Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Iran Supreme Leader Iotola
Speaker 1: Ali Hamanei has been killed in today's joint attack by
Speaker 1: the US and Israel.
Speaker 2: Our objective is to defend the American people by eliminating
Speaker 2: eminent threats from the Iranian regime.
Speaker 3: What the United States is doing is an act of aggression.
Speaker 3: What we are doing is the act of self defense.
Speaker 4: Targets in Iran, Israel, and elsewhere in the Middle East
Speaker 4: are under attack in an unprecedented escalation in the conflict
Speaker 4: between the US and Iran.
Speaker 2: Would be wonderful if the negotiates really in good conscious,
Speaker 2: good faith, in conscience, but they are not getting there.
Speaker 4: The combat operations come after weeks of negotiations between the
Speaker 4: US and Iran over what remains of its nuclear program.
Speaker 4: This was not an imminent nuclear threat.
Speaker 3: This is a military action over regime change, not over
Speaker 3: the nuclear program.
Speaker 4: Iranian state TV has reported that at least two hundred
Speaker 4: people were killed in the strikes. The country responded with
Speaker 4: missile attacks on Israel and strikes aimed at US assets
Speaker 4: in the region, where at least three US service members
Speaker 4: have been killed. Aron says it sees no red lines
Speaker 4: as it continues to respond with counter strikes. I'm David Gera,
Speaker 4: and this is the big take from Bloomberg News Today.
Speaker 4: On the show, Bloomberg'sjeff Mason and Jumani Berseacci joined me
Speaker 4: to discuss what we know about the timing and goals
Speaker 4: of this weekend strikes and the risks of a widening
Speaker 4: regional conflict. Bloomberg White House correspondent Jeff Mason and Jumna
Speaker 4: Birssecci in Dubai have been here with me all weekend
Speaker 4: long at Bloomberg, along with correspondents across the globe following
Speaker 4: this story. Jeff, we just now heard the tape from
Speaker 4: President Trump announcing this operation. He did it in a
Speaker 4: post on truth social which is an unprecedented move by
Speaker 4: a sitting US president. What has the President said, Jeff,
Speaker 4: about why they.
Speaker 2: Did this now, why they undertook this at this moment, Well,
Speaker 2: the President is pitching the operation is having been in
Speaker 2: response to an imminent threat, and that is something that
Speaker 2: no doubt people are going to question and look into.
Speaker 1: But that is the rationale that he used. His people. Also,
Speaker 1: his top advisors told him that the negotiations that were
Speaker 1: going on in Geneva with Iran about its nuclear program
Speaker 1: essentially came to a point where the United States concluded
Speaker 1: that Iran was not interested in talking about its blistic
Speaker 1: missile program and was still interested in pursuing a nuclear weapon.
Speaker 4: Jeff, what does the US want? Is that clear? Are
Speaker 4: they using a playbook that they deployed in Venezuela just
Speaker 4: a couple months ago.
Speaker 1: Well, it seems very clear that regime changes something that
Speaker 1: they wanted, because the President very directly referred to that
Speaker 1: in his statement when he encouraged people in Iran essentially
Speaker 1: to rise up and take this opportunity to take over
Speaker 1: their government. But they haven't. They been The United States
Speaker 1: in this case have not laid out how they expect
Speaker 1: that to happen. And of course there's some comparisons to
Speaker 1: the Iraq War and this operation, but where those comparisons
Speaker 1: don't continue, at least so far as there are not
Speaker 1: US ground troops in Iran, and so the President may
Speaker 1: have less ability to influence that despite the fact that
Speaker 1: strikes are continuing.
Speaker 4: Jamana, You're witnessing the escalation of this firsthand. You're based
Speaker 4: in Dubai, and I'm curious what things look like there.
Speaker 4: In the wake of these strikes that we've seen, Well, what.
Speaker 3: You need to understand is that a substantial volley of
Speaker 3: missiles and drones have been directed at all of these
Speaker 3: Gulf states. And here I'm talking about the UAE behind
Speaker 3: in Kutar, Kuwait, even Oman who were obviously playing a
Speaker 3: key mediation role in those Geneva discussions. So that was
Speaker 3: also quite a surprising development. And while most of the
Speaker 3: missiles and drones have been intercepted, there are bits of
Speaker 3: debris that actually did cause a significant amount structure of
Speaker 3: infrastructure damage. These are financial centers in the Middle East
Speaker 3: that have prided themselves on political stability and geoeconomic stability
Speaker 3: in the context of a broader region that tends to
Speaker 3: be quite hot and cold, i would say. And so
Speaker 3: the reaction has been pretty and notable in that it
Speaker 3: seems as though many of these Gulf states are losing
Speaker 3: their patients with Iran. So we just had some comments
Speaker 3: from a key advisor to the UAE President and Viz
Speaker 3: warning Iran to return to their senses and to deal
Speaker 3: with their neighbors in a respectful fashion because otherwise, and
Speaker 3: this is a quote, it confirms the narrative that Iran
Speaker 3: is the biggest source of danger in the region. At
Speaker 3: the same time, you know, Iran has stopped one step
Speaker 3: short of going all the way of directly targeting you know,
Speaker 3: residential buildings or civilian infrastructure or oil infrastructure. But you know,
Speaker 3: who's to say that this isn't going to escalate further.
Speaker 4: Jeff, I want to pull back a bit. And there
Speaker 4: was this meeting yesterday of the UN Security Council which
Speaker 4: was called for by the Iranians, and Mike Waltz, the
Speaker 4: US representative at the UN, was there making the case,
Speaker 4: the US case for doing this. We've seen responses from
Speaker 4: other world leaders. European allies are holding an emergency meeting tomorrow.
Speaker 4: I was just talking with Senator Mark Warner of Virginia,
Speaker 4: who sits on the Intelligence Committee. He talked about the
Speaker 4: prospects of this being really a US Israeli mission here
Speaker 4: not enjoying wide support of allies. How do you think
Speaker 4: about the way that the international community has responded to
Speaker 4: what's happened here?
Speaker 1: Well, I think number one, that it's not something that
Speaker 1: President Trump is going to be too concerned about, and
Speaker 1: that's in large part because he during this second term
Speaker 1: and to some extent during his first term as well,
Speaker 1: has upended the international order with his own will and
Speaker 1: with his actions, be it from on the economy, using tariffs,
Speaker 1: or these strikes now in Iran and what was done
Speaker 1: in Venezuela. That said, you know, the international community and
Speaker 1: other countries and allies or enemies for that matter of
Speaker 1: the United States have a right to voice their opinion,
Speaker 1: and the United Nations is a place to do that.
Speaker 1: Whether or not that actually has an impact, though I
Speaker 1: will see.
Speaker 4: After the break, the risk to the Strait of Hormuz
Speaker 4: and to the oil market, and with the US military
Speaker 4: build up, where this could go from here? She want it.
Speaker 4: In the statements that we got from the US President,
Speaker 4: from President Trump, from the Israeli Prime Minister of Benjamin
Speaker 4: at Yahoo, there was this entreaty to Iranians to overthrow
Speaker 4: their government, to put down their weapons, and to seek
Speaker 4: a change of government in Iran. What risks does that introduce?
Speaker 4: The call for that happening in the wake of an
Speaker 4: attack that was undertaken from the air, not on the ground.
Speaker 3: Well, I have to think also that one of the
Speaker 3: reasons that Iran became such a focal point to the
Speaker 3: Trump administration was because of those demonstrations at the beginning
Speaker 3: of the year. That was the as at least in
Speaker 3: twenty twenty six, obviously with the background of Iran's multi
Speaker 3: decade build up of nuclear capabilities. But if you recall
Speaker 3: back in January, president Trump posted that help is going
Speaker 3: to be on the way for the protesters and the
Speaker 3: demonstrators who were taking to the streets, and of course
Speaker 3: we know that they were brutally put down by the
Speaker 3: Iranian regime, and overtime those demonstrations started to peter out,
Speaker 3: and so here we are. You fast forward about a
Speaker 3: month later, and the US have now got involved militarily
Speaker 3: alongside Israel. And it was pretty clear from that original
Speaker 3: video post that President Trump put up that his expectation
Speaker 3: is that the Iranian people should also use this as
Speaker 3: an opportunity to rise up. But of course that comes
Speaker 3: with many challenges. The major risk is that this could
Speaker 3: strengthen the hardliner's hands. They could go down even more
Speaker 3: aggressively on the demonstrators, on the protesters. That could also
Speaker 3: be this push to rally around the flag as well
Speaker 3: and unite their Iranian people about against these external threats
Speaker 3: that are coming through. But then also there's a real
Speaker 3: risk of broader retaliation. And right now, I think the
Speaker 3: Iranian regime sees this as a very fight for their existence,
Speaker 3: and so they're not going to hold back at retaliating,
Speaker 3: either against their own people or against neighboring countries, which
Speaker 3: is what we've seen in the last forty eight hours.
Speaker 4: Jeff, what do we know of what the president is
Speaker 4: watching for here? As you said, his rationale here has
Speaker 4: been changing, somewhat ambiguous. What is he looking for in
Speaker 4: the days to come?
Speaker 1: Well, certainly one of their primary objectives is to prevent
Speaker 1: Iran from being able to develop a nuclear weapon, and
Speaker 1: that's another thing that he talked about in his video statement.
Speaker 1: So the military campaign will no doubt be focused on
Speaker 1: that and on the resources and infrastructure that is available
Speaker 1: in Iran that could potentially be used for that and
Speaker 1: weapons programs, et cetera. Obviously, we know that they targeted
Speaker 1: Iranian leadership, and no doubt he'll be watching how around response.
Speaker 1: We know, as we were just discussing that the retaliation
Speaker 1: is happening. Does that change any military calculations for President
Speaker 1: Trump the United States? How do they respond to that?
Speaker 1: I imagine they're watching all of those things, Jana.
Speaker 4: Let me ask you about the oil market. What this
Speaker 4: means for that the Strait of Hormu is a key
Speaker 4: part of this conflict, at choke point where nearly twenty
Speaker 4: percent of the world's oil is transported. What is this
Speaker 4: likely to mean for oil prices in the days to come.
Speaker 3: Well, even at the run up to this, oil prices
Speaker 3: had been lifted by a certain amount of what analysts
Speaker 3: call geopolitical premium because there was an expectation that a
Speaker 3: strike could happen at some point, so we were already
Speaker 3: up almost around twenty percent. We'll see where the market
Speaker 3: opens up. But to your point, the Strait of Hormas
Speaker 3: is a key passageway for seaborne oil and as of now,
Speaker 3: if you look at the traffic over the weekends, according
Speaker 3: to Kepler they have their data analytics, it suggests that
Speaker 3: the flow of tankers is down around by seventy five
Speaker 3: to eighty percent. So essentially what's happening is tankers and
Speaker 3: vessels are avoiding going through the straits, so a significant
Speaker 3: drop in overall activity. At the same time, you know,
Speaker 3: one thing that you need to think about is the
Speaker 3: oil that passes through that Strait. Most of it ends
Speaker 3: up going to Asia. So this is oil that's coming
Speaker 3: through from the Gulf countries, from Iran, but also other
Speaker 3: countries as well, Saudi Arabia, other GCC nations. The main
Speaker 3: buyer there is going to be China, and so if
Speaker 3: that oil isn't able to pass through the Straits, then
Speaker 3: obviously the oil has to come from somewhere else.
Speaker 4: Jaman, I understand that OPEC plus that group of nations
Speaker 4: that produce oil weighing an increase in production as a
Speaker 4: result of this.
Speaker 3: Yeah, that's true. So they actually had their regular meeting
Speaker 3: today and on the back of that they announced an
Speaker 3: increase of production of more than two hundred thousand barrels
Speaker 3: a day. That was probably not going to happen in
Speaker 3: the absence of the weekend's events, because the last couple
Speaker 3: of months they've just paused with their production output. In
Speaker 3: Q four of last year, they were averaging around one
Speaker 3: hundred and thirty seven thousand extra barrels a day put
Speaker 3: back to the market, But in light of recent events
Speaker 3: and in light of perhaps a tightening of the market,
Speaker 3: they've opted to go with this extra supply increase, which
Speaker 3: also signals that at least a couple of countries within
Speaker 3: OPI plus Saudi Arabia and UAE, who've been pushing anyway
Speaker 3: to increase OPEK share the global share of oil, are
Speaker 3: using this as an opportunity to get more of their
Speaker 3: oil back on the market.
Speaker 4: Jeff, I want to end with what might be an
Speaker 4: off ramp for the president here. In the run up
Speaker 4: to this, there was a school of thought that because
Speaker 4: this might push up oil prices, maybe the president would
Speaker 4: avoid doing this. That he is under pressure to talk
Speaker 4: more about cost of living in affordability, and if gas
Speaker 4: prices were to rise, that would be a challenge to
Speaker 4: him and his party going into the midterm elections. How
Speaker 4: is he thinking about that and how much of a
Speaker 4: forcing mechanism do you think that's likely to be here
Speaker 4: as he tries to game out a path forward.
Speaker 1: Well, number one, he can't go back, so he's done
Speaker 1: it now and there's no way of erasing that. And
Speaker 1: the impact that it's going to have on the economy
Speaker 1: and on oil prices is still TBD. I think that'll
Speaker 1: be very interesting to watch. Certainly, you're right to say
Speaker 1: that the political risk here for him in terms of
Speaker 1: the midterms is it potentially robs him of one of
Speaker 1: his favorite talking points, which is that he likes to
Speaker 1: take credit for low gasoline prices, and gasoline prices are
Speaker 1: absolutely something that voters watch because it's a part of
Speaker 1: their daily lives. And when consumers see their prices going up,
Speaker 1: be it at the grocery stores or be it at
Speaker 1: the pump, they remember that at the polls. And is
Speaker 1: that an off ramp? I mean, does it impact whether
Speaker 1: these strikes continue? I think the answer to that is
Speaker 1: no at this point, because the United States is all
Speaker 1: in and.
Speaker 4: Jaman, what are the expectations in the region for where
Speaker 4: this goes from here?
Speaker 3: I think it's very difficult for anyone to have really
Speaker 3: good foresight on how this is going to play out.
Speaker 3: The hope I think from the US side is that
Speaker 3: the ongoing attacks will either lead the Iranian regime to
Speaker 3: fully collapse on itself or eventually for it to capitulate.
Speaker 3: And the capitulation will only come if they have been
Speaker 3: decapitated at a senior level in terms of top echelon
Speaker 3: being taken out and a military level in terms of
Speaker 3: their actual ballistic missile arsenal their launchers being so severely
Speaker 3: damaged that they can't continue lobbying all of these missiles
Speaker 3: and drones into the region, into the GCT countries and
Speaker 3: into Israel. The Prime Minister is really Prime Minister Natanyahu
Speaker 3: was just speaking as well and saying that they also
Speaker 3: expect to continue with these attacks over the next coming days.
Speaker 3: And if anything, it will say from the Gulf State's perspective,
Speaker 3: the fact that they've been drawn into this, the fact
Speaker 3: that it has been so destabilizing for their own economies,
Speaker 3: has probably hardened their own resolve, and for a while
Speaker 3: they had been seeking to have not necessarily the strongest
Speaker 3: relations with Iran, but at least have operational diplomatic relationships.
Speaker 3: This could be a huge game changer for the region.
Speaker 3: And one just last development that I would bring up
Speaker 3: as well is a phone call took place yesterday on
Speaker 3: Saturday between the Saudi Crown Friends Mohammad bin Seman and
Speaker 3: the UAE President MBZ. The two leaders have not spoken
Speaker 3: in a couple of months over disagreements around the forward
Speaker 3: path of Yemen. What this clearly shows you is that
Speaker 3: the whole region and the Gulf States are uniting at
Speaker 3: this point in time to bring down the temperature to
Speaker 3: de escalate and to ensure that things really don't get
Speaker 3: out of control.
Speaker 4: This is the Big Take from Bloomberg News. I'm David Gurra.
Speaker 4: This is a developing story. We're live blogging at Bloomberg
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Speaker 4: We'll be back tomorrow.