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Watching the markets and as we see Iranian missiles targeting the United Arab Emirates, there's some concerns about that Tehran warning that it was tightening its grip on the straight of horror moves.
I mean, Joe, this is once again we see this back and forth and it feels like there's no progress towards an end.
It feels pretty hairy. And this comes with this Operation Freedom, I guess it's being called the President announced over the weekend, where we would in fact not necessarily start escorting vessels through the Strait, but stand by to help them. Is a question about whether anybody's going to take that opportunity, and it's where we start our conversation with Ian Bremer, the force behind the Eurasia Group, is with us live
and in person here at the Milken Conference. It's great to see you, and I hope that this set of meetings is going well for you. We would just love to talk about this very delicate moment that we are in and whether the President has the ability to open this corridor in the Strait, and even if he does, could we move enough ships to make a difference.
As of right now, he does not, and that is a big part of the problem. This is by far the biggest challenge we've seen since the ceasefire was announced by President Trump a couple of weeks ago. We now have ships that are being fired on in the straight one doing a quick U turn right after that.
No one injured to the best of our knowledge.
And then we have what looks to be some interceptions, the UAE Ministry of Defense saying that they had intercepted some shots at them from Iran in the last.
Couple of hours.
That is clearly an escalation, a direct response by the Iranian government from Trump's announcement that he was going to have a humanitarian freedom operation.
To get some of these ships through.
The Iranian perspective is we are prepared to talk about ending the blockade if you're going to let our ships through.
Otherwise it's not happening.
And the Iranians have the ability and the willingness to prevent Trump from making these moves. This is a He's going to be pretty antagonized by this. There's no question in my mind, Ian who's.
Got the cards, Who's got the winning hand right now? Or is there a winning hand because it doesn't seem like there's.
Really any progress.
I mean, Iran understands its power by controlling the strait of horror moves, and if it lets that go, then.
What I wouldn't want to be the Iranian regime right now, very clearly of one hundred and fifty of their leaders have been killed, so to say they've got the winning hand in that environment. They're desperate, but they're also their regime is not going to change.
More of them can be killed.
A lot more Iranians have been killed and displaced by the way than anyone else in this war.
Lebanon's the only other country that's even close.
So it's not like the Americans are facing some existential threat. But this was a war the Americans chose to fight that President Trump chose to fight with Israel, and it turns out that Iran's capacity to cause damage and pain to the Americans is massive.
Where one place.
The Iranians have an advantage is an information advantage. They know what the polls are in the United States, they know what people inside the Trump administration are saying, and that they're not completely aligned on this. They know the Republicans don't like the war the US has none of that transparency on what is being said at the top of the IRGC inside Iran, and that is a disadvantage for the United States.
Well where's our intelligence on that?
Well, there is intelligence, but again, you've killed most of the people you were talking to, right, And the Foreign Minister who is engaged and still engaged every day by text with Steven Whitcoff, they're still talking and the sides aren't all that far apart on the nuclear issue. But he's not the guy calling the shots inside Tehran. The people calling the shots are not on television, they're not engaged publicly because.
They don't want to get killed.
So, I mean, it is just a lot harder to get intelligence on what the Iranians are doing and what the Iranians are thinking. And I'll tell you as many times as I've seen President Trump say they better watch out no more, mister nice guy, when when the supreme leaders like kid and father and mother have already been assassinated in this war, no more, mister nice guy doesn't hold a lot of credibility. Right, most Iranians that we've spoken to in Tehran.
That's nice. What's bad exactly?
They think that the war is going to restart imminentally, they believe.
There was a moment a couple of weeks ago, and you remember this, the markets were lit up with optimism because there was a thought that if we're arguing about duration on stopping enrichment, then we've obviously made progress that we can somehow get to a yes, that the fact that we were just talking about is it five years, is it twenty years? Is it indefinite? That optimism seems to have gone away. Was it ever real to begin with?
It was real.
It was real in the sense that there was a there was serious engagement on what not only the duration of enrichment being stopped would be, but also.
The removal of the uranium stock part.
At the point the President said there was a deal to him hand it over.
Yeah, yeah, but what And to be fair, also, the Americans had given up on the ballistic missiles, said that was a regional issue. So that's if you're not going to have to resolve it, it makes it easier not even talking about Iranian support for proxies. So there you've got a deal. But in order to get to that deal, you have to open the straight and the Iranians if they're not going to tell anymore, they have to get something. So what are they getting? How are you paying them off?
And there we did not see a deal. So ultimately, the Iranians have very little reason to open.
The strait, which is their one point.
There's singular point of global leverage, not just versus the US. Unless they're going to see something that is better for them than the position they're presently in.
They don't have that, all right, So we've been going back and forth. Obviously the White.
House thought this was going to be just like Venezuela. It obviously is not. So do you see an endgame and outcome anytime soon? Because at this point markets, when you look at oil prices and other factors, they are pricing this out through the end of the year. They've already decided this is nothing that's going to and soon. It hasn't ended soon already. So do you see Ian at ultimately some kind.
Of endgame here?
The thing that worries me, the reason I don't have an immediate yes for you, is that Number one, Trump seems to believe that he's already gonna lose mid terms. He seems he's calverty counseling patients. He's saying, I'm surprised that oil prices are below one hundred, you know, I think that they could be a lot higher. So he's
willing to go longer and take that pain. Secondly, the Iranians themselves do seem like they are prepared to continue to hunker down, and they're capable of continuing to hunker down. So it is hard for me, even if you were to get to a deal, implementing that deal. So with the International Arms inspect the Atomic Inspectors, no one's engaged with them so far.
You'd need them on the ground.
That would take time staging that With the money that the Iranians would have to get, that's a matter at best of another month or two after a deal is in place. Even if you came to yes, and we're not close to yes right now, it would still not be Oh, everything's going through.
The straight I think it was.
Darren Was last week said it would be at least two months from the strait being opened, also that it would take that long for the energy market to rationalize itself and get the flow.
Longer, if you look at Qatar, we're talking like three to five years.
So go back to the first Pentagon briefing, Pete hag Seth dan Kine, it's the new duo. It's turned into a road show. The first questions were was there a plan for the straight and he mocked the reporters for asking that. He said, of course we had a plan, what was it.
I think that when you believe that this is going to go over because you're killing the leadership and so of course they see that overwhelming US military capacity.
That they're going to then want a deal.
Big assumption you don't.
It's a big assumption you don't need that plan.
The biggest problem that we have right now as Americans is that President Trump, in my view, is not getting an accurate picture of what's happening on the ground. And the reason for that is because people around him, not just his domestic advisors but international leaders too, when they
actually talk with him, they sugarcoat it. When they actually talk to him, they're like, sir, you're doing so well, and you know, there's so much of this is going well, and maybe this is one little thing that if you can just do a little bit different, And they do that in part because he won't tolerate criticism but also because they want to continue to have access and they know that if they really say, in an unvo way, let's be real, they want access because other people around
them are competing to be the one in front. So if they're the one that's giving Trump the messages in life the ear they're not going to be there. No one would run a company that way, right, I mean, you would downgrade that company if you are in Bloomberg. That's the way the United States government is presently being run in a war environment, and I just think that's horrible.
I think about your concept your book g Zero.
Right, this world, everybody is kind of out for their own oil, and we see it when it comes to raw materials, rare earths, commodities.
All of a sudden in the markets, we're.
Not talking as much about high tech, We're talking about raw materials, gold, steel.
I mean, the world has changed.
Does that make that even difficult, even more difficult to get some kind of resolution?
And is this just our worldy? And going forward?
It makes it more difficult in the region because the most consequential geopolitical impact that has come from this war is that the Amoradis and the Saudis are in much more open hostility, right. I mean, that's why the UAE decided to leave Opek in the middle of wartime. It's not like the strait is suddenly open because they did that.
That was the headline that crossed and it was like, wait.
It's wildly consequential because long term, the UAE is aligned with and supported by Israel, and they do not want, cannot tolerate this Islamic republican Iran with this level of military capabilities, and they will continue to mow the grass, as the Israelis call it, with Israel going forward if those capabilities exist. The Saudis are not a globalies are the regional anchor that's focused on long term, big cheap oil production at scale. They've got a much bigger market themselves.
They're going to be the regional anchor. They're going to work with pas Kistan, which.
Provides a nuclear umbrella for Saudi Arabia.
They're going to do a deal with the Iranians that Pakistan and China will facilitate. They will find a way to engage so the day after this war is over, it is a different Middle East.
It is a different Gulf, and the jizer Is worse. Is it more stable, it's less stable, It's less stable.
It certainly is more aligned with the individual interests of those countries, but you lack the multilateralism. The Golf Cooperation Council is no longer fit for purpose. They could easily fall apart. And that you know historically, again, people people that are looking watching the show right now, Historically they would go to they would invest in the golf and it wouldn't matter so much if they had their headquarters in Abu Dhabi or Saudi Arabia. That thing that will
be massively consequential going forward. They will not be a singular golf strategy. You will need to understand how you are engaged with these different leaders, both very strong leaders and by the way, both generational, so it's not like they're going away anytime soon.
This is a very big deal.
You mentioned China, and the role that China is about to play could be significant. President Trump seems to think that there's I won't call it a long game, but maybe a break glass situation with President she If this is not solved by then he goes to the meeting with Hijin Ping and they work this out together. Is he the Lynchpin to getting to Iran and getting this straight eye open.
It's got to be good.
It's going to have pandas. I like pandas.
And also the fact is that this summit is going forward even with the straight still closed. And at the same time, the US has put in principle sanctions against Chinese teapot refineries that are not linked into the broader financial system, and the Chinese in return, I said, okay, if you actually do that, these companies will have the right to go after any American company doing business in
China to receive the money that they've lost. Now, the fact that China is willing to hit back like that right before a summit with Trump shows that not only are they confident, they know that the Americans are not going to take moves against them. They know that they're not really under pressure or resolve anything. So I think the meeting will go well. I think they will show
respect for each other. I think, you know, Chijin Ping will try to see if he can get Trump to say something useful on opposing Taiwan independence, which she wants and no one around Trump wants to see.
But one on one Trump might say.
That but this is this is not going to be if you're waiting for a Sheshin Ping summit to be a breakthrough on the straight up four moves.
Yeah, they want none.
This is the president not thinking that. The way he's been talking recently makes you wonder.
The way he's been talking recently makes you wonder about many things. Now, I mean, pick the tweet and tell me which bit you want to focus on it. Then we'll wonder.
About all the different events lunch time. No, but that the.
Point is he's frustrated, he's angry, he wants an off ramp. He'd like to blame someone. It is his fault and he can't do anything about it. That's an unusual situation for him.
I and I've got to ask you.
I was talking with an Iranian yesterday who's been in this country for a long time. But he said, Iran really wants to be actually friends with the United States rather than China. And I think about that China Iran Russia alliance. That's an interesting one. Do you feel that that's possible the Islamic Republic?
No, of course not.
Look, I think I was listening to NPR briefly this morning.
There I listened to NPR brief this morning, and it bothered me that, after five minutes of this interview, which was wildly disconnected from what was happening on the ground, people that would listen to this person who used to be in the US Administration in the Treasury Department, I don't know the name, and now is in some think tank in Washington, but was not introduced as an Iranian American who just desperately wants the regime to collapse and
will say anything in service of that. Now, that is a legitimate perspective for a person to have, but the people listening don't necessarily know that that is the perspective of that person. And look, I would love to see the regime collapse. It's a brutal, horrible regime, lots of its own people. But what I want is not analysis, right, What I want is not what's going to happen.
All I know is, man, just when I think it could get easier, it's not. It just gets more complicated. You create insanity for us on the Ecuation Center.
Thank you.