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Let's check in with one of the experts we always love to chat with when it comes to global energy, and that's Ellen Wald, Senior Fellow at the Atlantic Council. Ellen, we're seeing, obviously, the spike up and energy prices and that seems like we've seen this before. Is this an efficient market that you're looking at right here? And how do you think this plays out over the coming days.
Honestly, what I think we're seeing is a global energy crisis unfolding in real time.
I'm surprised, honestly.
That prices didn't spike to eighty five when the market opened, you know, Sunday night in Asia, because it was clear once uh you know, tankers were not moving through the straight orform moves either way, that this is going to be a major energy crisis unless it was resolved by today. I mean, I think that that unless they can get the tankers moving in the next couple of days, we're going to see extremely high oil prices, which will frankly be warranted given that no oil is moving out of
the Persian Gulf. And while you know, consumers in the United States may have plenty of oil, we're not going to necessarily see you know, gas lines, We've got product, we've got oil. We're not immune to you know, price bikes in the in the price of crude oil globally, and so this is going to affect people, you know,
in terms of what they're paying at the pump. But other countries, okay, that depend and rely on this oil could potentially start to see shortages unless there is a plan, unless they start rolling out a plan to either get things moving or you know, find alternatives.
So you say that some of the important issues in terms of oil prices as well as natural gas prices are the potential damage to oil infrastructure in Iran. You also talk about the extent of delays and marine traffic entering and exiting the Persian Golf, as well as OPEK, plus the response there from the US and China as well. How do you think about some of these challenges or all the different important variables that we're seeing as it relates to oil prices.
I think that the most important variable right now is how long this military conflict is going to last, because that's what is pushing up the price of insurance so much that tankers are unwilling to attempt even to cross the straight orform moves. It's just too expensive, meaning it's
too risky. So, you know, if they can get a handle in this military conflict, but it doesn't look like that's going to happen, you know, within the next week or two at least, seems like it's probably going to intensify in fact, and so that means that yes, opek plus has reacted.
But the problem is most.
Of its big producers, the ones with all the spare capacity, are the same ones that are in the Persian Gulf that rely on, you know, on the Persian Gulf to get oil out. Now we know that Saudi Arabia is starting to make plans to load more oil on the red seed. That's great, but it's still not going to account for all of the oil. Iraq is going to be in a huge issue. They're going to have to
shut down production. In fact, they're already starting to shut down production because they don't have the storage capacity to just hold on to crude oil if it can't be loaded into tankers. So that's already starting to affect affect production. And then I do think that China is a big wild card here. Can China put its considerable economic weight to bear on Iran potentially to get it to maybe concede or make some concessions to end the military conflict sooner so that we can get the oil flowing.
It seems oddly enough that one of the winners here might be President Putin and Russia to the extent that they can move their oil at these higher prices.
Is Russia as a player.
Here, yeah, exactly, Well, Russia is in a very good spot personally, That's what I think.
Russia is in a very good spot.
It can move more oil to China to satisfy some of the oil that China's not getting from the Middle East.
Although I believe there.
Have been some issues in terms of loading at one port that was recently attacked by Ukraine, which is certainly
precipitous on their part. But Russia is also going to be able to charge a lot more for its oil, So this kind of conflagration is having the effect of kind of lining Putent's pockets, which is probably going to cause some problems down the road for the Trump administration if they're really looking to put an end to the Russia UK Craine conflict, you know, some time in the next year or so.
So I'm also curious how will multinational companies, if you think about energy shipping insurance, how do they assess and price in the geopolitical risk here from conflicts like this.
I mean, I'm not you know, I'm not an insurance expert here, but they're definitely looking at this and they're saying, Wow, the potential for a ship to get you know, severely damaged, have an oil spill and whatnot is really high right now in the Persian Gulf, and so they are adjusting their rates accordingly. Now there will be some ships who may be willing to you know, either self insure or chance it and may take that risk that right now
that doesn't seem very likely. Plus you've also got the risk in you know, in the Red Sea of the hoothis that they could you know, kind of take up their mission again and start harassing ships there, which is a problem because you know, a Ramco at the very least is hoping to start loading oil out of its port in Gyanbu. And then if it wants to send that oil to Asia, it's going to have to leave the Red Sea, you know, go round the Arabian Peninsula
and out that way. And if the houthis start posing problems, that's another issue to increase prices.
And we got the oil pricing spiking high. Here's an intra day high, seventy seven dollars eighty five cents for.
WTI good oil. A rack.
Here's a red headline crossing the Bloomberg terminal. A rack starts shutting oil output at Ramala as storage fills. So, just as you were saying, Ellen, so Ellen, what role does the US play here? Can we just crank up our drilling and are refining to maybe offset some of the decreased supply out the middle least?
Well, you can bet that, you know, every every fracking company is calling up people there. You know, anyone who's idled rigs has got to be putting them back into production.
Now.
I bet there's teams headed from North Dakota at the moment to get things going. I mean, this is really you know, this is the moment for the American oil industry, and it can really prove how agile, how quick it is.
If these producers that have been.
Talking about slowing down production, this is their moment to get things going and sell that oil, refine that oil. We have limited extra refining capacity in the United States, but we do have more production capacity. It's all about you know what we can get going, and you know what American companies can do with personnel, with people. You know, if there's money and financing available, they're certainly going to make that money selling oil, either you know, internationally or
at home. So I would say this is the moment for the American fracker.
Great, great to hear. I'm sure the folks down in the patch they're ready to go.
Ellen Wald, Senior Fellow at the Atlantic Council, giving us the latest on global energy.
Stay with us more from Bloomberg Surveillance coming up after this.
You're listening to the Bloomberg Surveillance podcast. Catch us live weekday afternoons from seven to ten am Eastern Listen on Applecarplay and Android Otto with the Bloomberg Business app, or watch us live on YouTube.
Win thin chief econmisce at Bank of Nasau. Wait, when you see the geopolitics on certay, we've kind of become a little bit used to that, but now we see it in time with higher energy prices, for example, how is the last several days or last several weeks has that impacted your economic outlook at all?
Well, first of all, thanks for having me. It's always a pleasure. So I still think we're still in early days. I think the big question that's hanging over us, over everyone is, well, is this what's the duration and scope of this attack? Is it going to be a twelve day attack we saw last June? Because is it gonna be a month of a bartment followed by a groundovation like you saw during the first Golf War?
Would be a groundovation followed by multi year occupants occupancy. We don't know. It's so so early, And be.
Honest, it's it's the goals that the administration have put forth have been very fuzzy. So I think markets, as you know, hate uncertainty, They hate they really hate prolonged uncertainty. So it's really it's the big question is how long is.
This going to go on? And you know, sort of the breadth and depth and it's to be determined.
But you know, I think the problem with market is after a while you start pricing and like really bad outcomes, and that that's the concern.
I mean, how do you actually forecast during a time like this. It's been so much uncertainty. I can only imagine what it was like when we had this gap in data, government data because the government shut down. You've got tariffs. Now we've also got this geopolitical uncertainty.
What does your job look like?
It's tinari, It's it's you know, the whole the phrase, the fog of war, that's that's where we are.
When when does this fog lift?
Obviously again the market's the quicker the better, But you know, to me, you just you can only see downside here. You know, we've talked about I'm go ingenough to remember all the oil shocks from the seventies. You know, it's it's stacklation, higher unemployment, high inflation.
It really gets ugly.
So the markets are repricing, and I think Paul you mentioned that the risk of higher inflation because it's not just what supplies, it's the shipping lanes, transport, it's all sort of all sorts of like sort of second third level effects that we just don't know about.
But to me, they're all bad.
If you're you know, to me, uncertainty, if your household all of a sudden your gas prices.
Go well, you pull in right uncertainly, you're pulling. You worred about your job, you're pull in.
If you're firm and looking at best thinking about investing, you see all what's going on while we're gonna pull in and if you're the Fed, we're gonna do it while we want to cut rates, probably because the livey labor markets is softening.
But you don't know to your point, nor you don't really know what's going on.
You don't.
It's kind of being on.
Hold, so to me, so being on hold and pulling back is not a good thing in sort of in terms of sort of wider economy. So I do see some downside risks if this is prolonged.
Yep, Okay, let's put that to the side just for the moment. How is the US economy doing?
From your perspective, it's doing solid. You know, we saw the Q four g D print a couple of weeks ago. Headline was, you know, softly expected. We know there is some impact from the government shutdown, But I was focusing on the consumption portions slower it's been.
It's been sequentially slowing since I think mid year of last year.
Yeah, sure, of course there's all these distortions, right, we had the shutdown, we had the weather, all these things.
But taking junk conjunction note to me like nor you mentioned.
This, like as what do you do with this sort of figure out what it's To me, it's like a puzzle, big puzzle that you're trying to figuret you get some clues pieces here and there. So got slow inflation, I'm sorry, slowing consumption as well as to me when I think is a very soft labor mark that's still softening, and to me, you put those two together and it's not a great mix. Then you've got higher oil prices can hit the pocketbook. So I don't think it's a recession.
I think that's you know, that's tail risk.
But I do look for sort of.
Softening economy the fens on hold because obviously there's inflation risks.
But I think when pushed customs comes.
To shove, they worry about their full employment mandate.
Right now, So what do you make of the disconnect because I think if you ask the average US consumer, they would say times are tough right now, right economically, but then you see a solid economy when we're looking at the data. What do you make of that disconnect between the super consumer confidence and then the actual data that we're seeing right now.
No, that's been like a million O A question for the last couple quarters. Things haven't really aligned.
But you know, we talked about this K shape economy where I can't remember the exact numbers, but something like twenty percent of the upper income people driving like over half of the.
Consumption something like that. Thinks even more than that.
So the bulk of Americans AAA eighty percent are struggling. They are worried about the price of eggs, they worry about their prices of gas. They're not getting these They're not the ones they are benefiting from the massive tax cuts. So the question has always been, well, in this K shape economy, can can that upper sloping K sort of support the lower sloping K part.
The other distortion I think that's out there is the AI investment. You know, investment has been a big driver and we get this unbalanced growth.
Whether it's the K shape whether it's the sort of AI stuff, it's it's to me, healthy economy is where people are getting hired, people feel comfortable going out and spending, people aren't worried about the jobs, and that's to me is sort of the US the most sort of the healthiest outlook. And again it's uh, you know, it's to be.
Determined right now.
The good news that the economy's been resilient, We're coming into this year pretty solid.
But again, the longest drags out there more worried. I get.
And you mentioned AI, and I think you know a lot of folks feel like that's having some impact on the liabor market today.
And maybe A characterized as a.
Low fire, low higher job economy, maybe that's being impacted by AI.
Do we need as many entry level jobs.
On the white collar side and all that type of things, And how do you get how do you feel?
Well? I hear you talk about solid time, Paul.
You're you're the view that that A as a job killer, and I'm with you on that one, at least over the short to medium term. It's hard to me to figure out how this ends up. Sure, some engineers and what have you, We'll get some jobs but short term, I just see so much you know, sort of downside for the labor market. So that's another yet another sort of I would just also say, you know, investment in data center, that's all capital intensives, not labor intensive.
Right. I want to end where we started talking about the geopolitical tensions. What does consumer spending tend to look like during periods of uncertainty as it relates to geopolitical conflict?
Yeah, so again it's on the present duration.
But if it's I think in general like we saw after say nine to eleven, or you know, some.
Of these big geopilical events, people.
Just sort of pull in you thing of buying a car, buying Washington, Well, you're probably gon to put that off, and she kind of fail.
What's going on? It sounds silly, you know.
I don't think grandma's waiting home, you know, trying to figure out what's going on.
You're on. But when you're seeing this on the news, uh, and you're seeing.
Impact cast pump and you're hearing your neighbor getting laid off, these are all things that sort of things that make you go hmm. And And that's again Mark's hayten uncertainty. Firms hating certainty in households hat and I hate uncertainty. Everyone you know wants some sort of certainty and and I think that's sort of where we're at right now.
So I use my fingers crossed right exactly, my fingers crossed. Wain, thanks so much for joining us.
Always appreciate getting a few minutes of your.
Time went in.
He's the chief economist at the Bank of Nassau.
Stay with us.
More from Bloomberg Surveillance coming up after this.
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Well.
One of the reasons offered by the administration as to go to war with Iran is potentially regime change, and a lot of folks are asking is that possible? Who would ignite that regime change and who perhaps would assume power? I think our next guest has some views on that.
Ali Safabi.
He is a member of Iran's Parliament in exile, the National Council of Resistance of Iran, and he's also a president of Near Eastern Policy Research, which is a consulting in policy analysis firm in Washington, DC, Ali, thanks so much for joining us here. Is regime change possible with these events in Iran over the last several days.
There's all good to be with you. Well, regime change is indeed possible. There's no doubt about it, because you have a nation that has been suppressed for forty seven years. You have had one hundred thousand dissidents of the main Ranian opposition, the major diner have executed by this regime. And you saw this past January, thousands were slaughtered, and of course we have seen the same thing happening in
twenty twenty two, twenty nineteen, twenty seventeen. And yes, the Iranian people are very determined despite the cost that it has exacted on them to overthrow this regime. But that said, we, as the resistance movement that has been fighting this regime for forty seven years and the previous regime, the Shaws regime since nineteen sixty five, do not believe that change would come from the air. The change will not come
true foreign intervention. Change must come from within Iran, underground, indigenous organic by the Ranian people and by a very potent and structured resistance within Iran itself. But yes, change is indeed possible. I think the a Reny regime is at the end of the line. Their economy is bankrupt, their currency is in a free fall, There's massive unemployment, systemic corruption, and the regional policy has been defeated.
So yes, indeed changes is at hand.
So President Trump called on the Iranian people to rise up and topple their government. Do you expect that the Iranian people are prepared to do that?
I believe that the Iranian people are very independent minded people, as has been demonstrated throughout our history, and they're not going to rise up or sit down on a call of anybody from the outside. They will decide to rise up when they think the time is right. Obviously, at this current moment, with bombs dropping all over Iran, Iranian people are understandably careful not to do anything to get themselves into harms way, after all, there's a war ongoing.
But as missus Rajavi said the other day, that they should try to take care take care of especially those who've been injured, and she also called on the all party it involved to exercise restraint when it comes to Iranian infrastructure and civilian areas. And yes, they will rise up, but in a methodic way, and this has to be organized. To expect that when bombs are dropping for millions, one is to come to the streets. It's just very unrealistic.
No similar situation. You have seen people coming up. But once these conflicts of size and given that they're in, regime is weakened tremendously with the loss of harmony, which as Missus Rajavi said yesterday, means the end of the religious tyranny in Iran. They will come out, but it has to be an organized fashion. Nothing will happen spontaneously.
In what ways has the current conflict altered the domestic, political or social environment inside Iran?
Well, the very good question.
Well, I think it has demonstrated to the people of Iran that the possibility to toppling this regime is much greater than any other time in the history of our nation. And it has also shown that the Ringing people in order to topple this regime, they must get organized. And I think if you look at the trend of events in Iran, particularly since twenty seventeen. You see that happening. Previously, there were protests by let's say, some sectors of Iranian society.
But what happened in January you had basically all walks of life in Iran, from students to bizarre merchants, to workers, to farmers, nurses, you name it, were out on the streets. And this wasn't just in one or two cities. It was in four hundred different cities in thirty one provinces.
And interestingly, the slogans were all universal. One as to the dictator too down with the oppressor, whether the Shah or the leader, meaning that Theyrenian people having learned the lessons of the nineteen seventy nine revolution when an impostor Romaine came in from abroad and stole that revolution, they are not very clear that I they know exactly what they want. They don't want relics of the past, and
they don't want the current regime. They wanted to look to the future, which is a democratic future, a republican form of government, which is why mister Rajavi and the NCRO announced the formation of a provisional government that would hold three and fair elections in Iran within six months of the Milor's overthrow to elect the Constituted Assembly, whose members elected by the real people would draft the new constitution for a new republic and lead Iran into the
twenty first century towards a glorious future which we are very hopeful for and we have fought for for forty seven years. So this is a very realistic objective, very realistic future, and it will come. It just takes time, it takes effort, it takes sacrifice, and Iranian people are ready. They're ready, and of course the organized resistance also is ready.
Bear in mind that before the US attacked Commedies Compound a week earlier, the Amkare resistance units attacked the two hundred and fifty of them and they had no drawnes and they had no Tomahawk missiles. They attacked it underground, while of course we lost about one hundred and some arrested, but the remaining members of that two hundred and fifty assault force returned safety.
So there is an organized opposition to do this.
Just about the Ayatola Kamani was targeted and killed by the US military. How important of an event is that and what is next for the clerical leadership of Iran.
Given that Sesson, well, that was a very very important development. In a sense, it beheaded the regime eliminated if you were the lynch pin of the clerical establishment. And I do not believe despite the pretenses that you see these days a three man council trying to appoint his successor, that's not going to happen. Kameny's stature and the power emerge for him being at the helm for thirty nine years, nobody can replace him.
And I think in the weeks ahead you will see.
Some sort of if you will, I don't want to call it disintegration, but fragmentation within the regime itself, and of course to the extent that the organized opposition and there Inni people can get better organized take actions that is needed to be taken.
I think change will come.
Change will come, and I must say that a firm policy is a Virnean regime is helpful to the Rani people. Remember that for forty seven years the West.
Offered concessions to this regime.
Even now, some countries are not willing to call for the overthrow of the Iranian regime. The British haven't yet put the IRGC on the terrorist list, and so I think that's what the watershed moment, and we are now in an entirely new phase, a new, if you will, a strategic situation.
Yep, Ali, thank you so much, Sir Ali Savabi. He is the member of Iran's Parliament exile, that is the National Council of Resistance of Iran. With the reporting from what may come next for the leadership of Iran, but again the military operation continues and mister Sabab saying this will take time.
Stay with us. More from Bloomberg Surveillance coming up after this.
You're listening to the Bloomberg Surveillance podcast. Catch us live weekday afternoons from seven to ten am Eastern Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
Volatility today, again, we like to look at the VIX here just for the equity market volatility up almost four big points here to twenty five and change here. We did get the twenty seven earlier today, So this is a VIX level that's been hovering around sixteen, seventeen eighteen for a long time.
So big increase in global volatility. Somebody gets paid to do this stuff.
Michael schau Will put folio manager in Ion Asset Management. Michael, you wake up over the last couple of days and you see this geopolitical news and the market's been a little bit pricing a lot of it in. But boy, got some volatility today?
Is it looks like.
This adventure in Iran looks like it will be going on maybe a little bit longer than initially thought it.
How do you dress volatility in a portfolio?
I mean you have to come in set up for it. As you said that, you did have plenty of warning last week that something was happening. And frankly, anybody who's been alive in paying attention over the last couple of months has known that something that something was in the air. You know, I would say, right now, it looks like the Asians were least prepared, or maybe it's because there's so much US money in Asia right now, it seems to me that the bulk of a panic took place
Sunday afternoon Monday evening. We calmed down in yesterday's US session, and it looks like things got pitty hairy in Asia overnight, judging by what I saw when I woke up this morning.
So how do you play this market? I mean, how are you advising your clients during this time period? I mean, we saw energy as the best performing sector in the S and P five hundred today. But are there any specific sectors that you're keeping an eye on?
Well, I mean, I think energy was what you wanted to own, and I think you wanted to earn it for various reasons. We've been bullished on energy since the fourth quarter and fortunately added to positions you know at that point in time, you know, I think now, I think there's a lot of noise going on. I do think it's very important to keep an eye on credit.
Credit had been quietly misbehaving, or particularly credit related equities have been quietly misbehaving going into this, I think, without any obvious linkage to a van So look, I think this is going to be a test of the market's nerve now and we'll learn a lot by you know, what bottom's early and what bottom's like.
Allocation here, what's typically your portfolios allocation? Stocks, bonds, commodities, alternatives, because diversification is the tried and true way to try to deal with volatile well.
I mean I run a hedge fund, I'm not an advisor, so you know, in my portfolio we've been sort of heavy on commodities for the last eighteen months or so, and you know, just as I say, we spent the fourth quarter lightening up somewhat on precious medals and adding to adding to energy. Look, I think the global economy is still fine. I think the global economy will will find a way. You know, we'll find a way through this.
But you know, we've been adamant for more than a year now that the ownership of commodities is much much more important, both of the sort of industrial and economic level and at the portfolio level than people understand.
So how far do you think these precious metals, Well, how many legs do you have to run? If I think about it on a year to date basis, I'm looking at spot gold, it's not about twenty percent so far in twenty twenty six. How much further do you think this rally can go?
You know, I think precious medals probably made a major peak in January, and I think it's going to take quite some time to get who that silver may actually have made its peak at one hundred and twenty Gold I think makes a higher high. But I think it's going to be some distant stand of rode as I say it's it's I think it's all about energy for
the rest of this half of the year. And I think what's going to surprise people is that even if this particular episode calms down in the next two to three weeks and energy has a pullback, it doesn't pull back to where it was a couple of months ago.
So I mean just recently is a few a month or two ago, or even a few weeks ago, there was a discussion of there's a global oil glut in the marketplace.
We don't buy that. No, we did.
We bought crude when we saw that. We were buyers of crude after Venezuela, where there was this sort of final flush out of this idea that somehow, you know, a few million extra vowels and Venezuela were going to come on board. No, I think the balance between supply and demand for crude is tighter than people realized. I think the tendency to stockpile globally is accelerating arm and I think at fifty five dollars a bowel, crude was
a pretty good one way beat to the upside. No, granted, at seventy five eighty dollars to the bowels, it's a more nuance bet. But as I say, I think people came into via much too bearish crude oil arm and you know there's been a somewhat hurried adjustment to that.
How do you think about opportunities outside of the United States.
I mean, we like non US markets. I think the you know, the relationship between emerging market performance and S and P performance, it's what I would call a very trendy performance. What I mean by that is it tends to be several years in one direction or the other. And I think emerging markets, you know, sort of finished a ten to fifteen year period of out underperformance against the US last year, and all things being equal, I think over the next five years EM beats EM beats V S and P.
That doesn't mean it.
Goes up every day for five years. There'll be plenty of pullbacks. But I think you want to be looking to diversify outside. And again I have the latitude to do whatever I want to do. I run a much more glow wal portfolio today and I would have done two or three years ago.
And that kind of goes to the issue of just an economic discussion globalism. I mean, this is an administration that suggests, you know, America first, and we've seen that actually in a lot of corporate movements, corporate actions. Do you think globalization is on the wayne dead dying on the.
Way and yeah, yeah, I mean basically, look, I start with China first before I said America first. Look, I've coined a phrase fragmentation, which I've been using to describe as sort of end of globalization and tracking it. You sort of see this word fragment, fragmented, fragmentation. It's popping up all over the place all of a sudden. And look, I think globalization its peak was probably twenty fifteen in retrospect.
It clearly took a big ding in twenty eighteen, took another ding in COVID, and what was left of it, you know, I think fell apart over the last eighteen months. Doesn't mean we don't We're still going to have tons and tons of global trade, but I think the tendency is going to be to split the world between a US dominated sphere of influence and a Chinese dominated sphere of influence.
And although there.
Will be trade between those spheres, you know, the tendency is to see those relationships attenuate and a deeper relationship within the spheres of influence.
It feels like the word uncertainty has been used more times than not. I'm curious, you know, as we think about a potential resurgence or surge in inflation, as people are really weighing some of these geopolitical tensions, how do you think about the outlook and how to position yourself given the lack of you know, certainty on the outlook for inflation and the economy more broadly.
I mean again, I you know, came into be strongly believing in at least reflation. You know, I think we certainly, we certainly see that. You certainly see strengthening PPI actual inflation. Yeah, Look, I think it's very sticky. I think it's easier for inflation to get from two and a half to three and a half and from two and a half to one and a half. So, you know, I look at the long end of the curves as potentially dangerous. But
there's a lot of cross currents here. As I say, credit, wow, is me more than inflation at this point in time. I think the performance of credit is absolutely going to make all bake twenty twenty six thirty seconds.
Private credit cockroaches, is that where you think the concern is the first and foremost.
Private credit is where the excess was and whether his excess for his mistakes.
Very good, Michael.
Shall, thank you so much for joining us. Michael Shall is a portfolio manager for Ion Asset Management based here in New York City.
Stay with us more from Bloomberg Surveillance coming up after this.
You're listening to the Bloomberg Surveillance podcast. Catch us live weekday afternoons from seven to ten am Eastern Listen on Apple, Karclay and Android Otto with the Bloomberg Business Up or what is live on YouTube.
The military operations in Iran, the US has hit more than one thousand Iran assets. Now comes a hard part, so says our next guest, Becca Wasser, Defense lead for Bloomberg Economics Beca. I'd love for you to just summarize what you understand to be the military operations to date, and then maybe what maybe coming in the next several days and maybe even weeks.
So, the United States has hit over one thousand targets in Iran. These are largely going after Iran's missile program, both its missile storage sites, production facilities, and missile launchers, as well as Iran's navy and key command and control centers. There's been a division of labor with Israel, who has largely gone after some of the leadership, as well as government buildings and at least one nuclear site. So this
is what it's looked like to date. There's been a tremendous amount of firepower and intense firepower at that thrown at Iran. In the coming days, I think we expect to see more strikes, in part because President Trump has said that the big wave is coming, and so what that ends up looking like is probably going after more
navy targets, additional missile targets. But at some point the United States is going to run out of pre planned targets to strike, which means it's going to either have to restrike some of the same targets or generate more, which can be a little bit of a riskier endeavor because it requires US intelligence and surveillance and reconnaissance assets and fighter jets flying overhead.
BETA.
Tell us what exactly you understand to be the depth of Iran's missile capabilities.
So nobody truly knows exactly how many missiles Ron has and how many they actually have left after their missile program has been severely degraded by Israeli and U strikes. But prior to all of this, the United States estimated in twenty twenty two that Iran had about three thousand
ballistic missiles of various ranges. Israel said that that number dropped to about two thousand after the Twelve Day War, So we can assume that there had been some rebuilding between the Twelve Day War and this operation, but no one knows exactly how many they have. That being said, it's not just Iran's missiles that matter here, it's also its large amount of one way attack drones that it has used in great effect to menace some of the Gulf states and to attack US bases throughout the region.
Beka.
We understand one of the objectives for the US intervention here was to degrade the nuclear capabilities of the Iranians. But again past reporting, we've learned that those are those facilities, many of them are built way underground and very hardened bunkers. Is there, what's the US military saying about its ability to attack those targets.
Has the ability to attack those targets, It requires heavy bombers flying either from the continental United States or somewhere else overseas, like the base in Diego, Garcia that has been in the news so much lately, or bases in Europe, and it also requires them to use heavy bunker buster
bombs to get to those hardened targets. Underneath that being said, we haven't seen the United States try and strike any of those nuclear sites quite yet, but we have seen them use bombers and some of the more heavier bombs to go after some of the missile cities that Iran has that are also hardened underground. So we can maybe see some additional strikes on nuclear sites in the coming days as part of that big wave that both President
Trump and Secretary Rubio have talked about. But it does go against what President Trump has said previously that his earlier operation obliterated Iran's nuclear program, So if the US restrikes those, it might go against what he's said before.
Super quickly, just curious, how do you think about the idea of how complex and costly this could potentially be for Washington as we look toward more than difficult, more difficult targets.
Absolutely, there are risks ahead and abound, and I think that's something that we've heard really consistently from President Trump and from other leaders, particularly General Dan Keane at the Defense Department, where they have warned that more casualties are likely, not only civilian casualties, but casualties of military service members.
And at the end of the day, we can cost the number of airplanes that have been shot down in friendly fire incidents, we can cost the number of missiles, but the one thing that we can't actually put a price tag on is the blood and treasure lost from our service members.
Beer Defense lead for Bloomberg Economics, based in Washington and DC.
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