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

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Speaker 2: This is the BlueBag DAYBAC podcast. Good morning, It's Wednesday,

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Speaker 2: the fourth of March. I'm Caroline Hepga in London and

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Speaker 2: I'm Stephen Caroline Brussels. Coming up today, the United States, Israel,

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Speaker 2: and Iran continue to fire waves of missiles and drones

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Speaker 2: as the war enters a fifth day. Sitting ducks investors

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Speaker 2: express concern over US plans to provide naval escores and

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Speaker 2: insurance guarantees to oil tankers through the Strait of hor Mooz.

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Speaker 3: Plus, the UK's Chancellor Rachel Reeves tells Bloomberg Britain won't

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Speaker 3: make around decisions based on US trade ties, as President

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Speaker 3: Trump warrens he'll cut off all trade with Spain after

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Speaker 3: Madrid denies America access to its military bases for strikes.

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

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Speaker 3: The US Israeli war against Iran shows no signs of

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Speaker 3: easing this morning, as more countries face being drawn into

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Speaker 3: the conflict. Israel says that has launched another broad wave

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Speaker 3: of strikes targeting Iranian launch sites, defense systems, and infrastructure.

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Speaker 3: Iran is continuing to fire missiles at Israel, the UAE Katar, Bahrain,

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Speaker 3: and Oman, with Doha saying targets weren't limited to military interests,

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Speaker 3: and in the last few hours, Saudi Arabia says it

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Speaker 3: intercepted and destroyed two cruise missiles from Iran. Yesterday, the

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Speaker 3: Israeli military also appeared to attack Iran's clerical body tasked

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Speaker 3: with choosing the next Supreme leader. I Meanwhile, US President

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Speaker 3: Donald Trump says he fears Iran could now install a

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Speaker 3: new leadership that's equally hostile to the United States.

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Speaker 4: I guess the.

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Speaker 1: Worst case would be we do this and then somebody

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Speaker 1: takes over who's as bad as the previous person.

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Speaker 4: Right, That could happen. We don't want that to happen.

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Speaker 4: It would probably be the worst.

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Speaker 1: You go through this and then in five years you

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Speaker 1: realize you put somebody in it was no better.

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Speaker 3: The US President was speaking as the Iranian Red President reporters.

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Speaker 3: But at least seven hundred and eighty seven people have

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Speaker 3: been killed in the in Israel. The death tolls Mouranian

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Speaker 3: strikes is now eleven, while a total of six US

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Speaker 3: service personnel have so far been killed.

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Speaker 2: Oil prices have risen more than twenty percent this week,

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Speaker 2: amid growing concerns that the war in Iran could trigger

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Speaker 2: an energy crisis, with cutter and Iraq halting production at

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Speaker 2: major energy sites. In response, President Trump announced on social

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Speaker 2: media that the US will provide insurance guarantees and naval

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Speaker 2: escorts for oil tankers and other vessels sailing past the

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Speaker 2: Iranian coast. The plan to help ships navigate the Strait

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Speaker 2: of Horn Moves has been welcomed by analysts, but IG's

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Speaker 2: head of Commodities strategy warned that unless Tehran's capabilities are

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Speaker 2: degraded first quote, naval escorts will be sitting ducks to

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Speaker 2: Iranian attacks.

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Speaker 3: The UK's Chancellor, Rachel Reeves, says Britain won't make decisions

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Speaker 3: about Iran based on US trade ties. Speaking to Bloomberg

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Speaker 3: after delivering her Spring economic update, the Chancellor explained why

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Speaker 3: the government wasn't taking part in the strikes on Tehran.

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Speaker 5: When it comes to decisions around using British armed forces

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Speaker 5: to take part in the conflicts around the world, it

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Speaker 5: is very important that we charge those on whether it

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Speaker 5: is legal and whether it is the right thing to do.

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Speaker 5: You can't make a decision about whether to get British

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Speaker 5: armed forces involved in a conflict because it may or

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Speaker 5: may not make it more likely to get a trade deal.

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Speaker 3: Rachel Reeves was speaking to Bloomberg after President Trump criticized

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Speaker 3: Prime Minister kir Starmer over the UK's limited support on Iran,

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Speaker 3: saying this is not Winston Churchill we're dealing with. Meanwhile,

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Speaker 3: the latest figure is from the Independent offers for budget

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Speaker 3: responsibility warned of weaker economic growth for the UK this year,

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Speaker 3: even before factoring in the conflict in the Middle East. Whoever,

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Speaker 3: lower expectations for government borrowing and an increase in the

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Speaker 3: size of Reeves's fiscal buffer.

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Speaker 4: We're all so predicted, helped by.

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Speaker 3: Declines and borrowing costs and an improved tax take.

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Speaker 2: The US person says that he'll cut off all trade

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Speaker 2: with Spain after the country denied the US access to

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Speaker 2: its military basis for the campaign against Iran. Speaking during

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Speaker 2: a meeting at the White House yesterday, Donald Trump said

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Speaker 2: that he had already instructed the US Treasury Secretary, Scott Bessent,

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Speaker 2: to sever the relationship.

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Speaker 1: I told Scott to cut off all dealings with Spain.

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Speaker 4: They were the only country that in.

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Speaker 1: NATO would not agree to go up to five percent

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Speaker 1: I don't think they want to agree to go up

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Speaker 1: to anything. They wanted to keep it a two percent,

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Speaker 1: and they opaid a two percent. So we're going to

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Speaker 1: cut off all trade with Spain.

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Speaker 2: A Spanish government official said that the US must respect

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Speaker 2: international trade agreements and the autonomy of private companies, and

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Speaker 2: a but in executive chair of Spanish Bank Santander, sought

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Speaker 2: to downplay the situation.

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Speaker 6: Spain and the United States have had an amazing relationship

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Speaker 6: forever in centuries, and I'm sure that's going to happen

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Speaker 6: again very soon.

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Speaker 4: So Santander.

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Speaker 6: On the other side, we have a big investor in

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Speaker 6: the United States. We see ourselves as a bridge between

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Speaker 6: the United States and Latin America and Europe and the

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Speaker 6: United States.

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Speaker 2: Santande's and I bought in there. Speaking yesterday. Spanish Prime

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Speaker 2: Minister Pedro Sanchez is due to make a statement today

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Speaker 2: at nine am Madrid time.

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Speaker 3: Meanwhile, President Trump says that Germany has been great as

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Speaker 3: he met Chancellor Fridrick Martz in the Oval Office. The

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Speaker 3: Chancellor said that the US could not impose prohibitive trade

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Speaker 3: measures solely on Spain after the country denied access to

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Speaker 3: its military basis for the American bombing campaign against Iran.

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Speaker 3: Speaking in the Oval Office, Mertz also expressed concern about

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Speaker 3: the war's impact on the global economy.

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Speaker 4: This is of course damaging our economies.

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Speaker 7: This is true for the oil prices, and this is

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Speaker 7: true for the gas prices as well. So that's the

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Speaker 7: reason why we all hope that this war will come

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Speaker 7: to an end as soon as possible, and we are

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Speaker 7: hoping that the Israelian and the American army are doing

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Speaker 7: the right things to bring this to an end.

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Speaker 3: Fredrik Martz added that he wants the EU's trade deal

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Speaker 3: with the US to be implemented quickly. Leader of Europe's

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Speaker 3: largest economy, warned that the Bloc will not accept an

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Speaker 3: agreement on worse terms. Following the Supreme Court decision on tariffs.

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Speaker 2: Europe is scrambling to defend an Eastern outpost after Cypress

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Speaker 2: came under attack from Iran and its proxies. The president

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Speaker 2: of Cypress, Nicos Christoda Ledes, says that Greece, the UK

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Speaker 2: and France are involved in bolstering the Mediterranean Islands defenses.

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Speaker 2: After a British air base there was hit by a

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Speaker 2: drone strike on Sunday, French president and many in. Macon

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Speaker 2: says that France is sending a warship and air defenses

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Speaker 2: to Cypress, as well as an aircraft carrier to the Mediterranean.

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Speaker 2: Here he is speaking for a translator.

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Speaker 8: We have economic interest to protect because oil and gas prices,

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Speaker 8: as well as the international trade situation are profoundly disrupted

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Speaker 8: by this war. Faced with this unstable situation and the

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Speaker 8: uncertainties of the coming days, I have ordered the aircraft

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Speaker 8: carrier Charles de Gaullil air assets and its frigate escort

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Speaker 8: to head toward the Mediterranean.

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Speaker 2: Imanain Macaun was speaking as Europe's resources are increasingly stretched

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Speaker 2: by the war in Ukraine. Europe is concerned that Gulf

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Speaker 2: allies under attack from Iran will require air defense help

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Speaker 2: that otherwise would have gone to Ukraine.

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Speaker 3: In Texas, some results in the biggest context of the

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Speaker 3: contest of the twenty twenty six mid term election cycle,

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Speaker 3: a race that could determine whether Democrats can potentially narrow

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Speaker 3: the gap with Republicans in the US Senate come November.

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Speaker 3: In the Texas Republican primary, US Senator John Coynan is

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Speaker 3: leading with forty two percent, and Texas Attorney General Ken

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Speaker 3: Paxton is power at about forty percent according to results

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Speaker 3: compiled by the Texas Secretary of State.

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Speaker 4: The Democrats are US.

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Speaker 3: Representative Jasmine Crockett and state Representative James Tallerico. Tallarico is

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Speaker 3: leading with about fifty three percent support and about seventy

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Speaker 3: percent of the vote counted. But the democratic contest has

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Speaker 3: been complicated by uncertainty over voting locations and an escalating

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Speaker 3: legal battle.

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Speaker 2: And those are our top stories for you this morning.

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Speaker 2: Now looking at the markets, so we have trading resuming

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Speaker 2: in Dubai and stocks in Dubai are now down by

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Speaker 2: four point seven percent. In Abu Dhabi a drop of

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Speaker 2: two point four percent. We have seen the widespread impact

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Speaker 2: of this growing conflict, Asian equities tumbling the most in

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Speaker 2: a year, led in particular by major declines in South Korea.

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Speaker 2: The pullback in Ai and chip makers the COSPI INDECKS

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Speaker 2: is plunging eleven and a half percent today. European stocks

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Speaker 2: have posted their biggest two day drop in since April.

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Speaker 2: We see stop futures for Europe down three tenths this morning,

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Speaker 2: s and P five hundred emaily futures also in the red.

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Speaker 2: Two FED officials saying that the US Israeli A tacks

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Speaker 2: on Iran have introduced another element of uncertainty. Markets focusing

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Speaker 2: on oil. They're weighing Present Trump's plans for that escort

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Speaker 2: via the Strait of Hormuz. Brink crude futures have jumped

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Speaker 2: more than fifteen percent over two days. We are training

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Speaker 2: at eighty three dollars twenty three, so two point two

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Speaker 2: percent high this morning.

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Speaker 3: There's the markets in a moment, the latest on the

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Speaker 3: fifth day of the war in the Middle East as

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Speaker 3: strikes continue. Plus how energy markets have reacted to Donald

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Speaker 3: Trump's plan to get oil tankers moving through the golf

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Speaker 3: What another story that we've been reading this morning on

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Speaker 3: the race for many to try and leave golf hobs

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Speaker 3: like Dubai. Our reporters have been speaking to some of

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Speaker 3: those who've been trying to get out of the region

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Speaker 3: since the war began on Saturday, and airspace over keyhobs

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Speaker 3: like Dubai, Dabbi and Doha has largely been closed. This

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Speaker 3: means from many a journey overland to Aman or to

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Speaker 3: Saudi Arabia, whereflights are still operating.

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Speaker 4: It's an expensive trip.

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Speaker 3: We spoke to one traveler who paid one thousand dollars

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Speaker 3: for a car and driver to take them from Doha

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Speaker 3: to Read and then another two thousand dollars for a

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Speaker 3: flight out via London, as well as the journey that

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Speaker 3: usually from Dubai to Moscow takes about five hours, although

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Speaker 3: it's much longer at the moment. There's long delays at

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Speaker 3: border control and a lot of traffic traveling on these

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Speaker 3: routes as well, but many people still choosing to do

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Speaker 3: that rather than stay in these places, which of course

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Speaker 3: have attracted so many people to move to them over

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Speaker 3: recent years.

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Speaker 9: Yeah.

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Speaker 4: Absolutely.

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Speaker 2: Look on the US side, there has been criticism of Scotts,

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Speaker 2: we said, of the Trump administration for not having a

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Speaker 2: clear plan for evacuations or clear communication. In the UK,

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Speaker 2: I mean, newspapers, tv've radio are full of discussion about

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Speaker 2: the tens of thousands of British systems still in the region.

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Speaker 2: Many have registered their presence with the UK authorities. The

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Speaker 2: government is apparently making plans for in fact creation some

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Speaker 2: reports of that, but not much has actually happened yet.

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Speaker 2: Some flights coming back into Heathrow, the BBC saying the

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Speaker 2: government's going to be chartering a repatriation flight out of

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Speaker 2: Oman but it's tens of thousands of people.

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Speaker 4: Yeah.

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Speaker 3: Look, this is the conversation that's happening in countries all

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Speaker 3: over Europe as well. Poland's also chartering planes irelander Is

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Speaker 3: as well to try and move citizens too, So this

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Speaker 3: is something that's also being discussed all across the continent

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Speaker 3: and in degonal other parts of the world as well,

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Speaker 3: as many people are trying to still get out of

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Speaker 3: the region with airspace remaining closed. Let's bring you up

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Speaker 3: to date now with developments in the Middle East though

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Speaker 3: our midleast breaking new zeder.

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Speaker 4: Patrick Sykes is with us for more. Patrick, good morning.

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Speaker 3: What is the latest this morning in terms of the

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Speaker 3: strikes that are happening around the region.

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Speaker 10: Yeah, we heard just minutes ago that Iran has launched

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Speaker 10: an additional forty missiles this morning at Israeli and US

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Speaker 10: targets in the region. Overnight, of course, Israel had also

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Speaker 10: targeted the building of the Assembly of Experts in Iran.

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Speaker 10: That's important because it's the body that will choose the

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Speaker 10: next supreme leader. And Iran is also just this morning

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Speaker 10: issued a kind of veiled warning to European countries as well,

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Speaker 10: I think connected to these tensions of a Cyprus saying

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Speaker 10: that they risk bemplicted in the US Israeli operation. So

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Speaker 10: I think an effort to keep European countries out of

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Speaker 10: the fight and warn them that Iran will respond if

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Speaker 10: it feels I have to.

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Speaker 4: What do we know.

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Speaker 2: Though, about what is happening inside Iran? Is there any

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Speaker 2: progress being made on finding a new Supreme leader.

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Speaker 10: Yeah, that's the key I think process at the top

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Speaker 10: of government. At the moment, we know that that building

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Speaker 10: that I mentioned the Assembly experts was struck overnight. Israel's

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Speaker 10: confirmed that for the moment, Iran is saying that it

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Speaker 10: was empty at the time of that attack, and Iranian

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Speaker 10: wires semi official news wires saying that voting in that

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Speaker 10: process will be conducted remotely. Obviously, in a time of war,

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Speaker 10: they're going to have to be thinking about, I think,

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Speaker 10: alternative ways to conduct that vote. Bear in mind, though

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Speaker 10: they've only done this process once before, and that was

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Speaker 10: back in around I think nineteen eighty nine, where Harmony

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Speaker 10: was elected. Harmony's son, Mostabar, who's a candidate for the succession,

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Speaker 10: we now know that he's alive. That was confirmed yesterday.

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Speaker 10: I think his role in anything going forward will we

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Speaker 10: want to watch.

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Speaker 3: Patrick, you mentioned that latest wave of missiles launched by Iran.

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Speaker 3: At this point, is there any sign that the pace

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Speaker 3: of attacks may slow? How long can Iran keep up

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Speaker 3: it's retaliatory fire.

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Speaker 10: Yeah, there's been some interesting analysis showing that Iran's rate

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Speaker 10: of fire has been decreasing compared to those first couple

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Speaker 10: of days of the war. That may be true, but

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Speaker 10: I think the counterweight to that is that this was

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Speaker 10: never really alike for like battle right, Iran has always

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Speaker 10: tried to leverage capabilities, asymmetric capabilities that give it an

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Speaker 10: outsized influence. You know, if you can land one drone

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Speaker 10: or missile on the US consula in a golf country,

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Speaker 10: then that has an an outsized propaganda and military effect

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Speaker 10: for the range. So I think they'll be looking for

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Speaker 10: moments like that rather than a sort of straightforward number

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Speaker 10: of missiles getting through kind of metric. But yeah, an

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Speaker 10: important one to watch as well, I think.

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Speaker 2: Okay, Patrick, thank you so much for being with us

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Speaker 2: on Middle East Breaking news. Editor, Patrick Sykes, stay with

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Speaker 2: us more from Bloomberg DAYBAKEUOBE coming up after this.

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Speaker 3: Price of oils continuing to rise this morning despite the

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Speaker 3: US President's offware to provide insurance and naval escorts to

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Speaker 3: ensure safe passage for oil tankers and other ships through

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Speaker 3: the strait of horror moves. Steven Stoptuonski, who leads our

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Speaker 3: team covering energy and Asia, joins us now for more. Stephen,

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Speaker 3: what do we know about Donald Trump's plan to protect

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Speaker 3: ships and will that be enough to convince ship operators

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Speaker 3: to move their vessels that are currently stuck in the region.

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Speaker 9: I mean, when we talk to people in the market,

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Speaker 9: they really want more than just lip service. They want

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Speaker 9: some tangible action. They want the ships, you know, they

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Speaker 9: want warships to be there.

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Speaker 5: They want.

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Speaker 9: Insurance guarantees, they want their insurance rates to be lower.

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Speaker 9: They want to make sure that their insurance can continue

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Speaker 9: they can, want to make sure they sell the war coverage.

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Speaker 9: And right now there is really no tangible movement. So

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Speaker 9: it seems that until something happens, until we actually see

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Speaker 9: Trump delivering on what he says he will do, I

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Speaker 9: think the market is going to be in more of

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Speaker 9: a weight and see situation, and that's what we're seeing

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Speaker 9: the reaction at least from oil prices as well.

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Speaker 2: Yeah, indeed, what's happening though with the flow of oil

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Speaker 2: and gas from the region right now, it looks like

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Speaker 2: storage is filling up quickly.

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Speaker 9: Yeah, certainly, so that's an issue for a number of countries.

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Speaker 9: Iraq has had to reduce their oil production because of that,

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Speaker 9: shut one of their largest fields. There are also refineries

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Speaker 9: and other facilities that are facing higher storage levels.

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Speaker 4: But it's not just UH storage or horror moves.

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Speaker 9: It's also these ongoing UH tit for TAT drone attacks

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Speaker 9: as well. The Qatar's largest LNG export facility in ros

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Speaker 9: Lafon was there was an attack on the larger complex

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Speaker 9: earlier this week and they had to shut LNG production

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Speaker 9: and and shortly after also shut production of other products.

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Speaker 9: And so these facilities are shutting down because of attacks,

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Speaker 9: because of damage, because you know, they want to evacuate staff.

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Speaker 9: It's becoming an issue and it is affecting flows. There

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Speaker 9: has been no LG ship to leave the region since Saturdays,

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Speaker 9: since the weekend because and that's that's an issue for

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Speaker 9: for major buyers like India has had to curtail gas

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Speaker 9: supply to some of their downstream industries because of that.

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Speaker 9: Qatar supplies twenty percent of the world's LNG so when

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Speaker 9: there is a reduction in flows, it reverberates around the world.

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Speaker 3: Stephen, you mentioned India there, But what other countries are

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Speaker 3: particularly vulnerable from this disruption and supply. I mean it's

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Speaker 3: only been a couple of days, but how quickly do

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Speaker 3: we start to see that actually being reflected in shortages

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Speaker 3: or the potential for shortages in other parts of the world.

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Speaker 9: So it goes country by country, right, there are some

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Speaker 9: countries more dependent, less dependent. But when you take a

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Speaker 9: broader look, four fifths of Qatari energy last year went

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Speaker 9: to Asia. The biggest buyer is China. That Qatar makes

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Speaker 9: about thirty percent of their energy imports. India is second,

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Speaker 9: makes up half of their energy imports. And I think

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Speaker 9: let's just focus on those two right now. India isn't

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Speaker 9: a tough spot. They really need that energy. It feeds industries,

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Speaker 9: fertilizer plants, city gas to smaller degrees, power facilities, and

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Speaker 9: without constant deliveries of Katar energy to India, they have

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Speaker 9: a shortfall. And they're already dealing preparing for shortage by

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Speaker 9: reducing supply to industries and different customers, you know, declaring

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Speaker 9: force masure.

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Speaker 4: So on.

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Speaker 9: Now, China buys quite a bit, but they have a

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Speaker 9: lot of different levers that they can pull. They have

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Speaker 9: quite a lot of pipeline gas that they've been increasing

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Speaker 9: imports of from Russia and other places over the last

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Speaker 9: few years.

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Speaker 4: They have domestic gas production.

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Speaker 9: They have a large swath of energy importers that have

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Speaker 9: other long term contracts from other suppliers, Australia, even the

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Speaker 9: United States. I mean, they haven't imported from the US

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Speaker 9: in a while, but they have US supply if they

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Speaker 9: need to turn to it. So there, and on top

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Speaker 9: of that, Chinese demand is just relatively weak right now February,

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Speaker 9: Lergy imports for the lowest level in years because they're

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Speaker 9: able to turn to alternatives and also their industries just

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Speaker 9: don't need it quite as much at the moment. So

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Speaker 9: there are certain countries that are more dependent. Pakistan ninety

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Speaker 9: nine percent their energy comes from Kutar. Singapore where I sit,

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Speaker 9: quite a bit of energy comes from Kutars. We're going

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Speaker 9: to see different countries either deal with curtailment or have

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Speaker 9: to shuffle to buy supply from the spot market to

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Speaker 9: make up for the shortfall.

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