# Oil Heads For Biggest Weekly Surge in Years

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 6 Mar 2026, 21 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/58e85be7-dbb5-4043-afed-af80014dc0b3/bbc2d8df-a0e9-4a99-a9f4-b405002f58c6/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Business and finance news from the Asia-Pacific. The US-Israeli offensive against Iran has rattled energy markets, driving crude oil to multi-year highs on fears that disruptions in the Strait of Hormuz may choke supplies and reignite inflation. That came as equity investors confront stretched valuations after an artificial intelligence-fueled rally pushed stocks to elevated levels. We spoke to Winnie Wu, Head of APAC Equity Strategy at Bank of America Global Research. Plus - Goldman Sachs Natural Gas Research Head Samantha Dart says a scenario where Brent crude prices cross the 100 dollar threshold as "possible" if the Strait of Hormuz were to experience several weeks of interrupted oil flow. She spoke to Bloomberg's Haidi Stroud-Watts and Avril Hong. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
[0:11] Speaker 2: Welcome to the Daybreak Asia podcast. I'm Doug Krisner. These days,
[0:15] Speaker 2: for financial markets, it's really all about crude oil driving
[0:18] Speaker 2: the price action In New York. On Thursday, prices jumped
[0:22] Speaker 2: after Iran launched a fresh wave of missile and drone
[0:25] Speaker 2: strikes across the Gulf. WTI was up eight and a
[0:28] Speaker 2: half percent to eighty one dollars. That's the highest level
[0:31] Speaker 2: we've seen since January twenty twenty five. Then late in
[0:35] Speaker 2: the day, a retreat during the electronics session that came
[0:38] Speaker 2: on a report of potential US Treasury action in the
[0:42] Speaker 2: oil futures market. Reuter's reported an announcement could come soon,
[0:47] Speaker 2: And now we are learning the US will allow some
[0:49] Speaker 2: Russian oil sales to India. The Treasury Department is issuing
[0:53] Speaker 2: a temporary waiver to Indian refiners, Treasury Secretary Besen saying
[0:57] Speaker 2: it will not provide significant financial benefit to the Russian government.
[1:02] Speaker 2: And at the same time, the Chinese government has told
[1:04] Speaker 2: top refiners to suspend exports of diesel and gasoline. For
[1:09] Speaker 2: a closer look at how the oil story is impacting
[1:12] Speaker 2: other markets, I'm joined by Winnie Wu Winnie is head
[1:15] Speaker 2: of APAC Equity Strategy at Bank of America Global Research.
[1:19] Speaker 2: She joins us from Hong Kong. Thank you for being here, Winnie.
[1:23] Speaker 2: As you look at what's happening with oil, where do
[1:25] Speaker 2: you focus next?
[1:28] Speaker 3: Apparently oil energy prices will have a broad impact on
[1:33] Speaker 3: global economy and markets, and I think for Asia in particular,
[1:38] Speaker 3: many Asias are net oil importers, and their economies and
[1:43] Speaker 3: market will be impacted through the disruptions of oil and
[1:48] Speaker 3: trade channels. Although what matters will be the magnitude and
[1:52] Speaker 3: the duration of the oil shop, which clearly market is
[1:57] Speaker 3: watching very closely. For different Asian economies, the impact will diverge.
[2:03] Speaker 3: Relatively speaking, You know, China is actually one of the
[2:07] Speaker 3: relatively less impacted compared to either markets or economies like
[2:12] Speaker 3: Career Japan, because China over the past decades has been
[2:18] Speaker 3: trying to diversify its energy sources, developing renewable energies wind, solar, nuclear.
[2:29] Speaker 3: China domestically also have a relatively large code supply. Also
[2:34] Speaker 3: in terms of oil dependence from the Middle East. Based
[2:38] Speaker 3: on our housevield, we show that you know, countries like
[2:42] Speaker 3: Japan's over ninety percent oil supply from the Middle East,
[2:47] Speaker 3: whereas in China the reliance is probably like more like
[2:50] Speaker 3: forty to fifty percent. So clearly, you know energy oil
[2:54] Speaker 3: price will lead to broad inflation concerns and that will
[2:59] Speaker 3: drag down the Markey performance. But actually in a relative
[3:03] Speaker 3: perspective China, which PPI is still in the negative territory,
[3:09] Speaker 3: the damage of energy price increase is probably less a
[3:14] Speaker 3: concern for China. Also for China market this year, market
[3:18] Speaker 3: actually didn't expect or didn't price significant rate cuts, right,
[3:23] Speaker 3: so that even if you know, with the higher energy prices,
[3:28] Speaker 3: deflation become narrow and turning into some reflation. I think
[3:34] Speaker 3: the impact on China's monetary policy will also be relatively limited.
[3:38] Speaker 2: So we just had the National People's Congress in China
[3:41] Speaker 2: and officials softened the growth target for GDP this year.
[3:45] Speaker 2: I think they cut it to a range of between
[3:47] Speaker 2: four and a half to five percent, which is the
[3:50] Speaker 2: first reduction we have seen since twenty twenty three. Give
[3:52] Speaker 2: me your sense on what we can expect in terms
[3:56] Speaker 2: of the growth story for China and what may be
[3:59] Speaker 2: underneath the hood, so to speak, what may drive this
[4:01] Speaker 2: growth story on the mainland.
[4:03] Speaker 3: With China's growing base of the overall GDP, it's just
[4:09] Speaker 3: harder and harder to maintaining a super high growth rate, right.
[4:13] Speaker 3: And also I think, you know, there has been market
[4:17] Speaker 3: concerns about what's the marginal cost of driving the growth, Right,
[4:22] Speaker 3: is that increasing a lot of the leverage in the
[4:26] Speaker 3: corporate sector, in the government, is that that polluting the environment,
[4:31] Speaker 3: is building too much over capacity and lead to the
[4:35] Speaker 3: capital misallocation. So I actually think, you know, a gradual
[4:39] Speaker 3: slowdown is almost inevitable over the long term as the
[4:44] Speaker 3: economy becomes bigger and richer. And also that in light
[4:49] Speaker 3: of the current environment we're trying to still have these
[4:53] Speaker 3: structural challenges of you know, over capacity, inflation, Allowing some
[5:00] Speaker 3: level of slowdown is actually healthier. China's bigger problem is
[5:04] Speaker 3: not so much about should we drive six percent of
[5:07] Speaker 3: five percent GDP growth, but it's really too you know,
[5:11] Speaker 3: it's really about bringing the welfare of the people right,
[5:17] Speaker 3: the society and addressing its strategic concerns in terms of
[5:23] Speaker 3: the issues in you know, reducing overcapacity, addressing the deflationary issue,
[5:29] Speaker 3: rebuild consumer confidence, and to some extent, the external issues
[5:34] Speaker 3: in terms of mitigating the trade tensions, stabilizing the geopolitical environment,
[5:42] Speaker 3: so I actually don't think market should take it nectively.
[5:45] Speaker 2: We've heard from President Chichenpin in the past that he
[5:48] Speaker 2: has more focused on the quality of growth rather than
[5:51] Speaker 2: the quantity, and a lot of the focus coming out
[5:54] Speaker 2: of the administration has been on certain advanced technologies. It's
[5:59] Speaker 2: very interesting today in the US we learned that the
[6:02] Speaker 2: Trump administration is considering the use of US government permits
[6:07] Speaker 2: for virtually all exports of AI accelerators. We're being told
[6:12] Speaker 2: that these rules are in draft form, and they're not
[6:14] Speaker 2: really meant to function as an export band of advanced
[6:18] Speaker 2: chips outright. Rather, this regulation would set up the government
[6:21] Speaker 2: as kind of a gate keeper for the AI industry globally.
[6:27] Speaker 2: And I'm wondering whether or not when you hear that
[6:30] Speaker 2: that it represents some sort of threat to the growth
[6:35] Speaker 2: of the AI industry in China, or whether China is
[6:38] Speaker 2: now making strides on its own that would essentially buffer
[6:42] Speaker 2: it from any steps that the US may take to
[6:45] Speaker 2: try to control or restrict its advancement in artificial intelligence.
[6:51] Speaker 3: You know, to your point about the quality not necessary
[6:55] Speaker 3: the quantity of growth, I think that you know it's
[6:58] Speaker 3: perfectly aligned to what the government has has been doing,
[7:05] Speaker 3: and an important part of the quality is about building
[7:09] Speaker 3: up the self reliance, self sufficiency in critical areas like energy,
[7:15] Speaker 3: like food like technology and supply chain. So, you know,
[7:19] Speaker 3: the concern about technology hurdles, that export bands are not
[7:25] Speaker 3: something new, right, It started almost back in twenty eighteen
[7:30] Speaker 3: with you know, the first account of administration and in
[7:35] Speaker 3: October twenty twenty two when when the you know ban
[7:39] Speaker 3: on semiconductors advanced chips were announced and make it more
[7:44] Speaker 3: imminent threat. That's one market further deepen the concern about
[7:49] Speaker 3: China's growth future that if China can pussess enough access
[7:54] Speaker 3: to leading edge technology, equipment, software talent to advance in
[8:01] Speaker 3: the age of AI. Right, because semiconductor has been a
[8:05] Speaker 3: fairy global industry that no country was able to pull
[8:09] Speaker 3: it up on their own. But over the past few years,
[8:13] Speaker 3: I think China has demonstrated that it's able to make
[8:17] Speaker 3: progress despite all these kinds of trade bands and restrictions.
[8:22] Speaker 3: Right from last year's deep seak in terms of large
[8:26] Speaker 3: language model to the continued advancement in humanoid robot autonomous driving,
[8:33] Speaker 3: innovative drugs to the past six months, we see more
[8:37] Speaker 3: Chinese AI accelerated companies get coming to the market Chinese
[8:42] Speaker 3: and getting listed, and potentially there will be Chinese memory
[8:45] Speaker 3: companies getting listed. So I think, you know, China is
[8:49] Speaker 3: fully aware of the external challenges in terms of access
[8:56] Speaker 3: to leading edge technologies elsewhere, so that China has been
[8:59] Speaker 3: st strategically trying to emphasize reviewing its supply chain and
[9:06] Speaker 3: see the critical vulnerabilities around the supply chain and trying
[9:10] Speaker 3: to close the gap. So I think, you know, given
[9:13] Speaker 3: the reemergence of the global volatility, the geopolitical tensions, I
[9:19] Speaker 3: think that trend will probably remain to be here and
[9:23] Speaker 3: it might further deepen that countries will be reviewing their
[9:28] Speaker 3: critical technologies, Countries will be revealing their strategic vulnerabilities, and
[9:34] Speaker 3: even in the age of AI, we see more countries
[9:38] Speaker 3: right trying to build up their own sovereign AI and
[9:41] Speaker 3: reduce the dependence on the superpowers.
[9:45] Speaker 2: So we just had the NPC as I referred to
[9:47] Speaker 2: a moment ago, and I think the target now for
[9:50] Speaker 2: urban employment is around twelve million jobs. We know that
[9:54] Speaker 2: China has been facing a lot of difficulty when it
[9:57] Speaker 2: comes to inviting a little bit more domestic stick demand.
[10:01] Speaker 2: People just seem to lack a lot of confidence, and
[10:04] Speaker 2: sentiment on the consumer side has been weak. Do you
[10:07] Speaker 2: have a sense of what the government may do next
[10:09] Speaker 2: to help drive a little bit more of the domestic
[10:12] Speaker 2: demand story.
[10:13] Speaker 3: The weakness of consumption is now not only in China, right,
[10:18] Speaker 3: It's actually become a little bit more global issue because
[10:22] Speaker 3: what we're facing more broadly in many markets, especially in
[10:27] Speaker 3: the more developed markets, is a combination of aging populations
[10:33] Speaker 3: plus the rapid AI development which is replacing displacing jobs,
[10:39] Speaker 3: especially now the jobs for young people and knowledge workers. Right,
[10:43] Speaker 3: So the challenges to consumer confidence again, it might be
[10:48] Speaker 3: not only China, and it might be not only a
[10:52] Speaker 3: short term thing. It might be a structural headwing. And
[10:55] Speaker 3: you you know, we see AI can create more jobs,
[10:59] Speaker 3: create eight income like, create more you know, sustainable job opportunities,
[11:05] Speaker 3: to build the rebuild the confidence of young people on
[11:08] Speaker 3: their you know, long term outlook of incomes, and rebuild
[11:12] Speaker 3: their long term confidence on income. So from China's perspective,
[11:15] Speaker 3: over the past couple of years, they've been doing some
[11:18] Speaker 3: of the consumption subsidies, including the trading programs, and I
[11:23] Speaker 3: think they will continue to do that. I think in
[11:26] Speaker 3: the NPC, there's nothing surprising in terms of bigger than
[11:31] Speaker 3: expected package and consumption stimulus. But you know, as government
[11:36] Speaker 3: discussed this before that they are open to launch and
[11:42] Speaker 3: conventional policies if necessary. So I think so far, you know,
[11:46] Speaker 3: the economy, the stock market, the currency are all pretty
[11:51] Speaker 3: much on track and developing well, so I don't think
[11:54] Speaker 3: government is endered too much pressure in terms of launching
[11:59] Speaker 3: the big similar policy. So in the NPC, the focus
[12:03] Speaker 3: is a bit more on the investment side because this
[12:06] Speaker 3: is the first year of the fifteen to five year plans,
[12:09] Speaker 3: so they tend to from load these big projects in
[12:14] Speaker 3: the early part of these five years. But I would
[12:17] Speaker 3: expect that if economy slow down more significantly, if you know,
[12:22] Speaker 3: we've seen bigger pressure or challenges for employment or consumer confidence,
[12:29] Speaker 3: government could launch further policies to support consumption.
[12:33] Speaker 2: So I take your point that generally speaking, there were
[12:36] Speaker 2: no surprises coming out of the NPC, But for me,
[12:39] Speaker 2: I was struck by the fact that Beijing is now
[12:41] Speaker 2: planning an increase in defense spending of seven percent, which
[12:45] Speaker 2: I think is the slowest that we have seen since
[12:47] Speaker 2: about twenty twenty two. Winnie, we will leave it there,
[12:50] Speaker 2: thank you. So very much. Winni Wu is head of
[12:52] Speaker 2: APAC Equity Strategy at Bank of America Global Research. Joining
[12:56] Speaker 2: from Hong Kong here on the Daybreakasia podcast. Welcome back
[13:08] Speaker 2: to the Daybreak Asia Podcast. I'm Doug Chrisner. So the
[13:11] Speaker 2: war in Iran and its impact on oil markets is
[13:14] Speaker 2: really forcing financial firms to make their forecast. Goldman Sachs
[13:18] Speaker 2: has raised its estimate on average Brent crude prices for
[13:21] Speaker 2: the second quarter by ten dollars to seventy six dollars.
[13:25] Speaker 2: And that's where we begin our conversation with Samantha Dart.
[13:28] Speaker 2: Samantha is Goldman Sachs co head of Global Commodities Research.
[13:32] Speaker 2: She spoke with Bloomberg TV host Heidi Stroud wattson April
[13:35] Speaker 2: Hong and the conversation begins with Samantha addressing Goldman's framework.
[13:40] Speaker 4: Yeah, I think because we have very little edge in
[13:44] Speaker 4: forecasting the duration of a conflict like this, we rely
[13:48] Speaker 4: on our framework. So what we try to do is
[13:51] Speaker 4: really to model, okay, for different lengths possible of the conflict.
[13:57] Speaker 4: What would this mean for the price case, as you mentioned,
[14:01] Speaker 4: is for Brent to average about seventy six dollars a barrow,
[14:05] Speaker 4: so up about ten dollars a barrow from our previous
[14:08] Speaker 4: forecast in Q two. But this assumes a base case
[14:13] Speaker 4: of very low flows through the Strait of hormones for
[14:17] Speaker 4: another five days or so and then a gradual months
[14:20] Speaker 4: long recovery flows, and that might not happen to your point, right,
[14:25] Speaker 4: So if instead of five days, you have let's say
[14:28] Speaker 4: another five weeks of very.
[14:31] Speaker 5: Low flows of oil through the.
[14:33] Speaker 4: Strait, it's very possible that we would see brand prices
[14:36] Speaker 4: crossing the one hundred dollars per barrel threshold, Samantha.
[14:42] Speaker 1: We've seen the US administration flagging various options with varying
[14:46] Speaker 1: degrees of detail on how they could help alleviate that pressure,
[14:50] Speaker 1: everything from insurance to military escorts, to the treasury trading
[14:54] Speaker 1: oil futures to release from the emergency reserves. Right, do
[14:59] Speaker 1: any of those press reassure you when it comes to
[15:02] Speaker 1: being able to make a difference.
[15:05] Speaker 4: It's really hard to say. I think of the proof
[15:09] Speaker 4: is in the pudding. So we'll have to see what
[15:11] Speaker 4: types of measures will actually increase flows through the strait.
[15:16] Speaker 4: There are questions that we hear from our clients regarding
[15:19] Speaker 4: the practicality of naval escorts to ships because of the
[15:23] Speaker 4: large number of tankers crossing. There are also questions related
[15:28] Speaker 4: to the nature of the attacks that we've seen. How
[15:31] Speaker 4: effective can you be against drawn attacks. So there are
[15:34] Speaker 4: still a lot of questions coming from our clients in
[15:38] Speaker 4: that respect, and I would say that there is not
[15:41] Speaker 4: a ton of confidence that this alone can resolve the situation.
[15:48] Speaker 5: Samantha, what my potential treasury intervention in oil markets actually
[15:52] Speaker 5: look like.
[15:55] Speaker 4: So usually when you have or at least the risk
[15:59] Speaker 4: of the physical shortage like this, you're blocking a certain
[16:03] Speaker 4: amount of energy, both oil and gas. What prices tend
[16:08] Speaker 4: to do, they have a function, right, They help the
[16:11] Speaker 4: market rebalance. It's when you have a price rise as
[16:16] Speaker 4: the result of a shock that you can potentially have
[16:19] Speaker 4: an adjustment on the demand side, especially on the natural
[16:23] Speaker 4: gas side. One of the reasons why European natural gas
[16:26] Speaker 4: prices have skyrocketed up sixty percent from last Friday is
[16:31] Speaker 4: because you are helping the market adjust and curtail demands
[16:37] Speaker 4: so that you can have enough natural gas in the
[16:39] Speaker 4: system ahead of the next winter. So the same thing
[16:42] Speaker 4: with oil. I think intervention in the market can maybe
[16:47] Speaker 4: disrupt this price signal that could be helpful in solving
[16:51] Speaker 4: the imbalance, So I'm not sure it's the best solution.
[16:58] Speaker 5: And this is coming along with all these risks for
[17:00] Speaker 5: the market. I mean, when it comes to how you
[17:03] Speaker 5: model things, is it more about the potential impact on
[17:08] Speaker 5: damage to infrastructure that you see as a bigger risk,
[17:11] Speaker 5: or is it still about the street and the traffic
[17:14] Speaker 5: being halted There.
[17:16] Speaker 4: Both risks matter. I think you touched on the two
[17:19] Speaker 4: key points. So you need not only the passage through
[17:24] Speaker 4: the strait to be restored, but you need those producing
[17:27] Speaker 4: assets to be operational. Otherwise, even though the conflict might
[17:32] Speaker 4: look to the escalate at some point, if you don't
[17:35] Speaker 4: have production, then you still have a supply disruption in place.
[17:38] Speaker 4: So both matter, and both have timing uncertainty related to them.
[17:44] Speaker 2: Unfortunately, how is all.
[17:47] Speaker 5: This also affecting stockpiling behavior?
[17:52] Speaker 4: That is an excellent question, because what we have noticed
[17:57] Speaker 4: is that because commodity supplies all fragmented. I mean, if
[18:01] Speaker 4: you look at, for example, refining of rare earths, more
[18:04] Speaker 4: than ninety percent of that happens in China. The refining
[18:07] Speaker 4: of a lot of other metals is all focused in China,
[18:10] Speaker 4: while the US holds a lot of energy. So as
[18:14] Speaker 4: a result, you're seeing efforts from both sides. For example,
[18:17] Speaker 4: in trying to become more self sufficient in those two areas,
[18:21] Speaker 4: you have China stockpiling more crude, you have China moving
[18:24] Speaker 4: more into evs. This is no coincidence. This is the
[18:27] Speaker 4: look for self sufficiency. Since COVID happened, we had such
[18:32] Speaker 4: a broad disruption of supply chains. So this is not
[18:36] Speaker 4: just commodities. This is I think a much broader concern,
[18:40] Speaker 4: and a disruption like this is just another reminder of
[18:44] Speaker 4: how important this can be. And this, I think just
[18:47] Speaker 4: illustrates how places like Europe, Japan and Korea that are
[18:52] Speaker 4: generally short a lot of these commodities are in a
[18:55] Speaker 4: tough spot right now.
[18:59] Speaker 1: Somata how much does USHAW come into this kind of
[19:03] Speaker 1: new normal scenario.
[19:06] Speaker 4: So what happens with SHOE is that it's well, first
[19:10] Speaker 4: of all, short cycle. If you compare with the old
[19:13] Speaker 4: days when we had to rely on those deep water
[19:16] Speaker 4: projects to go production. Short cycle. SHOE can respond within
[19:21] Speaker 4: one year, but that's still not fast enough to prevent
[19:25] Speaker 4: the drawdown in inventories that are likely to happen with
[19:28] Speaker 4: the disruption we're currently going through. So higher prices we
[19:32] Speaker 4: were talking about the importance of the price signal. Right,
[19:35] Speaker 4: higher prices are incentivizing US shale producers to crank up production. Unfortunately,
[19:42] Speaker 4: just it takes a few months to see it, so
[19:44] Speaker 4: you don't see that offset showing up overnight. But it
[19:48] Speaker 4: is an incentive that we think can be effective over time.
[19:52] Speaker 2: That was Samantha Dark Goldman Sachs, co head of Global
[19:55] Speaker 2: Commodities Research, speaking with Bloomberg TV host Heidi Stroud, Watts
[19:59] Speaker 2: and April bringing you their conversation here on the Daybreak
[20:03] Speaker 2: Asia podcast. Thanks for listening to today's episode of the
[20:08] Speaker 2: Bloomberg Daybreak Asia Edition podcast. Each weekday, we look at
[20:12] Speaker 2: the story shaping markets, finance, and geopolitics in the Asia Pacific.
[20:17] Speaker 2: You can find us on Apple, Spotify, the Bloomberg Podcast
[20:20] Speaker 2: YouTube channel, or anywhere else you listen. Join us again
[20:24] Speaker 2: tomorrow for insight on the market moves from Hong Kong
[20:27] Speaker 2: to Singapore and Australia. I'm Doug Prisner, and this is
[20:31] Speaker 2: Bloomberg

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