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- [00:01]
Joe Matthew
The thing about AI for business, it
- [00:03]
Kelly Lyons
may not automatically fit the way your business works.
- [00:06]
Joe Matthew
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.
- [00:20]
Kelly Lyons
Now we're helping companies get smarter by
- [00:23]
Joe Matthew
putting AI where it actually pays off, deep in the work that moves the business.
- [00:27]
Kelly Lyons
Let's create smarter business. IBM,
- [00:33]
Jeannie Shan Zaino
Bloomberg Audio Studios Podcasts Radio news. 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.
- [00:55]
Kelly Lyons
Clearly, markets have seized on the narrative that emerged from a phone call President Trump had with a CBS journalist yesterday. The idea that the war be over very soon, that he thinks that the objectives are getting close to complete, pretty much. And that's a quote, of course, that doesn't necessarily match the rhetoric we got from President Trump when he spoke in Florida yesterday on the idea that, yes, the US Is winning, but there is more to be won, that they want to see some degree of completion of the mission here, though that may not still be clearly defined. And all the while we hear from the Defense Department or the Department of War, as Pete Hegseth likes to call it, that things are only intensifying in terms of our operations when it comes to Iran not easing up. This was Secretary Hegseth at a briefing this morning.
- [01:39]
Joe Matthew
Today will be yet again our most intense day of strikes inside Iran. The last 24 hours have seen Iran fire the lowest number of missiles they've been capable of firing. We will not relent until the enemy is totally and decisively defeated. On to truth Social the president of the United States earlier today, if Iran does anything that stops the flow of oil within the Strait of Hormuz, they will be hit by the United States of America 20 times harder in all caps than they have been hit thus far. A far cry from the war being very complete. Bloomberg's Washington correspondent Tyler Kendall is on the North Lawn of the White House to begin our coverage this hour. Tyler, how do we rationalize the rhetoric coming from the Pentagon, the White House and Iran, which now says it's not interested in a cease fire right now?
- [02:32]
Tyler Kendall
Well, Joe, I think both of you really set it up perfectly that there seems to be a little bit of tension here when it comes to a potential timeline. Now President Trump outlining yesterday that the US Is ahead of schedule in his words when it comes to achieving its objectives, but that he doesn't expect the conflict to be resolved this week. Then pair that with Secretary Pete Hegseth earlier today outlining that the US Will to achieve its goals are endless. But he said that this operation is not going to be endless. And we heard him reiterate how the US Is measuring progress, perhaps outlining those goals, including destroying Iran's ballistic missile program, but also the industrial base used to create those weapons, destroying Iran's naval and navy capacity, and then making sure that Iran will not be able to ever deploy a nuclear weapon. So we're looking for some sort of update when it comes to how the US Is actually measuring how it is working towards these targets. As Pete Hexas said earlier today that the US has so far hit more than 5,000 targets in Iran. But then, as you mentioned, we got this statement from the speaker of Iran's parliament saying that they absolutely not are looking to negotiate and have a cease fire. And then I'll also point you to a statement overnight from the IRGC saying that the military intends to continue to block oil flows and exports when it comes to the region. And you mentioned President Trump's post on Truth Social earlier today. Yesterday we heard him say actually that we could see the list of US Targets widen to hit the electricity infrastructure if disruptions in the Strait of Hormuz do continue. And by most metrics they are. Traffic in the strait has effectively come to a halt, as Joe and Kelly Bloomberg News reporting this morning that it appears that electronic warfare is now being deployed to jam the signals in the straits, which is only complicating the matter more for those vessels that are supposed to be heading through.
- [04:27]
Kelly Lyons
Well, it's incredible, Tyler, as a red headline just crosses the Bloomberg terminal that oil is extending declines. We are now down 15% on the day, trading back near $80 a barrel on WTI. This is a far cry from where we were just at this time yesterday, certainly from the earlier trade Sunday into Monday, which speaks to the idea that President Trump clearly is cognizant of the market. If the Strait of Hormuz cannot be opened up in the near term, what other action domestically do we understand the administration may be prepared to take when it comes to G prices, which are still higher than they were when this conflict started, even with the declines we are seeing?
- [05:03]
Tyler Kendall
Well, I'll actually give you first the international coordinated effort that we could see, as the G7 did ask the International Energy Agency today to drop scenarios about potentially drawing down those emergency stockpiles And President Trump himself has said that the US Is looking at some other potential options. Right. He had floated the idea that we could see Navy, the US Navy escort tankers through the strait. I'll point out that the chair of the Joint Chiefs of Staff, Dan Kaine was asked directly about this and said that the military was prepared to drop scenarios if that option ended up being fulfilled or asked by, by the president. But it doesn't seem that that scenario has been built just quite yet. And then people familiar with the matter telling Bloomberg News just yesterday that there are these other tools in the toolkit that the administration is eyeing, including potentially a federal gas tax holiday. I'll point out that that would require congressional approval. We could also see potentially some intervention in the oil futures market and then this idea that we could tapping of strategic reserves. Amid some questions about replenishing the spr, I pulled the latest statistics earlier today. The SPRO right Now is at 60% capacity. So there could be some, some room here, of course, but the administration had been denying that that was really an option that they had ultimately wanted to tap. So we'll see as it goes from here. Because, Kelly, you're exactly right. This is a White House that has been trying to message around affordability concerns. But as retail gas prices go up, it's going to be something that puts the administration on the defense.
- [06:35]
Kelly Lyons
All right, Bloomberg's Tyler Kendall live at the North Lawn of the White House. Thank you so much. And as we consider the White House messaging around affordability, around gasoline prices, around this conflict in Iran, we got many messages from President Trump yesterday, either via interviews like the one with CBS that really turned the markets around into the close in the Monday trade, or in statements that the president has given both to Republicans at their retreat in Doral, at his facilities in Doral, or in the press conference that followed. Here's a taste of the words of President Trump yesterday.
- [07:06]
President Donald Trump
This was just an excursion into something that had to be done during this brief disruption. We're way ahead of schedule and it's going to be ended soon. And if it starts up again, they'll be, they'll be hit even harder.
- [07:23]
Kelly Lyons
So we want to speak now with someone who was there in the room where the president spoke yesterday. Congressman Marlon Stutzman is with us. He's a Republican representing Indiana's 3rd district, joining us live from Doral. And we appreciate it, sir. Welcome back to BALANCE of Power here on Bloomberg. When you heard the words of the president, both in the ones directly to you and your House colleagues, And in the press conference after, do you have a sense of clarity as to when exactly this conflict is going to be wrapped up and what we will have achieved at the end of it, what we still may have yet to achieve?
- [07:54]
Congressman Marlon Stutzman
Yeah, daily. Great to be with you. Yeah. You know, the president is taking the information day by day that comes in. You know, one of the things that we all know and are seeing is that our military is performing just incredibly. And the fact that, you know, the intelligence that was gathered on the front end gave our military the ability to go in and take out the Iranian assets at the pace that they did is truly remarkable. And, you know, I think for us as Americans, our attention span can be very short and we want these things to happen quickly, just like, you know, with the Maduro case, where our military was in and out overnight was incredible. But, you know, we have to realize that these things do take some time and that this is going to be a long term situation that is going to have to be dealt with. And I think President Trump is handling it.
- [08:45]
Kelly Lyons
How long is long term, Congressman?
- [08:47]
Congressman Marlon Stutzman
Well, I think we're going to operate as quickly as possible. We want to destroy the assets and we want to see that the Iranian regime decimated. And, you know, as was said earlier on the program, that, you know, the other side has a vote in this. I think that they're going to continue to, you know, use their propaganda to try to drag this out as long as they can, like they always do. But in reality, I think we know that this is going to be a shorter situation. The mission is already mostly accomplished, but of course, the transition and the changes over there still have to be made. My hope is the Iranian people really step up and they're the ones that start to make the changes in the government that need to be made with the support of a coalition that has really come together very strong in the Middle east and here at home.
- [09:31]
Joe Matthew
Well, I guess to your point, Congressman, it is good to have you back. Thanks for joining us. I know it's a gorgeous day in Miami right now. That research coming from Rapidan Energy would suggest that we could be in for a lot more of this. U.S. military Operations, Rapidan writes, have not yet meaningfully degraded Iran's ability to disrupt Strait of Hormuz traffic and are likely to do so for several weeks. This updated disruption outlook indicates that barring a cease fire and the resumption of Hormuz flows, crude oil could get back into the mid-1100s. Kind of like we saw in the panic that brought us to $120 almost yesterday morning. How worried are you that we actually have not seen the worst of this yet?
- [10:13]
Congressman Marlon Stutzman
Well, I think there's definitely concern and there's natural concern. I mean, who wants to take the risk traveling through there right now? But it was just announced that President Trump just put together a $20 billion underwriting insurance program and is telling these ship operators and these shipping companies to move and to continue to operate. And that, you know, we've taken care of the navy, the Iranian navy, that they're no longer a threat. Of course, China wants to see activity. Most buyers and sellers of the, you know, almost 20% of the oil and gas that comes out of the Persian Gulf area and through the Straits of Hormuz is able to move. And so I think that President Trump, who is a businessman, knows that while there is instability with the military attacking Iran, that it does create uncertainty. But by coming back on the backside with an insurance program and confidence saying that they can move, hopefully will make a difference. So I think, really, you know, to question earlier, I think within a month from now, we're going to have a very different conversation.
- [11:23]
Kelly Lyons
Well, as we consider the Strait of Hormuz, it is worth noting that the energy secretary, Chris Wright, actually just posted on X that President Trump is, in his words, maintaining stability of global energy during these military operations against Iran. He says the U.S. navy successfully escorted an oil tanker through the Strait of Hormuz to ensure oil remains flowing to the global market. So when we consider that escort, Congressman, and you mentioned also the insurance underwriting, that's billions of dollars as well. All of this comes at a cost via military resources or others. Which raises the question, and given your seat on the Budget committee, I'll pose it to you. How we're going to pay for this if we need more funding to pay for this, and whether that's going to come through just a supplemental bill or maybe a second reconciliation package?
- [12:07]
Congressman Marlon Stutzman
Well, it could probably come through either one of those. It depends on what the needs are. A reconciliation bill is going to move, but it's going to probably take time. Now, you know, one thing that we have seen is that getting things through the Senate, sometimes you have to package them together like we did with the one big, beautiful bill. There may have to be a second big, beautiful bill for to be able to move through. But if it's a supplemental, I think that there will also be strong Republican support. And I think that the fact is, is that President Trump wants, he moves quickly. He wants to find solutions and get things moving without as little disruption as possible. But as we all know that, you know, markets get scared, people don't want to take the risks. And so there's, there is going to be a price to pay for that. So, you know, I would answer that. You know, with stability there comes a price. It's much easier for terrorists to shoot a, you know, $2,000 rocket when we have to have a $200,000 rocket to respond to it, to knock it out of the sky. So safety and security does come with a price tag. And I think that that's why it's important to do this now before we ever gave Iran a chance to have a nuclear weapon, and they would be leveraging the west from here for eternity.
- [13:22]
Joe Matthew
I'd love to ask you about the messaging conversations that you're having at the retreat, Congressman, but just quickly, do you expect that supplemental request from the White House this week, as some had reported?
- [13:33]
Congressman Marlon Stutzman
I don't know if it'll be this week. I think they're probably still analyzing a bit. But you know what, they may have the numbers that come from the Department of War. You know, they have a pretty good idea of what the daily costs are. But I think that, you know, I would suspect maybe over the weekend or the request comes and then we'll have to take it up next week when we get back to Washington. But I think that there's a lot of positivity around the actions, the mission that has been accomplished in Iran. You know, just watching the Iranian people here in America, the Iranian Americans that are celebrating because this regime is being changed, you know, I don't have any problem saying that there needs to be a change in regime in Iran, and the fact that we have taken out the military capabilities that they've had, the nuclear capabilities that they were working on, giving the Iranian people a chance, I think that the Iranian people are the real difference makers here that are going to really guide the direction of Iran. Just like I said, the same thing with Syria, and Syria is making a good move in the right direction. So having opportunity for the people will produce good results, I hope.
- [14:40]
Joe Matthew
Well, we're covering the globe here, and I want to ask you about the ayatollah's son now, Congressman. And that's the issue. We've now talked for about 10 minutes and we haven't brought up the issue of affordability in our remaining moment. Are you having conversations there? Is there a plan for members like yourself in the Republican Conference to message around this war when it comes to, to affordability in America?
- [15:00]
Congressman Marlon Stutzman
Yeah, Noel, no, that's exactly right. You know, things here at home are getting better. Inflation is down. Of course, what we passed in the big, beautiful bill addresses the tax policy that is now going to benefit Americans. We're just coming into tax season and the treasury secretary is doing a phenomenal job of communicating what is happening and that people are seeing more money being left in their pockets rather than going to pay the federal government's spending sprees over the last several years. When people have more money in their pockets, that's going to spur on the economy. And as I was just talking to some sales folks back home, they don't see the urgency yet, but they are starting to see that people are just kind of building up and ready to make moves here over the summer. So I think again this summer we'll see a much more active market.
- [15:53]
Joe Matthew
Well, I guess we'll all be hoping for fat tax returns this year. Congressman, thank you so much for the insights. Again, red hat on the terminal. The Navy escorting an oil tanker through the Strait of Hormuz. It has happened. This is Bloomberg. Stay with us on Balance of Power. We'll have much more coming up after this. From coast to coast, unlock adventure at Red Lion Hotels by Sinesta, where restful sleep, friendly service and trusted local knowledge are part of every stay. Red lion makes it easy to feel welcomed, comfortable and connected wherever the road takes you. Whether you're traveling for business or pleasure, you can spend less and make more of every trip. When you sign up for Sinesta Travel Pass, you'll get their best rates instantly. Go to sonesta.com to book your stay and unlock the best rates with Sonesta Travel Pass here today, roam tomorrow. Join now@sonesta.com Terms and conditions apply.
- [16:48]
Jeannie Shan Zaino
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
- [17:01]
Kelly Lyons
us live on YouTube, we track this remarkable move in oil. Yes, it was an outsized move to the upside yesterday before a complete reversal on the headlines from Trump's interview, a conversation with CBS suggesting the war could end soon. Now even more downward pressure coming today and the leg lower. Continuing after this headline from the Energy Secretary Chris Wright, who says the Navy has successfully escorted a tanker through the Strait of Hormuz, which of course President Trump suggested the US Navy would be willing to do in order to combat higher oil prices, which when he launched, launched his combat operations when it comes to Iran over a week ago he said he anticipated. This was the president yesterday evening.
- [17:41]
President Donald Trump
I knew oil prices would go up if I did this and they've gone up probably less than I thought they'd go up. We're also waiving certain oil related sanctions to reduce prices when the time comes. The US Navy and its partners will escort tankers through the strait if needed.
- [17:59]
Joe Matthew
And here we are. It's actually happened, as Kayleigh mentioned, the President adding some thoughts on Truth Social to write. If Iran does anything that stops the flow of oil within the Strait of Hormuz, they will be hit by the US 20 times harder than they have been hit thus far. Additionally, we'll take out easily destroyable targets that will make it virtually impossible, he says, for Iran to ever be built back as a nation again. Death, fire and fury will rain upon them. We assemble our political panel for their take. Bloomberg Politics contributors Rick Davis, Republican strategist partner at Stone Court Capitol, and Jeannie Shan Zaino, democracy visiting fellow at Harvard Kennedy School's Ash center with us for more on this. Rick, when you hear the rhetoric from the President, you see now that we're actually escorting tankers through the strait. This is essentially a no fly zone that we're standing up here. Can we afford to do this for weeks?
- [18:54]
Rick Davis
Well, it's, it's certainly within the capacity of the, you know, fifth Fleet, our Navy presence in the Gulf to be able to carry out these maneuvers. They train this, they do war games around it. They know what they're doing and it's no easy task. The, the, the, the Gulf is a very shallow body of water. The pinch point at the Strait of Hormuz. You could throw rocks into Iran as you sift your way through there. So it's, it's taking these tankers through a war zone and you know, it's, it's great for the price of oil. Obviously we see movement just off the announcement that's important for the rest of the world. But I would worry that this is an escalation on the part of the military, a new phase of the war where we're putting our service members and our military at risk in order to deliver oil to who? Mostly this oil goes to Asia and half of it goes to China. And I think that's a real political risk for the President if anything happens.
- [19:56]
Kelly Lyons
Well, and the president was saying that out loud in his press conference yesterday, Jeannie. He actually said this really is standing to benefit China, that it's an honor to do it. How does that message Ring here at home.
- [20:11]
Jeannie Shan Zaino
Not. Well, it was, you know, on top of saying he knew oil prices were going to go up, he is saying that this is going to benefit China. He said so many things during that press conference that were really Orwellian to the point that you couldn't really make sense of them. At one point he said we could do it the easy way or the hard way. And I think the hard way is the easy way. And you just stop and think, what is he talking about? And so none of this works for him politically. It is a risk, it is an escalation for the US Navy to do this, and it is an escalation just hours after the President said this thing was near over. And, oh, by the way, we're going to keep going. So it's hard to know what to make of it, except this is bad for the United States, it's bad for him politically. And I guess the winner here. Thank you. Donald Trump is China.
- [21:10]
Joe Matthew
Well, you know, the old don't take him literally, take him seriously line. Rick Davis is even challenged by what we've heard in the last 24 hours. The war was very complete, according to what he said yesterday. And now we're doubling down to what Pete Hegseth calls the most intense day of bombing yet. Assuming that the military is outperforming, and that has been the report from every quarter, what about the rhetoric and the way voters are supposed to interpret what they're hearing? The President did hold a news conference last evening and it was a bit of a weave. Does the administration need to be more direct, more on point with the American people?
- [21:50]
President Donald Trump
Sure.
- [21:51]
Rick Davis
I would say that at best, the communication strategy around this entire thing has been stressed out. President never went to the American public at the beginning and said, this is why we are doing what we're doing. This is why I have asked to spell our blood and treasure in a place like Iran. This is why it's important to the American people. So that didn't get done. So since then, it's been pretty much backfilling. You know, this is what happened today. And sometimes it's good news, sometimes it's bad news. Certainly the bad news the public tracks is how many American service personnel die in this effort, because that is the most sensitive political issue in America ever. And so, yeah, I don't think this administration is really on top of their game. Pretty clear. Last night, the President was saying things that were not echoed by the Secretary of War today. This is always the challenge with doing press briefings. You expose yourself to inconsistencies within the administration. So it's incumbent upon this administration to communicate clearly to the public, and it's on them if they don't. And in an election year like this is, it makes it even more important. So we'll see whether or not they sort of get their comms act together. But right now they seem pretty spread thin on that.
- [23:14]
Kelly Lyons
Well, and to this point, there's new polling out from Ipsos around public sentiment around the war in Iran. Overall, just 33% of those polls say that President Trump has clearly explained the goals of US military action in Iran. 64% said the administration has not adequately explained the objectives or haven't done so clearly. And to Rick's point, Jeannie, there was also overwhelmingly 54% or very 31%, somewhat concerns concerned about risk to the lives of American military personnel. There's concern in here about the cost of military action and the economic impact here at home. The vast majority are concerned about that. But President Trump has suggested that he doesn't care about polling around this issue. So I wonder, when we think about the tone shifts we have gotten from the president, whether or not they're consistent. If you think that is more reflection of political reality or market reality, Market forces that the president is considering
- [24:09]
Jeannie Shan Zaino
primarily to market forces. He does care an awful lot about his own image, his legacy, how he is viewed in the media and in polls. But of course, he discounts the polls that don't show him favorably and he holds up those that do. So I'm not surprised with these really bad numbers out of Ipsos, out of Quinnipiac. I mean, it is across the board. You know, he is of course going to say, oh, these polls don't matter. And I think just to step back and say the President spoke for 90 minutes yesterday, Kelly, and you and Joe listened to the entire thing. And what did we get out of that? We got completely mixed and muddled messages. None of this is normal. Over 1500 people have been killed. We have an energy crisis. We have a president and administration who don't agree on why we're there. We have an ayatollah son who is now the supreme Leader after having his wife, his children, his father killed. He is more hardline than the previous. And we have 900 pounds of nuclear material sitting in Iran. And they are saying job is almost done. This is looking great. None of this is normal. None of it makes sense. And the American people are right when they say we do not support what is going on here and they need a Congress to Back them up in that.
- [25:37]
Joe Matthew
You know, Rick, we're talking about the President's messaging to the American people. How about to members of Congress and specifically the Senate? There's great reporting today by Bloomberg's Matt Shirley that you can find on the terminal and online that several Senate Democrats are throwing threatening to force war powers votes and disrupt the chamber unless Republicans agree to hold public hearings with key Trump administration officials on the reasons for the attacks on Iran. That doesn't sound like something the Trump administration is about to do. Does this bring ever more dysfunction to the Senate?
- [26:10]
Rick Davis
Yeah, I mean, this is just one more layer of dispute between Democrats and Republicans on top of layers and layers of issues that they're trying to fight through. And you see Republicans sort of, you know, bouncing from side to side on this. You know, many of these issues are really stressing out Republicans who want to see government function, who want to see things move along and, and want to support the President on the war, but has have been given very little to go on. I mean, there have been many classified briefings, and this is the complaint the Democrats are making. If you're willing to sit with the entire Congress and tell us these things frankly that we read in the New York Times the next day, then what's the good of having a classified briefing? Because really what we are is the greatest press conference known to man. Congress we communicate to the American public through these hearings. And that's why they want public hearings, because they want this administration go on the record to explain to the public why they're doing what they're doing, not just at the Department of War in a daily press briefing, not just the president in the back of the plane. They want this stuff on the record in the Congress so that the American people can judge the consequences. It shows just how polarized the politics of all this is. And it doesn't stop at the water's edge anymore. It goes with war also.
- [27:34]
Kelly Lyons
Well, does this not. Could it not also in some way serve the administration? Jeannie, when we're talking about the communication problems, why not just go testify and make the case that you have arguably been making in press conferences, whether it's at the Department of Defense or President Trump last night?
- [27:50]
Jeannie Shan Zaino
Yeah, I mean, Kelly, it couldn't get much worse from a communications perspective. So I do think, and I do hope the Democrats are successful in getting them there. The problem for the administration is there is no clear objective as to what they were they are doing, how long this is going to go on, why we are there, and they have been all over the map. So imagine you drag these people in. How are they going to make this any clearer? This starts and ends with Donald Trump in 90 minutes. He stood up there yesterday and it was like you were re reading Some kind of 1984 Georgia Orwellian newspeak as he went from one side to the other. This is almost over. It's not over. We're going to win. We haven't won. I mean, it was back and forth and they won't be able to change that.
- [28:38]
Kelly Lyons
All right, Jeannie Shan Zaina and Rick Davis, Bloomberg Politics contributors. The both of them are political panel today. Thank you so much for joining us here. On Balance of Power.
- [28:45]
Joe Matthew
Stay with us On Balance of Power. We'll have much more coming up after this. Find home wherever you roam at Sinesta Es and Simply Suites where longer stays feel comfortable, flexible and easy. Stretch out and enjoy spacious accommodations and homelike amenities designed to help you settle in and stay productive or relaxed for however long you need. And when you're a Sonesta TravelPass member, staying at Sonesta Es in Simply Suites means earning points toward free nights, upgrades and more with every eligible stay. Go to Sonesta.com to book your stay and unlock the best rates with Sonesta Travel Pass here today, Rome tomorrow. Join now@sonesta.com terms and conditions apply.
- [29:30]
Jeannie Shan Zaino
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 played Bloomberg 11:30.
- [29:49]
Joe Matthew
Remarkable turn. We've been talking about the reversal in oil prices. We just saw a reversal of a tweet from the Energy Secretary. Kelly, this is remarkable. This is the post that brought crude oil WTI futures below $80 a barrel. We had a seven handle a couple of moments ago. It is now gone. After the tweet was deleted, Chris Wright had said that the U.S. navy successfully escorted an oil tanker through the Strait of Hormuz to ensure oil remains flowing to global markets. Even had a video attachment of him making that announcement. He said it occurred about 36 hours ago. Kelly, the Energy Department, or Chris Wright himself, has deleted that tweet. You retweeted it at one point. Point it is no longer available.
- [30:32]
Kelly Lyons
No longer available. Of course, the tweet being deleted is not the same as the Energy Department coming out and saying that this escort didn't happen or that this wasn't successful. We do not know that for sure. But certainly the market is trying to take a cue here knowing that it really has been very, very vulnerable to each and every headline that crosses about this. We saw the reversal that happened yesterday on the headline of Trump speaking on the phone with CBS suggesting the war will be over soon. So, so this is clearly just a market that is, that is twitchy.
- [31:02]
Joe Matthew
Well, that's for sure. As the president says, has the yips right now. Crude oil is down about 15%. We're still looking at big declines here today, but back above $80, just about $81 a barrel right now. Energy stocks haven't been moving a lot here as we wait for the next cues on what the president's talking about, essentially ensuring these shipments through the strait, but the strait outside of the this ship is still largely, if not closed, unused.
- [31:28]
President Donald Trump
Yeah.
- [31:28]
Kelly Lyons
And remember, President Trump on True Social overnight suggested that if Iran does anything to stop the flow of oil within the Strait of Hormuz, that they will be hit by the United States of America 20 times harder than they have been hit thus far, going on to say death, fire and fury will rain upon them. So we want to get into this now with Aaron David Miller, who's joining us from the Carnegie Endowment for International Peace, where he is a senior fellow. Welcome back to Bloomberg TV and Radio. Aaron, it's, it's great to have you when you consider the rhetoric we have heard from President Trump just in the last 24 hours, let alone over the course of the last 10, 11 days. Where are we right now on the escalatory or de escalatory curve?
- [32:06]
President Donald Trump
I mean, wandering all over the parking lot. This is a war of, of choice, not necessity. And wars of choice, wars of discretion, the metrics and standards for evaluating success are much higher because presumably in a war of choice, there was no imminent or immediate threat to the security and prosperity of the United States. And frankly, as of February 23rd, that statement still stands. The administration has toggled back and forth. I think they've settled more or less on a narrative that not only did the president and the Israelis help kill Ali Khamenei, the supreme leader, and by the way, this is a transformative act. There's no doubt about it. Iran is not going to be the same country after decades rule of a guy who basically championed death to Israel, death to America, used proxies to spread Iranian influence in four or five capitals and frankly, bankrupted the country by pursuit of a nuclear weapon or at least a nuclear weapons program. But I think they've settled on a narrative that they have basically undermined, to use the president's favorite word, obliterated Iran's capacity to project its president power abroad. And with the Israelis taken a major whack at the instruments of state repression that have been used to repress and oppress demonstrations and the. And the Iranian public for decades. Regime change. No. I think after 11 days, it seems to be clear that the headline is the trend line that this regime, the irgc, and remember, to control Iran, you need access to money, you need access to guns, and you need access to oil. And the fact is, there's only one organization, Security Services and the irgc, that has that sort of influence and. And power. So 11 days in. I mean, can we speculate? The work could be over next week. It could last for another several weeks. This is the problem with a war without defined objectives.
- [34:15]
Joe Matthew
Mm. Well, so we have a new supreme leader. The regime is holding, as you're pointing out here, Aaron. David Miller. And we wanted to talk to you about some of the sunlight that we're finding between us and Israeli objectives. Does the Ayatollah son, the new supreme leader, have a price on his head? Does he need to stay indoors for the foreseeable future?
- [34:41]
President Donald Trump
Now, I would think, yeah. Hassan Nasrallah, ahead of Hezbollah, the Israelis killed in the fall of 2024. His successor, Hashim Safa Adin, lasted six days. Maybe Mujtaba Khamenei will last longer. But I think, no, the Israelis are going after leadership targets. They live in the neighborhood. And on this one, look, let's be clear. We're Venus, the Israelis are Mars. The Israelis really do have an existential threat should Iran actually cross the new nuclear threshold, from a threshold weapons state to an. Actually to an actual weapons state. So they're there in that respect. Benjamin Netanyahu, I think, would like to see the war last for another several months so the Israelis can continue to degrade, not just Iran's, of ballistic missile production and its inventory, but their leadership targets as well. But make no mistake, when Donald Trump decides the war is over, Benjamin Netanyahu will comply. Rarely has an American president. And I worked in administrations from Jimmy Carter to Bush 43, and I throw in Obama and Biden into that mix. Rarely ever has an American president had more leverage, leverage over an Israeli prime minister. Because for Netanyahu, the one organizing principle in 2026 is not Iran, it's not Gaza, it's not Lebanon. It's reelection. And the fact is, if the government goes to term in October 2026 or if elections are advanced, which they may be until June or July, Benjamin Netanyahu needs Donald Trump as an active campaigner, not as a, not as a passive one, an active campaigner. Which means that when Trump says jump, the issue for Netanyahu, maybe I'm phrasing it a tad too strongly, is how high. So, no, if Donald Trump wants the war over and the Israelis to stand down or to de escalate or push it into another phase, Netanyahu is going to comply.
- [36:47]
Kelly Lyons
But what about Iran? Is Iran likely to, to comply?
- [36:50]
President Donald Trump
And, and, and that is the key issue. Will the Iranians let Donald Trump de escalate? That is a critically important question because what Iran has now established is one, regime stability and the cohesiveness of the Revolutionary Guard. And two, that what they are we're calling horizontal escalation. They can't go up directly against the US Military or the Israeli military, but they can escalate horizontally over a discrete area. And they're demonstrating with a terrifying clarity the power they have. And they probably latent capacity if they're holding stuff back. And I think they are to basically make life extremely uncomfortable, both for oil markets and for the Gulf states who crave security and stability. And thought when they allowed the Chinese, Saudis to broker this detente between Iran and Saudi Arabia, that's what they were getting. And look, guys, in this part of the world, geography is destiny. And as far as the Gulf states are concerned, yeah, they can continue to rely on the United States, but it hasn't stopped the Iranians from disrupting life basically as they know it. Proximity guarantees vulnerability, and they are vulnerable.
- [38:14]
Joe Matthew
It's great to have you back, Aaron. David Miller, Senior Fellow, Carnegie Endowment for International Peace We've been looking forward to this conversation, Aaron. Thank you for being part of it. I'm Joe Matthew in Washington alongside Kailey Lyons. The Tuesday edition of Balance of Power takes a strange turn today as we learn that the Energy Department has deleted the post that got the markets churning a short time ago for the better. We had a seven handle on crude oil and Kelly, it looks like we've given that up about $81. Still down quite a bit, down sharply 15%. But evidence of a U.S. military escort for an oil tanker through the strait got investors attention. That is what Energy Secretary Chris Wright was announcing in the Post. It has since been deleted. So we don't know if that did occur or if there are more nuances around this story. But Kelly, we're certainly paring some of the losses that we saw before.
- [39:04]
Kelly Lyons
Yeah, so let's get into this now with Jeff Mason, who's a White House correspondent for us here at Bloomberg, here with us in our DC Studio. Jeff, do we have a sense of, of whether this did indeed happen and maybe it's just the rollout of communication failed, or was this something that hasn't happened yet and they jumped the gun?
- [39:18]
Jeff Mason
No sense yet. It's very fresh. I will say that there's a White House briefing coming up at 2:00'. Clock. So that will be an opportunity to ask directly at the briefing what what the deal is. Here are a couple scenarios. Number one, it could be that it didn't happen. You're right to ask that. Number two, it could be the communication issue. Number three, and related to number two, it could be that the secretary is got ahead with what is major news of the president. And that's always a no, no in the Cabinet. And President Trump in particular likes to announce big news. You may recall that the day that the Iran war was announced, we were waiting for confirmation that the supreme Leader had been killed. That confirmation ended up coming directly from the president because that was a major headline and he wanted to make it. It's possible that that's the case here. I don't know that. Just laying out some potential scenarios, do
- [40:09]
Joe Matthew
you get the sense that this administration is aware of how sensitive the energy market is to each word that's coming out of the White House? Because the rhetoric has been a little confusing for the last 24 hours.
- [40:20]
Jeff Mason
True. Through that, I think that the administration and the president himself are aware of the impact this war is having on energy markets, certainly aware of how important it is to bring those prices down. We've talked a lot on these shows and when we're together about the political impact of this war and the political risk of higher gasoline prices heading into the midterms for President Trump. So I think you saw some of that at play with his comments yesterday suggesting, suggesting that the war was going to end earlier than he has said, but then offering a contradictory comment on that later when he said that there could be even harsher attacks. So that's a long way of saying, Joe, yes, I think they do realize that. And yet it doesn't necessarily make them more careful.
- [41:03]
Kelly Lyons
Well, so regardless of what happened here, the fact that a post was made and then deleted, does that not just speak to the idea that across the varying cabinets within the Trump administration, there is a serious messaging challenge, an inconsistent messaging challenge when it comes to this conflict?
- [41:18]
Jeff Mason
And on an issue that, as you just said, Is supermarket moving? I mean, this is not just a message about something going on at the White House or a new event or whatever might end up on a social media post. This is something that is directly connected to the war, connected to people's businesses, and connected to financial markets.
- [41:38]
Joe Matthew
So we're going to be hearing from the press secretary momentarily. Top of the hour. Supposed to have a White House press briefing whether it begins on time or not. As someone who spent a lot of time in that front row, what is her job today? What's the question you'd be asking?
- [41:50]
Jeff Mason
Well, I think because of the news that we just are talking about, I think my first question would be just that. Did this actually happen? Can you tell us what happened? You know, what ship it was? How did it go? And if not, then how in the world world did it come out already and have to then be deleted by the Energy secretary? Also, if it happened and you're confirming that, then why was the post deleted? And what's the backstory?
- [42:14]
Joe Matthew
And would you expect an answer?
- [42:15]
Jeff Mason
Not necessarily. I mean, I. Oh, Joe, you're putting me on the spot here. I. No, I mean, I think definitely she will come out with some kind of information about that. She can't really not come out without information about it, but we may not get all the.
- [42:28]
Joe Matthew
All the backstory. Well, we'll keep tabs on what is said in that briefing room with the help of Jeff Mason. Thank God you're on board and thank you for jumping in here in the clutch with great analysis. As always, thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already at Apple, Spotify, or wherever you get your podcasts. And you can find us live every weekday from Washington, D.C. at noontime Eastern at Bloomberg. We buy insurance for peace of mind. But every year, millions of claims are denied, not because people did anything wrong, but because their policies quietly excluded what happened. Insurers know every detail. Policyholders rarely do. That's why my policy advocate exists. For just 27 cents a day, their platform reads your policies and explains where you are vulnerable. They don't sell insurance. They deliver transparency. Before you trust your policy to protect you, let my policy advocate tell you what it really says. Go to mypolicyadvocate.com this podcast is brought to you by Wise the Smarter Way
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