Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Watching the markets and as we see Iranian missiles targeting
Speaker 2: the United Arab Emirates, there's some concerns about that Tehran
Speaker 2: warning that it was tightening its grip on the straight
Speaker 2: of horror moves.
Speaker 3: I mean, Joe, this is once again we see this
Speaker 3: back and forth and it feels like there's no progress
Speaker 3: towards an end.
Speaker 1: It feels pretty hairy. And this comes with this Operation Freedom,
Speaker 1: I guess it's being called the President announced over the weekend,
Speaker 1: where we would in fact not necessarily start escorting vessels
Speaker 1: through the Strait, but stand by to help them. Is
Speaker 1: a question about whether anybody's going to take that opportunity,
Speaker 1: and it's where we start our conversation with Ian Bremer,
Speaker 1: the force behind the Eurasia Group, is with us live
Speaker 1: and in person here at the Milken Conference. It's great
Speaker 1: to see you, and I hope that this set of
Speaker 1: meetings is going well for you. We would just love
Speaker 1: to talk about this very delicate moment that we are
Speaker 1: in and whether the President has the ability to open
Speaker 1: this corridor in the Strait, and even if he does,
Speaker 1: could we move enough ships to make a difference.
Speaker 4: As of right now, he does not, and that is
Speaker 4: a big part of the problem. This is by far
Speaker 4: the biggest challenge we've seen since the ceasefire was announced
Speaker 4: by President Trump a couple of weeks ago. We now
Speaker 4: have ships that are being fired on in the straight
Speaker 4: one doing a quick U turn right after that.
Speaker 5: No one injured to the best of our knowledge.
Speaker 4: And then we have what looks to be some interceptions,
Speaker 4: the UAE Ministry of Defense saying that they had intercepted
Speaker 4: some shots at them from Iran in the last.
Speaker 5: Couple of hours.
Speaker 4: That is clearly an escalation, a direct response by the
Speaker 4: Iranian government from Trump's announcement that he was going to
Speaker 4: have a humanitarian freedom operation.
Speaker 5: To get some of these ships through.
Speaker 4: The Iranian perspective is we are prepared to talk about
Speaker 4: ending the blockade if you're going to let our ships through.
Speaker 5: Otherwise it's not happening.
Speaker 4: And the Iranians have the ability and the willingness to
Speaker 4: prevent Trump from making these moves. This is a He's
Speaker 4: going to be pretty antagonized by this. There's no question
Speaker 4: in my mind, Ian who's.
Speaker 2: Got the cards, Who's got the winning hand right now?
Speaker 2: Or is there a winning hand because it doesn't seem
Speaker 2: like there's.
Speaker 3: Really any progress.
Speaker 2: I mean, Iran understands its power by controlling the strait
Speaker 2: of horror moves, and if it lets that go, then.
Speaker 4: What I wouldn't want to be the Iranian regime right now,
Speaker 4: very clearly of one hundred and fifty of their leaders
Speaker 4: have been killed, so to say they've got the winning
Speaker 4: hand in that environment. They're desperate, but they're also their
Speaker 4: regime is not going to change.
Speaker 5: More of them can be killed.
Speaker 4: A lot more Iranians have been killed and displaced by
Speaker 4: the way than anyone else in this war.
Speaker 5: Lebanon's the only other country that's even close.
Speaker 4: So it's not like the Americans are facing some existential threat.
Speaker 4: But this was a war the Americans chose to fight
Speaker 4: that President Trump chose to fight with Israel, and it
Speaker 4: turns out that Iran's capacity to cause damage and pain
Speaker 4: to the Americans is massive.
Speaker 5: Where one place.
Speaker 4: The Iranians have an advantage is an information advantage. They
Speaker 4: know what the polls are in the United States, they
Speaker 4: know what people inside the Trump administration are saying, and
Speaker 4: that they're not completely aligned on this. They know the
Speaker 4: Republicans don't like the war the US has none of
Speaker 4: that transparency on what is being said at the top
Speaker 4: of the IRGC inside Iran, and that is a disadvantage
Speaker 4: for the United States.
Speaker 3: Well where's our intelligence on that?
Speaker 4: Well, there is intelligence, but again, you've killed most of
Speaker 4: the people you were talking to, right, And the Foreign
Speaker 4: Minister who is engaged and still engaged every day by
Speaker 4: text with Steven Whitcoff, they're still talking and the sides
Speaker 4: aren't all that far apart on the nuclear issue. But
Speaker 4: he's not the guy calling the shots inside Tehran. The
Speaker 4: people calling the shots are not on television, they're not
Speaker 4: engaged publicly because.
Speaker 5: They don't want to get killed.
Speaker 4: So, I mean, it is just a lot harder to
Speaker 4: get intelligence on what the Iranians are doing and what
Speaker 4: the Iranians are thinking. And I'll tell you as many
Speaker 4: times as I've seen President Trump say they better watch
Speaker 4: out no more, mister nice guy, when when the supreme
Speaker 4: leaders like kid and father and mother have already been
Speaker 4: assassinated in this war, no more, mister nice guy doesn't
Speaker 4: hold a lot of credibility. Right, most Iranians that we've
Speaker 4: spoken to in Tehran.
Speaker 3: That's nice. What's bad exactly?
Speaker 4: They think that the war is going to restart imminentally,
Speaker 4: they believe.
Speaker 1: There was a moment a couple of weeks ago, and
Speaker 1: you remember this, the markets were lit up with optimism
Speaker 1: because there was a thought that if we're arguing about
Speaker 1: duration on stopping enrichment, then we've obviously made progress that
Speaker 1: we can somehow get to a yes, that the fact
Speaker 1: that we were just talking about is it five years,
Speaker 1: is it twenty years? Is it indefinite? That optimism seems
Speaker 1: to have gone away. Was it ever real to begin with?
Speaker 5: It was real.
Speaker 4: It was real in the sense that there was a
Speaker 4: there was serious engagement on what not only the duration
Speaker 4: of enrichment being stopped would be, but also.
Speaker 5: The removal of the uranium stock part.
Speaker 1: At the point the President said there was a deal
Speaker 1: to him hand it over.
Speaker 4: Yeah, yeah, but what And to be fair, also, the
Speaker 4: Americans had given up on the ballistic missiles, said that
Speaker 4: was a regional issue. So that's if you're not going
Speaker 4: to have to resolve it, it makes it easier not
Speaker 4: even talking about Iranian support for proxies. So there you've
Speaker 4: got a deal. But in order to get to that deal,
Speaker 4: you have to open the straight and the Iranians if
Speaker 4: they're not going to tell anymore, they have to get something.
Speaker 4: So what are they getting? How are you paying them off?
Speaker 4: And there we did not see a deal. So ultimately,
Speaker 4: the Iranians have very little reason to open.
Speaker 5: The strait, which is their one point.
Speaker 4: There's singular point of global leverage, not just versus the US.
Speaker 4: Unless they're going to see something that is better for
Speaker 4: them than the position they're presently in.
Speaker 3: They don't have that, all right, So we've been going
Speaker 3: back and forth. Obviously the White.
Speaker 2: House thought this was going to be just like Venezuela.
Speaker 2: It obviously is not. So do you see an endgame
Speaker 2: and outcome anytime soon? Because at this point markets, when
Speaker 2: you look at oil prices and other factors, they are
Speaker 2: pricing this out through the end of the year. They've
Speaker 2: already decided this is nothing that's going to and soon.
Speaker 2: It hasn't ended soon already. So do you see Ian
Speaker 2: at ultimately some kind.
Speaker 3: Of endgame here?
Speaker 4: The thing that worries me, the reason I don't have
Speaker 4: an immediate yes for you, is that Number one, Trump
Speaker 4: seems to believe that he's already gonna lose mid terms.
Speaker 4: He seems he's calverty counseling patients. He's saying, I'm surprised
Speaker 4: that oil prices are below one hundred, you know, I
Speaker 4: think that they could be a lot higher. So he's
Speaker 4: willing to go longer and take that pain. Secondly, the
Speaker 4: Iranians themselves do seem like they are prepared to continue
Speaker 4: to hunker down, and they're capable of continuing to hunker down.
Speaker 4: So it is hard for me, even if you were
Speaker 4: to get to a deal, implementing that deal. So with
Speaker 4: the International Arms inspect the Atomic Inspectors, no one's engaged
Speaker 4: with them so far.
Speaker 5: You'd need them on the ground.
Speaker 4: That would take time staging that With the money that
Speaker 4: the Iranians would have to get, that's a matter at
Speaker 4: best of another month or two after a deal is
Speaker 4: in place. Even if you came to yes, and we're
Speaker 4: not close to yes right now, it would still not
Speaker 4: be Oh, everything's going through.
Speaker 5: The straight I think it was.
Speaker 1: Darren Was last week said it would be at least
Speaker 1: two months from the strait being opened, also that it
Speaker 1: would take that long for the energy market to rationalize
Speaker 1: itself and get the flow.
Speaker 2: Longer, if you look at Qatar, we're talking like three
Speaker 2: to five years.
Speaker 1: So go back to the first Pentagon briefing, Pete hag
Speaker 1: Seth dan Kine, it's the new duo. It's turned into
Speaker 1: a road show. The first questions were was there a
Speaker 1: plan for the straight and he mocked the reporters for
Speaker 1: asking that. He said, of course we had a plan,
Speaker 1: what was it.
Speaker 4: I think that when you believe that this is going
Speaker 4: to go over because you're killing the leadership and so
Speaker 4: of course they see that overwhelming US military capacity.
Speaker 5: That they're going to then want a deal.
Speaker 1: Big assumption you don't.
Speaker 5: It's a big assumption you don't need that plan.
Speaker 4: The biggest problem that we have right now as Americans
Speaker 4: is that President Trump, in my view, is not getting
Speaker 4: an accurate picture of what's happening on the ground. And
Speaker 4: the reason for that is because people around him, not
Speaker 4: just his domestic advisors but international leaders too, when they
Speaker 4: actually talk with him, they sugarcoat it. When they actually
Speaker 4: talk to him, they're like, sir, you're doing so well,
Speaker 4: and you know, there's so much of this is going well,
Speaker 4: and maybe this is one little thing that if you
Speaker 4: can just do a little bit different, And they do
Speaker 4: that in part because he won't tolerate criticism but also
Speaker 4: because they want to continue to have access and they
Speaker 4: know that if they really say, in an unvo way,
Speaker 4: let's be real, they want access because other people around
Speaker 4: them are competing to be the one in front. So
Speaker 4: if they're the one that's giving Trump the messages in
Speaker 4: life the ear they're not going to be there. No
Speaker 4: one would run a company that way, right, I mean,
Speaker 4: you would downgrade that company if you are in Bloomberg.
Speaker 4: That's the way the United States government is presently being
Speaker 4: run in a war environment, and I just think that's horrible.
Speaker 3: I think about your concept your book g Zero.
Speaker 2: Right, this world, everybody is kind of out for their
Speaker 2: own oil, and we see it when it comes to
Speaker 2: raw materials, rare earths, commodities.
Speaker 3: All of a sudden in the markets, we're.
Speaker 2: Not talking as much about high tech, We're talking about
Speaker 2: raw materials, gold, steel.
Speaker 3: I mean, the world has changed.
Speaker 2: Does that make that even difficult, even more difficult to
Speaker 2: get some kind of resolution?
Speaker 3: And is this just our worldy? And going forward?
Speaker 4: It makes it more difficult in the region because the
Speaker 4: most consequential geopolitical impact that has come from this war
Speaker 4: is that the Amoradis and the Saudis are in much
Speaker 4: more open hostility, right. I mean, that's why the UAE
Speaker 4: decided to leave Opek in the middle of wartime. It's
Speaker 4: not like the strait is suddenly open because they did that.
Speaker 3: That was the headline that crossed and it was like, wait.
Speaker 4: It's wildly consequential because long term, the UAE is aligned
Speaker 4: with and supported by Israel, and they do not want,
Speaker 4: cannot tolerate this Islamic republican Iran with this level of
Speaker 4: military capabilities, and they will continue to mow the grass,
Speaker 4: as the Israelis call it, with Israel going forward if
Speaker 4: those capabilities exist. The Saudis are not a globalies are
Speaker 4: the regional anchor that's focused on long term, big cheap
Speaker 4: oil production at scale. They've got a much bigger market themselves.
Speaker 4: They're going to be the regional anchor. They're going to
Speaker 4: work with pas Kistan, which.
Speaker 5: Provides a nuclear umbrella for Saudi Arabia.
Speaker 4: They're going to do a deal with the Iranians that
Speaker 4: Pakistan and China will facilitate. They will find a way
Speaker 4: to engage so the day after this war is over,
Speaker 4: it is a different Middle East.
Speaker 5: It is a different Gulf, and the jizer Is worse.
Speaker 5: Is it more stable, it's less stable, It's less stable.
Speaker 4: It certainly is more aligned with the individual interests of
Speaker 4: those countries, but you lack the multilateralism. The Golf Cooperation
Speaker 4: Council is no longer fit for purpose. They could easily
Speaker 4: fall apart. And that you know historically, again, people people
Speaker 4: that are looking watching the show right now, Historically they
Speaker 4: would go to they would invest in the golf and
Speaker 4: it wouldn't matter so much if they had their headquarters
Speaker 4: in Abu Dhabi or Saudi Arabia. That thing that will
Speaker 4: be massively consequential going forward. They will not be a
Speaker 4: singular golf strategy. You will need to understand how you
Speaker 4: are engaged with these different leaders, both very strong leaders
Speaker 4: and by the way, both generational, so it's not like
Speaker 4: they're going away anytime soon.
Speaker 5: This is a very big deal.
Speaker 1: You mentioned China, and the role that China is about
Speaker 1: to play could be significant. President Trump seems to think
Speaker 1: that there's I won't call it a long game, but
Speaker 1: maybe a break glass situation with President she If this
Speaker 1: is not solved by then he goes to the meeting
Speaker 1: with Hijin Ping and they work this out together. Is
Speaker 1: he the Lynchpin to getting to Iran and getting this
Speaker 1: straight eye open.
Speaker 3: It's got to be good.
Speaker 5: It's going to have pandas. I like pandas.
Speaker 4: And also the fact is that this summit is going
Speaker 4: forward even with the straight still closed. And at the
Speaker 4: same time, the US has put in principle sanctions against
Speaker 4: Chinese teapot refineries that are not linked into the broader
Speaker 4: financial system, and the Chinese in return, I said, okay,
Speaker 4: if you actually do that, these companies will have the
Speaker 4: right to go after any American company doing business in
Speaker 4: China to receive the money that they've lost. Now, the
Speaker 4: fact that China is willing to hit back like that
Speaker 4: right before a summit with Trump shows that not only
Speaker 4: are they confident, they know that the Americans are not
Speaker 4: going to take moves against them. They know that they're
Speaker 4: not really under pressure or resolve anything. So I think
Speaker 4: the meeting will go well. I think they will show
Speaker 4: respect for each other. I think, you know, Chijin Ping
Speaker 4: will try to see if he can get Trump to
Speaker 4: say something useful on opposing Taiwan independence, which she wants
Speaker 4: and no one around Trump wants to see.
Speaker 5: But one on one Trump might say.
Speaker 4: That but this is this is not going to be
Speaker 4: if you're waiting for a Sheshin Ping summit to be
Speaker 4: a breakthrough on the straight up four moves.
Speaker 5: Yeah, they want none.
Speaker 1: This is the president not thinking that. The way he's
Speaker 1: been talking recently makes you wonder.
Speaker 4: The way he's been talking recently makes you wonder about
Speaker 4: many things. Now, I mean, pick the tweet and tell
Speaker 4: me which bit you want to focus on it. Then
Speaker 4: we'll wonder.
Speaker 5: About all the different events lunch time. No, but that the.
Speaker 4: Point is he's frustrated, he's angry, he wants an off ramp.
Speaker 4: He'd like to blame someone. It is his fault and
Speaker 4: he can't do anything about it. That's an unusual situation
Speaker 4: for him.
Speaker 3: I and I've got to ask you.
Speaker 2: I was talking with an Iranian yesterday who's been in
Speaker 2: this country for a long time. But he said, Iran
Speaker 2: really wants to be actually friends with the United States
Speaker 2: rather than China. And I think about that China Iran
Speaker 2: Russia alliance. That's an interesting one. Do you feel that
Speaker 2: that's possible the Islamic Republic?
Speaker 5: No, of course not.
Speaker 4: Look, I think I was listening to NPR briefly this morning.
Speaker 4: There I listened to NPR brief this morning, and it
Speaker 4: bothered me that, after five minutes of this interview, which
Speaker 4: was wildly disconnected from what was happening on the ground,
Speaker 4: people that would listen to this person who used to
Speaker 4: be in the US Administration in the Treasury Department, I
Speaker 4: don't know the name, and now is in some think
Speaker 4: tank in Washington, but was not introduced as an Iranian
Speaker 4: American who just desperately wants the regime to collapse and
Speaker 4: will say anything in service of that. Now, that is
Speaker 4: a legitimate perspective for a person to have, but the
Speaker 4: people listening don't necessarily know that that is the perspective
Speaker 4: of that person. And look, I would love to see
Speaker 4: the regime collapse. It's a brutal, horrible regime, lots of
Speaker 4: its own people. But what I want is not analysis, right,
Speaker 4: What I want is not what's going to happen.
Speaker 2: All I know is, man, just when I think it
Speaker 2: could get easier, it's not. It just gets more complicated.
Speaker 2: You create insanity for us on the Ecuation Center.
Speaker 5: Thank you.