Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Today marks four consecutive
Speaker 1: days of conflict between Israel and Iran. Israel first launched
Speaker 1: a surprise attack on Iran on Friday, striking cities including
Speaker 1: its capital, Tehran, and key nuclear facilities, and the two
Speaker 1: countries continued to attack each other over the weekend. As
Speaker 1: of Monday afternoon, hundreds of people in Iran and dozens
Speaker 1: in Israel have been killed. Conflict between Iran and Israel
Speaker 1: has been simmering for decades, and the relationship has only
Speaker 1: gotten more tense since Israel and Iran backed Hamas went
Speaker 1: to war in twenty twenty three. But Golnar Mota Valley,
Speaker 1: who covers Iran for Bloomberg, says these latest attacks marked
Speaker 1: a major escalation.
Speaker 2: So it's a very different type of conflict and war
Speaker 2: than what we've seen playing out between Israel and Hamas
Speaker 2: or Israel's operation in Gaza.
Speaker 1: Golnar says it's different because the two sides are engaging
Speaker 1: each other directly instead of fighting through proxies. As world
Speaker 1: leaders convene for the G Seven in Canada this week,
Speaker 1: many are concerned about the prospect of continued fighting and
Speaker 1: a broader regional conflict. Asked if the US would get
Speaker 1: more involved militarily, President Donald Trump said he didn't want
Speaker 1: to discuss it and encouraged both sides to work towards
Speaker 1: a resolution.
Speaker 3: They have to make a deal, and it's painful for
Speaker 3: both parties, but I'd say Iran is not winning this war,
Speaker 3: and they should talk, and they should talk immediately before
Speaker 3: it's too late.
Speaker 1: I'm Sarah Holder, and this is the big take from
Speaker 1: Bloomberg News today on the show, the conflict between Israel
Speaker 1: and Iran at a tipping Point.
Speaker 2: Has just issued a statement telling residents of a district
Speaker 2: in northern Tehran that's heavily populated and it's a big
Speaker 2: district to evacuate the area within the next hours in
Speaker 2: anticipation of an air strike. That language is very, very chilling,
Speaker 2: because what it suggests is that the IDF is going
Speaker 2: to use the same approach that it used in Gaza.
Speaker 2: People are just getting out of the city and trying
Speaker 2: to get to the countryside, but they're not moving very fast.
Speaker 2: I think there is a fear that they're kind of
Speaker 2: like sitting ducks.
Speaker 1: In Israel, residents were warned that there would be further
Speaker 1: attacks from Iran in the coming days, and Prime Minister
Speaker 1: Benjamin Netanyah who urged people to rush to bomb shelters
Speaker 1: when air raid sirens sound or when they get phone alerts.
Speaker 2: From what I've seen and from the reporting that we
Speaker 2: have done, it's clear that Israeli residents, particularly in Tel Aviv,
Speaker 2: have had a huge amount of diction to their lives.
Speaker 2: And the pictures that you've seen coming from Televiv of buildings,
Speaker 2: apartment blocks just gutted and destroyed, they're quite jarring. Having
Speaker 2: said that, I think the reports are from the IDF
Speaker 2: and I think from our colleagues, is that the Iron Dome,
Speaker 2: the very sophisticated air defense system that Israel has, has
Speaker 2: been relatively efficient at intercepting the majority of Iran's missiles.
Speaker 1: Iran and Israel have been in conflict for decades. In
Speaker 1: the past twenty months, as you've mentioned, have seen tensions
Speaker 1: only rise since Israel and her mass which has been
Speaker 1: backed by Iran, went to war. But this is a
Speaker 1: clear escalation. How much of a surprise was this to Iran.
Speaker 2: I think it was a huge surprise. I think people
Speaker 2: were massively shocked. I do think that there has been
Speaker 2: so much tension between these countries over so many years,
Speaker 2: and there's been so much rhetoric about war and threats
Speaker 2: of destruction, threats of annihilation or at this kind of
Speaker 2: end game language coming both from Iran specifically the Supreme
Speaker 2: Leader of Iran iol Alikarmene, and also threats of military
Speaker 2: action by Benjaminette and Yahoo over the past twenty years,
Speaker 2: specifically in reference to the nuclear program, but more broadly.
Speaker 2: The Isamic Republic is a state system and a regime,
Speaker 2: so it's been on a low boil for many many years. However,
Speaker 2: with all that in mind, I don't think anyone in
Speaker 2: Iran would have expected this for the simple reason that
Speaker 2: Iran was engaged officially in negotiations with the United States
Speaker 2: over its nuclear program. And you know, normally when countries
Speaker 2: are involved in a diplomatic tract like this, they don't
Speaker 2: expect to be attacked by a close ally of their
Speaker 2: counterpart in their negotiations, and these were very sensitive negotiations.
Speaker 2: So I think there's a strong element within the Iranian establishment,
Speaker 2: and I've spoken to business people as well in Tehran
Speaker 2: who were extremely worried, but many of them feel a
Speaker 2: genuine kind of betrayal and humiliation that they've entered this
Speaker 2: diplomatic process expecting the other side, that counterparts the US
Speaker 2: to also like them, be looking for a deal that's
Speaker 2: going to resolve this standoff.
Speaker 1: Trump had suggested that those talks were going well just
Speaker 1: a few days ago, and he had advised Israel not
Speaker 1: to attack Iran while they were ongoing. So why did
Speaker 1: Israel attack now?
Speaker 2: I think from the point of view of Netanyahu, it's
Speaker 2: a very opportunistic move, and I think he felt that
Speaker 2: it was a kind of now or never situation for him.
Speaker 2: This defense strategy that Iran has relied on pretty much
Speaker 2: since the US invasion of Iraq to surround itself at
Speaker 2: arm's length, This kind of like forward defense strategy of
Speaker 2: having militias, whether it's in Iraq or whether it's in Yemen,
Speaker 2: whether Huthisa, or whether it's Lebanon and Hezbolah or Hamas
Speaker 2: in Gaza or Bashar al ah Soud in Syria, having
Speaker 2: this sort of like network of allies that can help it.
Speaker 2: That strategy kind of crumbled after Israel began bombarding southern
Speaker 2: Lebanon and southern Bay Route and it effectively completely sort
Speaker 2: of crippled Hezbollah and At the same time, Iran's economy
Speaker 2: has continued to struggle. It's still being sanctioned actively by
Speaker 2: the US. Those sanctions have been increasing and expanding under Trump.
Speaker 2: The leadership in Iran harmony and the Republic of widely unpopular.
Speaker 2: Their support base has been shrinking, and they have had
Speaker 2: some extremely challenging demonstrations. So there's a kind of common
Speaker 2: fluence of things going on that, perhaps from netanna Who's
Speaker 2: point of view, make this the best time to attack Iran.
Speaker 1: How much of this is about damaging Iran's nuclear capabilities
Speaker 1: versus pushing sort of a broader regime change in Iran.
Speaker 2: From what Netnau has said, he kind of wants it
Speaker 2: to be both. So as a statement he made addressing
Speaker 2: the Uranian people, you know, he made very explicit remarks
Speaker 2: about how we're going to go after the targets of
Speaker 2: the Ayatola's regime, and.
Speaker 4: Our pilots over the skies of Tehran will deal blows
Speaker 4: to the Itolo regime that they cannot even imagine. And
Speaker 4: I can tell you this, we have indications that senior
Speaker 4: leaders in Iran already packing their bags, they sense what's coming.
Speaker 2: That very much suggests that He's not just looking for
Speaker 2: a narrow strategic opportunity to incapacitate the nuclear program. He
Speaker 2: actually wants regime change. I think that's quite clear.
Speaker 1: You've reported that Tehrana is walking a difficult line here
Speaker 1: in terms of its response. It wants to avoid in
Speaker 1: escalation that would get the US involved in this conflict.
Speaker 1: But what is that point? What would get the US
Speaker 1: to step into this conflict?
Speaker 2: There is a point where Israel will have to seek
Speaker 2: help from the United States if the conflict continues and escalates.
Speaker 2: It's not something that Israel can continue alone. The other
Speaker 2: thing that's going to trigger US involvement is a very
Speaker 2: important issue of Iran's membership or it's a signature of
Speaker 2: the MPT, the nucle Non Periferation Treaty. Iran's parliament is
Speaker 2: going to have a discussion about whether they should propose
Speaker 2: a bill to exit and withdraw from the MPT. Doing
Speaker 2: that could trigger a very serious response from the US,
Speaker 2: because once they do that, koreated in two thousand and three,
Speaker 2: then that's Iran's way of saying, like Pakistan, like India,
Speaker 2: like Israel itself reportedly, we are going to develop a
Speaker 2: nuclear weapons.
Speaker 1: Arsenal after the break with the region and the rest
Speaker 1: of the world are most worried about if Iran and
Speaker 1: Israel's conflict deepens. Even as Trump suggests that Iran is
Speaker 1: open to talks, Israel's strategic affairs Minister Ron Durmer told
Speaker 1: Bloomberg Monday that it will continue to strike targets in
Speaker 1: the country. I asked Bloomberg's Golnarmata Valley about the concerns
Speaker 1: of world leaders as they watch this unfold.
Speaker 2: I think, obviously the thing that they're most concerned about
Speaker 2: is that the war doesn't widen, or it doesn't expand
Speaker 2: to engulf more of the region, that other countries in
Speaker 2: the region don't get involved. There's a massive fear there.
Speaker 2: One of the things that's preventing that from happening is
Speaker 2: the fact that Iran and the Gulf Arab State, they've
Speaker 2: really worked on their relationship since the last Trump administration,
Speaker 2: and after the twenty to fifteen nuclear deal, relations between
Speaker 2: Iran and Saudi deteriorated considerably, they actually cut diplomatic ties.
Speaker 2: So rebuilding those relationships was a key part of this
Speaker 2: whole nuclear talks process that was going on between Iran
Speaker 2: and the Trump administration because those countries were really encouraging
Speaker 2: Trump to do a deal with the Iranians, reduce the
Speaker 2: tension in the region, reduce the tension with Iran. But
Speaker 2: obviously Israel had other ideas.
Speaker 1: What impact is this having on energy and oil markets?
Speaker 2: So it's obviously going to have a direct impact on
Speaker 2: oil markets because Iran is a major producer of oil.
Speaker 2: Not only that it sits on the Persian Gulf where
Speaker 2: we have the Strait of Hormones. There's a huge amount
Speaker 2: of oil that passes through that narrow passageway in the
Speaker 2: Persian Gulf every day. Iran has threatened numerous times in
Speaker 2: the past that it will shut down or block the
Speaker 2: Strait of horrm wares and countries like China rely on
Speaker 2: a secure means of securing energy from the Middle East
Speaker 2: so that they can run their economies effectively. But yeah,
Speaker 2: the impact on oil prices is immediate. If the market
Speaker 2: thinks that it's going to have an effect on supply,
Speaker 2: then prices will obviously rise. There are some others.
Speaker 1: And they are arising, yes they are, But.
Speaker 2: There are other fundamentals that affect whether the market thinks
Speaker 2: that supply is going to be protected or it's going
Speaker 2: to come from somewhere else. It's going to be offset
Speaker 2: by other factors in other countries, amongst other oil producers.
Speaker 2: But fundamentally, yeah, the market is directly affected by any
Speaker 2: conflict that happens around in and around the Persian Gulf,
Speaker 2: and after all, Iran is a major opic producer.
Speaker 1: We're seeing reports starting to service that Iran is signaling
Speaker 1: an interest in de escalation. What does that mean?
Speaker 2: Yeah, we have seen those reports today and I think
Speaker 2: also Trump himself may have alluded to this. He's made
Speaker 2: some reference to Iranians wanting to talk behind the scenes.
Speaker 2: The Uranians haven't said any such thing, But interestingly, they
Speaker 2: haven't actually said explicitly that will never go back to
Speaker 2: the negotiating table again. They've said that nuclear talks for
Speaker 2: now are useless while Israel is bombarding us, which is
Speaker 2: different from saying we will never talk to them. And
Speaker 2: maybe at the moment that looks like the most sensible
Speaker 2: way through this, a back channel de escalation where through
Speaker 2: mediating countries Iran says we want to end this. How
Speaker 2: can we start? Tell the Americans we want to do this,
Speaker 2: Tell them to tell the Israelis, X, Y, and Z.
Speaker 2: But a lot of this, I think depends on what
Speaker 2: Israel does and what Nettana who wants to do. Israel
Speaker 2: has acted with a level of impunity over the past
Speaker 2: twenty months in the face of a lot of international criticism,
Speaker 2: so it's hard to know who, whether that's Trump or
Speaker 2: someone else, is able to say to these Raelies, draw
Speaker 2: a line under it. The Iranians want to draw a
Speaker 2: line under it, and you know, listen to us.
Speaker 1: This is the Big Take from Bloomberg News. I'm Sarah Holder.
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