WEBVTT - The Diesel Midterms 0:00:02.759 --> 0:00:04.460 Bloomberg Audio Studios. 0:00:04.920 --> 0:00:06.439 Podcasts. Radio. 0:00:06.880 --> 0:00:07.300 News. 0:00:09.240 --> 0:00:11.260 How much nuance is the president, is the White House 0:00:11.380 --> 0:00:14.420 using in talking about the drivers of these higher energy prices? 0:00:14.820 --> 0:00:17.570 Well, off camera, they will make some of the same arguments. 0:00:17.610 --> 0:00:19.630 You know, inflation adjusted, it's not as bad as it 0:00:19.700 --> 0:00:22.509 used to be. $ 100 oil isn't $ 100 oil the way 0:00:22.550 --> 0:00:24.930 we used to think about it. But in reality, it's 0:00:24.970 --> 0:00:27.310 a five alarm political fire for them. And it is 0:00:27.350 --> 0:00:30.000 not only seemed to have put the House further and 0:00:30.020 --> 0:00:32.640 further out of reach in these midterm elections, but expanded 0:00:32.680 --> 0:00:36.640 the Senate map into fairly jaw-dropping places like Kansas and 0:00:36.680 --> 0:00:40.490 South Carolina, where the president is campaigning. Gas prices are 0:00:40.970 --> 0:00:43.350 very closely correlated to the president's approval rating. And so 0:00:43.390 --> 0:00:46.050 you've seen Trump go around, kind of knock on every door, 0:00:46.229 --> 0:00:49.050 open every cupboard, try to find every gallon of gasoline 0:00:49.390 --> 0:00:52.280 and diesel he can find anywhere, including from Vladimir Putin. 0:00:56.040 --> 0:00:57.840 I'm David Gurra, and this is The Big Take from 0:00:57.860 --> 0:01:01.320 Bloomberg News. Today on the show, energy prices are up. 0:01:01.860 --> 0:01:12.390 Will they take down Trump's party in the midterms? I'm 0:01:12.410 --> 0:01:15.110 going to start by having you both introduce yourselves, first name, 0:01:15.130 --> 0:01:16.949 last name, and what you do here at Bloomberg. 0:01:16.990 --> 0:01:17.990 Josh, let me start with you. 0:01:18.390 --> 0:01:20.730 I'm Josh Wingrove. I'm a White House reporter here at Bloomberg. 0:01:20.920 --> 0:01:24.780 My name is Will Kubzanski. I cover refined products for Bloomberg. 0:01:24.840 --> 0:01:27.500 So that's fuels like gasoline, diesel, jet fuel. 0:01:27.720 --> 0:01:30.040 This is a classic Bloomberg beat. Very niche. It is 0:01:30.060 --> 0:01:31.060 so Bloomberg, yeah. 0:01:31.940 --> 0:01:35.039 Will, before I sat down, I checked Brent Crude. It's 0:01:35.160 --> 0:01:37.980 at $ 106. 50 a barrel, thereabouts. In the U.S., the average 0:01:38.040 --> 0:01:41.179 price of a gallon of gasoline, according to. 0:01:41.160 --> 0:01:44.280 AAA, $ 4. 33 a gallon. Diesel's about $ 6. 0:01:43.520 --> 0:01:43.899 30. 0:01:43.900 --> 0:01:45.360 Put all of this in context for us. 0:01:45.400 --> 0:01:47.320 How high are energy prices right now? 0:01:47.580 --> 0:01:47.980 They're high. 0:01:48.740 --> 0:01:53.020 Energy prices... at least on fuels, are at the highest 0:01:53.080 --> 0:01:54.940 point for this time of year that we've ever seen. 0:01:54.940 --> 0:01:59.290 $ 6 diesel was something that was unprecedented until this year alone. 0:01:59.730 --> 0:02:01.190 To be fair, right, you can go back and you 0:02:01.210 --> 0:02:03.250 can do inflation adjustments and you can say, well, in 0:02:03.250 --> 0:02:06.720 2008 and in 2022, maybe it was more comparable. But 0:02:06.960 --> 0:02:09.220 in terms of the absolute number drivers are seeing at 0:02:09.260 --> 0:02:12.160 the pump, it has never been higher for diesel. And 0:02:12.200 --> 0:02:13.880 this time of year, it's never been higher for gasoline. 0:02:14.280 --> 0:02:16.270 How much of this is directly. 0:02:15.930 --> 0:02:18.270 Attributable to the war in the Middle East, the war 0:02:18.290 --> 0:02:18.709 with Iran? 0:02:19.050 --> 0:02:21.690 This is a question that we have spent a while 0:02:21.770 --> 0:02:24.290 trying to sort of get a solid answer on. The 0:02:24.310 --> 0:02:27.710 White House has said Russia is to blame for diesel prices. Look, 0:02:27.770 --> 0:02:29.970 if you go back to the chart of Brent crude 0:02:30.490 --> 0:02:33.030 and you go to, you know, February 27th and then, 0:02:33.090 --> 0:02:34.769 you know, first week of March when the war began, 0:02:34.790 --> 0:02:38.930 the cost of oil spiked. And that was certainly the 0:02:38.990 --> 0:02:42.000 cause of higher gas prices, higher diesel prices in the 0:02:42.020 --> 0:02:44.669 first months of the war. The amount of supplies that 0:02:44.690 --> 0:02:46.590 we lost coming from the Middle East through the Strait 0:02:46.610 --> 0:02:48.990 of Hormuz is much larger than the amount of supply 0:02:49.030 --> 0:02:51.790 that we lost from Russia. With that said, as Ukraine 0:02:51.830 --> 0:02:55.590 has picked up its drone strikes on Russian refineries, the 0:02:55.710 --> 0:02:58.970 barrels we have lost from over there have risen, and 0:02:59.070 --> 0:03:00.889 that has also contributed to rising prices. 0:03:01.130 --> 0:03:03.190 Will, we got this reading of the Consumer Price Index, 0:03:03.210 --> 0:03:07.150 the latest read of that index this morning. Gasoline prices, 0:03:07.169 --> 0:03:10.810 that index up 9% in September, made up over half 0:03:10.850 --> 0:03:14.940 the monthly increase for all items. situate energy in kind 0:03:14.960 --> 0:03:16.640 of the broader U.S. economy, the degree to which these 0:03:16.700 --> 0:03:18.900 rising prices are affecting the overall economy? 0:03:19.280 --> 0:03:21.519 I mean, look, gasoline and diesel, I think, are actually 0:03:21.560 --> 0:03:23.560 two really good ways to look at the economy because 0:03:23.590 --> 0:03:27.010 gasoline is, you know, a personal consumption item. You're a driver, 0:03:27.169 --> 0:03:29.690 you know, you live in Michigan or Wisconsin or Iowa 0:03:29.730 --> 0:03:30.889 and you see the price every day. 0:03:30.910 --> 0:03:31.730 You're feeling that pain every day. 0:03:31.750 --> 0:03:33.190 You're feeling it every day and you fill up your 0:03:33.230 --> 0:03:35.490 car and you say, I'm going to put X amount 0:03:35.530 --> 0:03:39.700 of money into the tank. With that said, comparatively, if 0:03:39.720 --> 0:03:42.820 you think about your expenditures as a broad picture, there's 0:03:42.860 --> 0:03:45.730 obviously a lot more than just gasoline. Diesel prices seep 0:03:45.750 --> 0:03:48.290 through into everything else. Diesel is a fuel that is 0:03:48.350 --> 0:03:51.610 primarily used for, aside from agriculture and industry, it's used 0:03:51.630 --> 0:03:52.210 for trucking. 0:03:52.510 --> 0:03:53.930 The workhorse fuel. 0:03:54.050 --> 0:03:57.110 Workhorse fuel of the global economy. We've said that a lot. 0:03:58.010 --> 0:04:02.490 Diesel prices... push inflation higher. We might not be seeing 0:04:02.550 --> 0:04:05.070 the impacts of higher diesel prices right now in the 0:04:05.090 --> 0:04:08.529 inflation print because it takes time. There's pass-through from agriculture 0:04:08.650 --> 0:04:12.040 to truckers to grocery stores, but it's sort of a 0:04:12.060 --> 0:04:14.700 squeeze on both ends that is making the economy really 0:04:14.740 --> 0:04:15.080 feel this. 0:04:15.680 --> 0:04:17.760 Josh, you've spent a lot of time with the president 0:04:17.779 --> 0:04:19.620 recent weeks. You've been on the campaign trail with him 0:04:19.660 --> 0:04:22.740 as he's been stumping for Republican candidates. How much is 0:04:22.779 --> 0:04:26.050 this in energy prices How much has it turned into that? 0:04:26.310 --> 0:04:30.270 I think it is very substantially that under a broader umbrella, 0:04:30.290 --> 0:04:33.349 this is a cost election. This is an affordability election 0:04:34.029 --> 0:04:37.070 like the last two were. We're seeing that in particular 0:04:37.100 --> 0:04:40.859 in a lot of polling that shows certain demographic groups. 0:04:40.960 --> 0:04:44.880 Latino voters, for instance, swung to President Trump substantially in 0:04:44.880 --> 0:04:48.659 2024 over concerns about prices. They're now swinging back in 0:04:48.720 --> 0:04:51.260 such a jarring way that some of the gerrymanders that 0:04:51.300 --> 0:04:53.839 Trump did to try to cling to the House majority 0:04:53.860 --> 0:04:58.010 are maybe even backfiring. And so I think for Trump, 0:04:58.630 --> 0:05:01.310 The question is, you know, what can you do to 0:05:01.589 --> 0:05:04.250 calm voter concerns on that? We've seen him do things 0:05:04.290 --> 0:05:08.710 like announce checks, both $ 90 checks to certain people, as 0:05:08.740 --> 0:05:12.000 well as the promise of a $ 5, 000 check that not 0:05:12.040 --> 0:05:13.800 a lot of people think is ever, of course, real. 0:05:13.940 --> 0:05:16.339 But he's trying to respond to it in some ways. 0:05:16.540 --> 0:05:18.420 But then he's also Donald Trump, and he can't kind 0:05:18.460 --> 0:05:21.380 of help himself, but like veer off into other topics, 0:05:21.580 --> 0:05:24.490 including renovations and this and that. And so there's not 0:05:24.529 --> 0:05:28.650 been a consistent message from the administration on what they're 0:05:28.680 --> 0:05:31.320 doing on this. And that's, you know, where it's sort 0:05:31.339 --> 0:05:33.980 of landed. Now, Trump's administration right now is sort of 0:05:34.040 --> 0:05:37.300 holding out hope that things won't be bad. Republicans still 0:05:37.339 --> 0:05:39.640 have a lot of money. It's possible that they can 0:05:39.680 --> 0:05:42.100 sort of thread the needle, you know, treat the Senate 0:05:42.140 --> 0:05:44.719 in particular as sort of a last ditch effort. One 0:05:44.740 --> 0:05:47.849 official telling our colleague, Catherine Lucy, it's now sort of 0:05:47.880 --> 0:05:50.710 a firewall. But the polls on that don't look good either, 0:05:50.750 --> 0:05:53.570 because if states like Texas and Iowa and Ohio and 0:05:53.610 --> 0:05:56.880 Alaska are going to flip, or at risk of flipping, 0:05:56.930 --> 0:05:58.810 that really changes the math. This wasn't supposed to be 0:05:58.830 --> 0:06:01.250 a very good cycle for Democrats, but if, you know, 0:06:01.470 --> 0:06:03.910 that they even have a hope of flipping the Senate 0:06:04.990 --> 0:06:06.910 at all is an indication of how bad things have 0:06:06.950 --> 0:06:07.930 gotten for Republicans. 0:06:09.930 --> 0:06:11.390 We're like two weeks out, Will. 0:06:12.330 --> 0:06:13.950 I'm not going to make you opine on the politics, 0:06:13.990 --> 0:06:15.850 but let me just ask you about the time horizon here. 0:06:16.070 --> 0:06:19.810 Is there any hope or likelihood that in that period 0:06:20.170 --> 0:06:22.469 we could see these prices of gas, of diesel, of 0:06:22.550 --> 0:06:24.549 oil come down at all substantially? 0:06:25.710 --> 0:06:29.050 It's a good question. I mean, there is sort of 0:06:29.170 --> 0:06:32.950 an upper bound on how much prices can move within two, 0:06:33.050 --> 0:06:36.219 three weeks before election day. You know, the dynamic everyone 0:06:36.240 --> 0:06:38.520 always talks about with gas prices is rockets and feathers, 0:06:38.560 --> 0:06:41.340 which is when crude oil goes up, prices for gas 0:06:41.440 --> 0:06:44.120 go skyrocketing up right with it. And then feathers, when 0:06:44.140 --> 0:06:47.340 it comes down, it sort of trickles down slowly. Right now, 0:06:47.360 --> 0:06:49.950 what we're seeing in sort of the gasoline and diesel 0:06:49.990 --> 0:06:53.150 futures markets doesn't really seem to indicate that we're getting 0:06:53.190 --> 0:06:55.810 a massive price relief anytime soon. The other thing that's 0:06:55.830 --> 0:06:58.250 going on right now is right now the U.S. has 0:06:58.650 --> 0:07:02.479 seasonally really low stockpiles of both gasoline and diesel compared 0:07:02.540 --> 0:07:05.240 to sort of normal fall months. So that means that 0:07:05.460 --> 0:07:08.100 whenever there's a refinery that has an issue, if there 0:07:08.260 --> 0:07:10.740 is a pipeline that has a problem, if there's a 0:07:10.820 --> 0:07:13.820 storm that means you can't ship fuel from, say, the 0:07:13.840 --> 0:07:16.840 Gulf Coast to the Northeast, that is going to meaningfully 0:07:16.900 --> 0:07:20.690 impact the price of fuel. So yeah, two, three-week horizon, 0:07:20.710 --> 0:07:24.050 you could certainly see prices decrease, but not by blockbuster margins. 0:07:24.710 --> 0:07:26.130 Josh, I was going to ask you what levers the 0:07:26.150 --> 0:07:29.150 president has to pull and indeed has pulled in recent weeks. 0:07:29.170 --> 0:07:30.850 I'll take your cupboard metaphor, though, as he's kind of 0:07:30.890 --> 0:07:33.530 rooting through that cupboard. What has he found? 0:07:33.730 --> 0:07:37.050 Well, the Europeans agreed to release some stockpiles, although I 0:07:37.070 --> 0:07:40.210 think there are questions about how much and how quickly 0:07:40.430 --> 0:07:42.970 that will come. The most controversial deal, of course, is 0:07:43.010 --> 0:07:46.240 the deal with Russia to release diesel. The administration has 0:07:46.300 --> 0:07:49.100 not really been clear on what that means. There's a 0:07:49.120 --> 0:07:52.020 bipartisan group of senators who've objected to that, saying it's 0:07:52.040 --> 0:07:55.960 against the law. There's a 2022 law banning direct Russian 0:07:56.000 --> 0:07:58.750 energy sales into the U.S. The administration has seemed to 0:07:58.790 --> 0:08:00.770 signal that it won't come to the U.S. and instead 0:08:00.790 --> 0:08:02.850 would hit the global market and then, you know, maybe 0:08:02.870 --> 0:08:06.710 bring prices down generally, including here in the U.S., but 0:08:06.750 --> 0:08:09.930 that will only expand the criticism that Trump is giving 0:08:09.990 --> 0:08:12.010 a lifeline to Putin. You know, why are you doing 0:08:12.060 --> 0:08:14.540 this if it's not even directly coming to the U.S. 0:08:14.740 --> 0:08:16.620 in the first place? I mean, you know, this has 0:08:16.640 --> 0:08:18.480 come up in other calls, including over the weekend with 0:08:18.500 --> 0:08:22.020 the Canadian prime minister, according to Carney's office. They discussed 0:08:22.060 --> 0:08:26.170 diesel as well. So it seems like he's Basically mentioning 0:08:26.190 --> 0:08:29.690 it in every call, calling anyone he can to try 0:08:29.730 --> 0:08:32.330 to shake loose what he can. And this is part 0:08:32.350 --> 0:08:35.030 of a pattern of him, you know, not being afraid 0:08:35.080 --> 0:08:38.100 to use the administration and its policies to an electoral 0:08:38.200 --> 0:08:41.780 end in a pretty aggressive way. I think right now 0:08:41.800 --> 0:08:45.420 he's just kind of running out of cupboard doors. Time 0:08:45.460 --> 0:08:48.500 is running out. And their question is, can they reallocate 0:08:48.540 --> 0:08:52.360 money fast enough in particular to keep states like Kansas 0:08:52.920 --> 0:08:55.960 not affected? a swing state when it comes to the Senate, 0:08:56.050 --> 0:08:58.960 although they do have a Democratic governor, from flipping. And 0:08:59.000 --> 0:09:00.240 if they can do that, if they can sort of 0:09:00.460 --> 0:09:03.800 cling on to maybe like a 51-49 or a 50-50 0:09:04.200 --> 0:09:08.240 Senate with J.D. Vance breaking the ties, then, you know, 0:09:08.260 --> 0:09:11.550 they think that maybe that's a better case scenario than 0:09:11.570 --> 0:09:13.670 the alternatives that are in front of them at the moment. 0:09:13.950 --> 0:09:15.810 Will, I'm going to ask you to level set here. 0:09:15.910 --> 0:09:18.469 So the president announces this diesel deal. Russia's going to 0:09:18.510 --> 0:09:22.589 supply the global market with around 36 million barrels of diesel. 0:09:23.210 --> 0:09:25.370 What's the impact of that likely to be if, in fact, 0:09:25.410 --> 0:09:25.949 it does happen? 0:09:26.390 --> 0:09:29.070 The short version is, at least in the short term, 0:09:29.130 --> 0:09:33.170 pretty limited. Analysts are pretty underwhelmed by the amount of 0:09:33.230 --> 0:09:36.390 diesel that Trump announced and then that Russia later confirmed. 0:09:36.480 --> 0:09:39.060 And I should just say these numbers are moving targets. 0:09:39.140 --> 0:09:41.560 We're sort of getting changing numbers from the Russians on 0:09:41.600 --> 0:09:44.160 how much they're going to release. We don't know when 0:09:44.179 --> 0:09:46.240 those ships are going to load. There are legitimate legal 0:09:46.280 --> 0:09:49.240 hurdles to getting those cargoes to the U.S., as we discussed. 0:09:50.630 --> 0:09:53.839 But the initial shipments, especially pre-election, are not going to 0:09:53.860 --> 0:09:56.000 be anywhere close to large enough to move the price 0:09:56.020 --> 0:09:59.030 of diesel. Look, 36 million barrels at the margin, and 0:09:59.070 --> 0:10:01.380 this is sort of over. multiple months, and we're talking 0:10:01.400 --> 0:10:03.780 about maybe a resumption of monthly exports sort of into 0:10:03.820 --> 0:10:08.699 the winter. Anything helps. The diesel market is incredibly undersupplied 0:10:08.740 --> 0:10:11.859 right now. Any additional barrel is helpful to a farmer 0:10:12.000 --> 0:10:14.320 in Brazil or someone looking to heat their home in Europe. 0:10:15.450 --> 0:10:19.670 With that said, Compared to where Russia was, Russia is 0:10:19.720 --> 0:10:22.800 normally the world's second largest exporter of diesel. This still 0:10:22.840 --> 0:10:25.880 leaves the market pretty short. I would actually say really 0:10:26.020 --> 0:10:28.559 quite short of where it needs to be to sort 0:10:28.580 --> 0:10:31.000 of resolve those supply issues that it's facing right now. 0:10:33.960 --> 0:10:36.360 Coming up, more of my conversation with Josh Wingrove and 0:10:36.400 --> 0:10:48.950 Will Kosansky. Josh, a busy weekend. So we had this 0:10:48.990 --> 0:10:52.550 announcement about diesel exports from the president, announced that the 0:10:52.570 --> 0:10:54.390 Treasury Department was issuing a waiver to Russia to be 0:10:54.429 --> 0:10:57.610 able to do this, ending sanctions that had been in 0:10:57.670 --> 0:11:00.760 place effectively. And then he announced this so-called energy truce 0:11:00.780 --> 0:11:04.760 between Ukraine and Russia. What has that meant, if anything, 0:11:04.780 --> 0:11:06.100 in actual fact, over the last few days? 0:11:06.120 --> 0:11:09.020 I mean, he has said that it is a truce 0:11:09.040 --> 0:11:12.140 that exists because he declared it to exist. And so, 0:11:12.540 --> 0:11:15.550 by extension, he's admitting that they didn't agree to it. 0:11:16.000 --> 0:11:19.160 or at least both countries haven't. It is tenuous at best, 0:11:19.260 --> 0:11:23.520 and it is not only sort of fueling questions about 0:11:23.580 --> 0:11:29.130 the president's lifeline or olive branch to Russia, but renewing 0:11:29.170 --> 0:11:31.569 all these questions about what, if anything, the U.S. will 0:11:31.610 --> 0:11:35.930 do to support Ukraine to sort of drive the circumstances 0:11:36.210 --> 0:11:40.250 to force some kind of a ceasefire or truce between 0:11:40.309 --> 0:11:43.800 Russia and Ukraine. Europeans They don't like this. They think 0:11:43.850 --> 0:11:47.510 that it is a hurting and undercutting efforts to reach 0:11:47.550 --> 0:11:50.670 a deal of some kind and to support Ukraine. Because, 0:11:50.710 --> 0:11:53.030 of course, the question is, well, if Putin gets all 0:11:53.070 --> 0:11:56.660 this revenue from oil. and from diesel and just keeps 0:11:57.059 --> 0:12:00.540 hammering along in the war. And Trump tries to clip 0:12:00.600 --> 0:12:03.620 the wings of Zelensky to fire back and use drone 0:12:03.660 --> 0:12:06.800 strikes or whatever to limit Russian energy production. Then that 0:12:07.000 --> 0:12:09.179 tilts a pretty, what already is a pretty precarious sort 0:12:09.200 --> 0:12:12.100 of balance a little bit towards Russia or perhaps more 0:12:12.120 --> 0:12:12.620 than a little bit. 0:12:13.020 --> 0:12:16.730 So there's like the questionable or dubious legality of this. 0:12:16.780 --> 0:12:19.760 There's the blowback that the president has gotten from his peers, 0:12:20.429 --> 0:12:23.470 many leaders in Europe pushing back on this. And then 0:12:23.490 --> 0:12:25.390 there's domestic pushback as well, Josh. And I wanted to 0:12:25.490 --> 0:12:27.010 ask you about that and sort of what it says 0:12:27.070 --> 0:12:29.309 about the political moment that we're in, that you have 0:12:30.270 --> 0:12:32.380 lawmakers speaking out against the president for doing this. You 0:12:32.390 --> 0:12:35.620 have legislation in the name of Ronald Reagan pushing back 0:12:35.679 --> 0:12:38.080 on this as well. What does that tell you about 0:12:38.100 --> 0:12:41.140 the president's ability to consolidate power in this very immediate 0:12:41.179 --> 0:12:42.230 run up to the midterms? 0:12:42.550 --> 0:12:45.110 Yeah. And also this seems to fly in the face 0:12:45.170 --> 0:12:48.030 of the Lindsey Graham Russia sanctions bill that was, you know, 0:12:48.390 --> 0:12:51.339 passed not that long ago. We are starting to see 0:12:51.400 --> 0:12:54.099 Republicans more comfortable speaking out against the president in some 0:12:54.160 --> 0:12:57.760 cases because they have to, because they're seeking reelection in 0:12:57.800 --> 0:13:00.439 either swing districts or what they hoped weren't swing districts, 0:13:00.460 --> 0:13:03.069 but suddenly are because the tide has come out 10 points. 0:13:03.809 --> 0:13:06.090 Or they just are trying to send public warnings to 0:13:06.110 --> 0:13:08.809 the president and they're fearful that he's getting poor advice 0:13:08.850 --> 0:13:12.920 from his inner circle. which has remained sort of unchanged 0:13:12.960 --> 0:13:15.260 but shrinking since he took office again for the second 0:13:15.280 --> 0:13:18.090 time in 2025. And so I think sort of overall, 0:13:19.450 --> 0:13:22.150 you kind of sense among Republicans certainly that they expect 0:13:22.170 --> 0:13:25.610 to lose the House and that now, you know, this 0:13:25.650 --> 0:13:27.990 sort of despondency that the Senate might flip. 0:13:30.270 --> 0:13:32.830 Will, as you know so well covering this, and as 0:13:32.870 --> 0:13:35.720 the president I think is learning, there's an intractability to 0:13:35.740 --> 0:13:38.179 the global energy market. And we've seen this string of 0:13:38.220 --> 0:13:40.920 attacks everywhere. It's taken place in Saudi Arabia. The Houthis 0:13:40.940 --> 0:13:44.460 have attacked the airport in Riyadh, Aramco. 0:13:44.059 --> 0:13:48.240 Facilities as well. What effect is that having on prices globally? 0:13:48.600 --> 0:13:51.740 Yeah, any additional conflict in the Middle East adds to 0:13:52.020 --> 0:13:55.790 what is called the risk premium for oil. Any expectation 0:13:55.950 --> 0:13:59.750 of increased fighting, of pipelines being attacked, of increased attacks 0:13:59.809 --> 0:14:03.570 on shipping adds to the price of oil. And the 0:14:03.590 --> 0:14:05.410 price of shipping through the Strait of Hormuz right now 0:14:05.550 --> 0:14:08.170 has gone up. There's still a lot of oil that's 0:14:08.230 --> 0:14:10.520 making its way out. but the risk of attacks from 0:14:10.580 --> 0:14:13.300 Iranians has risen. And so that's risen the price of freight. 0:14:13.679 --> 0:14:15.660 And in turn, the price of freight all around the 0:14:15.679 --> 0:14:17.580 world is going up. So it's this sort of chain 0:14:17.620 --> 0:14:19.960 reaction that's pulling different parts of the string and you're 0:14:19.980 --> 0:14:22.080 seeing the price react in turn. 0:14:22.920 --> 0:14:26.360 Josh, how is that shaping the president's calculus when it 0:14:26.420 --> 0:14:28.980 comes to the Middle East? I mean, it's really been 0:14:29.020 --> 0:14:31.300 kind of a back and forth. Would he get involved 0:14:31.360 --> 0:14:32.620 again in the Middle East or not? 0:14:33.000 --> 0:14:34.610 Yes, he will. No, he won't. Maybe he'll wait to 0:14:34.620 --> 0:14:35.190 the midterms. 0:14:35.210 --> 0:14:39.330 Kind of classic Trump uncertainty or projected uncertainty about that 0:14:40.440 --> 0:14:41.960 when it comes to these attacks that we've seen in 0:14:42.000 --> 0:14:45.160 Saudi Arabia. He has floated the idea that he might 0:14:45.200 --> 0:14:48.780 be willing to support Saudi Arabia in going after the Houthis. 0:14:49.900 --> 0:14:50.660 Where does that stand? 0:14:50.680 --> 0:14:52.280 What's your sense of his thinking when it comes to 0:14:52.330 --> 0:14:54.270 further engagement or additional engagement in the Middle East? 0:14:54.930 --> 0:14:57.770 I talked to a White House official yesterday and asked them, hey, 0:14:58.170 --> 0:15:01.190 is this on the table, both the question of helping 0:15:01.230 --> 0:15:04.690 the Saudis with targeting information, for instance, or actually more 0:15:04.730 --> 0:15:09.660 broadly joining the war with U.S. strikes in particular? they 0:15:09.680 --> 0:15:13.210 really didn't want to bite on that. The source indicated 0:15:13.230 --> 0:15:15.070 that it really wasn't top of mind. I think the 0:15:15.090 --> 0:15:17.950 broader concern is the president would see this as a 0:15:17.990 --> 0:15:20.830 risk of looking like he's getting further into a foreign 0:15:20.870 --> 0:15:23.310 entanglement at a time when there's a lot of concerns 0:15:23.370 --> 0:15:25.790 in his base about this already. He's, of course, declared 0:15:26.010 --> 0:15:30.940 victory several times over the course of this conflict with Iran. 0:15:31.440 --> 0:15:34.760 And so right now, the signals that they're sending are 0:15:34.980 --> 0:15:38.350 not a no, But very, very cool interest about getting 0:15:38.390 --> 0:15:41.450 dragged further and further into this. And of course, there's 0:15:41.470 --> 0:15:44.170 good reason with that, right? Trump has reshaped the Republican 0:15:44.230 --> 0:15:47.940 Party in part with a sort of message of not 0:15:47.980 --> 0:15:50.920 getting involved in these foreign wars. And I think it 0:15:50.980 --> 0:15:54.400 just remains one of the thornier forks in the road 0:15:54.470 --> 0:15:56.670 facing them about whether they decide to double down and 0:15:56.690 --> 0:15:59.790 get further involved. Into this, we might see that potentially 0:15:59.950 --> 0:16:03.170 after the election or if they just leave it to 0:16:03.190 --> 0:16:05.010 the Saudis to try to deal with it and, of course, 0:16:05.100 --> 0:16:07.540 risk the Saudis getting frustrated that the U.S. isn't there 0:16:07.560 --> 0:16:10.260 to help them deal with the collateral fallout of all 0:16:10.280 --> 0:16:10.520 of this. 0:16:12.000 --> 0:16:13.540 Josh, I'm going to pick up on something you said there, 0:16:13.560 --> 0:16:16.260 which is what happens after the midterm elections. How are 0:16:16.280 --> 0:16:20.170 you thinking about that? You know, if control of Congress changes, 0:16:20.230 --> 0:16:23.280 for instance... Do we have a president who is as 0:16:23.320 --> 0:16:26.120 engaged with this issue of energy prices, more engaged, less engaged? 0:16:26.140 --> 0:16:27.560 How do you think about that going forward? 0:16:27.920 --> 0:16:30.990 In the past, a sort of cornered Trump has been 0:16:31.030 --> 0:16:33.870 a more unpredictable Trump. And so I think it's really 0:16:33.910 --> 0:16:37.370 difficult to know. He's, of course, teed up the prospect 0:16:37.450 --> 0:16:42.320 of reengaging with strikes on Iran after the election. He's 0:16:42.340 --> 0:16:44.700 sort of spoken on both sides of his mouth on that. 0:16:44.800 --> 0:16:47.390 So I think sort of basically anything happens. is on 0:16:47.410 --> 0:16:49.450 the table. But the dynamic is going to shift here 0:16:49.470 --> 0:16:51.790 in Washington. At minimum, if the House flips, Trump's going 0:16:51.810 --> 0:16:55.310 to be facing a range of investigations from the Oversight Committee, 0:16:55.330 --> 0:16:58.410 among other committees about, you know, family business and any 0:16:58.790 --> 0:17:00.650 conduct of the administration. I mean, the list will go 0:17:01.410 --> 0:17:03.050 on and on and on and on. And all that 0:17:03.090 --> 0:17:05.300 will be playing out in the context of the 2028 0:17:05.300 --> 0:17:08.840 race ramping up, his own vice president being increasingly ensnared 0:17:08.880 --> 0:17:11.820 by these questions. And so I think the domestic politics 0:17:11.880 --> 0:17:15.270 are going to get messy pretty quick for him. As 0:17:15.310 --> 0:17:17.790 we see it here, Trump's first goal is get to 0:17:17.850 --> 0:17:21.889 the midterms with the best outcome possible. After that, I 0:17:21.930 --> 0:17:24.010 think a lot of things are on the table, but 0:17:24.590 --> 0:17:27.690 he will be increasingly confined to executive power and not 0:17:27.730 --> 0:17:31.050 congressional power. And that could manifest sort of either way. 0:17:31.290 --> 0:17:34.030 Either he's focused more domestically and dealing with whatever's going 0:17:34.109 --> 0:17:38.130 on politically, or he decides that this is a legacy 0:17:38.170 --> 0:17:39.990 issue and he wants to engage in it. No one 0:17:40.040 --> 0:17:40.950 knows which way he's going to go. 0:17:49.280 --> 0:17:51.770 This is The Big Take from Bloomberg News. I'm David Gurra. 0:17:52.050 --> 0:17:54.550 To get more from The Big Take and unlimited access 0:17:54.570 --> 0:18:00.100 to all of Bloomberg.com, subscribe today at Bloomberg.com slash podcast offer. 0:18:00.780 --> 0:18:02.540 Thanks for listening. We'll be back tomorrow.