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Joe Matthew
Connecting the dots here on Balance of Power every day and this Wednesday edition included. Thanks for joining us on Bloomberg Radio. Stream live on YouTube search Bloomberg Business News Live unless you're already dialed into Bloomberg Originals Get a grip, says the President of the United States Our headline today as US Allies, he says, need to get a grip, step up and help open the Strait of Hormuz. This is just a one of several posts on Truth Social that we have seen from the President of the United States this morning, only to face a redhead just as we come to air here at high noon. It happens like that a lot. Enter the vice President who's in Michigan today talking about affordability. What will he say to oil executives when they meet? Yeah, that's the news. J.D. vance to meet American Petroleum Institute board members on Thursday is going to huddle with the API. We look forward to convening key officials, says the vice President Energy Secretary. Right. Bipartisan leaders in Congress and governors are going to have a big confab on the role of American oil and natural gas in supporting reliable energy amid global volatility. Yeah, you heard what Charlie said. Take a look. WTI98, we're above $98 a barrel. Remembering we almost kissed $120 at the outset of this whole experience. Brent crude has been in triple digit territory for some time. It's above $108, up 5%. WTI is up 2%. I mentioned J.D. vance in Michigan. He's actually talking right now. This is part of the affordability tour. Right? There he is if you with us on YouTube is at the podium and he's I guess going to have to get around to oil and gas prices, which in Michigan are up significantly since the start of this operation. As is the case around the country. I say Operation President still calling it Excursion and we have a lot of News here, by the way. I'll get to what's going on in Capitol Hill in a little bit. Half the cabinet seems to be sitting in testimony today. But we've had some pretty big developments in this excursion. The Pentagon says US forces used 5,000 pound deep penetrator munitions on Iranian missile sites along the strait that quote posed a risk to international shipping, unquote. That clearly didn't make anybody feel any better. We also have news, and this is more the concern for the oil patch. Iran warned Gulf countries after Israel attacked its South Pars gas field that energy assets are now on the table. We can come blow yours up too. And that's why we're seeing this reaction here in the energy market, in the oil market. Listen to the way the President termed this last evening as he was presented with the Shamrock Bowl. Remember it was Taoiseach Day yesterday. It's like a distant moment in the past now, the President talking about Iran at the White House.
President Donald Trump
Listen, we did a little excursion and it's, we're way ahead of schedule as you probably noticed. And we've had, there's no, we knocked out their navy, their air force, their anti aircraft equipment, their radar and their leaders. It's been, it's been amazing militarily, but it's something that had to be done.
Joe Matthew
Yet the strait is still closed, even as the President has repeatedly suggested that we've already won another post on Truth Social and this one's got us wondering. Well, the President's wondering himself. He says, Tyler, I'm sure read this. We read it together here. Tyler, I wonder what would happen if we finished off what's left of the Iranian terrorist state and let the countries that use it. We don't be responsible for the so called straight so called. That would get some of our non responsive allies in gear and fast. Three exclamation points. Our Washington correspondent is on the North Lawn listening to me run through all of this right now. And she's back with us. Tyler Kendall, boy, I'm not actually sure where to begin today. Maybe we should note the fact that the President is leaving the bubble here to go witness the dignified transfer at Dover. What can you tell us?
Tyler Kendall
Well, Joe, if we start with that, we're expecting President Trump to take off on Marine One shortly. You might be able to actually hear the helicopter whirring around us. He's scheduled 1:25pm Eastern. That's when that dignified transfer is going to happen at Dover as we await those six service members who have been killed in Iran as you all know, this happened last Thursday where we saw that refueling aircraft crash in Iraq. It included three U.S. air Force personnel and three National Guard members. So that's going to take up the bulk of the president's schedule today. And as he leaves here, this is likely the only time that we're going to see him publicly, besides for welcoming those service members back home. We heard from the White House press secretary, Caroline Levitt, earlier today saying that this is going to be the focus of the president's attention. But, of course, as you mentioned, we have also been getting some some messages from him out on Truth Social, reiterating the idea that the Strait of Hormuz is really the sole focal point at the moment when it comes to these ongoing operations in Iran.
Joe Matthew
Yeah, interesting. The president obviously is not happy with our NATO allies specifically, although he's isolated and pointed out Japan, South Korea and others, Tyler, for not taking part in a coalition, international coalition, to help open the Strait of Hormuz. Remember, back in the Bush days, it was the coalition of the willing. Well, there aren't many willing, if any, willing parties right now, Tyler, but the president has also indicated that we do not need them. What's the latest on this? He suggested that he wants an answer by Friday.
Tyler Kendall
Right. So this came in a post from the president earlier today. He seems to be going back and forth between retreating off of his demand for allies to help secure the Strait of Hormuz, but also saying that ultimately we don't need them. Yesterday, he was asked to directly which countries the US Was in talks with in terms of forming a coalition after he had signaled earlier this week that one could be announced by Secretary of State Marco Rubio. And I think it's fair to say that he sidestepped the question and instead touted bilateral relations between the US And Middle east countries. And as we've discussed about before, this is really highlighting what at this point has been long strained tensions between the Trump administration and traditional allies when it comes to defense spending. There also appears to be this concern among our allies that if the US if they don't act in the conflict with Iran, then we could see this White House disengage when it comes to the conflict in Ukraine. And I bring that up only because yesterday President Trump brought it up a lot, actually pretty unprompted, saying at one point, quote, we've helped them in Ukraine, but they will not help us in Iran. So that's just another thread that we should be watching really closely here. But we've heard from a flurry of leaders and allies in the NATO alliance who have been wary at best of meeting the president's demand for naval escort. It appears that that threshold to actually get involved and send assets is going to be a cease fire. Actually, Joe, for then maybe we'll see a coalition put into place to then ensure that that cease fire would hold if we get to that point. But it's not just NATO's allies. As you mentioned to others, I would say tomorrow's meeting with the Japanese prime minister expected here at the White House comes at quite the time. This meeting, of course, was announced well before the conflict started. And then also on China, if I could just quickly add, I did catch up with the U.S. trade Representative, Jamison Greer earlier today. Nearly 38% of the oil that flows through the Strait of Hormuz goes to Beijing. He told me that at trade talks earlier this week, U.S. negotiators made it very clear to China that it would be in Beijing's best interest if they get the Strait of Hormuz opened as quickly as possible.
Joe Matthew
Tyler reminding us she doesn't just talk to me while she's on the lawn. She's actually talking with members of the administration. And that's a full story you can read on the terminal and online with Tyler's byline alongside Skylar Woodhouse. This is an important moment as Jameson Greer points to China. And you do wonder, Tyler, if that's going to be the message from this White House on a go forward here in the coming weeks. Hey, you guys use the straight, not us. So maybe you'll keep it open. And the President seems to be indicating that on Truth Social. We'll see if there is some break in this standoff at some point soon. Tyler, thank you. Great reporting as always. Tyler Kendall, live from the White House. Stay with us. On balance of power. We'll have much more coming up after this.
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Kelly
the markets for us as they wait with bated breath for maybe not the Federal Reserve decision, but certainly the news conference that follows and how Chairman Powell is going to speak around the potential inflationary shock that could be emanating from the Middle east is the war with Iran is Now in day 19, the Strait of Hormuz still effectively closed, and therefore global energy markets, at least about a fifth of that global energy trade, is that somewhat of a standstill. Still, of course, much of what happens next will depend on how long this war continues, what the time horizon is. I'm sure we'll hear something similar from Chairman Powell this afternoon. And on that time horizon. President Trump has repeatedly suggested it could be a matter of weeks, but the US Is ahead of schedule. He again said so just yesterday we
President Donald Trump
did a little excursion and it's we're way ahead of schedule, as you probably noticed. And we've had there's no we knocked out their Navy, their Air Force, their antiaircraft equipment, their radar and their leaders. It's been, it's been amazing militarily, but it's something that had to be done.
Joe Matthew
The President speaking at the White House yesterday. He's now wheels up to Dover as we have been mentioning the President of the United States on his way to Dover to witness the dignified transfer of six Americans who lost their lives in a tanker crash, a KC135 Air to Air refueler that went down over western Iraq last week. We bring in the voice of Congresswoman Haley Stevens. The Democrat from Michigan is with us here, Michigan's 11th and a candidate for U.S. senate. Congresswoman, it's great to see you. Welcome back to Bloomberg TV and Radio just for starters, because we haven't had a chance to compare notes with you in some time. This excursion, as the President describes it, is something you support.
Congresswoman Haley Stevens
No, it's a war that he started on his own. Michiganders don't want this. They're paying for it. We have 200 injured. It's hitting us at the gas pump. It's hitting us in our pocketbooks and it's something that the president began without the consultation of the American people and certainly of Congress. So I voted for war powers and I continue to stand with the Michiganders who want something much better than what they're getting from this administration right now.
Kelly
Well, of course the administration, while it didn't ask for authorization for these combat operations, Congresswoman, may still yet come to you and your colleagues with a supplemental funding request in order to keep paying for these operations. Now, I'm not sure whether, given what you just said, you would be supportive of a supplemental, but if the alternative Republicans could pursue is budget reconciliation, a package that could theoretically include far more than just funding for the war with Iran, is, is that potentially a worst case scenario?
Congresswoman Haley Stevens
Well, I'll tell you who they're going to come to for funding. They're going to come to Michiganders who, you know, $1 billion a day that is costing us. They're cutting food assistance, health care, education programs. We've dealt with reckless and chaotic tariffs that have threatened our manufacturing sector. Our economy has been rocked as a result of this. And now, you know, those gas prices that are coming down on Michiganders who are just trying to get to their job to pick up their kids from school, go to the store and get what they need to get, it's just another strangulation. It's not acceptable. It's not working for us. This is an overreach. There's no plan, there's no strategy and I'm not going to go along with it.
Joe Matthew
Congresswoman, not mincing words today, as the average price for gasoline hits 386, it's almost 387 in the state of Michigan specifically, which by the way, is slightly above the national average. Congresswoman, you sit on the China Select Committee, which steers our conversations pretty frequently when we talk here on Bloomberg. It's been suggested that China, if not Russia, but China is the biggest winner from this action right now. Do you agree with?
Congresswoman Haley Stevens
Well, we certainly see our allies going to our adversaries for energy. You know, we've got this challenge with the Strait of Hormuz, as you've just mentioned, our own energy considerations now being challenged. And I want the world to see what we do in Michigan. That's where I'm always going to stand. We've got, you know, the vice president bopping around my district today, going to a manufacturing shop. I've spent years, you know, being with these manufacturers, advocating for them at the Lawmaking table. And we've got to win the race against China from the place that I call home. But that race is not going to be won if we're pushing our allies into the arms of, you know, the adversaries here, particularly on the energy costs and on trade. And so I've got a lot of concerns. I also got plans. I've got bills that I've helped pass and bills to come lessening our dependence on China for our supply chain, lowering costs, creating jobs. We've done that on chips. I want to do that for critical minerals. I want to secure our supply chain from the place that I'm so proud to call home. We're the best manufacturing economy in the world, and our state needs a champion. That's what I'm advocating for each and every single day here.
Kelly
Well, you mentioned that the vice president is in your state of Michigan today. His remarks have concluded, but in part he says, and this is a quote, in November, it's going to be very simple. Do we support the people who made us hundreds and hundreds of dollars richer or the people who made us hundreds and hundreds of dollars poorer? Referencing in part this administration's efforts on taxes as tax returns are larger, at least at this point on average, than they were prior to the big beautiful bill being passed. What do you say to a Michigander who does have more money coming into their wallet in that regard right now? Should they not be glad that that policy exists?
Congresswoman Haley Stevens
Look, I'm going to tell you something. This administration is one big grift. They're the ones getting rich. They're the ones profiting off of cuts to programs that benefit so many Michiganers. To the fully paralyzed veteran who reached out to me last year asking if he was still going to get his benefit check because Elon Musk prancing around a stage with a chainsaw. I just authored a bill called Stop Enrichment in the Congress. People here, we gotta stop the stock trading in the House of Representatives, the Senate, and also in the executive office. And that's what my bill does. No sitting on corporate boards. Stop the grift here. And so we're all paying that price. I want to see tax fairness. It needs to be to go further for working Michiganders. They need more money in their pocketbook not to continue to pay at a higher marginal rate than the corporations or in some cases, the billionaires.
Joe Matthew
Congresswoman, you mentioned J.D. vance. He is in your backyard today, Auburn Hills, at a company called Engineering Design Services, which is involved in robotics, engineering and design. This is something that the administration this type of technology has started, has tried to harness and it's something that you've been involved with as well, with your background in the auto sector going back to the Obama administration. I'm old enough to remember this. I wonder what your advice would be for J.D. vance when he speaks to the workers at Engineering Design Services, what he should know about Auburn Hills today.
Congresswoman Haley Stevens
Yeah, well, look, the voice of our manufacturers and our manufacturing workers needs to be heard at the lawmaking table. We've got to ask in terms of what they're paying for erratic tariffs, what they have paid, what that's cost them, you know, what policies need to come into place to secure our state and our workers to go and win the future. I've spent a ton of time in Auburn Hills visiting manufacturers from FEV to Borg Warner and on people who were standing up during the COVID crisis to meet our supply chain disruptions and considerations to make sure that Michiganders got masks, ventilators. There's so much incredible innovation going on in Auburn Hills, Michigan and of course, what's going on with Canada. Is JD Vance going to say that we're going to open up that bridge, the Gordie Howe that President Trump is shuttering? Because that impacts us too, that impacts trade. You know, we've got in my congressional district, you know, the second busiest airport in Michigan because of the freight that just goes on, you know, between our trade partners. And yet those relationships have been diminished and impacted by some of these policies. So yeah, listen to our manufacturers and then do something.
Kelly
All right, Congresswoman, thank you so much for joining us. Democratic Congresswoman Haley Stevens of Michigan, of course, also a Senate candidate for Michigan. Thank you for being here on Bloomberg TV and Radio. And we want to play this conversation now to our political panel who is joining us, Bloomberg Politics contributors Rick Davis and Jeannie Shan Zaino. Rick Stonecourt, capital partner and Republican strategist Jeannie, our Democratic analyst and senior visiting our democracy visiting fellow at Harvard Kennedy School's Ash center. As we talk about JD Vance's affordability messaging, which the congresswoman was just talking about. Rick, it's also worth pointing out that he did face questions in Michigan today about the war in Iran, what they're doing, what it is doing to gas prices. Also about the resignation of Joe Kent, who until yesterday was the counterterrorism chief. Vance said this is a quote, nobody likes war. I guarantee the president of the United States is not interested in getting us into the kind of long term quagmires that we've seen in years past, it seems, Rick, that he's just trying to cast this as this is a different president, which is why I feel differently about something like this compared to how I always have historically. Is he doing a good enough job walking the line here?
Rick Davis
I don't know if he's doing a good enough job walking the line. There's a pretty big split in MAGA over the incursion into Iran and I know it's got to be difficult for him to try to please both the non interventionists with those who are much more muscular on foreign policy. He's going to lose that fight. There's no such thing as being both. And I'd say he's probably already pretty well defined as someone who was very much in the America first line and has now sort of sacrificed that which will weaken his prospects in the future if he plans to run for national office again. So I do think it's a political problem for J.D. vance.
Joe Matthew
I don't know what Joe Kent is thinking about this right now, Jeannie, but a day after his resignation over the war in Iran suggesting that there was no imminent threat, this is the head of our counter terror agency. He's going to be on the Tucker Carlson program later on today. To what extent could he further exacerbate this divide within maga?
Jeannie Shanzano
Oh, I think he's going to underscore it. And you know, Joe and Kelly, I was listening and I know you guys were to the hearing going on today with Tulsi Gabbard. What a day on Capitol Hill for hearings. And one of the big questions that she was asked repeatedly had to do with this question of an imminent threat because of course the intelligence, intelligence community's assessment was that Iran did not pose an, an imminent threat. She was asked repeatedly to confirm that because of course the president is saying they did. And she said that it is up to the president to determine what is an imminent threat and what isn't. And so this question one also Carolyn Levitt has been asked repeatedly about what is an imminent threat, what is not? Is it up to the president to determine that? That is all the rage. And of course, as Rick was just talking about it has split the MAGA base terribly. And Joe Kent, Megyn Kelly, Joe Rogan, I mean the list goes on and on. Certainly Tucker Carlson are taking one side of this and this is starting to look a lit a little bit like the sort of fall off we found with George Bush.
Kelly
Well, and it's incredible as we consider Gabbard's spoken testimony, she actually omitted something that was included in her written opening statement. She was going to say Iran's nuclear enrichment program was obliterated in opposite Operation Midnight Hammer back last June and that there quote, has been no effort since then to try to rebuild their enrichment capability. But she did not say that out loud ultimately in her opening statement. Rick, what do you make of that?
Rick Davis
Well, I mean, she would have been contradicting the President, United States, who made a point that part of the concerns they had was that the Iranians could reproduce their enrichment program and come out with a potential bomb, nuclear bomb, sometime in the very near future, which has helped precipitate the attack on Iran. I would say just as a point on this MAGA split, even though there is a fight in MAGA over this, it has not actually inured to the weakness of the President. He is still getting 90% of Republican support for his efforts in Iran. And so even though there is this fight at a sort of policy level, if you want to call it that, it hasn't risen to the political level yet.
Jeannie Shanzano
Wow.
Joe Matthew
How come that is, Rick? What do you make of that and could that change if you know, this becomes a weeks, if not months long endeavor and oil prices keep rising?
Rick Davis
I mean the reality from my perspective is Donald Trump is seen as a powerful, you know, aggressive fighter. And these characteristics are what the MAGA Republican Party like about him. They're much less concerned about specific issues. And if President Trump says we're going to take a U turn and go in a different direction, I believe at least for a while, he'll have the command of that party behind him. The question is, and this is, I guess the point that J.D. vance was trying to make is how long is that patience going to last and when does it run out? Because I think that's on the question of everybody's lips right now. What are we in for here?
Joe Matthew
What are we in for here? Great question that we will keep asking with the help of our panel. Thanks to both of you Bloomberg Politics contributors Rick Davis and Jeannie Shanzano, our great panel. Stay with us. On Balance of Power. We'll have much more coming up after this
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Joe Matthew
Joe Matthew alongside Kailey Leinz here in Washington with our eyes on Iran. More specifically, the Strait of Hormuz, which remains largely closed save for a couple of vessels that managed to get through over the past couple of days. And that is why we're seeing West Texas intermediate closer to 100 and Brent closer to 109 this afternoon. We heard about this earlier today on Bloomberg TV and Radio in conversation with Jeff Curry, chief strategy officer of Energy Pathways at Carlisle. Here's his take.
Jeff Curry
The type of oil consumption that's left in the global economy is critical. And so if you pull those barrels out of the system, the rippling factor, the cascading effect through global supply chains is going to be significant. You go from gas to urea, urea to fertilizers, fertilizers to the dinner table.
Joe Matthew
And to our table here in Washington with Clayton Siegel, who's senior fellow at the center for Strategic and International Studies. We had the voice of another expert. Clayton, it's great to see you and welcome back to Bloomberg TV and Radio. We're talking weeks, maybe months. How much worse could this get?
Clayton Siegel
Well, it could get considerably worse. The oil market is always trying to price both the duration and the volume of a disruption. And for the past almost, let's say several weeks, we've seen almost no oil and gas cargoes coming out of the Gulf. As you said, Iran is playing a bit of a gatekeeper function right now, deciding which of a few handfuls of ships have been able to get out, maybe get to China with some oil. But for the most part, the Gulf is still paralyzed to oil and gas traffic.
Kelly
Well, and of course the traffic is one thing, but there's also the question of the actual infrastructure that produces it in the first place. And Iran is Now declaring that that infrastructure is fair game to be targeted, actually sending out a list of targets that could be aimed at for retaliation for Israel striking its South Park Pars gas field. This kind of escalation, is this the worst case scenario for the global energy market?
Clayton Siegel
It really is among them. Kelly. We looked at some scenarios like this for escalation before the war started. And one of them was about the two sides not just blocking each other's exports and shipping, but actually destroying offshore facilities and even onshore facilities, facilities that could take a really long time to repair and keep this supply offline for longer. And then you start to get to pricing in the oil market. That's really around demand curtailment and I think back to 2022 when the national average price of gasoline in the United States hit a record $5 per gallon. I hope we're not heading in that direction, but there are signs that we may be, especially in Asia in the physical market. That's different than what we see on the ticker here where it's only around 100 up there, refined product prices are closer to 200 in some cases.
Congresswoman Haley Stevens
Wow.
Joe Matthew
Well, you know, the administration is playing all the greatest hits when you get into this territory. We've already had a release approved from the SPR president today waiving the Jones act, which is something that we saw coming. It allows foreign flag vessels to carry goods between US ports and it gives a 60 day window. Will that make any difference?
Clayton Siegel
By itself, in isolation, it might not make that much of a difference in terms of pump prices. It allows the Gulf coast to supply the East Coast a little bit more easily and at slightly lower cost to the, to the midstream companies. But it's not really going to put a dent in $4 gallon gasoline, $5 a gallon gasoline, if that's where we're headed. To do that, you really need those supplies which are critical for world demand to be resumed from the Middle East. Gulf, there's really no substitute. And all of these policy accommodations that we're talking about here in town can really just buy us more time to get to that ultimate outcome.
Kelly
Okay, so basically there is no policy fix for this particular problem, despite what the administration might wish. So what does that mean as we're now half an hour or so away from a Fed decision about what the monetary response is, is likely to be? Can, as you talk about the idea that you need demand destruction come in, can higher interest rates fix a supply shortage problem?
Clayton Siegel
Realistically, I don't think so, Kelly. I think that in this Environment. The number one concern is a return of general inflation. And we've fought a lot of battles in recent years to tame inflation. Monetary policy is a huge part of that. And the question now is, does the Fed have room to further cut rates? If we're worried about a resurgence in inflation that comes not only from the direct effects of higher oil prices. But Joe, as you said before, the segment, the cascading effects through the economy, which go to agriculture, they go to the paralyzed nature of shipping around the world and not enough capacity to move stuff around. All of this is macroeconomic risk.
Joe Matthew
Even helium is being held up, which doesn't have to do with party balloons. But in fact, the creation of high end AI chips is being used to cool these data centers. It's amazing how many tentacles there are coming out of the Strait of Hormuz. The President likes to talk about the pipes. He says I call them the pipes. He's referring to the gas pipelines on Carg island, which he chose not to bomb. When we struck Carg Island a couple of days ago, what would happen if we did?
Clayton Siegel
Well, in the scenarios we looked at, there's three levers that we could play with Kharg island, which is so important because that's where the Iranian crude exports originate, we could destroy it. But as the President pointed out, that would really be doing a disservice to the Iranian people. We're supposed to be going in to rescue them, help them with the future after this regime. We could try seizing it. We could land troops on Hog island and get our hands on the spigot. But our troops could come under fire there. I think that they. That's a big risk to consider. I think that we could accomplish what we want to do. If we repeat the success story from Venezuela, a naval quarantine that blocks ships carrying Iranian oil from getting to market. That would maybe level the playing field a little bit with Tehran at less risk to our servicemen and women.
Kelly
If we hadn't gone into Venezuela and have the accessibility of that oil now in the global market, how much worse could this have been? What difference really is it making?
Clayton Siegel
I'm afraid to say it's not making a difference at all. The extra oil from Venezuela is maybe just a couple hundred thousand barrels per day. There's still around a million barrels per day in a 100 million barrel per day market. It's a drop in the bucket compared to missing 10 or 15 million barrels a day from the Gulf.
Joe Matthew
Interesting, the idea of committing troops, special ops, commandos, whatever we call them, to A point place like Carg island or for instance to seize the enriched uranium that we still not located. Would that be a market moving headline to the extent that we're seeing now, would we see further gains in oil on such a thing that many folks think is inevitable?
Clayton Siegel
Well, we have a split market right now between futures which are generally sanguine about risk, and the physical market which is getting ready for shortages. So I think we would see price effects supplies in both markets and they would read it in the way that they want to read it to validate their position. So I think some people on the futures market may say hey, it's almost over now that the US is intervening on the ground, but in the physical market they'd be worried about those supplies.
Kelly
Well, as we consider that the US is considering at least sending even more personnel and assets in, the President has also asked the same of allies like Europeans who he argues, and he's right, are more exposed to this particular energy story. If you're Europe already cut off from Russian natural gas, by and large you now have a major problem. If you also can't get LNG and the like out of the Middle East. Knowing that European central banks have decisions to make this week, the ECB and the BOE on deck tomorrow. How much worse is this going to be for Europe in particular when it comes to the energy story?
Clayton Siegel
It will be worse for Europe in certain fuels markets like the middle distillate grouping which is things like diesel close to jet fuel. You know, Europe will have problems supplying if there's a real outage. But the number one region for concern of running shortages by far is Asia. Japan gets 78% of their supplies from the Gulf, South Korea 62 and China which needs 11 million barrels per day to run the show, gets about half from the Gulf. The overarching problem here is that Iran basically now controls not just the strait of hormones moves, so we don't want to over index there, but the whole Middle East Gulf. Until that situation changes, we are at risk of real supply shortage.
Joe Matthew
$5 diesel was a big headline yesterday. The fact that it's used for so much global shipping. What would continue increases in diesel mean for not just the energy market but the global economy?
Clayton Siegel
That's what we worry about in terms of the transference into the macroeconomic story and gdp because if it costs more, so diesel is the fuel of the 18 wheeler. It takes everything that we buy from market or port to stores and ultimately our doorsteps. And if they have to start working in higher prices for deliveries and transportation prices for everything are going to go up.
Kelly
All right. Clayton Siegel, Senior Fellow at the center for Strategic and International Studies thank you so much.
Joe Matthew
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Date: March 18, 2026
Hosts: Joe Mathieu & Kailey Leinz
This episode addresses the escalating oil price crisis as a result of the ongoing conflict between the US and Iran, with a focus on the closure of the Strait of Hormuz and rising global energy volatility. The hosts dig into the Biden administration's struggle to keep oil prices in check, the lack of strong international coalition support, the internal US political rifts caused by the war, and the growing economic consequences at home and abroad. The conversations are rich with real-time reporting, expert insight, and political analysis.
[00:55–09:02]
President's Demands on Allies: President Trump used Truth Social to urge US allies to "get a grip" and help open the Strait of Hormuz, expressing frustration over a lack of coalition support especially from NATO, Japan, and South Korea.
Military Operations: The US utilized heavy munitions on Iranian missile sites seen as threats to shipping, but the strait remains closed.
Iran's Threats: Iran responded to Israeli attacks by warning Gulf states their energy infrastructure would be targeted, escalating market fears.
Presidential Schedule and Focus: President Trump scheduled to attend the dignified transfer of six US service members killed in Iran-related incidents, signaling personal involvement and a shift in public appearances.
White House & Trade: Conversations with US Trade Rep. Jamison Greer reveal diplomatic pressures on China—about 38% of Strait oil goes to China—with the US making clear it'd be in Beijing's best interest to support reopening the strait.
[12:07–20:15]
Congresswoman Haley Stevens (D-MI):
Administration’s Economic Justification: Vice President J.D. Vance, on an "affordability tour," argues that the administration’s tax policies are putting money in Americans’ pockets, a narrative Stevens forcefully rejects.
[20:15–24:58]
J.D. Vance’s Position:
Imminent Threat Debate:
MAGA Loyalty:
[27:14–35:45]
Market Situation:
Expert Analysis with Clayton Siegel (CSIS):
Macro-Economic Risks:
The episode is urgent, direct, and candid, combining breaking news, policy analysis, and energy market expertise with on-the-ground reporting and sharp political debate. The tone is serious and occasionally adversarial, reflecting deep tensions both internationally and within US political circles. As the crisis continues, the hosts and guests stress the far-reaching consequences for global markets, domestic wallets, and geopolitical stability—while underscoring the administration’s fraught efforts to manage a complex, potentially protracted conflict.
This summary covers the main discussions and insights, providing clear highlights and speaker attributions for quick reference. For the full experience, listen directly to the Bloomberg Balance of Power podcast.