1 00:00:02,360 --> 00:00:09,520 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. I'm Stephen Carroll and 2 00:00:09,600 --> 00:00:11,920 Speaker 1: this is Here's Why, where we take one news story 3 00:00:11,960 --> 00:00:14,040 Speaker 1: and explain it in just a few minutes with our 4 00:00:14,080 --> 00:00:29,960 Speaker 1: experts here at Bloomberg. Since the start of the war, 5 00:00:30,080 --> 00:00:32,920 Speaker 1: the US and Israel have been attacking sites across Iran 6 00:00:33,360 --> 00:00:36,080 Speaker 1: in response to Ihran has fired hundreds of missiles and 7 00:00:36,159 --> 00:00:39,320 Speaker 1: drones at targets around the Middle East, from its neighbors 8 00:00:39,360 --> 00:00:42,000 Speaker 1: in the Gulf, but also reaching as far as Cyprus 9 00:00:42,000 --> 00:00:44,920 Speaker 1: and Turkey. As the shock of the opening days of 10 00:00:44,960 --> 00:00:48,199 Speaker 1: the conflict gives way to a more sustained campaign, some 11 00:00:48,320 --> 00:00:51,280 Speaker 1: key questions are emerging, like who could run out of 12 00:00:51,280 --> 00:00:55,000 Speaker 1: weapons first, and when there's really a race on to 13 00:00:55,000 --> 00:00:58,279 Speaker 1: figure out who expends their ammunitions first and fastest. 14 00:00:58,360 --> 00:01:00,720 Speaker 2: I don't believe that the US entered this going okay, 15 00:01:00,760 --> 00:01:03,360 Speaker 2: we only have enough missiles for one week, two weeks, 16 00:01:03,400 --> 00:01:04,679 Speaker 2: three weeks, or even four weeks. 17 00:01:04,760 --> 00:01:08,000 Speaker 1: I think it's really about the temple of taking out 18 00:01:08,120 --> 00:01:11,800 Speaker 1: the Iranian capacities for dromes and ballistic missiles. 19 00:01:11,840 --> 00:01:14,240 Speaker 2: But if you look at the basic math before the war, 20 00:01:14,440 --> 00:01:17,759 Speaker 2: it certainly favored Iran and just share numbers. The question 21 00:01:17,840 --> 00:01:21,319 Speaker 2: becomes how effective is it being at degrading those capabilities. 22 00:01:22,000 --> 00:01:25,800 Speaker 1: Here's why the around war could hinge on missile math. 23 00:01:28,680 --> 00:01:31,560 Speaker 1: Becha Wasser leads our defense research at Bloomberg Economics, and 24 00:01:31,600 --> 00:01:34,560 Speaker 1: she joins US now for more. Becca, First of all, 25 00:01:34,560 --> 00:01:37,720 Speaker 1: what do we know about Iran's stockpile of missiles and 26 00:01:37,800 --> 00:01:39,320 Speaker 1: how many they may have left? 27 00:01:39,600 --> 00:01:42,680 Speaker 2: So nobody knows exactly how many they have left right now. 28 00:01:42,760 --> 00:01:44,959 Speaker 2: But I think the most important thing is it's not 29 00:01:45,040 --> 00:01:48,320 Speaker 2: just about the missile numbers, it's about whether they can 30 00:01:48,440 --> 00:01:53,160 Speaker 2: actually use those missiles. And the United States has really 31 00:01:53,200 --> 00:01:57,400 Speaker 2: focused on degrading Iran's missile program, going after the missile 32 00:01:57,480 --> 00:02:01,320 Speaker 2: launchers and making it so those missile that Iran does 33 00:02:01,360 --> 00:02:04,760 Speaker 2: still have they can't fire them. But that being said, 34 00:02:05,040 --> 00:02:09,720 Speaker 2: prior to the Twelve Day War, Iran had approximately two 35 00:02:09,760 --> 00:02:13,360 Speaker 2: thousand to three thousand ballistic missiles and it fired at 36 00:02:13,480 --> 00:02:17,880 Speaker 2: least five hundred of those. It spent some time reconstituting 37 00:02:18,360 --> 00:02:21,560 Speaker 2: prior to this current conflict, so they probably have a 38 00:02:21,600 --> 00:02:24,720 Speaker 2: sizeable amount. And it's worth noting that they've got missiles 39 00:02:24,800 --> 00:02:27,960 Speaker 2: of different ranges. Short range missiles that they've used to 40 00:02:28,160 --> 00:02:32,080 Speaker 2: strike the Gulf States, medium range missiles that they've used 41 00:02:32,240 --> 00:02:35,880 Speaker 2: in places like Jordan and Israel, as well as some 42 00:02:36,000 --> 00:02:38,839 Speaker 2: long range missiles that we haven't really seen play such 43 00:02:38,840 --> 00:02:41,440 Speaker 2: a large role in this fight. They also have a 44 00:02:41,520 --> 00:02:45,160 Speaker 2: number of drones and cruise missiles, and those also come 45 00:02:45,200 --> 00:02:45,760 Speaker 2: into play. 46 00:02:46,320 --> 00:02:48,560 Speaker 1: Well, let's talk about a bit more about the drones, 47 00:02:48,600 --> 00:02:51,320 Speaker 1: which are of course cheaper and faster to produce. What 48 00:02:51,400 --> 00:02:53,440 Speaker 1: do we know about the capacity that Iran has in 49 00:02:53,480 --> 00:02:54,040 Speaker 1: that area. 50 00:02:54,800 --> 00:02:59,399 Speaker 2: So Iran, as by my count, fired over three thousand 51 00:02:59,480 --> 00:03:02,600 Speaker 2: drones at the Golf States alone at this juncture in 52 00:03:02,680 --> 00:03:06,040 Speaker 2: time in the conflict. As you said, they're cheap, they're roughly, 53 00:03:06,320 --> 00:03:10,320 Speaker 2: you know, twenty to fifty thousand dollars. They've used them 54 00:03:10,360 --> 00:03:14,480 Speaker 2: to great effect to create a number of economic costs 55 00:03:14,520 --> 00:03:17,200 Speaker 2: as well as psychological costs on the Golf States and 56 00:03:17,240 --> 00:03:21,040 Speaker 2: the global economy. They've managed to fire these at a 57 00:03:21,080 --> 00:03:23,800 Speaker 2: pretty consistent rate, and part of that is because they 58 00:03:23,800 --> 00:03:26,920 Speaker 2: can't rely on their missiles as much, so they've tried 59 00:03:26,919 --> 00:03:30,040 Speaker 2: to make up for that with their use of drones. 60 00:03:30,639 --> 00:03:35,040 Speaker 2: We imagine that right now there is still some drone capacity, 61 00:03:35,160 --> 00:03:39,760 Speaker 2: drone production capacity that Iron still has, but a lot 62 00:03:39,760 --> 00:03:42,240 Speaker 2: of the US and Israeli strikes have also tried to 63 00:03:42,240 --> 00:03:47,280 Speaker 2: go after some of the drone storage locations and production facilities, 64 00:03:47,320 --> 00:03:50,400 Speaker 2: really going after the heart of their drone and missile 65 00:03:50,440 --> 00:03:53,520 Speaker 2: programs and making it so that they can't replenish and 66 00:03:53,560 --> 00:03:57,400 Speaker 2: they can't reconstitute, either during the conflict or into the future. 67 00:03:57,760 --> 00:03:59,800 Speaker 1: So that speaks to I suppose the possibility of them 68 00:03:59,800 --> 00:04:03,760 Speaker 1: being able to replenish those stocks too. What about the 69 00:04:03,800 --> 00:04:06,320 Speaker 1: pace of attacks that we've seen, though there's been some 70 00:04:06,480 --> 00:04:09,720 Speaker 1: change in cadence as we've moved into the second week 71 00:04:10,320 --> 00:04:13,000 Speaker 1: of this war, what does that tell us about the 72 00:04:13,040 --> 00:04:15,040 Speaker 1: strategy that Iran appears to be adopting. 73 00:04:15,760 --> 00:04:20,440 Speaker 2: So, by my calculations, Iran's missile and drone attacks are 74 00:04:20,560 --> 00:04:25,479 Speaker 2: down approximately eighty three percent from the start of the conflict, 75 00:04:25,640 --> 00:04:28,000 Speaker 2: and there's a few different reasons for this. The first 76 00:04:28,120 --> 00:04:31,960 Speaker 2: is those initial salvos were quite large. They were intended 77 00:04:32,040 --> 00:04:35,760 Speaker 2: to overwhelm They were intended to overwhelm air defenses, to 78 00:04:35,880 --> 00:04:38,240 Speaker 2: extract costs, and to try and make it so that 79 00:04:38,279 --> 00:04:42,359 Speaker 2: the Gulf States in particular didn't become partied to the fight. 80 00:04:43,080 --> 00:04:47,440 Speaker 2: Since then, we've seen continued use of those drone attacks, 81 00:04:47,800 --> 00:04:51,840 Speaker 2: and part of that is because of the attrition that 82 00:04:51,920 --> 00:04:55,000 Speaker 2: Iran has taken to some of its missile launchers and 83 00:04:55,080 --> 00:04:58,279 Speaker 2: trying to continue to use what it can. But even 84 00:04:58,320 --> 00:05:01,520 Speaker 2: though drones don't require dead catered launchers, you still have 85 00:05:01,600 --> 00:05:03,800 Speaker 2: to move them out into the open. You need to 86 00:05:03,839 --> 00:05:07,160 Speaker 2: position them and be able to get them off the ground, 87 00:05:07,279 --> 00:05:11,040 Speaker 2: and that means that they're viable targets for both US 88 00:05:11,080 --> 00:05:14,839 Speaker 2: and Israel to strike. So that has also degraded some 89 00:05:14,960 --> 00:05:18,880 Speaker 2: of the tempo that we've seen in those attacks. Really, 90 00:05:18,920 --> 00:05:20,920 Speaker 2: what I think we're seeing right now is a shift 91 00:05:20,960 --> 00:05:24,240 Speaker 2: to what I would term an attritional approach from Iran, 92 00:05:24,640 --> 00:05:27,159 Speaker 2: where they're in it for the long haul and they're 93 00:05:27,200 --> 00:05:31,800 Speaker 2: trying to impose costs slowly over time, and all they 94 00:05:31,800 --> 00:05:33,719 Speaker 2: need to do is just keep up the pace of 95 00:05:33,760 --> 00:05:36,960 Speaker 2: attacks and make it so that there are attacks every 96 00:05:37,000 --> 00:05:42,440 Speaker 2: single day rather than have intense attacks every single day. 97 00:05:42,800 --> 00:05:45,080 Speaker 2: We've also seen them have a shift in targeting. Where 98 00:05:45,080 --> 00:05:49,000 Speaker 2: they're targeting has seemingly gotten better. Rather than these large 99 00:05:49,040 --> 00:05:53,160 Speaker 2: salvos of both drones and missiles, we see drones being 100 00:05:53,200 --> 00:05:58,040 Speaker 2: able to cause some damage to critical infrastructure, including oil infrastructure, 101 00:05:58,080 --> 00:06:02,360 Speaker 2: AI data centers, pop releation centers, as well as really 102 00:06:02,360 --> 00:06:06,760 Speaker 2: critical military hardware like radars needed for air defense. So 103 00:06:06,960 --> 00:06:09,800 Speaker 2: we're seeing the start of a cost and position strategy. 104 00:06:10,320 --> 00:06:13,680 Speaker 2: That means that Iran's probably also trying to preserve some 105 00:06:13,760 --> 00:06:15,840 Speaker 2: capabilities in case of a long war. 106 00:06:16,600 --> 00:06:19,080 Speaker 1: What about the weapons that the US and its partners 107 00:06:19,080 --> 00:06:21,800 Speaker 1: are using to defend against Iran's attacks, and of course 108 00:06:21,839 --> 00:06:24,640 Speaker 1: the continuing strikes on the US and Israeli sides as well, 109 00:06:25,080 --> 00:06:29,680 Speaker 1: stretched to those stockpiles, and how quickly could they be replaced? 110 00:06:29,920 --> 00:06:34,200 Speaker 2: So I think it's worth making a difference between air 111 00:06:34,240 --> 00:06:37,960 Speaker 2: defense interceptors and some of the offensive missiles that the 112 00:06:38,120 --> 00:06:42,000 Speaker 2: US and Israel are using. The offensive missiles, while yes, 113 00:06:42,040 --> 00:06:44,920 Speaker 2: there are limited stockpiles for some of those higher end 114 00:06:45,200 --> 00:06:49,320 Speaker 2: long range capabilities, they do exist in greater numbers, and 115 00:06:50,000 --> 00:06:52,720 Speaker 2: I think that it's very likely that the United States 116 00:06:52,720 --> 00:06:57,000 Speaker 2: and Israel could sustain the conflict over time without having 117 00:06:57,080 --> 00:07:01,720 Speaker 2: to dip too far into their stockpiles, although there may 118 00:07:01,800 --> 00:07:05,920 Speaker 2: be some pulling of missiles and munitions from one theater, 119 00:07:06,120 --> 00:07:09,080 Speaker 2: say Europe or the Indo Pacific, to the Middle East. 120 00:07:09,640 --> 00:07:12,440 Speaker 2: Air defense interceptors are a little bit harder because they're 121 00:07:12,520 --> 00:07:16,080 Speaker 2: so in demand. There's never enough air defense to go around, 122 00:07:16,480 --> 00:07:19,520 Speaker 2: and there's air defense for the US, and then there's 123 00:07:19,520 --> 00:07:22,280 Speaker 2: also the air defense interceptors that it sells to the 124 00:07:22,320 --> 00:07:26,640 Speaker 2: Gulf States and other regional allies. So when you have that, 125 00:07:26,680 --> 00:07:29,640 Speaker 2: there is this stress and strain on the US defense 126 00:07:29,680 --> 00:07:32,720 Speaker 2: industrial base to produce more, and they're trying to quickly 127 00:07:32,800 --> 00:07:36,800 Speaker 2: ramp up production. There's a new push to quadruple production 128 00:07:37,120 --> 00:07:40,720 Speaker 2: of really critical interceptors, but that's not going to happen 129 00:07:40,880 --> 00:07:44,920 Speaker 2: until twenty thirty and you're moving from producing say ninety 130 00:07:45,000 --> 00:07:48,800 Speaker 2: six THAD interceptors per year to close to four hundred 131 00:07:49,160 --> 00:07:52,640 Speaker 2: in the twenty thirties, so replenishment is not going to 132 00:07:52,640 --> 00:07:53,080 Speaker 2: be quick. 133 00:07:53,760 --> 00:07:56,680 Speaker 1: All of that being said, if the fighting then continues 134 00:07:56,720 --> 00:07:59,880 Speaker 1: at this intensity, what is likely to become the most 135 00:08:00,040 --> 00:08:03,320 Speaker 1: emitting factor? First, I think. 136 00:08:03,240 --> 00:08:06,160 Speaker 2: The most limiting factor is not the one that you 137 00:08:06,200 --> 00:08:10,600 Speaker 2: can count. It's not missiles and munitions. It's not going 138 00:08:10,640 --> 00:08:14,120 Speaker 2: to be things like force readiness. It's going to actually 139 00:08:14,160 --> 00:08:18,120 Speaker 2: be political will. The ability to wage war, and frankly, 140 00:08:18,160 --> 00:08:21,720 Speaker 2: the ability to terminate war is so based on political will, 141 00:08:22,000 --> 00:08:25,240 Speaker 2: and it's going to require leaders who are able to 142 00:08:25,280 --> 00:08:28,360 Speaker 2: do that, and that is something that we can't quite quantify. 143 00:08:28,440 --> 00:08:30,920 Speaker 2: And I think We're already starting to see shifts in 144 00:08:31,000 --> 00:08:34,640 Speaker 2: that direction. We're starting to see President Donald Trump say 145 00:08:34,679 --> 00:08:36,920 Speaker 2: that the war is going to end soon and he 146 00:08:37,000 --> 00:08:39,640 Speaker 2: can end it whenever he wants. At the same time 147 00:08:39,679 --> 00:08:42,600 Speaker 2: that he's saying the US can sustain this conflict for 148 00:08:42,640 --> 00:08:45,440 Speaker 2: as long as it takes. So, when it comes down 149 00:08:45,440 --> 00:08:47,600 Speaker 2: to it, what we should be looking at, it's not 150 00:08:47,760 --> 00:08:50,000 Speaker 2: just the math, it's also the political part. 151 00:08:50,480 --> 00:08:53,920 Speaker 1: Okay, beca wisser leading our defense research at Bloomberg Economics. 152 00:08:53,960 --> 00:08:57,320 Speaker 1: Thank you. For more explanations like this from our team 153 00:08:57,320 --> 00:09:00,160 Speaker 1: of three thousand journalists and analysts around the world, go 154 00:09:00,240 --> 00:09:04,960 Speaker 1: to Bloomberg dot com slash explainers. I'm Stephen Carroll. This 155 00:09:05,080 --> 00:09:07,440 Speaker 1: is here's why. I'll be back next week with more. 156 00:09:07,720 --> 00:09:08,520 Speaker 1: Thanks for listening.