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- [00:00]
A
Par le tu francais hablas espanol, par le italiano. If you've used Babbel, you would. Babbel's conversation based technique teaches you useful words and phrases to get you speaking quickly about the things you actually talk about in the real world. With lessons handcrafted by over 200 language experts and voiced by real native speakers, Babbel is like having a private tutor in your pocket. Start speaking with Babbel today. Get up to 55% off your Babbel subscription right now at babbel.com acast spelled B A B B E L.com acast rules and restrictions may apply.
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B
Hello everyone, and welcome to Amanpour. Here's what's coming up. Tensions escalate as the US And Iranian militaries trade shots over the Strait of Hormuz. Former U.S. ambassador to NATO Ivo Daalder joins us. Then the Supreme Court guts the Voting Rights act reaction from civil rights activist Martin Luther King. The third plus energy expert Jason Bordoff shares with Walter Isaacson the potential global consequences of the Iran shock. Welcome to the program, everyone. I'm Bianna Go Rodriguez, New York, sitting in for Christian Almanpour. Tensions are rising in the Strait of Hormuz as the US Military says that it blew up six small Iranian boats after Iran launched multiple cruise missiles, drones and small boats at US Navy ships and at commercial ships being protected by the US Military. This is according to the head of US Central Command. US Admiral Brad Cooper says that he strongly advised Iranian forces to steer clear of US Military assets. Meanwhile, negotiations do not appear to be making much headway here. Here's what President Trump said over the weekend.
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C
Again, they want to make a deal. They're decimated. They're having a hard time figuring out who their leader is. They don't know who their leader is because their leader is gone. Their leader that their former leader, Khomeini. But we'll see.
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B
Iran, for its part, disputes these claims. So we start this week with the same level of uncertainty as we did last week. The conflict now in its third third month. Ivo Daalder was the US Ambassador to NATO in the Obama administration. He joins me now from Chicago. Ivo Daalder, welcome to the program. So let's just start with the breaking news. The UAE saying that it has intercepted three Iranian missiles and also issuing a statement saying that they call this a dangerous escalation and that they reserve the right to retaliate given the ceasefire being as shaky as it already is. Do you see that at some point sooner, rather than later the United States or Israel once again resuming kinetic action.
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D
Well, I think the possibility increased as a result of the events in the last few hours. Shooting missiles towards the uae, although intercepted and apparently no real casualties, is not something that the United States or Israel or the UAE for that matter, can let go unanswered. And this is the difficulty that we find ourselves. We're in a stalemate in a ceasefire without any clear sign of how we should end it. Clearly, the Iranians believe that they have the upper hand because they control access to and from the Strait of Hormuz, or at least are trying to do that. The President hasn't been willing to break that with military force. And so you see this situation in which people are starting to communicate not by negotiations, but by shooting missiles and downing aircraft and going after boats. That is a very dangerous situation, particularly when the communication between the United States and Iran is going through third parties. The best thing to do is to sit down at the table, figure out how to move forward on this conflict in a way that satisfies as many sides as possible.
- [04:25]
B
And thus far with the revised 14 point plan that Iran returned to the negotiating table with. Though we haven't had a formal response from the United States or President Trump yet, it does appear to be dead on arrival given the demands that Iran continues to make and not attempting to have earnest conversations about its nuclear enrichment program. Now at least they continue to want to put that off for another time. And it's coming after the President over the weekend announced that he would be dedicating some 15,000 service members and over 100 aircraft to what he's calling Project Freedom. That's helping to restore transit there among the vessels who are essentially stuck in the strait. Since the blockade has been enacted, the irgc, as we know, has been continuing to threaten to strike, retaliate against American vessels there, American military ships as well. Do you see this as the logical next step for the US to be taking? We had General Wesley Clark on who said that this was in fact, in his view, the right step for the US to be making. Now, do you agree?
- [05:33]
D
Well, I think this is a half measure. These are the measures that the President has put in place is to say that to tell the ships that are stuck in the Gulf to just take the transit and they'll show you guide where there are no mines and they may provide some air cover and maybe even some naval cover. But this is not an escorting mission. This is not a mission which says you shoot at any one of us. We'll shoot at you in the way that we did back in the 1980s. I mean, at some point it is important to open up the Gulf. And you can either do that through negotiation or you can do it through military force. The negotiation doesn't seem to be working. And so escalating in order to try to help ships that are stuck to get out and more importantly to restore the flow through an international waterway may be, may be the best way to solve this question. But you do have to answer the question before you go into this. How far do you want to take this? Let's say that you try to escort these ships through. They do get attacked. Indeed. Apparently a UAE tanker was just attacked overnight. Or our ships get attacked, then you respond and how far do you want to take this? We are in this pickle because frankly, the military option is no, no more attractive than the diplomatic option. And that's why the President, every time he's confronted with the reality that the Iranians are saying no, not because they're divided or they don't have leadership, as the President keeps on saying, but because they think they have the upper hand. The only way to deal with that is either through, through negotiations that says, okay, we'll give you what you want more or less, or escalating militarily, and we don't want them escalate militarily. The President doesn't want to escalate militarily because as we saw in the six weeks of war, escalating military doesn't necessarily get you what you want, whether it's the nuclear issue, whether it is opening up the strait, or whether it is a change of regime. And that is the fundamental strategic dilemma that the United States finds itself in, having started a war without thinking through the consequences of what would happen.
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B
The President announces Operation Freedom as sort of a goodwill gesture to what he says were a number of international countries that have asked him to do just this. Though President Macron made it explicitly clear today that France will not be participating, saying they do not want to be dragged into a wider war. If our close allies, if our NATO partners, view this as a strategic trap, is there something that US Intelligence is seeing, perhaps that they're not?
- [08:15]
D
Maybe. And if they do, then perhaps it would be a good idea to start consulting with allies rather than shouting at them through true social posts and what have you and share that intelligence. If there is something and a strategy that the United States thinks it has to open up the straits, that it can do so with minimal risk of escalation, then Please do share that with the Europeans. They have the capability, they have the forces. In fact, they have naval capabilities the United States doesn't have, including mine clearing vessels, which the U.S. of course, withdrew back last November, that are necessary to open up the Gulf. But that requires the kind of cooperation that we used to have with our allies but no longer seem to have. The president is more interested in blaming Europe for the problem that we're having and threatening either tariffs, as he did on Friday, or withdrawing troops, as he also did on Friday, rather than finding a way to bring the Europeans along. And as long as that is the case, I don't see any country in Europe, whether it's the French or the British or anyone else, getting involved in a situation which, frankly, the US Military hasn't figured out how to resolve itself.
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B
And yet it is those European countries, one could argue, that are suffering even more than the United States is, given the rise in energy prices stemming from this war. A war that they were consulted about. True. A war that they were surprised when it first launched February 28th. And obviously, we've seen the rhetoric between President Trump and some of these leaders directed at these leaders and at NATO. All of that aside, do they not stand to benefit at this point to help, at least with regards to opening up the strait and hopefully lowering energy costs and thus taking away some of the leverage that Iran seems to believe it has?
- [10:09]
D
Yeah, they would stand to benefit if there was an easy way to open up the straits. But there isn't an easy way to open up the straits because the Iranians still have the capacity to attack commercial and military vessels in large numbers. The problem is that the President of the United States and the Prime Minister of Israel decided to go to war in the mistaken belief that they had all the cards that our military capability would devastate and destroy Iran. To the extent that it couldn't respond. Iran did respond. It closed the Strait of Hormuz quite predictably. It still has a very large capacity of naval these, the Mosquito boats and other naval vessels and missiles and drones that it could use to inflict damage on anyone who was trying to get through the strait without their direct agreement. And as long as that is the case, the military option for opening up the strait is dangerous and risks further escalation. And the Europeans, not having been consulted, not having been asked to be part of this from the very beginning, are saying, we're not going to risk involving ourselves in this situation until and unless we know that it is safe to do so. And that is the dilemma that we have faced. The reality is the president keeps on saying the Iranians don't have cards, they do have cards. They can close the Strait of Hormuz at a cost that they are willing to bear, and frankly, no one else is willing to bear. That is the problem that we're facing.
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B
President Trump also, in the meantime, hitting Europe with a 25% tariff on cars, while at the same time simultaneously demanding that they do more to open up the Strait of Hormuz. Can the US Effectively wage a trade war or relaunch a trade war with its NATO allies, while at the same time trying to get them to work together to open up the strait and resolve the conflict?
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D
It's a very Trumpian notion that the way you deal with allies is to try to beat them over the head as hard as they can so they will come in running towards you. And the last year and a half has taught, I think, most of our allies, unfortunately, that the better way to deal with the United States under these circumstances is to say no and to stand up to the United States. That is what China has demonstrated. And as a result, the US Relationship with China is. Is not as bad as it is between the United States and its allies. And so I think the allies have learned that it is probably best most of the time just to ignore what the President is saying and to focus on what they need to do themselves, which is to reduce dependence on the United States in the security sense, reduce dependence on the United States in an economic sense, and if necessary, if pain is inflicted on them economically, to retaliate. And the reality is that the European Union is still the largest trading partner of the United States. It is the largest investor in the United States. And to the extent that the President of the United States is determined to damage that economic relationship, the Europeans are going to suffer. But the Europeans have means to make Americans suffer as well. Wouldn't it be better if we return to the kind of policies we had before, where we work together with our allies to squeeze those who we oppose, including the Iranians, in terms of economic and diplomatic levers, including the Chinese, on the questions of technological and other competition that we're engaged in, rather than trying to beat them into. Into submission so they could do our bidding? They're not going to do it. They have decided, after all this time that enough is enough. They're moving ahead. They're meeting today, as we speak, in. In Armenia to figure out ways to reduce their dependence on the United States and to do more alone. That's not good for The United States, it's frankly not good for Europe, but that's where we are, unfortunately.
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B
And it's clear the United States in this administration does not view NATO as a whole and a number of these countries as so called model allies. The US withdrawing, pulling some 5,000 troops from Germany, most would agree that that came in response. That was the President and his frustration with German Chancello Mertz accusing the US of being humiliated by Tehran. And that was sort of his retribution. And in addition to that, perhaps even more alarming for Germany and US allies is the US is walking back a 2024 agreement to deploy Tomahawk and hypersonic missiles to Germany, creating what many would view as a major deterrence gap against Russia now closing. Can you just talk about how Moscow is viewing this? All right.
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D
Oh, I think Moscow is looking at this and just can't believe it's luck. Listen, Vladimir Putin and the Russian army were on their ropes. They were losing 35 to 40,000 troops on the front lines. In Ukraine, 96% of the Russian casualties were being inflicted not by direct gunfire, but by drones and other autonomous vehicles. The economy was in a deep tailspin. And all of a sudden, two things happen that change that situation. Number one, oil prices rise. And of course, revenues for the Russian oil sales means that the Russian coffers are being increased at $150 million a day. That is significant. And then secondly, the United States and Europe are at loggerheads precisely in the way that Russians and indeed the Soviet Union has long wanted. The one thing that the Russians have wanted is the United States to leave Europe. And the United States is now doing exactly that by saying that it's taking out its troops. It's not deploying its most advanced weaponry. In fact, it is telling the Europeans, including the so called model allies, whatever that means, that they're not going to be getting the weapons that they have purchased because of course, the Iran war has depleted US Stockpiles and the US has to get those weapons before anybody else does. So the relationship is in deep trouble on the security side. We talked about the economic side. And that leaves Vladimir Putin looking out and saying, wait a minute. What I see is a lesser US Commitment, a fact of withdrawal in some forms by the United States from Europe. That gives me more options, it gives me more opportunities. Let me wait it out in Ukraine and maybe find another way to threaten security in Europe in another way, because I don't have to worry so much as I used to about what the US Would do.
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B
And yet, given all of that I would like to get you to comment to reporting from CNN and others that Putin, while may be benefiting from both the fracturing within NATO and the strait closing and thus the spike in oil prices, intelligence is showing that he's increasingly more isolated than ever in bunkers due to paranoia over drone strikes from Ukraine. His domestic approval ratings are taking those independent. The very few independent agencies that can still poll are showing that the numbers of Russians who are supporting him and this war continue to deteriorate. So how do you think that is going to impact his thinking as far as how he conducts this war against Ukraine? And given that internal paranoia, do you think he's really focused as much about what's happening outside of his borders in Europe with the United States?
- [17:48]
D
Yeah, I think he's focused on the Ukraine war and I think his paranoia will likely make him double down rather than to give in. He has bet an awful lot on success in this Ukrainian war. He's lost over 1.3 million people either dead or severely wounded. He has changed the entire economy from a consumer economy to a war economy. He has asked a lot from the people of Russia in order to support this war. So he's going to double down. I fear escalation at this point more than de escalation.
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B
Escalation from who?
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D
From the Russians. I mean they have other means as we know, including of course, nuclear weapons. We had a threat of nuclear weapons a few years ago back in October of 2022. I think the more the pressure is on him, the more isolated he feels, the more he may well double down. I worry that he may not is looking for a face saving way out. This is the time when the President of the United States, rather than conducting a war that seems to really not be moving in the right direction, can tell Vladimir Putin maybe it's time rather than thinking about escalation. It's time for you to find a resolution. Let's get to the table. Let's find a way to end this war that at least achieves something for you, while at the same time ensuring Ukraine's security. This is a time for real diplomatic engagement. I don't see that happening by the President of the United States. I don't think the people he has sent are capable of doing so. But we are in a fraud moment where it seems to me the Russians are increasingly seeing the Ukrainians taking the advantage and the initiative and they're faced with the choice. Do I give in and give up what I have suffered for so greatly, or do I find a way out to escalate knowing Vladimir Putin. The latter, I think, is unfortunately more likely than the former.
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B
Ivo Daalder, we'll have to end it there. Thank you so much for the time. Really appreciate it.
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D
My pleasure.
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B
Do stay with cnn. We'll be right back after the break. Claire.
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E
I'm CNN tech reporter Claire Duffy. This week on the podcast Terms of Service, Mercedes Kilmer, thank you so much for doing this. When director Corti Voorhees and his brother John, who is co producing this film, first approached you about building this AI likeness of your dad for as deep as the grave, what was sort of your thought process as you were considering this? Once I understood his involvement in the project differently, then I agreed to participate. My dad always saw technology as something that could augment or expand our potential as humans rather than to replace us. So he saw it very optimistically. And when Top Gun was coming out, we talked a lot about it. And I was like, what do you want to do?
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F
What?
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E
And he was like, I would be in a video game, like, relax. Listen to CNN's Terms of Service wherever you get your podcast.
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B
American democracy activists are grappling with a historic decision by the US Supreme Court, which last week slashed yet another key part of the 1965 Voting Rights Act. It was more than 60 years ago when President Lyndon B. Johnson signed the bill designed to prohibit racial discrimination in voting. Senator Raphael Warnock says that the Supreme Court ruling tarnishes the legacy of Martin Luther King, Jr. Who was instrumental in pushing Congress to pass the landmark law.
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G
We've heard from the Supreme Court. I'm waiting to hear from my colleagues in the Congress. Quite frankly, many of them will line up come January heaping praises on Martin Luther King, Jr. Well, let the word go forth that you cannot remember Martin Luther King, Jr. While sitting silently as his legacy is being dismembered. Now is the time to speak
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B
with me. Now is the civil rights leader's son, Martin Luther King iii, a civil rights activist in his own right. Welcome back to the program from Atlanta. Really appreciate you joining us today to discuss such an important subject matter and so consequential. We know Justice Elena Kagan's dissent argued that the majority has essentially, quote, eviscerated the Voting Rights Act. You've gone a step further forward calling it a moral indictment. Why do you feel this decision is a retreat from voting justice?
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H
Well, I think that historically we went to the court and the court expanded rights. But when you limit rights and you also act as if there's still no discrimination. And in Fact, the result of what you have done will potentially close the door for a number of congresspersons, particularly the Black Caucus. Perhaps also, it impacts not blacks, not just the black community, but the brown community and all of the community. I mean, I think we always need to be creating opportunities for more people to vote, not suppressing that right and suppressing a part of the population. And so when you talk about what is morally right, the courts did that back in 19. Well, actually, I should say Congress did it in 1965 with the passage, but the courts allowed it for a number of years, but the job was not complete. There may be a day when it is complete, but it's just not at this point.
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B
This case involved Louisiana specifically. And so for our viewers there, for voters in Louisiana who are already in casting ballots, we should note in the primary that has now been suspended, what does this mean for their representation in 2026?
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H
Well, it could mean that they have no representation. They really are not represented. I mean, it's unconscionable that in the middle of an election process, it's even one thing to say, okay, we're going to phase this in and, you know, for some years down or next election cycle, because so many voters will be uninformed, will not know what is going on and that they are being disenfranchised. They will feel it and they will know it. But it's really just unconscionable that people are being diminished. This is almost. It's unheard of. But in this particular climate, it seems like it's all right. And the solution, of course, is to stay engaged, to stay on the battlefield, to get registered early and make sure that your vote counts. But the fact of the matter is, if you don't really know what's going to happen, how do you do that? And so the system has got to be corrected. But people have to stay involved. I mean, this government is supposed to be for the people, not for some people. Not. It's like as opposed to people electing officials, officials are deciding who they want to retain them in power. That's just wrong.
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B
Your father in 1957, made a speech called Give us the Ballot. And in it, Give us the ballot, he said, give us. He said this. So long as I do not firmly and recitably possess the right to vote, I do not possess my. I cannot live as a democratic citizen observing the laws I have helped to enact. How much of his life's work in Selma was just undone by this court's decision?
- [25:47]
H
Well, again, I think a significant amount of the work is either discounted or attempted to be abolished. I mean, you know, history is very important to understand. And there are some in office today who are trying to eliminate and abolish the history of all people. Because when you know the history, you don't repeat the mistakes of the past. But if you don't know, you operate like a blind person. And so this is a part of attempting to diminish. I actually believe that people going to rise up. My hope is in young people. Our daughter is 18 years old and she's just turning 18. She and a whole group of her peers. In fact, she was born right before President Obama was elected. And so for eight years they saw government work. All of those young people now will have an opportunity who were born in that same year in 2008 will have an opportunity to vote for the first time and engage. And we're going to see, I think something different. But we have to keep fighting. I mean, as I said, we can't give up, we can't give out, we can't give in. We have to continue to move forward. There's a bill in the Congress right now that Congress refuses to pass which John Lewis authored before he died. And that would have given everybody that right in a way where everyone could participate in a not encumbered way. And so today when you are gerrymanding and you know, all of many states are talking about just changing this whole process because of a terrible Supreme Court decision, in my judgment that's going to haunt us at some point if we don't find a way to course correct. Just like so many other things that we may be doing in this nation. We must make a course correction. And the first thing is to stay engaged.
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B
Given the opportunities that you've just laid out that your daughter and her generation have. I think that that's what Justice Alito is using to claim that he's just updating the framework for a country that has changed dramatically since 1965. So he's essentially saying that discrimination is no longer really an issue today and that protections of Section 2 of the Voting Rights are Act are no longer needed. Explain to our viewers why he's wrong and what he may not be seeing that many minority voters are.
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H
Well, I think that again, if you all you gotta do is say that over half or almost half potentially of the Congressional Black Caucus would be gone. They've been representing folks for incrementally and every year there's been president progress made in terms of more congresspersons not just black congresspeople, but Latino, Hispanic, congressperson, persons from every walk of life being elected. So what he seems to be saying is racism doesn't exist anymore. And I wish that was the case. I honestly do wish. You know, my dad talked about the day when this could happen, but we just have not achieved that yet. And I think that voters need to understand everything shouldn't have to be about color, but we do have to create the concept of a color blind society. But that's just not real yet. I mean, when you look at the fact that 300 plus million African American women have been abolished from jobs in the federal government, I mean, there's others who've been abolished also. But I'm just saying that the significant fact, the most qualified of those in the African American community, black women, 300,000 gone. And there's no justification as to why we don't see the government operating any more efficiently. In fact, we see us spending more and more money on death and destruction. It's proposed that we spend at least $25 billion on the Iran war. And my only point would be this. If we're going to spend that much money on death and destruction, we ought to at least demand that we spend the equal or same or even more amount on life and the concept of creating and saving lives, not just on death and destruction.
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B
And by requiring proof of intent rather than just effect. That's one of the reasons why Justice Kagan has warned that Section 2 is now basically a dead letter, in her words. So in practice, how quickly will we see minority voting power diluted, especially in the South?
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H
Well, if all of the gerrymanding that is being proposed now in states like Florida, in states like Tennessee, in states like there are few, several others, if that happens, and all the Southern states, this is a lot of the African American population is moving back to the South. So you're moving back to the south and you're disenfranchised on day one of elections if all of what is being done goes into effect. So you're talking about an immediate impact, not next year, not two years from now, but immediately. And so again, that's why engagement is so important and it's very confusing. I don't even understand how you're going to explain to people with all of this in this short period of time while elections are going on right now. It's almost like you can't, if a car is broken, you can't fix it while you're driving. So the election is going on and you're Changing the system, to me, that generally would be illegal. And yet it seems that some are making it legal.
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B
Politico says now redistricting just went nuclear after this decision. We know that this was initially the Republicans under President Trump who was pushing for it in Texas. Now, obviously, we saw it taken up in California, Virginia. Now you've got Florida also engaging in this, as well as states like Louisiana and Florida are redrawing the map as we speak. Do you think that this just takes away any. When you talk about trying to reengage younger generations to get them involved, do you think that this just takes away a path for fairness and bipartisanship, nonpartisanship in terms of who they're voting for and how they vote?
- [32:34]
H
Well, I definitely think it certainly does, that it really, this is a hole in terms of what democracy is supposed to be about. I mean, that's why dad in 1957, in May, delivered give us the ballot speech. We can do so much if we're able to be engaged in the system. When you dramatically change the system and make it even harder for people to vote to find their polling places, I mean, new places will have to be established. It's a number of things, and this just should not be. America is better than what it has done, what it did when it decimated the Voting Rights Act. It started in 2013, of course. So they've been chipping away at it for a number of years. And finally it almost is watered down to nothing. That has got to change. And we've got to find a way to expand the opportunity for people to participate.
- [33:29]
B
And now there's just concern that this is a race really to the bottom. I mean, even Democrats who are reluctant to do this are saying, well, we don't have any other choice. If Republicans started this, we have to follow suit, fight fire with fire. And that ultimately leaves the voters who are on the losing end. I want to close by asking about how Democratic House Leader Hakeem Jeffries, what he said in response to this ruling as he was speaking at a press conference for members of the Congressional Black Caucus. Let's listen to what he said.
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G
Today's decision by this illegitimate Supreme Court majority strikes a blow against the Voting Rights act and is designed to undermine the ability to of communities of color all across this country to elect their candidate of choice. But we're not here to step back. We're here to fight back.
- [34:26]
B
How do you feel about his language there, calling the Supreme Court majority illegitimate?
- [34:34]
H
Well, I would not say. I will say there are probably a lot of people who feel that way. I mean, if we went back in history and during President Obama's tenure there was an entire year left and the leadership of Mitch McConnell would not allow, at that time, it was Merrick Garland later on who became attorney general. Him to be seated would not even allow a hearing to happen. So is that democracy? You know, you kind of change the rules when you want to accomplish something you want to accomplish. So from that perspective, there is, it does feel like there's not legitimacy because the court represents certainly who they represent and they're allowed to do that. You know, I would only encourage the court to engage. One of the things that goes even further is, you know, the courts are supposed to be a provision for checks and balances. And we need to ask the question, are the courts doing their jobs to provide checks, accountability? And some, many would say no. And I would almost have to agree with that. The court has got to do a better job. I mean, some have even talked about expanding the court and that probably is where we are. I think the leader, leader Jeffers, also talked about expanding the court.
- [35:54]
B
Would you support that?
- [35:55]
H
That isn't going to happen right now. I think that's something we need to strongly consider, particularly if a court is not going to fully engage in doing what the court should always do.
- [36:09]
B
All right, Martin Luther King iii, thank you so much for the time. I can't help but look at that beautiful portrait of your mother there over your left shoulder. So I've been listening to you and looking at her and just thinking about how much she and your father and you continue to. To do on this very important issue in speaking, speaking truth to power. Really appreciate the time. Thank you.
- [36:33]
H
Thank you for the opportunity. Thank you.
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B
And we'll be right back after this short break.
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F
I'm Jack McBrayer and I am back on the hunt to find even wilder.
- [36:46]
B
Oh no.
- [36:48]
F
Is this real?
- [36:49]
C
It is more outrageous.
- [36:51]
F
You like painting?
- [36:52]
B
It's my favorite color.
- [36:53]
C
Over the top houses on the market. Oh, look at this bathroom.
- [36:57]
F
And meet the fascinating people who call these one of a kind places home. How does one obtain a caboose?
- [37:06]
C
Zillow gone wild. All new season, Friday at 9:30 on HGTV.
- [37:15]
B
Now, as we've mentioned, the US Military is attempting to guide ships out of the Strait of Hormuz. Iran's blockade of this crucial waterway has been wreaking havoc in many countries with oil facing what our next guest calls the largest supply disruption we've ever seen in history. In his recent Foreign affairs article, energy expert Jason Bordoff details how governments are reassessing their reliance on global energy markets and why the biggest impacts of this crisis haven't quite hit America yet. He joins Walter Isaacson in this discussion.
- [37:47]
C
Thank you. Biana and Jason Bordoff, welcome to the show.
- [37:51]
F
Thank you. So good to be with you.
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C
You know, two decades ago, the United States imported, I think, 60% of its oil and natural gas. Now, with the world's biggest producer, we're an exporter. Has that helped cushion the blow of this Iran and the Srei de fourmus closure?
- [38:12]
F
It has, and a bit more than, to be honest, I had anticipated at the start of this. Of course, oil is still a global commodity. And whether you're an importer or an exporter, if there's a disruption halfway around the world, global prices will go up and the price of the pump is set by the global price, and consumers will feel that pain. And that's what's happened so far. Gasoline has gone from below $3 to well over $4 at this point. But there have been a few factors that have insulated the US More than would have been the case. Say, when I served in the White House 12, 30, 13 years ago, and we were trying to figure out how to take Iranian oil off the market to impose economic pressure on Iran because of its nuclear program. And we were really concerned about what it would do to the US Economy. First, the impact on the macro economy is smaller when increased consumer spending flows to domestic producers and shareholders rather than abroad. There has been this really interesting dynamic with the time lag before the US really feels the same pain the rest of the world does. The physical shortages of taking off up to 15 million barrels a day of global supply. With the Strait of Hormuz closed, you really saw physical shortages in Southeast Asia. People shortening work weeks, airlines having trouble refueling. Eventually that make that pain kind of with the time lag to move cargo ships around the world makes its way to the U.S. but it's taken two or three months. And so we had a little bit of a head start where we were feeling pain, but not as bad as
- [39:36]
C
the let me drill down, so to speak, on that time lag. When's it going to hit us more in the United States?
- [39:43]
F
It's coming. And, you know, oil prices already have kind of soared back to some of the highest levels we've seen since this Crisis started, around 1 10, $115 a barrel. Gasoline prices are going to keep going up because it is a global market. And, you know, at some point, there's dozens of tankers from Asia headed to the United States ready to load up US Crude if, if we can. And the price in the US Is going to have to rise high enough to keep those barrels here and meet domestic demand. So, global market. But we have seen a interesting disconnect where the physical price of oil started to be pretty disconnected from the so called traded price that you tend to see on your screen. Usually they're the same, but it was, we didn't see that disconnect in the US we saw it in Europe and we saw it in Asia. But if you keep the Strait of Hormuz closed, I don't know if it's two weeks, three weeks or six weeks, but we are headed to much higher oil prices because eventually if you have 15 million barrels a day of supply off the market, prices have to rise high enough to destroy 15 million barrels a day of global demand. And that's what happens.
- [40:49]
C
Well then wait, wait, wait. Why is it that the market hasn't priced us in? I mean, you look at future prices, you're Talking about only $100, $110 a barrel for domestic oil here.
- [41:00]
F
Yeah, I think there's a few answers to that. That futures price, you're talking about the sort of price of Brent or WTI that people tend to see as the headline oil price, that's technically a one month. So it's kind of what people think the price will be, not at this very moment to buy a barrel of crude, but say a month from now. And I think what we've seen the market doing, and part of this is Trump's own rhetoric, is betting that this is going to be over soon. And you've seen the administration sort of set time lags. It'll be over in two or three weeks or six weeks. We're past all of those deadlines, to be clear, and there doesn't seem to be any end in sight. But I think generally people have been betting this will be over sooner rather than later. And then we had some cushions built in. We released a lot of oil from the Strategic Petroleum Reserve. Inventories globally were quite high. So we've been drawing those inventories down. But there's only so long we were even taking ease sanctions on Iran and Russian oil that was floating in tankers on the water. You can argue about whether that's a good idea or a bad idea. But we had some buffers in the system. But those buffers recede pretty quickly.
- [42:03]
C
Well, I have a counterintuitive question then. Even if you look at the Futures for, say, September. Why is oil price so low?
- [42:13]
F
You know, before this conflict started, we had low, relatively low oil prices, 60, $70 a barrel. And estimates were that the oil production in 2026 would exceed global demand for oil by 2,3 to 4 million barrels a day. Estimates varied, but there was a broad consensus we were going to produce more oil than the world was going to consume, and that was weighing on prices. So that was the reality before this all started and we shut the Strait of Hormuz. If the Strait were to open tomorrow and within a few weeks or a month or two, you get that supply back online, we're back to that scenario where we were before. So again, people are betting that if this ends relatively soon and there's not yet been significant physical damage to the oil infrastructure in the region, that would take years to repair. So people think it could come back online, you know, relatively quickly. And then we're back to that oversupplied situation.
- [43:04]
C
You say if it. If it ends in two or three weeks, things go back to normal. It happens relatively soon. How long does the closure of the Strait of Hormuz have to last before we get to something that's really bad and hard to reverse?
- [43:20]
F
It's hard to know exactly. And oil markets tend not to move in a linear fashion. People kind of, in a trading sense and a physical sense, react in step changes. But I think in the next one to two months at most, if you continue to see 14, 15 million barrels a day of global supply off the market, prices are going to just continue, because there is no policy tool in the policy toolkit to deal with oil supply disruptions large enough to cope with a supply loss this large. It's by far the largest supply disruption we've ever seen in history, even back to the Arab oil embargo.
- [43:56]
C
So it's the largest disruption we've ever seen in history. And yet in some ways, it hasn't affected the economy of the United States. Are we more insulated than, say, Asia?
- [44:11]
F
I think we are. We're not immune, to be sure, but I think we are more insulated than parts of the world that are very heavy oil importers, where those physical shortages show up more. There's also a dynamic with natural gas, where the price of natural gas in the US is almost totally disconnected. It's below $3 here, and it's gone to $15 or $20 in Europe and Asia. There are some other buffers there, too, and I think that's important to acknowledge, say, in China. China has a strategic oil Reserve of more than a billion barrels. And the US has been selling our strategic reserve off both sides of the aisle, in my view, foolishly, I think out of a sense that the shale revolution gives us newfound security. And China has been, for energy security reasons, not just environmental or climate reasons, trying to reduce oil imports for decades by electrifying more of its economy. Half of the new car sold in China are electric because they don't want to be dependent on global oil imports. If you're in Southeast Asia and some lower middle income countries, Pakistan, Bangladesh, Thailand, Vietnam, the pain is particularly acute right now in those places. Much more so than we're feeling here.
- [45:19]
C
Why is jet fuel so expensive, especially in Europe now?
- [45:24]
F
Yeah, it's the nature of the refining system and where they import from and the way their refineries are optimized. And when you refine a barrel of oil, you get different products from it, gasoline, diesel, jet fuel, other things. And certain crudes, like everyone's talking about middle distillates now, certain types of crude produce more of some than others. So as the type of oil that tends to come out of the Strait over Hormuz has been disrupted, it's caused disruptions in the products that are produced when you refine a barrel of oil. And those are manifesting themselves more with some products than others. So as you said, more with jet fuel than say with gasoline and more in certain regions than others. Because we should remember the Gulf was not only the Strait of Hormuz. We say 20 million barrels a day went through it. That was about 15 million barrels a day of crude, but 5 million barrels a day of refined petroleum products. So there were refineries in the Gulf that couldn't get their jet fuel, their diesel out and people were seeing shortages.
- [46:23]
C
Why is it that the stock market had the best month in a long time? April was the best month in memory. It's hit record highs. Shouldn't this be affecting the U.S. economy?
- [46:38]
F
Well, it has affected inflation levels and has been somewhat of, of a drag. But as I said, I think the market generally and other guests you guys have had on recently have commented on this, have a sense that this is a short lived crisis. This will be over relatively soon. On relative basis, we are pretty better off than some other parts of the world. So I think it's kind of a timing question. And then you have some other parts that are a little more immune from global shocks like this. The AI boom is driving the US economy. China's economic growth forecast has been revised downward. Still not catastrophic, but revised Downward, partly because they depend a lot on exports. And this concern about for manufacturing, kind of what the global economic impact of this is going to look like on demand.
- [47:24]
C
For a long time we've talked about energy independence in the United States, sort of a phrase. And you've written this piece in Foreign affairs with Megan o', Sullivan, and you, I think, say that that's not a goal we should be chasing or even a concept that that's, that's very useful. Explain why.
- [47:43]
F
Yeah, it's a goal. Obviously, presidents for decades have talked about energy independence and depends how you define the term independence. The idea that the US has gone from a huge importer to a large exporter has certainly helped the US Economy. Helped from the geopolitical standpoint I just talked about. But what Megan and I wrote in Foreign affairs was that I think the lesson from the 1970s energy crises that many took was that more integration, interconnection and global cooperation increases, not decreases, energy security. After the Arab oil embargo, we created the International Energy Agency so consuming oil countries could have diplomacy and cooperation. When there were crises, we created strategic stockpiles that we collectively managed and shared to work together to put out in case of an emergency. We created an interconnected integrated global oil market. So what I talked about before, if there's a supply disruption, a tsunami hits Japan or a hurricane hits the US Gulf Coast, a global market gives you security because you can access supplies from other places. That didn't exist really in the 1970s when oil was sold in long term contracts between buyer and seller. I think in the world of geopolitical competition, fragmentation, the deteriorating world order that Mark Carney spoke eloquently about at Davos and so many others have countries increasingly view interconnection as a source of risk, not a source of strength. And we sort of warn about the downsides of that view. It is certainly the case that countries want to produce more at home. There's good arguments for that. But if you try to disconnect, take an approach that looks like autarky, as we called it, there's a lot of downsides. Downsides to that. Happy to talk more about.
- [49:27]
C
Well, tell me those downsides, because I'm looking around and thinking we're lucky. Strait of Hormuz closes, yet we have huge amounts of natural gas. We have our own oil. We're not that dependent on the ships coming through that strait.
- [49:43]
F
We're not, but we're still exposed to a global market. And as I described a moment ago, I think with natural gas, it's a bit different. But for oil, the benefit we have in addition to more economic activity, when prices go up, there are winners, there are losers. Not just losers, but we kind of. It's a timing question. We have like a head start, as we talked about before, of maybe two to three months before we're feeling the pain the rest of the world does. But in a global oil market, we're going to feel that pain eventually. Which is why one of the things you asked, why the US is better off today, it's not just because we're producing more, it's because we're using less as a share of our economy. Since the Arab oil embargo, the US economy has increased fourfold and oil demand has barely gone up. So when an oil shock has, we feel it less, it has less of an impact. So trying to have more electrification, as China did, of our use less oil through energy efficiency, through electrification, that also makes us more resilient. And then the thing to say, I think more than anything else is there's a cost to self sufficiency. If you're worried about solar panels and batteries from China, and there might be good reasons to worry about some of those things, and you want to make everything at home, you want to mine all your critical minerals, process all your lithium, you can do that. It's probably more expensive. And that's going to be true for lots of other parts of the energy system. So the question is what insurance premium society is willing to pay in a world that is increasingly seeing geopolitical risks and concerns. But if you really try to wall yourself off and make everything at home, that probably undermines your relationships and diplomatic alliances globally. But it also can be very, very expensive.
- [51:23]
C
You say that it hasn't fully affected the world economy yet, but oil shocks generally lead to global recessions at some point. Correct me if I'm wrong. Tell me, do you think we may be set up for a global recession even though the stock market keeps going up?
- [51:43]
F
You know, there are probably macroeconomists who'd have a more firmly held view on that. I'll say from an energy standpoint, you're right. There's a long history. Economist James Hamilton and others have documented how most major oil shocks have fed into recessions. But there are a number of buffers in place now that are stronger than we have seen before, including the fact, as I said, that the global economy is far less oil intensive now than it was in the past. You had this massive new source of supply in shale growing 9 million barrels a day over the last last decade or so, which is just an unprecedented increase in supply that helped to cushion the world. That's part of the reason we were a bit oversupplied, as I said before. So I think you're going to see a very we're already seeing quite an adverse economic impact in certain regions. One of the things that's different today is in the past when I said before, oil prices have to rise high enough to make people use less to destroy demand. That pain today, that demand destruction is being seen first and foremost in middle and lower income countries because that's where the growth in oil demand has been most pronounced the last 10 or 20 years is these emerging markets. So I think that's where you're going to see the worst economic effects.
- [52:59]
C
Jason Bordoff, thank you so much for joining us. Appreciate it.
- [53:03]
F
Thank you.
- [53:05]
B
And finally, some sweet dreams in a country that works some of the longest hours in the developed world. Hundreds of South Koreans turned up at a Seoul park this weekend to do something many of them barely get to sleep. It was the city's third annual power nap contest and the entry requirements were simple, come tired and with a full belly. Officials walked between the contestants checking heart rates to make sure the sleep was real. Because in this game, snoozing is not losing. One competitor came with a unique dress for success strap. I usually don't sleep well. I struggle to fall asleep and wake up easily. Koalas are famous for their deep slumber. I came dressed as one, hoping to borrow a little of their magic. I love that the koala game plan just wasn't enough. However, the winner beating out the exhausted office workers and sleep deprived students was a man in his 80s. He didn't just win the trophy, he put the competition to bed. An award should go out to our creative writers who put that together as well. I love this story. That does it for now. Thank you so much for watching. If you ever miss our show, you can find the latest episode shortly after it airs on our podcast. And remember, you can always catch us online on our website and all over social media. Thanks for watching and goodbye from New
- [54:24]
D
York,
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B
I'm Daniel Dae Kim.
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C
I'm going to South Korea to figure
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B
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C
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K everything streaming May 9th on the CNN App.
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Influential journalist Kara Swisher is taking a hard look at the longevity industry.
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