WEBVTT - Oil Turns Lower With Iran-Israel Attacks 0:00:02.720 --> 0:00:10.600 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.600 --> 0:00:14.560 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.640 --> 0:00:17.880 Eastern on Apple, Coarclay, and Android Auto with the Bloomberg 0:00:17.920 --> 0:00:21.000 Business App. Listen on demand wherever you get your podcasts, 0:00:21.360 --> 0:00:23.120 or watch us live on YouTube. 0:00:23.920 --> 0:00:26.520 Taking a look at the oil market, cred prices down 0:00:26.640 --> 0:00:29.360 by about three point seven percent on the news from 0:00:29.400 --> 0:00:32.120 the Wall Street Journal that perhaps Aron is open to 0:00:32.280 --> 0:00:35.199 a de escalation with Israel. Let's get more on this 0:00:35.240 --> 0:00:39.000 with Ellen Wald, president of Transversal Consulting, joining us. Ellen 0:00:40.200 --> 0:00:43.440 what kind of risk premium should be in the market 0:00:43.600 --> 0:00:45.560 for at least the short term. 0:00:46.120 --> 0:00:48.720 Yeah, I think I wouldn't be surprised between like two 0:00:48.760 --> 0:00:51.400 and four dollars, kind of vacillating a bit. I mean, 0:00:51.400 --> 0:00:54.800 we're definitely in a situation of much higher risk than 0:00:54.840 --> 0:00:59.200 we were last month, but we have seen similar ish 0:00:59.240 --> 0:01:02.720 situations and that's kind of the risk premium we saw. 0:01:03.200 --> 0:01:04.520 I do think that. 0:01:06.240 --> 0:01:09.560 It does depend a lot on what happens in the 0:01:09.600 --> 0:01:13.399 Persian Gulf, other country's reactions to it, and also but 0:01:13.440 --> 0:01:15.960 it does seem that Iran is continues to have the 0:01:16.000 --> 0:01:19.759 ability to export oil and that's really what matters for 0:01:20.120 --> 0:01:23.920 oil prices, whether or not these supplies are disrupted. 0:01:24.560 --> 0:01:27.759 If they're not, then really it's just a risk premium. 0:01:27.800 --> 0:01:28.839 It's going to go up and down. 0:01:29.240 --> 0:01:31.800 I wouldn't be surprised if we see insurance rates for 0:01:32.560 --> 0:01:34.600 takers go up, and that can. 0:01:34.480 --> 0:01:36.759 Also impact prices as well. 0:01:37.200 --> 0:01:40.240 But at the same time, you know, it's just I 0:01:40.240 --> 0:01:42.160 think we're kind of in the in the range of 0:01:42.680 --> 0:01:45.080 you know, maybe three four dollars. 0:01:45.400 --> 0:01:49.600 The straits, the Straits of Hormuz that's never been closed 0:01:49.600 --> 0:01:52.360 down in the past. Is the market as far as 0:01:52.360 --> 0:01:53.760 you can tell when you talk to people in the industry, 0:01:53.880 --> 0:01:56.559 are they believe that is still going to be the case, 0:01:56.680 --> 0:01:58.360 that that's still going to be you're able to get 0:01:58.360 --> 0:02:01.280 your oil in and out of the straight Yeah. 0:02:01.320 --> 0:02:03.440 I think what's going on is people are. 0:02:03.440 --> 0:02:07.680 Very jittery, and you know, every time there's any kind 0:02:07.720 --> 0:02:11.080 of you know, military action in the Persian Gulf, that's 0:02:11.280 --> 0:02:13.760 kind of the worst case scenario that everyone jumps to. 0:02:14.240 --> 0:02:16.240 And I think a lot of that is a holdover 0:02:16.400 --> 0:02:19.400 from the seventy three oil shocks, where you know, oil 0:02:19.480 --> 0:02:23.760 was embargoed, and also from the Iran Iraq War where 0:02:23.800 --> 0:02:26.880 there was this tanker war and essentially the US military 0:02:27.040 --> 0:02:30.920 had to escort oil tankers out of out of the 0:02:30.919 --> 0:02:34.240 Persian golf to ensure their safety. I don't think that 0:02:34.280 --> 0:02:36.880 we have the same dynamic now because, first of all, 0:02:37.120 --> 0:02:40.760 China is a really big player. China is basically the 0:02:40.840 --> 0:02:44.160 largest customer. Asia is now the largest customer for these 0:02:44.200 --> 0:02:47.280 Persian golf producers that includes Iran and Saudi Arabia and 0:02:47.320 --> 0:02:49.880 other ones. And you don't want to kick the nest 0:02:50.040 --> 0:02:52.639 when it comes to China. China is not going to 0:02:52.800 --> 0:02:55.160 like it if their ships are disrupted, if there are 0:02:55.240 --> 0:02:59.800 access to oil is disrupted, and so they will put 0:03:00.200 --> 0:03:04.760 economic pressure to cool things down and to make sure 0:03:04.800 --> 0:03:09.560 that their economic needs and desires are protected there. So 0:03:09.600 --> 0:03:11.960 I think that's that's a new factor now that we 0:03:12.000 --> 0:03:14.400 haven't seen that we didn't see in previous years. 0:03:14.520 --> 0:03:15.519 There's also a matter. 0:03:15.280 --> 0:03:19.680 Of can they physically actually close thee of wour moves. 0:03:20.280 --> 0:03:23.120 I would argue that it's not as easy as it 0:03:23.160 --> 0:03:24.000 seems or as they say. 0:03:24.000 --> 0:03:25.160 They can definitely. 0:03:24.760 --> 0:03:28.200 Threaten ships, which can also be pretty bad, but you 0:03:28.240 --> 0:03:29.720 can't actually close it. 0:03:30.720 --> 0:03:34.480 Eron's not the only country that has ownership over the waters. 0:03:34.480 --> 0:03:37.520 There and you can actually re route ships into waters 0:03:37.560 --> 0:03:41.840 into Emirati and Amani waters. It would take some time, 0:03:42.280 --> 0:03:45.960 and during that logistical you know, inter inter period, it 0:03:45.960 --> 0:03:48.600 would be we'd see higher oil prices. 0:03:48.640 --> 0:03:50.840 But I do believe it would work itself out in 0:03:50.880 --> 0:03:51.160 the end. 0:03:51.680 --> 0:03:55.200 And there are some spare pipeline capacity through Saudi Arabia 0:03:55.200 --> 0:03:57.400 and the UAE to bypass the straight but it is 0:03:57.400 --> 0:04:01.000 still relatively limited. Do we have good sense as to 0:04:01.080 --> 0:04:04.680 whether Israel truly wants to strike oil and gas facilities. 0:04:04.720 --> 0:04:06.360 I mean, I know over the weekend we did see 0:04:06.400 --> 0:04:09.240 some of that, but nothing that truly disrupted production. 0:04:10.120 --> 0:04:11.360 Right, And I think that's interesting. 0:04:11.400 --> 0:04:13.920 I think they're really walking a very close line because 0:04:14.240 --> 0:04:18.200 all of the facilities that they hit they hit to 0:04:18.600 --> 0:04:21.640 gas processing plants in the South Pars gas field, they 0:04:21.720 --> 0:04:27.200 hit a fuel depot outside of Tehran, and they hit 0:04:27.240 --> 0:04:30.919 an oil refinery, and those all have domestic impacts because 0:04:30.960 --> 0:04:34.240 Iran doesn't export it's natural gas. It uses it only 0:04:34.279 --> 0:04:38.880 for you know, electricity, Domestically, Iran has to make all 0:04:38.880 --> 0:04:41.520 of its own gasoline, et cetera. So you can see 0:04:41.520 --> 0:04:47.600 that their strikes are designed for maximum domestic effect and 0:04:47.640 --> 0:04:50.960 that they have not touched carg Island, which is where 0:04:51.240 --> 0:04:55.200 the ninety percent of Iran's exports are loaded into tankers, 0:04:55.560 --> 0:05:00.360 and they haven't touched anything that would impact Iran's exports. Now, 0:05:00.720 --> 0:05:04.440 the question is how long can they not touch them, 0:05:04.560 --> 0:05:08.400 either by accident or because the exports are a primary 0:05:08.440 --> 0:05:11.240 source of Iran's funding and at a certain point you've 0:05:11.240 --> 0:05:13.919 got to go after their funding. And so I think 0:05:14.000 --> 0:05:17.360 that right now it's not on the table. But if 0:05:17.360 --> 0:05:20.279 there isn't any kind of resolution to this, I wouldn't 0:05:20.279 --> 0:05:23.960 be surprised to see them at least threaten it diplomatically 0:05:24.160 --> 0:05:25.719 or someone down the road. 0:05:26.520 --> 0:05:31.039 Ellen Aside from the geopolitical risk there, what is underlying demand? 0:05:31.080 --> 0:05:33.520 What are the assumptions for underlying demand for the rest 0:05:33.560 --> 0:05:35.599 of the year for oil and gas. 0:05:36.400 --> 0:05:37.200 It's a good question. 0:05:37.240 --> 0:05:40.039 I think we're in a pretty good demand situation. I 0:05:40.080 --> 0:05:42.760 do think, you know, everyone's a little bit nervous about 0:05:42.760 --> 0:05:44.560 whether or not there might be a recession or not. 0:05:44.640 --> 0:05:47.160 In that case, demand can go down, but otherwise demand 0:05:47.160 --> 0:05:48.279 seems pretty stable. 0:05:48.800 --> 0:05:51.000 I think, you know, there can be. 0:05:50.880 --> 0:05:54.599 Some variation depending on what happens in China or you know, 0:05:54.960 --> 0:05:56.479 or India, but in general. 0:05:56.200 --> 0:05:59.159 Demand's pretty stable. Supply looks good as well. 0:05:59.360 --> 0:06:01.880 I don't think we're We're not in an oversupplied situation 0:06:03.320 --> 0:06:06.480 at this point, or like not a massive oversupplied situation, 0:06:07.200 --> 0:06:10.200 but likewise we're not under supplied either, And so I 0:06:10.200 --> 0:06:11.920 think prices. 0:06:11.560 --> 0:06:14.119 Seem to be pretty good for where they are. 0:06:14.640 --> 0:06:17.080 And I don't think unless you know, I don't think 0:06:17.160 --> 0:06:21.840 that this issue in the Middle East, provided that it 0:06:21.880 --> 0:06:26.120 remains within kind of the confines where Iranian oil exports 0:06:26.160 --> 0:06:30.520 aren't hurt and Iran doesn't try to obstruct any other 0:06:30.640 --> 0:06:34.080 oil exports, that I don't see that we shouldn't really 0:06:34.160 --> 0:06:37.120 hit one hundred dollars a barrel, for example, because of this. 0:06:37.680 --> 0:06:39.680 I think that that's not realistic. 0:06:39.400 --> 0:06:42.280 So different than what we would have seen ten years ago, 0:06:42.839 --> 0:06:45.599 all fifteen years ago. Allen, before you let you go, 0:06:46.120 --> 0:06:48.240 what are the Saudi's doing right now? How are they 0:06:48.240 --> 0:06:50.040 involved or not in these discussions? 0:06:51.120 --> 0:06:53.719 The Saudis are probably involved. 0:06:53.720 --> 0:06:57.040 I wouldn't be surprised if they're talking to Russia because 0:06:57.040 --> 0:06:59.279 they're very keen. They'd love to be, you know, help 0:06:59.320 --> 0:07:03.560 broker some sort of a deal here. They are privately 0:07:03.720 --> 0:07:07.799 very happy that Israel attacked Iran's nuclear facilities. They don't 0:07:07.839 --> 0:07:10.720 want Iran having a nuclear weapon either, but they're not 0:07:10.760 --> 0:07:13.480 going to say that out loud in private. They you know, 0:07:13.520 --> 0:07:17.000 they in public they are condemning Israel's attacks, but basically 0:07:17.000 --> 0:07:20.520 there I'd say they're focused on keeping their oil supplies, 0:07:21.280 --> 0:07:24.000 you know, going, and kind of to have. 0:07:24.040 --> 0:07:24.840 A low profile. 0:07:25.880 --> 0:07:27.680 All Right, Allen, thank you so much. We appreciate it 0:07:27.720 --> 0:07:28.240 as always. 0:07:28.240 --> 0:07:31.320 Ellen Wall the president of Transversal Consulting and a senior 0:07:31.320 --> 0:07:33.000 fellow with the Atlantic Council. 0:07:34.720 --> 0:07:38.440 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:07:38.520 --> 0:07:41.880 weekdays at ten am Eastern on Applecarplay and Android Auto 0:07:42.000 --> 0:07:45.080 with the Bloomberg Business App. Listen on demand wherever you 0:07:45.120 --> 0:07:48.120 get your podcasts, or watch us live on YouTube. 0:07:48.720 --> 0:07:50.520 Let's get to the markets here with the SMP up 0:07:50.600 --> 0:07:53.440 over one percent, Fill Orlando, chief equity market strategist and 0:07:53.440 --> 0:07:57.040 head of client portfolio Management in Federating Hermes joins us. 0:07:57.040 --> 0:07:58.320 So Phil I was out Friday. 0:07:58.920 --> 0:08:01.720 If I pretended Friday Day happened, the equity markets in 0:08:01.760 --> 0:08:04.240 the exact same place it was when it closed on Thursday, 0:08:04.520 --> 0:08:07.240 What do I make of that? When there is actual 0:08:07.440 --> 0:08:09.600 severe geopolitical risk out there? 0:08:10.400 --> 0:08:14.640 Well as as your previous guests just talked about I 0:08:14.640 --> 0:08:20.160 guess there's an assumption that is dissettling, as the Israeli 0:08:20.320 --> 0:08:24.760 attack of Iran was. Maybe Iran this is going to 0:08:24.800 --> 0:08:29.040 force them to the bargaining table. Point number one, point 0:08:29.120 --> 0:08:32.720 number two. Look at what transpired in the energy market 0:08:33.280 --> 0:08:35.559 that in the first you know, four or five months 0:08:35.559 --> 0:08:38.560 of the year, crude oil went from eighty dollars a 0:08:38.559 --> 0:08:41.600 barrel down to fifty five. Then we spiked up to 0:08:41.679 --> 0:08:45.600 seventy seven dollars on Friday, and now we're back down 0:08:45.679 --> 0:08:48.320 to seventy two dollars. And if you think about what's 0:08:48.360 --> 0:08:50.920 gone on behind the scenes, we were talking about this 0:08:51.000 --> 0:08:55.440 at our morning meeting today. Over the last couple of months, 0:08:55.480 --> 0:09:02.280 the Saudis spurred OPEK to sort of oversupply the market 0:09:02.520 --> 0:09:04.400 with a lot of crude oil. In each the last 0:09:04.400 --> 0:09:08.199 two or three months. In the United States, very quietly, 0:09:08.720 --> 0:09:12.720 we have increased the size of our strategic petroleum reserve. 0:09:13.520 --> 0:09:16.320 From three hundred and fifty million barrels at the beginning 0:09:16.360 --> 0:09:18.960 of the year, we're now a little over four hundred 0:09:19.040 --> 0:09:21.840 million barrels. I think on our way back to peak 0:09:21.880 --> 0:09:24.800 capacity at about seven hundred and twenty million barrels. So 0:09:26.120 --> 0:09:28.760 you wonder whether or not the United States and the 0:09:28.800 --> 0:09:35.680 Saudis anticipated what transpired on Friday, or maybe had advanced 0:09:35.800 --> 0:09:38.680 noticed that something might happen, and it might not be 0:09:38.720 --> 0:09:41.320 a bad idea to, you know, make sure that there's 0:09:41.360 --> 0:09:45.480 some fruit on hand in case there is some problems 0:09:45.520 --> 0:09:49.240 with the Straits of Hormuz or the Uranians take their 0:09:49.240 --> 0:09:52.880 oil up the market or whatever. And it looks like 0:09:53.200 --> 0:09:56.040 things are reasonably stable. And so as a result of 0:09:56.040 --> 0:10:00.240 the markets sort of bouncing back today, you know, the 0:10:00.280 --> 0:10:04.160 benefit of having had the weekend to think through, you know, 0:10:04.240 --> 0:10:05.479 last Friday's developments. 0:10:06.600 --> 0:10:08.440 Phil, it's been if you look at the charter of 0:10:08.480 --> 0:10:10.480 the s and P five hundred year to date, talk 0:10:10.520 --> 0:10:14.040 about a v bottom and recovery here, like we should 0:10:14.080 --> 0:10:15.439 talk about for the economy. 0:10:16.160 --> 0:10:16.560 I don't know. 0:10:16.600 --> 0:10:18.920 I was kind of surprised that we went down as much, 0:10:18.960 --> 0:10:21.200 and now I'm equally surprised that we came back as 0:10:21.280 --> 0:10:22.960 much and how quickly it all happened. 0:10:23.440 --> 0:10:24.840 You're an old pro what do you make of what 0:10:24.880 --> 0:10:25.800 we've seen here? To date? 0:10:26.600 --> 0:10:31.319 Markets tend to overshoot on both sides, and we were 0:10:31.360 --> 0:10:37.400 disappointed with the market's response to the Liberation Day chaos. 0:10:37.480 --> 0:10:41.520 But look, frankly, the Trump administration did a poor job 0:10:41.760 --> 0:10:48.000 in orchestrating the implementation of that tariff announcement. So the market, 0:10:48.160 --> 0:10:51.440 in the absence of any knowledge, you know, responded appropriately 0:10:51.520 --> 0:10:54.120 down fifteen percent in the space of a week. And 0:10:54.160 --> 0:10:56.679 then once we had a better sense of how that 0:10:56.880 --> 0:11:00.920 was going to work, along with how is the economy doing, 0:11:01.440 --> 0:11:04.440 the market rebounded back to what, you know, we felt 0:11:04.440 --> 0:11:08.040 were more reasonable levels of valuation. Remember, Paul, we talked 0:11:08.040 --> 0:11:11.120 about this down in Washington a couple of weeks ago. 0:11:11.600 --> 0:11:13.720 Our full year forecast for the S and P this 0:11:13.800 --> 0:11:16.720 year is still sixty five hundred. We're sitting now a 0:11:16.760 --> 0:11:20.240 little bit over six thousand, So we've still got you know, 0:11:20.440 --> 0:11:24.640 five hundred points, you know, maybe eight or nine percent 0:11:24.679 --> 0:11:27.760 of potential appreciation over the course of the back half 0:11:27.800 --> 0:11:31.720 of the year. So there's more room for the market 0:11:31.760 --> 0:11:35.280 to continue to grind higher if the fundamentals continue to 0:11:35.280 --> 0:11:36.000 fall into place. 0:11:37.120 --> 0:11:40.200 What's the safety right now? Are bonds portraying the safe 0:11:40.240 --> 0:11:41.280 haven bid or does it have. 0:11:41.280 --> 0:11:41.760 To be gold? 0:11:43.720 --> 0:11:46.280 Well, Gold's been the safe haven play for a while, 0:11:46.440 --> 0:11:53.400 and given any concerns about geopolitical risk or inflation, gold 0:11:53.480 --> 0:11:55.480 is the play, and so having a little bit of 0:11:55.480 --> 0:11:59.320 gold in your portfolio. I can't. I can't. I don't 0:11:59.360 --> 0:12:02.720 have any problem with a client taking that position. But 0:12:02.840 --> 0:12:06.920 certainly if you think that there's going to be slower 0:12:06.960 --> 0:12:14.240 economic growth, certainly bond should rally. Treasuries historically are great 0:12:14.240 --> 0:12:18.360 safety play. You know, we think the treasury yields benchmark 0:12:18.400 --> 0:12:21.360 ten's are probably going to grind down towards four percent 0:12:21.760 --> 0:12:23.960 over the balance of the year. So I don't have 0:12:24.000 --> 0:12:28.280 a problem with investors holding both treasuries and gold as 0:12:28.320 --> 0:12:31.959 sort of safe havens, given you know, the complete uncertainty 0:12:32.000 --> 0:12:35.160 and volatility of what you know. We've we've watched over 0:12:35.200 --> 0:12:36.400 the last seventy two hours. 0:12:37.360 --> 0:12:39.600 Phil, thanks so much. Always appreciate getting a few minutes 0:12:39.640 --> 0:12:41.880 of your time. Phil Orlando. He's a chief equity market 0:12:41.880 --> 0:12:45.720 strategist and had a client portfolio Management and Federated Hermes 0:12:46.440 --> 0:12:49.240 joining us there, and we spoke to Phil when we 0:12:49.240 --> 0:12:50.760 were down in Washington a few weeks ago. 0:12:50.840 --> 0:12:52.000 He was there as well. 0:12:53.800 --> 0:12:57.440 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:12:57.600 --> 0:13:00.640 weekdays at ten am Eastern on alf o'clock and Android 0:13:00.679 --> 0:13:04.000 Auto with the Bloomberg Business app. Listen on demand wherever 0:13:04.040 --> 0:13:07.160 you get your podcasts, or watch us live on YouTube. 0:13:07.640 --> 0:13:09.439 We're also, of course paying attention was happening at the 0:13:09.440 --> 0:13:09.840 G seven. 0:13:09.840 --> 0:13:12.440 We're waiting for biladeral meeting to begin between President Trump 0:13:12.840 --> 0:13:16.960 and Canadian Prime Minister Mark Carney. Also reports indicate that 0:13:17.000 --> 0:13:20.280 President Trump and Germany's A Chancellor Frederick Mertz will be 0:13:20.320 --> 0:13:23.600 meeting this morning as well at the G seven. So 0:13:23.640 --> 0:13:26.319 we'll bring you all of those headlines of course as 0:13:26.440 --> 0:13:27.240 they cross. 0:13:27.400 --> 0:13:27.640 All right. 0:13:27.679 --> 0:13:29.640 Want to get to the news though, of the last 0:13:29.640 --> 0:13:32.720 few days, and that's what's happening with Iran and Israel. 0:13:32.800 --> 0:13:35.120 Lots of different reports coming out right now. 0:13:35.200 --> 0:13:39.040 Israel's continuing to strike despite reports that iron would like 0:13:39.120 --> 0:13:42.280 to de escalate. They've exchanged fire now for the fourth 0:13:42.320 --> 0:13:46.080 consecutive day. And this then raises the possibility and the 0:13:46.200 --> 0:13:48.199 risk of and all out war that could drag the 0:13:48.240 --> 0:13:50.200 rest of the Middle East as well as Western nations 0:13:50.240 --> 0:13:53.720 into it. Ned Lazarus is Associate Professor of International Affairs 0:13:53.960 --> 0:13:58.240 at George Washington University, joining US now, professor, what is 0:13:58.360 --> 0:14:02.160 your base case now, uh, and what is the biggest risk? 0:14:04.200 --> 0:14:09.280 Well, I think you brought in an important development, which 0:14:09.360 --> 0:14:13.360 is that there are reports that Iran, through other channels, 0:14:13.360 --> 0:14:18.559 through Arab Arab neighbors UH. And also I've heard through Cyprus, 0:14:19.120 --> 0:14:22.800 is attempting to send messages UH to to return to 0:14:22.920 --> 0:14:27.080 negotiations and to and to de escalate UH and to 0:14:27.480 --> 0:14:30.040 uh you know, according to some reports, is floating the 0:14:30.080 --> 0:14:33.480 idea that it will become more flexible in its stance 0:14:33.560 --> 0:14:40.560 on UH enriching uranium UH and UH nuclear development. So this, 0:14:41.240 --> 0:14:45.520 if correct, this is a signal that Israel's strikes are 0:14:46.200 --> 0:14:52.400 being felt acutely by the regime which previously had you know, 0:14:52.480 --> 0:14:55.560 really seem seemed to be dragging out its talks with 0:14:55.600 --> 0:15:00.000 the Trump administration, not in any way willing to uh 0:15:00.200 --> 0:15:05.000 uh compromise on its desire to enrich uranium to very 0:15:05.080 --> 0:15:07.880 high levels UH and to maintain the option to break 0:15:07.880 --> 0:15:11.120 out to you know, uh nuclear weaponization. 0:15:13.000 --> 0:15:13.640 UH. 0:15:14.080 --> 0:15:20.200 Whether this will actually lead to a cease fire, I 0:15:20.200 --> 0:15:24.360 think I would say that's unlikely for the moment. I 0:15:24.360 --> 0:15:30.000 think Israel initiated this uh uh this attack because of 0:15:30.360 --> 0:15:34.600 an opportunity that it was time limited and a threat 0:15:34.680 --> 0:15:38.680 that was time limited. So Israel sensed also from reports 0:15:38.680 --> 0:15:43.720 of the International Inspectors that Iran was moving towards uh 0:15:43.920 --> 0:15:46.960 you know, nuclear breakout or the ability to move quickly 0:15:47.000 --> 0:15:51.160 to nuclear breakout. And Israel also has an opportunity because 0:15:52.000 --> 0:15:57.040 Iran's entire strategy of maintaining these uh you know, this 0:15:57.200 --> 0:16:02.080 network of regional proxies that could inflict damage on Israel 0:16:02.120 --> 0:16:04.760 in this kind of conflict had been weakend. Israel had 0:16:04.760 --> 0:16:09.840 taken Hasbellah out of the out of the war, essentially 0:16:09.880 --> 0:16:14.560 out of commission. The Syrian regime of Asad collapsed because 0:16:15.080 --> 0:16:18.720 of what Israel did to Hasbelah in essence, and Iran 0:16:19.600 --> 0:16:25.600 lost its ability to effectively defend its airspace when Israel 0:16:25.720 --> 0:16:31.200 responded effectively, if more quietly, to previous rounds of Iranian 0:16:31.440 --> 0:16:35.800 missile barrages. So there's a time limited opportunity, and I 0:16:35.800 --> 0:16:39.960 think Israel is going to maximize the damage that it 0:16:40.000 --> 0:16:42.800 can inflict on Iran's nuclear program and its regime. 0:16:43.280 --> 0:16:44.960 Ned would they even take it even further? 0:16:45.040 --> 0:16:48.120 I mean, if I'm Israel, I'm on a roll here, 0:16:48.320 --> 0:16:51.160 I mean everywhere. Look, I've been very aggressive, I've been 0:16:51.280 --> 0:16:54.840 very successful. You just mentioned some of the successes Israel's 0:16:54.840 --> 0:16:57.560 had against some of its enemies and the proxies and 0:16:57.600 --> 0:16:57.960 so on. 0:16:58.480 --> 0:17:00.960 So I press my bets here and look for. 0:17:00.960 --> 0:17:04.600 Something bigger and around, whether it's regime change or really 0:17:04.960 --> 0:17:08.200 really just decimating their military capabilities. 0:17:09.440 --> 0:17:12.879 I think the ladder. Yes, I think right now, uh, 0:17:13.240 --> 0:17:16.600 you know, the the Israeli Air Force is probably busy 0:17:16.720 --> 0:17:19.359 both with trying to do what it can to the 0:17:19.720 --> 0:17:24.639 you know, to the to to uh undermine the nuclear program, 0:17:25.440 --> 0:17:27.960 but also very much I think the Israeli Air Force 0:17:28.040 --> 0:17:32.800 is trying to take out the missile capacities because Iran 0:17:33.000 --> 0:17:36.920 is certainly able to you know, to damage Israel. They've 0:17:37.000 --> 0:17:40.040 killed twenty four Israelis in uh, you know, a series 0:17:40.119 --> 0:17:44.359 of late night missile barrages that you know, their their 0:17:44.359 --> 0:17:48.320 capacity to fire. They can fire enough huge just you know, 0:17:48.400 --> 0:17:51.560 massive missiles that all of the Israeli air defenses cannot 0:17:51.880 --> 0:17:57.359 hermetically prevent hits. And they've hit Tel Aviv, they've hit Haifa, 0:17:57.400 --> 0:18:01.760 they've hit an oil refinery. So Iran is capable of 0:18:01.800 --> 0:18:05.720 doing damage and is doing damage in a way that 0:18:06.400 --> 0:18:09.760 you know, is painful for Israelis. The Israel obviously has 0:18:09.800 --> 0:18:12.680 a tremendous military advantage and they are able to get 0:18:12.760 --> 0:18:16.240 strategic Iranian sites right. So yes, I think they will 0:18:16.240 --> 0:18:18.560 continue and I think what they are hoping to do 0:18:18.640 --> 0:18:22.400 is really reduces Iran's capacity. Yeah, get to strike back. 0:18:22.560 --> 0:18:24.359 Yeah, we gotta leave it there. Thanks very much. 0:18:24.400 --> 0:18:26.919 Nand Laser, Associate Professor of the National Affairs at George 0:18:26.960 --> 0:18:27.960 Washington University. 0:18:29.720 --> 0:18:33.440 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:18:33.520 --> 0:18:36.600 weekdays at ten am Eastern on Apple, Cocklay and Android 0:18:36.600 --> 0:18:39.920 Auto with the Bloomberg Business App. Listen on demand wherever 0:18:39.960 --> 0:18:43.080 you get your podcasts, or watch us live on YouTube. 0:18:43.840 --> 0:18:46.320 All right, this is the gig here for the airspace 0:18:46.359 --> 0:18:49.280 and airline industry. They get together every year and they 0:18:49.320 --> 0:18:53.480 alternate between London, outside of London and in Paris, always 0:18:53.520 --> 0:18:56.440 in June, plenty of rose flowing, and they never meet 0:18:56.480 --> 0:18:57.960 in like sheboygan in January. 0:18:58.000 --> 0:19:00.440 I know, right, So George Version is over there every year. 0:19:00.440 --> 0:19:02.159 I send them over there and he goes and I 0:19:02.160 --> 0:19:04.280 don't know. But this is where the big deals happen, 0:19:04.600 --> 0:19:07.320 I mean some big orders. And right now Airbus is 0:19:07.359 --> 0:19:10.680 dominating the story as it looks like Boeing is sitting 0:19:10.760 --> 0:19:13.439 out here as they deal with the crash of the 0:19:13.480 --> 0:19:17.040 Air India flight. Kate Duffy joins us Bloomberg Aviation reporter 0:19:17.240 --> 0:19:20.880 on this Paris air Show again, I'm looking at your reporting, Kate. 0:19:21.040 --> 0:19:25.639 Along with sid and Lean, Airbus dominates air shows. Boeing 0:19:25.680 --> 0:19:28.880 sits out the order Freenzing tell us about what Airbus 0:19:28.920 --> 0:19:29.200 is doing. 0:19:30.280 --> 0:19:32.880 Yeah, absolutely, I mean this has been a big win 0:19:33.000 --> 0:19:35.560 for air Bus currently in the show. So we've had 0:19:36.080 --> 0:19:39.640 order from Avilease which have signed for some A three 0:19:39.720 --> 0:19:43.840 fifty freighters and a three twenty family jets. Also Riad 0:19:43.920 --> 0:19:47.919 Air order for fifty Airbus wide body jets and a 0:19:47.960 --> 0:19:51.639 lot as well a Polish airline for forty eight twenties. 0:19:51.720 --> 0:19:54.400 And as you say, Boeing has really stepped back from 0:19:54.480 --> 0:19:56.840 the Paris Air Show this year following the seven eight 0:19:57.400 --> 0:20:00.919 seven eight seven crash last week, so no orders have 0:20:01.040 --> 0:20:06.040 been announced and executives are really slim in attendance or 0:20:06.160 --> 0:20:08.959 Berg obviously canceled and they've rolled back any sort of 0:20:09.240 --> 0:20:12.600 commercial announcements as they focus on really finding out what 0:20:12.760 --> 0:20:15.879 happened with their India crash. 0:20:16.240 --> 0:20:20.840 So how much of Airbus's triumph is Boeing issues like 0:20:20.880 --> 0:20:23.359 what we saw with the seven eighty seven and Air India, 0:20:23.400 --> 0:20:25.359 and how much of it is just like everything was 0:20:25.440 --> 0:20:27.639 kind of going in this direction anyway, and Boeing just 0:20:27.680 --> 0:20:29.399 has so much runway to make up. 0:20:30.520 --> 0:20:32.800 No, I think it was definitely a cause of what 0:20:32.920 --> 0:20:36.240 happened last week. There were potentially orders in the works, 0:20:36.840 --> 0:20:40.000 but this is all down to sort of what happened 0:20:40.160 --> 0:20:44.439 and executives taking the decision to not really take up 0:20:44.480 --> 0:20:47.440 the limelight this week just because of the crash and 0:20:47.920 --> 0:20:52.480 the consequent deaths that did happen. So yeah, there could 0:20:52.480 --> 0:20:55.000 be orders further down the line, but at the moment, 0:20:55.040 --> 0:20:57.960 their main focus is trying to sort of sort out 0:20:57.960 --> 0:20:59.160 the situation in India. 0:21:00.680 --> 0:21:03.880 So announcing big orders at these air shows is one thing. 0:21:04.119 --> 0:21:07.480 Actually delivering the planes is another. And it's not just 0:21:07.520 --> 0:21:12.160 bowing that Scott problems. Airbus has some production issues as well. 0:21:12.160 --> 0:21:14.119 Can you highlight kind of where Airbus is today in 0:21:14.240 --> 0:21:16.280 terms of their deliverables. 0:21:17.520 --> 0:21:20.679 Yeah, absolutely, I mean Airbus is also struggling just as 0:21:20.760 --> 0:21:23.240 much as Boeing is with the supply chain at the moment. 0:21:23.680 --> 0:21:27.520 Is something that's happening across all airlines. You know, they 0:21:27.600 --> 0:21:30.879 are struggling to get in these deliveries and whether it 0:21:30.920 --> 0:21:33.520 be sort of wide bodies or narrow bodies, that is 0:21:33.560 --> 0:21:35.000 the real pinch point at the moment. 0:21:36.520 --> 0:21:38.480 What do you think is well in general? 0:21:38.960 --> 0:21:40.720 I know this is the place where they unveil everything 0:21:40.720 --> 0:21:43.520 that's cool, and it's always good, happy talk and all that. 0:21:43.600 --> 0:21:45.760 But how is the aviation industry doing? 0:21:47.200 --> 0:21:49.000 Abe engine is doing well at the moment. 0:21:49.000 --> 0:21:50.800 I mean, what we're seeing here is a lot of 0:21:50.840 --> 0:21:56.280 EVETEL companies, that's the electric vertical takeoff and landing firms, 0:21:57.040 --> 0:22:01.919 displaying and flying their aircraft around and having lots of 0:22:01.920 --> 0:22:06.040 interviews with the press, and that includes vertical aerospace and archer. 0:22:07.040 --> 0:22:07.920 What we've seen is. 0:22:07.880 --> 0:22:12.200 That they are particularly interested in sort of pointing their 0:22:12.240 --> 0:22:17.200 aircraft towards the defense sector and selling that to defense 0:22:17.240 --> 0:22:19.520 as they see sort of the growth in Europe that 0:22:19.640 --> 0:22:24.200