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Quest Means Business

SpaceX Market Cap Eclipses Amazon In Today's Trading; Anthropic Suspends All Access To Mythos Model; Trump: U.S. Is Not Investing Any Money In Iran; Brent Crude Falls Below $80 For The First Time Since March; Shipping Industry Approaches Gulf Region With Caution. Aired 4-4:45p ET

Aired June 16, 2026 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[16:00:13]

PAULA NEWTON, CNN INTERNATIONAL HOST: So a decent day for the Dow as you can see there, but that doesn't tell the whole story. When we look across

the indices there, the rally on the NASDAQ especially seemed to peter out today. The S&P not faring much better. Of course, there is more to this

story.

Those are the markets, and these are the main events.

What I am talking about is SpaceX, that market rally continues, now the sixth most valuable company in the world.

Oil prices dipped below $80.00 for the first time since March as President Donald Trump prepares to release the details of his initial agreement with

Iran.

And as the U.S. hosts its second World Cup, we will hear from the man who made the first U.S. tournament the biggest in football history.

Live from New York. It is Tuesday, June 16th. I am Paula Newton in for Richard Quest and QUEST MEANS BUSINESS.

So as we were saying, SpaceX stock soars again to briefly overtake two market giants in value. Its shares are up another four percent. You see it

there today. In fact, almost five at the bell. I just checked that a few minutes ago and it has gone up almost one percent, since I checked it.

Now, the rise comes after the company announced it would acquire popular A.I. coding tool, Cursor, a move that will allow it to compete with

Anthropic and OpenAI. Now, SpaceX stock is now up nearly a third -- a third -- since its IPO on Friday. It is currently the sixth most valuable company

in the world after briefly holding the fourth spot.

Clare Duffy has been really tracking all of this for us since Friday. I am running out of superlatives, really to describe this stock and the

valuation because it is mimicking the rockets themselves. I mean, what's behind this enthusiasm given the valuation, the crazy valuation we are

seeing here.

I mean, is it all the Musk effect? Because Clare, I have to remind you, we heard so much skepticism in the lead up to this IPO.

CLARE DUFFY, CNN BUSINESS WRITER: Yes, Paula, I mean it is really remarkable of all of the retail traders buying individual stocks yesterday,

SpaceX made up three-quarters of that activity. This is an incredible rally and I do think that a lot of this is the Elon Musk effect. There is a lot

of FOMO happening here, not wanting to miss out on a potential revolutionary company. But I don't think that a lot of this is based in the

business fundamentals, at least at this moment.

And I think to understand that you can look at the company's three different divisions. You've got Starlink, its connectivity division in the

first quarter of this year that was profitable and brought in the company's most revenue. Then you've got space, the rockets business, that lost $662

million in the first quarter of this year. But you can see how much potential there is there. SpaceX really doesn't have very many competitors.

It is working with NASA to get astronauts back on the moon.

And then Paula, you have artificial intelligence, which in just the first quarter of this year lost $2.4 billion. And yet nonetheless, SpaceX sees

the most potential for revenue over time from that A.I. division of the total addressable market it believes it has. It says 92 percent of that is

going to come from A.I.

So you've got the division that is burning the most cash also potentially has the most potential according to the company and so I think for the

investors that are getting in on this rally right now, it really is a long term play and getting in on this idea that Elon Musk might be able to do

something really unexpected with this company.

NEWTON: Yes, then we have this acquisition of Cursor that, of course, as we explained, will allow it to perhaps rival Anthropic and OpenAI, which given

what those companies have done in the last few years, is kind of incredible. But I am wondering, given all of this cash, that SpaceX has now

raised, it could make it a much more formidable opponent just because it has got so much money for these acquisitions.

DUFFY: Yes, Paula. I mean, on one hand, it has raised a lot of cash. On the other hand, it is burning a lot of cash, and so it has got to balance

there.

Cursor, I do think gives it much more potential to compete with the likes of OpenAI and Anthropic. xAI, which is now part of SpaceX has really fallen

behind those big rivals with its A.I. model, Grok, and importantly, SpaceX is trying to catch up here with those rivals in the enterprise A.I.

business, which has the potential to be the most lucrative. That is where Cursor A.I. could come in and give it new firepower in the A.I. coding

services business, which has been really one of the most widely adopted A.I. software services at this point.

[16:05:04]

But now, SpaceX is going to owe Cursor $60 billion in stock, and so it really is going to have to balance investing in order to catch up with

rivals in this A.I. space and earn more money and more profit from that business potentially, while also addressing the fact that it is burning a

lot of cash there.

NEWTON: Yes, a lot of work to do and yet, Elon Musk does not seem to be intimidated in the least by the challenges he has set for himself in the

years to come.

Clare Duffy, thanks for breaking it down. Really appreciate it.

DUFFY: Thank you.

NEWTON: Now, SpaceX's success comes as other A.I. related stocks are struggling. In fact, shares in big chip makers including NVIDIA and AMD are

down. You can see it there. Microsoft fell as well. It raises questions over whether the rise in SpaceX will come at the expense of other tech

giants.

Joe Brusuelas is the principal and chief economist at RSM, and he joins me now. Good to have you here. As I try and figure out this market, can you

explain some of the dynamics at work here? Because I am not sure I've seen anything like this before.

JOE BRUSUELAS, PRINCIPAL AND CHIEF ECONOMIST, RSM: So none of us have because we are now moving towards the evolution of what we are going to

call the space economy here as we begin to see the build out, not just of what SpaceX is doing, which can be focused on two things, satellites to

support their ground linked operations or excuse me, the space linked operations. And then, of course, what they're talking about broadly in

Silicon Valley and other places is can we build data centers in outer space?

So in many ways, it is a real speculative play on the next gen version of the United States economy, which I've got to tell you is very exciting.

NEWTON: It is exciting, and yet when I look at some of the stock trades today, it shocked me that even anyone that was SpaceX adjacent to a certain

point, some people, you know, had a rise in their stock, but others just fell apart and even that was the chip makers.

Why are we seeing that? And how much is space dominating, especially the retail market right now?

BRUSUELAS: All right, so what I saw today was more of a technical move. I don't think it really signified much of anything, but SpaceX really is

setting the stage to drive valuations here over the next couple of weeks. You know, we are really looking at what is going on in NASDAQ and their

index of space is actually integrated into it. That's going to give a broader boost to that index, and I really do think financial markets, you

know, in many ways, when you think about our new economy, right, it is based on low rates, leverage and liquidity. That's the holy trinity of the

new economy, and there is such a real solid tailwind due to financial conditions behind these asset markets that it is really hard to be bullish

when you're seeing what is going on with SpaceX and the foreknowledge that there are going to be so many IPOs coming to market later this year.

And of course, this all redounds well for the United States economy, that's going to get another tailwind as oil prices come down, as the wars wind

down in the Middle East.

NEWTON: So I get that that puts a good framework in place for, I guess, what you believe is going to be a bull market, but is SpaceX really

crowding out a lot of the competition here given the capital that they've raised?

BRUSUELAS: No, I don't think so. I mean, look what they did today. It was just $60 billion in a stock exchange transactions, so I am not of that ilk

that thinks SpaceX is crowding out other investment. Yes. The broader A.I. ecosystem right now is contributing a little bit to inflation because

demand for what they need to drive that clearly needs to be met.

But my sense is one of those virtuous stages of capitalism. We are mid to late cycle, there is real demand for these products. It is going to be both

public and private and I think as we go forward here at the end of the remainder of the year, you're going to see the U.S. economy actually pull

away from its G7 competitors. I guarantee you that's what is on the tip of the tongues of all the Prime Ministers and Presidents meeting at the G7

this week.

NEWTON: So you think that was on the table, I know they had a big discussion about A.I., a lot of that was about safeguards. How about some

of those -- so if you're an A.I. company and I take your bullishness, Joe. But if we are talking about the capital expense here and the return on

investment, given the fact that so many governments around the world are looking to rein in A.I. because it might also pose a safety threat, you're

saying, look, this is going to be awash at the end of the day, this will still pull the U.S. economy ahead of the others.

BRUSUELAS: Let's talk about that safety threat. What's going on at Mythos? Anthropic with Mythos is going to require a basically a system upgrade in

its information architecture security. That's going to have to be both a public and private sector led event.

That demand is outside the virtuous circle of the ten hyperscalers, and now SpaceX, so that demand is going to go forward and it is not just going to

be in the United States, it is going to be everywhere.

But the U.S. will provide -- be the tip of the spear and provide leadership there that will drive the economy onward and upward. I really urge

everybody to take a look at what's going on at Anthropic and with Mythos, because that demand that can't be wished away. We are all going to have to

upgrade our information security architecture.

[16:10:14]

NEWTON: Interesting and interesting to discussion still taking place right now between Anthropic and the Trump administration, even at this hour.

Joe Brusuelas for us. Thanks so much. Appreciate it.

BRUSUELAS: Thank you.

NEWTON: Now, a big part of SpaceX's plans include building and you heard Joe just talk about it. This A.I. data center, some of it even in space.

Kamala Harris has thoughts on those built here on earth.

The former U.S. Vice President spoke to CNN's Elex Michaelson alongside former California Governor and actor, Arnold Schwarzenegger at an event in

Vienna. Now, she said, data centers need to contribute to the country's energy infrastructure and that they should be required to use renewable

power.

(BEGIN VIDEO CLIP)

KAMALA HARRIS (D), FORMER VICE PRESIDENT OF THE UNITED STATES OF AMERICA: I believe that what we should be requiring, from a policy perspective is that

any organization, corporation that wants to build a data center in a community, that they be required to power it with renewable energy, and

that they also be required to invest in what has been decaying for decades, energy grid in America.

(END VIDEO CLIP)

NEWTON: U.S. President Trump says Congress will have a chance to review an agreement between Washington and Tehran. He told reporters at the G7 that

he might even read it out loud at a future news conference. Much of the world has been left in the dark about critical details. The U.S. and Iran

are expected to sign the Memorandum of Understanding, the MOU on Friday. That will then extend a 60-day cease fire between the two sides as they

negotiate or try to negotiate an end to the war.

Trump says that the next phase of talks will be easier than previous rounds. Melissa Bell is there for us in Evian. I am wondering how you parse

the entire day of this, the totality, it was a dizzying array of bilaterals here, a lot of different topics on the table, and yet not more clarity on

what even G7 leaders said was really the centerpiece, right? This agreement with Iran.

MELISSA BELL, CNN SENIOR INTERNATIONAL CORRESPONDENT: It is remarkable. And yet, Paula, the fact that he had this Memorandum signed digitally to be

signed in real life in Lucerne on Friday, kind of in his pocket, did change the entire tone of this meeting. I think the fact that the American

President arrived with what he considers to be a win, and therefore rather more chipper than he would have been otherwise. The fact that European and

other G7 leaders were just keen to pick up on that and make use of that to avoid this being another testy G7 and try and get stuff done really changed

the nature of the meetings.

And so what you had were the leaders agreeing on a number of different things, positive meetings with President Zelenskyy that have led to

President Trump saying that Moscow needs now to find peace. An agreement amongst G7 nations as well, that they will seek to find ways to put

pressure on Moscow, potentially through sanctions on gas and oil.

This is something that the sort of maximalist expectations of the French presidency, then on the question of Iran itself, there is, of course, a lot

of vagueness about what is actually in this text, the page-and-a-half of course, no one knows. We have a vague idea of its contours. The fact that

it includes the lifting of the American blockade on Iranian ports, the reopening of the Strait, the beginning of the 60-day period of nuclear

talks.

But there are hints of some of the things that are in it as well, Paula, like this $300 billion Arab Fund to help the reconstruction of Iran, that

was on the agenda today, but when you look at the verbatim of what happened in those meetings with some of the regional leaders that came, and the

Saudis didn't come at all, by the way, who will presumably be expected to cough up the biggest amount for that, those that were there -- the UAE, the

Egyptians, the Qataris -- at no point when you look at the detail of what was said, did any of those press conferences that either preceded it or

came after the bilats and none of them did we learn any more about the fact that this has actually been agreed with any of these leaders.

So there are so many more questions raised than answered by the idea of this Memorandum of Understanding. And yet, I think the French presidency,

when you think back to a couple of days ago, when it was still trying to orchestrate the dinners and the events so that President Trump would stay,

I think will be very satisfied that as much as was done, was done.

Beyond those big questions of Iran and Ukraine, there were the other questions on which they agreed A.I., Ebola. These were some of the issues

that the French presidency had always imagined would become the sort of joint statements at the G7, because it had to begin with, understood that

when it came to the bigger geopolitical questions, they would be left to the French presidency to make declarations on afterwards.

So I think that the progress made is pretty remarkable, given those very low expectations -- Paula.

[16:15:07]

NEWTON: Yes, like you said, low expectations. It has been fascinating and you've covered it so well. The choreography that Macron went through to

make sure that the U.S. President stayed and didn't leave early like he did last year in Canada.

Melissa Bell, we will continue to follow it and see if the President does indeed stay for all the festivities.

Melissa Bell for us, live from Evian. Appreciate it.

Now, France and Senegal are currently tied nil-nil in their World Cup match. I will say a little bit more than half of that match underway; while

Argentina are now getting ready to take on Algeria in Kansas City. Up next, we will discuss what the host city hopes to gain from the tournament.

(COMMERCIAL BREAK)

NEWTON: So, France, one of the favorites of the World Cup are battling Senegal at this hour for they want that first win, right, in the group

stage. Still no goals, we will remind you at the start of the second half.

Now, this matchup carries some big memories. Senegal upset the then defending champs when they last faced France at the Men's Tournament in

2002.

Argentina fans are getting ready for their team to take on Algeria. That's just a few hours from now, and the host, Kansas City, is betting on the

World Cup to transform it into a global tourist destination.

Organizers in Kansas City expect to make more than $653 million from the tournament and draw in 650,000 visitors. That's more than the city's

population. That stat alone, Elizabeth Perez is in Kansas City for us.

ELIZABETH PEREZ, CNN EN ESPANOL SPORTS ANCHOR: Paula, hello from Kansas City where, as you said before, Argentina starts in a few hours, the

defense of their world title against Algeria in the stadium behind me, the Kansas City Stadium. There is a lot of expectation in this city because

this game is huge and all the eyes are going to be only on Lionel Messie, who is set to make history by playing in his sixth World Cup.

One, very special because at 38 years old, almost 39, the Argentinian begins what it could be the final World Cup chapter of an amazing career.

Many Argentinians came to Kansas City to support their team and painted the city baby blue and white, Albiceleste, as we say in Spanish, the colors of

their flag and jersey, especially this Monday during the famous Banderazo, which is a huge celebration in a park to celebrate Argentinian football.

Something that surprised many locals.

[16:20:14]

(BEGIN VIDEO CLIP)

PEREZ: You are a resident of Kansas City. What do you think about El Banderazo?

UNIDENTIFIED MALE: So truly amazing. Nothing like this has ever been here before, and we've never seen anything like this.

PEREZ: But you had other celebrations. The Royals, the Chiefs. What about this?

UNIDENTIFIED FEMALE: Those draw big crowds, but this is just a lot more fun party atmosphere. The chanting, the dancing, a lot of fun.

UNIDENTIFIED FEMALE: This looks like so much fun.

UNIDENTIFIED FEMALE: Very, very fun.

UNIDENTIFIED FEMALE: Yes. It makes me want to visit Argentina.

PEREZ: Oh. Are you going to watch the World Cup, the game tomorrow?

UNIDENTIFIED FEMALE: Oh yes! Oh yes! We even have it on at work -- on a T.V. at work so we can keep up.

PEREZ: Do you understand anything of the chants they are doing?

UNIDENTIFIED FEMALE: Not a bit. Nope. Just that everybody seems to know the same chant. So that -- that's fun.

(END VIDEO CLIP)

PEREZ: Yes, Everybody is having lots of fun because Argentina also arrived as the holders of the trophy they won in Qatar in 2022 and are to become --

aiming to become the first nation since Brazil in 1962 to successfully defend a World Cup title.

I have to say that it is not an easy feat to make, taking into consideration that, besides, Verde Amarela, only Italy did it in the 1930s

in front of this debut, they have Algeria, a team that returns to the World Cup stage after 12 years of absence. However, let's not forget Qatar, 30

years and a half ago in the opening game, Argentina was surprised by Saudi Arabia. Now, the big question is Paula, can Lionel Messi and Argentina

avoid history repeating itself and begin their title defense with a victory? We are going to find out in a couple of hours.

NEWTON: So many backstories to all of this, Elizabeth, and I am so grateful for you for being there, because I do know that city, Kansas City really

making this a marquee event for them. And as you said, it is not just one football game or one concert, it is an event that will go on for a few

weeks.

Elizabeth Perez for us live just before that anticipated match between Algeria and Argentina. Appreciate it.

Now, some say the groundwork for this year's tournament was laid in 1994, with the success of the first World Cup on U.S. soil. That event was

attended by nearly 3.6 million fans. I want to point out that was a record. Stadiums in nine host cities were filled to about 96 percent capacity. You

see the map there. Brazil took home the trophy that year after playing Italy to a scoreless tie, then won three-two on penalty kicks.

Now, the tournament finished with a $50 million surplus. The money was used to improve training facilities and renovate stadiums, and just two years

later, Major League Soccer, MLS was born, allowing pros to compete again in the United States.

The success was all under the guidance of my next guest, Alan Rothenberg. He was the CEO and chairman of the 1994 World Cup. He also created the U.S.

Soccer Foundation and its lifetime director.

Alan, welcome to the program. I just want to get your thoughts as this thing has kicked off, there has been such a lead off, how do you think it

is playing out and are you gratified, really about the head start that you gave this World Cup with the last one?

ALAN ROTHENBERG, FORMER CEO AND CHAIRMAN OF THE 1994 WORLD CUP: Well, I am obviously very gratified and very proud of everything that has happened

since the 90s when we got everything launched and I am so happy at the way this World Cup has started, you know, there was so much negativity leading

up to it, which isn't surprising generally before a World Cup and before an Olympics since the participants have already been established months in

advance.

There is that lag period during which there is no serious competition going on. And so, about the only thing that there is for the media to cover is

the preparation and there are always issues with respect to preparation.

But once that first ball was kicked out, this tournament has kind of quieted all that noise. The stadiums are full, whereas there have been

fears that because of the ticket pricing, they wouldn't be and the fan festivals have been enormous around the countries. So, so far, it is more

than so good, and also, you know, there was criticism that by expanding to 48 teams, you'd have some really one-sided matches. Well, with the

exception of the Germany-Curacao match, not only have they not been one sided, but much lower ranked teams have held higher ranked teams to ties,

which is really effectively an upset, so far, so very good.

[16:25:06]

NEWTON: Yes, we are still talking about Cape Verde, right and what they were able to pull off there.

I want to ask you though, in terms of what the U.S. brings to the World Cup, I mean, let's be clear, in Canada and the United States, they don't

even call it football, they call it soccer, and yet when you bring it to this sporting market, what more does it do for FIFA? I mean, we've had some

discussions just about eyeballs, right, viewers, but also the marketing opportunities.

ROTHENBERG: Well, from FIFA's standpoint, unfortunately, frankly, it is strictly about the money, and obviously FIFA is going to do very, very well

from a financial standpoint.

Domestically, it is less about the immediate return and indeed the various host cities are scrambling just to break even, but more importantly, it is

going to elevate the sport even further than where it is now.

I mean, even now, there was a recent poll by "The Economist" that said that soccer is the third most popular sport in the United States, behind only

football and basketball, and the Major League Soccer last year had average attendance greater than the average attendance in the NBA and the NHL. So,

we are already at a great position, but I think that the excitement from the World Cup is going to move the needle way up very quickly to the

benefit of the U.S. Soccer, to the benefit of MLS, to the benefit of NWSL and sports in America overall.

NEWTON: And, and given that, Alan, I mean, we talked about what impact it had on MLS, what do you foresee going forward? You know, we went and spent

some time with red balls here in the area in New Jersey and New York, quite frankly, to see what they have coming. They want to try and get to the next

level.

Do you think this World Cup can pull that off for MLS? You know you want to you want it to be the go to place for the best soccer football players in

the world, not the, you know, the substitute league.

ROTHENBERG: It will move us closer, no question about it. The greater interest is going to mean greater interest from sponsors, most importantly,

from the media. Rights fees are the lifeblood of every sport and where Major League Soccer has lagged, it is in getting major rights fees.

And I think the greater interest and the way Major League Soccer is doing a great job of partnering in the various cities and using the World Cup as a

launch for more support is going to result in greater rights fees, greater rights fees, obviously puts MLS on a closer to equal position with the

Major Leagues in the world and therefore able to get more talent, including more talent in their prime rather than just past their prime.

So, think it could have a huge difference maker. And the other thing is - -

NEWTON: Sorry, Alan, we have to go. We have to go, but I do -- I just want to give you 20 seconds here. Can you tell us if you saw this coming, that

the World Cup would return to U.S., Canada, Mexico and be the huge, huge event that it is now?

ROTHENBERG: Well, I had a lot of visions, but I am not that much of a visionary that I could have looked ahead 32 years and predicted what's

going on now. But this is the natural evolution and it is the capstone really, from everything that we started back in the 90s.

NEWTON: Indeed it is, Alan, I have to leave it there. Enjoy the World Cup. I see you have it on in the background there and you're keeping track of

that all-important match as so many of us are through the next few weeks. Alan Rothenberg for us, thanks so much.

Now oil prices have fallen to a three-month low on hopes that the agreement between the U.S. and Iran will quickly boost production. But it might not

be that simple. More on that next.

(COMMERCIAL BREAK)

[16:32:27]

NEWTON: Now oil prices are falling sharply due to the agreement between the U.S. and Iran. Brent crude has dipped below $80 for the first time since

March. That is significant. And you see WTI there trading about $76.63. "The Wall Street Journal," in fact, says the agreement allows Tehran to

sell oil immediately and that the U.S. will facilitate those sales by waiving certain sanctions.

Now, in response to that report, a senior U.S. official told CNN this is a performance based agreement. Iran can only access any benefits of the MOU

if they abide by all of the points they agreed to, including no nuclear weapon, neutralizing its enriched material, and not interfering with the

free flow of navigation in the Strait of Hormuz.

Our David Goldman joins us now on all of this.

This is highly significant in terms of pricing the oil. The Trump administration is not denying that Iran will be able to sell that oil

legally without sanction for the first time in years. That is significant in terms of the amount of oil going on the market and the proceeds that go

back to Iran.

DAVID GOLDMAN, CNN BUSINESS SENIOR CORRESPONDENT: Well, it certainly is. I mean, we have de-sanctioned Iranian oil during this crisis. Remember, there

was all the floating storage, all of the tankers that were just sitting there with Iranian oil that couldn't be -- couldn't get out. Well, the

United States de-sanctioned hundreds of millions of barrels of that. But the administration continued to say, well, Iran isn't actually going to

benefit from that because the sanctions on the money still exist. It's really just allowing other, you know, other nations to buy the oil.

For the first time now, if the "Wall Street Journal" story is correct, to your point, Iran will be able to get money from its own sales -- oil sales

to anyone, not just through, you know, these shadow fleets that go to China. Most of Iranian oil had been going to China. About 80 percent of

Iranian oil was sold there. And now it opens up the market. Now, the reason that you've seen oil prices fall even more dramatically today after many

days of big declines has something to do with this.

So that is good for the price of oil. But obviously there are big questions about whether or not the administration is being truthful in saying that

this is only incentive based and not upfront payment here.

[16:35:07]

That is something that we're going to have to find out as this de- sanctioning starts.

NEWTON: And in terms of the price, that is very closely allied to the supply, right, as closely tied to supply. You've been reporting on this

really for months now. The supply so far, there hasn't been any relief on that front. Can we expect this? Because it does seem as if this memorandum

of understanding will go into effect by the end of the week.

GOLDMAN: Yes. I'm not sure how close to supply the price of oil actually has been. There is for sure a cushion that we had going into the crisis

where we had a record eight billion barrels of storage all around the world, and that has insulated us from some of the more dramatic price hikes

that we were expecting going into this. But remember that we've lost 1.1 billion barrels of supply during this crisis. And so that cushion has

really gone away.

Now, the oil market isn't acting like that cushion went away. Prices continue to fall, to your point, without the Strait of Hormuz actually

reopening. So a lot of this is sentiment, right? And so at some point, the actual physical barrels of oil will matter here. The paper price, the price

that you're seeing CNN flash on its screen all the time, well, that is what the traders believe the oil is worth.

But at some point there is an actual value that that physical oil will have. And if the crude inventories continue to fall and we reach these

operational stress points that we've started to see here in the United States, particularly in Cushing, Oklahoma, but in other places around the

world. Well, the rubber is going to meet the road at some point, Paula, and that might mean that oil prices need to start to rise again. We'll just

have to wait and see.

NEWTON: Yes. Friday, even if that agreement is, you know, goes into effect, as you say, that it may just be the beginning of this story.

David Goldman, for us, thanks so much for explaining that.

GOLDMAN: Thank you.

NEWTON: Now, as we were just talking about that, you know, the shipping activity in the Strait of Hormuz has yet to return to pre-war levels, far

from in fact. Data from Marine Traffic confirms only a handful of recent crossings. The shipping industry is still worried about threats like mines,

drones, missile attacks. There's also the matter of crew exhaustion. Months of uncertainty have taken a toll on stranded seafarers, and that raises the

risk of fatigue related mishaps.

Karen Young is a senior research scholar at Columbia University's Center on Global Energy Policy, and she joins us now from Washington.

Karen, good to see you again. I've been following kind of what you've been telling us about this for months now, the minute that this war started. I'm

wondering what you see happening in the days and weeks ahead when it comes to the Strait of Hormuz because we're still hearing some very conflicting

signals, including from Iran, who's still acting like as if they're going to be in charge.

But the White House saying that, look, the Strait of Hormuz will be free, not just in terms of access, but in terms of no tolls as well.

KAREN YOUNG, SENIOR RESEARCH SCHOLAR, COLUMBIA UNIVERSITY CENTER ON GLOBAL ENERGY POLICY: So we have to keep in mind this MOU is not yet published.

There's been good reporting from the "Wall Street Journal," Al Arabiya has put it 14 points online. But we're really going to have to wait until

Friday. And as you said, that's not the same as a return to normalization of traffic flows pre-February 28th. It won't happen automatically. And the

first reason is, as you say, we have to look for danger, for mines, for a sense of security that mariners and captains are ready to move and they

feel safe to do so.

And then thinking about how we get new empty containers into the Gulf to start loading, unloading first from storage, then beginning more production

from wells. There are about 35,000 wells in the Gulf region. 10,000 of those have been essentially shut in. Some will take longer than others to

get back to production, certainly at their full capacity. Some won't ever get back to their pre-February 28th capacity.

So there's the traffic issue. There's the danger issue. And then there's just, you know, considerations of what production can really return. And I

would say my expectation is that these pipelines through the UAE and Saudi Arabia have become so essential that they are more likely to be continuing

in use for years to come and more pipelines constructed alongside them, that those alternative routes or diversion routes along the Red Sea or

through the Gulf of Oman are going to be considered safer and a lower risk premium for a long time to come.

So we never -- we might never get back to that 20 million barrel a day volume that we had before this war started.

[16:40:04]

NEWTON: So as you've warned us before, in fact, this changes the entire dynamic in terms of the oil coming -- produced and coming out of the Middle

East and how it comes out of the Middle East in terms of its roots. Do you feel that that will have a good impact on price in terms of trying to keep

it more stable in the months and years to come?

YOUNG: The pipelines have certainly helped. I mean, a lot of the explanation for why oil wasn't $150 or $200 a barrel, it's twofold. We did

have these very, very large inventories, which we've been drawing from all over the world, and we reduced demand, particularly demand from China.

That's a large reason why prices did not spike higher. Basically, China stopped importing oil and natural gas from the Middle East and drew on

their own inventories and just used less.

So where the demand picture returns to is also a big question, and that refilling of inventories, whether it's in the United States or in Japan or

in China or wherever else, it doesn't necessarily happen all at the same time. People are going to be and governments will be price sensitive on

that refilling, so they might do it gradually over the next year or so. And so that, you know, kind of demand dynamic will determine where prices go.

But in the immediate, you know, let's see, next week if things open and the MOU is signed. And we don't see a continued sort of threat environment.

There will be a lot of tankers exiting the strait, maybe 80 million barrels or so are sitting there ready to go right now. And then we'll start that

process of empty tankers coming in and refilling.

But, you know, I would just, I would say, yes, that's a downward pressure as long as it goes smoothly. But it doesn't mean that were out of the woods

yet in terms of a balancing of oil markets going forward.

NEWTON: And Karen, I only have about a minute left, but given the "Wall Street Journal" reporting that they believe that not only will Iran be

selling this oil immediately, perhaps starting Friday, but that a lot of the restrictions, the sanctions will be lifted. How significant of an

impact do you believe that will be on the market?

YOUNG: It's really important, but this is something that we have to see officially from the U.S. Department of Treasury, and we have no indication

yet these would be banking sanctions, transport sanctions and oil sanctions as well. And if we have a real opening where Iran can access not just its

frozen funds from previous sales, but new revenue generation from sales, that would be a reversal of years of U.S. sanctions policy on Iran.

I wouldn't expect that to happen in one afternoon. I hope that the administration would take a slower and more careful approach to the lifting

of the sanctions.

NEWTON: Yes. And once again, CNN has not gotten a denial on that "Wall Street Journal" report so we will have to see exactly how that plays out

towards the end of the week.

Karen Young, again, I learned a lot. Thanks so much for joining us. Really appreciate it.

And that is QUEST MEANS BUSINESS. I'm Paula Newton. Up next, "CONNECTING AFRICA."

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[16:45:50]

(CONNECTING AFRICA)

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