Trade and Geopolitics on the High Seas

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2:07All investing involves risk of loss. See complete disclosures at public.com slash disclosures. Bloomberg Audio Studios. Podcasts, radio, news. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. You may remember on Wednesday, United Airlines CEO Scott Kirby warned that geopolitical tensions risk disrupting what's been a pretty hot start to the year. Here's what he said to Bloomberg's Lisa Abramowitz, quote, we're the largest global airline from the U.S. We're exposed to all levels that are all around the globe. He later noted it would cause short-term pain, but his airline will, stay focused on the long term.

2:48I have to say, it does feel like executives, we've talked about JP Morgan's Jamie Dimon, the conversation with David Rubenstein when he talks about what could maybe create some problems within financial markets. And he talks about what's going on around the globe and geopolitics. We're increasingly hearing folks point to that. That's exactly what we want to talk about with Stamatis Santanis, chairman and chief executive officer of Synergy Maritime Holdings and founder, chairman and CEO of United Maritime Corporation. The two firms together, they're micro caps. They're traded in the U.S. Together, they have a total of 25 ships.

3:19They carry grains, wheat, corn, steel, copper, oil, and more all over the world. Stamatis is back here in the Bloomberg Interactive Brokers Studio. Welcome back. Thank you. Nice to be here. We spoke to you last over the summer in July, and that was a time of geopolitical tension, too, but it was a different type of geopolitical tension. Are things more or less stable, in your view, than they were then?

3:41Stamatis Tsantanis:Well, certainly they're less stable. I mean, you have so many things going on around the world. You have disruptions. You have, like, potential wars. All these things happening. And you have all this new military drive that people need to start building things again, which is not just for real estate, but you need it for strategic reasons, defense and all that. So, you know, shipping and raw materials of steel, bauxite, iron ore, and coal, they become more and more relevant all the time. So tell us what you're seeing. I remember doing a trip to India during the financial crisis and trying to understand, you know, you got a great view of this being an emerging market and driving somewhere in the middle of the night and seeing all the big trucks and really understanding the build and the moving of materials around.

4:29You have such a great vantage point of that. So with the stuff that's going on around the globe, whether it's from the White House, whether it's from other regions, whether it's China, what has shifted in terms of where the ships are going and where activity is happening and what's being moved around?

4:43Stamatis Tsantanis:Well, first of all, you have a commodities rally, right? I mean, you have gold, you have silver, you have tin, you have copper, you have all these prices surging to these levels. and I strongly believe that you're going to see aluminum, you're going to have steel and all these things coming up a lot because demand is so strong for these products. So there's more movement of all of this around? I strongly believe you're going to have a lot of movement for that because it's not just good to have real estate or a house, but it's strategic, it's defense, it's military, so you're going to have a lot of these things going on.

5:15Stamatis Tsantanis:On top of that, you also have the AI. You need to upgrade the power grids. You need to create all these data centers. And all these things require vast amounts of metals that we transport. So it's pretty much important these days. The geopolitical disruptions as far as what's happening out there while the ships are out there, have you had to make changes to routes as a result of any issues, as a result of countries' military doing operations in certain places? We saw the disruptions around Venezuela in that region, just to commercial airlines, for example, when Nicolas Maduro was brought to the United States.

5:53Have you been affected by any of that?

5:54Stamatis Tsantanis:Well, of course. I mean, Red Sea has been out of the question for more than a year now. Black Sea is out of the question because of missiles going on board ships. So we tend to avoid this kind of area. So the more places you avoid, the more diversions you have for the ships, the longer distances you make and the more ships you need. So freight rates go up, unfortunately. What are your biggest costs? Is it, give us an idea. I mean, these ships are not cheap. Walk us through some of the dynamics or the financials here. Well, inflation is everywhere, right? Building ships today has surged a lot because, you know, for all these raw materials, you need to build the ships.

6:29Stamatis Tsantanis:And then you have fuel. But fuel has been quite stable, I must say. Yeah, but building the ship has actually gotten way more expensive. That's how it is. And that's also strategic. I mean, China has been building a lot of ships recently, and prices keep going up and up all the time. So, you know, the U.S. at a certain point need to start building ships. Are you building? We are building some ships, yes. Okay. Yes, in China and Japan. You are? Yes. Okay. Yes, we are. But the U.S. is not? No, you don't see a lot of shipbuilding activity here in the U.S. Well, the president hopes there will be some military shipbuilding activity here.

7:03Stamatis Tsantanis:We all hope that there's going to be some shipbuilding activity here as well, but we're just going to wait and see when that's going to take place. Do you think the U.S. can build the ships that the president wants to see? Well, there's nothing that the U.S. Or that you want to buy? There's nothing that the U.S. cannot do, to be honest. It's just going to be a matter of cost and time. So we're just going to wait and see. Hey, speaking of that, in the U.S. over the last year, we've seen a push toward bringing manufacturing back to the United States. The tariffs that have gone into effect, the tariffs that have been used as a cudgel against countries to get what the president wants.

7:39In your view, does that eventually lead to fewer goods traded between countries? to fewer the less of a need for your services it should but it doesn't happen global trade has been

7:52Stamatis Tsantanis:going up year after year you have all these container ships actually being ordered and built and everything so in theory that's a very correct statement but in practical terms i think global trade this keeps going up every year after year and it's unstoppable why why is it unstoppable because you need infrastructure so in order to create it's not just consumer goods consumer goods is only a part of shipping, right? All the heavy things, which is oil, oil products, metals, iron ore, coal, bauxite, and all that. I mean, that keep increasing year after year all the time. What's the biggest part of your business in terms of the stuff that you move around?

8:28Stamatis Tsantanis:It's mostly iron ore, and we do a lot of bauxite and coal. So we move around 20 million tons of materials every year. And that's a lot. Long hauls. That is long hauls. I am also curious about in terms of trade routes. I think, you know, with the U.S. kind of pushing back and tariffs and so on and so forth, are you seeing more trade just in general between China and other parts of the world? Like, where are you seeing increases? Where are you seeing decreases? Well, China has been increasing their imports in iron ore and coal year after year. China has been producing 56 % of the global steel production.

9:01Stamatis Tsantanis:So wherever you need steel, you need to get it mostly from China. That's how it works. You have about$5 trillion of committed infrastructure projects globally. So that's a huge amount of steel you're going to require in the next few years, excluding data centers and everything associated with that. So you're going to require a lot of steel in the next few years. And China has been very well prepared in importing a lot of raw materials. But I think we're also, that's fascinating because it's just a reminder of supply chains, where things are, right? But what about in terms of the pushback? Is there more trade between China and Europe?

9:35I think we're trying to assess what are the relationships around the world. And the U.S. continues, it feels like some say, to alienate certainly its allies in other parts of the world. But is that really happening from what you see in terms of the activity?

9:49Stamatis Tsantanis:Well, all this tariff talk and all this port use and everything that has been in discussions for the last year or so, that hasn't really slowed down China at all. China has been importing big quantities of iron ore and bauxite and all that. So year after year, they continue to increase their production of steel and aluminum and all the strategic metals that you're going to require for the future. So, yes, China is still a very vital part of the global commodities and especially the metals. We're speaking with Stamatis Santanis. He's the chairman and CEO of Synergy Maritime Holdings and founder, chairman and CEO of United Maritime Corporation.

10:26You transport oil around the world.

10:30Stamatis Tsantanis:We transport mostly iron ore, coal, and bauxite. That's what we do. But also? Yeah, we used to have a few oil transportation ships, tankers, but we sold them a few years ago at the peak. Would you get back into it? The answer is yes. At the next part of the cycle, we will definitely get back into tankers. What part of the cycle? Well, it's all times high right now. So asset values and freight rates are at this peak of all peaks. So we will wait for the right time in the cycle. Maybe it's going to be next year or the year after, and we're definitely going to get back into that. Do you see Venezuela as an opportunity for you to ship oil from to other parts of the world?

11:07Stamatis Tsantanis:Venezuela is still not a big part of the transportation of oil globally. They only do like a few hundred thousand barrels per day, so that's not really important and vital right now. Maybe it's going to get to a point in the next few years, and I'm hopeful they will, but so far we don't really see them as making any material difference in seaborne oil. You're just back from Davos. Yes. Talk to us about what you heard on the ground, what you thought was interesting. We've just talked with our David Weston of Wall Street Week and, you know, how so much of what the conversations evolved once again around President Donald Trump.

11:43But I'm just curious your take on the ground and what you were hearing and seeing.

11:47Stamatis Tsantanis:Well, it's all about infrastructure. It's all about defense. It's all about military spending. It's all about alliances. so people don't talk so much about you know, diversion and inclusiveness and all these things anymore they talk about strategic stuff so it's completely different I mean, the narrative in Davos it's all about the future of alliances of infrastructure, real estate I was at a dinner with Eric Trump the other day and he all talked about you know, about the projects of the family in the Middle East and how spectacular that he expects to be in the next few years. So you hear a lot about real estate, infrastructure, and, of course, defense and alliances.

12:27Stamatis Tsantanis:That's what you hear. What are you doing with the Middle East that you can tell? I mean, it just seems like they're certainly looking to diversify their economy, investing in sports, investing in lots of different projects, technology, and so on and so forth. How do you see it in terms of what they're doing and the activity? The Middle East is a spectacular place. That's all I can say. I mean, the amount of development you see there, everything's modern, everything's new, everything's in huge scale. So I'm very hopeful that the next few years, the Middle East, especially the UAE and Saudi Arabia, will continue to be investing hundreds of billions of dollars into these beautiful, big new buildings.

13:08Stamatis, just got 30 seconds left here. A word or two that you would describe the global economy right now or for 2026 as you see it?

13:17Stamatis Tsantanis:Well, it will continue to be very, very challenging. I think that we're going to see way more important disruptions happening and trading routes being kind of broken down. But shipping has always been very agile to adapt in whatever geopolitical or what have you changes has happened. We did COVID, we did everything, so it's going to be fine. We know you've been on the road a lot, and I know you're headed home, but thanks so much for finding time and stopping by our studios. Stamata Santanas, he is chairman and CEO of Scene Energy Maritime Holdings and also of the United Maritime Corporation Synergy, forgive me, Maritime Holdings.

13:55This is Bloomberg.

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