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Their company's success helped build a nation.
The company is such a big part of Korea's economy.
But who are the family behind one of the world's tech giants?
Major corporate empire that we now know today, samsung.
Inheritance samsung from the bbc world service explores the real-life dramas of the lee family and their company, samsung.
There's a succession style drama underneath of all this inheritance samsung coming soon wherever you get your bbc podcasts.
Just in case you hadn't already heard oil prices are still going up, but gold is going down.
Our world is facing the greatest global energy security challenge in history.
We definitely, at the moment of a conflict, expect to see an immediate moment for gold to spike.
But those early surges are often reversed pretty quickly.
It's a World Business Report from the BBC World Service.
I'm David Harper and in just a moment we'll find out why a leading global voice on energy says we all need to cut demand right away, and we'll ask if it's actually going to happen.
We'll also investigate why the price of gold has fallen at a time when many people might expect it to rise, and we'll hear how one company is watching their employees' working hours to check they're not working too much.
Now exactly a week ago today we were talking about oil prices.
Conflict in the Middle East and the disruptions it's created pushed Brent crude past the psychologically significant milestone of 100 a barrel.
A week on and there's no sign of anything settling down.
In a moment we're going to look at calls from the International Energy Agency to reduce the amount of energy we're using around the world.
And we're going to be hearing how the Iran conflict has affected gold prices.
Before that, though, we're joined by Chris Lowe, chief economist at FHN Financial in New York.
Chris, thank you for being back with us.
Is the situation from your point of view any different to how it was a week ago?
Not really.
And I think that maybe the most important difference is we've heard from most of the global central banks that in the course of the week,
And that outlook has changed dramatically.
Before all of these banks met, we were expecting rate cuts in the US, no change in interest rates in Europe and the UK.
After these meetings, all of these markets are now expecting at least the possibility of a rate increase this year.
It seems like there's a little bit of a kind of hold back and see what happens at the moment.
Yeah, and I think that's actually a good way of putting it.
Looking at U.S.
Fed funds futures, for example.
It's not even a full rate hike that's priced in, but maybe about a half increase, a 50-50 chance priced in this year and then rate cuts way out toward the end of last year, next year, rather.
So it's almost as if traders are saying look, we're not sure what the Federal Reserve will do in the next year and a half probably nothing.
But if they are going to cut rates, it'll be a long time from now.
Chris, we will have more of a chat about this a little bit later on, but let's move on, because we've been told that we've got to start saving energy right now.
That is the message from Dr Fatih Birol, the executive director of the International Energy Agency.
Our world is facing the greatest global energy security challenge in the history.
It is much bigger than what we had in the 1970s, the oil price shocks.
It is also bigger than the natural gas price shock we have experienced after Russia's invasion of Ukraine.
Even if tomorrow there was a ceasefire, I wish it happens.
We need months and months of time that the energy infrastructure, the oil fields refineries, pipelines and the others will go back to where they were before the war has started.
There was a huge amount of energy oil and gas, but also fertilizers, petrochemicals coming from this region.
And this will have repercussions for the economy, especially emerging and developing countries whose economies are much more fragile.
And I'm afraid we may well see similar to that crisis we have seen after 1970s.
They will be having some difficult times.
But not only those countries.
Globally we may well see pressure upward, pressure on the inflation and the economic growth slowing down.
Last week the IEA coordinated the release of 400 million barrels of strategic oil reserves to try to stabilise the global oil price.
20% of their total reserves, in fact, but the oil price went up anyway.
Dr Birol is now calling on countries to cut demand, suggesting that lower speed limits, avoiding air travel, even restricting the use of private cars.
Could be the answer.
Well, joining us now is Andy Euler, energy reporter in residence at the University of Texas, at Austin Energy Institute.
Andy, thank you very much for being with us today.
We heard Dr. Birol there say this is the greatest global energy threat in history.
Is that an exaggeration?
No, I don't think it's an exaggeration at all.
I mean the sort of elephant in the room is that the International Energy Agency itself was created as a result, in 1974, of the oil embargo and the oil crisis.
And so the agency itself was sort of a reaction to that.
No, I think right now, just because of how international the oil market is, how global it is all of our markets are, i think it's absolutely fair to say that this is the most in history.
This is.
This is absolutely right there.
We're going to talk a little bit more about some of the comparisons with 1970s oil problems in just a moment, but presumably that there's got to be some kind of end point to this.
The americans and the israelis are not going to continue this conflict indefinitely.
Whatever that end point looks like that, there's got to be a point at which this does ease up.
It has to, and we hear from the Trump administration they're not interested in a ceasefire, but they are talking about sort of ratcheting down things.
But sort of the after effects and the effects that the International Energy Agency was talking about.
The infrastructure that has been decimated as a result – is going to take a long time to get back up.
And it's just going to be it's not going to be sort of, OK, everything's good.
And now oil is going to go back to 70, 80 dollars a barrel.
I think actually, what's going to end up happening is we're going to see a spike even if things slow down, even if things, even if we see some sort of stoppage or ceasefire.
I still think oil prices are probably going to escalate even more before we see any sort of windfall.
Just going to what we've heard.
Those calls to cut energy usage, so suggesting things like cutting speed limits, also encouraging people to work from home, restricting air travel, even potentially limiting private car use.
Obviously, this sort of thing will be quite worrying to a lot of people who've been through the pandemic a few years ago.
Well, I mean, the first question is, are governments likely to do this?
Sure.
I think they probably are.
I think you know it's funny because when we have stresses here in Texas on the electricity grid, we get text messages and we get emails about you know, don't have your air conditioner on.
All of the time, things like that.
What happens here and what I think might happen in the United States is there's going to be a little bit of an eye roll, a little bit of y'all.
Put us in the situation.
This is your doing.
Why are you asking us questions? to sort of react and lower demand.
But I think the International Energy Agency is right to do this, right?
You don't have a big enough lever on the supply side to figure things out.
So you have to ask folks on the demand side to actually help you out.
And it's not a bad idea.
And the 10-point sort of system that they put together, it makes a whole lot of sense.
I just, especially here in America, I think you're going to get a lot of.
Really, you're asking us to sort of fix this problem that you know, one leader, sort of dictated right.
Huge, huge political problems potentially.
Let's just hear a little bit more from Dr Fatih Birol for a moment, because he also talked about the potential for energy transition.
Let's just have a listen to this.
When we look at the 1970s oil crisis.
After those oil crises, there was a policy response from governments around the world.
One of them was a big wave of nuclear power plants built around the world.
And about 40 of the nuclear power plants we have today are built as a response to that oil crisis in 1970s.
Second, the cars, car industry went through a major transformation.
The amount of oil we use for driving 100 kilometres is halved because of the efficiency improvement in cars.
The fuel efficiency
I expect this time there will be also policy response to the challenge we are seeing today.
Well, Andy, let me ask you, is this going to mean big changes to energy and transport?
I think we saw a little bit of this with Russia invading Ukraine.
We saw a spike in natural gas prices.
We saw a spike in petrol as well.
I think if you're on the energy transition, if you're in that camp, you're absolutely going to point to commodity prices spiking as we have clean, firm energy.
We can make sure that these shocks aren't going to be felt nearly as heavily, nearly as much as If we invest more in renewables, if we invest more in wind and solar and geothermal and nuclear.
I think no.
There's absolutely going to be an opportunity for folks to sort of push that narrative.
In terms of behavioral economics.
I don't know how long this is going to have to last for folks to say you know what?
I'm tired of buying petrol.
I'm going to go ahead and sort of cash in on that EV.
I just don't see sort of the behavior specifically of Americans changing that quickly.
And also the question when you're talking about the power grid.
These things cannot happen overnight.
Andy, thank you for being with us today.
Andy Euler, energy reporter in residence at the University of Texas.
We will be speaking to you again a little bit later in the programme.
But let's move on for a moment because gold prices are down.
They already fell from a peak just after the Iran conflict began.
But in the last couple of days they've dropped sharply from just under 5000 an ounce to just over 4500 an ounce.
But isn't gold supposed to be the safe haven in times of global uncertainty?
Well, Joe Cavatoni, Senior Market Strategist at the World Gold Council, told me how gold prices have been changing since the beginning of this year.
Probably the most prominent thing that we've noticed is a huge increase in the level of volatility in the gold price, but very positive sentiment.
So keeping us in positive territory and actually gold reacting and responding like you'd expect it to to geopolitical issues, but also big economic factors that are in play.
Most recently, we've seen this in the Fed announcement that we had this week around their outlook, as with other central banks, outlooks on potential risk of inflation and ultimately, where they might be headed with rates, whether it's to hold, cut or maybe even consider an increase.
Before we get to the events of the last couple of weeks, we saw a couple of quite significant peaks over the last month or two.
What was the cause of that?
Well, I think what's playing out in the gold market is that number one.
We have more people participating in it than we've ever had before, whether it's at the retail level, institutional level.
And like we always like to remind people on a global scale, I think we had quite a bit of momentum.
And actually I characterize that as those looking at opportunities to take advantage of a moving price.
And so some speculation that took us to very high levels, and corrections on the back of that, as those trades unwound.
Some of it was motivated by news.
Some of it was motivated by general market sentiment.
But ultimately those corrections have taken out a little bit of that movement that's taken us beyond what we would normally be expecting and have been seeing in the gold price trajectory up.
You said there were more people involved.
Are there new people who perhaps weren't traditionally investing in gold, who are getting involved in the markets now?
I think that's a great question.
And I think what I'd like to get everyone to understand is that the market has a lot of retail and institutional participation.
But you know we've seen significant increase uptake by central banks who have been very active over the last four years, increasingly so over the last four years than they are normally.
But here's where it's really getting interesting.
In markets like China, which have been traditionally physical markets or jewelry markets for gold, we're seeing the increased interest and use by banks, financial institutions and retail aggregators to use financial products.
So insurance companies, but also people buying exchange traded funds.
And year to date, China actually leads the market for ETF growth in terms of net new creations.
It's actually just more markets, more people, more different organizations.
And, on top of that, those that are actually trading the market, whether it's for hedging purposes, investing purposes.
We're speculating.
And as we always say, there might be more people, there's always a finite amount of gold available.
Let's just look at what we've seen more recently because, since the Iran conflict unfolded, this is the sort of time when the basic 101 of it is you would expect people to go to a safe haven like gold.
But we've seen quite a significant drop.
Is that something which surprised you?
Well, I think it didn't surprise us as much as maybe people would think.
So we definitely at the moment of a conflict expect to see an immediate moment for gold to spike.
And that's exactly what we did see.
But those early surges are often reversed pretty quickly.
What happens is emotion takes place, markets move quickly, prices move, and then things settle in and people start to look at how the conflict will develop, how long it might last, and then ultimately, what the outcome could mean for broader economic conditions, political conditions, geopolitical tensions, how things will play out more broadly.
And I think what we're seeing in the case of the Iran conflict is pretty substantial headwinds For all assets, as we see inflation really taking hold again potentially, and the price of oil dominating in the conflict.
And I think that's actually putting a little bit more pressure on risk assets.
It's putting a little bit more pressure on safe haven assets like gold, until we can start to see more clarity down the line.
That's when you'll see gold see its rebound and actually it will then take on that trajectory upwards which we see after conflict.
So a spike, a pullback, and then an upward trend.
Joe Cavatoni, Senior Market Strategist at the World Gold Council.
Chris Lowe from FHN Financial is still with us.
So far within this programme, we've heard about the price of gold and we've been talking about the price of oil.
Is there anywhere else that we're seeing this conflict have a significant effect at the moment?
Absolutely.
Probably the most important thing is fertilizer.
The Gulf states produce a significant share of the world's fertilizer, about a third.
And Production has almost stopped.
And of course, it's not coming through the Strait of Hormuz because nothing is.
In addition to that, Qatar is responsible for producing about one third of the world's helium.
Helium, an essential commodity used in silicon chip production.
They are producing zero at the moment.
Helium is a byproduct of natural gas production and they've had to shut down their natural gas production.
That could take years to come back.
So we could be looking— chip shortages, sulfur shortages and shortages of fertilizer, in addition to shortages of natural gas which, of course, is used primarily to produce electricity and of oil.
So it really is a very far-reaching economic impact.
We could see higher food prices as well as higher energy, for example.
All of the knock-on industries that we see from well, pretty much everything that is connected to the oil price.
Chris, we'll be back with you in a short while.
You are with World Business Report from the BBC World Service.
Their company's success helped build a nation.
The company is such a big part of Korea's economy.
But who are the family behind one of the world's tech giants?
The major corporate empire that we now know today.
Samsung.
Inheritance Samsung from the BBC World Service explores the real life dramas of the Lee family and their company Samsung.
There's a succession style drama underneath of all this.
Inheritance Samsung coming soon wherever you get your BBC podcasts.
Now, moving on to some other stories, it certainly isn't the first time that we've heard stories of companies taking a close look at employees' working hours and habits.
But the banking giant JP Morgan Chase say they're now trialling software to analyse working hours.
Workers will get a report which compares the hours they've logged on their timesheets with the hours that the system thinks they have worked, based on their digital activity.
JP Morgan say this will enable them to prioritise wellbeing.
And there is no shortage of stories about people in the banking industry, of course, working very long hours.
But it has raised questions about the ethics of logging every video call or keystroke.
Well, I spoke to Wendy Sellers, an HR expert and author, known online as the HR lady, and asked her about the possible thought process behind introducing such a system into tracking staff.
So, from an HR perspective, this kind of monitoring sits right at the intersection of well-being, or surveillance.
And on paper, using data to spot burnout, for example, or overwork sounds responsible.
But in reality, it's the intent and the execution that matters.
If employees feel this is about support, it can be positive.
If they feel that it's control or scrutiny, it's going to destroy trust.
And once trust is damaged, productivity and well-being usually follow as well.
Is it a real problem people may be putting more work in than their managers are aware of?
And that comes down to is the manager really a manager or they just have a title on there and they're a boss?
And I don't like that word boss, but I think we all know what it means.
I highly doubt that in the big picture people are working moderately, more than a real manager knows.
But many people like myself.
We're work addicts and we may be doing that and not even realizing it ourselves.
So it's not that the employees aren't reporting that they're working excess hours, but it's that they may not even be realizing it.
Have people obsessed about this a bit more?
Now we have a more hybrid culture with lots of people working from home and not being in the office.
I've heard numerous stories of people working from home but being on systems where their boss can see if they're online and they're doing something or not.
Has this become a growing trend in the last few years?
Absolutely.
The good, the bad and the indifferent.
Right.
Because somebody may be online just because somebody is online doesn't mean they're working.
I think we're seeing a lot more of the opposite trends, especially when people are salaried that they don't have the drive to work anymore.
They don't have to leave for lunch anymore.
And so they're working more and more and more hours, but it's the same time period.
It's just that their commute went from their bedroom to their living room.
I definitely do think that a lot of individuals are working more and more because the pressures on them, the thought of oh, am I going to get laid off?
And just look at these systems again from the workers' point of view.
You talked about that bond of trust and how it can destroy that trust.
I mean obviously the hint of something like this is going to be treated very suspiciously by workers and even trade unions.
Absolutely.
I think there's three big ethical pillars here.
Number one, transparency.
Employees need to clearly understand what's being tracked, why, and how will it be used.
The second ethical pillar that I think comes into play here is about proportionality.
Like tracking, keyboard strokes calls meetings.
It's very granular.
What does that mean?
What's the level of detail actually necessary to support my well-being?
And why do you need all that information?
And then the third ethical pillar that I really think we need to talk about is consent and fairness.
In the UK.
Especially employers need to be very careful that monitoring isn't excessive or intrusive under data protection expectations.
And you have to make sure that you let them know about it before you're doing it.
The ethical risk is that well-being becomes justification, but surveillance becomes the lived experience of oh, my employer doesn't trust me.
And they're two totally opposites at the end of the spectrum.
Wendy Sellers there, also known as the HR lady and HR expert and author.
We did contact JPMorgan Chase to ask them about this.
They gave us a statement saying that the tool is about awareness, not enforcement, and that it's designed to support transparency, well-being and encourage open conversations about workload.
Well, let's go back to our main story now, as the uncertainty over global oil supplies continues to raise prices.
Chris Lowe and Andy Euler are still with us.
We're also joined by John Kilduff, the founding partner of Again Capital.
And I'll turn to you first John, because at the beginning of the programme I asked Chris how things have changed in the last week.
And I'll ask you the same question.
What differences do you see compared to where we were a week ago?
Well, the situation is getting worse by the day in terms of production, and in terms of production, really because the exports out of the strait have been ceased since the week time that you just referenced.
But now we're hearing about Iraq declaring force majeure.
We're hearing about.
Obviously, there's been a series of missile attacks and other attacks in and around the region to various oil production and natural gas facilities.
So the oil price here continues to grind higher on the message that this isn't going to get resolved anytime soon.
I didn't know what really to make of President Trump's statement about an hour or so ago now about leaving the security of the Strait to others.
If that's going to be the stance now, these oil prices will just soar higher because we've been holding back, thinking that securing the Strait was sort of the second phase of the military operation.
And with the word rumors of US troops being sent out that way now finally, that this is exactly what would happen, that the US would in fact marshal the resources to secure the Strait.
I don't know if I should be taking President Trump at his word on this or not, but it appears that is not in the cards right now.
Well, it is interesting because we hear a lot of messages from the White House and not all of them, if we're being honest, properly lined up.
Let me ask you as well John, because we talked earlier about the effects of the volatility in the oil markets on consumers.
But from a trading perspective, how are people seeing this?
Is this a cause for extreme caution or are people you know?
As awful as it might sound to people, are we seeing this as an opportunity?
I mean, no, is that to me?
I'm sorry, John Kilduff?
John, yes.
Oh, sorry.
It's a very volatile time, as you're saying.
The problem the traders have right now is that.
So, on the one hand, we're dealing with this disruption that's the mother of all disruptions in terms of supply out of this trade of hormones.
I mean this is worse than the 1973 Arab oil embargo because of how many countries are involved and the volumes that are involved.
But, on the other hand, if President Trump had made a different tweet earlier today and committed to or was able to strike some kind of tone that in fact, the Strait will be reopened, this oil price drops 10 to 15, maybe even 20 today in rapid fashion.
Once we know, once this market knows that that oil, that supply is going to be coming back on the market, they'll reward that in the price very quickly.
So you have a trap door under this market.
It keeps climbing higher and higher, but you do know that the road could be pulled out from under you at any moment.
So the term we use, we call it a cliff trade.
There is tremendous upside here potentially, But there's also a magnificent downside that could also affect anyone's position.
We have a little bit of time left.
So let me turn to the three of you and just ask a little bit towards the future.
We've asked a lot of questions over the course of this programme.
But maybe turning back to you Andy, where do you think, insofar as anyone can tell, we could be heading over the next weeks and months?
Weeks and months.
I think this is going – I mean, if you believe what we're sort of hearing from the White House, maybe there's going to be a ratcheting back of attacks.
It doesn't seem like – again, there was a statement about not wanting a ceasefire.
I don't really know what that means.
It's just so incredibly volatile.
I don't know.
I don't think, in terms of oil and oil production, I don't think we're going to see any sort of reprieve in the next weeks.
I think it's going to be months.
I think it may be months.
A few months at least.
And John, we talked earlier in the programme about the fact that there's got to be some sort of end point, that this conflict is unlikely to go on indefinitely.
Is that in the mind of traders?
No, in fact, we are entering a critical phase, I think, for most of us.
A lot of us have been led to sort of believe again that securing the strait is the second phase of the military operation.
That gets done.
Like I said, oil prices will come back down appreciably.
However, if this looks like it's going to persist and we're not wrapping things up by the first week of April in terms of getting that supply back on the market and there's no sense of it, then look out above.
And finally, Chris, in the 10, 15 seconds we have left, your thoughts?
Remember the infrastructure damage.
Once the straits are open, it's still going to take time to get that oil and gas flowing.
Well, thank you to all three of you Chris Lowe, Andy Euler and John Kilduff for sharing your thoughts with us.
This has been World Business Report from the BBC World Service.
