June 13, 2025 • 40 mins
Watch Joe and Kailey LIVE every day on YouTube: http://bit.ly/3vTiACF.
Israel launched strikes across Iran on Friday morning, targeting nuclear facilities and killing top military commanders in a major escalation against its chief adversary that risks sparking a broad war in the Middle East.
The strikes were far more extensive than those Israel carried out against Iran last year and underscored the country’s growing assertiveness, as well as its military and intelligence capabilities.
Iran appeared to launch a retaliatory barrage of missiles toward later Friday, according to the Israel Defense Forces, who said in a statement that “all of Israel” was under fire. Plumes of smoke could be seen over Tel Aviv on Friday evening. Iran did not immediately comment on the action.
Bloomberg Washington Correspondents Joe Mathieu and Kailey Leinz deliver insight and analysis on the latest headlines from the White House and Capitol Hill, including conversations with influential lawmakers and key figures in politics and policy. On this edition, Joe and Kailey speak with:
- Bloomberg Washington Correspondent Tyler Kendall.
- Center for Strategic and International Studies Middle East Program Director Mona Yacoubian.
- The Washington Institute Senior Fellow Holly Dagres.
- Bloomberg Intelligence Senior Commodities Strategist Mike McGlone.
- Bloomberg Politics Contributors Rick Davis and Jeanne Sheehan Zaino.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
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Speaker 2 (00:25):
Keeping an eye on the market response to the events
while we're watching in the Middle East, of course, events
that the President and top administration officials are also paying
attention to, having convened in the Situation Room at eleven
o'clock this morning to consider what the way forward may be.
Knowing we still have questions about the extent to which
Israel plans to continue these attacks and the course, the
extent to which Iron will have the capacity to respond
(00:48):
and in what fashion. But as we mentioned Israeli Prime
Minister Benjamin Nettnia who has signaled that these operations will
continue for some time, as he outlined last evening, in
and rest the operation that Israel is referring to as
Operation Rising Lion.
Speaker 3 (01:06):
Israel launched Operation Rising Lion, a targeted military operation to
roll back the Iranian threat to Israel's very survival. This
operation will continue for as many days as it takes today,
it is clear that Iran is just buying for time.
It refuses to agree to this basic requirement of peaceful nations.
(01:29):
That is why we have no choice but to act
and act now.
Speaker 4 (01:34):
In fact, they are still acting Secretary of State Marko
Rubio calling the Israeli strikes unilateral action. And that's where
we start with Bloomberg's Tyler Kendall, who has the latest
from the North lawn of the White House.
Speaker 5 (01:45):
Tyler, Yeah, hey, Joe, Well, we're still waiting on some
pretty important updates from the White House. One, President Trump
convened his National Security Council earlier today. That was on
the public schedule for eleven am Eastern. And two we
are expecting a phone call between President Trump and his
real Prime Minister Benjamin and Yahoo. Of course, when we
get any of those readouts, will bring them to you.
But it does come as President Trump does seem to
(02:07):
signal some apparent.
Speaker 6 (02:09):
Support for these Israeli air.
Speaker 5 (02:11):
Strikes, even as the US contends it is not part
of the ongoing operation, though it did get advanced warning
that it was coming ahead of time. And there's really
a few key things that we are focusing in here on,
of course, one being that in a series of posts
on True Social earlier today, President Trump really counting American
military might and also suggesting that US equipment could be
(02:33):
flowing into Israel shortly. But he made the point that
one of the top priorities here is that the US
wants to see Iran make a nuclear deal. This is
going to be absolutely imperative, and he sort of put
on a warning to it, right He said that it
has to happen.
Speaker 6 (02:46):
Before it's too late.
Speaker 5 (02:48):
He's using these strikes as leverage to see if that
can get aron to the negotiating tables.
Speaker 6 (02:53):
We wait to see if those six.
Speaker 5 (02:54):
Rounds of talk in Oman actually end up materializing. A
US official does tell Bloomberg News they are hopeful that
they will continue there. It is clear that the administration
wants to find this diplomatic de escalation. That's been their
stance going into this. In fact, President Trump said that
he gave her on a deadline to make a deal,
which they ended up not being able to meet. In fact,
(03:17):
it was Bloomberg's very own Amory hor Dern but reported
back in March that the Trump administration sent a letter
to Iran saying that they had two months to wrap
up the deal.
Speaker 6 (03:26):
Of course, we are well beyond this, Joe and Kelley.
Speaker 5 (03:29):
It could take a while as we watched to see
how this ends up escalating. We had the Israeli ambassador
to the United Nations on Bloomberg Television earlier today who
said that this operation could extend in two weeks.
Speaker 6 (03:40):
As we wait to see how this develops.
Speaker 2 (03:43):
And Tyler, of course, the president still has no public
events on his schedule today. Do we expect to hear
from him beyond his posts on truth social about this.
Speaker 5 (03:52):
At the moment, Kayley, there's nothing publicly on the schedule,
So we're going to have to see how this ends
up evolving if he does give come out and and
gives us some sort of update here moving forward.
Speaker 6 (04:03):
We know though that they are really.
Speaker 5 (04:05):
Pushing to have these talks in Oman continue, as that
has been a really clear priority from this administration since
President Trump actually took office, but it's been unclear if
there's really has been any substantial progress towards an outcome.
Unclear what an outcome would look like beyond the JCPOA,
which of course the first Trump administration did pull out
of back in twenty.
Speaker 6 (04:24):
Eighteen, We're going to have to see.
Speaker 5 (04:27):
We're also watching closely, of course, Defense Secretary Pete Hegseth
and what he has to say about the situation as
it continues to evolve.
Speaker 2 (04:35):
All right, Bloomberg's Tyler Kendall live on the North lawn
of the White House for us on Bloomberg TV and Radio.
Speaker 7 (04:40):
Thank you so much. We appreciate it.
Speaker 2 (04:41):
And as Tyler referenced, there was a conversation that took
place with our colleagues on Bloomberg Surveillance earlier today where
the Israeli Ambassador to the UN joined them and talked
about what Israel's expectation is will happen next year.
Speaker 7 (04:54):
Here's part of their exchange.
Speaker 8 (04:56):
We took into consideration that there would be retaliation on
Marie and proportional. Well, they know that we have capability
as well, so they will have to think, you know,
twice before the attack athen and what they are doing.
And I would say that today we can reach every
target in Iwan. We have the control.
Speaker 7 (05:17):
And just as we.
Speaker 2 (05:18):
Listen to that sound, we get headlines from the Israeli
defense forces that residents have been instructed to minimize movement
in public areas and remain in protected spaces as Israel
braces for further response. Here for more, we turn to
Mona Yakubian, who is joining us here on Balance of Power.
She's director of the Middle East Program at the Center
for Strategic and International Studies. Mona, we appreciate your time
(05:41):
as we consider that Israel is still active in these operations.
These strikes are continuing, and the signal from the Israeli
government has been that they will continue for days to come.
Do we have an understanding of to what extent Israel
has already been had reduced Iran's capacity to respond to
retally in some way, Well.
Speaker 9 (06:02):
We haven't. We don't have direct bomb damage assessments. There's
lots of film footage coming out that shows some fairly
extensive hits, and of course is noted the attacks are continuing.
I think it is interesting to see that we have
yet to see a significant response from Iran that could
indicate that there at least their ballistic missile capabilities have
(06:24):
taken a hit. But again it's too soon to know.
Iran could just be biding its time and waiting, but
I think some sort of Iranian retaliation is certainly to
be expected.
Speaker 4 (06:35):
With reports from the Associated Press Mona suggesting that we're
now hearing explosions near the four Doah underground nuclear site.
What does that tell you about Israel's plans to so
called close the deal this time?
Speaker 9 (06:50):
Well, Israel has made it very clear Prime Minister Ntsagna,
who has said that Israel will not tolerate Iran gaining
any sort of the nuclear weapons capable ability. Fairdough is
the mother load, if you will, of Iranian uranium and Richmond.
It is deep, deep underground. There are real questions as
to whether Israel has the armaments, the bunker busters, if
(07:13):
you will, that can penetrate. So time will.
Speaker 7 (07:16):
Tell, Well, it certainly will.
Speaker 2 (07:20):
And when we consider that, that gets to the US
position Mona, where we have seen some conflicting characterization as
to what extent the US knew of this attack or
supported it is. Marco Rubio, the Secretary of State, immediately
last night acted to distance the US government from Israel's action,
and yet President Trump today is signaling that this never
would have happened without US military technology that Israel has
(07:43):
access to. What role do you expect the administration to
play in what happens moving forward?
Speaker 9 (07:49):
Well, how much the US knew in advance. I think
is going to be a question that we will all
be learning about in the coming days. But I think
what is clear is that the United States is not
interested in taking on an offensive role in this military engagement.
We are seeing US military assets being flown in and
(08:11):
coming in by sea to the region, but that is
largely for a defensive posture, both to protect significant US
assets and of course Israeli forces as well.
Speaker 4 (08:25):
We saw strikes and responses tit for tat a couple
of times last year, Mona, Are you thinking of that
again in this case or is this the beginning of
a war between Israel and Iran?
Speaker 10 (08:39):
Yeah?
Speaker 9 (08:39):
I think this is a distinct departure from what we
saw last year, which were, as you noted, limited tit
for tat attacks that came to a quick conclusion. Already,
Israel is signaling that it is intends to continue its
campaign for days, if not weeks, and we know Iran
(09:02):
has said that this is a declaration of war. And
so I'm afraid that the region is really at an
incredibly perilous moment, one that has been long feared, where
it really could fall into the abyss of a region
wide war.
Speaker 2 (09:18):
Well, and what role will Iran's proxies play in that moment,
knowing that they have been greatly diminished over the last
several years. Is Israel, of course, has waged an ongoing
war against Tamas, has acted to take out Hesbela. The
US had reached at one point recently a truce with
the Huthis. I don't know if you think that will stand.
But what role will those proxies play here?
Speaker 9 (09:39):
Well, I think that's a big question, and this in
part may account for Israel's timing of the attacks Hesbela,
Uran's primary proxy, its second strike capability, if you will,
was largely decimated last year, and Tamas too has had
extreme damage to its forces. That leaves the Huthis, and
(10:01):
I think the Huthis are a wild card. We should
not underestimate the Huthis' capabilities. We'll have to see what
they do, whether they choose they have already launched attacks
on Israel in the past, do they join the fight.
We're going to have to wait and see.
Speaker 4 (10:18):
You mentioned the lack of response, or at least the
slow response from Iran, knowing that a lot of things
could still happen Mona, does that speak to disruption at
the top of the chain of command following the killings
we saw last night.
Speaker 9 (10:32):
Yeah, I mean, we're seeing fairly significant decapitation of Iran's
military and paramilitary forces. There's no question this has put
Iran on the back foot, and this might account again
for the fact that we're not seeing right now a
significant response. We'll have to wait and see where things go,
(10:54):
but Iran has certainly suffered some fairly significant blows over
the past twenty months. Whether or not it is completely down,
I think, is another question. But I would always say,
you know, we should never completely count Iran out. It
will find a way, I think to respond.
Speaker 6 (11:14):
Well.
Speaker 2 (11:14):
President Trump today has suggested multiple times that some of
the individuals inside Iron's chain of command that the US
was negotiating with trying to come to terms with, are
now dead Mona and I wonder as we considered the
future of those negotiations, knowing that six round of talks
was set to take place this weekend, if you think
there really is a future, does this add to or
(11:35):
diminish the chances of reaching another nuclear record between the
US and Iran.
Speaker 9 (11:40):
I'm afraid this dramatically diminishes those prospects. It's hard to
imagine negotiations going forward given everything that's just happened. I think,
you know, best case scenario, these talks are put on
the back burner. But again, I think we're entering, unfortunately,
a new and very scary period in the Middle East,
(12:02):
one that's really going to be dominated more unfortunately by
military action to resolve problems rather than diplomacy.
Speaker 4 (12:10):
Well by extension mona. You wonder about talk. It was
only months ago there was talk about expanding the Abraham Accords,
that normalizing relations between Israel and Saudi Arabia was at
last at hand.
Speaker 9 (12:24):
How about now, Well, already prospects for Israeli Saudi normalization
were diminishing given the deepening conflict in Gaza. Now I
think it's virtually impossible to imagine how that goes forward.
I'd note that when we look at responses from the
(12:45):
region to Israel's attacks, among the most vocal critics of
the attacks was Saudi Arabia, and Saudi almost in the
quote from the King, seemed to align itself with Iran.
So I think Saudi Israeli normalization is at really I
wouldn't even call it a distant prospect. I think the
(13:07):
chances for that for it right now are next to nil.
Speaker 2 (13:11):
Well, I wonder, Mona, how much you think that might
have to do with Saudi concern or concerns of any
oil producing country in the Middle East about Iran potentially
going after their production capacity or taking the perhaps most
dramatic option of closing off the Straight of Hormuz entirely.
Do you think that's a realistic possibility here?
Speaker 9 (13:30):
You know, I don't in the sense that I think
that Iran would essentially be shooting itself in the foot.
I don't see that happening because it would of course
dramatically imperil the global energy supplies and Iran would suffer
as a result. The other thing to keep in mind
is just prior to all of this happening, there really
(13:52):
had been an interesting and marked warming of relations between
Iran and Gulf Arab countries. I sense that Iran is
going to want to actually protect those relationships now more
than ever. So I don't see Ron doing anything to
provoke its neighboring Arab countries.
Speaker 4 (14:12):
We just have about a minute left. Mona, is Jordan
the most nervous neighbor in the neighborhood.
Speaker 9 (14:19):
I think Jordan has a lot to fear. Absolutely, people,
you know, colleagues and friends there already reporting concerns sirens
going off. Jordan is not a country that is used
to daily warfare and fighting, and it is right now
on the edge of the of the most intense fighting.
(14:39):
And so where things go in Jordan, I think we're
going to need to watch very very closely. But I'm
sure that the Jordaanes are deeply, deeply concerned about the
spillover of this conflict into their country.
Speaker 4 (14:53):
Moni Yakubian, director of the Middle East Program at the
Center for Strategic and International Studies CSIS, thank you so
much for the insights. With more breaking news on the terminal,
the Kremlin saying that Vladimir Putin spoke with Israel and
Iranian leaders. The Russian president had phone calls with both today, Kaylee,
remarkable development as we wait for input from Russia and
(15:14):
China on this.
Speaker 1 (15:18):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on Apple,
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New York station just Say Alexa played Bloomberg eleven.
Speaker 4 (15:35):
Thirty headlines crossing the terminal. Now, the International Energy Agency
commenting on an email here, the ia email activating its
Incident and Emergency Center on Iran attacks. We had heard
earlier that they had not measured radiation at dangerous levels
around the Uranium and Richmond sites bombed by Israel. The
(15:56):
IAEA commenting that it is continuous contact with Iran on
potential hazards. There's a big question here about response, about retaliation.
We know for a fact that about one hundred drones
were sent back from Iran toward Israel. Most of them
were knocked down. We don't have much of any recorded damage,
(16:19):
and very few people believe that will be it. We
actually had a conversation earlier today my colleague and Marie
hor Dern on Bloomberg Surveillance on Bloomberg TV, speaking with
Israel's UN ambassador Danny Dan and listen.
Speaker 8 (16:32):
We took into consideration that there will be retaliation.
Speaker 7 (16:34):
On Marie and will be proportional.
Speaker 8 (16:37):
Well, they know that we have capabilities as well, so
they would have to think, you know, twice before the
attacks and what they are doing, and I would say
that today we can reach every target in Iwan. We
have the control.
Speaker 4 (16:51):
We have the voice now of Holly Dagras, Senior fellow
at the Washington Institute, for her take on this. Holly,
it's great to have you back on Bloomberg. Thank you
for joining us. What is next in retaliation from Iran?
Speaker 11 (17:06):
Well, I think that the Iranians are currently trying to
assess the damage. So it's a lot of US analysts
as well to understand what capabilities do they still have left.
The last time we saw tit for tat strikes in
April and October of twenty twenty four, Israel had taken
out its capabilities, So we'd like to know do they
(17:27):
have the capabilities still to actually respond to Israel? Do
they have the defense capabilities? Probably not, given that they
had allegedly over two hundred Israeli drets flying over Iranian airspace.
So I think it's first assessing the damage and then
they're going to have to decide how they're going to respond. Historically,
(17:48):
as you've noted, and because of these tip for tat strikes,
a response is expected because they have to stand up
to Israel and show their very few supporters that they
have left, that they are strong and defined, and that
they know how to respond.
Speaker 4 (18:05):
Considering the fact that Iran may be on its heels militarily,
how could it inflict the most damage. We did hear
threats of hundreds of ballistic missiles that could be shot
at Israel, but of course the US was moving personnel
out of Iraq. We know that there could be some
asymmetric retaliation here with regard to energy infrastructure. Where should
we be looking?
Speaker 11 (18:28):
You hit at some important points? Of course, I keep
referring back to those original tip for tat strikes because
those are our best data points. Iran did for at
least three hundred munitions at Israel in both instances, so
that should tell us that they are definitely capable of that.
And as you noted, the US actually did come in
(18:51):
for airspace backup, and so did Jordan, the UK and
other countries. Presumably that some of the conversations that are
happening behind closed doors because there is a retaliation expected.
Israel has actually announced that and has told its people
to shelter in place for that event. But it's also
noteworthy that the Israelis have said this isn't a one
(19:11):
off that this is an ongoing operation, So we're all
waiting to see tonight in the coming days, what other
targets is REEL going after, and if they'll be continuing
to hit these nuclear sites that they've already hit.
Speaker 4 (19:27):
There are big questions about whether for Dough will be
on that list. There were a number of enrichment sites,
nuclear infrastructure sites, but this is the area where you
have the deep underground caverns and the control centers that
would likely require the use of the MOAB. The US
made Mother of All Bombs as it's called. Will that
be on the list of targets?
Speaker 11 (19:49):
Well, when you talk about bombs and capabilities, that's the
issue that's been why there's been a lot of conversational
washing about why Israel shouldn't go on alone, because Israel
doesn't have the capabilities to hit these very deep nuclear facilities,
and that the United States arguably has the right bombs,
and it hasn't, at least to our knowledge, handed over
(20:10):
those bombs to Israel to do these kind of attacks.
So in essence, this is looking more like a mow
the lawn attack where they're taking out things and slowing
things down. Thus far, and as we wait for more information,
it's not entirely clear if these facilities are being taken
out in their entirety.
Speaker 4 (20:33):
I want to ask you about the diplomatic side of
this before you leave us, Holly. The President is still
talking about a deal being possible. In fact, he seems
to think, based on comments to Axios earlier today, that
these strikes make a deal more likely, knowing that there
was a set of talks planned for Sunday. Here's how
the President put it yesterday at the White House. Ahead
of these attacks.
Speaker 12 (20:54):
Iran cannot have a nuclear weapon. Other than that, I
want them to be successful. I want to have agreement
with Iran. We're fairly close to an agreement. We are
fairly close to a pretty good agreement. It's got to
be better than pretty good, though, but it's got to be.
I much prefer an agreement as long as I think
there is an agreement. I don't want them going in
(21:15):
because I think I.
Speaker 4 (21:15):
Would blow it.
Speaker 12 (21:17):
Might help it, actually, but it also could blow it.
Speaker 4 (21:21):
Well, they've gone in. What are the chances now, Holly?
Speaker 11 (21:26):
Well, historically Iran doesn't respond to this kind of pressure well,
given their ideology and so presumably, it's hard to believe
that after everything that's just happened in these past twelve
hours or more, that the Iranians would sit across from
the Americans and say say uncle and make a deal.
(21:46):
I mean, this calculation can change potentially over time if
these strikes continue. But I think just looking at the
climate that Iran is in now and reeling from the
events that have just taken place, with some of its
top military blat brass and nuclear scientists being assassinated, that
they'd be like, Okay, let's sit across some of these
(22:07):
guys and make a deal.
Speaker 4 (22:11):
Not likely. Holly Dagrass, senior fellow at the Washington Institute,
one of the voices we wanted to hear from today. Holly,
thank you so much for the insights. Something tells me
we're going to be talking again soon, and we do
want to stay in touch as well with Mike mcgloane,
one of the other voices that we add to the
mix today. With our eyes on the energy space here,
having seen the pop and oil prices, West Texas intermediate
(22:32):
crude oil futures up about six percent right now, we're
hovering just below seventy two dollars a barrel, and we
saw Brent jump on this even more overnight. Mike mcgloon,
of course, covers commodities for US, our senior commodity strategist
at Bloomberg Intelligence. Mike, it's interesting that no actual energy
infrastructure that I'm aware of was targeted outside of nuclear
(22:53):
infrastructure by Israel. Is this in anticipation of in fear
of a supplied disruption that we have not Senia?
Speaker 13 (23:01):
Correct, Joe, and I like that word you use. Pop
pops usually don't last long. It's a few better ways
to fuel a bear market than to cleanse the shorts,
and we certainly did that today. The high for the
year and WTI is round eighty. We pumped up around
seventy six or so overnight. Now we're about seventy two,
which is unchanged on the year. The lowes fifty five,
and we still have an overhang of access supply in
(23:23):
the US and the world in decline demand. You have
to ask ourselves is this going to add to that
or reverse it. It's going to increase that supply and
decrease demand, and unless there's some kind of supply shock
that's enduring, it's probably going to enhance that bear market
for prices to go lower.
Speaker 4 (23:38):
So if we did see Iran respond with an attack
on energy infrastructure, an attack on pipelines or on ports,
what would it mean. Would it fulfill this jump in
prices or send it even higher?
Speaker 13 (23:51):
Exactly, it might fulfill the current jumping prices. It might
get to eighty, but I probabish today. I think eighty
is a new hundred since the Russians invasion in Ukraine
that bear mark with prices going down from one point thirty,
the highest volume area has been around eighty. To get
above near you have to have some major enduring cut
in production. But even if they shut it off in
(24:12):
the short term, it's going to incentivize more supply and memory.
The massive incremental supply is really coming from South America
Opak too. It'll turn MOPEC back on, and we have
actually the declined demand from China. So the situation for
this is bad. And if Crudel stay hot Staysie tilts
that world towards a global recession, which you are kind
of leaning there already, as indicated by rising gold and
(24:32):
falling crude oil.
Speaker 4 (24:34):
Well really interesting. It's not what I expected to hear
from you, Mike, and that's why we like to talk,
of course, because you're the expert here, but we all
grew up thinking that this was the end. When you
see the headline that Israel has attacked Tehran, head for
the hills, start stockpiling oil and gas. This is a
remarkable reaction, then, isn't it.
Speaker 14 (24:54):
Well.
Speaker 13 (24:54):
I like how you brought that up as we grew up,
because that's how the world's changed. In two thousand and eight,
the US was importing about ten eleven million barrels a day.
Now we're exporting about three million barrels a day. The
world has the paradigm shifted. We have a massive oversupply
of energy and grains in agriculture, and so it's the
Alpe's less significant. So that might hurt the rest of
(25:16):
the world. But I can just sense a lot of
people and the oil patch are looking at this and say,
oh cool, I can sell forward some of these prices,
add to my production and lock in profits.
Speaker 4 (25:28):
How about that. I have to ask you, because you're
with us, about what's happening on the gasoline side as
we look to refine products. Triple A's got a national
average three dollars thirteen cents for a gallon of unleaded
When we consider a geopolitical world that could be very
tense this summer, and you add demand from summer driving season.
(25:49):
Is this the level we're going to be at or
could we see something more severe? You remember what happened
to gas when Russia invaded Ukraine.
Speaker 13 (25:57):
Yeah, so that's the key reason why we're still in
a domin me trajectory, and both energy products and commodities.
It's on the back of Russia's invasion in Ukraine incentivized
more supplies and recreased and decreased demand. But the price
right now you mentioned is down about ten percent from
this time last year.
Speaker 6 (26:13):
It's a seasonal factor.
Speaker 13 (26:15):
Come next year, I think it's going to be closer
to a two handle, particular if we get a little
bit of roll over US stock market, and particularly because
remember we have we're a net exporter of crude oil,
liquor fuels in this country. We don't have to worry
about the rest of the world anymore. So it's actually
more their problem if this continues. Happens actually good for
the US.
Speaker 4 (26:33):
Fascinating A true expert, Mike mcglohan, great to see them.
I can appreciate your clutch analysis here as always from
Bloomberg Intelligence, where I swear the smartest people in the
business all work. We just saw a headline across the
terminal the IDF detecting a missile was launched from Yemen
towards Israeli territory. This is another potential factor here if
this begins to impact shipping in the Red Sea, with
(26:56):
big questions about what it means for our agreement or
truce or whatever we're calling it. With hoothy rebels in
Yemen park that here, We're going to assemble our panel
next with developing news under our feet here on Bloomberg.
Genie Shanzano and Rick Davis, I'm glad to say are
straight ahead here on the fastest show in politics. Stay
with us on Balance of Power only on Bloomberg.
Speaker 1 (27:21):
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News Live. To find our livestream on YouTube as well
Bloomberg Originals. With our continuing coverage here that's going to
continue rolling through the day because we have a lot
to learn about, not only what happened last evening in Israel,
strikes against Iran nuclear facilities, against its top military commanders,
(28:03):
but of course the retaliation that we're expecting, and frankly,
the continued attacks by Israel Benjaminetnye who making it clear
they are not done. This could last days. Jets have
been scrambled again. There was another round of strikes that
apparently set off air defenses in Iran, and we are
now seeing headlines from the IDF. This is important. Sirens
(28:24):
in Jerusalem are now being heard after a projectile was
fired from Yemen. Of course, remembering our truce if I
can use that word with hoo, they rebels in Yemen
who are interfering with shipping in the Red Sea. All
of this could be renewed at this moment. Reuter's sighting
Israeli military on continuing attacks. Of course, as we get
(28:46):
into the evening there we could have a lot more
to talk about. Is really attacks focusing on missile launchers
and drone sites now, Reuter says. Israel says its air
force is continuing to attack Iran. This is happening as
I speak to you here on Bloomberg Radio. I want
to back up a little bit to eleven am Eastern time.
Less than two hours ago. President Trump was scheduled to
(29:07):
be in the situation room for a meeting of his
National Security Council. We have not heard that that meeting
has concluded. He may still be in there now. That
is also likely why we're not seeing continued posts untruth
social He did post a short time before he went
into the situation room, and there were a couple of
things that were really interesting. Knowing that the administration so far,
(29:30):
at least on an official level, has said that the
US was not involved, Secretary of State Mark Arrubio calling
the Israeli strikes a unilateral action in his statement last evening,
saying point blank the United States was not involved. He
said the Trump Administration's top priority, as you can see
on YouTube, is protecting American forces in the region. But
(29:52):
of course Donald Trump had many different things to say
about this. Talking about the use of US military equipment,
he says more lethal than anywhere else in the world
by far that Israel has a lot of it, with
much more to come. He also said, I gave Iran
a chance, a chance after chance, to make a deal.
I told them, in the strongest words, to just do it.
(30:12):
But no matter how hard they tried, no matter how
close they got, they just couldn't get it done. He
also then referred to this as day sixty one. In
a separate post before he entered the situation room two
months ago, the President writes, I gave Iran a sixty
day ultimatum to make a deal. They should have done it.
Today is day sixty one, implying that he was the
(30:35):
force behind this. The President says, I told them what
to do, but they just couldn't get there. Now they
have perhaps a second chance. Let's assemble our panel. I'm
really glad both Rick Davis and Jeanie Schanzano are with
us today. Bloomberg Politics contributors. Rick, of course republican strategist
and partner at Stone Court Capital. Genie is a senior
(30:56):
Democracy Fellow at the Center for the Study of the
Presidency in Congress. Let's get into all of this, guys.
Good to see you here. It's our first chance to
talk since this all happened last evening. Rick, I'm going
to start with you on the messaging that's coming from
the White House. Are we to believe the United States
was involved or not?
Speaker 10 (31:15):
Yeah, it seems like we're doing everything we can to
distance ourselves from the attack. Typically we would lean in
and say we've got their back. You would think there'd
be a carrier group headed toward Israel. You would think
that we would be sharing intelligence and the kinds of
sort of standard things we do for our allies. But
in this case, the administration seemed to be going out
(31:37):
of its way to say, hey, we didn't do any
of that, and this is day one. Obviously there's a
lot more to be done. Taking credit for the kind
of weaponry that Israeli is flying and launching is kind
of overtaken by events in the sense that that's already engagement.
So I'm a little surprised. I think we saw kind
(32:00):
of a distance between what Donald Trump was trying to
do with a peace treaty and with Iran and what
Israel was saber rattling over the course of the last month.
Maybe it was a coordinated effort to get them to
a deal, but clearly the deal wasn't happening fastened up,
and Israel has made it very clear that they have
intelligence that Iran was nearing an ability to build a bomb,
(32:25):
and they weren't going to go for it. And that's
been very consistent on their part for many years.
Speaker 4 (32:32):
The statement from Iran makes no qualms here about US involvement. Genie.
Iran of course summoned the Swiss ambassador to Tehran, as
we've been reporting, to deliver this warning to the United States.
This was delivered via the Swiss ambassador to Tehran. It
is unthinkable the Zionist regimes aggressive actions against Iran were
(32:55):
carried out without cooperation, coordination, or at least a green
light from the US. It says, in this regard, the
US must be held accountable for its illegal behavior. In
this regard, you can't separate the two in the eyes
of Tehran. What do you think of the attempt here
to distance from the White House? But also Donald Trump
personalizing this Genie, He says, two months ago I gave
(33:16):
iron a sixty day ultimatum. Today is day sixty one.
Speaker 14 (33:21):
Yeah, you know, I was struck last night when Benjamin
Netanyahu made his statement. There was a line in the
middle of that statement where he clearly said, long live Israel,
Long live the United States. And so it's going to
be very hard for the United States to separate itself
from this action, particularly given the transition of the President's statements.
(33:45):
I mean another thing I was struck by, and I
know you were watching this, Joe. President Trump was eerily
quiet last night when this happened, letting Marco Rubio take
center stage, which we all know is highly unusual for
Donald Trump. And what did Marco Ruby say? He said,
Israel informed the United States that they were going to
do this.
Speaker 9 (34:05):
Who informed who?
Speaker 6 (34:06):
When?
Speaker 4 (34:06):
Where? Why?
Speaker 14 (34:06):
We I'm not clear on and you may know better.
But the reality is is that if the US wanted
to stop this, they likely could have. And we have
seen an evolution because this morning and Donald Trump, he
read some of it, has been truthing all morning with
these increasingly sort of loud statements about, you know, just
(34:28):
do it, come to the table, sort of bulletsh in
his remarks today. So you know, all of that I
think is very striking. But I think when you get
down to it, what we're seeing is that Benjamin and
Yahoo knew if Iran and the US strike a nuclear deal,
his window in which to attack is gone and over.
And this is something he's been on tent and intent
(34:49):
on doing since he held up that picture in twenty twelve,
twenty thirteen at the UN. So he went out and
he did it, and the United States didn't stop it,
and for them, I think we are likely going to
see some attempt at retaliation by Iran.
Speaker 4 (35:07):
An important headline just crossed from the Associated Press. Rick.
We've been waiting to see if this was in fact
going to happen, if this type of follow through would
in fact happen under the orders of Benjaminett and Yahoo
and Iranian news outlet close to the government now says
two explosions have been heard near the four Dough Underground
nuclear Enrichment Plant. This is the big one, Rick, This
(35:30):
is hundreds of feet under ground under rock. We have
been told repeatedly that Israel could not access the centerfuges
or the technology under there without the MOAB, without American technology,
bunk or busting bombs. What does it tell you when
you see a headline like this.
Speaker 10 (35:47):
It's a continuation of the attacks. I think you have
to believe the officials and or Israel when they said
they're going to continue to prosecute this attack until at
which point in time they are assured that they have
completely degraded the Ranian capability to make a bomb. And
obviously this location is the focal point of a lot
(36:10):
of that activity. And look, there is an enormous amount
of damage you can do even if you don't actually
penetrate the final chambers of where these centrifuges are to
stop the progress that they were making and set them back.
So it's not totally clear to me whether they will
(36:30):
have repeated percussions on site so that they can do
the same kind of damage with the weapons they have,
precision strike weapons that a thirty thousand ton bunker buster
them lab would do. And so we'll see. It's pretty
clear they feel unfettered in their ability to control the
(36:50):
skies over ran and attack. They spend time. There's really
idf air force knocking out the last time they went
into Iran a lot of their air defense systems. It
seems to be that those things are still not very effective. Again,
the attacks from the air that Israel is perpetrating.
Speaker 4 (37:14):
Genie, it's going to be interesting to find out what
Israel's neighbors, beginning with Jordan. Think of this. You put
more than two hundred warplanes in the area, you have
to cross through airspace beyond your own. What will this
mean for Jordan? What will this mean for Saudi Arabia
and their relationships with the United States?
Speaker 14 (37:34):
You know, I think we're still in a wait and
see mode on that. It shouldn't be lost on any
of us that it was just yesterday for the first
time and I think twenty years, the International Atomic Energy
Agency said Iran was not complying with its nuclear non
proliferation obligations. That was a big, big moment, and none
(37:55):
of their neighbors are immune from that kind of statement.
So how this impact our relationship with these with these
neighboring countries is important. You know, we still don't know.
It's hard for me to believe that wit Cough would
be meeting in Oman with Iran this weekend on Sunday,
but that still seems to be maybe in the off thing.
(38:15):
It's hard again for me to believe that so so
much of this is still up in the air. And
you know, the divide that we're talking about between and
Yahoo and Trump by the way, you see it repeated
in the MAGA movement. You hear Tucker Carlson just the
other day, don't bomb no, you know, don't do it Israel.
And then you have other more traditional Hawks in the
(38:38):
Republican parties supporting it. And so we're very much division
both at home as it pertains to this and the
US is rolling it, which again is still unclear and
what this is going to mean going forward for our
alliances in the Middle East. Just after the President's trip
visiting so many of those neighbors you just mentioned.
Speaker 4 (38:57):
It's a really great point you bring up here, Rick,
and I'm wondering your thoughts on the split in MAGA.
Charlie Kirk was on immediately after. I don't quote Charlie
Kirk very often. After the strikes, he said, how does
the America First foreign policy doctrine and foreign policy agenda
stay consistent with this? Right now? Does this White House
have an answer? I don't think they even address it.
Speaker 10 (39:19):
First of all, they will send people out within the
movement and say, it's not our task to degrade the
Iranian capabilities to make a bomb. Israel's done that themselves
without our cooperation, right I have no doubt that part
of this distancing from the event is a head fake
to the political realities of the mega movement. But this
(39:41):
isn't the first time MAGA has been scratching their head
over exactly what Donald Trump's up to with his foreign policy.
It is not consistent with the protectionist attitudes that he's
campaigned on.
Speaker 4 (39:54):
Rick Davis and Genie Shanzeno are here with us on
an important day in geopolitics, and I really appreciate your insights,
both of you Bloomberg Politics contributors here as we wait
for further headlines to roll in. The sun is setting
in Tehran and we could see a lot take place overnight.
What does happen? Of course you'll hear about it first
on Bloomberg. Thanks for listening to the Balance of Power podcast.
(40:21):
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Speaker 2 (00:25):
Keeping an eye on the market response to the events
while we're watching in the Middle East, of course, events
that the President and top administration officials are also paying
attention to, having convened in the Situation Room at eleven
o'clock this morning to consider what the way forward may be.
Knowing we still have questions about the extent to which
Israel plans to continue these attacks and the course, the
extent to which Iron will have the capacity to respond
(00:48):
and in what fashion. But as we mentioned Israeli Prime
Minister Benjamin Nettnia who has signaled that these operations will
continue for some time, as he outlined last evening, in
and rest the operation that Israel is referring to as
Operation Rising Lion.
Speaker 3 (01:06):
Israel launched Operation Rising Lion, a targeted military operation to
roll back the Iranian threat to Israel's very survival. This
operation will continue for as many days as it takes today,
it is clear that Iran is just buying for time.
It refuses to agree to this basic requirement of peaceful nations.
(01:29):
That is why we have no choice but to act
and act now.
Speaker 4 (01:34):
In fact, they are still acting Secretary of State Marko
Rubio calling the Israeli strikes unilateral action. And that's where
we start with Bloomberg's Tyler Kendall, who has the latest
from the North lawn of the White House.
Speaker 5 (01:45):
Tyler, Yeah, hey, Joe, Well, we're still waiting on some
pretty important updates from the White House. One, President Trump
convened his National Security Council earlier today. That was on
the public schedule for eleven am Eastern. And two we
are expecting a phone call between President Trump and his
real Prime Minister Benjamin and Yahoo. Of course, when we
get any of those readouts, will bring them to you.
But it does come as President Trump does seem to
(02:07):
signal some apparent.
Speaker 6 (02:09):
Support for these Israeli air.
Speaker 5 (02:11):
Strikes, even as the US contends it is not part
of the ongoing operation, though it did get advanced warning
that it was coming ahead of time. And there's really
a few key things that we are focusing in here on,
of course, one being that in a series of posts
on True Social earlier today, President Trump really counting American
military might and also suggesting that US equipment could be
(02:33):
flowing into Israel shortly. But he made the point that
one of the top priorities here is that the US
wants to see Iran make a nuclear deal. This is
going to be absolutely imperative, and he sort of put
on a warning to it, right He said that it
has to happen.
Speaker 6 (02:46):
Before it's too late.
Speaker 5 (02:48):
He's using these strikes as leverage to see if that
can get aron to the negotiating tables.
Speaker 6 (02:53):
We wait to see if those six.
Speaker 5 (02:54):
Rounds of talk in Oman actually end up materializing. A
US official does tell Bloomberg News they are hopeful that
they will continue there. It is clear that the administration
wants to find this diplomatic de escalation. That's been their
stance going into this. In fact, President Trump said that
he gave her on a deadline to make a deal,
which they ended up not being able to meet. In fact,
(03:17):
it was Bloomberg's very own Amory hor Dern but reported
back in March that the Trump administration sent a letter
to Iran saying that they had two months to wrap
up the deal.
Speaker 6 (03:26):
Of course, we are well beyond this, Joe and Kelley.
Speaker 5 (03:29):
It could take a while as we watched to see
how this ends up escalating. We had the Israeli ambassador
to the United Nations on Bloomberg Television earlier today who
said that this operation could extend in two weeks.
Speaker 6 (03:40):
As we wait to see how this develops.
Speaker 2 (03:43):
And Tyler, of course, the president still has no public
events on his schedule today. Do we expect to hear
from him beyond his posts on truth social about this.
Speaker 5 (03:52):
At the moment, Kayley, there's nothing publicly on the schedule,
So we're going to have to see how this ends
up evolving if he does give come out and and
gives us some sort of update here moving forward.
Speaker 6 (04:03):
We know though that they are really.
Speaker 5 (04:05):
Pushing to have these talks in Oman continue, as that
has been a really clear priority from this administration since
President Trump actually took office, but it's been unclear if
there's really has been any substantial progress towards an outcome.
Unclear what an outcome would look like beyond the JCPOA,
which of course the first Trump administration did pull out
of back in twenty.
Speaker 6 (04:24):
Eighteen, We're going to have to see.
Speaker 5 (04:27):
We're also watching closely, of course, Defense Secretary Pete Hegseth
and what he has to say about the situation as
it continues to evolve.
Speaker 2 (04:35):
All right, Bloomberg's Tyler Kendall live on the North lawn
of the White House for us on Bloomberg TV and Radio.
Speaker 7 (04:40):
Thank you so much. We appreciate it.
Speaker 2 (04:41):
And as Tyler referenced, there was a conversation that took
place with our colleagues on Bloomberg Surveillance earlier today where
the Israeli Ambassador to the UN joined them and talked
about what Israel's expectation is will happen next year.
Speaker 7 (04:54):
Here's part of their exchange.
Speaker 8 (04:56):
We took into consideration that there would be retaliation on
Marie and proportional. Well, they know that we have capability
as well, so they will have to think, you know,
twice before the attack athen and what they are doing.
And I would say that today we can reach every
target in Iwan. We have the control.
Speaker 7 (05:17):
And just as we.
Speaker 2 (05:18):
Listen to that sound, we get headlines from the Israeli
defense forces that residents have been instructed to minimize movement
in public areas and remain in protected spaces as Israel
braces for further response. Here for more, we turn to
Mona Yakubian, who is joining us here on Balance of Power.
She's director of the Middle East Program at the Center
for Strategic and International Studies. Mona, we appreciate your time
(05:41):
as we consider that Israel is still active in these operations.
These strikes are continuing, and the signal from the Israeli
government has been that they will continue for days to come.
Do we have an understanding of to what extent Israel
has already been had reduced Iran's capacity to respond to
retally in some way, Well.
Speaker 9 (06:02):
We haven't. We don't have direct bomb damage assessments. There's
lots of film footage coming out that shows some fairly
extensive hits, and of course is noted the attacks are continuing.
I think it is interesting to see that we have
yet to see a significant response from Iran that could
indicate that there at least their ballistic missile capabilities have
(06:24):
taken a hit. But again it's too soon to know.
Iran could just be biding its time and waiting, but
I think some sort of Iranian retaliation is certainly to
be expected.
Speaker 4 (06:35):
With reports from the Associated Press Mona suggesting that we're
now hearing explosions near the four Doah underground nuclear site.
What does that tell you about Israel's plans to so
called close the deal this time?
Speaker 9 (06:50):
Well, Israel has made it very clear Prime Minister Ntsagna,
who has said that Israel will not tolerate Iran gaining
any sort of the nuclear weapons capable ability. Fairdough is
the mother load, if you will, of Iranian uranium and Richmond.
It is deep, deep underground. There are real questions as
to whether Israel has the armaments, the bunker busters, if
(07:13):
you will, that can penetrate. So time will.
Speaker 7 (07:16):
Tell, Well, it certainly will.
Speaker 2 (07:20):
And when we consider that, that gets to the US
position Mona, where we have seen some conflicting characterization as
to what extent the US knew of this attack or
supported it is. Marco Rubio, the Secretary of State, immediately
last night acted to distance the US government from Israel's action,
and yet President Trump today is signaling that this never
would have happened without US military technology that Israel has
(07:43):
access to. What role do you expect the administration to
play in what happens moving forward?
Speaker 9 (07:49):
Well, how much the US knew in advance. I think
is going to be a question that we will all
be learning about in the coming days. But I think
what is clear is that the United States is not
interested in taking on an offensive role in this military engagement.
We are seeing US military assets being flown in and
(08:11):
coming in by sea to the region, but that is
largely for a defensive posture, both to protect significant US
assets and of course Israeli forces as well.
Speaker 4 (08:25):
We saw strikes and responses tit for tat a couple
of times last year, Mona, Are you thinking of that
again in this case or is this the beginning of
a war between Israel and Iran?
Speaker 10 (08:39):
Yeah?
Speaker 9 (08:39):
I think this is a distinct departure from what we
saw last year, which were, as you noted, limited tit
for tat attacks that came to a quick conclusion. Already,
Israel is signaling that it is intends to continue its
campaign for days, if not weeks, and we know Iran
(09:02):
has said that this is a declaration of war. And
so I'm afraid that the region is really at an
incredibly perilous moment, one that has been long feared, where
it really could fall into the abyss of a region
wide war.
Speaker 2 (09:18):
Well, and what role will Iran's proxies play in that moment,
knowing that they have been greatly diminished over the last
several years. Is Israel, of course, has waged an ongoing
war against Tamas, has acted to take out Hesbela. The
US had reached at one point recently a truce with
the Huthis. I don't know if you think that will stand.
But what role will those proxies play here?
Speaker 9 (09:39):
Well, I think that's a big question, and this in
part may account for Israel's timing of the attacks Hesbela,
Uran's primary proxy, its second strike capability, if you will,
was largely decimated last year, and Tamas too has had
extreme damage to its forces. That leaves the Huthis, and
(10:01):
I think the Huthis are a wild card. We should
not underestimate the Huthis' capabilities. We'll have to see what
they do, whether they choose they have already launched attacks
on Israel in the past, do they join the fight.
We're going to have to wait and see.
Speaker 4 (10:18):
You mentioned the lack of response, or at least the
slow response from Iran, knowing that a lot of things
could still happen Mona, does that speak to disruption at
the top of the chain of command following the killings
we saw last night.
Speaker 9 (10:32):
Yeah, I mean, we're seeing fairly significant decapitation of Iran's
military and paramilitary forces. There's no question this has put
Iran on the back foot, and this might account again
for the fact that we're not seeing right now a
significant response. We'll have to wait and see where things go,
(10:54):
but Iran has certainly suffered some fairly significant blows over
the past twenty months. Whether or not it is completely down,
I think, is another question. But I would always say,
you know, we should never completely count Iran out. It
will find a way, I think to respond.
Speaker 6 (11:14):
Well.
Speaker 2 (11:14):
President Trump today has suggested multiple times that some of
the individuals inside Iron's chain of command that the US
was negotiating with trying to come to terms with, are
now dead Mona and I wonder as we considered the
future of those negotiations, knowing that six round of talks
was set to take place this weekend, if you think
there really is a future, does this add to or
(11:35):
diminish the chances of reaching another nuclear record between the
US and Iran.
Speaker 9 (11:40):
I'm afraid this dramatically diminishes those prospects. It's hard to
imagine negotiations going forward given everything that's just happened. I think,
you know, best case scenario, these talks are put on
the back burner. But again, I think we're entering, unfortunately,
a new and very scary period in the Middle East,
(12:02):
one that's really going to be dominated more unfortunately by
military action to resolve problems rather than diplomacy.
Speaker 4 (12:10):
Well by extension mona. You wonder about talk. It was
only months ago there was talk about expanding the Abraham Accords,
that normalizing relations between Israel and Saudi Arabia was at
last at hand.
Speaker 9 (12:24):
How about now, Well, already prospects for Israeli Saudi normalization
were diminishing given the deepening conflict in Gaza. Now I
think it's virtually impossible to imagine how that goes forward.
I'd note that when we look at responses from the
(12:45):
region to Israel's attacks, among the most vocal critics of
the attacks was Saudi Arabia, and Saudi almost in the
quote from the King, seemed to align itself with Iran.
So I think Saudi Israeli normalization is at really I
wouldn't even call it a distant prospect. I think the
(13:07):
chances for that for it right now are next to nil.
Speaker 2 (13:11):
Well, I wonder, Mona, how much you think that might
have to do with Saudi concern or concerns of any
oil producing country in the Middle East about Iran potentially
going after their production capacity or taking the perhaps most
dramatic option of closing off the Straight of Hormuz entirely.
Do you think that's a realistic possibility here?
Speaker 9 (13:30):
You know, I don't in the sense that I think
that Iran would essentially be shooting itself in the foot.
I don't see that happening because it would of course
dramatically imperil the global energy supplies and Iran would suffer
as a result. The other thing to keep in mind
is just prior to all of this happening, there really
(13:52):
had been an interesting and marked warming of relations between
Iran and Gulf Arab countries. I sense that Iran is
going to want to actually protect those relationships now more
than ever. So I don't see Ron doing anything to
provoke its neighboring Arab countries.
Speaker 4 (14:12):
We just have about a minute left. Mona, is Jordan
the most nervous neighbor in the neighborhood.
Speaker 9 (14:19):
I think Jordan has a lot to fear. Absolutely, people,
you know, colleagues and friends there already reporting concerns sirens
going off. Jordan is not a country that is used
to daily warfare and fighting, and it is right now
on the edge of the of the most intense fighting.
(14:39):
And so where things go in Jordan, I think we're
going to need to watch very very closely. But I'm
sure that the Jordaanes are deeply, deeply concerned about the
spillover of this conflict into their country.
Speaker 4 (14:53):
Moni Yakubian, director of the Middle East Program at the
Center for Strategic and International Studies CSIS, thank you so
much for the insights. With more breaking news on the terminal,
the Kremlin saying that Vladimir Putin spoke with Israel and
Iranian leaders. The Russian president had phone calls with both today, Kaylee,
remarkable development as we wait for input from Russia and
(15:14):
China on this.
Speaker 1 (15:18):
You're listening to the Bloomberg Balance of Power podcast. Catch
us live weekdays at noon and five pm Eastern on Apple,
Coarcley 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 eleven.
Speaker 4 (15:35):
Thirty headlines crossing the terminal. Now, the International Energy Agency
commenting on an email here, the ia email activating its
Incident and Emergency Center on Iran attacks. We had heard
earlier that they had not measured radiation at dangerous levels
around the Uranium and Richmond sites bombed by Israel. The
(15:56):
IAEA commenting that it is continuous contact with Iran on
potential hazards. There's a big question here about response, about retaliation.
We know for a fact that about one hundred drones
were sent back from Iran toward Israel. Most of them
were knocked down. We don't have much of any recorded damage,
(16:19):
and very few people believe that will be it. We
actually had a conversation earlier today my colleague and Marie
hor Dern on Bloomberg Surveillance on Bloomberg TV, speaking with
Israel's UN ambassador Danny Dan and listen.
Speaker 8 (16:32):
We took into consideration that there will be retaliation.
Speaker 7 (16:34):
On Marie and will be proportional.
Speaker 8 (16:37):
Well, they know that we have capabilities as well, so
they would have to think, you know, twice before the
attacks and what they are doing, and I would say
that today we can reach every target in Iwan. We
have the control.
Speaker 4 (16:51):
We have the voice now of Holly Dagras, Senior fellow
at the Washington Institute, for her take on this. Holly,
it's great to have you back on Bloomberg. Thank you
for joining us. What is next in retaliation from Iran?
Speaker 11 (17:06):
Well, I think that the Iranians are currently trying to
assess the damage. So it's a lot of US analysts
as well to understand what capabilities do they still have left.
The last time we saw tit for tat strikes in
April and October of twenty twenty four, Israel had taken
out its capabilities, So we'd like to know do they
(17:27):
have the capabilities still to actually respond to Israel? Do
they have the defense capabilities? Probably not, given that they
had allegedly over two hundred Israeli drets flying over Iranian airspace.
So I think it's first assessing the damage and then
they're going to have to decide how they're going to respond. Historically,
(17:48):
as you've noted, and because of these tip for tat strikes,
a response is expected because they have to stand up
to Israel and show their very few supporters that they
have left, that they are strong and defined, and that
they know how to respond.
Speaker 4 (18:05):
Considering the fact that Iran may be on its heels militarily,
how could it inflict the most damage. We did hear
threats of hundreds of ballistic missiles that could be shot
at Israel, but of course the US was moving personnel
out of Iraq. We know that there could be some
asymmetric retaliation here with regard to energy infrastructure. Where should
we be looking?
Speaker 11 (18:28):
You hit at some important points? Of course, I keep
referring back to those original tip for tat strikes because
those are our best data points. Iran did for at
least three hundred munitions at Israel in both instances, so
that should tell us that they are definitely capable of that.
And as you noted, the US actually did come in
(18:51):
for airspace backup, and so did Jordan, the UK and
other countries. Presumably that some of the conversations that are
happening behind closed doors because there is a retaliation expected.
Israel has actually announced that and has told its people
to shelter in place for that event. But it's also
noteworthy that the Israelis have said this isn't a one
(19:11):
off that this is an ongoing operation, So we're all
waiting to see tonight in the coming days, what other
targets is REEL going after, and if they'll be continuing
to hit these nuclear sites that they've already hit.
Speaker 4 (19:27):
There are big questions about whether for Dough will be
on that list. There were a number of enrichment sites,
nuclear infrastructure sites, but this is the area where you
have the deep underground caverns and the control centers that
would likely require the use of the MOAB. The US
made Mother of All Bombs as it's called. Will that
be on the list of targets?
Speaker 11 (19:49):
Well, when you talk about bombs and capabilities, that's the
issue that's been why there's been a lot of conversational
washing about why Israel shouldn't go on alone, because Israel
doesn't have the capabilities to hit these very deep nuclear facilities,
and that the United States arguably has the right bombs,
and it hasn't, at least to our knowledge, handed over
(20:10):
those bombs to Israel to do these kind of attacks.
So in essence, this is looking more like a mow
the lawn attack where they're taking out things and slowing
things down. Thus far, and as we wait for more information,
it's not entirely clear if these facilities are being taken
out in their entirety.
Speaker 4 (20:33):
I want to ask you about the diplomatic side of
this before you leave us, Holly. The President is still
talking about a deal being possible. In fact, he seems
to think, based on comments to Axios earlier today, that
these strikes make a deal more likely, knowing that there
was a set of talks planned for Sunday. Here's how
the President put it yesterday at the White House. Ahead
of these attacks.
Speaker 12 (20:54):
Iran cannot have a nuclear weapon. Other than that, I
want them to be successful. I want to have agreement
with Iran. We're fairly close to an agreement. We are
fairly close to a pretty good agreement. It's got to
be better than pretty good, though, but it's got to be.
I much prefer an agreement as long as I think
there is an agreement. I don't want them going in
(21:15):
because I think I.
Speaker 4 (21:15):
Would blow it.
Speaker 12 (21:17):
Might help it, actually, but it also could blow it.
Speaker 4 (21:21):
Well, they've gone in. What are the chances now, Holly?
Speaker 11 (21:26):
Well, historically Iran doesn't respond to this kind of pressure well,
given their ideology and so presumably, it's hard to believe
that after everything that's just happened in these past twelve
hours or more, that the Iranians would sit across from
the Americans and say say uncle and make a deal.
(21:46):
I mean, this calculation can change potentially over time if
these strikes continue. But I think just looking at the
climate that Iran is in now and reeling from the
events that have just taken place, with some of its
top military blat brass and nuclear scientists being assassinated, that
they'd be like, Okay, let's sit across some of these
(22:07):
guys and make a deal.
Speaker 4 (22:11):
Not likely. Holly Dagrass, senior fellow at the Washington Institute,
one of the voices we wanted to hear from today. Holly,
thank you so much for the insights. Something tells me
we're going to be talking again soon, and we do
want to stay in touch as well with Mike mcgloane,
one of the other voices that we add to the
mix today. With our eyes on the energy space here,
having seen the pop and oil prices, West Texas intermediate
(22:32):
crude oil futures up about six percent right now, we're
hovering just below seventy two dollars a barrel, and we
saw Brent jump on this even more overnight. Mike mcgloon,
of course, covers commodities for US, our senior commodity strategist
at Bloomberg Intelligence. Mike, it's interesting that no actual energy
infrastructure that I'm aware of was targeted outside of nuclear
(22:53):
infrastructure by Israel. Is this in anticipation of in fear
of a supplied disruption that we have not Senia?
Speaker 13 (23:01):
Correct, Joe, and I like that word you use. Pop
pops usually don't last long. It's a few better ways
to fuel a bear market than to cleanse the shorts,
and we certainly did that today. The high for the
year and WTI is round eighty. We pumped up around
seventy six or so overnight. Now we're about seventy two,
which is unchanged on the year. The lowes fifty five,
and we still have an overhang of access supply in
(23:23):
the US and the world in decline demand. You have
to ask ourselves is this going to add to that
or reverse it. It's going to increase that supply and
decrease demand, and unless there's some kind of supply shock
that's enduring, it's probably going to enhance that bear market
for prices to go lower.
Speaker 4 (23:38):
So if we did see Iran respond with an attack
on energy infrastructure, an attack on pipelines or on ports,
what would it mean. Would it fulfill this jump in
prices or send it even higher?
Speaker 13 (23:51):
Exactly, it might fulfill the current jumping prices. It might
get to eighty, but I probabish today. I think eighty
is a new hundred since the Russians invasion in Ukraine
that bear mark with prices going down from one point thirty,
the highest volume area has been around eighty. To get
above near you have to have some major enduring cut
in production. But even if they shut it off in
(24:12):
the short term, it's going to incentivize more supply and memory.
The massive incremental supply is really coming from South America
Opak too. It'll turn MOPEC back on, and we have
actually the declined demand from China. So the situation for
this is bad. And if Crudel stay hot Staysie tilts
that world towards a global recession, which you are kind
of leaning there already, as indicated by rising gold and
(24:32):
falling crude oil.
Speaker 4 (24:34):
Well really interesting. It's not what I expected to hear
from you, Mike, and that's why we like to talk,
of course, because you're the expert here, but we all
grew up thinking that this was the end. When you
see the headline that Israel has attacked Tehran, head for
the hills, start stockpiling oil and gas. This is a
remarkable reaction, then, isn't it.
Speaker 14 (24:54):
Well.
Speaker 13 (24:54):
I like how you brought that up as we grew up,
because that's how the world's changed. In two thousand and eight,
the US was importing about ten eleven million barrels a day.
Now we're exporting about three million barrels a day. The
world has the paradigm shifted. We have a massive oversupply
of energy and grains in agriculture, and so it's the
Alpe's less significant. So that might hurt the rest of
(25:16):
the world. But I can just sense a lot of
people and the oil patch are looking at this and say,
oh cool, I can sell forward some of these prices,
add to my production and lock in profits.
Speaker 4 (25:28):
How about that. I have to ask you, because you're
with us, about what's happening on the gasoline side as
we look to refine products. Triple A's got a national
average three dollars thirteen cents for a gallon of unleaded
When we consider a geopolitical world that could be very
tense this summer, and you add demand from summer driving season.
(25:49):
Is this the level we're going to be at or
could we see something more severe? You remember what happened
to gas when Russia invaded Ukraine.
Speaker 13 (25:57):
Yeah, so that's the key reason why we're still in
a domin me trajectory, and both energy products and commodities.
It's on the back of Russia's invasion in Ukraine incentivized
more supplies and recreased and decreased demand. But the price
right now you mentioned is down about ten percent from
this time last year.
Speaker 6 (26:13):
It's a seasonal factor.
Speaker 13 (26:15):
Come next year, I think it's going to be closer
to a two handle, particular if we get a little
bit of roll over US stock market, and particularly because
remember we have we're a net exporter of crude oil,
liquor fuels in this country. We don't have to worry
about the rest of the world anymore. So it's actually
more their problem if this continues. Happens actually good for
the US.
Speaker 4 (26:33):
Fascinating A true expert, Mike mcglohan, great to see them.
I can appreciate your clutch analysis here as always from
Bloomberg Intelligence, where I swear the smartest people in the
business all work. We just saw a headline across the
terminal the IDF detecting a missile was launched from Yemen
towards Israeli territory. This is another potential factor here if
this begins to impact shipping in the Red Sea, with
(26:56):
big questions about what it means for our agreement or
truce or whatever we're calling it. With hoothy rebels in
Yemen park that here, We're going to assemble our panel
next with developing news under our feet here on Bloomberg.
Genie Shanzano and Rick Davis, I'm glad to say are
straight ahead here on the fastest show in politics. Stay
with us on Balance of Power only on Bloomberg.
Speaker 1 (27:21):
You're listening to the Bloomberg Balance of Power Podcast. Catch
us live weekdays at noon and five pm Eastern on
Apple Cockley and Android Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts, or watch
us live on YouTube.
Speaker 4 (27:38):
Thank you for joining us here on Bloomberg Radio Satellite
Radio Channel one twenty one on YouTube Search Bloomberg Business
News Live. To find our livestream on YouTube as well
Bloomberg Originals. With our continuing coverage here that's going to
continue rolling through the day because we have a lot
to learn about, not only what happened last evening in Israel,
strikes against Iran nuclear facilities, against its top military commanders,
(28:03):
but of course the retaliation that we're expecting, and frankly,
the continued attacks by Israel Benjaminetnye who making it clear
they are not done. This could last days. Jets have
been scrambled again. There was another round of strikes that
apparently set off air defenses in Iran, and we are
now seeing headlines from the IDF. This is important. Sirens
(28:24):
in Jerusalem are now being heard after a projectile was
fired from Yemen. Of course, remembering our truce if I
can use that word with hoo, they rebels in Yemen
who are interfering with shipping in the Red Sea. All
of this could be renewed at this moment. Reuter's sighting
Israeli military on continuing attacks. Of course, as we get
(28:46):
into the evening there we could have a lot more
to talk about. Is really attacks focusing on missile launchers
and drone sites now, Reuter says. Israel says its air
force is continuing to attack Iran. This is happening as
I speak to you here on Bloomberg Radio. I want
to back up a little bit to eleven am Eastern time.
Less than two hours ago. President Trump was scheduled to
(29:07):
be in the situation room for a meeting of his
National Security Council. We have not heard that that meeting
has concluded. He may still be in there now. That
is also likely why we're not seeing continued posts untruth
social He did post a short time before he went
into the situation room, and there were a couple of
things that were really interesting. Knowing that the administration so far,
(29:30):
at least on an official level, has said that the
US was not involved, Secretary of State Mark Arrubio calling
the Israeli strikes a unilateral action in his statement last evening,
saying point blank the United States was not involved. He
said the Trump Administration's top priority, as you can see
on YouTube, is protecting American forces in the region. But
(29:52):
of course Donald Trump had many different things to say
about this. Talking about the use of US military equipment,
he says more lethal than anywhere else in the world
by far that Israel has a lot of it, with
much more to come. He also said, I gave Iran
a chance, a chance after chance, to make a deal.
I told them, in the strongest words, to just do it.
(30:12):
But no matter how hard they tried, no matter how
close they got, they just couldn't get it done. He
also then referred to this as day sixty one. In
a separate post before he entered the situation room two
months ago, the President writes, I gave Iran a sixty
day ultimatum to make a deal. They should have done it.
Today is day sixty one, implying that he was the
(30:35):
force behind this. The President says, I told them what
to do, but they just couldn't get there. Now they
have perhaps a second chance. Let's assemble our panel. I'm
really glad both Rick Davis and Jeanie Schanzano are with
us today. Bloomberg Politics contributors. Rick, of course republican strategist
and partner at Stone Court Capital. Genie is a senior
(30:56):
Democracy Fellow at the Center for the Study of the
Presidency in Congress. Let's get into all of this, guys.
Good to see you here. It's our first chance to
talk since this all happened last evening. Rick, I'm going
to start with you on the messaging that's coming from
the White House. Are we to believe the United States
was involved or not?
Speaker 10 (31:15):
Yeah, it seems like we're doing everything we can to
distance ourselves from the attack. Typically we would lean in
and say we've got their back. You would think there'd
be a carrier group headed toward Israel. You would think
that we would be sharing intelligence and the kinds of
sort of standard things we do for our allies. But
in this case, the administration seemed to be going out
(31:37):
of its way to say, hey, we didn't do any
of that, and this is day one. Obviously there's a
lot more to be done. Taking credit for the kind
of weaponry that Israeli is flying and launching is kind
of overtaken by events in the sense that that's already engagement.
So I'm a little surprised. I think we saw kind
(32:00):
of a distance between what Donald Trump was trying to
do with a peace treaty and with Iran and what
Israel was saber rattling over the course of the last month.
Maybe it was a coordinated effort to get them to
a deal, but clearly the deal wasn't happening fastened up,
and Israel has made it very clear that they have
intelligence that Iran was nearing an ability to build a bomb,
(32:25):
and they weren't going to go for it. And that's
been very consistent on their part for many years.
Speaker 4 (32:32):
The statement from Iran makes no qualms here about US involvement. Genie.
Iran of course summoned the Swiss ambassador to Tehran, as
we've been reporting, to deliver this warning to the United States.
This was delivered via the Swiss ambassador to Tehran. It
is unthinkable the Zionist regimes aggressive actions against Iran were
(32:55):
carried out without cooperation, coordination, or at least a green
light from the US. It says, in this regard, the
US must be held accountable for its illegal behavior. In
this regard, you can't separate the two in the eyes
of Tehran. What do you think of the attempt here
to distance from the White House? But also Donald Trump
personalizing this Genie, He says, two months ago I gave
(33:16):
iron a sixty day ultimatum. Today is day sixty one.
Speaker 14 (33:21):
Yeah, you know, I was struck last night when Benjamin
Netanyahu made his statement. There was a line in the
middle of that statement where he clearly said, long live Israel,
Long live the United States. And so it's going to
be very hard for the United States to separate itself
from this action, particularly given the transition of the President's statements.
(33:45):
I mean another thing I was struck by, and I
know you were watching this, Joe. President Trump was eerily
quiet last night when this happened, letting Marco Rubio take
center stage, which we all know is highly unusual for
Donald Trump. And what did Marco Ruby say? He said,
Israel informed the United States that they were going to
do this.
Speaker 9 (34:05):
Who informed who?
Speaker 6 (34:06):
When?
Speaker 4 (34:06):
Where? Why?
Speaker 14 (34:06):
We I'm not clear on and you may know better.
But the reality is is that if the US wanted
to stop this, they likely could have. And we have
seen an evolution because this morning and Donald Trump, he
read some of it, has been truthing all morning with
these increasingly sort of loud statements about, you know, just
(34:28):
do it, come to the table, sort of bulletsh in
his remarks today. So you know, all of that I
think is very striking. But I think when you get
down to it, what we're seeing is that Benjamin and
Yahoo knew if Iran and the US strike a nuclear deal,
his window in which to attack is gone and over.
And this is something he's been on tent and intent
(34:49):
on doing since he held up that picture in twenty twelve,
twenty thirteen at the UN. So he went out and
he did it, and the United States didn't stop it,
and for them, I think we are likely going to
see some attempt at retaliation by Iran.
Speaker 4 (35:07):
An important headline just crossed from the Associated Press. Rick.
We've been waiting to see if this was in fact
going to happen, if this type of follow through would
in fact happen under the orders of Benjaminett and Yahoo
and Iranian news outlet close to the government now says
two explosions have been heard near the four Dough Underground
nuclear Enrichment Plant. This is the big one, Rick, This
(35:30):
is hundreds of feet under ground under rock. We have
been told repeatedly that Israel could not access the centerfuges
or the technology under there without the MOAB, without American technology,
bunk or busting bombs. What does it tell you when
you see a headline like this.
Speaker 10 (35:47):
It's a continuation of the attacks. I think you have
to believe the officials and or Israel when they said
they're going to continue to prosecute this attack until at
which point in time they are assured that they have
completely degraded the Ranian capability to make a bomb. And
obviously this location is the focal point of a lot
(36:10):
of that activity. And look, there is an enormous amount
of damage you can do even if you don't actually
penetrate the final chambers of where these centrifuges are to
stop the progress that they were making and set them back.
So it's not totally clear to me whether they will
(36:30):
have repeated percussions on site so that they can do
the same kind of damage with the weapons they have,
precision strike weapons that a thirty thousand ton bunker buster
them lab would do. And so we'll see. It's pretty
clear they feel unfettered in their ability to control the
(36:50):
skies over ran and attack. They spend time. There's really
idf air force knocking out the last time they went
into Iran a lot of their air defense systems. It
seems to be that those things are still not very effective. Again,
the attacks from the air that Israel is perpetrating.
Speaker 4 (37:14):
Genie, it's going to be interesting to find out what
Israel's neighbors, beginning with Jordan. Think of this. You put
more than two hundred warplanes in the area, you have
to cross through airspace beyond your own. What will this
mean for Jordan? What will this mean for Saudi Arabia
and their relationships with the United States?
Speaker 14 (37:34):
You know, I think we're still in a wait and
see mode on that. It shouldn't be lost on any
of us that it was just yesterday for the first
time and I think twenty years, the International Atomic Energy
Agency said Iran was not complying with its nuclear non
proliferation obligations. That was a big, big moment, and none
(37:55):
of their neighbors are immune from that kind of statement.
So how this impact our relationship with these with these
neighboring countries is important. You know, we still don't know.
It's hard for me to believe that wit Cough would
be meeting in Oman with Iran this weekend on Sunday,
but that still seems to be maybe in the off thing.
(38:15):
It's hard again for me to believe that so so
much of this is still up in the air. And
you know, the divide that we're talking about between and
Yahoo and Trump by the way, you see it repeated
in the MAGA movement. You hear Tucker Carlson just the
other day, don't bomb no, you know, don't do it Israel.
And then you have other more traditional Hawks in the
(38:38):
Republican parties supporting it. And so we're very much division
both at home as it pertains to this and the
US is rolling it, which again is still unclear and
what this is going to mean going forward for our
alliances in the Middle East. Just after the President's trip
visiting so many of those neighbors you just mentioned.
Speaker 4 (38:57):
It's a really great point you bring up here, Rick,
and I'm wondering your thoughts on the split in MAGA.
Charlie Kirk was on immediately after. I don't quote Charlie
Kirk very often. After the strikes, he said, how does
the America First foreign policy doctrine and foreign policy agenda
stay consistent with this? Right now? Does this White House
have an answer? I don't think they even address it.
Speaker 10 (39:19):
First of all, they will send people out within the
movement and say, it's not our task to degrade the
Iranian capabilities to make a bomb. Israel's done that themselves
without our cooperation, right I have no doubt that part
of this distancing from the event is a head fake
to the political realities of the mega movement. But this
(39:41):
isn't the first time MAGA has been scratching their head
over exactly what Donald Trump's up to with his foreign policy.
It is not consistent with the protectionist attitudes that he's
campaigned on.
Speaker 4 (39:54):
Rick Davis and Genie Shanzeno are here with us on
an important day in geopolitics, and I really appreciate your insights,
both of you Bloomberg Politics contributors here as we wait
for further headlines to roll in. The sun is setting
in Tehran and we could see a lot take place overnight.
What does happen? Of course you'll hear about it first
on Bloomberg. Thanks for listening to the Balance of Power podcast.
(40:21):
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, DC at noontime Eastern
at Bloomberg dot com.
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