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The oil prices hit new highs.
Consumers are feeling it.
Prices of items are increasing, but now they are going even higher.
Pays aren't increasing, so salaries aren't increasing, but the cost of living is.
Is it really, though, so bad?
You know, people see a peak and they just extrapolate ever-rising prices into the future, whereas each crisis in the oil market has been followed by a fairly precipitous fall.
This is World Business Report from the BBC.
I'm Ed Butler and, amidst more political turmoil over the Iran war, we're looking at the latest swings in the oil price and fears it could be pushing us towards global recession.
Also in the show why the Saudi's great multi-billion dollar golf experiment came crashing down.
And can India fix its scamming problem?
Well, amidst all the political turmoil that we've been seeing in the Gulf and apparently stalled peace process there, oil prices have been rising sharply once again on Monday.
At one point, Brent crude reached $126 a barrel.
That is its highest level in four years.
It then fell back sharply later in the day by about 10, one of the more topsy-turvy fluctuations, you might say in a pretty volatile period.
With us is John Kilduff of Again Capital.
He's an oil trader in New York.
Hi, John.
Thanks for being with us.
Now, talk us through this.
The spike we saw today, first of all, this was driven by what exactly?
Well, there was a statement by the Iranians Iran's new Ayatollah about basically digging in on this whole situation and never giving up their nuclear ambitions, which was obviously a volatile statement to make to the world.
But obviously it was targeted at the U.S.
So that that helped spike.
But on a technical basis though, I will tell you that the June Brent futures contract was expiring today, very thinly traded.
So it looked like that there was some exaggerated price action as a result of the low liquidity.
So some people, also people desperate for barrels that they could get via that contract.
So it got bid up in an almost an emergency last resort basis, went to 126.
The new contract trading today is back down towards 110.
Yeah, so it kind of subsided pretty fast.
We also, of course, have reports that President Trump might be extending the US blockade on Iranian ports.
We've had the US military briefing President Trump on plans for a wave of short and powerful strikes, potentially on Iran.
We don't obviously know if those will happen.
It does... sound pretty bleak.
Oh, it's bleak.
It looks pretty bleak to you, yeah.
It's bleak, all right, because you know We are in a situation here where, as you just pointed out, there's really no end in sight.
And for us, our viewpoint is that this market is awaiting the next shoe to drop in terms of military action, given the number of US military personnel that's been ginned up in the region and the inability to strike a deal quickly here.
That's what we feel is the next step.
Right.
And that will just force another kind of step change upwards in terms of the oil price.
That's what you're saying.
No doubt about it, because it's likely this time around Iranian infrastructure, oil infrastructure, will get hit.
Also too, you're also seeing, on the flip side of this, the Iranians doing what they do best, and that is to torturously draw out, drag out negotiations until the cows come home.
Theoretically take another set of years to get them to put ink to paper.
So that's the other problem we are staring down in this market.
As a trader yourself, what's it like for you dealing with this kind of volatility?
I mean, up and down by 10% in a day, it must be stressful, mustn't it?
It's borderline insane.
I will tell you that these, as someone who's been doing this for a long time these are nightmarish heart attack headlines.
To hear an oil tanker getting boarded in the Strait of Hormuz or off the coast of India.
This blockade the mining of the Strait, you name it.
Any one of those headlines in isolation in years past would have been enough to send shivers up everyone's spine.
Now it's coming at you like a fire hose.
And it's just been remarkable.
And on top of it, you have this sort of almost diabolical social media posts that pull the rug out from under the fears by indicating that there could be a resolution in days, every few days.
So it's really the news input here is just at a level I've never seen before.
Pity the poor oil trader.
John Kilduff, thank you.
Well, all this volatility is hurting consumers everywhere as well.
Here's a couple of them, in different parts of the world, fretting about rising prices of all kinds on consumer goods.
Pakistan, first of all, actually, before Pakistan, let's hear from Kenya.
I just woke up to a headline from The Nation today that we're having perhaps the slowest economic growth in three or four years.
So prices of items were increasing, but now they're going even higher.
And the buses that they have going around the country are increasing their prices by 20 or 50 shillings daily.
I mean, Pakistan prices have gone up quite a bit with regards to food and groceries and stuff.
Pays aren't increasing, so salaries aren't increasing, but the cost of living is, which is really becoming cumbersome and very, very difficult to consumers there.
Well, some economists have started using a variety of doom-laden terms to describe where the global economy is going, obviously driven by this high oil price.
Demand, destruction, stagflation are just a couple of the more colourful terms.
But is all the pessimism really overplayed?
Sadiqa Helm is a professor of economic policy at Oxford University.
He's seen a few crises over the decades.
And looking beyond the current logjam in the Gulf, he reckons there are actually some reasons to be cheerful, at least about the fuel price recovery.
He points first to this week's news that the UAE is pulling out of OPEC, the oil cartel which, of course, has been aiming to maintain higher prices over recent years.
Well, the underlying trends in the market prior to this what I take to be temporary interruption of the straits for moves was that prices were falling.
So, prices have been coming down in real terms.
What this does is reinforce those forces driving the price down.
And the immediate issue in OPEC to the extent that OPEC functions at all the immediate incentive for the countries is to increase their production because the prices are higher and because they need to get the revenue to handle the costs that have been imposed upon them.
So I expect in the medium term, much more pumping to take place.
And remember the United States has gone from 20 25 years ago, 7 million barrels a day to 14 million barrels a day.
And it is the largest producer in the world and now the largest exporter of LNG as well.
And then there's stuff to come from Brazil, Canada, Russia.
I mean, we're awash with the potential production.
And this event and the higher prices are a catalyst in the medium term to increase supply.
And therefore, the price will most likely fall.
So basically all of those countries that can produce more, and obviously this is, I suppose, imagining a reopening of the Strait of Hormuz as well, so that countries in the Gulf can follow suit.
They're all going to, I feel like, swing very hard the other way.
It's quite possible.
And of course, even within the Gulf, all the main producers are going to be looking for ways of getting their oil out without going through the Straits of Amuz.
Saudi Arabia already has a major pipeline to the Red Sea.
UAE looks to try to transport it outside the Straits of Hormuz.
And the country that has most interest in keeping that strait open is not the United States, because it has no oil or gas coming out of it.
It is China.
China's the big play.
And I don't envisage the Chinese will tolerate the Strait of Hormuz being closed in the medium term.
So they will use their leverage on Iran to make sure there's no further disruption than there needs to be.
I think that's right.
And I think that, in a way, what the US is doing by, if you like, humbling Iran's capabilities, is to make it even more desperate Iran to sell as much oil as possible after this conflict, and specifically to the Far East, and especially China.
So Iran is weakened and it really does need to produce a lot of oil to get the revenue to make up for the damage that's been done, and China is the main recipient.
So your takeaway from this is the doom mongers, the Jeremiahs out there, kind of warning of a global shock, a price shock and indeed global recession, may be overstating the risks, at least in terms of the energy market.
Well, there are reasons why there might be global economic downturns anyway.
Financial markets are in a very ropey state and they were before this event happened.
But to suggest that, as people did in the 1970s and indeed in the run up to 2014 and the peak of all that, People see a peak and an inverted commas crisis and they just extrapolate ever-rising prices into the future, whereas each crisis in the oil market has been followed by a fairly precipitous fall.
So in the 1980s, we were told that oil prices were going to $200, et cetera, et cetera.
We had to build lots of nuclear power stations, all sorts of stuff to get out of oil.
And in fact, the oil price fell back very sharply and stayed low for a decade.
And in 2014, exactly the same.
And then the price fell very sharply afterwards.
Because in the end, the price is the incentive mechanism to get people to produce.
Higher prices mean more production.
And also, higher prices destroy demand.
And that means lower demand than you previously thought you were going to have.
Economic downturns would make that more severe and potentially more supply.
And I think in 101 economics, an increase in supply and reduction in the expected demand leads to a fall in price.
Reasons to be cheerful from Professor Dieter Helm.
Joining me now, Kerry Leahy, an economist at Columbia University in New York.
Hi, Kerry.
Quickly, let's start with the US economy then.
It undershot?
This is on the theme of potential slowdowns.
It has undershot expectations about growth, hasn't it?
2% in the first quarter.
Yeah, the 2% annualized number was disappointing.
You look quickly to see that it's in consumer spending, which only grew about 16 in annual rate and that's about two-thirds of the economy.
But it's also important to remember that Virtually 100 percent of the growth was in the investment area regarding computers and the data center purchasing.
So in that sense the US economy is basically flatlining and getting an extra 2 percent from that one small slice of enormous building which is increasing so rapidly it's hard to keep up.
Right.
Well, let's stay with tech then and talk about Apple.
On Thursday, it reported results that beat Wall Street estimates.
It was such a good number on so many levels.
The first overall, they touted how well the iPhone was selling, the best iPhone of all time.
And then they chirped in with the fact that we would have made even more money if we hadn't been held back by a chip shortage.
And then finally, they said an area where they've had some disappointments, which is china.
They are now having two great quarters and it looks like the luxury uh i phone phone market meaning the iphone He's doing quite well, whereas two or three years ago they weren't the leader.
They were the follower, but a very profitable follower.
Now they're the big guy in town in terms of just sales itself.
OK.
One, I suppose, piece of good news definitely is the US Congress on Thursday approving funding for most of the Department of Homeland Security.
This ends a record-breaking partial government shutdown in the States, one that's disrupted critical agencies for more than a couple of months.
That's right.
I would argue the last few weeks there hasn't been too many disruptions for travelers and the like.
But it is a good sign that they finally got their house in order.
But this has been a problem we've been having now for decades, that the –
So they're shutting down the economy for a lot of pretty wild reasons.
And usually what fixes the problem, believe it or not, is when people can't get to where they want to go on an airline and you have difficulties in flying there.
Eventually is some solution to the problem.
Yeah, difficulties even for congressmen, no doubt.
Kerry Leahy, thank you very much indeed.
You're with World Business Report from the BBC World Service.
Now the world's biggest auto show has been taking place in Beijing, with plenty of shiny new vehicles on display.
AI and other technologies are trending, with Chinese companies widening their auto lead over the rest of the world, it seems.
Our Asia business correspondent, Surenjana Tiwari.
Now brings us up to speed on some of the latest technologies on display.
No engine roar, no exhaust rumble.
Most vehicles here run on electricity.
With oil prices surging after the Iran shock, demand for EVs is soaring and China's carmakers are in a position to capitalise.
One of the biggest names here isn't a traditional carmaker.
Xiaomi started out selling smartphones.
Now it makes cars.
Its Su7 electric sedan is topping sales charts in China.
Here's founder and CEO Lei Jun.
In short two years, we have delivered 655,000 vehicles from scratch.
Xiaomi's new concept car was designed and tested entirely in a virtual world, before a single component was physically built, treating the car as part of a connected ecosystem linked to your phone, your apps and your smart home.
The biggest barrier to EV adoption has always been charging.
But BYD's new flash charging system claims 400 kilometres of range in just five minutes, designed to work even in extreme weather.
Here's Diego Paresci, BYD's director of EV charging.
It's extremely important because the batteries are usually very sensitive to high or low temperature, and this usually degrades the performance in terms of charging time.
Especially with cold weather, a charge session that would be about one hour can become two or three hour long instead.
With this technology in the worst possible condition it is minus 30 degrees celsius the charge session becomes just three minutes longer, which is very short.
It's not only about the technology here.
It's impossible to miss the number of auto influencers live streaming new car launches as they happen.
EV makers are increasingly using digital creators and platforms to promote their brands inside and outside of China.
In one corner of an exhibition hall is Chinese carmaker Guili's booth.
It's developing humanoid robots and a fully autonomous car built for ray-tailing.
It looks very futuristic, like a bubble-shaped people carrier.
The front and back are the same shape.
Inside there is no steering wheel or driver's seat and no pedals at all.
Just a clean, luxurious open cabin with seats facing each other.
Because no human is expected to drive this.
Here's a Geely representative who only wants to be referred to by her surname, Liao.
Because we have so powerful computing power, so the AI we call it EVA they can control the car.
So we don't need steering wheels, we don't need the accelerator, we don't need the brake pedals.
Yet
Driverless cars from BYD.
That was Surinjana Tiwari with that report.
Let's go to India now, where nearly two and a half million people have lost some two and a half billion dollars over the last year to digital scammers.
That's some of the latest figures, at least.
The explosive jump in criminal cases has prompted India's central bank, the Reserve Bank of India, to step in.
Our BBC reporter Nikhil Nanamdar tells us more.
What we've seen in India over the last half decade is essentially that there's a massive sort of leapfrogging of digital payments, of phone payments, and regulation hasn't really caught up or financial literacy hasn't caught up.
So just to give you a sense of how big this is, just about five years ago it was huge a few million dollars being lost every year.
At least the reported number was that.
But now some two and a half billion dollars have been lost by nearly two and a half million people in 2025.
And that gives you the scale of how big this has become.
And that's precisely why the Reserve Bank of India, which is India's central bank, has decided to jump in.
And they have put out a discussion paper which is considering various measures to look at this.
What kind of fraud are we talking about?
This is a broad spectrum of digital fraud, which includes things such as OTP scam, for instance, where you're sent a message and that sort of diverts you to a phishing link which drains your bank account.
Or there's something called a digital arrest, in which literally millions, Millions of rupees are taken out, because these are criminals who pose as law enforcement officials and threaten you with all sorts of repercussions if you don't pay the money.
And people fall for it.
They think it's the actual authorities, when it actually is people who are wanting to essentially take money out of your account.
Obviously, listeners around the world will be familiar with scams of all kinds coming to their inboxes.
There's a feeling in India that it's particularly vulnerable.
These are sorts of scams that would potentially be around in various parts of the world.
But like I said, in India, we now have click of a button payments.
We can scan a QR code, a few buttons on our phone, and that allows us to pay hundreds of thousands of rupees even.
And so what's happened right now is that people are using cash.
What is the central bank proposing?
You know, in a nutshell, there are about four proposals.
They're saying that you know this could include something like a one hour lag at the payer's end in account to account transactions.
If you're an older person, it would need an added authentication by a trusted person if you're going for a high value digital payment.
And they're considering other methods, such as giving people more control, for instance, to switch on or switch off digital payments and set limits like they can for credit cards.
But bear in mind, this is just a discussion paper at this point in time.
It's been opened up for consultation.
And once I think they have sort of widespread views from the industry, it would become a diktat or potentially regulation going ahead.
The BBC's Nikhil Enamda.
Saudi Arabia is to stop funding the LIV golf tour at the end of this season.
LIV was formed as a breakaway from the long-standing, established PGA tour, with billions of Saudi dollars invested over recent years to lure away some of the world's top golfers.
So it now looks like Liv is, if not splashed in the water, then definitely in some very deep rough.
Michael McEwan is a head of content at golf media brand Bunkered.
Hi, Michael.
You're going to miss Liv?
It's a very good question.
It's certainly been good for business.
It's created a lot of talking points over the last four, four and a half years.
And it's disrupted the game.
It's brought a lot of eyeballs to it, whether for good or for bad.
I suppose that's for other people to decide.
Yeah, but a billion's invested over five years by the Saudis and it's estimated more than 1 billion lost.
Yeah, it's obviously been not their greatest investment.
And I think this is the key part that a lot of people seem to have misunderstood.
The PIF is called the Public Investment Fund.
It's not called the Public Charitable Fund.
It's not the Public Benevolent Fund.
This has been an attempt by the Saudis to try and make money They spent an awful lot of money.
It's reported between five and six billion dollars over the lifetime of Liv.
And they're not seeing a return on that investment.
So I think it's Yes, probably quite easy to see and pretty clear to see why they've decided to not spend another cent.
The plan was wasn't it for the Saudis and it's not just in golf, but in other sports that it was going to diversify its economy away from oil?
But it seems like a lot of people out there, particularly Western sports fans, human rights groups as well viewed it as the Saudis trying to bolster their influence and status, whilst still perhaps not being the most sort of shiny stand up individuals.
Yeah, I think that's certainly the accusation that's been levelled most regularly and most loudly at Liv.
It's been dismissed as an attempt by the Saudis to launder their reputation.
And you're right, that has been seen in other sports, whether it's been boxing or...
Even the FIFA World Cup with the bid and successful bid to get to host that in a few years' time.
More recently, Snooker.
We've seen them lure a lot of high-profile footballers over to Saudi Arabia in recent years, most notably Cristiano Ronaldo.
Yeah, that's certainly been the accusation that's been levelled, as I say, most loudly at them.
But I continue to come back to the point that you know, to your point, this has been an attempt to diversify their revenues.
And as I say, it's called an investment fund for a reason.
Do we think then briefly, I don't know if you know about this are there going to be divestments from other sports?
Is it like the end of sport altogether as a Saudi venture?
It appears that they're moving away from sport in a large way.
Their new strategy made no mention of sport.
They've recently sold one of their football franchises in the Saudi Pro League, Al-Halal.
And there's been a lot of rumours around other sports such as boxing and snooker, what the future may look like for them.
So sport was...
The big thing for the Saudis a few years ago where they saw a bright future, now not so much.
And it'll be interesting indeed to see if the World Cup does go ahead there in a few years' time.
Quick thought as a sports, as a golf fan.
According to the PIF, this live has forever changed the game of golf for the better.
Do you agree?
We'll know in 10 years' time.
For the better, I think, is highly subjective.
But will people remember it 10 years from now?
Will it still be a thing 10 years from now?
Because it is not quite yet dead.
They're still hoping to try and secure other private equity from multiple investors to replace the PIF money.
So...
Yeah, we'll see.
Time will tell.
But it's certainly been, as I said at the top, a disruptive few years, a noisy few years and a busy few years.
Michael McEwan at the golf media brand Bunkered.
Thank you very much for your thoughts.
The first direct commercial flight from the US to Venezuela in seven years has taken off today for Caracas, a further sign of easing relations.
Flights were suspended back in 2019 because of political tensions and security concerns.
Natalia Molinom is the director and spokesperson of the US Department of State.
She says the move marks a significant shift.
For nearly seven years, there have been no direct commercial flights between our countries.
Under President Trump and his leadership, we're changing that today.
Well, the restart is expected to open the door to more business and travel between the US and Venezuela.
One of the passengers on board the first flight, Venezuelan-born Lennart Ochoa, says he's heading home for the first time in nearly two decades.
I'm from Venezuela.
The last time I was here in Venezuela was 18 years ago and I'm very excited to go and see the family and you know looking forward for see the country.
How exciting it's going to be.
Everything was moving so fast that when, on April 19th, the flights become available to purchase, I was there.
12-on-1, I purchased my ticket, and I'll be around on the first flight to Caracas, Venezuela.
The thoughts of one happy US Venezuelan citizen there.
In another piece of news, Venezuela's acting president has hiked the minimum wage today for public sector workers by more than 26 to 240 a month.
She was addressing a rally in Caracas.
Delcy Rodriguez said it was the most significant increase in recent years and she called for an end to sanctions.
That's it for today's edition of World Business Report.
I hope you enjoyed it from me, Ed Butler, and the rest of the team here in Salford.
Thanks very much for listening.
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