trump's announcement
[00:04:02] announcement that you just mentioned mentioned around more diesel coming coming into the market. We haven't
[00:04:06] haven't seen any of these volumes volumes yet. But in anticipation
[00:04:08] anticipation of that, the oil price price went slightly, slightly down.
[00:04:11] down. And now the market is realising realising that, you know, the geopolitical
[00:04:15] geopolitical risk is still very much much there and alive. And we don't
[00:04:18] don't have any kind of resolution resolution to the conflicts that that we're seeing. So again, it's
[00:04:22] it's going to creep up. But the point
[00:04:24] point being is that we are still
[00:04:27] still over $100 a barrel here. And
[00:04:30] And I would estimate maybe $30 of
[00:04:33] of that is a geopolitical premium premium that's here to stay unless
[00:04:37] unless we do get a real resolution resolution to both the conflicts,
[00:04:40] conflicts, the one between Russia Russia and Ukraine and the one in in the Middle East. Just talking
[00:04:44] talking of premiums, I just want want to bring it back to us. You
[00:04:47] You know, the public, the users of
[00:04:50] of these oil these crude products.
[00:04:53] products. Does the cost that countries countries governments are paying
[00:04:57] paying on the market actually reflect reflect what we're paying out at
[00:05:00] at the pump? Because it does feel feel as if we are paying a premium.
[00:05:03] premium. What's going on there? No.
[00:05:05] No. For sure. I mean it's a story
[00:05:08] story also of bottlenecks that are are faced by the refining system,
[00:05:11] system, although, I mean, we have have been monitoring recovered exports
[00:05:15] exports of crude out of Hormuz. For For example, last month we saw an
[00:05:19] an average of something like 16 million
[00:05:20] million barrels make it out of the
[00:05:24] the strait, which is a recovery. recovery. However, because we have
[00:05:27] have limited refining capacity globally,
[00:05:30] globally, these product prices have
[00:05:32] have shot up and we will continue continue to see that. And even the
[00:05:35] the deal that President Trump now
[00:05:37] now has with Russia only brings limited limited supply to the market. That
[00:05:41] That isn't enough to, you know, relieve relieve the gap. And we've also heard
[00:05:44] heard about the EU releasing 100 100 million barrels. We're not sure
[00:05:47] sure how much of that yet is going going to actually hit the market.
[00:05:50] market. But we expect that maybe maybe 50% of the 1 million barrel
[00:05:54] barrel per day deficit of diesel
[00:05:57] diesel could be filled in, in the
[00:06:00] the next 90 days. But, again, I mean,
[00:06:02] mean, we continue to see the squeeze squeeze on prices. And that means
[00:06:06] means as consumers will continue continue going to we're going to
[00:06:08] to be paying higher prices for these these products. OK, Amina, we'll we'll leave it there. Thank you very
[00:06:12] very much for that analysis. And
[00:06:14] And of course, continued focus on
[00:06:17] on events in the Middle East and and oil markets right here on BBC
[00:06:20] BBC News. Let us head to Thailand Thailand now where global finance
[00:06:24] finance chiefs are gathering for for the International Monetary Fund
[00:06:27] Fund and World Bank annual meetings. meetings. The inflationary impact
[00:06:30] impact from events in the Middle Middle East is likely to dominate
[00:06:33] dominate this agenda. Soaring energy energy prices are piling on the pressure
[00:06:37] pressure on economies around the the world. That and soaring global
[00:06:40] global debt levels are also pushing
[00:06:42] pushing up government borrowing costs
[00:06:45] costs through the bond markets. Laura
[00:06:47] Laura Cooper is head of macro credit
[00:06:49] credit and global is a global investment investment strategist at the Global
[00:06:54] Global investment manager Nuveen. Nuveen. Laura. Lovely to have you
[00:06:56] you with us. Starting off then with
[00:07:00] with words first off, you know right right from the off this morning we
[00:07:03] we heard the head of the IMF saying
[00:07:07] saying that there is a toxic mix
[00:07:08] mix going on. Member states need
[00:07:12] need to act swiftly if they note note that inflation is rising. I
[00:07:15] I mean, easier said than done, isn't
[00:07:17] isn't it? Well, it's very challenging
[00:07:20] challenging in this backdrop when when the inflation is being driven
[00:07:24] driven by a supply shock. So essentially
[00:07:26] essentially we can have policy makers
[00:07:28] makers come out and try to mitigate
[00:07:31] mitigate the inflationary pressures pressures by tightening policy and
[00:07:34] and raising rates, which we have have already seen them do, certainly
[00:07:37] certainly in Europe and the US. But
[00:07:39] But that's not actually going to
[00:07:41] to mitigate those supply pressures. pressures. So I think inflation is
[00:07:45] is continuing to be more of a persistent persistent concern that there's very
[00:07:49] very limited. I would say that that that most governments and policy
[00:07:51] policy makers can do at this juncture.
[00:07:54] juncture. One of the big themes,
[00:07:57] themes, rather of these meetings
[00:07:59] meetings is AI. And AI is being closely
[00:08:03] closely linked to inflation. And And what I did is I actually had
[00:08:06] had to use AI to see how many times
[00:08:08] times it featured on this week long
[00:08:11] long series of meetings taking place
[00:08:13] place in Bangkok. 15 headline AI
[00:08:16] AI events, never mind the 33 sideline sideline Plenaries.
[00:08:21] What's going on when it comes
[00:08:23] to AI inflation? And what are the
[00:08:25] the IMF saying about that in particular? particular? Well, there's certainly
[00:08:29] certainly a confluence of factors factors when we think about the AI
[00:08:32] AI picture. I think to your point
[00:08:35] point around the inflationary pressures, pressures, we are already seeing
[00:08:39] seeing that materialise. If we look
[00:08:41] look at US price gauges so far this
[00:08:43] this year, we've seen software and
[00:08:45] and accessories really drive a predominant
[00:08:49] predominant force in those inflationary inflationary pressures because we
[00:08:51] we are seeing very tight supply demand
[00:08:54] demand dynamics. There's this robust robust demand for AI, but we just
[00:08:58] just are not seeing supply being being able to keep up with that.
[00:09:01] that. And that's coming through in
[00:09:02] in prices. We think about semiconductors
[00:09:06] semiconductors compute in particular. particular. So even though AI in
[00:09:09] in the long run is likely to be disinflationary, disinflationary, I think we're seeing
[00:09:12] seeing that add to this broader inflationary
[00:09:15] inflationary mix. So that's one factor factor that that we are going to
[00:09:18] to see. You know governments focus
[00:09:20] focus on. But as well there's also
[00:09:23] also concerns around regulation, regulation, around the growth impact
[00:09:25] impact of AI. So a number of factors factors I think to keep to keep certainly
[00:09:29] certainly members busy this week. week. Thank you very much indeed.
[00:09:33] indeed. Thank you. Let us stay with with artificial intelligence. It
[00:09:37] It really is the main story, isn't
[00:09:39] isn't it? In our days. And the President
[00:09:43] President of Microsoft has said that that work on AI regulation needs
[00:09:46] needs to start immediately. He was was speaking to my colleague Will
[00:09:49] Will Bain for the BBC's Big Boss Boss interview, and he said that
[00:09:53] that the system of self-regulation self-regulation advocated for by
[00:09:56] by the White House was actually insufficient.
[00:10:00] insufficient. I applaud we applaud applaud as a company that statement
[00:10:04] statement and we're happy to sign sign it. It's a good step. It's a
[00:10:08] a necessary step. And fundamentally fundamentally what it does is it it says companies should have internal
[00:10:11] internal controls. It should have have its internal auditors looking
[00:10:15] looking at things like AI safety. safety. We've been doing that since
[00:10:18] since almost a decade ago, and there there ought to be some external evaluators
[00:10:21] evaluators as well, all to the good.
[00:10:24] good. It's necessary. I don't think
[00:10:26] think it's sufficient any longer
[00:10:30] longer because the challenge for for any self-regulatory regime is
[00:10:33] is if it's left to the industry alone,
[00:10:37] alone, frankly, the good companies companies will do what you want. want. It's the companies that are
[00:10:41] are not as responsible that you need
[00:10:42] need to worry about. Now, financial
[00:10:45] financial firms have voiced concern concern about a Downing Street proposal
[00:10:49] proposal to do away with non-compete non-compete clauses in employment
[00:10:52] employment contracts. The Prime Minister, Minister, Andy Burnham, has argued
[00:10:55] argued that such clauses can be a a barrier to hiring for what he called
[00:10:59] called our most promising start ups
[00:11:01] ups and scaling firms. But the city
[00:11:04] city UK, which represents some big big financial firms, has been speaking
[00:11:07] speaking to the BBC and told us that
[00:11:09] that the proposed changes would undermine
[00:11:12] undermine Britain's world class financial financial and related professional
[00:11:15] professional services companies. companies. Dan Kemp is founder of
[00:11:18] of Portfolio Thinking and this is
[00:11:20] is an AI powered investment research
[00:11:23] research business, and he joins us us now. Lovely to have you with US,
[00:11:26] US, Dan. So what are the companies
[00:11:28] companies what's the pushback then
[00:11:30] then to Andy Burnham's
[00:11:35] proposals? Well, Lukwesa, it's wonderful wonderful that the government wants wants to support new firms, particularly particularly in these exciting areas
[00:11:39] areas that we've been talking about
[00:11:40] about just over the last few minutes.
[00:11:43] minutes. But I don't think this is is quite the right way of doing it.
[00:11:47] it. So a non-compete clause is something something you normally sign when
[00:11:50] when you join the employer that stops stops you from working for another
[00:11:54] another employer when you leave, leave, it's a bit like a restaurant restaurant closing their doors to
[00:11:57] to try and keep their diners in. in. If a restaurant has to keep their
[00:12:00] their doors locked, there's probably probably something bad going on in in the kitchen or in the service.
[00:12:04] service. That's what companies should should be sorting out, not worrying
[00:12:08] worrying about non-competes. OK, OK, maybe I've missed your solution
[00:12:12] solution in there, but exactly what what should they be doing then? How
[00:12:14] How do you not throw the baby out
[00:12:17] out with the bathwater? Well, absolutely.
[00:12:20] absolutely. It's obviously engaging
[00:12:22] engaging in private contracts between between employees or businesses.
[00:12:26] businesses. It really supports the
[00:12:27] the lawyers. If we're looking for
[00:12:30] for support for smaller businesses, businesses, if we're looking for
[00:12:32] for greater investment in the UK,
[00:12:35] UK, then what we need is incremental incremental improvements, which is
[00:12:38] is difficult to do when budgets are
[00:12:39] are tight. But for example, the latest
[00:12:43] latest stamp duty measures that the the government's brought in to ease
[00:12:47] ease stamp duty on share trading trading that's really welcomed. So
[00:12:50] So the more that the government can
[00:12:54] can reduce the regulations, reduce reduce the cost of doing business business here, the better it is for
[00:12:58] for small and large businesses. They They don't have to get involved in
[00:13:01] in private contracts. And how does does the UK compare with elsewhere
[00:13:04] elsewhere in the world? Do we risk risk losing our talent? I honestly
[00:13:07] honestly don't think we do risk losing
[00:13:10] losing our talent. The. The. The
[00:13:12] The UK is a great place to operate
[00:13:15] operate naturally. I started a business
[00:13:17] business here recently and the costs
[00:13:19] costs are lower than in the US and and other parts of the world. So
[00:13:23] So it's already a good place to do
[00:13:25] do business. We want as little friction friction as possible naturally. But
[00:13:29] But I think from the government's government's perspective, focus on
[00:13:32] on the things that they can control
[00:13:35] control rather than having to interfere interfere in, in other people's contracts.
[00:13:38] contracts. So this is not about trying trying to protect big businesses.
[00:13:41] businesses. It's about focusing on on the areas that they have jurisdiction
[00:13:45] jurisdiction over where they can can make life a little bit easier easier for small companies as well
[00:13:48] well as big companies. Dan Kemp, Kemp, thank you very much for that.
[00:13:51] that. Thank you. And it's been lovely
[00:13:53] lovely having you with us for now.
[00:13:57] now. That is it.
[00:15:12] latest news, interviews, results results and goals as we follow every
[00:15:14] every twist of the Premier League
[00:15:16] League season here on BBC News. MUSIC
[00:15:32] Being able. To inspire someone
[00:15:35] is always the greatest joy. I. I
[00:15:37] I saw Souza one time at the Grammys Grammys and she said that she studied
[00:15:40] studied some of my songs for their their songwriting and I thought that that that was the biggest compliment
[00:15:43] compliment ever. My support for Ukraine
[00:15:47] Ukraine is unwavering. It is 100%
[00:15:50] 100% when the big names talk, they
[00:15:53] they talk to us.