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00:00:50MUSIC Oil Oil under pressure. Energy chiefs chiefs pull out of a major gathering
00:00:53gathering in Riyadh as Iran backed backed Houthis strike the airport
00:00:57airport in Saudi Arabia yet again. again. Also tough choices. Finance
00:01:00Finance ministers are meeting in in Bangkok as the head of the IMF
00:01:04IMF warns countries to rein in spending
00:01:06spending as debt levels and borrowing borrowing costs surge. And we're
00:01:10we're also going to be hearing from
00:01:12from the Microsoft president on the
00:01:14the perils of self-regulation for
00:01:17for artificial intelligence. If it's
00:01:19it's left to the industry alone. alone. Frankly, the good companies
00:01:23companies will do what you want. want. It's the companies that are
00:01:26are not as responsible that you need
00:01:28need to worry about. Hello there
00:01:32there and welcome to Business Today Today with me Lukwesa Burak. Let's
00:01:35Let's start off with oil prices. prices. The big story in the business
00:01:38business world as markets have been
00:01:40been reacting to a weekend of major major international upheaval feeding
00:01:44feeding into those energy prices. prices. Now on Friday, President
00:01:47President Trump announced that controversial controversial deal with Moscow to
00:01:51to import Russian diesel following following a phone call with President
00:01:53President Putin. Ukraine's President
00:01:56President Zelensky condemned it as
00:01:58as a gift for President Putin. OK.
00:02:01OK. Then on Sunday, on True Social, Social, President Trump announced
00:02:04announced that Russia and Ukraine Ukraine had agreed to an immediate
00:02:08immediate energy ceasefire is how how he described it, but didn't provide
00:02:11provide any detail. Well, that seemed seemed to take Ukraine by surprise.
00:02:15surprise. Now just bear in mind that
00:02:16that Kyiv backs the idea. If the
00:02:19the Kremlin signs up. But it's since
00:02:21since accused Russia of hitting energy
00:02:24energy infrastructure in Ukraine. Ukraine. Meanwhile, in Saudi Arabia,
00:02:27Arabia, the main international airport
00:02:29airport in Riyadh was struck by those
00:02:32those Iran backed Houthis on Sunday.
00:02:34Sunday. Now this is the third such
00:02:36such attack in four days. And elsewhere
00:02:38elsewhere in the capital in Riyadh,
00:02:41Riyadh, a major international gathering gathering of energy ministers and
00:02:44and industry leaders began on Sunday.
00:02:47Sunday. But you can see the pictures pictures here. There are a few big
00:02:50big names that are missing. Energy
00:02:53Energy bosses have been pulling out
00:02:55out of this gathering. BP certainly
00:02:57certainly confirming its chief executive,
00:03:00executive, is not attending that that event. Let's take a look at
00:03:03at the oil prices then. Whilst all
00:03:04all of this is going on international
00:03:07international benchmark Brent crude crude futures are currently trading
00:03:10trading just shy of $106 a barrel.
00:03:14barrel. Let's take us through more
00:03:16more of the detail regarding all all of these developments. Amina
00:03:19Amina Bakari is head of Middle East
00:03:22East Energy and Opec plus research
00:03:25research at Kpler. Hello Amina, lovely
00:03:26lovely to have you with us here on
00:03:29on the programme. Now 106 we started started off I think this morning
00:03:32morning at about 103. It slowly crept crept up just shy of 106. I have
00:03:36have to say that you would have or or rather, you know, a couple of
00:03:40of weeks, months ago there seemed seemed to be a lot more volatility
00:03:43volatility when it came to the oil
00:03:45oil prices. Yes, it's high but steady.
00:03:48steady. What's going on? Yeah. We
00:03:50We have been seeing a lot of volatility volatility because prices still continue
00:03:54continue to trade on headlines. We We started the day off today for
00:03:58for example with a lower price given given President Trump's announcement
00:04:02announcement that you just mentioned mentioned around more diesel coming coming into the market. We haven't
00:04:06haven't seen any of these volumes volumes yet. But in anticipation
00:04:08anticipation of that, the oil price price went slightly, slightly down.
00:04:11down. And now the market is realising realising that, you know, the geopolitical
00:04:15geopolitical risk is still very much much there and alive. And we don't
00:04:18don't have any kind of resolution resolution to the conflicts that that we're seeing. So again, it's
00:04:22it's going to creep up. But the point
00:04:24point being is that we are still
00:04:27still over $100 a barrel here. And
00:04:30And I would estimate maybe $30 of
00:04:33of that is a geopolitical premium premium that's here to stay unless
00:04:37unless we do get a real resolution resolution to both the conflicts,
00:04:40conflicts, the one between Russia Russia and Ukraine and the one in in the Middle East. Just talking
00:04:44talking of premiums, I just want want to bring it back to us. You
00:04:47You know, the public, the users of
00:04:50of these oil these crude products.
00:04:53products. Does the cost that countries countries governments are paying
00:04:57paying on the market actually reflect reflect what we're paying out at
00:05:00at the pump? Because it does feel feel as if we are paying a premium.
00:05:03premium. What's going on there? No.
00:05:05No. For sure. I mean it's a story
00:05:08story also of bottlenecks that are are faced by the refining system,
00:05:11system, although, I mean, we have have been monitoring recovered exports
00:05:15exports of crude out of Hormuz. For For example, last month we saw an
00:05:19an average of something like 16 million
00:05:20million barrels make it out of the
00:05:24the strait, which is a recovery. recovery. However, because we have
00:05:27have limited refining capacity globally,
00:05:30globally, these product prices have
00:05:32have shot up and we will continue continue to see that. And even the
00:05:35the deal that President Trump now
00:05:37now has with Russia only brings limited limited supply to the market. That
00:05:41That isn't enough to, you know, relieve relieve the gap. And we've also heard
00:05:44heard about the EU releasing 100 100 million barrels. We're not sure
00:05:47sure how much of that yet is going going to actually hit the market.
00:05:50market. But we expect that maybe maybe 50% of the 1 million barrel
00:05:54barrel per day deficit of diesel
00:05:57diesel could be filled in, in the
00:06:00the next 90 days. But, again, I mean,
00:06:02mean, we continue to see the squeeze squeeze on prices. And that means
00:06:06means as consumers will continue continue going to we're going to
00:06:08to be paying higher prices for these these products. OK, Amina, we'll we'll leave it there. Thank you very
00:06:12very much for that analysis. And
00:06:14And of course, continued focus on
00:06:17on events in the Middle East and and oil markets right here on BBC
00:06:20BBC News. Let us head to Thailand Thailand now where global finance
00:06:24finance chiefs are gathering for for the International Monetary Fund
00:06:27Fund and World Bank annual meetings. meetings. The inflationary impact
00:06:30impact from events in the Middle Middle East is likely to dominate
00:06:33dominate this agenda. Soaring energy energy prices are piling on the pressure
00:06:37pressure on economies around the the world. That and soaring global
00:06:40global debt levels are also pushing
00:06:42pushing up government borrowing costs
00:06:45costs through the bond markets. Laura
00:06:47Laura Cooper is head of macro credit
00:06:49credit and global is a global investment investment strategist at the Global
00:06:54Global investment manager Nuveen. Nuveen. Laura. Lovely to have you
00:06:56you with us. Starting off then with
00:07:00with words first off, you know right right from the off this morning we
00:07:03we heard the head of the IMF saying
00:07:07saying that there is a toxic mix
00:07:08mix going on. Member states need
00:07:12need to act swiftly if they note note that inflation is rising. I
00:07:15I mean, easier said than done, isn't
00:07:17isn't it? Well, it's very challenging
00:07:20challenging in this backdrop when when the inflation is being driven
00:07:24driven by a supply shock. So essentially
00:07:26essentially we can have policy makers
00:07:28makers come out and try to mitigate
00:07:31mitigate the inflationary pressures pressures by tightening policy and
00:07:34and raising rates, which we have have already seen them do, certainly
00:07:37certainly in Europe and the US. But
00:07:39But that's not actually going to
00:07:41to mitigate those supply pressures. pressures. So I think inflation is
00:07:45is continuing to be more of a persistent persistent concern that there's very
00:07:49very limited. I would say that that that most governments and policy
00:07:51policy makers can do at this juncture.
00:07:54juncture. One of the big themes,
00:07:57themes, rather of these meetings
00:07:59meetings is AI. And AI is being closely
00:08:03closely linked to inflation. And And what I did is I actually had
00:08:06had to use AI to see how many times
00:08:08times it featured on this week long
00:08:11long series of meetings taking place
00:08:13place in Bangkok. 15 headline AI
00:08:16AI events, never mind the 33 sideline sideline Plenaries.
00:08:21What's going on when it comes
00:08:23to AI inflation? And what are the
00:08:25the IMF saying about that in particular? particular? Well, there's certainly
00:08:29certainly a confluence of factors factors when we think about the AI
00:08:32AI picture. I think to your point
00:08:35point around the inflationary pressures, pressures, we are already seeing
00:08:39seeing that materialise. If we look
00:08:41look at US price gauges so far this
00:08:43this year, we've seen software and
00:08:45and accessories really drive a predominant
00:08:49predominant force in those inflationary inflationary pressures because we
00:08:51we are seeing very tight supply demand
00:08:54demand dynamics. There's this robust robust demand for AI, but we just
00:08:58just are not seeing supply being being able to keep up with that.
00:09:01that. And that's coming through in
00:09:02in prices. We think about semiconductors
00:09:06semiconductors compute in particular. particular. So even though AI in
00:09:09in the long run is likely to be disinflationary, disinflationary, I think we're seeing
00:09:12seeing that add to this broader inflationary
00:09:15inflationary mix. So that's one factor factor that that we are going to
00:09:18to see. You know governments focus
00:09:20focus on. But as well there's also
00:09:23also concerns around regulation, regulation, around the growth impact
00:09:25impact of AI. So a number of factors factors I think to keep to keep certainly
00:09:29certainly members busy this week. week. Thank you very much indeed.
00:09:33indeed. Thank you. Let us stay with with artificial intelligence. It
00:09:37It really is the main story, isn't
00:09:39isn't it? In our days. And the President
00:09:43President of Microsoft has said that that work on AI regulation needs
00:09:46needs to start immediately. He was was speaking to my colleague Will
00:09:49Will Bain for the BBC's Big Boss Boss interview, and he said that
00:09:53that the system of self-regulation self-regulation advocated for by
00:09:56by the White House was actually insufficient.
00:10:00insufficient. I applaud we applaud applaud as a company that statement
00:10:04statement and we're happy to sign sign it. It's a good step. It's a
00:10:08a necessary step. And fundamentally fundamentally what it does is it it says companies should have internal
00:10:11internal controls. It should have have its internal auditors looking
00:10:15looking at things like AI safety. safety. We've been doing that since
00:10:18since almost a decade ago, and there there ought to be some external evaluators
00:10:21evaluators as well, all to the good.
00:10:24good. It's necessary. I don't think
00:10:26think it's sufficient any longer
00:10:30longer because the challenge for for any self-regulatory regime is
00:10:33is if it's left to the industry alone,
00:10:37alone, frankly, the good companies companies will do what you want. want. It's the companies that are
00:10:41are not as responsible that you need
00:10:42need to worry about. Now, financial
00:10:45financial firms have voiced concern concern about a Downing Street proposal
00:10:49proposal to do away with non-compete non-compete clauses in employment
00:10:52employment contracts. The Prime Minister, Minister, Andy Burnham, has argued
00:10:55argued that such clauses can be a a barrier to hiring for what he called
00:10:59called our most promising start ups
00:11:01ups and scaling firms. But the city
00:11:04city UK, which represents some big big financial firms, has been speaking
00:11:07speaking to the BBC and told us that
00:11:09that the proposed changes would undermine
00:11:12undermine Britain's world class financial financial and related professional
00:11:15professional services companies. companies. Dan Kemp is founder of
00:11:18of Portfolio Thinking and this is
00:11:20is an AI powered investment research
00:11:23research business, and he joins us us now. Lovely to have you with US,
00:11:26US, Dan. So what are the companies
00:11:28companies what's the pushback then
00:11:30then to Andy Burnham's
00:11:35proposals? Well, Lukwesa, it's wonderful wonderful that the government wants wants to support new firms, particularly particularly in these exciting areas
00:11:39areas that we've been talking about
00:11:40about just over the last few minutes.
00:11:43minutes. But I don't think this is is quite the right way of doing it.
00:11:47it. So a non-compete clause is something something you normally sign when
00:11:50when you join the employer that stops stops you from working for another
00:11:54another employer when you leave, leave, it's a bit like a restaurant restaurant closing their doors to
00:11:57to try and keep their diners in. in. If a restaurant has to keep their
00:12:00their doors locked, there's probably probably something bad going on in in the kitchen or in the service.
00:12:04service. That's what companies should should be sorting out, not worrying
00:12:08worrying about non-competes. OK, OK, maybe I've missed your solution
00:12:12solution in there, but exactly what what should they be doing then? How
00:12:14How do you not throw the baby out
00:12:17out with the bathwater? Well, absolutely.
00:12:20absolutely. It's obviously engaging
00:12:22engaging in private contracts between between employees or businesses.
00:12:26businesses. It really supports the
00:12:27the lawyers. If we're looking for
00:12:30for support for smaller businesses, businesses, if we're looking for
00:12:32for greater investment in the UK,
00:12:35UK, then what we need is incremental incremental improvements, which is
00:12:38is difficult to do when budgets are
00:12:39are tight. But for example, the latest
00:12:43latest stamp duty measures that the the government's brought in to ease
00:12:47ease stamp duty on share trading trading that's really welcomed. So
00:12:50So the more that the government can
00:12:54can reduce the regulations, reduce reduce the cost of doing business business here, the better it is for
00:12:58for small and large businesses. They They don't have to get involved in
00:13:01in private contracts. And how does does the UK compare with elsewhere
00:13:04elsewhere in the world? Do we risk risk losing our talent? I honestly
00:13:07honestly don't think we do risk losing
00:13:10losing our talent. The. The. The
00:13:12The UK is a great place to operate
00:13:15operate naturally. I started a business
00:13:17business here recently and the costs
00:13:19costs are lower than in the US and and other parts of the world. So
00:13:23So it's already a good place to do
00:13:25do business. We want as little friction friction as possible naturally. But
00:13:29But I think from the government's government's perspective, focus on
00:13:32on the things that they can control
00:13:35control rather than having to interfere interfere in, in other people's contracts.
00:13:38contracts. So this is not about trying trying to protect big businesses.
00:13:41businesses. It's about focusing on on the areas that they have jurisdiction
00:13:45jurisdiction over where they can can make life a little bit easier easier for small companies as well
00:13:48well as big companies. Dan Kemp, Kemp, thank you very much for that.
00:13:51that. Thank you. And it's been lovely
00:13:53lovely having you with us for now.
00:13:57now. That is it.
00:15:12latest news, interviews, results results and goals as we follow every
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00:15:32Being able. To inspire someone
00:15:35is always the greatest joy. I. I
00:15:37I saw Souza one time at the Grammys Grammys and she said that she studied
00:15:40studied some of my songs for their their songwriting and I thought that that that was the biggest compliment
00:15:43compliment ever. My support for Ukraine
00:15:47Ukraine is unwavering. It is 100%
00:15:50100% when the big names talk, they
00:15:53they talk to us.