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FBN’s Sandra Smith and Former Shell Oil CEO John Hofmeister on the impact of Iran’s efforts to revamp its nuclear industry.
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Well Israel launch an attack on Iran's nuclear program the doomsday scenario is getting closer to reality last night to deputy speaker of Israelis.
Can -- told me that every.
-- every option is on the table oil with skyrocketing Iran could choke off the Strait of Hormuz where as much as.
Percent of the world's oil revenue -- travels through joining me now Fox Business Andrew Smith and the former president.
A Shell Oil John -- Meister guys go back to a full -- very quickly and just point out of -- of -- writing here.
Then there's a Suez Canal and then there's.
There's three troll points it but the Strait of -- John let me talk to you first shot straight -- 12% of the world's oil seventy million barrels every single day.
Traveling through the Persian gulf -- that straight rights -- And it goes east and it goes west from there.
So it's both Asia and North America and Europe that would suffer enormously.
If something happened to close down the straits of Hormuz.
Generate -- let's talk about that scenario I had the credit up a professor from George Washington University out last night also Israeli -- that's a deputy speaker both said oil would skyrocket necessarily skyrocket.
You're standing there in years here at CME in Chicago what you think would happen in the -- of a barrel of oil and a gallon gas.
Well there are you talking about this becoming a major -- -- up for a sixth straight trading day today so a lot of the bullish momentum obviously coming from Europe.
But now we're looking at this Iranian situation in the nuclear threat.
And there's a lot of talk about what this means for China we're talking about more sanctions imposed here.
What's China gonna do about that Eric I mean we're looking at numbers that are astronomical and we looked in the first nine months of this year.
Our brands that twenty million tons of crude -- to China tightening get chapter on border fights of the this a very important.
Why John -- Meister the center points out -- China's involved they.
They certainly don't want to see anything bad going on fairly certain no sanctions to Iran because as Sandi points out China deals in oil with a -- Russia deals in arms with Iran.
So there's a lot of internationally and interest don't what happens in in this part of the world.
And the geopolitical uncertainty of that region is whenever you think it can't get any worse guess what it gets worse.
So the reality of the situation is.
There is a an international standoff.
Because China Russia together our -- notable against Europe United States together.
The self interest of international nations take Q1 direction Eric and that direction is where our government refuses to go.
That direction is domestic development of natural resources.
Because that's the answer.
My answer to our energy security is not the Middle East it's not the -- -- -- The affordability of energy is it could cripple this economy if it gets too expensive.
Therefore let's look inside the United States.
And yesterday the secretary of the interior said no he said no to additional offshore drilling what he's -- -- hilarious.
He -- a little base -- certainly not in the Atlantic -- or the Pacific city.
You know advanced than those pits before -- doubles with a bunch of people have had short trip ripped off my back.
If oil went from 10200 dollars a barrel -- -- gasoline very near there.
My guess is gasoline would probably approaches -- seven or eight dollar gallon gasoline let's take it out to the economy what that -- of people watching right now.
It would cripple our economy -- global cripple the global economy it.
There's -- a lot of talk down here on the trading floor is Eric about.
What -- is gonna do even the final few months of the year your final couple of the year we're looking at nearly 97 dollars a barrel right now.
JPMorgan Goldman Sachs all the big investment firms there all stepping in and saying.
It would be nothing -- -- -- 1020 dollar -- right -- factor most of them are expecting -- -- -- hundred dollars a barrel by the end of the year if not by the end of the week.
There's a lot of bullish momentum and here nobody's really talking about -- returning to 6070 dollars a barrel this is becoming a very very big threat.
To the consumer here and to the country Eric.
-- -- -- -- being on the trading floor and oil was approaching fifty dollars on the way up for the first time.
Reporter running down the hallway guy goods and so what's happening -- it's about 150 my god can you believe it.
Now -- would be thankful for fifty dollar barrel of oil how will we ever see a fifty dollar barrel again.
We could if we allowed energy companies to produce the oil that's out there.
Because we could keep supply ahead of demand what's driving the price is the anticipation.
That supply does not keep up with demand because of all the restrictions.
On access to more oil.
There's no shortage of oil in the -- this let me give oil there.
But you have to be allowed to go get it based -- constrain the market on the supply side for political purposes.
So many gamblers are all -- -- card players look for tells you you're sitting across them from some anyone -- -- once it's what you something.
Here for -- -- for me is is oil usually goes in tandem with within the bigger picture the -- these stock market.
Stock market earlier in the day was down almost 300 points and oil started to make its move north so is going up with stocks were going down meaning.
It's bucking the trend of of economic activity that's usually tells me I'm -- gonna limb and say we're gonna see a hundred dollars very soon maybe even a hundred and in fifteen dollars coming up after before we see you fifty dollars is -- a barrel of oil.
If you want to know the chatter from the floor Eric that's exactly here at Chicago in fact I spent the day -- in the S&P 500 trading but talking to traders.
While they're doing another trading they've got one -- and the price -- throughout because it's influencing every move that they make right now in -- -- just the trading screens around the -- for what's the biggest you know.
Biggest potential market mover.
It is all out right now this is quickly becoming the big story quietly and very.
Why at least -- kind of have to leave it there but very quietly quietly inching its way up towards a hundred dollars -- -- many points out.
97 bucks bell that senator Smith and John how much to thank you very much.
