I'm John Batchelor. I welcome my good colleague Michael Bernstein of the Hoover Institution watching the Ukraine War and Russian sanctions because of the attack on Ukraine.

But now it's a much larger landscape because the price of a barrel of oil is so determinative to Russia's budget these many months,

unable to close their budget gap because of the fall off and the sale of oil

and the deep discounts they had to offer to move the shadow fleet into their customer base.

Now is topsy-turvy because of the fighting in straight to four moves and across Iran

and the potential fighting in the Red Sea.

Michael, I come to you because there is momentarily a surprising effort by the U.S. Navy to blockade

the Strait of Hormuz against shipping coming to and from Iran.

So far, and I trust this, the Navy says no ship has left Iran's ports past us,

and we don't permit any ship to go to Iran port.

But importantly, this is not caused a spike in the price of oil.

Why not, Michael? Good evening to you.

Good evening to you, and there are several reasons.

One is that at the moment, the Saudis and United Arab Emirates

significantly increase their pipeline shipments of oil to the Red Sea.

And what happened is that at the time before the war,

this so-called petrol line from Saudi Arabia to the Red Sea,

with the full capacity of 7 million barrels per day.

It used only at the peak 2.8 million, but generally between 770,000 barrels per day to 2 million barrels per day at most, and now they've increased

by 5 million barrels per day.

It is at full capacity.

It was damaged by the Iranian bombardment in the beginning of the war.

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