Inside Energy: Power Rations & Asia’s Supply 03/24/26

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1:06On today's episode, an update from the Middle East with CNBC's Dan Murphy. Iran's parliamentary speaker, Ghalibath, accusing the president of spreading fake news to manipulate the markets. President Trump's former Deputy National Security Advisor, Victoria Coates, on the importance of internet as Iran grapples with its own future. Everyone's saying, oh, there's no popular uprising going on. Well, quite frankly, we don't know. So that's something I hope we're also working on while dismantling the odious state internet system, the so-called National Information Network that they imported from communist China.

1:43Then, a look at small and medium-sized businesses with Valley National Bank CEO Ira Robbins. He says between loans, employment, and sentiment, it's the healthiest environment he's seen in two years. Typically, most of our clients are the small businesses, which account for, you know, 80 to 82 percent of the total jobs in the country, and they're hiring. Plus, insight into the energy markets at Sarawik and prediction markets Calci and Polymarket are making moves to stop insider trading. It's a problem with the whole thing. It is, but it's a problem with the whole thing. Right. It's Tuesday, March 24th, and Squawk Pod begins right now.

2:24Stand Becky by in three, two, one. Cue it, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We are live from the NASDAQ market site in Times Square. I'm Becky Quick, along with Joe Kernan. Andrew is off today. We've got a lot to look through with what's happened over the last 24 hours. Huge spikes yesterday that we saw just about 23 hours ago at this point. Huge spikes with the oil prices dropping off significantly with the futures jumping. And the markets managed to hold on to about half of those gains from the initial spike. We saw the Dow go from down 200 to up about 1200 in a matter of minutes.

3:05By the end of the session, the Dow closed up by about 630 points. S &P and the Nasdaq sort of followed suit. You had the Dow closing up by 1.3 percent along with the Nasdaq. The S &P was up by about 1.1 percent by the end of the session. Massive moves taking place in the Treasury market, too. We saw yields initially dropping pretty significantly. Now you see the 10 year sitting at 437. The two year is at 388. And energy has been the one place we've been watching ever so closely. That's where the biggest moves began and ended. Right now, WTI is trading at $90.51. Yesterday at this time, we were sitting right around$99, actually a little bit above that for WTI.

3:47By the end of the session, it was down by more than 10%, closed at$88. It's up by about$2.50 right now, again,$90.60. Brink crude yesterday at this time was above$113. It's now trading at$101. And we will continue to keep an eye on this. If you're watching over the one week, crude oil down by close to 6%. And Iran is pushing back on President Trump's claims and progress towards ending the nearly month-long war in the Middle East. We will be talking at length about this and who the person is. And everyone's pointing to the same individual as far as who Whitcoff and Kushner had been talking to. So a lot of the outlets want to make it as nebulous as possible but you know oil has not rebounded to 99 the futures were down maybe 90 points 100 points earlier on the Dow I don't know what's happening but now there's a name Mohammed Bagher Galaba he was I guess head of the Iranian he is head of the Iranian parliament was a general in the Revolutionary Guard and former mayor of Tehran maybe Dan Murphy of CNBC can join us was more, have you heard of this guy?

5:01I don't, I wouldn't want anyone, he's probably mad that I said his name right now because it, you know, there's a lot of short timers over there that have assumed some leadership position. Joe, good morning to you. Well, it is a name that has been floated around. And in fact, Politico was reporting early this morning that he is among a list of candidates that the United States could potentially prefer here as a future leader of Iran. He's viewed as somewhat more of a pragmatist and someone that the United States could actually negotiate with. At the same time as well, someone who the Gulf states could also potentially negotiate with as well as they seek to resolve this crisis that's still engulfing the Strait of Hormuz.

5:45In the meantime, let me update you on what's happened in the last 24 hours as well, because we have also seen a fresh barrage of Iranian missiles targeting multiple locations in Israel this morning, including in Tel Aviv, where multiple casualties have been reported. We are also seeing Iranian missiles and drones continue to target Gulf countries, including Saudi Arabia, the UAE, and in Bahrain, where we're also following another Amazon Web Services outage due to a suspected drone strike. The president insists that there has been productive conversations to end the war. But as you say, Iran is really doubling down now, saying there's been no dialogue with Washington.

6:23Iran's parliamentary speaker, Ghalibaf, accusing the president of spreading fake news to manipulate the markets. Even, as I mentioned, Politico reporting the administration floating him as a possible future Iranian leader. And of course, oil traders still following the headlines around the Strait of Hormuz as well. European officials weighing in overnight and calling on the U.S. and Iran to return to the negotiation table. The Adnok CEO, Dr. Sultan al-Jabba, also taking it one step further, calling the blockade of Hormuz economic terrorism against every nation, and also saying the status quo cannot continue when it comes to the situation inside the strait.

7:03And what's also interesting in the last 24 hours is that the Gulf states are obviously increasingly frustrated at the path of this conflict, And the suggestion that Iran could stay in control of Hormuz after the war ends, even charging a toll on ships passing through, has clearly ruffled some feathers. The Wall Street Journal also reporting this morning that countries here, including Saudi Arabia and the UAE, are now inching towards joining the fight. The paper actually reporting that Crown Prince Mohammed bin Salman is now close to a decision to enter the war. But of course, it's still unclear how credible that suggestion is, given President Trump has already hinted at an off ramp to this conflict of sorts.

7:46Joe? And I've also, maybe you can confirm it, there's been some reporting that some Chinese tankers hugging the Iranian coast have moved through. So, yeah, one, in an Indian tank, it's almost like there's there's some countries that have reached some type of an arrangement with someone in Iran, allowing them to pass through. I also read something about people know where there are a couple of mines. I mean, is it we count the number of mines that that we're worried about in the strait on on the on two hands? I thought when you mine an area that it would be, I don't know, dozens to tens of dozens of mines that you would put in.

8:32Can you shed any light on that? How many mines are we talking about? Well, Joe, this is something that the Energy Secretary hinted at in his conversation with CNBC yesterday. On this conversation of attempting to open up the Strait of Hormuz, you have to remember as well, This is such a narrow waterway and the transit path for the ships is complex at best. Of course, that transit path made even harder by the fact that we have seen these reports suggesting the Iranians have been laying mines inside the strait. And also reports that American and Israeli efforts to try and remove them have been successful.

9:10But of course, they can't clear all of them fast enough. And at the same time as well, we have also heard those reports that you've referred to, Joe, with regards to some ships now being able to pass through. Actually, it was one U.S. official who described it as a trickle of ships that are now passing through the Strait of Hormuz. No surprises to see those Chinese ships starting to pass through. Iran is the top buyer. Sorry, China is the top buyer of Iranian crude. But at the same time as well, India also opening up a pathway here to try and get some of its own ships passing through as well. So we're seeing a trickle of ships pass through.

9:46Of course, those ships that have the insurance and captains who are willing enough to actually transit past, given just how dangerous the situation still is. But of course, the big question at the moment is who is going to safeguard Hormuz moving forward? you've heard from top leaders like Dr. Sultan al-Jaba here in the UAE saying the status quo cannot remain. And given just how dangerous the situation still is now and the hot conflict that we have between the U.S., the Israelis and the Iranians in that very, very narrow waterway, then you really do get the sense that something's going to have to change here.

10:26It's going to have to change pretty soon. And that's something that's going to have to be on the negotiation table if and when the U.S. is able to sit down with whoever it is that they're speaking to inside Iran as well. We're going to have a long conversation about this. Also, there's something coincides with the five-day warning too, doesn't it? Aren't some Marines or at least a contingent of Marines arriving? There's people whispering that this is the way Trump operates, that this may be another diversion that, yeah, we're not going to do anything. And then, you know, on the day of the deadline, you know, who knows what, you know, nothing would surprise anyone at this point, I don't think.

11:10Have you heard things about that? That's exactly right. It's exactly right. So there was a report that suggested that perhaps this is the president buying time here. Of course, more U.S. military assets are en route to the region, including thousands of Marines. The U.S. has kept the door open, keeping its options open when it comes to a possible ground operation inside Iran or an operation inside Karg, which is that critical island responsible for the majority of Iran's oil production capacity. So the U.S. and the Israelis keeping the option open here to push forward if they need to. But at the same time, it's been suggested that given the time it's going to take for those new ships and those marines to actually reach the region, then the president has given himself a five-day negotiation window here to see exactly what Iran might do next.

12:04If Iran comes to the table, then perhaps the chances of a ground invasion or a long conflict will be reduced. If it doesn't, then the president at least has the option. That is the working assumption at this stage. All right. Keep your we know you will keep your ears to the ground. Try to do so many things at once. Anyway, Dan, thank you. In the meantime, asset management giant Apollo Global telling investors in its flagship private credit fund that it will limit withdrawals this quarter to just under half of the money that has been requested to come out. In an SEC filing, the$15 billion fund said that it received redemption requests equal to a little more than 11 % of the shares outstanding in the first quarter.

12:51That's more than double the 5 % cap that the fund allows. But Apollo will stick with that industry standard limit, unlike some of its rivals that have recently relaxed the rules. In its SEC filing, Apollo said, as long-term stewards of capital, we have a fiduciary duty to act in the best interest of all fund investors, balancing the interests of shareholders seeking liquidity with those who choose to remain invested. This is one of those situations where, again, you could be looking at a liquidity issue. Semi-liquid assets are basically liquid when you don't want them and not liquid when you do want them.

13:29That's the way that this goes. I understand Apollo's statement on this, saying that they are long-term stewards responsible for the well-being of all of the fund's clients. if you are forced to sell at what they think are fire sale prices, the long-term people who stick around in it will be hurt by those sales. And sometimes you have to give the manager some discretion as to how long, or really acting in your best interest. Because when you went into this, I'm sure that there was plenty of, in the disclosure documents, plenty of... This is the question, though. Do retail investors really understand what they're in for?

14:07when you're marketing something as semi-liquid assets. Should they be there? Should they be there to begin with? Those are questions for the SEC. There's been a big push to allow them to participate. About how much growth you will see in any of these funds when they've been relying on new retail money coming in. But if you want retail investors and others to be able to benefit from the higher returns that semi-liquid assets can offer, what goes along with higher returns? Higher risk. Illiquidity. And higher risk. And illiquidity. It's like this. You can get 2 % with no risk or you can... There are all kinds of questions that people have raised about leverage being used in some of these funds.

14:44Again, I can understand both sides of the argument on it. But you can understand how someone would say, no, we're not going to let you sell now because it's not a good idea. Right. If we had to sell it at a much lower level and then we hurt our investors who are sticking around. It's just how are these things marketed? Did the people understand what they were getting? I would say leave it to the professionals. prediction market cowshi says it will block athletes and politicians from betting on markets in which they're involved athletes and politicians because you don't want anybody about a game about journalists well if you're the one who can create i can think of 10 more you're the one who can think of 10 more legislation i think of 10 more these are the two big i know these are the two most right it's it's a problem with the whole thing it is but it's a problem with the whole thing.

15:32That's just the tip of the iceberg. The company rolling out new technological safeguards. Politicians won't be able to bet on their campaigns and athletes. I thought it was more than that. Athletes, referees, and others will be banned from wagering on their own sports, as we've seen referees. From their own campaigns? What about their own legislation? What about their own? How about referees, which in recent months, referees have more to do with it than the players. I was just reading a story about Virginia and Tennessee. It's hard. The sweet 16. And it's hard with instant replay, too. And then you don't want to spend every two seconds, you don't want to spend a minute and a half micro-analyzing like it's rolling off the gut.

16:12But you have to. CNBC and Koushi have a commercial relationship that includes a CNBC minority investment. Separately, Prediction Platform's Polymarket updating its rules to say users can't trade on contracts for which they might have confidential information or where they could influence the outcome of the event. The updates came as a bipartisan pair of senators in Washington introduced legislation to ban prediction markets from offering sports-related contracts. So this is the move, I guess the implication is, this is the move to suddenly react before legislation comes your way. Okay, we're going to try and self-regulate some of this before we get regulated and have it run right over our heads.

16:55I think these are going to look really different in the end, exactly. You mean the markets? Prediction markets. Yeah, prediction markets. I think you're probably right. Because it was totally wild, wild west. That's the way any new technology or any new trading. Words mentioned in a conference call. Right. And then that was Brian Armstrong's conference call for Coinbase. And he said, hey, I saw what was on the prediction markets. I'm going to say all those words that were out there. Right. Bah, bah, bah, bah, bah. You know. What color you're going to wear. Yeah. Whether we're going to match. Because we do a lot.

17:26We do, inadvertently. Yeah, not today. Yeah, we'll continue to watch this because I think you're right. This is a place that is rife for evolution. Sarah Week is off and running with the biggest names in the energy sector gathering in Houston. And that's where we find our Brian Sullivan. He is there and he joins us right now with more on what he's hearing at that conference. And Brian, Sarah Week is big every year, but this is perfect timing to try and find out what people are thinking as we watch these huge swings in crude oil and beyond. Yeah, it's been a crazy 24 to 36 hours. Becky and Joe, good morning.

18:06Thank you very much. I mean, listen, we're here live at Sarah Week. And to your point, coming into Sarah Week this weekend, it looked a little different than it did yesterday. Obviously, the president's comments, Joe's discussion with President Trump, setting futures up, commodity prices down. There's a little cautious optimism. And when I say a little, I mean a very little bit. I want to talk about two other themes, though, that are not getting a lot of attention, because I understand that oil is going to make the headlines because it goes to gas prices, can determine elections, whatever. But there's two things with the natural gas side that I think are critical and maybe not getting enough attention.

18:43Number one, and I just literally, it's 6, whatever, 55 in the morning, ran into longtime analyst Paul Sankey downstairs, and we were talking about this. The last cargos of liquefied natural gas going to Taiwan, going to parts of Japan and South Korea, LNG, imported LNG, is their biggest source of energy. The last cargos from Qatar Energy are arriving now. The last shiploads takes about two weeks to get there. After that, it's unclear what's going to happen to Asia. Are they going to have enough natural gas to make power? Or are they going to have to start rationing certain types of fuels like we are seeing in countries like Slovenia?

19:24And some of the emerging markets are starting to do that. So focus on that one first. And we talked to Venture Global. They're a big seller of LNG. We talked to Venture Global's CEO late yesterday, Mike Sable, about Asia. They're a huge seller into Asia. And we talked about what kinds of prices, shipload prices, basically per unit of natural gas, are being commanded right now. Listen to what he had to say. Asia is a little bit more expensive because it's a longer transport distance. So roughly$19,$20 versus$18 going to Europe. And where was it a year ago? A year ago. Roughly. $10,$11,$12, depending on what month.

20:09So we're paying$3 to$4 here for natural gas. Asia was paying$11 to$12, but now they're willing to pay$18 to$20 guys per unit because they need the gas so much. It's unclear if they're going to even have enough at any price. The second big theme, and it goes to natural gas, is, of course, the main sort of theme I would have said a month ago before everything happened and the Iran war started, which is the AI dreams. AI, obviously, earnings, growth, capital spending plans powering a large part of the stock market. It's powering a large part of the Mag 7, which kind of run the show. And whether or not rising natural gas prices, maybe not here, maybe not here, but around the world are going to hit or hurt the AI build-out dreams.

20:50I think theme number two would be right now, there is absolutely no indication that any AI capital spending plan will be impacted negatively, at least here in the United States. But I think, guys, the Asia story, undertold, so critical, not clear where Asia is going to get all of its electricity from in the weeks and months ahead. Brian, we were just reading today that a ship made its way through the Strait of Hormuz on its way to China. I guess one off like that is not going to be enough to really sustain any of this or or make it feel like it can stretch things out. They need that strait to be opened completely and get everything back through for this not to become a serious problem very quickly.

21:37Yes, and China has enough oil. I'm going to go back to oil for a second. China has hundreds of millions or maybe a billion plus barrels of floating stories. They've just been kind of accumulating oil mostly from Russia with the sanctions that are on Russia. Of course, some of those sanctions, floating oil, by the way, have been suspended for a couple of months. China has plenty of oil. Again, going back to the gas story and countries like Taiwan, South Korea, Japan. Japan can probably get the LNG that it needs because they can afford to pay that 20 that Mike Sable at Venture Global was just talking about.

22:12South Korea as well. The question on some of these regional players, Becky, can they get the fuel at any cost? Or will you and Joe and we'll squawk box and see NBC be having headlines, power rationing in some pretty major economies in Asia over the next couple of weeks? Brian, thank you. We look forward to what you're bringing today and amazed by everything you were able to do yesterday. So thank you very much. Thank you. Thanks. Cheese will be next. Coming up on Squawk Pod, former Deputy National Security Advisor Victoria Coates on the latest headlines out of Iran. It's going to be one of the great stories coming out of this war is how the United States and Israel coordinated through Suncom down in Tampa and pulled this off jointly.

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24:39Welcome back to Squawk Pod. Here's Joe. The U.S. says talks with Iran will continue this week. Joining us now, Victoria Coates. She served as Deputy National Security Advisor in the first Trump administration and is now Vice President of the Heritage Foundation's Davis Institute for National Security and Foreign Policy. Victoria, there's so many nuances to what's happening and differing opinions and reporting, I don't know, from individuals, some that are really, in mainstream media, are very quick to want to believe Iran. I'm not sure where that comes from. Do you have facts about what actually occurred?

25:23Do we know who the president was referring to in terms of on the other end of the negotiations? Do we know now that it was the leader of the Iranian parliament? and did Witkoff and Jared Kushner actually have conversations over the weekend? Well, Joe, good morning. What's clear now is that everything is quite unclear. Yes, it does seem that the head of the parliament, who's a well-known politician in Iran, he's run for president a couple of times. He was a member of the IRGC. So has some name recognition, is the interlocutor. And what's interesting about that is who it isn't. It It isn't the new supreme leader, Mashaba Khamenei.

26:05It's not the president of Iran. It's not the foreign minister of Iran, the folks that you would expect. It's this parliamentarian. So that is in and itself an interesting development. Is this sort of a lesser known figure for the United States, who's maybe a little bit less radical? So that could be interesting. He might have a little bit more credibility. But this is intensely murky. I think we probably shouldn't speculate too heavily about what might be going on, but wait for the facts to reveal themselves. Right. And I was reading about the pushback from Iran. And I mean, just reading it is Iranian state media cited an unnamed senior security official in a post saying that there's been no negotiations.

26:55And, you know, I'm old enough to remember Baghdad, Bob. I've watched a lot of spokespersons for Iran in the last, over the years. And when, I shouldn't be flipping about it, but if their lips are moving, they're likely lying. Whether it's for negotiations, whether it's about enrichment, whether it's about how far the missiles can be sent. We saw that it was 4 ,000 kilometers to Diego Garcia. They said they had nothing over 2 ,000. I mean, they do this for a living. And it reminded me of Baghdad Bob. So why do you think so many newspapers, websites, immediately would say, well, Iran says there aren't any talks?

27:33So Trump obviously just wanted to work on gasoline prices. Well, I think we're dating ourselves by admitting we remember Baghdad Bob from 2003. But yes, this is a very similar situation. And what it speaks to is absolute chaos in Tehran. Bear in mind, most of the senior leadership has been killed. The decision-making seems completely opaque, not necessarily rational. And one other thing I wanted to mention, Joe, is we are facing a catastrophic meltdown in the Iranian economy. And there's really nothing anyone can do about it, even if people wanted to help. They've been at zero internet now for almost over three weeks or 1 % internet.