Iran Signals No Letup in War, Oil Market In Tumult

Summary

Balance of Power – Iran Signals No Letup in War, Oil Market in Tumult

Bloomberg | March 9, 2026
Hosts: Joe Mathieu, Kailey Leinz | Key Guests: Tyler Kendall, Jane Harman, Maura Gillespie, Jeannie Shannon Zaino, Rebecca Babin

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Episode Overview

This episode of Balance of Power centers on the escalating conflict involving Iran, its deepening impact on global oil markets, and the political, economic, and security ramifications in the US and abroad. With oil prices spiking near $100/barrel and the Strait of Hormuz closed, the hosts and guests analyze the White House’s strategy, market volatility, political fallout, and the broader geopolitical risks tied to regime change in Iran. The show further explores market dynamics, legislative considerations, and the administration’s public messaging, all set against a fraught backdrop of military escalation and rising anxiety at the pump.

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Key Topics & Discussion Points

1. Oil Price Shock & Political Calculus

• Oil Prices & Strait of Hormuz Closure
  • Brent approaching $100/barrel; WTI at $94.66 ([00:55]).
  • Closure of the Strait of Hormuz by Iran has paralyzed oil transit, intensifying economic and political pressures on the US administration.
• Political Dilemma for President Trump
  • Hosts debate how soaring energy prices complicate the President’s position ahead of the midterms.
  • White House downplays the oil spike, emphasizing this is not expected to be a long-term conflict ([02:43]; [17:27]).

Notable Quote:

“Higher price per barrel does translate into higher prices at the pump... This creates quite the political problem for the President and frankly, for the Republican Party.”
— Kelly ([00:55])

Notable Quote:

“[President Trump] on true social media overnight suggested that higher oil prices are a very small price to pay. And this is a quote: ‘USA and World Safety and Peace.’”
— Kelly ([17:27])

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2. White House Strategy & Global Responses

• US Military Posture & Messaging
  • Administration claims destruction of Iranian navy and intends to expand list of targets ([01:40]).
  • Considerations for deploying special forces to seize Iran’s enriched uranium stockpile ([02:43]).
• G7 and Oil Reserves
  • G7 finance ministers not ready to deploy oil from strategic reserves; options include export curbs and possible gas tax holiday ([03:33]).

Notable Quote:

“We haven't cleaned out—we've wiped out their Navy... we figured oil prices would go up, which they will. They'll also come down. They'll come down very fast and we will have gotten rid of a major cancer on the face of the earth.”
— President Trump (via anchor, paraphrased) ([01:40])

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3. Geopolitical Fallout & Regime Change Dynamics

• Iran’s New Supreme Leader
  • Iran’s deceased Supreme Leader replaced by his hard-line son, signaling policy continuity and reduced prospects for cooperation with the West ([04:54]).
• Widening Conflict
  • Reports of NATO intercepting Iranian missiles targeting Turkey—raising the specter of further international escalation ([06:13], [10:23]).
  • Domestic terrorism concerns rise as homeland security is strained ([07:21]).

Notable Quote:

“The big winners... are Russia and China. We've waived additional sanctions on Russia... and China now benefits from the fact that we have re-pivoted to the Middle East.”
— Jane Harman ([07:21])

Memorable Exchange:

“Why are these not Article 5 incursions?”
— Joe ([10:23])

“They are... Or they could be—the country that is attacked has to invoke Article 5 and maybe Turkey is holding back.”
— Jane Harman ([10:23])

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4. Domestic Politics & Congressional Response

• Congressional Inaction and War Powers
  • Frustration expressed at Congress’s failure to vote on the War Powers Act; the President is acting with “free rein” ([07:21], [10:23]).
• Budget Pressures
  • High financial cost of conflict: $1–2 billion per day, with looming need for supplemental funding ([22:18]).
• Political Panel Analysis
  • Rising gas prices are a “regressive” tax; both Democratic and Republican strategists see electoral risks ([18:41], [19:33]).

Notable Quote:

“The President is trampling on the Article One branch of our government.”
— Jane Harman ([07:21])

“He’d have to make the case to Congress, and he has so far been refusing to do so...without a clearly defined plan and making the case to the American people...there's been confusing messaging.”
— Maura Gillespie ([22:37])

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5. Public Messaging & Administration Communication

• Mixed Messaging & Media Strategy
  • Criticism of administration’s bombast, “bro talk,” and use of video game/movie imagery (e.g., Top Gun, Call of Duty) for public relations ([25:33], [26:49]).
  • Calls for a clearer, more empathetic message from the President in upcoming press conference.

Notable Quote:

“What people are hearing is the bombast…the sort of bro talk...White House is putting out videos with references to films like Top Gun, Maverick and references to, to video games.”
— Jeannie Shannon Zaino ([25:33])

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6. Market Dynamics & Economic Impact

Oil Market Volatility

• Historic Disruption
  • Largest oil supply disruption in history if Strait of Hormuz closure persists ([34:02]).
  • Possible price spikes up to $120/barrel or beyond, depending on duration and clarity of conflict ([34:21]).

Notable Quote:

“If we are talking about logistical disruptions... we’re talking about something that can kind of heal the market rather quickly...But once we start talking about supply shut-ins in the Middle East... much longer process to get those barrels back online.”
— Rebecca Babin ([32:59])

Inflation, Stagflation, and Demand Destruction

• Economic Risks
  • Central banks face “stagflationary direction” with both inflation and unemployment worsening ([28:46]).
  • $4/gallon gasoline is seen as the critical threshold for US demand destruction; in emerging markets, $150/barrel oil could trigger severe impacts ([35:58]).

Notable Quote:

“If it’s short term, we can absorb it and move on. But if this has that open ended timeline you will see the demand destruction start to be much more extreme.”
— Rebecca Babin ([36:29])

• Equity Market Reaction
  • Oil equities not keeping pace with the commodity, reflecting expectations that the shock may be short-lived—unless the crisis drags on ([40:06]).

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Notable Quotes & Memorable Moments

| Timestamp | Quote | Speaker | |---|---|---| | 00:55 | “Higher price per barrel does translate into higher prices at the pump... This creates quite the political problem for the President.” | Kelly | | 01:40 | “We haven't cleaned out—we've wiped out their Navy... They'll [oil prices] come down very fast and we will have gotten rid of a major cancer on the face of the earth.” | Paraphrased Trump (Anchor) | | 04:54 | “President Trump... said that he is, quote, not happy as analysts point to the fact that this does signal a continuation of a hard line regime.” | Tyler Kendall | | 06:38 | “Every single day this regime in Iran has less missiles, has less launchers... and the world is going to be a safer and a better place when this mission is accomplished.” | Secretary of State Marco Rubio (clip) | | 07:21 | “Big winners... are Russia and China... The big losers are president... but in the shorter term, the United States Congress, which is sitting by and doing nothing.” | Jane Harman | | 10:23 | “Why are these not Article 5 incursions?”/“They are...Or they could be—the country that's attacked has to invoke Article 5 and maybe Turkey is holding back.” | Joe/Jane Harman | | 17:27 | “Trump on true social media overnight suggested that higher oil prices are a very small price to pay. And this is a quote: ‘USA and World Safety and Peace.’” | Kelly | | 18:41 | “As gas prices rise, it is regressive. People who can least afford it are hit the hardest...what did they vote for?...the promise on a war on cost. And what did they end up with? A war in a foreign country.” | Jeannie Shannon Zaino | | 22:37 | “He’d have to make the case to Congress, and he has so far been refusing to do so...without this clearly defined plan...there's been confusing messaging.” | Maura Gillespie | | 25:33 | “What people are hearing is the bombast...bro talk...the White House is putting out videos with references to films like Top Gun, Maverick and references to, to video games.” | Jeannie Shannon Zaino | | 32:59 | “If we are talking about logistical disruptions... we’re talking about something that can kind of heal the market rather quickly...But once we start talking about supply shut ins in the Middle East... much longer process.” | Rebecca Babin |

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Important Segments & Timestamps

• 00:55 – Opening discussion: Oil price spike, Strait of Hormuz, the President’s dilemma.
• 02:43 – Tyler Kendall reports on White House strategy, options under consideration.
• 04:54 – Analysis of Iran’s regime change and US concerns, with Tyler Kendall.
• 06:38 – Secretary of State Marco Rubio on US objectives in Iran.
• 07:21–13:10 – Interview with Jane Harman on security risks, Congress, and strategic consequences.
• 18:41–27:34 – Political panel (Zaino, Gillespie): Gas prices, political calculus, messaging disconnect.
• 28:46–37:47 – Oil market analysis with Christina Kino and Rebecca Babin: Supply disruptions, price outlook, inflation and demand destruction.
• 37:47–40:28 – Discussion of potential US move to seize Carg Island and its global market implications.

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Summary Takeaways

• US–Iran conflict has shut the Strait of Hormuz, leading to historic oil disruptions and high gas prices, just as the US heads into the midterms.
• President Trump’s administration projects confidence—framing oil price pain as a “small price for peace”—but faces rising costs, political blowback, and mounting security risks.
• Regime change in Iran appears unlikely to yield a softer government, as hardliners consolidate power; conflict’s regional and global ripple effects are unpredictable.
• US Congress is criticized for inaction; supplemental war funding could become a major legislative flashpoint.
• Markets are rattled but not in freefall; future oil price spikes hinge on clarity of conflict duration and real supply disruptions, with long-term inflation and “demand destruction” potential looming.
• White House messaging is criticized as bombastic and divorced from everyday concerns, with calls for a more serious, empathetic, and strategically clear approach.

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For listeners and readers, this episode provides a robust, candid, and multifaceted analysis of one of the most momentous foreign policy and economic crises of recent memory, examining its layers with real-time insight from policy experts, strategists, and market professionals.

Transcript

[IBM AI Representative]

The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM

[Podcast Host]

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[Bloomberg Anchor Kelly]

We are just shy of $100 a barrel on Brent, about a 9466 right now on WTI. And of course, higher price per barrel does translate into higher prices at the pump if you're an American consumer and driver of a vehicle. This creates quite the political problem for the President and frankly, for the Republican Party. As we get closer to the midterms, the question is, how does the president respond? Does it make him change his calculation when it comes to what the US And Israel are doing in Iran at the moment, considering that Iran has effectively made the Strait of Hormuz closed to transit for this time? Our very own colleague Bloomberg, Josh Wingrove was asking the President about this aboard Air Force One last night. Take a listen.

[IBM AI Representative]

What about the Strait of Hormuz? There's no traffic really going through.

[Bloomberg Anchor Joe]

That's, you know, the ship's choices. But we haven't cleaned out. We've wiped out their Navy.

[IBM AI Representative]

Their Navy is now at the bottom

[Bloomberg Anchor Joe]

of the sea, so that's the choice. This is an excursion. We figured oil prices would go up, which they will. They'll also come down. They'll come down very fast and we will have gotten rid of a major your cancer on the face of the earth. Now the President is pointing us to a news conference that will take place a few hours from now. Remembering they're all in Miami at Doral for the GOP retreat, the President says I'll be going to Speaker Mike Johnson's fundraising event at 4pm Then prior to leaving for D.C. i will hold a news conference from a Doral ballroom at approximately 5:30pm thank you for your attention to this matter. Bloomberg Washington correspondent Tyler Kendall is on the North Lawn on a beautiful day today in the nation's capital, not maybe as nice as Miami. Tyler, what's the President going to have in store for reporters when, when he meets the press later.

[Bloomberg Correspondent Tyler Kendall]

Yeah. Hey, Joe. Well, at this point, there's a lot of questions about exactly what you and Kelly were outlining when it comes to what's turning into higher retail gas prices at the pump. And so far, the Trump administration has really been downplaying the oil price spending spike. Right. You had the Energy Secretary Christopher Wright in an interview over the weekend saying that this is not going to be a long term conflict. The thing is we're seeing major Middle east producers cut production. The Strait of Hormuz is effectively closed. And President Trump previewed over the weekend that the conflict is expected to widen as the US Looks to expand its list of targets. Throw on that Bloomberg News now reporting that President Trump is looking at deploying special forces to potentially extract Iran's stockpile of highly enriched uranium. And, and at the moment, it doesn't feel like there is de escalation on the table, which is leading to questions on just how long this disruption will last. Now, it appears that a G7 meeting earlier today and a statement that came from it is some concerns about oil supplies. The G7 finance ministers ultimately saying that they're not ready yet to deploy from their strategic stockpiles, however, and reserves. When it comes to oil, however, the option is still on the table. That's one thing that we're looking at, Joe. And daily, as there's new reporting out from Reuters that President Trump has an array of options he could be considering when it comes to oil. This includes export curbs, intervening in oil futures markets and then also potentially a gas tax holiday. That's something that we had heard rumblings of last week. It would only be temporary and it would require Congress to get done, which isn't leaving this White House at the moment with that many options.

[Bloomberg Anchor Kelly]

Yeah, we of course heard a lot about that back in 2022 as well, when Russia invaded Ukraine and we know how that went. Tyler, I also am cur about how the White House is messaging knowing that President Trump, when he's outlined the objectives of this conflict with Iran, has said time and again that he would like to see a regime change and that he wanted to be involved. He said last week in the selection of the leader. What's the administration's response to the fact that now it's the Supreme Leader's, the deceased Supreme Leader's son who has become Iran's next supreme leader.

[Bloomberg Correspondent Tyler Kendall]

Well, Kelly, we heard directly from President Trump in an interview over the weekend where he said that he is, quote, not happy as analysts point to the fact that this does signal a continuation of a hard line regime regime. And this likely isn't going to be a leader that's going to look to cooperate with the US as you well know, the White House was hoping that there could be a more amenable leader to the US Demands as President Trump last week inside the Oval Office said that the potential worst case scenario for this military conflict would be if new leadership in Iran was, quote, just as bad as the old regime. Now, it is important to point out this new leader is closely aligned with the irgc, that military faction within Iran. And that is something critical to look out for here because we heard from Iran's president actually over the weekend saying that he has instructed the military not to strike countries that are not striking Iran. But then just today we have these headlines coming out that NATO is intercepting missiles headed for Turkey. So there seems to be a little bit of a distance perhaps between Iran's president and now the new supreme leader. Though at this point, the president did come out, Iran's president did come out after those remarks and said the regime is ultimately not going to back down. As Joe and Kelly, it feels like, like there is no diplomatic off ramp right now on the table.

[Bloomberg Anchor Kelly]

All right, Bloomberg's Tyler Kendall live at the White House. Thank you so much. As Tyler points to the fact that there are now missiles being lobbed at Turkey, of course, many countries in the Middle east have been targeted by Iran's retaliation. It does feel like a very dangerous moment in a large part of the world in the area surrounding the Middle East. But to hear the Secretary of State Marco Rubio say it, this moment is going to lead us to more safety in the long term. Take a listen to Secretary I want

[Bloomberg Anchor Joe]

everyone to know your military is getting the job done. And every single day this regime in

[IBM AI Representative]

Iran has less missiles, has less launchers, their factories work less and their navy is being eviscerated. And the world is going to be a safer and a better place when this mission is accomplished.

[Bloomberg Anchor Kelly]

Let's see how our next guest feels about that statement. Jane Harmon is with us, the former Democratic congresswoman from California, former ranking member of the House Intelligence Committee, also author of Insanity Defense. Why our failure, failure to confront hard national security problems makes us less safe. So let's talk, Jane, and welcome back to Bloomberg TV and Radio about what is making us less or more safe ultimately. Does this conflict with Iran bring the Middle east and bring the world to a better place?

[Podcast Host]

I think ultimately no. I think there are some aspects that are positive, such as Degrading further Iran's military capacity. Understand its nuclear ability was not obliterated as the administration claimed a few months ago and they're trying to rebuild right now. But I think those little bombs in New York City a day ago, I think that the homeland attacks could increase, especially now that our Homeland Department has been pretty, pretty neutered at the top. But here's what I would say. I say the big winners, and there are only two, and they are Russia and China. We've waived additional sanctions on Russia. I thought we were going to increase them to stop Russia, Russia's invasion of Ukraine, but we've waived them and they're selling oil, making money and they can perpetuate the war in Ukraine. And China now benefits from the fact that we have re pivoted to the Middle East. We have fewer assets in Asia against China. China is building, it is not just rebuilding but building enormous military capacity and it seems to me has all the moral authority it needs. I hope it doesn't do this to annex Taiwan, given what we're doing. So who are the losers? The big losers are president ultimately, I would predict, but in the shorter term, the United States Congress, which is sitting by and doing nothing. The Senate punted on the vote last week to invoke the War Powers Act. They didn't even vote on it. And so the President is claiming free rein to do whatever he wants, including charging taxpayers one to $2 billion a day to support the effort we have underway. And that effort is leading to the highest gas prices in American history. So if I were the Congress, this is advice to both parties. I'd figure out a way to work together to stop this. And I'd also figure out a way, if you want to win your election, to show that you're doing anything. The President is trampling on the article. One branch of our government,

[Bloomberg Anchor Joe]

Jane, is referring to the improvised explosive that was thrown near Mayor Mamdani's residence. And I just want to mention quickly the Attorney General Pam Bondi Jain just posted on Twitter. We have indicted the two alleged ISIS inspired terrorists who attempted to bomb a protest in New York. She has got a couple of pictures here. We will not allow ISIS is poisonous anti American ideology to threaten this nation. And I know that the ongoing threat, whether it's from a, from a cell or a lone wolf, is a very real one. But I'd like to just ask you with the prospect of a potentially widening war, Jane, and it's great to have you back today, what do you make of not once but Twice, Naito having to intercept a ballistic missile fired from Iran in Turkish airspace. And in fact today we saw debris fall in southern Turkey about 100 miles away from an air base. Why are these not Article 5 incursions?

[Podcast Host]

They are Article 5 incursions. Or they could be the country that's attacked has to invoke Article 5 and maybe Turkey is holding back. Turkey has a kind of complicated relationship in the Middle east with all these countries, in case you missed it. But maybe they're holding back. But let's see what else happens. There was a, an explosion in Norway yesterday and nobody has been able to trace that. That's another new article. Five new NATO countries. So let's see if Iran is provoking Europe. Might be true. But the other piece of this, Joe, is the domestic fallout. Domestic USA fallout. Those IEDs in New York couldn't, might not be a one off as you point out. This could be going on in the country. You know, think Washington, D.C. someplace. It's not that hard, unfortunately to be inspired and then to carry out a terror attack. And that could be our new future in the United States. But meanwhile, soaring gas prices, the markets are unstable and Congress is sitting on its hands. And let's, let's understand these costs. Congress can't duck voting on the budget. Eventually Congress will have to vote on the budget. Yes, it can have a broader government shutdown than the one we already have that's causing long TSA lines. But if Congress can't find a way out of this, I don't know what the justification is to anyone for anyone to be there. And yes, there are some well motivated people in both parties in Congress. Seems like more in the minority party, a lot more at the moment. But what would I like to see, I would like to see a function in Congress that holds the President across the board in check for this completely unprovoked war of choice, which is hugely dangerous and which was I guess inspired to some extent by his friendship with Bibi Netanyahu. But even Israel, my view is now seems to have free license to bomb the refineries in Iran and to be doing a huge amount of bombing along the southern coast of Lebanon to prevent Hezbollah from ever coming back. It seems to me there were better options that we could have taken and, and sadly we missed, we missed the movie.

[Bloomberg Anchor Kelly]

Well, as you talk about all the different bombs that are dropping, Jane, the munitions that we are expending, you of course used to lead the commission on the National Defense Strategy. So I'm wondering after this conflict is over whenever that may be, what kind of strategic disadvantage we may be in having expended all of this knowing the defense of defense industrial base is only capable of producing so much so quickly in order to restock.

[Podcast Host]

Well, great question. And to be fair, our commission recommended increased defense spending. We talked about the, the broken defense industrial base, the dip and ways to regenerate. We talked about the fact that the business model of the tech sector is much more efficient than the business model of the Pentagon and urged that there be more synergy there. But we also urged, by the way, that we use all elements of national power, not just hard assets, but also all the things Trump has dismantled. Sadly, this administration has dismantled our soft power, our development, our State Department. The State Department is a shadow of its former self, our use of partners and allies. And it's interesting to see, it will be interesting to see what partners and allies the US has if and when this Iran adventure ends. Again, let me say it is important to degrade Iran's military capacity. The shock and awe of our military is impressive. It is tragic that we've lost seven lives so far. And we may lose more if the president is able, as he says he wants to, to protect the traffic through the Straits of Hormuz, which is blocking 20% of the region's oil exports to the world. But I just call on Congress, get it together act, invoke the War Powers act, put strict limits on what goes on after this and surely get a handle on the costs and, and make clear that the American people have to be supporting this in order for our president to go forward.

[Bloomberg Anchor Joe]

Jane, it's great to have you back. Let's stay in touch as we learn more here. The next couple of days could be interesting both overseas and here at home. I think we've already determined. Jane Harmon, former Democratic congresswoman from California, former ranking member of the House Intel Committee and author of Insanity Defense, why our failure to confront hard national security problems makes us less safe. Kaylee, I'll remind everybody that for the first time since February, employees of the diplomatic mission in Saudi Arabia, American employees have been given mandatory departure orders. Mandatory. They are not allowed to stay even if they want to, which could give us a sense of what might be next.

[Bloomberg Anchor Kelly]

Yeah, speaks to how dangerous this moment is in the Middle East. I wonder what commentary we may get from President Trump about that when he holds a news conference from Florida later today. Again, that expected 5:30pm Eastern time. We'll have more on that in the late edition of Balance OF Power. But still ahead here in this hour here on Bloomberg TV and Radio, we'll turn to our political panel as we consider the political ramifications of all of this here at home.

[Bloomberg Anchor Joe]

Stay with us on balance of Power. We'll have much more coming up after this.

[IBM AI Representative]

The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced cost by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business IBM.

[Podcast Host]

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg 11:30.

[Bloomberg Anchor Kelly]

The house is not here in Washington. President Trump is also not here in Washington. They're down in Florida. President Trump is set to speak to the House GOP conference as they have their retreat at Hezdural Golf Club. And then shortly after, at 5:30pm Eastern time, he's planning to hold a news conference. We can imagine that Iran will be featuring quite heavily on the agenda. I'm sure he's going to get more questions about not just the US's strategy here, Joe, but also his strategy for combating what could be persistently potentially higher oil and gasoline prices. He, of course, on true social media overnight suggested that higher oil prices are a very small price to pay. And this is a quote USA and World Safety and Peace.

[Bloomberg Anchor Joe]

Yeah. Suggesting as well that if you don't understand where he's coming from, then you're a fool. But of course, now we've got an average for regular unleaded nationally of $3.47, and that is up pretty significantly from where we were on Friday. And a lot of analysts, including Bob McNally and Tom Closer, who was with us on Friday, Patrick, the Hank gas body, They've all identified $4 a gallon as a real possibility. You were on the road over the weekend. You're in Virginia 339 across the board, you said, which is central Virginia to

[Bloomberg Anchor Kelly]

Northern Virginia339 at every single station.

[Bloomberg Anchor Joe]

Nobody wants to top the guy next door, I guess.

[Bloomberg Anchor Kelly]

I guess not. Not when prices are elevating this quickly.

[Bloomberg Anchor Joe]

It's really amazing and it's really the heart of our conversation with our political panel. Let's Bring him in right now. Bloomberg Politics contributor Jeannie Shannon Zaino, democracy visiting fellow at Harvard Kennedy School's Ashe center and Republican strategist Maura Gillespie, Bluestack Strategies founder and veteran of John Boehner Speaker's Office. It's great to have you both here, Jeannie. Democrats obviously don't want to be paying more for gasoline, but the Machiavellian view would suggest that this is pretty good for Democrats on the midterm campaign trail. Are you making ads out of this post already? A small price to pay for peace?

[Podcast Host]

Yeah, I'm sure ads will be made. But of course, this is horrible for everybody. As gas prices rise, it is regressive. People who can least afford it are hit the hardest. And of course, even Trump supporters, what did they vote for? Especially Trump supporters, they voted for the promise on a war on cost. And what did they end up with? A war in a foreign country. Many people still do not understand what our interest is there. And so that's the dilemma that Donald Trump faces as he comes out this afternoon or this evening and tries to address the American public on this.

[Bloomberg Anchor Kelly]

Well, again, he does that after Maura. He addresses House Republicans who all have to be on the ballot in November. This retreat and Rao was supposed to be talking about midterm strategy. This is not what they wanted to have to to strategize around.

[Republican Strategist Maura Gillespie]

No, but it's what they're going to have to because this is going to play a very big role in what happens come November. Not only is the House already fractured and dwindling in numbers, we are hearing of more members who are not wanting to run for re election. And I think a large part of this is that what are they just a message on? There are a lot of things that the House wants to be able to tout, but they simply cannot. If one week the president is touting low gas prices and then this is happening right now where it is already jumped well over a dollar from what it was when he was touting it at the State of the Union address. And so I think when you talk about the affordability message that Republicans have been harping on the White House to provide more clarity on and more messaging on, that they are going to struggle. And so unfortunately, I think that's probably what's being discussed. But it seems as though many members have a hard time, especially the Republican Party, having those frank conversations with the president because what he wants to hear is that everyone's happy and things are going great. That's how he operates. And, and the Reality is going to be starkly different.

[Bloomberg Anchor Joe]

Jeannie, will there be a long term view looking back on this as a good thing that, you know, we hear this frequently from the president, from other Republicans, but 47 years in the making, many Americans have been killed by, by terror sponsored by Iran. And realizing that this is causing some big disruptions right now, the president's line speaks for itself. Small price to pay for what he sees as long term peace. Could he be viewed at some point in the future as the only leader who was brave enough to make this move?

[Podcast Host]

That would depend on what happens. And of course, before you set forth in terms of engaging in a war in the Middle east, you want to think carefully about whether what you want to achieve is achievable. And that's the, the problem here. We've had many presidents since 1979. All of them have been faced, as their administrations have, to Donald Trump's point, with a question of should we go in or not. There is a reason that, for instance, Barack Obama chose to try to negotiate on nuclear weapons with Iran. It is because achieving what the president wants to achieve is very, very difficult. What he needs to achieve to win is regime change and replacement. And we see the replacement today. It is somebody who is more hard line than his predecessor. So, yes, history will prove him right if he can achieve what he set out to achieve. But so far, nobody can tell a story that supports this war that gets us to the end he wants in a winning way. And that's the problem for the president. And at the same time, it's costing Americans a whole lot, including now seven military lives.

[Bloomberg Anchor Kelly]

Yeah, and that cost is a very heavy toll, obviously. Maura. But there also is the literal financial cost. There's estimates that this is costing a billion, maybe $2 billion per day, which raises the specter of needing supplemental funding from Congress. If the president asks for it, do you think he's likely to get it? Could we actually see Democrats who are on board with that effort?

[Republican Strategist Maura Gillespie]

He'd have to make the case to Congress, and he has so far been refusing to do so. He. I think that that's part of what I think Jeannie is talking about too, is that without this clearly defined plan and making the case to the American people who largely don't understand why we're even at war with Iran, and then wondering why we are implementing strikes without necessarily a plan of how to get out of it, there's been confusing messaging we talked about Jeannie mentioned there. But more than that, too, I think you also look at the President's flippant remarks about it's a small price to pay. It's not a big deal. Pete Hegseth saying this is what happens. This happens in war. Being so dismissive and flippant about something that's so very serious. It just shows again, this disconnect between the White House and what the American people are feeling and facing between the White House and reality. What our allies are looking at and wondering, where do you stand? What is this for and where does it end? And I think not being serious in a situation that is so very serious is a bit of a slap in the face to those of us who are wondering what's going to play out. To Jeanne's point, where does this end and what happens next?

[Bloomberg Anchor Joe]

Well, so what should happen? Maybe better to ask than what will happen at 5:30 when the President gets to the podium. He will have spent the whole day with members hearing probably some real concern behind closed doors about all of this. What does he need to say? He hasn't had the Oval Office address or that, that FaceTime with the American people since this began. Outside of a couple of questions in the driveway, some telephone interviews, posts on Truth Social. This is could be an opportunity or it is an opportunity. How, how should he handle it?

[Republican Strategist Maura Gillespie]

It's absolutely an opportunity for him to address the nation and taking a position of leadership and accountability that this was started xyz, this started because of X, Y, Z. We are now in a phase where we are implementing XYZ strikes. You know, he just needs to lay it out in a way that shows us that he understands the severity of the situation, but also that he actually has a clear plan and a clear mission.

[Bloomberg Anchor Joe]

You want details?

[Republican Strategist Maura Gillespie]

We want details, but we also want a, a confident goal. I would say that watching him get distracted by how great he's doing or curtains or wearing a hat that says usa. I mean, I think that he gets so distracted by other things that it takes away from what is actually impacting us right now, what's happening on the ground and to the people who are sacrificing and serving. And so I think that I would want to see him show some empathy, show some accountability and take responsibility for the position that he has as commander in chief and leader of the free world and President United States, and in what his role is in what is happening right now.

[Bloomberg Anchor Kelly]

Well, Jeannie, it of course is not only the President's role to make this case. He has charged others with his, within his administration to go out and make the case as well. Including the Secretary of State, Marco Rubio, we've heard from repeatedly. The energy secretary was out on Sunday morning television, as was the press secretary. Do you see anyone, if President Trump cannot so clearly define it, is anyone within the administration doing a better job as messenger?

[Podcast Host]

It's such a good question, Kelly. You know, I think what people are hearing is the bombast is the sort of bro talk, and this is the kind of Pete Hegseth secretary of war talk that Donald Trump is echoing. The White House is putting out videos with references to films like Top Gun, Maverick and references to, to video games. That sort of bravado is pretty much what people are hearing. You do have some voices in the administration who can make a more coherent argument. But the reality is this stops with the president and everybody has to be on the same page. What are you doing and why are you doing it and when does it end? Those simple but not so simple questions, they have been yet to articulate a coherent answer that people can say, aha, well, this then is in my interest and we will go along with this. But the president showcased all of where he stands on this this weekend with what you and Joe were talking about earlier to call people concerned about oil and gas prices fools for not seeing what he sees without him articulating it. That is why we are in this problem. So it's up to the president tonight. Nobody else can surrogate on this. We are in a war in the Middle East.

[Bloomberg Anchor Joe]

I don't know what you make of the memes that are coming out of the White House. They had Call of Duty footage interspersed with drones crashing into Iran. And it was the last weekend that the UFC put out the fight card for the Octagon that's going to be on the South Lawn. They're going to be 80,000 people apparently, on the Ellipse for this. This speaks directly to the base, though. Maura, how do you, how do you remove that and still be maga?

[Republican Strategist Maura Gillespie]

I don't know how you still be mad at people looking at this. And the hypocrisy is just so rampant to me. I mean, you're looking at this. And for such criticisms of previous administrations for being so insulated and having been out of touch with reality, I don't know how you don't see this being completely out of touch with reality and what's happening. And it just takes away from the seriousness of the situation we find ourselves in.

[Bloomberg Anchor Kelly]

All right, Mauric Gillespie and Jeannie Shan Zaino, our political panel today, thank you both so much for being with us and we still have more ahead here on Balance to Power as we get back to the markets and what we're seeing in oil. We're off the highs of the session, but we're still teetering around $100. We'll have more with Rebecca Babin of CIBC Private Wealth.

[Bloomberg Anchor Joe]

Stay with us on Balance of Power. We'll have much more coming up after this.

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You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Bloomberg Anchor Joe]

Who would thought $95 a barrel would seem cheap? Well, of course it doesn't to anyone. But the reversal of fortune that we have seen from $119 is significant and it has a lot to do with efforts that are being made by G7 nations to find some relief. We talked about talked about the impact though on the oil shock on the economy with Austan Goolsbee Fed bank of Chicago earlier today on Bloomberg TV and Radio. Listen, as with any supply side shock, it can lead you in a stagflationary direction, which is to say the the inflation side of the mandate getting worse. At the same time the employment side of the mandate is getting worse and that's always those the worst case scenario for the central bank because there's not an obvious monetary policy answer. And of course that worst case scenario may have grown even more worse over the weekend with the remarkable move that we saw in energy prices with investors eyes on Iran. Whether it was a short squeeze or not, it was not fun this morning and we welcome Christina Kino to the conversation, the Managing editor for Bloomberg Markets Live blog, fresh off her debut on Bloomberg this weekend. Christine, it is great to see you. How are we rationalizing this type of reversal? Is it as simple as the G7 news or is there more at play here?

[Podcast Host]

Yeah Joe, I mean I think there's a confluence of factors here. As you mentioned, the G7 news definitely helps because some of the knee jerk reaction is definitely about supply, especially given the news flow out of Iran and Israel as well, well over the weekend, as well as the neighboring countries, Kuwait and UAE curtailing production. So all of that contributing to higher oil prices. But I think there's also a little bit of positioning here, as you mentioned. You know, a move as big as this, as swift as this definitely will have some investors reconsidering or maybe it's time to pull back a little bit. And I suppose the broader way to look at this as well is, you know, markets are following a little bit the playbook that they deployed last week when war first broke out. Over the past weekend, we saw an initial bout of selling, particularly during the Asia and European sessions, and then a little bit of a climb down when it came to the US Sessions. And now it really just depends what sort of details next emerge out of the conflict. And it looks like we have a long road ahead of us.

[Bloomberg Anchor Kelly]

Well, and when we talk about details, Christine, as President Trump has suggested, he has a plan. We've already seen the floating of things like insurance and escorts for tankers and vessels in the strait for moves to some extent. Is this also a market that has been conditioned by the taco trade or so called Trump put. And that's what's going on here. They expect that that will kick in in a more material way.

[Podcast Host]

I mean, absolutely, Kelly. They have more than a few examples to go off of when it comes to this potential kind of anticipation of President Trump backing down. But you know, when it comes to the conflict though, I think the issue is that it's not a one sided issue that can be resolved immediately by the president just climbing down. Right? It is. I mean, of course that would help. The US Is a major player in this conflict. But there are other sides to consider here and there are some things that are kind of have been put into motion, especially when it comes to closures of refineries or curtailing of supply and production. That's not necessarily something that can be turned back on overnight. And this is why I think a lot of market watchers wondering if the transitory effect of higher oil prices can turn into something more than that because all of these processes just take time.

[Rebecca Babin, Senior Equity Trader]

Hmm.

[Bloomberg Anchor Kelly]

It's a great point. Christina Kino, managing editor for Bloomberg's Market Live blog. Thank you so much. And it's on that point I want to turn now to our next guest. Rebecca Babin is with us. She's senior equity trader and managing director at CIBC Private Wealth. Welcome back to Bloomberg TV and Radio. Rebecca, I would love to just begin with the point Christine was making about the idea that this isn't necessarily just as easy as an on off switch. When President Trump says, and this is quoting him directly from True Social last night, that these are short term higher oil prices, that they will drop rapidly when the destruction of Iran's nuclear threat is over, to what extent is it true? How quick could that actually happen?

[Rebecca Babin, Senior Equity Trader]

So this is a great point and I think we should distinguish between the type of disruptions that we're talking about. If we are talking about logistical disruptions, meaning the ships are loaded, they're sitting outside the Strait of Hormuz, and we're just waiting for it to open up, for those ships to kind of get where they need to go. We're talking about something that can kind of heal the market rather quickly. 10, 12 days to get to where they need to be to export the crude. Right. But once we start talking about supply shut ins in the Middle east and we're starting to see that happen in Iraq, 2.5 million barrels and 500,000 barrels in Kuwait, then you're talking about a much longer process to get those barrels back online. It's not just they're sitting there waiting to move. You need to restart the system, which then takes a couple of weeks and then you need the shipping through. So you kind of have to amplify that timeline when you talk about production that's lost as opposed to just logistical constraints.

[Bloomberg Anchor Joe]

And so here we have the largest oil disruption in market history. If that 20% remains locked up. Did we get a sense this morning, Rebecca, of what prices could look like? That jump to almost $120 a barrel really spooked a lot of investors this morning. When could we see that number again?

[Rebecca Babin, Senior Equity Trader]

So I think you see that number when we have lack of confidence on a timeline and a plan. So when there's this open ended timeline, the market knows we have spr. We have a tremendous amount of SPR in the, in the global market. We have inventories, we have floating storage, we have China that's built up their inventories. The market knows that, but it can't wrap its head around how meaningful that will be if we can't put a timeline on this so that panic will resume as this timeline becomes more opaque. So I think that's the key thing the market is trying to evaluate is how long does this last. I know I have some buffers built in, I know there's some levers we can pull, but these are not indefinite. And when I shut in production in the Middle east, those Levers effectively run out of Runway to help us and we get those spikes again. So I think that's where you start to see see these things come back into play and it was a really good example overnight. Your previous guest did highlight that there were some technical factors at play. Certainly on the open in the overnight session there's been a tremendous amount of call options trading in Brent crude dealers came in short and needed to cover. But that's going to reaccelerate that that trade isn't over but could certainly see those types of panicked moves again.

[Bloomberg Anchor Kelly]

Well so if we continue to see the panic moves and the pressure to the upside. Rebecca, off of concern over a supply shock, at what time, at what level does this become not about supply but actually turn into a demand destruction conversation?

[Rebecca Babin, Senior Equity Trader]

That's a critical question. There's a lot of analysis being done on that. I think across the street when I look at on an inflation adjusted basis if we look at the spike that happened in 2008, we're looking at much higher crude prices kind of over 200. If we inflation adjust where we would need to be to see that type of impact. I think the key metric that you've talked about is $4 gasoline prices in the United States. That's where you start to see an impact in the US for emerging markets it's different.

[Republican Strategist Maura Gillespie]

Right.

[Rebecca Babin, Senior Equity Trader]

I think when we start to see $150 crude for EM countries that's where you start to look at seeing some real demand destruction start and it will accelerate from there. Those are the benchmarks that are being thrown around. Again we have to see how this evolves in the time at which it spends at those prices is critical. If it's short term we can absorb it and move on. But if this has that open ended timeline you will see the demand destruction start to be much more extreme.

[Bloomberg Anchor Joe]

As they say, the best cure for high prices is high prices. Rebecca, I want to ask you about Carg island because there are reports out there today that the United States may consider seizing Carg island, which is about 15 miles off the coast of Iran. And it's kind of the transfer station if you will, where tankers are loaded up before they pass through the Strait of Hormuz. The conventional wisdom here in Washington is you would need boots on the ground to do that. And I wonder if the United States chose to to make that move and seize the centerpiece of Iran's oil industry here. Is that an all bets are off moment or would that reassure the market knowing that that site was secured by Americans, Great question.

[Rebecca Babin, Senior Equity Trader]

I tend to think that's an all bets are off moment. That to me is. Carg island is been maintained throughout the course of this conflict. It wasn't touched during the June 12day war. It's how we think about the long term preservation of, you know, crude output and supplies. And if you go after that, you've got to be able to move that crude through the strait. That means you are 100% invested and in the strait having to protect every single ship that goes through, I don't think that that will provide the market confidence unless the strait is also open. So it has to come hand in glove with a logistical output for that crude that can be safely transferred. Just going after it without that, I think actually does the opposite for the crude market. And may, may, may create a more panicked environment.

[Bloomberg Anchor Kelly]

Well, and when we consider the wider environment, Rebecca, it's one thing for, for crude and product prices to go up in and of themselves, but that of course can feed through into other prices too. When we think about the idea that you need fuel to get the things that ship goods to consumers and customers all over the world, how quickly could we be talking about this being a re inflationary kind of thing? I know you said a lot depends on, on time and duration, but what is the, what is the lag on that, on that feed through to costs elsewhere?

[Rebecca Babin, Senior Equity Trader]

Well, if we look at just the move in gasoline prices last week, you can see that there's been a pretty quick transition mechanism into, into at least gasoline prices. How it filters through into the rest of the products that crude is an input for varies dramatically by industry. Right. So we're going to see some things that have a much quicker uptake of it and some lagged. And there's very smart economists out there, I think, who are trying to figure out this exact question. But I think it's months. I don't think it's a weak scenario. Is it three months? Is it six months? It's likely in that window of the timeline that I hear from economists in terms of how much impact it takes or how long it takes to flow through into prices. But again, it will vary by industry and that'll be something I think the equity market will be watching exceptionally closely as we, as this extends out longer.

[Bloomberg Anchor Joe]

How do you read the lack of movement in oil stocks, Rebecca? We're talking so much about the commodity. I'm looking at Exxon and Chevron here. They're up modestly. The XLE is down 7 cents and they've been kind of just floating around for the last week. Plus, while this has all happened, does that imply to you that that stock traders see this as a short term blip?

[Rebecca Babin, Senior Equity Trader]

I think it implies two things. First, there was a tremendous buildup in energy equities leading up to this event. So they priced in a lot of this kind of heading into the event. In the last week or so when we've seen this kind of volatility driven increase, it's primarily in the front of the curve, right? The back of the curve is still relatively anchored and that does speak to the timeline that I think the market is using which is, you know, weeks, a month, but not except extended. And unless we see the back of the curve start to really adjust higher then we could see the next leg higher in energy equities. But I just don't think with the back end at 65, you know, we're looking at, you know, a windfall for equities. It will take a more, a more dramatic move and knowing that this is going to be a long term, not transitory event for that reacceleration, I think in the equities.

[Bloomberg Anchor Joe]

You know, Kelly told us this morning we needed to call Rebecca Babin today and I'm sure glad we did. Rebecca, this has been really helpful. Senior Equity Trader Managing Director, CIBC Private Wealth Rebecca Babin with us on Balance of Power here on Bloomberg TV and Radio. Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already. Apple, Spotify or wherever you get your podcasts. And you can. You can find us live every weekday from Washington D.C. at Noontime [e-mail] if

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