On Episode 965 of The Core Report, financial journalist Govindraj Ethiraj talks to Anas Alhajji, energy economist, researcher and writer on the sidelines of the Elara India Dialogue 2026.

SHOW NOTES

(00:00) Stories of the Day

(00:51) Better Than Expected GDP Growth Is Causing Economists To Revise Their Full Year Numbers.

(04:15) Oil Prices Begin Their Upward Journey Again.

(06:08) Brokerages Weigh On HDFC Succession, Wait To See Who Becomes New CEO

(08:21) Where Could Oil Prices Be In The Next Few Weeks?

(21:35) The Company That Sells More Watches Than Switzerland Is Seeing A Leadership Transition.

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NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on feedback@thecore.in.

Good morning. It's Tuesday, the 1st of September, and this is Govindraj Ethiraj, broadcasting and streaming weekdays from Mumbai, India's financial capital.

Our top stories and themes:

Better than expected GDP growth is causing economists to revise their full-year numbers.

Oil prices begin their upward journey again, and the markets are down.

Brokerages weigh in on HDFC succession; we'll wait to see who becomes the new CEO.

The company that sells more watches than Switzerland is seeing a leadership transition.

And finally, where could oil prices be in the next few weeks?

Markets, GDP Growth, Small Cars and Monsoon

India's economic data is demonstrating more resilience than expected and higher growth. The economy grew at a robust 7.8% for the June quarter of 26–27 against 8.6% in the preceding March quarter of 25–26, despite disruptions caused by the ongoing West Asia crisis, according to data released by the government on Monday. Forecasts by agencies for the June quarter GDP growth had ranged between 6.9% by India Ratings and 8% by the State Bank of India.

Gross value added (GVA) growth was recorded at 8.2% in the June quarter against 8.7% in the preceding March quarter. Agriculture output grew at a robust pace of 3.6% in the June quarter despite the delayed onset of the monsoon, compared to 4.4% in the same quarter a year ago. Manufacturing growth accelerated to 9.2% from 8.3% during the same period. Amongst the services sectors, financial, real estate, and IT saw a double-digit growth of 12% compared to 8.8% during the comparable period.

A note from Bank of Baroda Research said that this was a much higher than expected rate against their forecast of 7–7.2%. Bank of Baroda said in nominal terms, growth was about 10.3%, aided by higher inflation which enters the deflator indices. They also said that growth has been spearheaded by capital formation, which has increased to 34.3% in nominal terms from 31.4% last year, with a growth thus of 20.4%. This, the bank says, is a major takeaway as it involves both private and government expenditure, with the former being driven by data centres and power besides metals.

Both Bank of Baroda and CareEdge Ratings have said they expected a higher growth for the full year. Bank of Baroda says given this higher growth rate, we could expect GDP growth for the year to grow up to 7% for the year, which would be the fourth successive year of more than 7% growth. CareEdge Ratings said that buoyed by the better than expected growth momentum in Q1, they have raised their 26–27 growth projections to 7.3% from 7% earlier.

A note from CareEdge's chief economist also highlighted the resilience in the first quarter and said the gap between GDP and GVA (or gross value added) can be explained by strong growth in subsidies and contraction in indirect tax collections amidst past GST (or Goods and Services Tax) rationalisation and recent fuel excise cuts. Past consumption-boosting measures like income tax cuts, GST rate rationalisation, and low inflation boded well for growth and private consumption, according to CareEdge. It also highlighted, importantly, the sharp acceleration in exports growth which aided the overall growth momentum, one reason for which is obviously a depreciating rupee. CareEdge did add that they were expecting some growth moderation in the coming quarters.

The numbers came in after market closed, even as oil prices rose again following fresh military attacks between Iran and the United States, and more on oil prices shortly.

Interestingly, Maruti Suzuki chairman RC Bhargava on Monday, speaking to shareholders, credited GST reforms for economic impetus and growth, as well as weathering the economic uncertainty caused by the West Asia war. He said to shareholders that the Indian car industry is projected to reach 6.3 million units by 2031, or in about five years' time, and added that the small car market share is expected to grow significantly faster than previously observed. Small cars is a segment that large car makers had almost given up on, in a manner of speaking, until the turnaround that happened in September last year because of the GST rate cuts. Maruti now says it is expanding production capacity to meet anticipated demand increases.

With all of this, the benchmark indices on Monday were lower, with the Sensex falling 307 points to 76,957 and the Nifty 50 falling 95 points to 24,080. In the broader markets, the Nifty Midcap was however up 0.2%, while the Nifty Smallcap fell 0.7%.

The rupee hit a nearly four-week high against the US dollar on 31st of August, and that made it a monthly gain thanks to support from inflows because of an MSCI index rejig and central Reserve Bank of India intervention, according to Reuters, which added that the rupee closed at 95 rupees 16 paise, the highest level since August 5th, from the previous session's close of 95 rupees 37 paise.

Gold prices were down on Monday after the renewed Middle East attacks, which in turn led to fears of inflation and also hawkish comments from Federal Reserve Chair Kevin Warsh, which we spoke about on Monday, which boosted expectations for a September rate hike. Though gold is still on track for its biggest monthly gain since January, according to Reuters, which quoted spot gold prices at $4,448 per ounce.

India could see below-average monsoon rainfalls for September after August numbers also came in 16% below normal, according to the Indian Meteorological Department speaking on Monday, raising concerns once again about crop yields. Rainfall during September, which is also an important crop-maturing month, could hurt yields of summer-sown crops such as cotton, soybean, corn, and pulses, while reducing soil moisture needed for winter-sown crops like wheat and rapeseed, according to a Reuters report.

And some consolidation news from the IT services space: ITC Infotech said it would acquire a 22% stake in IT services provider Happiest Minds Technologies, which is promoted by Ashok Soota, for about 139 million dollars.

HDFC’s next CEO

There is a lot of discussion about who will take over HDFC Bank, being, as we mentioned yesterday, amongst the most weighted stocks (between 10% and 12% of the Nifty 50 and the Sensex). Shares of HDFC Bank meanwhile closed at their lowest levels in 30 months on Monday, even as investors and fund managers waited to see who would succeed HDFC Bank CEO Sashidhar Jagdishan, who announced he would step down at the end of his term in late October.

The bank said it will fast-track the succession, according to some reports. The stock price itself is down about 28% this year. Several brokerages have put out notes on the development and broadly seem to concur that the decision not to seek reappointment removes one uncertainty, even as they awaited or stood by for clarity on leadership.

Business Standard quoted Nomura Securities saying the key question was not just who replaces him—or rather, the current CEO—but what profile the bank wants. The next CEO will need to accelerate growth, improve deposit mobilisation returns, extract merger synergies (that's between HDFC and HDFC Bank), and, importantly, rebuild confidence around governance and senior management stability. The eventual choice therefore appears to be between continuity through the existing HDFC leadership bench and a broader leadership reset through an external appointment, according to that Nomura report. It also said Jagdishan's decision to not stay on is incrementally positive as it removes one binary uncertainty; however, clarity on the successor could take time, potentially extending into 2027, and until then, says Nomura, the leadership overhang could remain. Having said all of that, a credible successor could become a meaningful re-rating catalyst. In short, one overhang closes, and the market now waits to see who leads HDFC Bank into its next phase.

Jefferies, the other brokerage, said they will watch the process to find the candidate and watch out if this leads to a follow-on exit amongst senior leaders of the bank. Now, this can impact business and performance in the near term. "The transition is likely to impact revenue momentum on deposit mobilisation and fees," says Jefferies, and they also said they trim earnings for '27 to '29 by three percent each, but do not see a risk to asset quality.

Oil Price in the Next Few Weeks

Oil prices rose on Monday after the US attacked an Iranian island in the Strait of Hormuz, and Tehran said it had retaliated as the conflict extended into a sixth month. And US forces struck two launchers on Iran's Larak Island in the Strait of Hormuz on Sunday—the first known American strikes on Iran since late July, according to a Reuters report, which added that Brent crude futures were at about $91.25 on Monday morning.

With hostilities breaking out once again in West Asia, what does the medium-term outlook for oil look like, and the range that we can foresee at this point? And also, what is the outlook for not just oil, but gas as well—something that we've not spoken much about in recent days? I caught up with energy expert Dr. Anas Alhajji, who's based in Houston, Texas, but who was a speaker at and on the sidelines of the Ashwamedh Elara India Dialogue 2026 in Mumbai on Monday, and I began by asking him how he was seeing the median price of oil in coming weeks and months, and what would determine that. And I also asked him for his view on Russian oil flows to India.

INTERVIEW TRANSCRIPT

Anas Alhajji: Our main scenario is no war, no peace, which is the status quo in a sense right now. When we say no war, we are talking about war by definition is what happened in March and April, that's a full-scale war. So what this scenario basically is, whatever we've seen in recent weeks where you have skirmishes here and there and not some attacks on both sides, etc.

So whatever you see in prices right now, we're talking about range-bound prices in the 80s for rent. There is no reason for oil prices to skyrocket. There is no reason for them even to collapse.

In case of a recession, we are going to see a decline below this range, but we still need to see what's going on in terms of the data that's coming out of various countries. Governments basically are spending a lot of money in terms of subsidies to mitigate the impact of high energy prices, and that is preventing a recession right now. The question is, if this lasts for a long time, governments cannot continue subsidising their own populations for a long time.

So what's going to happen next? So something got to give. The only thing we are looking at right now is probably there's no war, no peace until the US elections, midterm elections.

What will happen after that, we don't know. But from now until then, it seemed like range-bound almost everything was increased. Of course, with heightened volatility.

Govindraj Ethiraj: How are you seeing the supply and demand both for oil, including from China? And there has been talk, for example, of China having reached peak oil already.

Anas Alhajji: Generally speaking, we've seen a massive decline in demand. And here we have to differentiate between consumption and demand. Consumption is one thing, demand is another.

So we've seen a very large decline in demand. And if you look at the numbers, for example, Japan minus 6 percent, China minus 12 percent, Bangladesh and Pakistan minus 14 percent. Among all the Asian countries, basically the least decline happened in India, which is minus 1.1 percent. And why India is different from anyone else? Simply because India is the only country that is importing massive amount of discounted Russian crude. And that helped.

And India was the only country in Asia that was able to recover its imports and replenish its storage and restart exporting petroleum products. It was able to manage all of those and it's the only country in Asia that was able to do that. But it was the Russian crude basically that helped with that.

Govindraj Ethiraj: And you mentioned storage and I interviewed you a few months ago. You talked about how India needs to step up its strategic reserves. Have you looked into that issue a little more or any other thoughts?

Anas Alhajji: Yes, there is something new relative to our last meeting. The thing new is, of course, now we are talking about Hormuz and the impact of Hormuz and the lessons we learned from Hormuz. Of course, the main lesson out of Hormuz is India needs to expand the strategic petroleum reserves.

We agree on that. But now there is a new game in town. Now India literally can go to the Gulf states and tell them, look, I'm going to change some regulations, ease some regulations, come to India and build strategic petroleum reserves in India.

This is important because if you look at the map of India, it's open on the oceans. Oil does not have to go through any waterways at all to sell to the rest of the world. So those countries basically can come in, build those strategic reserves.

If Hormuz is closed again, India will have the oil and anything extra basically they can export it to the rest of the world and they can create a mechanism where everyone benefits financially from it. So what is different between now and the past is that now India does not have to spend money to build a strategic petroleum reserves. Someone else can do it.

Govindraj Ethiraj: Right. And I'll come back to oil in a moment, but tell us about gas flows. How are you seeing LNG LPG flows and are there any newer trends in LNG supply distribution, particularly since the war broke out?

Anas Alhajji: Generally speaking, of course, we lost the LNG from Qatar. So that is kind of a big loss. And we've seen the United States increasing its supply of LNG to record high.

So the United States was the main beneficiary of that. Then we have the competition between Asia and Europe on who is going to get the spot LNG, depending on the differential and the price differentials, et cetera. But one thing is clear.

Okay. Day after day, it is very clear that LNG is becoming more important than ever. And of course, there are many reasons why we are bullish on LNG, but we are learning now that I will not be surprised if there will be a time when the trade in LNG is larger than the trade in oil.

And the trade in oil, as you know, is the largest in the world. And simply because gas has many uses relative to oil. So you can use it in so many things at the same time for conservatives, whether around the world, whether the United States, Europe, India, or any other places, conservatives like natural gas.

So they prefer natural gas, but for liberals who do not like fossil fuel, natural gas is the default fuel. So on one side, they wanted the other side of the default fuel and therefore everyone wants the natural gas. And the only way to transport natural gas globally is LNG.

Govindraj Ethiraj: Right. It's quite a dramatic statement when you say that it could become bigger than oil. So you feel even at this point of time, we are heading in that direction in terms of growth of LNG.

And I really want to tie that to the fact that Qatar's gas fields are still shut, not all of them, but many of them. And similarly in Iraq and so on. So where are we right now?

Anas Alhajji: Well, like you said, we lost that Qatari gas. We have new plants coming online in the United States. So that will add more.

We've seen some increase in Australia's exports, which was, by the way, a big surprise. And now we are seeing new projects coming online, not coming online, but being built in various places. And the recent one is the most interesting one because Trinidad and Tobago, this is a country where they used to export a lot of LNG and then the reserves in the field basically declined substantially.

So there is massive spare capacity in that plant. And nearby in Guyana and Venezuela, they have a lot of gas and no way out. So now BP and XRG, XRG belong to ADNO by the way, they decided, okay, I need the approvals to get the pipeline.

They already got the approval from the United States. They want to build a pipeline to take advantage of those reserves in the area. And since the LNG plant is already there, you don't need to spend billions of dollars building a new LNG plant.

You just take it to Trinidad and literally liquefy it and ship it from there. So we are seeing more. There is another project in Argentina right now to take advantage of the shale bonanza that is going on there.

So there are new plants coming or being built in Argentina right now.

Govindraj Ethiraj: I'll come to Venezuela since you touched upon it, but all of what you've talked about, including the increase in supply from the United States and the Americas as a whole, what does that mean for LNG prices?

Anas Alhajji: Generally speaking, as long as the Qatari LNG is not there, LNG prices will basically, or gas prices in general, whether we talk about Asia or Europe, will remain tight. So it will remain elevated until we see a resolution to Qatari exports. So that is very clear in the data.

The issue right now for many people in the poorer countries that energy prices so elevated. And if you look, for example, Bangladesh, they need the LNG, but at $21 per BTU, that's extremely expensive for them. So something got to give in those poorer countries.

It's just kind of, they cannot afford those prices.

Govindraj Ethiraj: Got it. So to come to Venezuela, we've had announcements from both US president, as well as the Venezuelan president, acknowledging or hailing this deal for America to take over the Venezuelan oil reserves. So interpret that for us.

What does it mean?

Anas Alhajji: Generally speaking, everything that President Trump said about the deal was completely off, was completely wrong. Every part of it was completely off. That 65 billion barrels that he talked about, this is what we call oil in place.

This is an industry jargon, an industry expression. What matters is what can we extract out of it? Usually we can extract about 15 to 18% of it.

So it's not 65. What we can extract out of it is 10 to 11, probably 12 billion barrels and that's it. So that's the first issue.

The second issue is Dulce Rodriguez, who is the interim president of Venezuela, already said that publicly, said, look, the constitution of Venezuela is very clear. No foreigners can own the reserves and therefore Trump cannot have access to those reserves. So that's another problem in Trump's statement.

He cannot own those reserves and therefore he cannot add them to US reserves as he claimed. So that is out of the question. Then we have the issues related to the cost, because he said, we are going to get the oil from Venezuela at cost.

And this is where it gets really interesting because if Venezuelan oil cost is way, way higher than anyone else, that means you are paying a very high price and this is not a win. This is actually a loss. So there are many issues with the statement he made.

He said, it's over a hundred years. Dulce said, no, it's for 25 years. We don't know where he got the a hundred years.

And in fact, it does not make sense to have a hundred years because you'll be depleting those resources anyway, way before that. So many of this statement, basically, he mentioned are incorrect. He said, we are going to use it for the SPR, the strategic petroleum reserves.

Well, the quality of the crude and the Western part of Venezuela is not suitable for the US SPR and therefore not a single barrel is going to go to the SPR. So we have all kinds of mistakes in the statement that do not even fit industry standards. Okay.

Govindraj Ethiraj: So this is about Russia and India, because this is something that I've asked you before as well. And things have changed because there is increased escalation between Ukraine and Russia. Ukraine has attacked Russia's oil facilities, refineries.

So what does this mean for oil coming out of Russia, whether it's crude or finished product? And what could it mean for countries like India who've been, as you yourself pointed out a little while ago, large importers of Russian oil?

Anas Alhajji: Generally speaking, the problem we have right now are the Ukrainian attacks on the Russian facilities. There are tankers carrying Russian oil and the ports. And Russia lost basically the ability to export gasoline and to export diesel, which badly needed right now by the world.

At the same time, their oil production itself is declining because of those attacks. And if Russia cannot export as they did last month, for example, then India cannot import as much as they did last month. So as Russia's exports declined because of the Ukrainian attacks, India, by default, their imports from Russia declines.

India benefited greatly from the purchases of Russian crude. To give you an example on that, the same time when we have the crisis, we have Japan. In Japan, we have a declining currency, just like declining rupee.

So it's the same issue here. Both of them have suffered from cutoff supplies. India was able to recover its imports, was able to replenish its storage, and was able to restart exporting, while Japan basically was not able to go back to its original imports and was not able to replenish.

Why? Because Japan is part of the G7 who imposed sanctions on Russia, while India was not part of the G7. So India was able to get the discounted Russian crude, while Japan was not able to get it.

And you can see the difference. India solved its problems, Japan was not able to solve its problems. So the Russian crude becomes essential to India as a result of the comparison between Japan and India.

Govindraj Ethiraj: Interesting. Dr. Alhajji, thank you so much for your time.

Anas AlHajji: You're welcome.

Tim Cook Is Done

For nearly 15 years, Tim Cook has led Apple through one of the largest corporate transformations, and of course, Apple's own transformation. Yesterday, on the 31st of August, he served his final day as CEO of Apple before handing over to John Ternus, marking the end of an era that began with one of the toughest successions in the industry, being the taking over from legendary and iconic founder Steve Jobs.

A report in The Wall Street Journal says Apple is on the top of the world; this may be incoming CEO John Ternus's biggest challenge, but also his biggest opportunity. As Ternus steps in as Apple CEO today, he takes over the world's second-largest company by market capitalisation, valued at nearly five trillion dollars, which is obviously a tough starting point. But The Wall Street Journal says the opportunity is in revving up Apple's innovation engine, especially in AI. Tim Cook's brilliance, it says, was to take the company Jobs built and scale it massively. The year Cook took over, Apple sold about 72 million iPhones, and this year it'll be 255 million, The Wall Street Journal quoted Counterpoint Research saying.

So Apple in this period has tripled volumes, minimised risky capital investments, and returned more than a trillion dollars to shareholders through dividends and buybacks, and also helped Cook multiply Apple's valuation 13 times during his tenure. The Wall Street Journal says Apple today sells more watches annually than Switzerland.