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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Iranian and Israeli strikes on major gas hubs jolted global markets.

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Speaker 2: Hours after Israel carried out a strike on a key

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Speaker 2: gas field in Iran retaliated, Iran then taking aim at

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Speaker 2: the world's largest liquefied natural gas terminal in Kata. A

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Speaker 2: military spokesperson says that the country's response is not over yet.

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Speaker 3: Just about three weeks into the Iran War, attacks are

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Speaker 3: escalated on vital parts of the Middle East energy infrastructure.

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Speaker 3: Iran has also threatened to attack ships in the Strait

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Speaker 3: of Hormuz, the narrow passageway that in normal times is

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Speaker 3: the gateway for one fifth of the oil sold on

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Speaker 3: global markets. Hundreds of tankers are now stranded waiting to

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Speaker 3: get through.

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Speaker 1: The large majority of the tanker fleet is just sort

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Speaker 1: of still stuck in the Persian Gulf and sort of

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Speaker 1: dealing with a lot of really difficult problems right now.

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Speaker 3: Jerry Doyle is Bloomberg's Global Defense Editor. He says, these ships,

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Speaker 3: with an estimated forty thousand seafarers aboard, are at the

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Speaker 3: center of a crisis with global reverberations.

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Speaker 1: Obviously, you know, folks are living aboard a ship with

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Speaker 1: no particular end date when they might be able to

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Speaker 1: get off of it. There's always the threat of missiils.

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Speaker 1: They can see oil installation burning on shore. You know.

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Speaker 1: GPS is scrambled and jammed, so that makes navigation more difficult.

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Speaker 3: The regional upheaval sent oil prices up sharply. On Thursday,

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Speaker 3: European gas futures soared as much as thirty five percent,

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Speaker 3: But restoring global supplies and settling markets won't happen until

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Speaker 3: traffic in and out of the Persian Gulf resumes. The

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Speaker 3: cost of ensuring one of these ships for this voyage

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Speaker 3: has gone up fivefold. A few ships have been able

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Speaker 3: to get through the straight of horm moves, apparently with

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Speaker 3: Tehran's blessing, but ships without that run the risk of attack,

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Speaker 3: and then there's concern about mines. UK Defense Secretary John

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Speaker 3: Healey has told her reporters that it's clearer and clearer

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Speaker 3: that the Iranians may have started mining in the Strait.

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Speaker 3: US Defense Secretary Pete Hegseth has said the US has

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Speaker 3: no clear evidence of that, but just the possibility that

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Speaker 3: Iran has laid minds in the Strait. Jerry says, makes

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Speaker 3: passage all but impossible.

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Speaker 1: It's sort of a reverse schroding your minefield. Right until

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Speaker 1: you find the minds that aren't there, you have to

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Speaker 1: assume they are there.

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Speaker 3: I'm David Gera, and this is the big take from

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Speaker 3: Bloomberg News today on the show. As the consequences mount

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Speaker 3: of the Strait of Poormus being closed, the very real

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Speaker 3: risks of navigating this crucial waterway, including the potential of minds.

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Speaker 3: How the US and other countries are trying to figure

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Speaker 3: out if those explosives are there and what it would

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Speaker 3: take and how long it would take to remove them

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Speaker 3: if there are. One of the White House's stated goals

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Speaker 3: for the Iran war is to annihilate the Iranian Navy.

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Speaker 3: I ask Bloomberg Global Defense Editor Jerry Doyle what capability

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Speaker 3: the Iranian Navy still has after more than two weeks

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Speaker 3: of fighting and what problems that poses for the Strait

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Speaker 3: of Hormones.

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Speaker 1: I mean, in conventional terms, the Iranian Navy is just

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Speaker 1: not really there. Doesn't have much in terms of a

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Speaker 1: surface fleet at the moment. All of its larger ships

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Speaker 1: have been sunk, damage destroyed. What it does have left again,

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Speaker 1: in some unquantifiable number is a lot of these small

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Speaker 1: speedboats which can navigate an area like the Strait pretty easily,

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Speaker 1: which can put out from shore or hidden location pretty easily,

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Speaker 1: and can carry some nasty stuff on board, including missiles,

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Speaker 1: anti ship mines and even explosive charges themselves.

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Speaker 3: So walk us through, if you could, the ways in

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Speaker 3: which Iran could target ships passing through this strait. You've

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Speaker 3: talked about these small boats and what they could do.

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Speaker 3: What are some of the other ways that Iran could

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Speaker 3: target tankers and ships.

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Speaker 1: Well, sea mines are probably the easiest way. They're very

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Speaker 1: easy to distribute. You can place mines in the straight

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Speaker 1: sort of under the guys or with the normal patterns

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Speaker 1: of sort of life in the strait using small boats

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Speaker 1: or traditional commercial vessel called dows that are ordinarily in

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Speaker 1: the strait. Anyway, you can push them out from shore

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Speaker 1: if you want. And the issue with minds is that,

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Speaker 1: as one expert told me, the number of minds you

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Speaker 1: need to create a viable naval minefield is zero. Until

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Speaker 1: you find the minds that aren't there, you have to

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Speaker 1: assume they are there. Just the threat of a minefield

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Speaker 1: existing in a narrow water way like that means that

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Speaker 1: it has to be cleared. You sort of have to

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Speaker 1: prove the negative. You have to show that there is

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Speaker 1: nothing there, and that requires a lot of painstaking work.

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Speaker 1: While those ships are conducting that sort of activity, they're

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Speaker 1: in range of all around the shore based weapons, which

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Speaker 1: creates a dangerous situation. So that is kind of the

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Speaker 1: easiest way that around can close the strait by either

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Speaker 1: threatening to or actually mining it, and then it sort

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Speaker 1: of becomes an impassable barrier until the minds are cleared.

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Speaker 3: I want to linger on this for a minute. That

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Speaker 3: is the kind of psychological power of a shipping company

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Speaker 3: or a captain or an insurance company, just wondering if

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Speaker 3: in fact there are minds in the strait, could you

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Speaker 3: kind of help us get into the head of each

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Speaker 3: of those individuals sort of what they would need to

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Speaker 3: know or see to feel comfortable going through the strait

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Speaker 3: at this point, given what you say is kind of

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Speaker 3: the fear of their being minds in these waters.

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Speaker 1: Well, I think what they would need it either assurances

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Speaker 1: from the Iranian government or the Iranian military that their

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Speaker 1: ships would be able to pass safely or guided through

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Speaker 1: perhaps parts of the strait that are not mined or

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Speaker 1: are safe, or they would need assurances from foreign military,

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Speaker 1: from the US Navy, from the Gulf navies that the

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Speaker 1: strait is safe to transit. It has to be a

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Speaker 1: pretty clear assurance either from the party that would potentially

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Speaker 1: mine the straight and know where those weapons were, or

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Speaker 1: the folks who would go through and clear it out.

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Speaker 3: Let's get into the mechanics of I guess trying to

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Speaker 3: assess if there are minds also clearing minds from a

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Speaker 3: body of water like the straight offor moves. How does

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Speaker 3: a military go about doing that.

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Speaker 1: Well, different militaris have different capabilities for it. You can

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Speaker 1: have purpose built ships which often have non magnetic hulls.

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Speaker 1: There may be fiberglass or wood covered in fiberglass, something

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Speaker 1: like that, which allows them to pass through these mind

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Speaker 1: areas a little more safely. And then you use those

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Speaker 1: ships and the sensors on board those ships to spot

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Speaker 1: the mind with sonar or other means of detecting anomalies

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Speaker 1: under the water, magnetic anomalies and things like that. Then

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Speaker 1: once you have those contacts identified, then you can assess

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Speaker 1: whether they are minds or not. They could just be

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Speaker 1: junk on the bottom of the sea and then once

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Speaker 1: you have the information, what you feel with reliable information

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Speaker 1: about what's a mine and what's not, then you have

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Speaker 1: to go through and disable them. And there's different ways

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Speaker 1: you can do that. You can use a small explosive charge.

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Speaker 1: You can even use divers if you want. All that's

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Speaker 1: obviously very risky, but it's a really painstaking process. Now

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Speaker 1: the US Navy is sort of phasing out those purpose

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Speaker 1: built boats. What it uses is its latorial combat ships,

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Speaker 1: which are these smaller, faster military vessels that are designed

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Speaker 1: to operate in close to shore, and they have a

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Speaker 1: mind clearing sort of module package that they can mount

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Speaker 1: on board the ship, and they use these remotely controlled

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Speaker 1: vehicles on crude undersea vehicles to go scan at some

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Speaker 1: distance from the ship and look for mind using those

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Speaker 1: same tools as sonars and magnetic anomaly detectors. Then you

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Speaker 1: have to go through again the whole process of clearing

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Speaker 1: the mind. That is considered a little bit safer for

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Speaker 1: the ship involved because it doesn't have to be directly

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Speaker 1: in the minefield. But in the case of the Strait

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Speaker 1: of Horme moods, clearing the straight and the waters around

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Speaker 1: it would require the ship. The main ships to still

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Speaker 1: operate within range of around anti ship missiles, which makes

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Speaker 1: it a very complicated and fraught process.

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Speaker 3: You mentioned the US was phasing out this kind of

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Speaker 3: old mind sweeping technology that were for these ships in

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Speaker 3: the Middle East that were moved out by the Navy

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Speaker 3: in January. Now we have these new literal combat ships

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Speaker 3: that haven't really operated in these sorts of conditions before,

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Speaker 3: and I wonder what kind of complications that introduces them

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Speaker 3: having to kind of do this in real time, maybe

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Speaker 3: before they've been been tested in doing this well.

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Speaker 1: I mean, that is the complication. You're doing something you

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Speaker 1: haven't done before in these types of circumstances. And so

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Speaker 1: you know, on the positive side of alser you will

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Speaker 1: learn how well things work, you will learn some better practices.

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Speaker 1: But on the negative side, obviously there's a lot of risk.

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Speaker 1: The stakes are pretty high, so if you make a mistake,

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Speaker 1: extremely bad consequences can result.

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Speaker 3: That's right where I wanted to go. You're describing a

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Speaker 3: process that is you could say delicate or risky. Is

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Speaker 3: this work that can be done in the middle of

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Speaker 3: an active conflict.

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Speaker 1: I mean it can be done, and World War two,

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Speaker 1: for example, it has been done. But in modern warfare

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Speaker 1: just not considered a very safe thing to do. It's

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Speaker 1: something you can do if you have to, but it's very,

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Speaker 1: very risky because again, at paintaking, you have slow moving

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Speaker 1: surface vessels that are operating within range of the enemy,

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Speaker 1: and that makes them much easier targets. And in a

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Speaker 1: constrained area like the Strait of Hormos, it's even more dangerous.

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Speaker 3: So how long could it take for the Strait of

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Speaker 3: Hormos to reopen? That's next. I'd love to turn to

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Speaker 3: the timeline here. If you start with the assumption that

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Speaker 3: there could be minds in the Strait of Hormones and

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Speaker 3: you need to make sure that there aren't or you

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Speaker 3: need to clear them, how long is that process likely

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Speaker 3: to take.

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Speaker 1: It depends on how many mines there are and the

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Speaker 1: area of seed that they want to make sure is

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Speaker 1: completely clear. Right, maybe many days, maybe weeks. It really

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Speaker 1: depends on how heavily mined it is, how big of

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Speaker 1: an area they want to make sure is safe, and

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Speaker 1: what kind of you know, opposition they face. If this

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Speaker 1: is a mind clearing operation that's going to take place

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Speaker 1: while Iran is launching missiles from the shore, it will

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Speaker 1: take a very long time.

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Speaker 3: We've heard the President of the United States ask allies

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Speaker 3: to help in reopening the Straight. So far many of

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Speaker 3: those allies have demruror they're not interested in getting involved. Theoretically,

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Speaker 3: what could they offer the US in this effort? How

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Speaker 3: could that sort of speed along or improve the process

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Speaker 3: by which they would get the you know, assessed with

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Speaker 3: the reminds there and remove them if necessary.

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Speaker 1: Not much, Honestly, the US Navy, you know, has more

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Speaker 1: or less the same sort of capabilities in these areas

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Speaker 1: that their allies do. Many hands make lighter work, I suppose,

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Speaker 1: But it's not like new or different technology will be

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Speaker 1: brought to the foe and all of those shifts, All

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Speaker 1: of these allies ships would be you know, facing the

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Speaker 1: same threat that the US would be. So it different

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Speaker 1: to see what having allied ships in the area would

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Speaker 1: do operationally, besides sort of offload some of the risk

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Speaker 1: of clearing the mines.

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Speaker 3: We have seen oil bouncing around one hundred dollars a barrel.

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Speaker 3: This is the pressure on the US to get this

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Speaker 3: straight opened up. In traffic moving again more quickly here,

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Speaker 3: What would a sustained closure of the strait of hormoes

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Speaker 3: mean for oil prices, for energy prices. More more broadly,

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Speaker 3: why is this something that's really applying a lot of

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Speaker 3: pressure on the US at this point in time.

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Speaker 1: Well, something like twenty percent of the world's oil passes

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Speaker 1: through the Strait in normal times, and so removing that

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Speaker 1: supply or making it take much more expensive accomvoluted or

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Speaker 1: lengthier time wise routes to get out of the region

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Speaker 1: just adds to supply pressure. And you know, the reserves

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Speaker 1: that are being released are not going to be able

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Speaker 1: to be released at a volume that matches the amount

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Speaker 1: of oil that is being cut off by the straight closure.

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Speaker 1: And then, of course, because so many aspects of the

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Speaker 1: global economy rely on oil, rely on fuel for container ships,

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Speaker 1: for aircraft, for your car, all the prices for those

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Speaker 1: things start to go up too. And the higher oil

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Speaker 1: prices get and the longer they stay high, the more

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Speaker 1: intense those pressures are going to be, sort of inflicting

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Speaker 1: quite a bit of pain and disruption into the global economy.

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Speaker 3: Jerry, I think a lot of us have been trying

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Speaker 3: to figure out if there's a unified rationale for this war.

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Speaker 3: We've heard a lot of things, different things from the President,

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Speaker 3: members of his administration. Now several weeks into this conflict,

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Speaker 3: I'm curious sort of what you think the role of

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Speaker 3: oil prices is in shaping the direction of this war,

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Speaker 3: And if we were to get higher prices of oil

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Speaker 3: in a sustained way, how that could shape the way

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Speaker 3: that this conflict continues to unfold.

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Speaker 1: Certainly from Iran perspective, the oil prices and sort of

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Speaker 1: the economic pain that Uron can inflict by keeping it

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Speaker 1: straight closed, by damaging oil infrastructure around the region. That's

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Speaker 1: really They're one big remain, maybe their only major card

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Speaker 1: remaining to play, right, and because they are in an

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Speaker 1: existential fight, they have not seem to have shown much

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Speaker 1: reluctant to play that card and to inflict that pain.

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Speaker 1: From the US perspective and from you know, the rest

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Speaker 1: of the world perspective. They're suffering economic pain and hardship

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Speaker 1: and all these things without necessarily a clear goal. And

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Speaker 1: so it's hard to square this idea of you know,

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Speaker 1: so I'm willing to endure this much pain and hardship

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Speaker 1: in order to have this goal at the end of it.

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Speaker 1: But if we don't know precisely what that goal is,

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Speaker 1: it's hard to calibrate. And so that that's complicating this

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Speaker 1: calculus at the moment, I think, but I do think

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Speaker 1: it's fairly clear that the longer oil price is stay high,

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Speaker 1: and the more those costs start to trickle down to

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Speaker 1: ordinary people, especially you know, consumers in the US, the

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Speaker 1: more political pressure they will be on the US to

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Speaker 1: in the war or reach some sort of terms of

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Speaker 1: you know, fire, or just walk away.

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Speaker 3: This is the Big Take from Bloomberg News. I'm David

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