WEBVTT - Iran Pledges ‘Decisive’ Reply to US Strikes as Israel War Rages 0:00:02.759 --> 0:00:10.600 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.640 --> 0:00:14.600 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.640 --> 0:00:17.880 Eastern on Apple, Cocklay and Android Auto with the Bloomberg 0:00:17.960 --> 0:00:21.080 Business App. Listen on demand wherever you get your podcasts, 0:00:21.400 --> 0:00:23.120 or watch us live on YouTube. 0:00:23.920 --> 0:00:27.040 Obviously, the overarching news and market themes of the day 0:00:27.400 --> 0:00:30.840 is Israel hitting nuclear sites as the world is now 0:00:30.880 --> 0:00:35.040 awaiting Iron's response to the US wrecking its nuclear sites 0:00:35.040 --> 0:00:37.600 in Iran over the weekend as well. All right, joining 0:00:37.640 --> 0:00:40.560 us now is doctor Aeriel Cohen, Senior Fellow Atlantic Council, 0:00:41.159 --> 0:00:44.879 joining us on the latest. How do we rank the 0:00:44.920 --> 0:00:46.720 probability of an Ironium response? 0:00:48.320 --> 0:00:53.600 It will be a response they unless the Iranian regime collapses. 0:00:54.240 --> 0:00:57.960 They will be trying to save face. The problem is 0:00:58.000 --> 0:01:02.680 their options are not great. One, they could try and 0:01:03.200 --> 0:01:07.000 attack tankers, and we see that the tanker rates, the 0:01:07.040 --> 0:01:12.200 insurance rates are all going already. Two, they could try 0:01:12.240 --> 0:01:16.440 to mine or close the Strait of Hormus. 0:01:17.000 --> 0:01:18.400 That will piss off. 0:01:18.319 --> 0:01:24.480 Their Chinese customers and endanger their political support from China. 0:01:25.040 --> 0:01:28.760 Three we see that Russia is talking but so far 0:01:28.920 --> 0:01:34.199 is not getting involved. Why because Russia benefits from high 0:01:34.440 --> 0:01:37.760 oil prices. The higher the prices, the happier puts in 0:01:38.080 --> 0:01:43.080 is so what else can they do? They could attack 0:01:43.160 --> 0:01:48.080 their neighbors. They would be cautious not to attack American Basis. 0:01:48.120 --> 0:01:51.880 It looks like because they could already could have attacked, 0:01:51.920 --> 0:01:56.000 they didn't. The regime is have broken because a lot 0:01:56.040 --> 0:01:59.480 of generals were taken out, so the decision making chain 0:02:00.440 --> 0:02:05.160 is WOBBLI. But if the attack American Basis, us will 0:02:05.920 --> 0:02:11.640 deliver devastating blows against their on if they attack the neighbors, 0:02:12.000 --> 0:02:14.840 same thing. And here's a question that a lot of 0:02:14.880 --> 0:02:19.320 people did not ask about the alleged closure of the 0:02:19.360 --> 0:02:24.200 Strait of Hormus. The pathway in the strait is through 0:02:24.360 --> 0:02:29.359 the Omani waters, it's not the Iranian waters. 0:02:29.560 --> 0:02:30.520 So are they going. 0:02:30.360 --> 0:02:37.400 To endanger their fragile relationships with other Gulf states a 0:02:37.440 --> 0:02:42.200 big question mark. Also, they're normalized with Saudi Arabia under 0:02:42.200 --> 0:02:45.840 the Chinese umbrella, the China broker that deal. Are they 0:02:45.880 --> 0:02:50.080 going to endanger both Saudi and China connections? So the 0:02:50.160 --> 0:02:53.959 option don't look good for the regime. And what I 0:02:54.000 --> 0:02:56.760 am worried about, what keeps me up at night, is 0:02:57.040 --> 0:03:02.840 all that highly enriched uranian. They enriched several hundred kilos 0:03:03.160 --> 0:03:09.239 to sixty percent. If the ability to build a deliverable 0:03:09.360 --> 0:03:13.959 nuclear weapon is destroyed, now what about a dirty bomb? 0:03:14.000 --> 0:03:15.680 And I think that should be on the table. 0:03:16.200 --> 0:03:19.320 US and Israel do not put regime change on the 0:03:19.360 --> 0:03:23.120 table yet. All the Trump had these musings about it. 0:03:23.600 --> 0:03:27.120 But all the boxes need to be changed in terms 0:03:27.120 --> 0:03:31.520 of ballistic missiles, in terms of enriched uranium, in terms 0:03:31.520 --> 0:03:35.200 of proxies, and eventually if we move to an agreement, 0:03:35.640 --> 0:03:37.680 that should be addressed in the future. 0:03:37.760 --> 0:03:41.120 Great Aeriel, is it your opinion that some people are 0:03:41.120 --> 0:03:43.560 talking about regime change but that seems far fetched? Is 0:03:43.680 --> 0:03:46.680 your sense that if there were to be regime change 0:03:46.680 --> 0:03:50.400 in around it would have to come organically from the people? 0:03:52.160 --> 0:03:53.720 Absolutely one percent. 0:03:54.440 --> 0:04:00.400 It's a country with three plus thousand year history, ninety 0:04:00.440 --> 0:04:01.720 plus million people. 0:04:03.280 --> 0:04:06.960 It's fractured. You have the Shah, the former. 0:04:06.760 --> 0:04:10.720 Shah supporters, the Crown Prince lived several miles from me 0:04:11.160 --> 0:04:12.560 here in Potomac, Maryland. 0:04:13.680 --> 0:04:18.560 We have the far left, the mujahidin Hulk people. 0:04:19.640 --> 0:04:22.240 We have the liberals in the regime, and of course 0:04:22.279 --> 0:04:25.120 we have IRGC and the Mullahs. 0:04:25.680 --> 0:04:29.920 So different components with diametrically. 0:04:29.200 --> 0:04:35.960 Opposed views of Iran society, the role of religion, the 0:04:36.040 --> 0:04:39.919 role of women. Don't forget this is a regime that 0:04:40.279 --> 0:04:43.920 was executing more people per capita than any other country 0:04:43.920 --> 0:04:46.799 in the world. This is a regime that a woman 0:04:46.839 --> 0:04:50.520 could be beaten and killed for not wearing the hijab 0:04:50.600 --> 0:04:54.800 in a proper way. So a lot of people inside 0:04:54.800 --> 0:04:58.839 Iran are very unhappy. But this is a totalitarian regime 0:04:58.960 --> 0:05:01.839 or quasi talk to all their terror or rechi that 0:05:02.080 --> 0:05:07.040 picks up, picks out dissidents and publishes them and kills. 0:05:06.800 --> 0:05:11.919 Them, which then makes an internal regime change enormously complicated. 0:05:11.960 --> 0:05:13.880 All right, doctor aiel Colemen, thank you very much, senior 0:05:13.920 --> 0:05:16.720 fellow Atlanta Council, for the latest in the Middle East 0:05:16.800 --> 0:05:20.080 or of what the actual options may be for Iran 0:05:20.240 --> 0:05:21.560 and the rest of the world. 0:05:23.240 --> 0:05:26.920 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:05:27.000 --> 0:05:30.120 weekdays at ten am Eastern on Apple, Cocklay and Android 0:05:30.120 --> 0:05:33.400 Auto with the Bloomberg Business App. Listen on demand wherever 0:05:33.480 --> 0:05:36.600 you get your podcasts, or watch us live on YouTube. 0:05:37.000 --> 0:05:39.760 All right, let's turn to the non market reaction. I mean, 0:05:39.760 --> 0:05:41.400 when you see the kind of headlines that we saw 0:05:41.440 --> 0:05:44.800 over the weekend. The impact was estimated to be huge 0:05:44.839 --> 0:05:47.840 on financial assets, and that has not seemed to play out. 0:05:47.880 --> 0:05:50.640 Emily lavell as Chief investment officer in New Mexico Climate 0:05:50.720 --> 0:05:54.720 Investment Center broadcase, Emily here, what do you make of 0:05:54.760 --> 0:05:57.080 what many are saying are a subdued market reaction? 0:05:58.760 --> 0:06:01.680 Hi, good morning to be here. I would agree. 0:06:01.760 --> 0:06:04.240 I mean, I'm pretty surprised that the markets haven't reacted 0:06:04.240 --> 0:06:06.520 a lot more forcefully. I think that, you know, this 0:06:06.600 --> 0:06:11.239 attack really expands the range of potential outcomes and creates 0:06:11.279 --> 0:06:13.480 a lot more potential downside and a lot more risk 0:06:13.600 --> 0:06:16.440 in markets. And I think it just underscores the need, 0:06:16.560 --> 0:06:19.919 the strategic need in the United States to have, you know, 0:06:19.960 --> 0:06:23.280 sources of energy coming from from all different sources, because 0:06:23.600 --> 0:06:26.599 you know, if we get an escalation from Aron, then 0:06:26.960 --> 0:06:29.160 we could really see, you know, some some pretty big 0:06:29.240 --> 0:06:32.600 energy shocks which could really impact inflation and prices all 0:06:32.640 --> 0:06:34.400 across the world, the US being no exception. 0:06:35.400 --> 0:06:40.560 What does the Trump administration mean for climate? Your Climate 0:06:40.640 --> 0:06:45.400 Investment Center thinking about alternative sources of energy? 0:06:45.760 --> 0:06:46.800 How are you guys. 0:06:46.600 --> 0:06:50.200 Kind of positioning what you do in terms of addressing 0:06:50.200 --> 0:06:52.760 the challenges of climate change with this new administration. 0:06:54.160 --> 0:06:56.200 Yeah, well, that's a it's a good question, it's a 0:06:56.240 --> 0:07:00.119 tough question. I mean, honestly, you know green Banks if 0:07:00.160 --> 0:07:02.200 if you're not familiar with with what they are, you know, 0:07:02.240 --> 0:07:03.840 we know that we need an estimated three and a 0:07:03.880 --> 0:07:06.920 half trillion dollars of investment into the energy sector in 0:07:07.000 --> 0:07:09.760 order to transition away from fossil fuels by twenty fifty. 0:07:10.240 --> 0:07:13.040 And green Banks stand in almost. 0:07:12.760 --> 0:07:16.160 Every state to really support that acceleration of the energy transition. 0:07:16.480 --> 0:07:19.560 And you know, New Mexico is really interesting because we're 0:07:19.600 --> 0:07:22.280 the second largest producer of oil and gas in the country, 0:07:22.640 --> 0:07:26.000 but we're also second in wind potential, is second in 0:07:26.000 --> 0:07:29.200 solar potential, third and wind, and sixth and geothermal, and 0:07:29.280 --> 0:07:33.400 so the potential for real diversification of our economy is 0:07:33.480 --> 0:07:38.000 really significant. Unfortunately, what the Trump administration is doing through 0:07:38.000 --> 0:07:42.720 a variety of policies enacted, the most significant of which 0:07:43.200 --> 0:07:46.040 is the budget bill, the reconciliation bill that's currently going 0:07:46.080 --> 0:07:48.480 back and forth between the Senate and the House, is 0:07:48.560 --> 0:07:51.440 it really removes the majority of the incentives that have 0:07:51.480 --> 0:07:54.400 been in place since two thousand and five to bring 0:07:54.520 --> 0:07:58.480 cleaner electrons onto the grid, and so you know, unfortunately, 0:07:58.520 --> 0:08:00.800 I think what that means for the whole economy is 0:08:00.840 --> 0:08:05.600 going to be higher energy prices, less resilience, less manufacturing, 0:08:05.720 --> 0:08:09.480 fewer jobs, you know, big multiplier effects for us Here 0:08:09.520 --> 0:08:11.400 at the Green Bank, we continue to see a lot 0:08:11.400 --> 0:08:15.440 of projects that are really interesting and benefit both you know, 0:08:15.520 --> 0:08:18.160 the low income communities that we're trying to serve and 0:08:18.280 --> 0:08:19.320 the broader economy. 0:08:20.000 --> 0:08:21.640 But it's definitely going to be more challenging. 0:08:21.680 --> 0:08:24.680 And there are estimates that fifty percent of the backlog 0:08:25.200 --> 0:08:27.360 and that's in the interconnection queue right now on the 0:08:27.360 --> 0:08:30.240 grid could be at risk if the bill passes in 0:08:30.280 --> 0:08:31.000 its current. 0:08:30.760 --> 0:08:33.000 Form, and that's not even take into account how long 0:08:33.040 --> 0:08:37.280 that line is to actually get connected to AGRID. So, 0:08:37.559 --> 0:08:40.160 if I was looking at individual stocks, is this like 0:08:40.240 --> 0:08:43.000 a fossil fuel play then at the end of the day, 0:08:43.120 --> 0:08:44.599 or are there are more nuanced ways to play this? 0:08:46.080 --> 0:08:48.400 You know, I sort of think of the way the 0:08:48.559 --> 0:08:51.040 US has been in the last couple of months in 0:08:51.400 --> 0:08:52.720 the way that I'm used to looking. 0:08:52.520 --> 0:08:53.360 At emerging markets. 0:08:53.360 --> 0:08:57.000 I invested in emerging markets for almost ten years, and frankly, 0:08:57.160 --> 0:08:58.840 I think you've got a skate where the puck is 0:08:58.880 --> 0:09:02.240 going when it comes to Paul, it's it's really hard 0:09:02.240 --> 0:09:04.800 to stick your neck out there. That being said, I 0:09:04.840 --> 0:09:08.280 do think there is maybe some potential in the utility 0:09:08.360 --> 0:09:11.840 scale UH solar and wind market. And the reason for 0:09:11.920 --> 0:09:14.040 that is, you know, at the same time that we're 0:09:14.080 --> 0:09:17.800 doing all these things to hurt this cheap, easy to 0:09:17.840 --> 0:09:20.960 get on the grid energy, we're having this big national 0:09:20.960 --> 0:09:23.880 discussion about how we become AI leaders. And we heard 0:09:24.120 --> 0:09:26.880 next to our CEO, John Ketchum say last week, if 0:09:26.880 --> 0:09:29.040 we kill solar and wind, we're going to lose the 0:09:29.040 --> 0:09:31.760 AI race. And so I do think that there's the 0:09:31.800 --> 0:09:35.360 potential for you know, lawmakers to come back to the 0:09:35.400 --> 0:09:40.120 table to try to support some utility scale solar plus storage. 0:09:40.160 --> 0:09:44.199 In particular, the administration is still very focused on domestic manufacturers, 0:09:44.200 --> 0:09:46.400 so I think a name like First Solar my benefit. 0:09:46.800 --> 0:09:52.200 You've got the you know, gas turbine manufacturers GeV and Siemens. 0:09:52.120 --> 0:09:53.720 But this is a cyclical industry. 0:09:53.760 --> 0:09:56.640 They've got backlogs to twenty thirty two now, and I 0:09:56.800 --> 0:09:59.640 just see more downside than upside at this point, with 0:09:59.679 --> 0:10:01.120 the back clogs the way that they are. 0:10:01.720 --> 0:10:03.959 Then you've got clean firm power. 0:10:03.679 --> 0:10:07.559 Which is you know, nuclear geothermal, and that's all well 0:10:07.600 --> 0:10:09.440 and good, and I think that that does need to 0:10:09.440 --> 0:10:12.439 be built out, but there aren't that many ways to 0:10:12.480 --> 0:10:13.959 play it in the market. You know, you can look 0:10:13.960 --> 0:10:18.640 at the Spraught Uranium Trust. There's a geothermal pure Play, 0:10:18.800 --> 0:10:23.120 or Matt there's Constellation Energy Group, but it's you know, 0:10:23.240 --> 0:10:25.840 it's it's tough out there. I think the reality is 0:10:25.880 --> 0:10:28.320 that you're going to start to see some people have 0:10:28.360 --> 0:10:30.600 to come back to the table because solar and storage 0:10:30.640 --> 0:10:33.480 is the cheapest and fastest way to get new energy 0:10:33.800 --> 0:10:34.600 onto the grid. 0:10:35.400 --> 0:10:37.440 Emily, thanks so much for joining us. Really appreciate it. 0:10:37.520 --> 0:10:41.120 Emily Levelle, chief investment Officer for the New Mexico Climate 0:10:41.200 --> 0:10:42.040 Investment Center. 0:10:43.800 --> 0:10:47.480 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:10:47.559 --> 0:10:50.959 weekdays at ten am Eastern on Appleclocklay and Android Auto 0:10:51.040 --> 0:10:54.120 with the Bloomberg Business App. Listen on demand wherever you 0:10:54.160 --> 0:10:57.120 get your podcasts, or watch us live on YouTube. 0:10:57.440 --> 0:10:58.880 Taking a look at the market here, you're looking at 0:10:58.880 --> 0:11:01.560 Brent off by one point one percent and WTI crewed 0:11:01.600 --> 0:11:03.760 off one point two percent. The question I'm getting is 0:11:03.760 --> 0:11:06.160 why why aren't we higher in prices? So I'm gonna 0:11:06.160 --> 0:11:09.320 ask that question to Emri Descent. She is founder and 0:11:09.400 --> 0:11:12.760 director of Market intelligence for Energy Aspects. All right, Amrito, 0:11:12.840 --> 0:11:13.559 what's your answer? 0:11:13.920 --> 0:11:17.280 Why are we lower in prices today? Yeah? 0:11:17.360 --> 0:11:20.959 Well, because again we haven't seen any actual supply disruptions. 0:11:21.840 --> 0:11:24.320 You know, we've been saying that, Yes, while Iran is 0:11:24.360 --> 0:11:28.160 threatening to close the straits or Foremos, that remains very 0:11:28.320 --> 0:11:31.960 much the last resort for them, right because if they 0:11:32.000 --> 0:11:34.600 did that, they are really going to get the US 0:11:34.720 --> 0:11:36.840 involved in a much much bigger way than they have 0:11:36.960 --> 0:11:40.079 been so far. Any country that's even neutral towards it 0:11:40.120 --> 0:11:44.680 will basically become far more kind of angry about the 0:11:44.679 --> 0:11:47.800 whole situation. And I don't think Iran necessarily wants to 0:11:48.440 --> 0:11:51.040 attract the hour of the whole world, given how weak 0:11:51.160 --> 0:11:53.000 the regime is right now, So I think that's a 0:11:53.000 --> 0:11:55.040 big part of it. The other one is a bit 0:11:55.080 --> 0:11:59.640 more technical. We've seen most of the crude traders trade 0:11:59.640 --> 0:12:02.040 this via the ouptions market, So when you are short 0:12:02.080 --> 0:12:05.439 call options as prices are going up, you actually are 0:12:05.960 --> 0:12:08.520 taking profits all the way through, right because you're kind 0:12:08.520 --> 0:12:11.199 of selling out of your position. So that's kind of 0:12:11.320 --> 0:12:15.400 adding to it, I would say, generally speaking, unless Iran 0:12:15.600 --> 0:12:19.719 actually escalates to the point of disrupting supplies, we are 0:12:19.760 --> 0:12:20.960 probably not going. 0:12:20.760 --> 0:12:23.199 To see any significant increase in prices. 0:12:22.920 --> 0:12:27.240 From here, Amrina. Is there a consensus about how much 0:12:27.640 --> 0:12:31.520 geopolitical risk premium is in oil these days? 0:12:33.040 --> 0:12:35.400 I don't know about consensus, but I think this one's 0:12:35.440 --> 0:12:38.640 relatively easy, right because we were in the high sixties 0:12:38.640 --> 0:12:41.680 for Brent, we were already moving higher, just based on 0:12:41.720 --> 0:12:44.960 the fact that fundamental had been stronger than people expected. 0:12:45.440 --> 0:12:46.959 But I would say, given where. 0:12:46.760 --> 0:12:49.920 We are now versus where we start started when the 0:12:49.920 --> 0:12:53.960 conflicts kind of headline started coming in, it's about ten dollars. 0:12:54.840 --> 0:12:55.920 What's your question then? 0:12:56.040 --> 0:12:58.080 So if I'm assuming the question you're getting is why 0:12:58.160 --> 0:12:59.400 aren't oil prices higher? 0:12:59.400 --> 0:13:00.559 But what's you question? 0:13:02.720 --> 0:13:06.720 I mean, for me, the real question becomes the medium term, right, 0:13:06.840 --> 0:13:09.000 Like I know the focus for the marketers in the 0:13:09.040 --> 0:13:12.760 Straits and Foremost, but we know this isn't over yet, right. 0:13:12.880 --> 0:13:15.880 We know Israel while kind of. 0:13:15.840 --> 0:13:19.480 You know, walking typrope around this, they are talking about 0:13:19.559 --> 0:13:22.760 regime change and what does that mean? A political upheaval 0:13:23.240 --> 0:13:28.439 has never been associated with a good outcome for oil production. 0:13:28.920 --> 0:13:32.280 Be It Eerrah bit Kuwait, be It Iran in the past, be. 0:13:32.320 --> 0:13:36.400 It Libya, and I do wonder for the medium term outlook, 0:13:36.440 --> 0:13:39.599 like do we actually see lower Iranian production over the 0:13:39.640 --> 0:13:42.400 next couple of years at a time when OPEC plus 0:13:42.400 --> 0:13:45.120 will also have less PEC capacity because they're bringing back 0:13:45.160 --> 0:13:47.400 a lot of production. I know this is not the 0:13:47.480 --> 0:13:50.160 time because of you know, the focus obviously has to 0:13:50.200 --> 0:13:53.560 be does Iran react and clos the straits? But for me, 0:13:53.640 --> 0:13:55.959 that's the more interesting thing that our long term ail 0:13:55.960 --> 0:13:59.760 price is undervalued given everything that was already going to happen, 0:13:59.760 --> 0:14:01.240 and now we added around to the mix. 0:14:02.000 --> 0:14:04.760 How has OPEC been behaving OPEK plus Has it been 0:14:04.880 --> 0:14:08.120 rational over the last I don't know, just since maybe 0:14:08.800 --> 0:14:10.760 you know October seventh of last year when things got 0:14:10.920 --> 0:14:13.800 really really ratcheted up in the Mid East. 0:14:14.880 --> 0:14:16.840 Yeah, I mean it's a great quitiontive. They're rational. 0:14:16.960 --> 0:14:19.600 I mean you have to understand kind of their logic 0:14:20.160 --> 0:14:21.400 to this, and I think they have. 0:14:21.440 --> 0:14:23.480 Been consistent, is what I would say. 0:14:23.720 --> 0:14:25.640 Saudi Arabia has been saying, Look, it needs to be 0:14:25.680 --> 0:14:27.960 equitable cuts, everybody needs to be a part of. 0:14:27.920 --> 0:14:30.600 This, and I think that's what they have been doing. 0:14:30.920 --> 0:14:34.960 But at the same time they have also been kind 0:14:35.000 --> 0:14:40.120 of obviously there's been disagreements between OPEC members, with Kazakhstan 0:14:40.200 --> 0:14:42.760 cheating clearly and some of the others as well with 0:14:42.880 --> 0:14:46.400 regards to, you know, what that kind of policy should be. 0:14:47.200 --> 0:14:49.120 I think that in terms of what's going on with 0:14:49.160 --> 0:14:51.800 the Middle Eastern conflict, one thing they're very very clear 0:14:51.840 --> 0:14:53.080 is they don't want to get drawn into it. 0:14:53.120 --> 0:14:55.680 They want to make sure that their. 0:14:56.880 --> 0:15:00.000 Genuine infrastructure, not just energy, it's protected, and I think 0:15:00.040 --> 0:15:00.440 they're going. 0:15:00.360 --> 0:15:02.280 To try and be as neutral as possible. 0:15:02.840 --> 0:15:04.560 And again, this is one of the reasons why I 0:15:04.560 --> 0:15:07.360 don't think they're going to be surging production if there 0:15:07.400 --> 0:15:09.720 were to be an Iranian outage, because the last thing 0:15:09.760 --> 0:15:12.880 they want is to then get attacked because Iran's going 0:15:12.880 --> 0:15:14.880 to be like, you're taking advantage of our situation. 0:15:15.200 --> 0:15:15.400 Right. 0:15:15.840 --> 0:15:19.400 Well, speaking of here's an extremely unfair question. When President 0:15:19.440 --> 0:15:23.160 Trump tweeted earlier, I want lower oil prices. Drill baby drill, 0:15:23.240 --> 0:15:26.080 Come on you, guys, I'm watching who's the you. I mean, 0:15:26.320 --> 0:15:28.040 who is he talking to specifically? 0:15:29.040 --> 0:15:32.120 I mean drill baby drill refers to the US producers, right, 0:15:32.240 --> 0:15:35.080 and I mean it's I did smile when I saw 0:15:35.120 --> 0:15:38.240 that because I was like, yes, you say that, but 0:15:38.320 --> 0:15:42.280 at the same time, you know, thanks to tariffs, thanks 0:15:42.320 --> 0:15:46.080 to just kind of broader his economic policies, oil prices 0:15:46.160 --> 0:15:48.520 are a lot lower. Again, if you take away the 0:15:48.560 --> 0:15:52.040 ten dollars geopolitical risk premium, then it has been in 0:15:52.240 --> 0:15:54.680 the in the last you know, couple of years, so 0:15:55.040 --> 0:15:58.040 there is no incentive for their producers to drill. 0:15:58.440 --> 0:15:59.480 We know we've talked. 0:15:59.240 --> 0:16:01.480 About this, Alex, you and I about how Gassi are 0:16:01.480 --> 0:16:04.800 the acreage is getting all of these reasons right. So 0:16:05.480 --> 0:16:08.120 Drew baby drul remains a five dream. I think that 0:16:08.800 --> 0:16:12.360 it's regardless of why the prices are simply because you 0:16:12.680 --> 0:16:14.880 are you know, you are in a situation, at least 0:16:14.880 --> 0:16:17.040 for the crude oil side of things, is geology is playing. 0:16:17.040 --> 0:16:18.680 It's pot we're going to get nngs, We're going to 0:16:18.760 --> 0:16:19.240 get gas. 0:16:19.600 --> 0:16:21.960 But I don't think that's going to necessarily translate into 0:16:22.040 --> 0:16:22.640 oil production. 0:16:23.960 --> 0:16:24.640 All right, I'm Rita. 0:16:24.680 --> 0:16:26.680 Thank you so much for we appreciate that. I'm Rita 0:16:26.720 --> 0:16:30.840 send founder and research director of Market Intelligence joining us. 0:16:32.560 --> 0:16:36.240 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:16:36.320 --> 0:16:39.440 weekdays at ten am Eastern on Apple, Cocklay and Android 0:16:39.440 --> 0:16:42.760 Auto with the Bloomberg Business app. Listen on demand wherever 0:16:42.800 --> 0:16:45.920 you get your podcasts, or watch us live on YouTube. 0:16:46.640 --> 0:16:49.880 Terry Hayes, founder of Pangea Policy, joining us in the 0:16:49.920 --> 0:16:52.840 middle of all of this. Terry, and let's just start 0:16:52.880 --> 0:16:57.720 with what we're seeing overseas. Are we too complacent about 0:16:57.720 --> 0:17:00.560 further action between the US around and is real? Or 0:17:00.560 --> 0:17:02.240 do you feel like one and done? Moving on? 0:17:03.880 --> 0:17:07.399 Good morning, Alex, I apparently am the uh am, the 0:17:07.400 --> 0:17:09.960 person urging humility and a sea of certainty. You know, 0:17:10.000 --> 0:17:14.000 I've heard, he written, heard and and read a lot 0:17:14.080 --> 0:17:17.440 of people saying this morning, well I can dandalists so saying, oh, 0:17:17.480 --> 0:17:19.280 I know exactly how this is going to go. Iran's 0:17:19.320 --> 0:17:21.960 going to super peace and this will happen, and that happened, 0:17:21.960 --> 0:17:24.400 and the other happened, and here's the you know, here 0:17:24.400 --> 0:17:27.639 the the the knock on effects from China and Russia 0:17:27.680 --> 0:17:30.720 and elsewhere. We're in the phase of this conflict where 0:17:30.800 --> 0:17:34.960 downside economic risk is heightened, much more heightened than people think, 0:17:35.359 --> 0:17:40.400 because the possibility for irrational action is much greater at route. 0:17:43.400 --> 0:17:45.879 So Terry, I could go on, I will know. 0:17:46.880 --> 0:17:50.800 It was just it seems like President Trump's policy seemed 0:17:50.800 --> 0:17:52.600 to change a little. There's the outlook seemed to change 0:17:52.640 --> 0:17:55.760 a little bit from you know, America first to now, 0:17:56.840 --> 0:17:59.480 you know, really ratcheting up the stakes in Iran. You 0:17:59.520 --> 0:18:01.520 how do you think has outlook changed. 0:18:02.840 --> 0:18:04.360 I've never looked. I got to tell you, Paul, I've 0:18:04.359 --> 0:18:06.080 never been the guy that thought, I think I said 0:18:06.080 --> 0:18:08.640 this to you yesterday too. I've never been the guy 0:18:08.680 --> 0:18:11.240 that thought that that this is some sort of a 0:18:11.359 --> 0:18:14.240 U turn or anywhere close to it. I think Trump 0:18:14.280 --> 0:18:16.520 is absolutely right to come in and put a fresh take, 0:18:16.520 --> 0:18:19.560 a fresh eye on the nature of the United States 0:18:19.560 --> 0:18:23.000 commitments and how and what's most important for America certainly, 0:18:23.800 --> 0:18:27.840 But you know, this got taken as withdrawal all over 0:18:27.880 --> 0:18:29.639 the world, and that was never going to happen. 0:18:30.000 --> 0:18:30.119 Uh. 0:18:30.440 --> 0:18:33.000 You know, we are. We're in it to our teeth 0:18:33.440 --> 0:18:38.000 in Taiwan, our interests in the Middle East are are 0:18:38.040 --> 0:18:41.000 are very very important to the national interest in the 0:18:41.080 --> 0:18:44.760 United States. And even in a situation like Ukraine, you know, 0:18:44.800 --> 0:18:47.960 we haven't left. They're not crazy about where we are, 0:18:48.000 --> 0:18:51.520 but we've given him more weapons, We've signed a minerals deal. 0:18:51.600 --> 0:18:54.000 We're not gone, and and we're not going to be 0:18:54.080 --> 0:18:57.960 gone either. And now it's very apparent to those for 0:18:58.040 --> 0:19:00.960 whom it wasn't obvious already that we're going to be 0:19:01.040 --> 0:19:03.680 in it to to stay. And you know, this is 0:19:03.960 --> 0:19:07.280 a clear situation I think where the uh, the duties 0:19:07.280 --> 0:19:09.960 of the president O weigh the preferences of the candidate. 0:19:10.480 --> 0:19:12.480 Well, what is in it to stay? 0:19:13.040 --> 0:19:13.720 In it to stay? 0:19:13.720 --> 0:19:15.440 I mean, like what what does that really entail? 0:19:17.160 --> 0:19:19.399 Well, you know, it's you know, we have we have 0:19:19.560 --> 0:19:24.560 continued to defend Taiwan and UH and you know, to 0:19:24.600 --> 0:19:29.840 work our work our military and economic interests there Middle East. UH. 0:19:29.960 --> 0:19:32.240 You know, it's not for nothing that the President made 0:19:32.640 --> 0:19:36.520 a centerpiece of his early second term a week long 0:19:36.520 --> 0:19:39.240 trip to the Middle East with the idea that we're 0:19:39.280 --> 0:19:44.639 going to be using interconnected economic alliances in part to 0:19:44.800 --> 0:19:47.879 ring fence the Iranians and the Ring then the Iranians 0:19:47.960 --> 0:19:50.520 or client state of China, so in essence ring fence 0:19:50.640 --> 0:19:54.359 China and Russia as well. So that's not uh, that's 0:19:54.400 --> 0:19:57.680 not new. And it's clear now that you know, the 0:19:57.960 --> 0:20:00.480 President would like the Europeans to stay up up to 0:20:00.520 --> 0:20:04.359 the plate on defense. UH, and you see that from 0:20:04.640 --> 0:20:07.800 from the NATO resolutions that they're finally getting serious about that. 0:20:08.359 --> 0:20:13.719 But you know, even then, we haven't completely withdrawn from Ukraine, 0:20:13.760 --> 0:20:16.720 as was widely assumed in the United States six months ago. 0:20:17.160 --> 0:20:17.400 Uh. 0:20:17.440 --> 0:20:20.600 So you know, we're we are not melting away from 0:20:20.600 --> 0:20:23.639 our from our global responsibilities here by any stretch. 0:20:24.160 --> 0:20:28.680 Terry you mentioned Ukraine. Does a calculus there for mister 0:20:28.720 --> 0:20:32.840 Putin change given the actions of the US in the 0:20:32.920 --> 0:20:34.119 in the Middle East over the weekend. 0:20:35.160 --> 0:20:37.399 Yeah, and well, you know, good news bad news. The 0:20:37.960 --> 0:20:41.520 increased price of oil helps him. Uh, and and and 0:20:42.640 --> 0:20:46.680 around does something that that sparks a significant increase in 0:20:46.720 --> 0:20:49.320 the price of oil. Obviously Putin has helped. So uh, 0:20:49.480 --> 0:20:51.840 that's not good news for Ukraine. But but on the 0:20:51.840 --> 0:20:57.639 other hand, what you have is increased not only increased resolution, uh, 0:20:57.880 --> 0:21:01.760 demonstrated by the European allies, wells, the United States and you, 0:21:02.240 --> 0:21:04.720 you and my estimation could do an awful lot more 0:21:04.720 --> 0:21:07.600 than they than they already are, which is the precious 0:21:07.640 --> 0:21:12.640 little but the U. But not only that, but you've 0:21:12.640 --> 0:21:15.760 got a situation here where there's a clear commitment by 0:21:15.760 --> 0:21:19.119 the president with a clear follow through. And that's that 0:21:19.200 --> 0:21:22.240 alone is bad news for Putin. So uh, you know, 0:21:22.359 --> 0:21:24.800 kind of a mixed a mixed bag overall. But I'd 0:21:24.840 --> 0:21:26.720 say for Russia. It's overall negative. 0:21:27.760 --> 0:21:30.119 And before you let you go, Dave palat test to 0:21:30.160 --> 0:21:33.199 find to the House tomorrow and the Senate on Wednesday, 0:21:33.440 --> 0:21:35.000 what do you think the biggest talking point is going 0:21:35.040 --> 0:21:35.240 to be? 0:21:36.640 --> 0:21:39.720 Well, you know, here's the thing. It's uh. I think 0:21:39.760 --> 0:21:42.399 we all know this. Pal's not going to say anything 0:21:42.400 --> 0:21:45.840 new personally. Secondly, you know, as Mike McKee just reminded 0:21:46.160 --> 0:21:48.600