Balance of Power – US-Iran Fight Centers on Hormuz

Podcast: Balance of Power (Bloomberg)
Date: March 13, 2026
Hosts: Joe Mathieu, Kailey Leinz, Tyler Kendall
Notable Guests: Jennifer Welch (Chief Geoeconomics Analyst), Rosemary Becky (Republican Strategy Partner), Jeannie Shan Zaino (Democracy Fellow), Mike Shepard (Tech Editor), Nathan Dean (Policy Analyst), Brian Karbaugh (CEO, Andesite, ex-CIA)

Overview

This episode centers on the rapidly intensifying US-Iran conflict, with a specific focus on the strategic Strait of Hormuz, the evolving nature of US and Israeli military operations, global energy markets, and the domestic policy ripple effects. The episode also explores the role of artificial intelligence (AI) in the defense sector, legislative responses in Washington, and features an in-depth interview with a former CIA officer-turned-tech CEO.

Key Discussion Points & Insights

1. US-Iran Conflict Escalation and Military Operations

• US and Israeli Attacks:
  The US and Israel have conducted airstrikes on over 15,000 targets, decimating Iran’s military capacity, especially its one-way drone capabilities (down by 95%).

  • Defense Secretary Pete Hegseth: “This will be the most intense day of bombing yet.” [01:55]
  • President Trump’s Statement: Emphasizes “unparalleled firepower, unlimited ammunition, and plenty of time.” [01:55]

• Uncertain Endgame:
  Both sides remain defiant. Iran’s new supreme leader has vowed to keep the Strait of Hormuz closed and to open new conflict fronts if strikes continue.

  • Jennifer Welch: “The timeline for this war remains very uncertain, but it certainly doesn’t look like there is an end in sight.” [02:43]

• Divergence Between US and Israel:
  There are signs of potential tactical differences, especially following Israeli strikes on Iranian oil infrastructure.

  • Jennifer Welch: “There is a risk here of divergence between these two partners that up until now have been operating largely in lockstep.” [04:01]

2. Energy Markets & Economic Impacts

• Oil Price Surge Fears:
  With shipping in the Strait of Hormuz at risk, oil prices have surpassed $100/barrel. Prolonged disruption could drive prices above $150, near $164/barrel.

  • Jennifer Welch: “If the disruptions persist for closer to three months, you could see oil well above $150 a barrel.” [05:11]

• US Lifts Some Sanctions on Russian Oil:
  The administration has eased certain Russian oil sanctions and released strategic reserves to soften the market impact.

  • Jennifer Welch: “Waiving of the Jones act, the release of strategic petroleum reserves—it’s definitely going to have a cushioning effect. … But if this conflict continues, it will only be a temporary comfort.” [06:41]

• Ceasefire or Partial Re-Opening of the Strait?
  Back-channel talks seek either a broader ceasefire or perhaps selective re-opening for certain national interests, but major hurdles remain over demands for guarantees and sanctions relief.

  • Jennifer Welch: “The two sides are very far apart on what that would entail.” [08:23]

3. Domestic Political Pressures and Messaging

• Pressure on Trump Administration:
  Rising gas prices become a significant political liability; options like a federal gas tax holiday are being discussed.

  • Rosemary Becky: “The longer this continues, it again creates such pressure to do something about it, particularly as we get towards the midterms.” [09:55]

• Casualties and Messaging Disparities:
  Latest Pentagon reports: 13 US service members killed since the war began. Contrasts emerge between military and civilian leadership in response and priorities.

  • Jeannie Shan Zaino on Joint Chiefs Chair Dan Kaine: “His tone is absolutely on point. … You just think about how horrifying this is.”
  • On Defense Secretary Hegseth: “He spent … chastising the press … at a time when he should be mourning the loss of these heroes. It just reflects where his interests are and where his focus is, and it is not where it should be.” [12:30–13:50]

• Tactical Objectives:
  Administration reiterates no plans for “boots on the ground,” pressing for regime change as the strategic goal.

  • Rosemary Becky: “The goal is to get a regime change in place. The goal is not to have boots on the ground.” [14:29]

• Americans' Fear of Terrorism:
  77% of Americans believe a terror attack on US soil is likely as a result of the war.

  • Jeannie Shan Zaino: “It’ll strengthen their resolve to defend the homeland, but … it will also underscore what a misguided situation we are in at the hands of an administration with no clear goals or ability to achieve them.” [16:05]

4. AI Technology, the Pentagon, and Private Sector

• Anthropic and the Pentagon:
  The Pentagon designates AI company Anthropic as a “supply chain risk” but continues using their tools during a 6-month phase-out. Anthropic sues the government, underscoring tension over AI safeguards and military control.
  • Mike Shepard: “There is an inherent contradiction—on the one hand, the Pentagon says you are now a supply chain risk, and yet we need your technology for the next six months.” [19:24]
  • On Use-Case Ethics: “Anthropic’s CEO argues this technology is still so nascent and error-prone, we do not trust it for using it yet in fully autonomous weapons.” [22:24]
  • On Transition to New Vendors: “It would be a little bit messy, but eventually you could find something that would plug in.” [23:50]

5. Congress, Government Shutdown, & Supplemental Funding

• DHS Funding Crisis:
  The Department of Homeland Security is in its fourth week of partial shutdown, missing payroll for 206,000 employees as political deadlock persists.

  • Nathan Dean: “There haven’t been really many negotiations whatsoever … we think this probably takes another week. … When this is done, we should be good through September 30th.” [26:44]

• Pentagon Supplemental Request:
  Expectation of a significant funding package (possibly $100B+) for Middle East operations, potentially bundled with other priorities like farm aid.

  • Nathan Dean: “If this bill is … 50 to 100 billion … and it goes through normal order, … it can actually pass. If it goes through reconciliation … blows up to a trillion-dollar package … we just don’t think that would happen.” [27:39]

6. Ex-CIA Tech Leadership: Interview with Brian Karbaugh, CEO Andesite

• AI for Cyber-Defense:
  Karbaugh, a former CIA Jawbreaker team member, builds Andesite to apply AI for real-time, contextual cybersecurity both in public and private sectors.

  • On AI’s defensive value: “Now you see that AI is really the attacker [too] … the challenge is—on defense we have to move at that same type of speed and alacrity.” [33:56]

• Role of Humans vs. AI:
  Stresses that human judgment remains crucial: “Having the human being be at the helm is core to what we do … the human can use that which is uniquely human—in the end, to use their judgment.” [35:49]

• Public vs. Private Sector Risk:
  Discusses heightened risk for private actors, especially those intertwined with global supply chains or Israeli interests.

• Importance of Cyber Investment:
  Notes that the administration’s push for a 50% increase in Pentagon spending acknowledges future threat escalation and the need for robust tech defenses.

Notable Quotes & Timestamps

• Joe Matthew (re: US firepower): “Watch what happens to these deranged scumbags today.” [01:55]
• Jennifer Welch (on the conflict): “It looks like it might not be next week either. … What all of that suggests is that the timeline for this war remains very uncertain, but it certainly doesn’t look like there is an end in sight.” [02:43]
• Jennifer Welch (oil price warning): “If the disruptions persist for closer to three months, you could see oil well above $150 a barrel, maybe even closer… around $164.” [05:11]
• Jeannie Shan Zaino (on Pentagon leaders): “There’s no controlling that narrative … he [Hegseth] has taken to chastising them at a time when he should be mourning the loss of these heroes.” [13:20]
• Mike Shepard (AI vendor contradiction): “There is an inherent contradiction… because on the one hand, the Pentagon says you are now a supply chain risk, and yet we need your technology for the next six months until we find a suitable replacement.” [19:24]
• Brian Karbaugh (Andesite CEO): “For sure, everyone across the intelligence community … was moving with the best intentions, but you just had massive amounts of information… What we needed was that combined, coalesced provision of contextualized information that gave us the type of insight we needed.” [32:25]
• Brian Karbaugh (AI for defense): “We think the right architecture, the right decision is to empower the human to be at the helm, make those decisions, really sort of enabled and enhanced by the power of AI.” [36:03]

Important Timestamps

• US/Israel attack escalation, Trump statements: [01:04–01:55]
• Market, oil price, war timeline analysis: [02:43–06:41]
• Back-channel negotiations on Hormuz Strait: [08:02–08:23]
• Political panel on gas prices/domestic fallout: [09:06–11:14]
• US military casualties, Pentagon/military messaging: [11:14–13:50]
• AI in the Pentagon (Anthropic dispute): [18:04–24:37]
• DHS shutdown, Congress funding debate: [25:06–28:32]
• Ex-CIA CEO Brian Karbaugh interview: [31:06–40:22]

Tone & Takeaways

The episode is urgent, deeply analytical, and infused with both strategic and economic concern. The guests’ language is candid and, at times, critical—especially regarding the clarity of US goals, the administration’s messaging, and the risks to American security and economic stability.

• Warfare in the region and oil market shocks are ongoing—no clear resolution in sight.
• Washington faces difficult political trade-offs, amplified by public fears and legislative gridlock.
• The rise of AI on the battlefield and in cyber-defense presents both opportunity and profound new risks.
• Veteran intelligence officers are increasingly shaping security technology in the private sector.

For listeners seeking a comprehensive understanding of the US-Iran flashpoint, the economic ramifications, and the intersection of new technology with national security, this episode delivers expert insight, candid analysis, and exclusive perspectives.