Good morning from the Financial Times.
Today is Tuesday, March 17th, and this is your FT News Briefing.
NATO allies don't want to get involved in the Middle East conflict.
Had Trump behaved in a more conventional way, had he not slapped them with tariffs, insulted them, threatened to invade Greenland, would they be more cooperative now?
And can China's oil stockpile carry it through the war?
Plus, Italy's Unicredit sweetened its bid for Germany's Commerce Bank.
I'm Sonia Hudson, and here's the news you need to start your day.
The UK, France and Germany yesterday rejected US demands for them to join a naval mission in the Strait of Hormuz.
Iran has effectively closed it by attacking ships there.
20% of the world's oil exports passed through it before the conflict started.
Here to talk more about what the straits closure means strategically in the short and long term is Gideon Rockman.
He's the FT's chief foreign affairs commentator.
Hi, Gideon.
Hello.
So yesterday we saw the biggest NATO allies reject U.S.
President Donald Trump's call for their navies to intervene.
Why did Trump ask them to do that and why are they resisting?
Well, I guess Trump asked them to do that because he has a big problem on his hands and he must feel that the US Navy alone couldn't clear the strait.
So I think the British and the Germans and all the others think that you know they're being asked to undertake an extremely hazardous mission, which might go on for months, that wouldn't be guaranteed a success but would almost certainly lead to casualties to get Trump away from the consequences of a decision that he took without really consulting them.
And I think the other thing is that had Trump behaved in a more conventional way towards European and Asian allies over the past year, had he not slapped them with tariffs, insulted them at various points, threatened to invade Greenland, etc etc.
Would they be more cooperative now?
I think they might be.
And so probably the best of the bad option is to say, no, we're not going to take part.
But at the end of the day, I mean these countries are also being impacted by the Strait of Hormuz closing.
The price of oil has just skyrocketed.
What options do they have, if any, to get the Strait reopened, if they're not going to intervene with their navies?
I think that one intriguing thing is that India seems to have done some sort of bilateral diplomacy with the Iranians to allow India-bound ships to get out of the Strait.
There may be a temptation to try to strike a deal with the Iranians, but I think the US would regard that as such a sort of treachery that I doubt that the Europeans will do it.
I think, you know, more broadly, they're talking about the need to bring the conflict to a close.
They'll be pushing very hard to for a swift diplomatic solution.
But whether that is realistic at this point, given Trump's need to save face, the Iranians' desire for revenge, the Israelis' desire to keep going for another three weeks they talk about, it may just be sort of whistling in the dark.
Given that Trump is not getting the support he needs from allies, what other options does the US have in the short term to get the Strait reopened?
Not many.
I mean, I think that they may hope that if they keep bombing, they will eventually take out the missiles and launchers and so on.
But Iran has other options.
And the point is, they don't have to sink every ship in the Gulf.
They just have to demonstrate that they can attack a few of them to make it seem too risky to ship owners, to crews, to insurers to go through the Strait of Hormuz.
Well, what if Trump were to, say, declare victory in Iran and just walk away from the conflict?
Would that solve it?
I don't think so.
I mean, I would have thought that was his first instinct.
But the problem is that he's now incentivized the Iranians to show that they can inflict real damage on the West, so that the US doesn't keep doing this and Israel doesn't keep doing this.
Not everyone agrees with me.
You know, when I interviewed Sir Simon Gass, who's a former British ambassador to Iran, his view was that actually, if Trump called a hold, the Iranians would keep firing for a couple of days, but would actually be pretty grateful because they're taking a terrible battering.
So that's one possibility.
It's not clear what their end game is though, because the difficulty with a diplomatic solution is is that they have every reason now not to trust the United States or Israel not to attack them again, because this war started in the middle of diplomatic negotiations.
So I don't know what kind of guarantees they would need to make them believe that a diplomatic process was credible this time.
Gideon Rockman is the FT's chief global affairs commentator.
He also hosts the Rockman Review podcast.
Thanks, Gideon.
Thanks.
Unicredit stepped up its pursuit of Germany's Commerce Bank yesterday.
The Italian lender launched a 35 billion euro takeover offer.
That's despite fierce opposition from the German government and Commerce Bank's board.
Unicredit's CEO said he doesn't expect to gain control of Commerce Bank.
But the move will give him the ability to buy its shares in the open market after a year of no progress on a deal.
That would add to Unicredit's existing 29% holding in Commerce Bank.
In the last four years, China's built up what experts believe are some of the biggest resource stockpiles in the world, including oil.
But now the war in the Middle East is testing the longevity of Beijing's reserves.
Here to discuss how long the country's oil stockpile may last is Ed White.
He's the FT's China correspondent.
Hi, Ed.
Hi, great to be with you.
Great to have you.
So exactly how much of China's energy supply is being affected by the war in the Well?
A lot of China's energy comes from the Middle East.
This is the world's biggest single oil importer, and about one third of the country's total oil supplies and about 25 of its gas imports come from the Middle East and actually pass through the Strait of Hormuz where, as we know, shipping has effectively been ground to a halt since these US and Israeli strikes on Iran started.
So China has a huge amount at stake at this.
Okay, it sounds like it's a good thing that China has this stockpile then.
How much oil has it built up?
I think the first thing for people to understand is that China does keep the size of all of its resource stockpiles as a closely guarded national secret.
So the experts that we speak to?
They look at things like budget documents to know how much China's spending.
They look at trade data for export and import flows.
And they also look at satellite imagery to see where the tanks and things like that are actually being built.
But most of the estimates that we know of put the total stockpile at the moment between about 11 and 14 billion barrels.
That is a number that has actually increased sharply over the past year.
Just in terms of the context for that, about 14 billion barrels would provide somewhere in the range of about 110 to 120 days of cover for all of China's oil imports, so around three months or so.
If we look at, by comparison, the US.
The US Strategic Reserve stood at just over 400 million barrels before the strikes on Iran.
It's less than half of those sort of estimates that we talked about for China.
And I think this all reflects quite a strategic shift in Beijing's thinking.
So if we look at just in the last week or so, that China's finance ministry has actually increased the budget again for stockpiling resources.
And so this is going to be something that will remain a key focus for China.
Ed, you mentioned that the current stockpile estimates would probably last China about three months.
What are China's options if the war continues past that?
I think, regardless actually of whether this is a war that ends in the next few days or few weeks, or it's something that becomes a protracted conflict that goes even longer than that, China's position and repositioning of its energy security is probably going to remain the same.
I think analysts at least expect that China will pursue closer ties with Russia around expanding the oil and gas flows.
And we've also seen Beijing spend more money on domestic oil and gas exploration.
So it's also, I think, important to remember that China's energy security has really benefited from what Beijing has been spending a lot of money on in terms of developing renewable energy projects.
Basically we're seeing from a Chinese point of view they will be looking to do everything they can to diversify the supply of oil and gas and other energy sources beyond the Middle East.
Ed White is the FT's China correspondent.
Thanks, Ed.
Thank you.
Before we go, scientists have discovered a new planet.
And the first word that comes to mind to describe what it looks like is hellish.
Scientists at Oxford University say the planet has a sulfurous atmosphere, so it smells like rotten eggs and it's covered in oceans of magma.
It's got a funky name, too, L9859D.
Given the planet's unwelcoming terrain, scientists think it can't support life, so they're not exactly expecting to find ET.
You can read more on all these stories for free when you click the links in our show notes.
This has been your daily FT News briefing.
Check back tomorrow for the latest business news.
