King of the Hill

0:00This BBC podcast is supported by ads outside the UK.

0:29CFO. LinkedIn has a word for that. Bull spend. Now you can invest in what looks good to your CFO. LinkedIn ads generates the highest ROAS of all major ad networks. You'll reach the right buyers because you can target by company, industry, job title, and more. So cut the bull spend. Advertise on LinkedIn, the network that works for you. Spend$250 on your first campaign on LinkedIn ads and get a 250 credit for the next one. Just go to linkedin.com slash broadcast. That's linkedin.com slash broadcast. Terms and conditions apply. Make Mother's Day even more special at Whole Foods Market. Kick off brunch or dinner with quality cheese and charcuterie with no synthetic nitrates.

1:19Then go seafood. There's an abundance on sale at Whole Foods Market, where it's all sustainable while cod or responsibly farmed. At the bakery, grab seasonal treats like their strawberry pretzel cream pie, and you can't go wrong with a ready-to-heat quiche Lorraine, deviled eggs, and fresh-cut fruits to go. Celebrate mom with Whole Foods Market.

1:42BBC Sounds. Music, radio, podcasts. Wake Up To Money from BBC Five Live. Hello, welcome. It is Wake Up To Money. It's been a bit of a rocky time for what's often called that special relationship between the US and the UK recently. King Charles has been doing his best to mend those links in a speech to the US Congress late last night. Whatever our differences, whatever disagreements we may have, we stand united. He's been delivering a toast at a White House state dinner as well. We'll hear a few of those words coming up very shortly. We'll take a look at what the future could hold for oil around the world.

2:24The oil cartel, OPEC, has seen the United Arab Emirates leave it. This key group of countries that have for so long organised how much oil is produced. We'll look at that major development. We'll be speaking to another of the main political parties in the next instalment of our election interviews. This time it'll be the SNP. And with the war in Iran and artificial intelligence both causing problems for the supply of helium, what is driving up the price of laptops and other electronics? Wake Up To Money with Sean Farrington. Good morning to you. Wake Up To Money on BBC5 Live. It's Wednesday morning, the 29th of April.

3:07We're at just after five o 'clock. Thank you for being with us this morning. 85058 your thoughts on all we are discussing on the show uh interested in your thoughts in the the diplomatic adventures of the king in the united states as well as we bring you the very latest from there uh you can get in touch with 85058 what's up 08085 909693 and if you're listening to us on bbc sounds or on the podcast use the hashtag wake up to money on social media We'll pick up your message along there. Let's have a listen to some of King Charles' historic address to the American Congress during his state visit.

3:49So we've in recent weeks, particularly at the heights of the war in Iran, President Trump has repeatedly criticised Prime Minister Keir Starmer over his stance on the Iran war. So this visit meant to celebrate the strong relationship between the two countries, which the king to Congress was keen to underline in his address. Whatever our differences, whatever disagreements we may have, we stand united in our commitment to uphold democracy, to protect all our people from harm, and to salute the courage of those who daily risk their lives in the service of our countries. Standing here today, it is hard not to feel the weight of history on my shoulder because the modern relationship between our two nations and our own peoples spans not merely 250 years, but over four centuries.

4:52Got Carleen Jackson with us this morning, Chief Executive of the BrightBase Digital Consultancy, Cloud9 Insight. Carleen, good to have you on the show again. Morning to you. Good morning. Great to chat to you, Carly. Don't know if you heard there a bit of what the King was saying to American Congress. Just this whole tour that the King is doing in the United States at the moment, the purpose of it, where does it fit, do you think, in our relationship, almost our trading relationship with the United States at the moment? Well, I guess that there's many people in the US who are concerned about decisions that Trump is making, and they're not necessarily all aligned with his thinking.

5:37So typically when someone's a president, it's only for a certain short period of time, and we still need to maintain good relations with the US for many reasons. But we need to take a long-term view of what's happening. and at the end of the day we still need to be united and so it's really great to see the king go over there and maintain the alliances that we have. And Colleen, we've talked often about Cloud9 and its links that you have with Microsoft and the products it produces and how you work with small and medium-sized businesses in the UK sort of around those. Clearly, Microsoft, one of the biggest companies in the world, an American company.

6:26Do you notice, does it come up when the relationship changes? There are question marks over the UK and the US's relationship when you're speaking just more broadly with American business people. So a lot of my peers, you could say, that we work together collaboratively across different geographies and not least in the US. In fact, I'm attending a global conference in Texas in the coming weeks. And I think there's many people who are quite open about their opinions about decisions that Trump is making and the taxes that he's looking to put in place that really stop people and their customers. They're really impacting their customers.

7:10And I think there's a lot of sort of dismay, you could say, at decisions that are being made and how it's affecting companies in the U.S., not least overseas and trying to sort of work with having the U.S. components as part of your distribution. And it's not really helping at all. So from a software perspective, I can't see people suddenly changing overnight and moving away from using Microsoft technology. It's so embedded into many of our markets. Although I hear that in France that the government has made decisions to move away from using Microsoft, but I've not heard of anything like that happening in the UK.

7:51So I'm sure it will continue that we'll work with Microsoft. Interesting. And, you know, when you have a big sort of global events, as we've had in the last few months with the war in Iran, and where politically that clearly has an impact on the relationship between Donald Trump and Keir Starmer. We've seen that play out in recent weeks as they take their positions on that war. Does that ever filter through into business conversations? If Donald Trump is saying the UK, you know, effectively at times haven't been there when we need them during this war in Iran, does that ever encroach on the conversations you might be having to just try and get some work done?

8:39I guess there are definitely many organisations that rely on fuel prices. so there's going to be some nervousness there about supply. There was talk for a while about is there going to be a fuel shortage? You start to think, does that mean I have to make decisions about whether people can come to the office? Do they have access to public transport? And also the other thing we're definitely noticing, we are recruiting and the recruiter that we're working with is saying that people are a lot more nervous about changing jobs. They could say at a consumer level, people are a little bit more uncertain than news, doesn't seem rosy, it's a little bit bleak, and people want that stability, really, and job stability, so they're not moving maybe when they might have done before.

9:23Got Emma Wall with us as well this morning, Chief Investment Strategist at Hargreaves Lansdowne. Emma, very good morning to you. Good morning, Sean. What is the approach to not necessarily get Donald Trump on side, but to minimise the impacts of some of Donald Trump's decisions on your economy around the world, If you are a country elsewhere doing business with the United States, what's been the best approach? I think the trade tariffs are, you know, this year has been so dominated by the conflict in Iran, it's easy to forget. Liberation Day last year, which, you know, wiped off nine and a half trillion dollars of global markets in the space of mere hours.

10:04I think that sort of gave the first signal to global markets of the direction of travel of this presidency, really ramping up the rhetoric around kind of US first and America first. And that actually has encouraged, through that process, better ties between other nations. So we have actually seen trade deals that don't include the US be developed and trade partnerships mature that don't include the US. And so I think actually, you know, although the US continues to be an extremely important global player, the size of its economy, the number of consumers, how developed the nation is, it will always be important to kind of those companies that play globally.

10:49It has actually encouraged that Liberation Day and those trade tariffs that were implemented off the back of it, better ties between other nations around inter-Asian relations. There's obviously a lot of work going on in the UK to retie us to the EUs in some way. Australia has been involved in trade deals. So I think it's more thinking about where else can I do business? You know, where else is it important for the government to have good relationships? And actually has become a little less dependent on the US because for the meantime, it is perhaps a less dependable partner. And we have seen various leaders around the world having different approaches with Donald Trump.

11:34just in the last few hours. Our King has been speaking at a dinner, that White House state dinner, where he's talked about the importance of alliances with the United States in a contested world. Donald Trump, at the same, in his toast, had talked about the United Kingdom and the ties with the UK being a friendship like no other. And we can get a little flavour of how the King was approaching his toast at the dinner. Here he is. We can hear a bit of him gifting Donald Trump a bell from the HMS Trump, which was a submarine that fought in World War II. Speaking of submarine alliances, there was one particular AUKUS predecessor launched from a UK shipyard in 1944 that served for the majority of her life attached to the fourth submarine squadron in Australia playing a critical role during the war in the Pacific her name HMS Trump so tonight mr.

12:46president I am delighted to present to you as a personal gift the original bell which hung on the conning tower of your valiant namesake may stand as a testimony to our nation's shared history and shining future. Emma, that's the definition of a charm offensive, isn't it? Well, he didn't call him Daddy, so I think that's probably an improvement on some other people's approach. Yeah, I thought that was brilliantly executed. It's quite interesting, and people will be able to He took into this three out five live today and we'll be able to catch up on the website as well when you wake up this morning about the effective joking around the light mood that has taken place at this dinner.

13:36So just seeing some of the quotes at the beginning of his speech, Donald Trump was saying, I want to congratulate Charles on having made a fantastic speech today at Congress. He got the Democrats to stand. I could never do that. And in the King's Toast, the King said, I cannot help noticing the readjustments to the East Wing, Mr. President, following your visit to Windsor Castle last year. And he said, indeed, you recently commented, Mr. President, that if it not for the United States, European countries would be speaking German. And the King said, dare I say that if it wasn't for us, you'd be speaking French.

14:07So that gives us an idea of the tone of that dinner, which is still wrapping up, I think, or at least they're all packing up after the end of that. So we may well hear plenty more of that to come over the course of the day. 85058, your thoughts on King Charles's role in this, whether it's a charm offensive, diplomatic approach, whatever it might be, to the United States right now, given all that has gone on previously. Right, let's talk about other aspects of global diplomacy, particularly when it comes to the oil price, oil production, oil delivery. We know we've been reminded once again in recent weeks how important that is for so many households and businesses right around the world.

14:52We've heard it here in the UK, whether it's in those early days of the war in Iran, heating oil costs shooting up very, very quickly because the oil price shot up very quickly. we've seen it filtered through to petrol and diesel prices as well. The Strait of Hormuz, that key passageway in the Gulf, being effectively closed all of this time. And now we've heard that the United Arab Emirates, one of the key oil producers in that region, has made a bit of a shock announcement that it's withdrawing from what is called the Organisation of Petroleum Exporting Countries. It might be an answer to a quiz question if asked, what is OPEC?

15:32So you might have heard us talk about OPEC, this cartel, effectively, of oil-producing nations. So the United Arab Emirates joined back in 1967. Its departure will leave that cartel with 11 members. There are an additional 10 non-OPEC members in what's called a wider OPEC plus alliance. Let's try and understand a bit more of this with Neil Atkinson. He was head of the Oil Industry and Markets Division at the International Energy Agency until 2021. so Neil good morning you would have had you know very sort of close conversations with with many that are close to the productions in these nations I guess.

16:11Yeah I know them very well and I also used to work for Petroleum de Venezuela which is the national oil company of Venezuela so I've had a lot of dealings with OPEC and you know OPEC has essentially lost it's like a club that loses one of its most important members and the club is just it's weakened by this there's no question of that whatsoever. This is a big blow to OPEC. Just explain to us, Neil, what the purpose of OPEC is, you know, and who is in it. You don't have to list every single member, but the point of who is in it. Well, the point of it was that in the post-war period, the countries that later formed OPEC, which was basically Middle Eastern oil producers, Iraq, Saudi Arabia, joined together with other countries, including Venezuela, because those countries felt that the international oil companies which ran the oil industry in their countries were not giving them a fair shake.

17:08So to all intents and purposes, they got together in 1960, and they decided that they would take control over their industries, and they would seek to influence international oil markets, which they've been doing essentially since 1960. So it came about originally because sovereign nations, which originally were quite weak, got stronger and decided to take more control of their domestic oil industries. Right. And so to what extent have they been controlling that? Has it been limiting supply or providing a glut of oil to the world? Which has it been in recent years? At various times in the last four decades since OPEC has run a quota system where they manage production.

17:52Their objective has been to manage production at a time when they thought that prices might fall, so therefore they have cut their production. Or when prices are rising quite high, they would raise the production partly to take advantage of higher prices. So they sought to act as a sort of oil price regulator. And they've had varying levels of success over the last four decades. But of course, what's happened in the last 15, 20 years, we've seen the rise of oil production from countries like Canada, notably the United States and others. And that's a rising production from other parts of the world has, if you like, crowded out OPEC from the global market up to a point.

18:39So OPEC's influence has been weakened. And with one of the members leaving, which is what the UAE has just done, then that influence is even weaker than it was before. So what was your reaction when you heard this and what did you think the consequences would be? I wasn't surprised that this decision has been taken because some years ago I wrote a paper suggesting that the Abu Dhabi National Oil Company, which is the biggest entity in the UAE in energy terms, they have been investing very, very aggressively in all parts of the oil and gas sector upstream through refining through to exports. and they also now have a trading division.

19:23And they have been itching, if you like, to raise their production and raise their market share. So they have been acting to all intents and purposes like an international oil company. But I must confess, I never thought the day would come when the UAE as a political entity would decide they would actually leave OPEC. But they've done it. And I confess to being surprised that they've actually done it. But it's now happened. And I think the consequences for the short term, frankly, that they're very little because the oil market is in turmoil because of the Stradar Hormuz situation. But if and when things do calm down and we start to return to normal operations, the UAE will through ADNOC will move aggressively to claim market share into the future.

20:10And that will be a challenge to the remaining members of OPEC, not least, of course, Saudi Arabia. Well, quite. And as we have been reminded in recent weeks, many of these nations are very close to each other, both geographically, but also diplomatically as well, when it's come to, as an example, trying to resolve this war in Iran. So what difference does that make between the relationship between the United Arab Emirates and, say, Iraq, Kuwait, Saudi Arabia? Well, the UAE and Saudi Arabia have had a tricky relationship in recent times because they have a different viewpoint on the ongoing war in Yemen, which is where the Houthis come from, who attacked shipping in the Red Sea.

20:55So there's been some political tension between the UAE and Saudi Arabia for some time now. But OPEC is related to the oil industry. There is something called the Gulf Cooperation Council, which is almost like a sort of mini European Union for the Gulf countries. Not anything like it's extensive, but something similar where they cooperate, where they work together. And they have a common enemy literally now in the case of Iran. So, you know, there's a crack in the front, if you like, of solidarity amongst the Gulf Arab countries and by the UAE leaving OPEC. But the wider political relationship between the Gulf countries, we'll have to see how that plays out.

21:40Because they are all in difficulty because of the attacks by Iran on energy infrastructure. And what does this mean, Neil, for long-term possibilities for the oil price? Spent a lot of recent weeks talking about the oil price being above that$100 a barrel level for Brent crude and the concerns that come with that. How might that this might change things in the long run? Well, in the long run, if if things do settle down and we start to get to business as usual, my personal belief is that oil demand globally is going to continue to rise for the next couple of decades. And so somebody has to supply that demand.

22:21And the UAE in the person of ADNOC is very well placed to do that. So there could well be very strong competition by suppliers. Saudi Arabia, of course, will remain very big and the UAE will grow. Iraq may grow. But outside of that list of countries, you've got Venezuela possibly growing into the future. Of course, Canada, US, Guyana, Brazil, they will grow as well. So it could well be that we have a situation of competition amongst producers for market share. And that could mean that prices in the future are moderated, i.e. lower than they might otherwise have been. But there's a long way to go before we get to that situation.

23:04And, of course, a great deal can happen. And just briefly, Neil, what is this to do with the war in Iran right now? Because many will be seeing one of the biggest headlines for the oil industry, you know, making front pages of our papers this morning on some of the papers, while also just being hearing about the oil industry for the last couple of months with the war. How is it linked? Well, it's linked in that the UAE has decided, I think, for broader political reasons that they're going to leave OPEC. And the reason for that is that the UAE has borne the brunt of the Iranian attacks on the countries around the Gulf region.

23:46They've been attacked more than anybody else, and they have suffered accordingly. And I think the UAE feel that the countries around the Gulf have not done enough to work together to attempt to oppose Iran. And there's perhaps not been enough solidarity. And of course, as I said earlier, the UAE and Saudi Arabia are on different sides as far as the Yemen conflict is concerned. So eventually the UAE said enough is enough. The timing is unfortunate, but we are where we are. and there's no doubt whatsoever that OPEC is weakened. Neil, thank you for your time this morning. Neil Atkinson there, head of the oil and formerly head of the Oil Industry and Markets Division at the International Energy Agency up until 2021.

24:34Emma, did the markets move at all about this? I mean, Neil sort of saying in the short term won't make much difference, but when you look at those screens, you can get a sense of what people might think might be happening further down the line as well. The difficulty is there's so much volatility in the oil price at the moment because of what's going on in the Iran war. It's difficult to isolate this specific piece of news. But I do agree that actually longer term, this makes for a potentially more volatile oil price because it makes for a more fragmented industry. So we are obviously experiencing quite significant volatility in commodity pricing and indeed equity and bond markets as well because of what's going on in Iran.

25:11But this move does potentially mean that actually we have to get used to moves within the oil price becoming more frequent because you're not just looking at one piece of supply demand information coming out of OPEC, which was controlling 25 % of supply. You're now looking to several different sources of information to determine actually what the long term trajectory for oil prices will be. Very interesting. Right. 85058, your thoughts, please. is Carleen, Carleen Jackson, who's with us this morning, tech boss, chief exec of the Brighton-based digital consultancy, Cloud9 Insight. Carleen, there's this big old court case going on in the United States.

25:50I mean, I've been billed as Elon Musk against Sam Altman. And we're starting to hear the deliberations, if that's the word. No, it's probably not the word. I'm not the au fait with where you use the right terms in a court. But we're starting to hear those opening statements, at the very least of what Elon Musk is looking for here about what OpenAI, the company behind ChatGPT, should be all about. It's almost about the ethics of it all, Carly. Are you watching this one with any interest? Could it change things? Potentially. I think that there's many people who are believing that AI is something that needs to be available for everybody.

26:31And the other sort of challenge for these organisations is it's hard for them to be making money at the minute. There's a lot of services that are being provided at a low margin. And so there's huge investments in data centres from these organisations. So there'll be a lot of organisations watching this closely. And it used to be that TAT-TPT was the main contender out there that was used by consumers. And now it's moving to Anthropic and Claude and close alliances between Microsoft and that as well. So they've adopted Claude as part of their co-pilot solution, enabling that service for a lot of organisations.

27:15It's interesting. So just hearing some of the initial words from Elon Musk, who actually took the stand at the beginning, when asked by one of his lawyers what the lawsuit was all about, he said, it's actually very simple. It's not OK to steal a charity. If it's OK to loot a charity, The entire foundation of charitable giving will be destroyed. Now, OpenAI, a lawyer from Sam Altman's camp, said this was really all about Musk trying to hold back a competitor in the industry. So, you know, we'll see how that plays out in the coming days. But do you have a view, Carleen? Do you think when you see where open AI came from, the foundation that was behind it, the not-for-profit initial ideas, the idea of advancing AI but being sort of cautious and protective for the human race around it versus a for-profit company attempting to be another one of the massive tech titans?

28:12Well, I do think it's important that we, well, whether we like it or not, the advancement of AI is going at a pace, a paradigm shift that we've never seen anything like in the world, let alone in tech. And so with OpenAI, it's been available for quite a while, but it was the advent of an app on ChatGPT and making accessible to everyday people that technology that has really accelerated consumption and demand of AI because it has been around for quite a long time. But I do think there's so many thousands of companies starting up across the world every day that are leveraging this technology. And I think that entrepreneurship is a great thing for our economy.

29:00So making it available for organizations and to consumers and to entrepreneurs is a really important thing to keep it open. Chicago talks a lot. Hold on, let me step over here. People are talking too much. We debate about food, deep dish, tavern style, who's got the best beef. We yell across rooms, across blocks, across generations. Yes, nice earrings, Grammy. And now we're doing it on our phones, too. Video calls from the L train, group chats that never shut up. Neighbors texting you the score before your TV catches up. Get a load of this guy. Ketchup. On a dog. Yeah, we've got thoughts. Because nothing here gets built without conversation.