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

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Speaker 2: This is the Bloomberg dab a Q podcast. Good morning,

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Speaker 2: It's Monday, the sixteenth of March. I'm Caroline Hepca in

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Speaker 2: London and I'm Stephen Caroline Brussels. Coming up today, US

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Speaker 2: President Donald Trump pressures countries to help secure safe passage

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Speaker 2: for ships past the coast of Iran. European allies are

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Speaker 2: left guessing at the US President's endgame for the war.

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Speaker 1: Plus fueling calls for support as the cost of energy sores.

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Speaker 1: UK and EU governments look at ways they can help.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 1: With the Iran war now in its third week, US

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Speaker 1: President Donald Trump is demanding other countries join American efforts

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Speaker 1: to defend the Strait of Hormuz. Trump says the United

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Speaker 1: States is in talks with about seven countries to help

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Speaker 1: ships pass safely through the waterway. The President didn't specify

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Speaker 1: witch countries he was told looking to. Here's what he

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Speaker 1: told reporters on Air Force One.

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Speaker 3: Will the under manning.

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Speaker 4: That these countries come in Jurgur because it is their journeys,

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Speaker 4: is the place from which they get their.

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Speaker 5: Energy, and they should come and they should.

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Speaker 4: Help us projecting.

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Speaker 1: Those comments came after an interview earlier on Sunday with

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Speaker 1: The Financial Times in which President Trump said he could

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Speaker 1: delay his planned summat with China's President she Zingping if

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Speaker 1: Beijing does not help to unblock the straight. Trump also

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Speaker 1: told the FT that NATO faces a very bad future

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Speaker 1: if US allies failed to assist. The conflict with Iran

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Speaker 1: has effectively halted trade through the vital shipping route, putting

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Speaker 1: oil prices higher again. Today, brentkrude is currently trading close

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Speaker 1: two one hundred and four dollars a barrel.

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Speaker 2: Sources have told Bloomberg that America's allies are becoming increasingly

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Speaker 2: frustrated with the lack of clarity from the US president

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Speaker 2: about the war. During a recent call with G seven leaders,

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Speaker 2: we're told that Trump was repeatedly pressed by European counterparts

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Speaker 2: about his end game. However, he reportedly said that he

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Speaker 2: could not discuss the war's objectives on the call, adding

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Speaker 2: that he had several in mind and that he wanted

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Speaker 2: the conflict to end soon. Iran's Foreign Minister Abasa Rakhci

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Speaker 2: has denied Trump's claim that Tehran has asked for an

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Speaker 2: end to hostilities.

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Speaker 6: Now. We never asked for a ceasfire and we have

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Speaker 6: never asked even for negotiation. We are ready to defend

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Speaker 6: ourselves as long as it takes, and this is what

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Speaker 6: we have done so far, and we continue to do

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Speaker 6: that until President Trump comes to the point that this

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Speaker 6: is an illegal war with no victory.

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Speaker 2: Abaso actually spoke to CBS as strikes continue across the

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Speaker 2: region by the US, Israel, and Iran. According to figures

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Speaker 2: from governments and non governmental organizations, at least three seven

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Speaker 2: hundred and fifty people have now died in the war.

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Speaker 1: Missiles have been fired at Turkey in the past two weeks,

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Speaker 1: so it's as close to the Turkish government to tell

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Speaker 1: Bloomberg they see the strikes as testing NATO's defenses, including

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Speaker 1: US early warning systems that track missiles. The attacks come

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Speaker 1: despite Turkey blocking its spaces and airspace from being used

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Speaker 1: for strikes on Iran. Around has denied any involvement in

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Speaker 1: the attacks, but Turkey's Foreign Minister Hakan fee Dan says

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Speaker 1: he's discussing the matter with Tehran.

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Speaker 7: As our prison has made it very clear. You know,

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Speaker 7: Turkey is a very capable contany, but in this case

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Speaker 7: We don't want to be rag into the war because

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Speaker 7: we shouldn't be provoked. We shouldn't be into war. Our

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Speaker 7: positions are defense for postion. Now the natal units are

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Speaker 7: very much effective at this moment in intercepting missiles. So

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Speaker 7: our primary objective is not to get into this war.

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Speaker 1: Turkey's Foreign Minister speaking there on Saturday. As more countries

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Speaker 1: way being dragged into the conflict, the metals used for

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Speaker 1: munitions are increasingly in demand. Tungsten prices have more than

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Speaker 1: doubled this year, from one thousand dollars perimetric turn in

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Speaker 1: January to two two hundred and fifty dollars now.

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Speaker 2: Dubai has once again stopped flights at its main international

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Speaker 2: airport after a drone struck the facility, causing a fire

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Speaker 2: at a nearby fuel tank. This is the third incident

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Speaker 2: the media office has confirmed in the past two weeks

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Speaker 2: and comes as Goldman Sachs says that golf economies are

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Speaker 2: at risk of the worst economic slump since the nineteen nineties.

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Speaker 2: In its latest forecast, the bank says that Qatar and

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Speaker 2: Kuwait could see GDP contract by fourteen percent this year

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Speaker 2: if the conflict continues throughout April. Saudi Arabia and the

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Speaker 2: UAE are expected to fare better given their ability to

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Speaker 2: reroot all their exports away from the Strait of Hormuz.

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Speaker 1: China's biggest oil refiner is reducing how much it processes

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Speaker 1: as the war in Iran hits its supply chain. Bloomberg

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Speaker 1: understands that State on Cinepak is cutting its planned activity

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Speaker 1: this month by t ten percent. It comes as the

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Speaker 1: Chinese economy show surprising signs of growth, with industrial production

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Speaker 1: and export numbers beating expectations in the first two months

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Speaker 1: of this year. Brombergaminion columnist David Fickling says China is

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Speaker 1: actually well placed to export alternatives to.

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Speaker 3: Oil, certainly for China's export industries as well, a lot

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Speaker 3: of them. You've seen a lot of like evs and

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Speaker 3: stylar panels going to emerging markets that are still very

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Speaker 3: dependent on fossil fuel imports. And we're going to see

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Speaker 3: in South Asia, Southeast Asia a lot of exposure to

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Speaker 3: the effects of the crisis we're seeing in the Middle East,

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Speaker 3: and China's standing there with the products, the sort of

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Speaker 3: alternative products to fix that problem.

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Speaker 1: Fickling adds that China's among the Asian countries that are

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Speaker 1: currently reliant on oil from the Middle East, but Beijing

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Speaker 1: has spent years building up massive oil reserves to protect

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Speaker 1: itself against shocks.

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Speaker 2: The UK government is preparing targeted support to help lower

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Speaker 2: income households with soaring energy bills transler ate your resist

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Speaker 2: of the times. Several options are being considered, but a

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Speaker 2: repeat if twenty twenty two's bailout would be unaffordable energy sectary.

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Speaker 2: Ed Miliban says the UK government will do whatever is

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Speaker 2: necessary to help people with rising energy costs.

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Speaker 8: As to any further help that might be provided, let

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Speaker 8: me just give you the candidate answer here. It depends

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Speaker 8: how long the conflict goes on, but people should be

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Speaker 8: no doubt this government's number one priority is the British peoples,

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Speaker 8: which is to tackle the cost of living crisis, and

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Speaker 8: we will do whatever is necessary to do that.

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Speaker 2: Ed Miliband, speaking ahead of an expected speech from the

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Speaker 2: Prime Minister lator today. Becoming price squeeze puts the Bank

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Speaker 2: of England in a vice torn between the potential inflationary

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Speaker 2: impact and climbing unemployment In Trance.

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Speaker 1: Afar I, candidate for the mayor of Nice, has won

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Speaker 1: a first round of voting with over forty percent of

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Speaker 1: the vote. Eric CERT's leading position ahead of next week's

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Speaker 1: run off as a boost for Marie Le Penn and

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Speaker 1: her National Rally party head of next year's presidential election

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Speaker 1: in Paris. The socialist candidate Emmanuel greg Ark came in first,

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Speaker 1: significantly ahead of conservative former culture minister Rashida Daddy. Five

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Speaker 1: candidates will progress to the runoff and the capitol, including

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Speaker 1: the far right figure at Sarah Knaffo, who narrowly passed

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Speaker 1: the ten percent threshold. The race to ron Paris is

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Speaker 1: expected to hinge on alliances forged over the next forty

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Speaker 1: eight hours.

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Speaker 2: Okay, so those are our top stories for you this morning.

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Speaker 2: As we enter the third week of the war in Nabran,

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Speaker 2: Brent crude remains bid, but actually off earlier highs, trading

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Speaker 2: around one hundred and four dollars per bowl, the US

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Speaker 2: dollar weekening for the first time in four days. European

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Speaker 2: stop futures, though, are firmer, up half of one percent,

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Speaker 2: s and P five hundred EMNI futures also gaining seven

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Speaker 2: tenths of one percent this morning. The MSCI China Index

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Speaker 2: at one point two percent. After those solid economic figures

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Speaker 2: Treasury yield zing a basis point to four point two

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Speaker 2: seven percent. We have twenty central banks or SO meeting

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Speaker 2: this week, the RBA the only one expected to hike

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Speaker 2: interest rates. But obviously we're on watch for any commentary

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Speaker 2: around the inflationary impact Act of the Middle East conflict.

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Speaker 1: Those are the markets, of course, Carl, and we can't

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Speaker 1: had not mentioned the oscars this morning as well, as

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Speaker 1: it's only the past couple of hours we've learned through

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Speaker 1: the winners or one battle after another, one Best Picture

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Speaker 1: from Paul Thomas Anderson. He'd been nominated eleven times before.

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Speaker 1: I never won an oscar, though I haven't seen it.

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Speaker 1: They're going to put it on my list. A film

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Speaker 1: about the wash a wash up revolutionary seeking to rescue

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Speaker 1: his daughter from his former nemesis. Sean Penn also winning

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Speaker 1: Best Supporting Actor for that film. And I also noticed

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Speaker 1: too Jesse Buckley winning Best Actress for Hamner, the first

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Speaker 1: irishwoman to ever win that award.

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Speaker 2: Of course, how could you not note that? But Michael B.

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Speaker 2: Jordan winning Best Actor for Sinner again an amazing film,

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Speaker 2: and the best Animated film K Pop Demon Hunters. Yeah, okay,

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Speaker 2: no harming please there we go the Oscar winners.

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Speaker 1: In a moment, we'll bring you more on how the

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Speaker 1: EU is responding to the higher energy prices caused by

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Speaker 1: the Iran war. But let's first bring you up to

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Speaker 1: date with the developments from the Middle East. This morning,

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Speaker 1: President Trumps demands that other countries contribute to efforts to

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Speaker 1: reopen the Strait of Hormus. We have our Middle East

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Speaker 1: Economics and Government Managing editor Paul Wallace with us for

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Speaker 1: more this morning. First of all, what would it take

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Speaker 1: to reopen shipping traffic through the Strait of Horrmus now?

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Speaker 1: And our country is likely to respond to Donald Trump's calls.

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Speaker 4: This is a big question, and in all honesty, I

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Speaker 4: think Trump in some way summed it up when he

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Speaker 4: announced that he wanted help from the likes of the

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Speaker 4: UK and France and China and South Korea and others

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Speaker 4: in terms of warships to provide escorts. He said that

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Speaker 4: Iran's military was pretty much one hundred percent destroyed, and

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Speaker 4: then he went on to say, but it's still easy

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Speaker 4: for them to disrupt shipping going through Hormoves with short

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Speaker 4: range missiles and small speedboats.

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Speaker 5: In this kind of thing, and this is the problem.

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Speaker 4: It's up to Iran essentially to decide when Hormuz reopens,

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Speaker 4: because it's up to Iran to decide when it won't

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Speaker 4: threat Threton and actually attack ships going through the narrow waterway.

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Speaker 4: That's so so crucial for container shipping and energy markets.

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Speaker 4: I think the fact that Trump has got to this

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Speaker 4: stage where he's having to lean on allies around the

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Speaker 4: world to potentially provide warships for escorts shows what a

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Speaker 4: conundrum the US faces.

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Speaker 2: It did not see this coming.

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Speaker 4: It clearly very much underestimated Iran's response to these US

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Speaker 4: Israeli attacks, and especially its willingness and ability to close Hormos.

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Speaker 4: It's a big, big problem for the US, and there's

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Speaker 4: no easy solution in sight short of the US deciding

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Speaker 4: that military operations are over and it will no longer

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Speaker 4: attack Iran.

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Speaker 2: Well, is it any clearer what the US president's goals

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Speaker 2: are for the war and what might prompt an end

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Speaker 2: to the conflict?

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Speaker 4: Again, that's a very good question, and there are a

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Speaker 4: lot of mixed messages from the US on this. I

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Speaker 4: would say that both the US and Israel and are

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Speaker 4: no longer really talking about regime change or at least

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Speaker 4: they're not presenting it as a realistic goal. Certainly in

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Speaker 4: the case of the US, they've moved on from that

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Speaker 4: and they're talking more about military goals. They keep saying

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Speaker 4: how they've essentially destroyed the Iranian navy and are very

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Speaker 4: close to all but destroying its ability to launch ballistic

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Speaker 4: missiles and drones too. And Trump talks a lot about

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Speaker 4: ending the nuclear threat from Iran and ending its ability

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Speaker 4: to ever produce nuclear weapons. So I think we are

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Speaker 4: getting closer to the point where Trump might think he

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Speaker 4: can declare victory. He has to get to that point

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Speaker 4: where he can essentially sell a victory to the American public,

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Speaker 4: but he probably thinks he's not there yet. The other

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Speaker 4: problem is that Iran might not necessarily except to cease

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Speaker 4: far straight away, as absurd as it sounds, because Iran

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Speaker 4: has been absolutely hammered and militarily it has been battered.

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Speaker 4: If Iran believes that a ceasefin now wouldn't serve its

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Speaker 4: interest in the sort of medium to long term because

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Speaker 4: Israel and the US might strike again, it might decide

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Speaker 4: to carry on with a tax on some level, carry

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Speaker 4: on roiling the region and perhaps keeping Homos closed to

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Speaker 4: really up the pain and sort of force the US

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Speaker 4: in Israel to give some pledge that they won't attack

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Speaker 4: their country again. That is a possibility. So there are

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Speaker 4: lots of factors at play here. Okay, Paul, thanks so

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Speaker 4: much for joining us. Our Middle East Economics and Government

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Speaker 4: Managing editor Poll Wallace.

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Speaker 2: Stay with us.

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Speaker 1: More from Bloomberg Daybreak Europe coming up after this. So

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Speaker 1: let's think more about the European Union Foreign and Energy

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Speaker 1: ministers meeting in Brussels today. As the war in Iran

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Speaker 1: has been pushing energy prices higher. Our Brussels bureau chiefs

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Speaker 1: of sand Lynch joined us now for more Susan what

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Speaker 1: measures are going to be discussed then by energy ministers

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Speaker 1: in response to the price shock?

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Speaker 5: Ministers had been scheduled to meet today.

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Speaker 9: Obviously, this whole topic, this whole challenge now for the

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Speaker 9: European Union, has moved front and center. Now we're expecting

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Speaker 9: ministers to discuss options, but not make any decisions as such,

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Speaker 9: we do expect further conversations later in the week when

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Speaker 9: EU leaders meet. But look, some of the ideas that

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Speaker 9: are on the table is, of course, the idea of

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Speaker 9: trying to cushion the blow for a lot of consumers

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Speaker 9: and businesses of these higher oil prices. So, for example,

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Speaker 9: the European Union could look at different kind of state

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Speaker 9: aid measures, relaxing those rules around stage aid so that

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Speaker 9: countries can help in their own markets. For example, the

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Speaker 9: European Commission has made the point taxes are quite high

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Speaker 9: in a lot of these countries, and in fact they

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Speaker 9: range a huge amount.

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Speaker 5: Now this is an option for individual.

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Speaker 9: Countries, but the European Commission could give more of a

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Speaker 9: green light to do something on those taxes. Other issues

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Speaker 9: would be a grid freeze. At the EU has a

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Speaker 9: minimum level, but many countries have higher than this. And

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Speaker 9: then of course you've got the whole price capping discussion.

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Speaker 5: Now that is a difficult one.

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Speaker 9: A lot of businesses, a lot of lobbyists, a lot

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Speaker 9: of people around the table are opposed to the idea

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Speaker 9: of a price cap. Now, this was introduced back in

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Speaker 9: twenty twenty two during the height of the energy crisis,

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Speaker 9: but it was never actually used. So there would be

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Speaker 9: a lot of worry that some kind of intervention on

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Speaker 9: price could actually disrupt the functioning on the energy markets

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Speaker 9: and risk financial stability. But that is something that's there

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Speaker 9: in the ether.

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Speaker 2: Okay, discussions about what to do.

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Speaker 6: Then.

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Speaker 2: The surgeon oil prices though, is also potentially delivering a

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Speaker 2: significant financial windfall to Russia. So does the EU think

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Speaker 2: about that? How might it respond?

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Speaker 5: Yes?

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Speaker 9: I mean this is obviously a paradox of this situation.

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Speaker 9: Russia is now benefiting from the energy crisis that we're

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Speaker 9: living through at the moment.

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Speaker 5: Now.

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Speaker 9: It was interesting the Ukrainian leader of Vladimir Lensky at

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Speaker 9: the weekend kind of put it to leaders saying, you know,

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Speaker 9: are you looking to collectively.

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Speaker 5: You know, to restore Russian oil experts.

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Speaker 9: He is annoyed about this ongoing issue whereby Hungary and

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Speaker 9: Slovakia have been holding up the ninety billion loan Ukraine

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Speaker 9: and Hungary has been annoyed about this pipeline, the drudge

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Speaker 9: by pipeline of the EU trying to get in there

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Speaker 9: with a fact finding mission, which is Lensky the Ukrainians

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Speaker 9: have so far blocked. But he is he's raising this

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Speaker 9: issue about Russian oil now. I mean, the message strongly

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Speaker 9: from leaders throughout the last week and from different ministers

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Speaker 9: meeting and Brussels, is that this is not the time

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Speaker 9: to reward Russia in any way. It's rolled over its

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Speaker 9: latest sanctions package, for example, that has to be rolled

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Speaker 9: over six months at that over the weekend, and it

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Speaker 9: does ultimately want to phase out oil completely.

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Speaker 5: So I don't think there's been.

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Speaker 9: Any push to take off, take the foot off the pedal,

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Speaker 9: if you like, when it comes to Russian sanctions going

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Speaker 9: forward for the Europeans, even though this oil price shock

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Speaker 9: and the turmoil and energy market is making things difficult.

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Speaker 5: Obviously.

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Speaker 1: The question then two more broadly on the position that

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Speaker 1: the EU countries have taken on the Iran war as well.

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Speaker 1: There is a variety of opinions there as always, but

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Speaker 1: these countries now facing pressure from Donald Trump to support

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Speaker 1: the US military campaign, are we likely to see any

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Speaker 1: common positions emerging from today's meetings.

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Speaker 9: Well, I think one of the issues that are going

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Speaker 9: to be discussed today is this idea of trying to

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Speaker 9: open up that straight of Hormouth. And we do know

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Speaker 9: that today EU Foreign ministers, who are also meeting simultaneously

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Speaker 9: as it happened as that EU Energy Council, are going

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Speaker 9: to be talking about now very preliminary it seems, but

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Speaker 9: about boosting in some way a maritime safe mission. It

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Speaker 9: already has you know, some countries are involved in that, Italy, Greece, France,

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Speaker 9: and that's in the Red Sea. Now Germany has come

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Speaker 9: out saying that it is pretty much, you know, opposed

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Speaker 9: to that, that this country doesn't really want to get

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Speaker 9: involved in this and in this conflict, in that any

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Speaker 9: effort to unlock access to the strait of hormone. But

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Speaker 9: we do expect ministers to touch on that today when

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Speaker 9: they meet you at Aaron Brussels.

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Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the

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