it's time for talking business, which this week is looking at how the war in ukraine has shone a spotlight on europe's reliance on russian oil and gas. hello, everybody and welcome to talking business weekly with me, aaron heslehurst. let's go and take a look

at what is on the show. can the west and its reliance on russia's vast oil and gas reserves? as putin continues a bombardment of ukrainian cities, europe continues to buy fossil fuels from moscow, but for how much longer? i will be discussing all of that with the head of the international energy agency, the iea, and the formal boss of oil giant bp. also on the show, with energy prices on the up, the aviation industry is facing a another tough year. so, i speak to the bosses of delta air lines about the cost of flying in 2022. wherever you arejoining me from around the world, once again, a big hello and welcome to the show. events in ukraine are continuing

to reverberate around the world. and as the death toll grows, so do the calls for further punitive sanctions to be placed on russia. western allies, well, they have so far acted with unprecedented coordination to hit everything from russia's central bank to its wealthiest individuals. but so far, sanctions on the country's most valuable exports, oil and gas, have been more uneven with europe unwilling, for now at least, to turn off the taps. here is why. russia is the third biggest producer of oil in the world. pumping close to 11 million barrels of the black stuff every day. more than half of its oil exports go to europe. russia is also the world's second biggest producer of natural gas and accounts for about 40% of the eu's gas imports. and all of this means that last year alone, russia exported over $240 billion in oil and natural gas. placing an embargo on those exports would be devastating for the economy.

but it would also lead to soaring global energy prices, rampant inflation and possibly a global recession. the problem is that by continuing to buy russian fossil fuels, the west is inadvertently funding putin's war in ukraine. well, dr fatih birol, the big boss, the executive director for the international energy agency and a little earlier, i caught up with him today to discuss this uncomfortable predicament. dr fatih birol, always good to see you. thank you very much for your time. let's start with this, is oil at $100 a barrel? is that the new normal? i think when you look at the fundamentals just before the crisis, i would say, this is a very, very high number. $100, but given the fact that we are seeing the invasion of ukraine by russia, sending shock waves around the oil markets, i think $100 that we are experiencing today may

not be the highest level of prices we will be seeing in the next weeks to come. and how much will these higher oil prices dent, hurt the global economy, at a time when we are already seeing consumer prices in pretty much everything rising at unprecedented rates? currently we estimate that the current price levels if they continue like this, it can choke off close to one percentage point from gdp, but of course nobody knows how the geopolitical developments will look like and how they will affect the energy markets further. the biggest chunk of the drop comes from, of course, russia itself. but we think close to 30% of the russian economy can be cut off as a result

of the developments now. india is looking to buy russian oil at possibly a massive discount because western nations are refusing to take it, but are theyjust cutting the legs out from the western sanctions? i think that we see a lot of russian oil, in the tankards, they are looking for buyers around the world. because even though they will not be sanctioned directly by the us or europe orjapan and other countries, there is a worry from the buyers that they might have financial troubles from the western financial institutions. as a result, they are discounting the price of oil and i would not be surprised that this

country would make use of that. having said that, one has to be careful. to pay for those barrows might have two applications, one for the buyers, there is a certain financial transaction here and some gray areas which part goes to the sanctions, which doesn't? and second, every single dollar going to russian oil goes to the russian economy and will go back as a tank or a bullet in ukraine. we must not forget that. the or a bullet in ukraine. we must not forget that-— or a bullet in ukraine. we must not foruet that. ,, . , , , , forget that. the us has been pushing forget that. the us has been pushing for more supplies _ forget that. the us has been pushing for more supplies from _ forget that. the us has been pushing for more supplies from nations - forget that. the us has been pushing for more supplies from nations like i for more supplies from nations like venezuela and quite possibly iran. not exactly a bastion for democracy. there are countries around the world

who have significant amounts of spare oil. especially those in the middle east. they have been in difficult times in history they have been responsible, they brought oil to the markets, but in this occasion, unfortunately am not seeing them being as responsible as before. this economic situation, if we see a major decline or recession as we have seen in the 1970s, this will be bad news not only for consumers, but also for the producing countries and for all of us. i urge all the producing countries to bring oil to the market as soon as possible in order to

prevent a significant sub shock. could you be suggesting that off the back of this we could see a global recession? i back of this we could see a global recession? ~ back of this we could see a global recession?— back of this we could see a global recession? ~' ., ., ~' recession? i think when we look in the 1970s, — recession? i think when we look in the 1970s, we — recession? i think when we look in the 1970s, we saw, _ recession? i think when we look in the 1970s, we saw, you _ recession? i think when we look in the 1970s, we saw, you may - recession? i think when we look in - the 1970s, we saw, you may remember, two oil price shocks. they lead to a major recession and at the same time a surge in inflation. if the prices continue at these levels for some time, i would continue at these levels for some time, iwould not continue at these levels for some time, i would not exclude that we may well see big difficulties for the global economy recovery and even a recession. fin the global economy recovery and even a recession. ., the global economy recovery and even a recession-— a recession. on that note, dr fatih birol, head — a recession. on that note, dr fatih birol, head of _ a recession. on that note, dr fatih birol, head of the _ a recession. on that note, dr fatih birol, head of the international - birol, head of the international energy agency, thank you for your time. has russia's actions created

an inflection point for the future of global oil supply and demand? to find out i spoke to the former global ceo of bp. he is credited with helping to shift the industry's approach to climate change. he now chairs beyond net zero, that is a group that helps companies tackle climate change. thank you for your time. you have met and negotiated with president vladimir putin. when you were the boss of bp. i am wondering have you ever thought that we would be in this situation today? i had an inkling that one day something might happen because of course, oiland something might happen because of course, oil and energy is both used as a weapon and a shield, both by many people. going back to the 70s

in my career when embargoes on oil to the west created crisis. prices went up and that was the middle east. so it comes and it goes. actually, when i was dealing with president putin, i think there was... they needed us to modernise their oil industry and to demonstrate that foreign investment could actually occur in the new russian republic. so that was a very different situation from what it is today. different situation from what it is toda . ., ~ different situation from what it is toda . . ~ ., ., ~ today. talking today, do you think it is effectively _ today. talking today, do you think it is effectively untenable - today. talking today, do you think it is effectively untenable to - it is effectively untenable to do business with russia? certainly for the immediate or foreseeable future? clearly it is because they have done something that is objectionable to all of us. they have created a humanitarian crisis. to a large

portion. somewhat completely uncalled for. the nations of the world are arrayed against russia. therefore as foreign—policy directs, trade must follow and trade must leave russia.— trade must follow and trade must leave russia. ., . ~ ., . ~ leave russia. you talked about back in the 19705 — leave russia. you talked about back in the 1970s i'm — leave russia. you talked about back in the 1970s i'm just _ leave russia. you talked about back in the 1970s i'm just wondering was| in the 1970s i'm just wondering was there a mistake for nations rely on russian resources? i there a mistake for nations rely on russian resources?— russian resources? i think i would no russian resources? i think i would to back russian resources? i think i would go back to — russian resources? i think i would go back to churchill. _ russian resources? i think i would go back to churchill. the - russian resources? i think i would go back to churchill. the only - russian resources? i think i would| go back to churchill. the only basis for security is diversity. and actually that rule applies from the 70s right up until today. we have made mistakes, but we have made mistakes not by relying on someone, but by over relying and not having enough choices. and sometimes we are lulled into a false sense of

security because of track record. for example russian gas has flowed to the west unimpeded since the early 1990s. so everyone has said it is clearly a reliable supplier, it is clearly a reliable supplier, it is probably still reliable, but it is probably still reliable, but it is used as a sword not as something to enhance the economics of europe. we are now in a situation where we are seeing the west do all it can to decouple itself from russia and the vast resources. can that be done without hurting themselves? i think it de ends without hurting themselves? i think it depends on _ without hurting themselves? i think it depends on how— without hurting themselves? i think it depends on how much _ without hurting themselves? i think it depends on how much time - without hurting themselves? i think it depends on how much time you i it depends on how much time you take. i think if you had a lot of time, you could decouple from almost anything. it is time, you could decouple from almost an hint. , ., ,, time, you could decouple from almost an hint. , , anything. it is happening very cuickl . anything. it is happening very quickly- that _ anything. it is happening very quickly. that is _ anything. it is happening very quickly. that is the _ anything. it is happening very quickly. that is the more - anything. it is happening very . quickly. that is the more difficult a bit. i quickly. that is the more difficult a bit- i think _ quickly. that is the more difficult a bit. i think for _ quickly. that is the more difficult a bit. i think for oil, _ quickly. that is the more difficult a bit. i think for oil, a _ quickly. that is the more difficult a bit. i think for oil, a lot - quickly. that is the more difficult a bit. i think for oil, a lot of- a bit. i think for oil, a lot of people are going to use less russian oil, but the less that some nations

use, the more other nations will use. because in my experience, and bar going oil is very different —— putting an embargo on oil is very difficult. because there is always someone who will buy it. this is a very difficult situation to handle. but as far as the west is concerned, i think oil can be taken out of the system. it will be difficult, but it can be done. natural gas, however, in mainland europe is quite another matter. it is literally tied with the pipeline and it is the fundamental basis for a lot of the economies, notably germany. to be clear, economies, notably germany. to be clear. there — economies, notably germany. to be clear, there are _ economies, notably germany. to be clear, there are nations _ economies, notably germany. to be clear, there are nations out - economies, notably germany. to be clear, there are nations out there i clear, there are nations out there who will continue buying russian oil? ., who will continue buying russian oil? . ., , ., oil? there are always people who will buy stuff—

oil? there are always people who will buy stuff which _ oil? there are always people who will buy stuff which is _ oil? there are always people who will buy stuff which is embargoedj oil? there are always people who i will buy stuff which is embargoed or sanctioned by other people for not importing into their countries. other people who do not have the other people who do not have the same attitude will ultimately buy the oil. it has happened in the past and will happen again. we the oil. it has happened in the past and will happen again.— the oil. it has happened in the past and will happen again. we are seeing old whirrin: and will happen again. we are seeing old whirring picture _ and will happen again. we are seeing old whirring picture of _ and will happen again. we are seeing old whirring picture of nations - old whirring picture of nations talking about firing up coal plants again, more fracking. is there and concerned, a worry that the invasion in ukraine could lead to further climate change disaster if you like? i think there is a reasonably good chance that that is the case, but the question is for how long. the immediate response from anybody is let's do what we can, so let's fire up let's do what we can, so let's fire up the coal plants, use those, do everything we can. and that will put

a blip in the path of getting down to net zero by 2050. we will have to redouble efforts. equally, i would say that people are saying let's get more domestic energy and the sources of domestic energies are renewables, thatis of domestic energies are renewables, that is wind and solar and nuclear. and those i things are all on the agenda at the moment right across the world to say, well, let's do more of that.— the world to say, well, let's do more of that. you have gone from runnina more of that. you have gone from running one _ more of that. you have gone from running one of— more of that. you have gone from running one of the _ more of that. you have gone from running one of the biggest - more of that. you have gone from. running one of the biggest oil firms to leading investment in clean energy. so, what is it going to take to get enough of this green energy production to wean ourselves off fossil fuels?— production to wean ourselves off fossil fuels? ., ., , ., , fossil fuels? continuous development of technology — fossil fuels? continuous development of technology is _ fossil fuels? continuous development of technology is very _ fossil fuels? continuous development of technology is very important. - fossil fuels? continuous development of technology is very important. we l of technology is very important. we have enough technology today to do a very good job of getting down to net

zero, not quite. we've got 80% of the technology, but it is expensive. it needs to be rolled out at scale. the so—called learning curves that all engineers want to see, the more you build, the cheaper it is, the more efficient it becomes. we have that. what we do not have is the right commercial framework. remember, that for many years and still in many cases, the oil and gas industry was subsidised by taxes, they were given a ride offs, preferences. it is time now for the non—oil and gas energy business to get some kick starts where the risk is too high for the private sector, which is the most important thing here, to invest money. here which is the most important thing here, to invest money.— which is the most important thing here, to invest money. here in the uk the labour— here, to invest money. here in the uk the labour party _ here, to invest money. here in the uk the labour party have - here, to invest money. here in the | uk the labour party have suggested here, to invest money. here in the i uk the labour party have suggested a windfall tax on oil companies to

help people pay for the consumer —— for the consumers to pay for the higher goods bills. that for the consumers to pay for the higher goods bills.— higher goods bills. that is justifiable _ higher goods bills. that is justifiable because - higher goods bills. that is justifiable because in i higher goods bills. that is justifiable because in the | higher goods bills. that is i justifiable because in the end of the resources are owned by the nations. except in the united states almost everywhere else in the world when you go and explore and supply oil and gas you are doing so under licence. most nations want to keep people interested in what they're doing. you can't say we will tax it 100%, it is a fine balance between how much do you let the rent owner have and how much do you take for the nation? when it is outrageous and stays there, then i think it is not unreasonable to think the nation to take a bigger portion of the rent for the treasury.—

to take a bigger portion of the rent for the treasury. while you were the boss of bp. — for the treasury. while you were the boss of bp. you _ for the treasury. while you were the boss of bp, you expanded _ for the treasury. while you were the | boss of bp, you expanded operations in russia and you certainly had very close ties to the russian energy sector in the subsequent years. do you regret that nowadays looking at the devastation we are seeing unfold in ukraine? i the devastation we are seeing unfold in ukraine? ~' the devastation we are seeing unfold in ukraine? ~ _, . ., , in ukraine? i think context changes everything. — in ukraine? i think context changes everything. but _ in ukraine? i think context changes everything, but while _ in ukraine? i think context changes everything, but while we _ in ukraine? i think context changes everything, but while we were i in ukraine? i think context changes | everything, but while we were doing it, i absolutely did not object to it. i supported it, i absolutely did not object to it. isupported it. ithought it, i absolutely did not object to it. i supported it. i thought it was very important. and the reason it was important is it brought oil and gas to the world and at that time, that was the thing that drove the development of the world, right across the board. it gave people a better standard of living. and of course, it was where there was reciprocity. bp was bringing managerial content, technical

content, organisational content and a reputation that it could do business there and russia was bringing derelict oil fields, business there and russia was bringing derelict oilfields, bad management, lack of technology. and it was a marriage which should happen. that balance of activity between what you could bring and what you owned, that made a match that worked at the time period and time, of course, that was different. i think it became very clear that russia i think one commentator said it is like a very small economy with a big gas station. in some ways that is semi—true. the politics, the foreign affairs of russia were heavily directed by what the leadership could say about oil and gas and that became clearer and clearer. then i think the balance of

the advantage changed.— clearer. then i think the balance of the advantage changed. talking about foreian the advantage changed. talking about foreign affairs — the advantage changed. talking about foreign affairs and _ the advantage changed. talking about foreign affairs and with _ the advantage changed. talking about foreign affairs and with all— the advantage changed. talking about foreign affairs and with all due - foreign affairs and with all due respect, you went back into the oil and gas business with the russian oligarchs, russian billionaire one who is now on the sanctioned list, even after the putin regime annexed crimea. how does that sit with you today? i crimea. how does that sit with you toda ? ., ., , today? i did indeed. formally i left in 2020. i today? i did indeed. formally i left in 2020. | went — today? i did indeed. formally i left in 2020. i went there _ today? i did indeed. formally i left in 2020. i went there to _ today? i did indeed. formally i left in 2020. i went there to set i today? i did indeed. formally i left in 2020. i went there to set up i today? i did indeed. formally i left in 2020. i went there to set up an| in 2020. i went there to set up an oil and gas company which i did in the hope that it could be run appropriately and for good values, which i think it did. irla appropriately and for good values, which i think it did.— which i think it did. no regrets on that one. not _ which i think it did. no regrets on that one. not at _ which i think it did. no regrets on that one. not at all. _ which i think it did. no regrets on that one. not at all. i _ which i think it did. no regrets on that one. not at all. i would i which i think it did. no regrets on that one. not at all. i would say l that one. not at all. i would say that one. not at all. i would say that maybe _ that one. not at all. i would say that maybe the _ that one. not at all. i would say that maybe the world _ that one. not at all. i would say that maybe the world should i that maybe the world should have been a little bit sharper in its response to the annexation of crimea. i think we all would have

done something differently. fin crimea. i think we all would have done something differently. on that note, thank done something differently. on that note. thank you _ done something differently. on that note, thank you so _ done something differently. on that note, thank you so much _ done something differently. on that note, thank you so much for - done something differently. on that note, thank you so much for your i note, thank you so much for your time. with pandemic restrictions easing in much of the world, there are high hopes that the battered airline industry would be flying high again in 2022. however, rising oil prices as a result of the war in the ukraine have put that recovery under threat. the ukraine have put that recovery underthreat. globaljet fuel the ukraine have put that recovery under threat. globaljet fuel prices soared to a 14 year high. i sat down with the boss of delta air lines and started by asking him just what these higher prices are going to mean for the cost of flying. it is auoin to mean for the cost of flying. it is going to go _ mean for the cost of flying. it is going to go no _ mean for the cost of flying. it 3 going to go up because you need to be able to push forward your cost of production in whatever business you are in. in the us we are not allowed to put surcharges onto the products. so on our domestic flights we actually have to get into our base pricing. it takes a little bit longer. we can increase the price

but it's a competitive battle to do so. it's a struggle between rising fuel prices or the market share. international is very different. the international recovery tends to be faster because of the surge pricing. staying with the higher ticket prices how much higher? it depends on what the — prices how much higher? it depends on what the fuel— prices how much higher? it depends on what the fuel prices _ prices how much higher? it depends on what the fuel prices settle i prices how much higher? it depends on what the fuel prices settle out i on what the fuel prices settle out on. i would say the average ticket price is about 25 prices on a ticket. that could be five to 10% at the high levels of oil. fiend ticket. that could be five to 1096 at the high levels of oil.— the high levels of oil. and more for international _ the high levels of oil. and more for international flights. _ the high levels of oil. and more for internationalflights. yes. - the high levels of oil. and more for international flights. yes. a - the high levels of oil. and more for international flights. yes. a little i international flights. yes. a little bit hither international flights. yes. a little bit higher than _ international flights. yes. a little bit higher than that. _ international flights. yes. a little bit higher than that. when i international flights. yes. a little bit higher than that. when it i international flights. yes. a little i bit higher than that. when it comes to sustainability, _ bit higher than that. when it comes to sustainability, delta _ bit higher than that. when it comes to sustainability, delta aims - bit higher than that. when it comes to sustainability, delta aims to i bit higher than that. when it comes

to sustainability, delta aims to fly l to sustainability, delta aims to fly with 10% greener fuel by 2030, that probably means you will have to invest more to get to that number. we are already doing everything we can to get there. the current prices is not making it easier, if that's your question. it isjust is not making it easier, if that's your question. it is just pushing is not making it easier, if that's your question. it isjust pushing up the price to get to that future. what we really need is we need the government, the us government who continued to be quite receptive to create the bridge between us and the energy producers. the energy producers want to create sustainable aviation fuels. the airlines want to purchase it, but the cost to produce versus the cost to buy is at a level of three to five times of what's in the marketplace today. that is where the marketplace today. that is where the government can starting the investment and putting it to scale. we know the war in ukraine and the economic consequences it is causing around of the world could not have

come at a worse time for your industry. you are alljust getting out from the pandemic. i want to know what your biggest fears are now. what keeps you awake? the world is returnin: now. what keeps you awake? the world is returning to — now. what keeps you awake? the world is returning to travel— now. what keeps you awake? the world is returning to travel and _ is returning to travel and governments have decided that covid is done and you are free to roam and move. we are seeing some of our largest bookings we have ever had in history and notjust in the us, internationally as well. that is encouraging giving that we still have a system pretty low in asia for example. we are trying to make sure we have all of our staff in place, we have all of our staff in place, we have a product fully restored, bringing back katie eating —— bringing back katie eating —— bringing back katie eating —— bringing back catering, amenities. making sure our premium services where it needs to be it has been our focus for some time. he hired 10,000 people in the usjust in focus for some time. he hired 10,000 people in the us just in the last 12 months and this year will probably

hire another five to 10,000. typically the business class is the lucrative part of airline. what percentage are you at today in terms of return? fist percentage are you at today in terms of return? . . ,., ~:: , percentage are you at today in terms of return?_ that i percentage are you at today in terms of return?_ that is i of return? at about 6096. that is what ou of return? at about 6096. that is what you were — of return? at about 6096. that is what you were in _ of return? at about 6096. that is what you were in december- of return? at about 6096. that is what you were in december so i of return? at about 6096. that is i what you were in december so i'm wondering how fast is the bounce back? it wondering how fast is the bounce back? , , , wondering how fast is the bounce back? ,, , ,, back? it is pretty fast because when omicron hit — back? it is pretty fast because when omicron hit in _ back? it is pretty fast because when omicron hit in the _ back? it is pretty fast because when omicron hit in the us, it _ back? it is pretty fast because when omicron hit in the us, it got - 0micron hit in the us, it got down to about 30 or 40% and so in recent weeks it has come fast. i think by the summer that should be 70% or more. the question of the return of business, everyone has an opinion. i realise there are forms of business travel that will never return. i also acknowledge there's going to be many new reasons why people travel, why business travellers travel or consumers are buying the premium services that we often equate to business. that premium has never

been stronger. let business. that premium has never been stronger-— been stronger. let me finish on a money question. _ been stronger. let me finish on a money question. you _ been stronger. let me finish on a money question. you had - been stronger. let me finish on a money question. you had huge i been stronger. let me finish on a i money question. you had huge losses like nearly all airlines around the world. you lost something like $3.1; billion last year. you are hoping to return to profit. can you still do that given what we have been talking about, certainly the higher oil prices? mr; about, certainly the higher oil rices? g , ., , , prices? my expectation is we will be rofitable prices? my expectation is we will be profitable this _ prices? my expectation is we will be profitable this year _ prices? my expectation is we will be profitable this year and _ prices? my expectation is we will be profitable this year and not - prices? my expectation is we will be profitable this year and not just i prices? my expectation is we will be profitable this year and notjust a i profitable this year and notjust a little bit, it will be a meaningful profit. and won't be back to 2019 levels. the first quarter of the year we will lose some money primarily because of 0micron. not the fuel crisis, but i do expect starting in the second quarter and beyond we will be profitable. thank ou so beyond we will be profitable. thank you so much _ beyond we will be profitable. thank you so much good _ beyond we will be profitable. thank you so much good luck _ beyond we will be profitable. thank you so much good luck with - you so much good luck with everything. i will check in with you later. that is all. follow me on twitter, you can get me. i will see you soon. thank you for watching.

despite the sunshine many of us would agree it feels on the cold side, particularly the wind. the skies are clear with lots of fine weather around and that will lead to a frost tonight. thanks to this high pressure will stick around for the weekend and into next week but around this area of high pressure the winds are pretty strong, blowing in from the east and the sea is very chilly this time of the year. in fact the temperatures around coastal areas are seven or eight degrees.

that wind blows off the sea gusting to around 30mph and drags that chilly air off the water inland and then it feels cold. of course it does warm up a little bit inland. up to around 13 or 16 degrees. in western parts of scotland we have more shelter with temperatures going up to 17 degrees so hints of spring across this part of the world. tonight clear skies with the nagging wind out there but where the wind falls light, particularly inland, there will be a touch of frost, probably around freezing in rural areas and two or three degrees above freezing in city centres. high pressure still with us tomorrow. this area of cloud across the netherlands and belgium is heading our way and for some of us it will be a bit more cloudy on sunday, maybe a few more showers around in east anglia and the south—east. it starts off sunny and breezy and chilly first thing and the area

of cloud from belgium and the netherlands moves into east anglia and maybe brings a couple of showers. many central areas from the south to the north lots of sunshine around. a bit chilly on north sea course and about nine degrees in newcastle with the wind blowing off the north sea. monday and tuesday, the wind switches from the south and it will be much milder. i would say it is even going to feel warm and a really promising outlook for the second half of the week. temperatures up to 17 or 18 and will probably touch 20 degrees, fingers crossed, for the first time this year.

this is bbc news. welcome if you're watching here in the uk or around the globe. i'm lewis vaughan jones. russian forces advance into mariupol with fighting now reported in the centre of the city. 80% of buildings in the port city have been damaged by the russian assault. those who've managed to get out describe what they've fled. translation: there is no mariupol. we sat in a cellar for ten days and did not leave once. we neither had water or electricity. dozens have been killed in an attack on a ukraine military base as president zelensky urges russia to join meaningful peace talks. translation: | want - everyone to hear me now, especially in moscow. it's time to meet, time to talk. it is time to restore territorial integrity and justice for ukraine.

and i'mjames reynolds live in the city of lviv