US Orders Some Diplomats Out of Saudi Arabia After Deadly Attacks, Brent Tops $110

Author: Bloomberg Television · Watch on YouTube

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Original language: English

Original video: US Orders Some Diplomats Out of Saudi Arabia After Deadly Attacks, Brent Tops $110 · Channel: Bloomberg Television · 45:54 · Watch on YouTube

Topics: Markets and economy

Summary

Asian stocks fell as mixed mega-cap earnings intensified doubts about the AI trade, with Tesla’s lower capital-spending forecast outweighing Meta’s increased investment plans. Brent crude rose above $110 amid deadly attacks in Saudi Arabia and concerns about energy infrastructure and shipping through the Strait of Hormuz. Guests discussed the risks of wider conflict, the outlook for diplomacy, and the UAE’s efforts to build a commercial space industry. The program also covered Kuwait’s oil exports, a proposed South African steel-industry deal, and efforts to revive Johannesburg.

Key points

Equity markets turned lower after Tesla cut its capital-spending outlook, while investors remained wary of the scale and returns of AI investment.
Analysts said the market was selling across Asian technology and AI supply chains, including semiconductor and robotics-related companies.
Deadly attacks in Saudi Arabia prompted the U.S. to order non-emergency personnel and their families to leave the country; Brent crude traded around $111 a barrel.
A Middle East policy analyst described several possible Houthi motives, including Yemen’s internal dynamics, economic pressure, and links to Iran’s confrontation with the U.S.
The analyst warned that further military action could be risky and uncertain, while emphasizing Europe’s energy and security interests in the Gulf.
The UAE Space Agency chairman said the country is shifting its focus toward a space economy, including private-sector investment and commercial satellite development.
The UAE aims to move into the top 10 space economies, and its space agency is developing shared infrastructure and international partnerships.
Kuwait Petroleum’s CEO said crude exports had returned to prewar levels, but additional security and shipping capacity were needed to raise production and restore refining output.
South Africa’s development finance institution reached an initial agreement to take over ArcelorMittal’s South African unit, in a deal reported at about $610 million, subject to further steps including a shareholder vote.
Business leaders called for Johannesburg’s infrastructure and services to improve, citing the city’s importance to South Africa’s economy and its ability to retain talent.

Chapters

Start	Chapter	Summary
00:13	Market open and AI-related selloff	The program opens with falling stocks, mixed mega-cap earnings, Tesla’s reduced spending forecast, and rising oil prices.
02:25	Why tech shares are under pressure	A market analyst explains how Tesla’s capex cut, semiconductor concerns, and shifting AI expectations drove declines across Asian markets.
07:14	AI valuations, gold, and the Federal Reserve	A market analyst discusses whether AI is in a bubble, the impact of valuations and economic conditions, gold demand, and the Fed’s rate outlook.
12:44	U.S. orders personnel to leave Saudi Arabia	Bloomberg’s Middle East editor discusses the deadly attacks, threats to Gulf energy infrastructure, and the risks to oil supply.
15:58	Houthi motives and regional escalation risks	A policy analyst outlines possible Houthi objectives and considers the prospects for wider conflict, U.S. involvement, and diplomacy.
21:53	Regional business news and UAE space ambitions	The show reports on restored aluminum-smelter capacity and a private-equity office, then introduces the UAE’s commercial space plans.
23:07	Asian markets and the UAE space sector	The program recaps market losses and interviews the UAE Space Agency chairman about commercial satellites, investment, astronauts, and the country’s space goals.
35:43	Kuwait oil exports and Strait of Hormuz shipping	Kuwait Petroleum’s CEO describes the recovery in crude exports and the need for shipping security and additional product carriers.
39:03	South African steel deal and Johannesburg’s recovery	Bloomberg reports on a proposed takeover of ArcelorMittal’s South African unit and discusses efforts to improve Johannesburg’s economy and infrastructure.
44:19	Closing market headlines	The program reports on South African bond yields and JPMorgan’s planned exit from Turkey before closing with a market update.

Quotes

The market finds that a lot less exciting than both companies increase in capex at the same time. — 04:33

In order to keep the transformation going, you have to find a diplomatic route to try to resolve this ongoing issue. — 13:48

When you get into space, you rely only on government you won’t get too far. — 28:42

What is missing right now is additional security for ships to transit through the Strait. — 36:16

Johannesburg is still in pretty good shape by any standards and I think it could be turned around relatively quickly. — 43:14

Concepts and entities

Brent crude, Strait of Hormuz, AI, Tesla, Meta, Nadia Elbilassy, Ahmad Belhoul Al Falasi, UAE Space Agency, Kuwait Petroleum Corporation, ArcelorMittal, IDC

Full transcript (original language)

00:13 ABEER: GOOD MORNING. THIS IS “HORIZONS MIDDLE EAST & AFRICA.” OUR TOP STORIES THIS MORNING, AI CONFIDENCE WAIVERS. STOCKS FALL AS MIXED MEGA CAP EARNINGS FAILED TO REASSURE INVESTORS ON THE TECH TRADE. TESLA RETREATS AFTER CUTTING ITS SPENDING OUTLOOK WHILE META DOUBLES DOWN ON AI INVESTMENT. ATTACKS ESCALATE, THE U.S. ORDERS DEPARTURE FOR NONEMERGENCY PERSONNEL AND THEIR FAMILIES FROM SAUDI ARABIA DUE TO THE GROWING THREAT FROM HOUTHIS MILITANTS. THE MOVE COMES AFTER DEADLY STRIKES ON AIRPORTS AND

00:46 CRITICAL ENERGY INFRASTRUCTURE. AND I WILL BE SPEAKING WITH THE CHAIRMAN OF THE UAE SPACE AGENCY ON THE COUNTRY’S SPACE AMBITIONS. IT HAS JUST GONE 8:00 A.M. ACROSS THE EMIRATES. LET’S GO WITH THE USUAL AND LOOK AT WHAT MARKETS ARE DOING. WE MIGHT’VE BREATHED A SIGH OF RELIEF TOO EARLY AT THE START OF THIS WEEK. LOOK AT THE EQUITIES PICTURE. S&P FUTURES DROPPING .6%. THE KOSPI IS LOSING. SAMSUNG SK HYNIX ARE SOME OF THE BIGGEST DECLINERS.

01:17 WE HAVE HEARD FROM META, WE HAVE HEARD FROM TESLA. TWO DIFFERENT VIEWS ON. TESLA HAD BROUGHT DOWN ITS CAPEX FORECAST TO 20 BILLION FROM OVER 25 BILLION. META SAYS EVERYTHING IS GREAT WHEN IT COMES TO THE AI TRADE. YOU ARE SEEING THE MARKET REACTION REALLY FOLLOWING TESLA’S LEAD. THIS IS WHY YOU ARE SEEING FUTURES – THE FUTURES PICTURE DROPPING. NASDAQ DROPPING A LITTLE MORE THAN THAT. IN .3% AS OF THIS POINT. ANALYSTS ARE POINTING THAT THE

01:50 MARKET IS A HARD ONE TO PLEASE ON EXPENDITURE CAPITAL. IT IS FRETTING WHEN COMPANIES ARE PULLING BACK. IT IS FRETTING WHEN COMPANIES ARE ACCELERATING. YOU ARE SEEING THE WIDER PICTURE NOT DOING SO GREAT IN THE EQUITY SPACE. BRENT CRUDE, $111 ON THE BARREL. THE ATTACKS ON SAUDI INFRASTRUCTURE CASUALTIES ONCE AGAIN IN THE KINGDOM OF SAUDI ARABIA. THREE PEOPLE OVERALL DEAD. WE WILL TALK ABOUT THAT IN THE SHOW LATER ON AND THE YIELD ON THE 10 YEAR NOTES. NOT DOING MUCH AS OF NOW.

02:25 FALLING ABOUT FOUR BASIS POINTS AS INVESTORS PROBABLY CHOOSE TO GO BACK TO THE STATUS OF SAFE HAVEN THAT THEY YIELDS ARE U.S. TREASURIES PRESENT. FOR MORE ON THE MARKET REACTION TO THE MIX MEGA CAP EARNINGS AND RENEWED CONCERNS OVER THE AI TRADE, WE ARE JOINED BY ANTHONY STEPHENS. LOOK AT THAT REACTION AND MARKETS. ALL IN THE GREEN AT THE START OF THIS WEEK. NOW TODAY, EVERYTHING IN THE RED. STOCKS ARE SINKING, IN ASIA TAKING THEIR LEAD FROM THE FUTURES PICTURE. WHAT IS DRIVING THIS SELLOFF? ANTHONY:

02:59 IT HAS BEEN AN INTERESTING DAY OF WHIPLASH PRICE ACTION. MOST AI OBSERVERS WERE EXPECTING A DECENT DAY. THAT WAS OUR FUTURES INDICATIONS COMING INTO THE DAY. THEN WE HAD THE TESLA CAPEX CUT. ALSO, THE META GOOD RESULTS WERE TAKEN BADLY BY THE SEMICONDUCTOR TRAIT. THERE IS THIS NARRATIVE THAT MONEY IS GOING TO GO INTO THE AI HYPERSCALERS, WHICH HAVE LAGGED THE NASDAQ ALL THE WAY UP AND AWAY FROM THE SEMICONDUCTOR TRAIT.

03:31 ALONGSIDE THAT LOCAL PRESS HAS BEEN TALKING ABOUT A SLOWER PACE OF GROWTH IN THE LIKES OF MEMORY, FOR EXAMPLE. THAT HAS OFFSET THE OPTIMISM AROUND CAPEX, FROM THE LIKES OF META AND FROM JENSEN HUANG’S SPEECH IN BERLIN. THERE HAS BEEN A CHANGE IN NARRATIVE NOW THAT THE BUY IS VERY HIGH TO BEAT. AND THE WELL-KNOWN SPACES ON THE MARKET AROUND TECH TALKING ABOUT SAMSUNG, THE CHINESE AI NAMES OR EVEN

04:03 TSMC. THAT IS WHERE PEOPLE ARE TAKING MONEY OFF THE TABLE IN LARGE SIZES. YOU SEE THAT ACROSS THE ENTIRE REGION. IT IS NOT COUNTRY SPECIFIC ANYMORE. PEOPLE ALREADY GROSSING ON THE AI SUPPLY CHAIN ACROSS ASIA AND MAY BE THE CASH BACK IN THE U.S. ABEER: LET’S FOCUS IN ON THE INDIVIDUAL NAMES, INDIVIDUAL EARNINGS. WE ARE GEARING UP FOR ANOTHER EARNINGS SEASON WITH A LOT OF FOCUS ON. TESLA CUT ITS SPENDING OUTLOOK. INVESTORS ARE REACTING

04:33 NEGATIVELY TO LOWER SPENDING. WHY IS THAT HAPPENING? ANTHONY: THAT SPEAKS TO THE CENTRALITY OF THE ELON MUSK ECOSYSTEM TO THE AI GO FORWARD STORY. WE HAD GOOD NUMBERS OUT OF SPACEX. THE MARKET GOT EXCITED. AND THERE WERE THOSE CONVERSATIONS AROUND A MERGER BETWEEN SPACEX AND TESLA. TESLA COMES OUT AND CUTS CAPEX. THAT’S LIKE YOU TAKE FROM ONE HAND ON GIVE TO THE OTHER. THE MARKET FINDS THAT A LOT LESS EXCITING THAN BOTH COMPANIES INCREASE IN CAPEX AT THE SAME TIME.

05:04 IT IS IMPORTANT ABOUT TESLA IS THEY WERE PUSHING INTO THE ROBOTICS SPACE. PEOPLE WERE VERY EXCITED ABOUT THE POTENTIAL RAMP-UP OF, OF THE COMPONENTS GOING INTO THE ROBOTICS SPACE. AS A RESULT OF THAT, YOU SEE A HUGE DRAWDOWN IN NOT ONLY THE ROBOTICS NAMES, OBVIOUSLY IN CHINA, KOREA AND JAPAN, BUT YOU ALSO SEE THE PASSIVE COMPONENT SPACE THAT POWERS THESE ROBOTS. THAT WAS A REALLY SUCKING OUT OF THE OPTIMISM ON NICHE PARTS BUT HIGH BEAT UP PARTS OF THE

05:35 STRAIN. THAT IS TESLA IN A NUTSHELL. AROUND 1% OF THE S&P. NOT THAT IMPORTANT. BUT A HUGE DRIVER OF RETAIL OPTIMISM IN THE AI TRADE. ABEER: JUST BRIEFLY ON META, WHY IS THE MARKET CHOOSING TO FOLLOW THE BAD NEWS? META IS MOVING THE OTHER WAY AFTER ITS BOOSTING ITS AI SPENDING OUTLOOK. WHY IS THE MARKET REACTING TO NOT THAT, ESSENTIALLY? ANTHONY: THERE ARE TWO PARTS TO THE META STORY. THE FIRST PART OF THAT STORY IS THEY ARE SITTING ON A LOT OF POWER. MARK WAS VERY EARLY IN

06:09 INVESTING IN COMPUTATIONAL POWER BEFORE HE HAD ANYTHING TO DO WITH IT. WHILE META’S EARLY AI EFFORTS FLOUNDERED. NOW THEY HAVE HIT THEIR STRIDE WITH THE MUSE AI AGENT. THEY HAVE A CLEAR PATH TO MONETIZATION, A KEY TAKE AWAY FROM THE ANALYSTS ON META’S POST EARNINGS BRIEFING. META IS ALSO GETTING A LOT OF CREDIT FOR ITS AI STRATEGY BUT DOES NOT NECESSARILY HAVE TO SPEND MORE MONEY GOING FORWARD ON AI, IN TERMS OF THE

06:41 SEMICONDUCTOR SPEND. IN TERMS OF THE PEER FLOW DYNAMIC, META HAS LIED TO THE HYPERSCALER INDEX ALL THIS WAY. A RALLY IN META DOES NOT NECESSARILY MEAN IT WILL HELP THE REST OF THE ECOSYSTEM. INSTEAD, SOME OF THAT LAG WILL POTENTIALLY GET RESOLVED AS MONEY COMES OUT OF POPULAR TRADES AND INTO META INCREMENTALLY. ABEER: OK. ANTHONY, EXCELLENT ANALYSIS AS USUAL. BLOOMBERG’S ANTHONY STEPHENS JOINING US FROM HONG KONG. AS WE MENTIONED, ASIAN STOCKS ARE FALLING AFTER THOSE MIXED

07:14 MEGA CAP EARNINGS, WITH TECH SHARES LEADING THE DECLINES. OIL ON THE OTHER HAND IS MOVING HIGHER AS DEADLY ATTACKS IN SAUDI ARABIA RAISE CONCERNS OVER MIDDLE EAST SUPPLY. DISCUSS THIS AND WHETHER MARKET – AND OTHER MARKET MOVES, I’M JOINED BY THE MARKET MAP – MARKET ANALYST. GOOD TO HAVE YOU WITH US. LET’S START WITH AI. I WAS TALKING TO MY COLLEAGUE ABOUT THE AI TRADE, THE WOBBLING WE ARE SEEING. KEN GRIFFIN SAID A COUPLE DAYS AGO HE BELIEVES AI IS IN A BUBBLE, THAT THE TRADE IS IN A

07:47 BUBBLE, BUT ENTREPRENEURS ARE SET TO MAKE MASSIVE GAINS. YOU GUYS HAVE AN OPPOSING VIEW. WHY DO YOU THINK AI IS NOT IN A BUBBLE? NADIA: LET’S START WITH THE MARKET SENTIMENT IS BAD. INVESTORS ARE FLOCKING, THEY ARE DOING A TECH SELLOFF AND THAT IS BECAUSE A CORRECTION WAS NECESSARY DUE TO NASDAQ REACHING ALL-TIME HIGHS ABOVE 30,000. THAT MOMENTUM IS HEALTHY TO SEE A TECH SELLOFF. I THINK IT IS FAIR THAT INVESTORS ARE WORRIED ABOUT THE

08:19 AI SPENDING AND HOW MUCH DEBT IT WILL TAKE FOR COMPANIES. WE ARE TALKING ABOUT OPERATE OF MODELS. WE ARE NOT TALKING ABOUT SPECULATION. THE AI TRADE IS OPERATING, WE ARE INTEGRATING IT INTO SO MANY PARTS OF OUR WORLD AND LET’S FACE IT, IF WE COMPARE IT TO THE DOT-COM BUBBLE, THE INTERNET DID GROW THE ECONOMY MOVING FORWARD AFTER THE INTERNET BUBBLE. I THINK THIS IS WHERE WE ARE GOING. ABEER: BUT DOES THAT EXPLAIN THE VALUATIONS? THE ARGUMENT BETWEEN AI VERSUS

08:54 THE.COM BUBBLE, OF COURSE, WE WITNESSED THAT, WE KNOW THE DIFFERENCES BETWEEN THEM. BUT THE VALUATIONS, DO YOU THINK THEY MAKE SENSE WHEN IT COMES TO INVESTING IN THOSE MEGA CAP? NADIA: I THINK SO. EARNINGS SO FAR BEATING EXPECTATIONS. WE ARE TALKING ABOUT THE BIGGEST COMPANIES, NVIDIA, MICROSOFT. WE ARE NOT TALKING ABOUT SMALL COMPANIES WE NEED TO BELIEVE IN. ABEER: GOING TO YOU BELIEVE THE AI TRADE WOULD BECOME A MACRO RISK RATHER THAN JUST A TECH STORY? WHEN DO YOU THINK THAT LITTLE PIVOTAL MOMENT HAPPENS AND YOU START RE-QUESTIONING THOSE THOUGHTS ABOUT THE FACT THAT IT IS NOT IN A BUBBLE? NADIA:

09:28 I THINK BECAUSE OF THE ECONOMIC SITUATION OVERALL, THIS IS WHERE INVESTORS ARE WORRYING. HOWEVER, IF ECONOMIC GROWTH WAS ON TO GROW, AND THERE WAS NO SUPERHIGH INFLATION, I THINK THIS IS WHERE THINGS WOULD HAVE BEEN ADJUSTED. ABEER: ITS TECH ABOUT GOLD BECAUSE I WAS LOOKING AT YOUR NOTES EARLIER IN THE SHOW. YOU MENTIONED GOLD REMAINS OR IS SET TO REMAIN RELEVANT AMID EVERYTHING WE SEE IN THE GEOPOLITICAL SCENE. WHY IS THAT? NADIA: I THINK OUR EXPECTATIONS FOR GOLD THIS YEAR, WE ALREADY PUT

09:59 IT DOWN A LITTLE BIT. HOWEVER, I DO THINK EVEN DESPITE THE WAR NOT REALLY BEING IN FAVOR OF GOLD PRICES RIGHT NOW, BECAUSE OF HIGHER INTEREST RATES, THE FED IS GOING TO INCREASE INTEREST RATES. THAT IS ON PLAY OUT FOR GOLD SO WELL. I THINK THIS IS WHY GOLD IS GOING DOWN A LITTLE BIT. HOWEVER, CENTRAL BANK BUYING IS KEEPING THE FLOOR ON GOLD PRICES RIGHT NOW. I FISH WE ARE GOING TO SEE MORE CENTRAL BANK BUYING AS LONG AS WE HAVE GEOPOLITICAL TENSIONS

10:31 IN THE MIDDLE EAST AND AFTER THE U.S. ELECTIONS, THE MIDTERM ELECTIONS. WE ARE WAITING FOR A RESPONSE. THIS IS WHY GOLD PRICES MAY BE HEAVILY VOLATILE IN THE NEXT PHASE. ABEER: SPEAKING ABOUT THE FED, YOU MENTIONED THE BASE CASE SCENARIO IS THAT THE FED WOULD RAISE A COUPLE TIMES LEADING UP TO MARCH. WHAT DO YOU THINK – NEXT WEEK, WHERE DO YOU THINK THEY DO NEXT? NADIA: I THINK WE WILL HAVE A PAUSE.

11:01 SPEAKING OF DATA, INFLATION IS AT 3.7, 3.6. THE NFP IS 29,000 JOB OPENINGS ONLY. WE DO HAVE A DRASTIC DOWNFALL OF THE JOBS MARKETS. I THINK THIS IS WHAT IS GIVING MORE ROOM FOR THE FED TO PAUSE. I THINK IT IS ALREADY PRICED IN THE MARKET THAT WE WILL SEE A DECEMBER HIKE INSTEAD OF AN OCTOBER HIKE. ABEER: WHERE DO YOU SEE THE NEXT VULNERABILITY IN WIDER MARKETS? IS IT OIL PRICES, YIELDS COMING PRIVATE CREDIT?

11:32 WE HAVE NOT SPOKEN ABOUT PRIVATE CREDIT IN A WHILE. NADIA: ACTUALLY, I THINK IT IS A SLEW OF ALL OF THESE TOPICS MIXED TOGETHER. BUT DEFINITELY INFLATION RISING, BOND YIELDS RISING, THE GAP BETWEEN FRENCH BONDS AND GERMAN BONDS AS WELL IS KEEPING INVESTORS WORRIED. I THINK WE DO NEED GOOD NEWS IN THE MARKET, TO SIMPLY GROW OUT OF THIS TECH SELLOFF. OVERALL, SENTIMENT IS A BIT WORRYING IN THE MARKET DUE TO HIGHER OIL PRICES. I THINK WHEN OIL PRICES DROPPED

12:04 DOWN A AND WE EXPECT THAT SOON, I THINK AFTER THE WAR INTENTIONS EASE OFF, THEN WE WILL BE ABLE TO SEE THAT. ABEER: WE ARE OPERATING FOR GOOD NEWS. THANK YOU FOR BEING HERE WITH US. NADIA ELBILASSY, SENIOR MARKET ANALYST AT EQUITY GROUP. COMING UP, THE U.S. IS ORDERING SOME DIPLOMATS TO LEAVE SAUDI ARABIA. WE WILL HAVE THE DETAILS FOR YOU, NEXT. THIS IS BLOOMBERG. ♪

12:44 ABEER: THE U.S. HAS ORDERED THE DEPARTURE OF NON-EMERGENCY PERSONNEL FROM SAUDI ARABIA AMID AS KILLING ATTACKS ON THE KINGDOM. THE LATEST STRIKES KILLED THREE PEOPLE AND TO ATTACKS ON ON ARAMCO OILFIELD. FOR MORE ON THE ESCALATING STORY, I’M JOINED BY LIMBURG’S EXECUTIVE EDITOR FOR THE MIDDLE EAST AND NORTH AFRICA. THREE PEOPLE KILLED OVERALL. SEVERAL INJURED. AN OIL FACILITY WAS TARGETED.

13:17 NO OPERATIONAL DAMAGE. TWO PEOPLE KILLED FROM DEBRIS. YET ANOTHER ESCALATION. WHAT’S THE LATEST? >> IT’S A REMINDER OF THEIR REACH. WE DON’T KNOW IF THIS CAME FROM THEM. THERE’S AN OUTSIDE CHANCE IT CAME FROM MILITIAS OUT WELL – ELSEWHERE. ONE WAY OR ANOTHER, IT SPEAKS TO THIS NOTION OF THIS CONSTANT THREAT TO ENERGY SUPPLIERS, THE LOSS OF LIFE WHICH IS APPALLING. IT KEEPS EVERYTHING ON EDGE.

13:48 THIS IS A REGION THAT IS TRYING HARD TO TRANSFORM ITSELF ECONOMICALLY. IT IS DEEPLY FOCUSED ON ENSURING PROSPERITY FOR ITS PEOPLE FOR MANY GENERATIONS TO COME. THIS JUST MAKES THAT MUCH HARDER. THE BIG PICTURE HERE IS, IN ORDER TO KEEP THE TRANSFORMATION GOING, YOU HAVE TO FIND A DIPLOMATIC ROUTE TO TRY TO RESOLVE THIS ONGOING ISSUE. ABEER: YOU OFTENTIMES MENTIONED THAT BRENT CRUDE PRICES COULD GET MUCH HIGHER, MUCH QUICKER. THIS REMINDER THAT YOU HAVE

14:19 SPOKEN ABOUT ABOUT TARGETING. PRECISION IN TARGETING OIL FACILITIES. HOW VULNERABLE IS ENERGY INFRASTRUCTURE IN THE GULF? HOW FAST COULD IT UPEND THE MOVEMENT OF OIL IN HORMUZ? >> ENERGY INFRASTRUCTURE IS NOT UNIQUE HERE. AROUND THE WORLD THIS WILL NOBLE. THESE ARE COMPLEX BITS OF KIT. HUNDREDS OF THOUSANDS OF KILOMETERS. VERY DIFFICULT TO DEFEND. BY AND LARGE, THE REGION HAS DONE A GOOD SIDE DEFENDING

14:53 ITSELF. NONETHELESS, IT’S A COMPLEX SITUATION. ONGOING RANDOM ATTACKS. IT’S DIFFICULT TO MAKE CONTINGENCY PLANS TO FULLY PROTECTED. OIL PRICE IS A REFLECTION OF THE ONGOING CONCERN. ON TOP OF THAT, CONTINUING ATTACKS ON RUSSIAN INFRASTRUCTURE AND THAT IS FEEDING INTO THE IDEA THAT THERE’S THIS NEAR-TERM SUPPLY CRUNCH. HOW MANY BARRELS ARE GETTING THROUGH? THE MARKET IS LOOKING AT THE

15:26 REFINED PRODUCT MARKET AND THINKING, WE HAVE A BIG PROBLEM. ABEER: DIESEL IS ONE OF THEM. BRENT CRUDE. 2% HIGHER BUT STILL RELATIVELY CONTAINED TO THE AMOUNT OF ATTACKS. $111 ON THE BARREL. THANK YOU FOR THOSE INSIGHTS. NOW, FOR MORE ANALYSIS. I’M JOINED BY SENIOR FELLOW FOR MIDDLE EAST POLICY AT THE INTERNATIONAL INSTITUTE FOR STRATEGIC STUDIES. A PLEASURE TO HAVE YOU ON SET WITH US THIS MORNING. LET’S START BY CARRYING THE

15:58 CONVERSATION. I’M TRYING TO UNDERSTAND WHAT THE GOAL OF THE HOUTHIS IS. IS IT TO FORCE THEM BACK INTO SOME KIND OF NEGOTIATING TABLE? THIS IS NOT RELEVANT TO THE WIDER WAR HAPPENING BETWEEN IRAN AND THE UNITED STATES. >> THERE ARE PROBABLY MULTIPLE MOTIVES HERE AT PLAY FOR THE HOUTHIS. IF YOU LOOK AT THE ENTIRE – INTERNAL DYNAMICS, THE CURRENT ESCALATION WAS PARTLY AN ATTEMPT TO PREEMPT WHAT THEY

16:31 SAW AS A SAUDI LED EFFORT TO CONSOLIDATE THE ANTI-HOUTHIS FRONT IN YEMEN. THE SAUDI’S HAD BEEN CONFRONTING OF FRACTURES LANDSCAPE UNDER A SINGLE MILITARY COMMAND EARLIER THIS YEAR. FROM THE HOUTHIS VANTAGE POINT, THERE WAS AN OPPORTUNITY TO PREEMPT THIS SAUDI LED EFFORT. THERE ARE ECONOMIC MOTIVES AS WELL. THE HOUTHIS ARE IN THE BUSINESS OF BLACKMAIL. THEY HAVEN’T BEEN DOING WELL. THE AREAS UNDER HOUTHIS CONTROL HAVE BEEN SUFFERING.

17:04 THEY HAVEN’T BEEN ABLE TO TRANSLATE THE CEASE-FIRE, THE ROADMAP OF SAUDI ARABIA WHICH DATES BACK TO 2032 – 2022. THEN THERE ARE THE LINKAGES WITH THE WAR WITH IRAN. IRAN’S CONTROL OVER THE STRAIT HAS BEEN SLIPPING. THAT OFFERS IRAN THE OPPORTUNITY TO SQUEEZE ENERGY MARKETS EVEN FURTHER. THERE ARE MULTIPLE DYNAMICS. ABEER: WHAT IS THE RISK OF FURTHER CONTAGION OUT OF THIS? RIGHT NOW, SITTING WHERE YOU

17:35 ARE, ARE YOU TILTING TOWARDS SEEING MORE ESCALATION INTO THE WIDER REGION OR MAYBE WE WILL SEE A RETURN TO DIPLOMACY? >> THERE ARE MULTIPLE COUNTRIES ENGAGED ON THE SIDE OF SAUDI ARABIA. THOSE INCLUDE A NUMBER OF REGIONAL COUNTRIES AND COUNTRIES FROM OUTSIDE OF THE REGION INCLUDING PAKISTAN, THE U.K., OTHERS. NONE OF THESE COUNTRIES ARE YET INVOLVED IN SAUDI LED OPERATIONS IN YEMEN. THE REGIONAL INVOLVEMENT IS STILL DEFENSIVE ON SAUDI

18:06 ARABIA’S SIDE. IRAN IS GEARING UP FOR A POSSIBLE ESCALATION, NOT JUST WITH THE WHO SEES – HOUTHIS BUT WITH IRAN AND THE UNITED STATES. ABEER: WHAT IS THE RISK OF U.S. INVOLVEMENT AFTER NOVEMBER 3? >> QUITE SIGNIFICANT. WE’VE SEEN REPORTS OF THE U.S. AND ISRAEL DRAWING PLANS FOR ANOTHER ROUND OF FIGHTING. IT’S QUESTIONABLE WHETHER MORE MILITARY STRIKES WILL ACHIEVE

18:38 WHAT PREVIOUS MILITARY STRIKES AGAINST IRAN HAVE NOT BEEN ABLE TO ACHIEVE. IT’S UNCERTAIN WHETHER IT WILL PRODUCE A CAPITULATION OF THE URANIUM REGIME. THIS REMAINS A VERY HIGHLY UNCERTAIN AND EXTREMELY RISKY BET, ESPECIALLY FOR THOSE OF US IN THE REGION. ABEER: EMMANUEL MACRON WAS VISITING THE UAE AND DECIDED LAST MINUTE TO MAKE A TRIP TO SAUDI ARABIA. WHAT DOES THAT TELL YOU?

19:09 WHAT KIND OF GLIMPSE DOES NOT GIVE YOU INTO THE EUROPEAN THINKING OF RELATIONSHIPS TO BE KEPT WITH THIS PART OF THE WORLD? >> IT TELLS ME THERE’S A SIGNIFICANT AND DEEP INTERDEPENDENCE ON EVERY LEVEL BETWEEN EUROPE AND THE GOALS. PRESIDENT MACRON IS INTERESTED IN OBTAINING GUARANTEES OF DELIVERIES OF DIESEL AND REFINED PRODUCTS. THE EU NEEDS THIS. THE EUROPEAN COUNTRIES NEED THIS REFINED AND CRUDE PRODUCT COMING OUT OF THE REGION.

19:40 FRANCE HAS A NUMBER OF DEFENSE AGREEMENTS WITH COUNTRIES IN THE GULF INCLUDING KUWAIT, QATAR, THE UAE, AND BAHRAIN. SO IN A SENSE, I THINK THIS REALLY POINTS TO THE FACT THAT THE EUROPEANS CAN’T SIMPLY TURN A BLIND EYE TOWARDS WHAT’S GOING ON IN THE GULF AND HOPE THAT IT FIZZLES AWAY. THEY HAVE STAKES BOTH FROM AN ENERGY AND SECURITY VANTAGE POINT. THE LINKAGES BETWEEN IRAN AND THE GOAL THEATER AS WELL AS THE RUSSIAN UKRAINE THEATER ARE ALSO OPERATIONAL ON MULTIPLE LEVELS.

20:14 ABEER: WHO IS IN MORE DIRE NEED TO COME BACK TO THE NEGOTIATING TABLE? THE U.S. OR IS IT IRAN AND THE FACT THAT THEY DON’T HAVE ANY OIL GETTING EXPORTED OUT OF GUIDELINES? >> THE KIND OF PAIN UNDER WHICH BOTH SIDES ARE UNDER IS QUITE DIFFERENT. FROM THE U.S. VANTAGE POINT, IRAN’S ABILITY TO IMPOSE POLITICAL PAIN ON THE TRUMP ADMINISTRATION BY BEING ABLE TO SQUEEZE ENERGY MARKETS AND THE WAY THAT THIS TRANSLATES INTO A

20:45 COST-OF-LIVING DIFFICULTY FOR THE U.S. PUBLIC. IRAN IS UNDER A WHOLE DIFFERENT LEVEL OF PAIN ALTOGETHER. THE ECONOMY IS SQUEEZED. THEY’VE BEEN DEGRADED. I THINK THEY ARE IN AN ECONOMIC DIRE SITUATION. THE PROBLEM IS THE IRANIANS SEE THIS AS AN EXISTENTIAL BATTLE THAT THEY MUST FIGHT UNTIL THE VERY END. SO IT’S NOT SIMPLY A QUESTION OF PAIN. IT’S A QUESTION OF PAIN TOLERANCE. IT’S NOT ENTIRELY CLEAR WHO HAS THE GREATER TOLERANCE. ABEER: I GUESS WE WILL HAVE TO WAIT

21:16 AND SEE. ALWAYS A PLEASURE TO CHAT WITH YOU IN PERSON. SENIOR FELLOW FOR MIDDLE EAST POLICY AND INTERNATIONAL INSTITUTE FOR STRATEGIC STUDIES. CHAIRMAN OF THE UAE SPAIN CHANGE AND SEE ON THE COUNTRIES SPACE AMBITIONS. THAT’S AHEAD. THIS IS BLOOMBERG.

21:53 ABEER: GLOBAL ALUMINUM HAS RESTORED HALF OF THE CAPACITY AT ITS MAIN ABU DHABI SMELTER ASKED HER – AFTER IT WAS DAMAGED IN THE AROUND MORE. IT REMAINS ON TRACK TO RETURN TO FULL CAPACITY BY THE FIRST QUARTER OF NEXT YEAR. PRIVATE EQUITY FIRM EXPANDING ITS MIDDLE EAST PRESENCE WITH A NEW OFFICE IN ABU DHABI’S FINANCIAL HUB. THE FIRM WHICH MANAGES MORE THAN $100 BILLION SAYS THE NEW PHASE WILL DEEPEN TIES WITH REGIONAL INVESTORS AND EXPLORE NEW INVESTMENT OPPORTUNITIES. COMING UP, THE UAE’S PUSH INTO

22:27 SPACE CONTINUES WITH ITS LATEST COMMERCIAL SATELLITE LAUNCH. WE DISCUSSED THAT WITH THE COUNTRIES SPACE AGENCY CHAIRMAN, NEXT. THIS IS BLOOMBERG. ♪

23:07 ABEER: GOOD MORNING. THIS IS “HORIZONS MIDDLE EAST AND AFRICA.” OUR TOP STORIES THIS MORNING, AI CONFIDENCE WAIVERS. STOCKS FALL AS MIXED MEGA CAP EARNINGS FAILED TO REASSURE INVESTORS ON THE TECH TRADE. TESLA RETREATS AFTER CUTTING ITS SPENDING OUTLOOK WHILE META DOUBLES DOWN ON AI INVESTMENT. ATTACKS ESCALATE, THE U.S. ORDERS DEPARTURE FOR NONEMERGENCY PERSONNEL AND THEIR FAMILIES FROM SAUDI ARABIA DUE TO THE GROWING THREAT FROM HOUTHI MILITANTS. THE MOVE COMES AFTER DEADLY STRIKES ON AIRPORTS AND CRITICAL ENERGY INFRASTRUCTURE.

23:45 AND I WILL BE SPEAKING WITH THE CHAIRMAN OF THE UAE SPACE AGENCY ON THE COUNTRY’S SPACE AMBITIONS. BUT BEFORE ALL OF THAT, IT IS 8:30 A.M. ACROSS THE EMIRATES. I’M ABEER ABU OMAR IN DUBAI. LET’S GIVE YOU A QUICK LOOK AT MARKETS. S&P FUTURES .7% HIGHER. NASDAQ 100 FUTURES DROPPING MORE THAN 1% AT THIS POINT. THIS IS A STORY OF CAPEX. IT IS A STORY OF AI WAVERING. TESLA SAID THAT SPENDING WILL

24:16 BE REDUCED OR THE FORECAST FOR SPENDING TO 20 BILLION FROM A FORECAST ABOVE 25 BILLION EARLIER. META DOUBLES DOWN ON AI. THE MARKET IS CHOOSING TO FOLLOW THE NEGATIVE LEAD FOR THE TIME BEING. YOU’RE SEEING THAT NEGATIVE PERFORMANCE SLIPPING SHOE THE ASIAN SESSION. THE KOSPI IS RETREATING. HEAVYWEIGHTS LIKE SAMSUNG AND SK HYNIX ARE RETREATING. IT IS ALL REALLY PART OF THE WIDER AI PLAY AND OF COURSE THE GEO POLITICS, ENERGY PRICES, BRENT CRUDE ABOUT $111 ON

24:47 BARREL. IT IS ABOUT 2% HIGHER. WE OF COURSE HAVE SPOKEN ABOUT THE MOST RECENT ATTACKS ON SAUDI ARABIA. THREE PEOPLE KILLED OVERNIGHT. ONE IN THE AIRPORT. SEVERAL OTHER PEOPLE INJURED. TWO AT AN ARAMCO OIL FACILITY. THE DEBRIS FROM A CRONE HAS KILLED TWO INDIVIDUALS THERE. THOSE ESCALATIONS IN THE MIDDLE EAST CONTINUE WITH THE WIDER CONTEXT OF THE WAR BETWEEN IRAN AND THE U.S. CONTINUING. THE YIELDS 5.1%. THE DROP IS FOUR BASIS POINTS

25:23 AS OF NOW, OF COURSE INVESTORS MAY BE CHOOSING TO RETURN TO THE STATUS OF SAFE HAVEN THAT THE TREASURIES PROVIDE. MUCH LOWER THAN THE ELEVATED LEVELS WE HAD SEEN OVER THE PAST MONTH OR SO AND NOW FOR A LOOK AT WHAT ASIAN MARKETS ARE DOING, WE HAVE AVRIL HONG IN SINGAPORE. WHAT ARE YOU LOOKING AT? >> WE’RE SEEING A DOWN DAY YESTERDAY. YESTERDAY’S GREEN LOOKED QUITE SHORT LIVED AGAINST THE BACKDROP OF AS YOU HIGHLIGHTED META INCREASING THEIR CAPEX.

25:56 THAT TELLS YOU OF PROGRESS IN AI BUT INVESTORS IN ASIA ARE CHOOSING TO FOCUS ON THE NEGATIVES. TESLA PULLING BACK ON CAPITAL EXPENDITURE WHICH IT NEEDS TO TRANSFORM INTO A MORE AI ROBOTICS COMPANY. LG AS WELL. THESE ARE THE STOCKS THAT ARE DRAGGING THE KOSPI FOR EXAMPLE ALONG WITH THE CHIP HEAVYWEIGHTS IN SOUTH KOREA. ALSO IN SOUTH KOREA YOU GET A MACRO CONCERN.

26:29 YOU HAVE THE GOVERNOR TODAY REITERATING THEY NEED TO GET INFLATION BACK TO TARGET AND UNTIL THEN A POLICY RESPONSE IS REQUIRED, EVEN AS TODAY, AS EXPECTED THEY LEFT THE BENCH MARK RATE UNCHANGED FOLLOWING TWO BACK-TO-BACK RATE HIKES WHICH ARE A REALLY RARE OCCURRENCE. YOU ARE SEEING HOW THE STICKY INFLATION CONCERNS ARE PLAYING OUT IN TERMS OF CENTRAL BANK GUIDANCE AS WELL. GIVEN WHAT WE’RE SEEING ALSO WITH THE GEO-POLITICAL BACKDROP

27:05 AT THE MOMENT, ABEER. ABEER: YEAH, AVRIL, THANK YOU AS ALWAYS FOR THOSE UPDATES. RETURNING TO THE U. ASHES AND SPACE. A MILESTONE FOR THE SPACE INDUSTRY. A FIRST COMMERCIAL SATELLITE BUILT IN THE COUNTRY WAS SUCCESSFULLY LAUNCHED THIS MONTH. TO DISCUSS THIS AND THE LAUNCH AND THE COUNTRY’S WIDER AMBITIONS FOR SPACE, I’M JOINED BY AHMAD BELHOUL AL FALASI, CHAIRMAN OF THE UAESPACE MINISTRY. CONGRATULATIONS ARE IN ORDER

27:39 LET’S TALK ABOUT THE TRANSITION HOW THE UAESTARTED ITS SPACE JOURNEY. 2006. NOW 2026 WE SEE THIS HAPPEN. CAN YOU WALK US THROUGH FRUITION OF THIS? >> ABSOLUTELY. THE FIRST DECADE OR TWO, WE WERE BUILDING THE BASICS OF OUR SECTOR. WE HAD OUR FIRST SATELLITE IN 2018. OUR FIRST ASTRONAUT WENT TO THE SPACE STATION IN 2019.

28:10 THE FIRST DECADE WAS GETTING OUR SPACE SECTOR, THE BASICS IN PLACE. ALSO AT THE SAME TIME TRADING AND GETTING PEOPLE INTO SPACE. OUR FOCUS NOW IS THE SPACE ECONOMY AND THE BIG PART OF THAT IS COMMERCIAL SPACE. WE HAVE A COMPANY BASED IN THE UAETHAT HAS INVESTED OVER $1 BILLION DEVELOPING SATELLITES WITH AI AND THEY HAVE CONTRACTS INTERNATIONALLY. WE JUST SHIPPED OUR FIRST COMMERCIAL SATELLITE.

28:42 THAT TRADITION IS PART OF ANY HEALTHY ECONOMY. WHEN YOU GET INTO SPACE, YOU RELY ONLY ON GOVERNMENT YOU WON’T GET TOO FAR. A STRONG BASE ECONOMY IS TO HAVE A BALANCE BETWEEN PUBLIC SPENDING AND PRIVATE SECTOR. ABEER: DOES THAT MEAN YOU’RE LEANING TOWARD PRIVATE SECTOR SPENDING AS WELL? CAN YOU GIVE US A BREAKDOWN? >> ABSOLUTELY. THE SPENDING OVERALL, 27%. THE MOST IMPORTANT PART FOR ME IS ALMOST HALF OF THAT IS

29:14 COMMERCIAL. 38% IS PRIVATE SECTOR. WHEN IT COMES TO SPACE GIVEN WHAT WE HAVE DONE OVER THE PAST DECADE OR TWO, THERE IS A STRONG – FROM INVESTORS THAT THE UAEIS INTERESTED IN SPACE AND AI. I MENTIONED THE COMPANY OR BITWORKS. YOU BUILD A SATELLITE THAT TAKES IMAGES AND SHOOT THEM

29:47 DOWNSTREAM FOR PEOPLE TO PROCESS. IT PROCESSES EVERYTHING AND SENDS A SIGNAL. FOR EXAMPLE, THERE IS AN OIL LEAKAGE. ABEER: YOU SPOKE ABOUT SOME OF THE ASTRONAUTS THAT YOU HAVE SENT TO SPACE A FELLOW MINISTER AT THIS POINT. YOU ALSO HAVE TWO OTHER ASTRONAUTS READY TO GO. WHAT ARE YOUR GOALS FOR THEM? ARE YOU LOOKING AT ANY MISSIONS SPECIFICALLY?

30:18 >> YES. ONE WENT ON A SHORT MISSION FOR ONE WEEK. ONE WENT ON A SIX-MONTH MISSION AND A SPACE WALK. BOTH WE ARE GETTING THEM READY. THEY EXTENDED THAT AS WELL FOR TWO TO THREE YEARS. THAT IS WHAT WE’RE LOOKING INTO. AND THERE ARE OPTIONS FOR COMMERCIAL SPACEFLIGHT AS WELL. WE HAVE BEEN APPROACHED BY DIFFERENT COMPANIES THAT OFFER COMMERCIAL SPACE AND THERE IS ALSO THE ULTIMATE GOAL OF THE MOON. I THINK THE U.S. IS LEADING THAT EFFORT THROUGH

30:52 ARTEMIS. ABEER: WHAT COMPANIES? >> THERE ARE SEVERAL COMPANIES THAT ARE TALKING TO US AND TALKING TO OTHERS IN TERMS OF SENDING ASTRONAUTS INTO OUTER SPACE. ABEER: THAT FALLS INTO THE UAE’S WIDER AMBITIONS. THE UAEMENTIONS THAT IT WANTS TO BE AMONG THE TOP SPACE ECONOMIES IN FIVE YEARS. WHAT DOES THAT INDICATE? WHAT ARE THE METRIX?

31:24 >> ABSOLUTELY. ARAMCO OCD. ONE IS THE GOVERNMENT SPENDING ON SPACE, INFRASTRUCTURE, THERE IS ALSO THINGS AROUND THE ECOSYSTEM AND THE SUPPLY CHAIN. TO INVEST IN SPACE, YOU HAVE TO BE SURE THERE IS A SUPPLY CHAIN IN PLACE. TODAY WE’RE – WE ARE 14TH. WE HOPE TO BE IN THE TOP 10 BY 2021. ABEER: OK. FOUR SPOTS LEFT TO GO. THAT SHOULD BE EASY. >> PEOPLE DON’T UNDERSTAND WHEN YOU COME TO GLOBAL RANKINGS,

31:59 THE PACE REQUIRED TO MOVE UP A NOTCH, YOU HAVE TO THINK AHEAD AND GO REALLY FAST. THAT IS SOMETHING THAT IS KEEPING US BUSY BUT AT THE SAME TIME WE BENEFIT FROM THE UAEIN SPACE. WE FOCUS HAVING INFRASTRUCTURE IN PLACE. MANY STARTUPS TELL US THAT WE WANT SOME SHARED INFRASTRUCTURE TO TEST OUR ROCKET ENGINES. THAT’S SOMETHING WE’RE TAKING SERIOUSLY.

32:30 AND THE UAEIS OPEN TO GLOBAL MARKETS. WE HAVE SIGNED PARTNERSHIPS WITH COMPANIES GLOBALLY. THEY CAN BENEFIT FROM THESE AGREEMENTS. AS I ITSELF HAS BECOME INCREASINGLY ATTRACTIVE FROM A MARKET PERSPECTIVE. ABEER: LET’S TALK ABOUT THE GEO POLITICS A LITTLE BIT. THE WORRIES ABOUT MILITARIZATION OF SPACE. ARE YOU WORRIED ABOUT WHETHER

33:01 IT IS THE SPACE OR THINGS SUCH AS THE GOLDEN DOME FOR EXAMPLE. IS THAT SOMETHING YOU CONSIDER? >> THE NATIONS ARE LOOKING INTO IT VERY CLOSELY. WE’RE A MEMBER OF THAT COMMITTEE AS WELL FOR THE SAFE USE OF OUTER SPACE. THE U.S. STARTED WITH THEIR SPACE CORE, LOOKS INTO SPACE. AT THE END OF THE DAY, EVERY COUNTRY NEEDS TO SIGN AGREEMENTS NO HOLD US RESPONSIBLE BUT YOU HAVE TO BE PREPARED ALWAYS. MILITARY, DEFENSE IN SPACE HAVE

33:37 BECOME INCREASINGLY CLOSE TO EACH OTHER. ALMOST 50% OF APPLICATIONS ARE DUAL USE. IF YOU ARE ABLE TO LAUNCH A ROCKET INTO SPACE FOR SPACE EXPLORATION, THAT IS – ABEER: 100%, BUT IT ALSO COULD BE USED. THERE IS GOOD AND BAD HERE. SATELLITE IMAGERY HAS BEEN USED FOR PURPOSES THAT ARE NEGATIVE FOR HUMANITY. IS THAT SOMETHING THAT YOU WORRY ABOUT WHEN YOU LAUNCH INTO SPACE AT ALL?

34:08 >> FOR US, WITH THE UNITED NATIONS, WE HAVE THE COMMITTEE ON EXACTLY THAT. THE BENEFIT THAT HAS HAPPENED TO COUNTRIES WHERE WE DISTRICT OUR IMAGERY FOR – WARFARE. I THINK ACCESS, ESPECIALLY TO CONTINENTS THAT ARE UNDERDEVELOPED. WE OFFER THESE IMAGES AND INFORMATION. IT IS QUITE CRUCIAL. LOOK AT THE UAE. WE HAD THE FLOODS YEARS BACK.

34:42 IMAGERY HELPED US MOVE THE RESOURCES TO THE RIGHT PLACE AT THE RIGHT TIME. ACCESS TO DATA AND CONTINUOUS DATA. TAKE A STEP BACK. IT IS SOMETHING VERY CRITICAL AND I THINK THE BENEFIT OF US USING IT FOR AVOIDING HUMAN DISASTER AND MINIMIZING IT OUTWEIGHS WARFARE. ABEER: YOU TOLD ME BEFORE ALL OF THIS, YOU WILL MAKE SPACE EASY FOR ME. YOU WERE RIGHT. THANK YOU SO MUCH FOR COMING HERE AND FOR YOUR TIME THIS MORNING. >> ABSOLUTELY. ABEER: AHMAD BELHOUL AL FALASI,

35:13 CHAIRMAN OF THE UAE SPACE AGENCY. COMING UP, THE CEO OF EXPLAINS HOW HIS COUNTRY’S EXPORTS HAVE GONE BACK TO PRECONFLICT LEVELS. THIS IS BLOOMBERG.

35:43 ABEER: WELCOME BACK TO “HORIZONS MIDDLE EAST AND AFRICA.” KUWAIT PETROLEUM CORPORATION CEO SAID THE COUNTRY’S CRUDE EXPORTS HAVE RETURNED TO PREWAR LEVELS. DESPITE THAT, HE TOLD BLOOMBERG THAT ADDITIONAL SECURITY IS STILL NEEDED FOR SHIPS TRANSITING THE STRAIT OF HORMUZ. HAVE A LISTEN. >> WE HAVE BEEN ABLE TO MOVE OUR PRODUCTION FROM ALMOST NOTHING REALLY DURING THE HEIGHT OF THE CRISIS TO WELL OVER 2 MILLION BARRELS A DAY AND OUR FIELDS AND OUR FACILITIES ARE RESILIENT. THEY CAN HANDLE THAT.

36:16 WHAT IS MISSING RIGHT NOW IS ADDITIONAL SECURITY FOR SHIPS TO TRANSIT THROUGH THE STRAIT SO THAT WE CAN RAISE OUR PRODUCTION TO WHAT IT WAS BEFORE THIS CRISIS BEGAN AT 2.7 BARRELS PER DAY. R. >> WHEN YOU SAY YOU’RE MEETING YOUR OBLIGATION, 100% OF WHAT YOUR CUSTOMERS ARE ASKING FOR, ARE YOU STILL GETTING OR MAKING CONCESSIONS? >> ON THE CRUDE SIDE, WE ARE. WE ARE EXPORING. BASICALLY DOING WHAT WE WERE DOING BEFORE THE WAR BEGAN.

36:48 WE ARE MEETING THE NEEDS OF OUR CUSTOMERS ON CRUDE OIL. WE HAVE HAD TO RESTRAIN SOME OF OUR REFINING CAPACITY ON THAT. YOU’RE SEEING THAT RESULT IN INTERNATIONAL DIESEL AND JET FUEL PRICES. ONE OF THE BIGGEST REFINERIES IN THE WORLD THAT PRODUCES JET AND DIESEL IS ACTUALLY IN KUWAIT. WE NEED MORE PRODUCT CARRIERS TO COME INTO THE GULF TO CARRY THAT PRODUCT. >> IS THE MAIN CONSTRAINT ON THE REFINED PRODUCTS, GETTING

37:22 THE TANKERS YOU NEED OR A SAFE ESCORT OF THOSE TANKERS IN AND OUT? >> IT IS BOTH. ONCE YOU HAVE SAFE EDUCATION COURT, MORE AND MORE TANKERS FROM THE INTERNATIONAL COMMUNITY WILL COME. WE’RE USING OUR FLEET TO SHUTTLE PRODUCT OUTSIDE AND MOVE TO OUR COMMERCE OUTSIDE. >> YOU HAVE TAKEN SOME DAMAGE TO YOUR TANK TANKERS BECAUSE OF THIS WAR. HAVE YOU BEEN ABLE TOLL REPLACE AND REPAIR THOSE IN AN EFFICIENT MANNER? >> WE HAVE BEEN DOING EVERYTHING WE CAN TO MOVE THE

37:53 SHIPMENTS OUT. THAT IS REPAIRING THE TANKERS THAT HAVE BEEN HIT. SOME OF THOSE ARE BACK IN SERVICE. OTHERS ARE IN THE PROCESS. >> HAVE YOU ASKED THE U.S. MILITARY FOR MORE HELP ON THE NAVAL SIDE? >> THEY HAVE BEEN FANTASTIC SUPPORTING US ALL THE WAY THROUGH. IT WAS VERY CLEAR TO US FROM THE BEGINNING THERE IS NOTHING THAT IS 100% EFFECTIVE. WE WILL ABSORB SOME HITS BUT IT IS A RISK THAT WE ARE TAKING BUT WE’RE ALSO ASKING THE INTERNATIONAL COMMUNITY, ASKING

38:25 OUR CUSTOMERS TO BEAR A GREATER PORTION OF THAT RESPONSIBILITY AND MOVE SHIPS TO WORK WITH US ON THE RISKS THAT WE’RE TAKING. >> WHY HAVEN’T WE SEEN THAT YET? >> WE’RE STARTING TO SEE THAT. OUR CUSTOMERS ARE NOW COMING INTO THE GULF SUPPORTING US WITH THE SHIPPING AND STARTING TO COLLECT PRODUCT FROM KUWAIT. ABEER: THAT WAS KUWAIT PETROLEUM CEO SPEAKING TO BLOOMBERG TV EARLIER. COMING UP, BLOOMBERG

39:03 UNDERSTANDS THAT SOUTH AFRICA’S DC IS NEAR A DEAL. THAT STORY IS NEXT. THIS IS BLOOMBERG. ABEER: WELCOME BACK TO “HORIZONS MIDDLE EAST AND AFRICA.” BLOOMBERG UNDERSTANDS THAT SOUTH AFRICA’S BIGGEST DEVELOPMENT FINANCE INSTITUTION HAS REACHED AN INITIAL AGREEMENT WITH ARCELORMITTAL TO TAKE OVER THE SOUTH AFRICAN

39:34 UNIT. WE ARE TOLD THE DEAL IS WORTH ABOUT $610 MILLION AND FOR MORE DETAILS ON THE DEAL AND WIDER SOUTH AFRICAN NEWS, WE’RE JOINED BY JENNIFER ZABASAJJA. JEN, FOR STARTERS, WALK US THROUGH WHAT THE DETAILS ARE OF THIS DEAL WE WERE REFERRING TO. JENNIFER: THIS IS SIGNIFICANT NEWS ABEER. IT COMES AT A TIME WHEN THESE NEGOTIATIONS FOR THIS TAKEOVER AND THIS DEAL HAVE BEEN GOING

40:04 ON SINCE ABOUT 2023. SO IT IS QUITE SIGNIFICANT FOR SOUTH AFRICA’S INDUSTRIAL INDUSTRY BUT MORE BROADLY ARCELORMITTAL WHICH YOU JUST POINTED OUT THERE. YOU SAID THE DEAL IS WORTH ABOUT $610 MILLION. THAT IS ABOUT 10 BILLION RAND. SOUTH AFRICAN RAND. BLOOMBERG’S UNDERSTANDING IS THAT THE OFFER INCLUDES A CASH COMPONENT OF 3 BILLION RAND ALONGSIDE THEIDC TAKING ON

40:36 ABOUT 7 BILLION RAND OF DEBT ACCUMULATED BY ARCELORMITTAL SOUTH AFRICA. JUST TO MENTION THIS AGAIN HAD BEEN SOMETHING THAT HAD BEEN IN DISCUSSION FOR A NUMBER OF YEARS AFTER WE DID HEAR ARCELORMITTAL SOUTH AFRICA ACTUALLY PLANNING TO SHUT DOWN THE STEEL MILLS THAT ARE CRITICAL TO SOUTH AFRICA’S AUTOMOTIVE AND MINING INDUSTRIES. WE KNOW THIS HAS BEEN VERY IMPORTANT TO THE PRESIDENT. FROM A BLOOMBERG PERSPECTIVE,

41:07 WE ARE WAITING TO SEE HOW THIS TRANSACTION AND WHETHER OR NOT THIS TRANSACTION WOULD FOLLOW THROUGH. AT THIS POINT. THEY ARE ALSO IN NEGOTIATIONS. RIGHT NOW THE NEXT STEP REALLY IS TO HAVE A SHAREHOLDER VOTE WHICH IS SUPPOSED TO HAPPEN BY THE END OF THE YEAR AND POTENTIALLY WE SEE THIS HANDING OVER BUT AGAIN, THE AUTOMOTIVE AND MINING INDUSTRY IS VERY IMPORTANT TO GROWTH OF THE SOUTH AFRICAN ECONOMY AND IT HAS BEEN SOMETHING THAT WE ONCE SAW THAT WAS THRIVING AND HAS BEEN IMPORTANT FOR THE GOVERNMENT TO AT LEAST TRY TO

41:38 RETAIN AND HOLD ON TO IN ORDER TO KICK START EVEN MORE GROWTH FOR THE ECONOMY. ABEER: LET’S STICK WITH SOUTH AFRICA. THE LATEST EDITION OF NEXT AFRICA AIRS LATER TODAY. IT FOCUSES ON THE MASSIVE PUSH TO REVIVE JOHANNESBURG AFTER YEARS OF NEGLECT. WHAT CAN YOU TELL US ABOUT THAT? JENNIFER: RIGHT. LET’S JUST REMEMBER JOHANNESBURG WHERE I AM RIGHT NOW CONTRIBUTES ALMOST 16% OF

42:10 ECONOMIC OUTPUT TO GDP FOR SOUTH AFRICA. IN MANY WAYS, IT STILL IS SEEN AS THE FINANCIAL HUB OF THE CONTINENT BUT ALSO IT IS VERY CRITICAL TO THE COUNTRY AND TO THE SUCCESS OF THE COUNTRY AND SO THAT WE HAVE SEEN WEAK GROWTH OVER THE PAST FEW YEARS MORE BROADLY AND IF YOU BREAK IT DOWN ON TO A MUNICIPAL LEVEL AND A CITY LEVEL HERE IN JOHANNESBURG, DETERIORATION OF INFRASTRUCTURE, OF PORTS, AND OF BUSINESSES MORE BROADLY HAS CREATED AN ENVIRONMENT WHERE A NUMBER OF BUSINESS LEADERS HAVE SAID SOMETHING NEEDS TO CHANGE.

42:42 SO WE ACTUALLY DID SPEAK TO HENDRICK WHO IS THE CO-FOUND ERR AND CEO OF 91 ABOUT WHAT HE THINKS 91 IS BASED IN CAPETOWN BUT OF COURSE HAS INVESTED INTEREST INTO THE ECONOMY MORE BROADLY. THIS IS WHAT HE TOLD US. >> THE CHALLENGE WITH JOHANNESBURG IS IF THAT CITY DOESN’T TURN AROUND, THE RETENTION OF EXECUTIVE TALENT WOULD BE AN ISSUE. PEOPLE DON’T WANT TO LIVE IN

43:14 PLACES WHERE THERE ARE TOO MANY POTHOLES ETC. BUT JOHANNESBURG IS STILL IN PRETTY GOOD SHAPE BY ANY STANDARDS AND I THINK IT COULD BE TURNED AROUND RELATIVELY QUICKLY. JENNIFER: SO THAT WAS PART OF WHAT HE TOLD US. OF COURSE THE REASON WHY WE FOCUSED ON THIS THIS MONTH IS SIMILAR TO WHAT WE’RE SEEING IN THE MID-TERMS IN THE U.S., SOUTH AFRICA IS GOING TO BE HOLDING MUNICIPAL ELECTIONS AND JOHANNESBURG IS ONE OF THOSE KEY AREAS AND POTENTIALLY WE SEE A SHAKEUP IN PARTY AND THAT

43:48 COULD HAVE AN EFFECT IN HOW THE CITY IS RUN FROM AN ECONOMIC STANDPOINT BUT ALSO MORE BROADLY WHAT THAT LOOKS LIKE FOR BUSINESSES AND SO WE SPOKE TO A NUMBER OF BUSINESS LEADERS ABOUT WHAT THEY SEE HAPPENING AND WHERE THE INVESTMENT LOOKS LIKE MOVING FORWARD, BUT AT THIS POINT, THE CITY HAS BEEN FOR PAST FEW YEARS OWED HUNDREDS OF MILLIONS OF RAND TO A NUMBER OF STATE UTILITY PROVIDERS SO IT REALLY IS IN THE INTEREST OF THE CITY AND OF AFRICA’S LARGEST ECONOMY TO

44:19 TURN A CITY LIKE JOHANNESBURG AROUND. THAT’S WHY WE FOCUSED ON THIS FOR NEXT AFRICA, ABEER. ABEER: OK. THANK YOU AS ALWAYS FOR THOSE UPDATES. BLOOMBERG’S CHIEF AFRICA CORRESPONDENT JENNIFER ZABASAJJA. CATCH NEXT AFRICA AIRING ON TV LATER TODAY. SOME OF THE OTHER STORIES WE’RE FOLLOWING. SOUTH AFRICAN BONDS RALLIED AFTER THE GOVERNMENT CUT WEEKLY ISSUANCE IN ITS BUDGET POLICY STATEMENT.

44:50 THE GOVERNMENT SAID THAT PEAKED AT 78.4% OF GDP IN 2025 AND 2026 SAND EXPECTED TO DECLINE IN THE YEARS AHEAD. THE YIELDS ON 10-YEAR BONDS FELL TO ITS LOWEST IN MORE THAN A MONTH. JPMORGAN MORGAN UNIT IN TURKEY SAYS IT PLANS TO CEASE OPERATING IN THE COUNTRY. IT HAS NOT HAD INVESTMENT ACTIVITY SINCE JULY 2015.

45:21 THE ANNOUNCEMENT COMES AT A TURBULENT TIME FOR THE MARKET WITH THE ISTANBUL 100 INDEX DOWN 15% SINCE MID SEPTEMBER AMID A FUND SCANDAL. A QUICK LOOK AT WHERE RISK AVIETTES SITTING. EVERYTHING IS IN THE RED. QUITE A PAINFUL DAY. NASDAQ OVER 1% LOWER. EURO STOXX 50 PICTURES ONCE AGAIN POINTING TO A NEGATIVE START IN EUROPE TODAY. THAT’S IT FOR “HORIZONS MIDDLE EAST AND AFRICA.” “DAYBREAK: EUROPE” IS UP NEXT.

45:54 THIS IS BLOOMBERG. ♪