Latest / The Fourcast / Middle East oil crisis: What is America's real 'endgame' in Iran?

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Middle East oil crisis: What is America's real 'endgame' in Iran? · The Fourcast

• 0:00
  I mean, the big question is why Ng infrastructure in Iran isn't
• 0:05
  being hit and. Your answer to that is they want
• 0:08
  to use it. Yes, I think that this is the
• 0:11
  end game. My sense is that we're going to
• 0:13
  see more escalation from the Iranians.
• 0:15
  I mean, the regime is hardened. It's united.
• 0:18
  The thing that worries me most is if they go for what I would
• 0:20
  call the nuclear option, which is not not a nuclear bomb, but
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  rather they try to attack the desalina tion plants.
• 0:28
  If we start seeing desalina tion plants being attacked and really
• 0:31
  all bets are off and it's an all out war.
• 0:38
  Hello and welcome to the Forecast.
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  I'm Christian Guru Murphy. In Jerusalem, oil prices are
• 0:43
  spiking well over $100 a barrel. And as this war goes on, the
• 0:48
  markets are clearly taking some fright at what this might mean
• 0:52
  for world economies. We've been seeing a series of
• 0:56
  statements from the Gulf states expressing their increasing fury
• 1:01
  of the way they've been drawn in to this war, notably from Saudi
• 1:06
  Arabia, who have reiterated their right to take any action
• 1:11
  to defend themselves that they feel is right.
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  But there are also some theories now circulating about to what
• 1:17
  extent oil is part of this war. And one of the motivations to
• 1:23
  explore all of this. I'm joined by Guy Laron from the
• 1:26
  Hebrew University of Jerusalem and author of Oil Wars, the
• 1:29
  Struggle for Control that has Shaped the Modern World, and
• 1:32
  Bernard Heikel, professor of Near Eastern studies at
• 1:35
  Princeton and a man who speaks regularly with the ruler of
• 1:39
  Saudi Arabia, Mohammed bin Salman, best known as MBS.
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  Thank you both very much indeed for joining us, Bernard.
• 1:48
  I mean, could you read, read into what the Saudis are saying
• 1:52
  publicly for us now and kind of explain, you know what, what do
• 1:56
  you think it means in terms of their calculation?
• 2:00
  Do you think they're thinking of joining the war?
• 2:03
  The Saudis have been very clear for quite some time now, meaning
• 2:07
  at least a couple of years, that they are neutral, they don't
• 2:12
  want to be involved in this war. They saw that Israel was intent
• 2:17
  on attacking Iran and they expected another attack after
• 2:21
  last year's 12 day war. And they've signaled to the
• 2:24
  Iranians that they will not allow their space, whether it's,
• 2:29
  you know, their territory or their land or, you know, the sea
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  or the air to be used against Iran.
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  And they were very worried about the Iranian threat to them, that
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  if the regime is existentially threatened, that the Iranians
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  would launch an all out attack on not just American bases in
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  the region, in the Gulf region, but also on oil installations
• 2:51
  and other vital installations and infrastructure like
• 2:53
  desalina, tion and so on. And the Saudis have made it very
• 2:56
  clear to the Iranians that if they pursue this, if they attack
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  Saudi Arabia's vital infrastructure, that they would
• 3:03
  retaliate and respond to defend themselves.
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  And they're now in a situation where that's increasingly
• 3:09
  happening. The Iranians have decided to
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  expand the war to make America and Israel and the world pay a
• 3:17
  price in terms of an economic downturn, higher oil prices,
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  creating a crisis to draw in more, more countries to stop
• 3:26
  this war. And the Saudis basically are
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  dreading that that getting involved.
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  They don't want to get involved. They're also dreading actually
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  the the downfall of an Iranian regime because if a civil war
• 3:43
  takes place in Iran, you would have serious instability with a
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  failed state next door. So they're really in a very,
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  very difficult spot right now, so.
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  So, so they have a very different desired outcome from
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  this war to both the United States and Israel, who each have
• 4:00
  slightly different desired outcomes as well, and yet they
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  could all end up fighting on the same side.
• 4:07
  Yeah, they could end up fighting on the same side.
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  Although again, I would add one more thing, which is that I'm
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  not sure what the Saudis can do to add value by entering this
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  war. They could, for instance, allow
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  the Americans to use their bases to to launch attacks.
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  And, you know, they have a base in Tehran which is just a few
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  minutes away from Iran by fighter jet or missile.
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  But, you know, as Saudi Air Force, getting involved with
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  would mean that the Americans would have to get them into the
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  scenario of the war with deconfliction and coordinating
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  with the Israelis and the Americans.
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  And that's very, very complicated.
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  And how how do you think the Saudis differ from the rest of
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  the Gulf states, particularly the UAE?
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  In, in, in emphasis and and and what they want out of this.
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  I think the, the actually, the attitudes are very, very
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  similar. They see Iran as an arsonist, as
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  a very unstable regime that wants to create instability.
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  And it's a revisionist regime that wants to see America
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  expelled from the region. That's not something they want.
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  They want stability. They want, you know, an
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  integrated, an economically integrated region.
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  So when it comes to Iran, I think all Gulf countries, the
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  countries of the GCC, the Gulf cooperation countries are all
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  Council countries are all basically on the same side.
• 5:26
  Guy, how are you reading this? Well, it was interesting to
• 5:30
  listen to Professor Heikal, and I was thinking that unlike
• 5:34
  Israel that wants to see this regime destroyed, the Gulf
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  countries seem to want this regime to be contained.
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  So that's a very different outcome that these players have
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  in mind. But also I think that we need to
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  infer intentions from actions rather than official rhetoric
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  from the Trump administration because what we see is Israel
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  pummelling military infrastructure.
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  The US is doing that as well, but it neither the US and until
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  recently neither Israel didn't hit oil infrastructure and
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  Israel did that yesterday and the US kind of leaked to the
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  press that that went out of line.
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  So the, I mean, the big question is why Ng infrastructure in Iran
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  isn't being hit, although this is definitely a point of
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  vulnerability for Iran and and. Your answer to that is they want
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  to use it. Yes, I think that this is the
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  end game. I mean, this is where I think
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  Israel and the US diverge in their aims.
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  While Israel do want to see this regime destroyed, they have no
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  problem with Iran disintegrating or sinking into civil war.
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  I think the best outcome for Trump is kind of Venezuela
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  version of Iran or Venezuela is the Iran in the sense that he
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  would use his Navy and the military, American military
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  presence in the Gulf to get into some kind of an arrangement on
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  the oil. And that would mean that the US
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  would control it in the same way it controls Venezuela's oil.
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  And the US can achieve it either by taking control of the island
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  of Har in the northern Persian Gulf, laying a siege on it and,
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  you know, if worst comes to worst, destroying it.
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  This is the point from which 90% of Iran's oil are being
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  exported. So this is the point, again,
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  where I infer intentions from actions rather than what Trump
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  is saying. And, and we know by the way,
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  that it has been leaked that people in the Trump
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  administration are thinking about the oil, about taking the
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  island of harm, and that Trump himself talked about it, talked
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  about it with his advisors. Isn't, isn't it sort of so far
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  in the realms of fantasy that that could be achievable, that
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  the, the first of all that the Iranian regime would, you know,
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  wouldn't destroy it or would be so degraded that it couldn't
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  attack, that it couldn't make that impossible or, or secondly,
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  that they would be so defeated and surrender that they would
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  cooperate? I mean the the Venezuelan
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  scenario seems, I mean kind of absurd, doesn't it?
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  Well, you, you did hear the Trump himself saying that there
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  were a few leaders he thought about working with, but they
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  were killed in the initial strike by Israel.
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  So that means that this scenario was there from the start.
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  And now he might be thinking about how to make it work.
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  The idea is not to take over Iran's entire oil and gas
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  infrastructure. The idea is to find people in
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  the Iranian government that would be willing to make
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  compromise and, and in in close conversations.
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  That's why I read in the American media Trump described
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  how this agreement would look like the uranium would stay
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  there, but in a secure place where the US would know what
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  goes on with the enriched uranium.
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  And 2nd, the US and Iran would work together on the oil.
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  Now, this is not just about, you know, capturing oil in abstract.
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  I think this is of the bigger strategic chess mate between
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  President Trump and the ruler of China, President Xi.
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  You know, they're meeting at the end of this month.
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  They have a summit plan. And last time she made Trump
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  back off by weaponizing rare earth supply, right?
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  So if you want gallium or scandium and whatever rare earth
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  that the American has to put in their high tech military
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  technology, then they have to deal with China and back off
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  from the threat of heightened tariffs on on Chinese finished
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  goods. Well, Trump may appear in this
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  summit and say, well, you might control the, you know, the raw
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  materials of the technology of the future, but I am now
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  controlling the raw materials of the old economy, the energy
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  economy and and China imports half of its oil and third of its
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  liquefied natural gas from the Gulf.
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  And that's where the American Navy is right now.
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  And that's a strategic surprise for China, because it always
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  thought that if US would do something like that, it would
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  try to block the Straits of Malacca.
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  So they built a Navy to deal with that.
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  But they haven't thought about the idea that the US would
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  actually get into the Persian Gulf and try to control the
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  Straits of Hiruz. Professor Heikel, what would you
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  make of this idea of this being a very complex chess game?
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  Yeah. I, I don't know.
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  I mean, I, I'm not sure President Trump is that
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  strategic A thinker. I mean, I think that he did come
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  to political awareness and consciousness in the 1970s when
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  you had two, two oil crises and 73 and 79.
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  And that he thinks that oil is really a, a very important
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  strategic asset and that the richest people on the planet are
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  the oil shakes, which is why he gives so much deference and
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  respect to, you know, countries like Abu Dhabi and, and the UAE
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  and Qatar and, and to some extent Saudi Arabia.
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  Of course. You know, he wants he, he, he
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  sees, I think that in this axis of resistance to America, you
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  know, with Russia, China, Iran, Venezuela, that the lowest
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  hanging fruit, the weakest links are Venezuela and Iran and his
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  thinking and that they're very oil rich.
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  So if he can somehow control their oil, change the regimes,
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  you know, that he's in a, he's in a better position.
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  He did this with Venezuela very successfully and then made the
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  analogy that the Iranian regime can't be too different, everyone
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  wants a deal, you know, etcetera in his thinking.
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  And what he doesn't realise is that the Iran regime is very
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  different from the Venezuelan regime.
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  It's an ideological regime and they'd rather die, you know,
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  then give up on their ideology, as we saw with the killing of of
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  the supreme leader and and many others there.
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  So, you know, he's dealing with a regime that will not
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  capitulate and is in and is fighting an existential, you
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  know, an existential war right now and which is why they've
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  expanded their, you know, the, their reach and, and trying to
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  create so havoc, you know, all over the, all over the region.
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  So I, I think Trump is really in many ways out of his depth here.
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  He thought this would be, you know, a 4-5 week long war.
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  It's going to last much longer. We see the price of oil today, I
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  think hit 120 at some point. You know, it's, that's, that's a
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  low price. By the way, if, if Hormuz stays
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  closed for many more weeks, you're going to see a much
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  higher price because something like almost 20% of the world's
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  oil transits through there. And effectively today, Kuwait is
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  not exporting, Iraq is not exporting from the South.
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  Saudi Arabia can still export because it has an East West
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  pipeline and the UAE. So, but we're seeing a major,
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  major disruption in, in the flow of oil.
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  And, and, and the last point I would say is that, you know, oil
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  is a global and fungible commodity.
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  So if the Americans, you know, it's not something you can kind
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  of control, you know, unless you, you know, balkanize or you
• 14:03
  you fragment the market and you say, you know, Kuwait, you can't
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  sell oil to the Chinese, that that's not that's never going to
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  happen, I don't think. And and no matter what President
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  Trump wants. So so that, you know, those are
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  my quick reflections on on some of these points.
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  And I think that, you know, again, I think Trump hasn't
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  thought about the day after and the day after in Iran, even if
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  this regime capitulates, could be a civil war, which would be
• 14:30
  very, very chaotic and spread a lot of instability in the Gulf.
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  So, you know, we're far from out of the woods here because
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  whether the regime survives or doesn't, we're in we're in a
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  very tense and, and period of instability.
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  So, and where does this next period leave, leave Saudi Arabia
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  particularly? I mean, you know, it's tempting
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  to think, well, they'll be pleased because the oil price
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  has gone up and they can still get their oil out and they can
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  sell their oil to China as well because they now have that
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  ability. And that, you know, to an
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  extent, there's a win there as well.
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  Yeah, I think it's, it's a bit more complicated than that.
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  You see, you want, if you're Saudi Arabia, you know, and you
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  want to build all these projects that they're building with the
• 15:14
  Vision 2030, which is a diversific economic
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  diversification plan to move away from dependence on oil.
• 15:19
  You certainly want oil to be, you know, closer to $90.00 a
• 15:22
  barrel than at $60.00 a barrel or $50 a barrel barrel.
• 15:27
  But you also don't want it to be so high that it creates what is
• 15:30
  called demand destruction. So permanent sort of destruction
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  and demand and people, you know, moving towards EVs and other
• 15:37
  forms of energy very quickly, which means you'll lose
• 15:40
  customers in the long term. So they don't want this a very
• 15:44
  high price for a very long period of time.
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  They want the price that's in a, you know, 90 to $100 band, you
• 15:50
  know, for, for a sustained period.
• 15:52
  That would be good for them, but, but, but too high or too
• 15:56
  low is not good for them. And, and while the Straits of
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  Hormuz is is blocked, how, how will they get their oil out?
• 16:05
  I mean, and how vulnerable is the Red Sea to the Houthis or,
• 16:09
  you know, yeah. So the Saudis have this thing
• 16:12
  called the East West pipeline, which can transport quite a
• 16:15
  significant amount of their production from where the oil is
• 16:19
  in the east to to terminals in the West.
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  And the terminals are far north of the Houthi area.
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  So it's not likely that their that their oil is, is going to
• 16:29
  be blocked, despite Hormuz, some of it will be.
• 16:35
  Also, I would say that the Saudis, you know, were thinking
• 16:39
  about this and knew this was going to happen.
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  So they have storage all over the world like the Kuwaitis and
• 16:45
  others. So, you know, for a while, for a
• 16:47
  few months, they can draw on their, on their storage and keep
• 16:51
  their clients happy. But you know, again, if it goes
• 16:56
  beyond the couple of months we're, we're, we're in, in
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  uncharted waters. And, and in particular, because
• 17:01
  President Trump so far has said that he will not use the
• 17:04
  Strategic Petroleum Reserve, which is the reserve that's in
• 17:07
  the United States. And it's specifically there for
• 17:10
  moments like these. I mean, when we've seen them
• 17:12
  together, it looks like the relationship between MBS and
• 17:15
  Trump is very good. How much do you think he can
• 17:20
  influence what Trump is doing well?
• 17:23
  You know, despite the reporting that he was for this war, in
• 17:25
  fact, MBS was against this war and, and clearly made that known
• 17:31
  to President Trump. And still the President Trump,
• 17:33
  you know, joined the war and was much more influenced by the
• 17:38
  Prime Minister of Israel, Benjamin Netanyahu.
• 17:40
  And I suspect that Prime Minister Netanyahu told Trump
• 17:43
  something like, you know, we have this regime completely, you
• 17:47
  know, in check. We understand every aspect of
• 17:49
  it. And this will be a very short
• 17:51
  war. And, and, and I, I suspect that
• 17:55
  President Trump believe that otherwise he wouldn't have taken
• 17:58
  such a big risk. This is the riskiest thing he's
• 18:00
  ever done. And if it doesn't go well, he he
• 18:03
  will be forever tarnished with this disaster.
• 18:07
  Guy, does that sound about right to you in terms of what
• 18:09
  Netanyahu would have said? Yes, of course.
• 18:12
  But you know, whenever Trump decided that something that
• 18:18
  Netanyahu wanted to do was a red line for him, he was able to
• 18:24
  impose his will. When Trump wanted Netanyahu to
• 18:28
  end the war with Iran in June, he he was absolutely explicit
• 18:34
  about it, yelling on the phone and yelling through his social
• 18:38
  truth account. The same thing happened in in
• 18:41
  Gaza. When Trump decided to impose a
• 18:44
  political solution on that conflict, he was able to do so.
• 18:49
  So what Netanyahu wanted to do and definitely the intelligence,
• 18:55
  you know, the depth of penetration that Israeli
• 18:59
  intelligence has in Iran, that that might have been a factor.
• 19:04
  But I assume that it was Trump's own decision.
• 19:10
  I mean, it's frightening to think that the president of the
• 19:14
  United States is out of his depth and was led by, you know,
• 19:19
  another foreign leader like the Prime Minister of Israel to this
• 19:23
  decision. But I think it's even more
• 19:26
  terrifying to think that he's a reckless geopolitical gambler.
• 19:31
  And once you zoom out from this current terrific war and you
• 19:37
  look at Panama and Venezuela and Greenland and now the Straits of
• 19:42
  Hormuz, you see a picture of someone who thinks that he
• 19:47
  doesn't need to lead the world through alliances and
• 19:51
  institutions like the US did before he came to power, but
• 19:54
  rather controlled the world through controlling various
• 20:00
  checkpoints and and and crucial resources.
• 20:03
  What do you think that means for how the Americans and Israelis
• 20:07
  will see wanting to end this now?
• 20:10
  You know, it's attempting to sort of go well, you know, we've
• 20:14
  seen how Trump responds to markets before.
• 20:16
  He's going to take fright soon. He's going to be under domestic
• 20:18
  pressure and that's the point of which he'll want to stop which
• 20:21
  which obviously runs counter to your theory of him wanting to
• 20:24
  take control of of of oil facilities that.
• 20:27
  That I I am absolutely willing to agree with, that he would
• 20:33
  want to cut his losses sooner than Israel, that Israel wants
• 20:38
  this war to go longer. That's good for Netanyahu.
• 20:41
  You know, his big strategy in the Middle East, but also
• 20:44
  domestically works in various ways for him.
• 20:48
  I can, you know, just as a short note to say that he had troubles
• 20:52
  passing the budget for 2026 and now it looks like it will go
• 20:58
  smoothly. And also he seems to be thinking
• 21:02
  about snap elections after this war.
• 21:05
  You know, he would go to the ballot boxes in Imperator Mundi
• 21:10
  that moved this successful operation against Iran.
• 21:17
  But the USI think would have a more pragmatic approach.
• 21:22
  And if Trump would think that he's not about to, you know,
• 21:29
  return his gamble. And every day that goes on from
• 21:34
  him from this point onwards, he's losing.
• 21:37
  Yes, I can see Trump deciding to end the war sooner rather than
• 21:42
  later. I mean, we don't know what he
• 21:45
  knows and how he considered this.
• 21:48
  So far, he's making noises as if he's not going to back off.
• 21:54
  But Trump is mercurial. You know, we can't expect his
• 22:00
  how he would respond. But again, I would expect him
• 22:05
  to, you know, end the war sooner than Netanyahu ones.
• 22:11
  But if Israel doesn't get total destruction and Trump doesn't
• 22:16
  get surrender, where does this leave the Gulf countries?
• 22:21
  You know, with the likelihood that this will be repeated in
• 22:24
  the future. Yeah, I mean it.
• 22:27
  You know, the Gulf countries were hoping that Ayatollah
• 22:32
  Khamenei, who was I think, 86 or 87 when he was killed, you know,
• 22:36
  was the last of the hardliners and that the next supreme leader
• 22:41
  of Iran would be a more moderate figure with whom they could do
• 22:45
  business. So they were banking on the
• 22:48
  moderation of the regime and and therefore reestablished
• 22:51
  diplomatic ties between Saudi and and the UAE in 2023.
• 22:55
  They were also hoping that the Chinese would have a role in
• 22:59
  moderating the Iranian regime over time.
• 23:02
  And, and, and that's clearly not happened.
• 23:05
  You know, right now the Iranians have appointed an even more
• 23:10
  ideological person in the form of Mujtaba Khamenei, who's the
• 23:13
  son of the last supreme leader, as the new supreme leader.
• 23:17
  And so the Gulf countries are, you know, are stuck with an
• 23:21
  arsonist next door in the form of Iran.
• 23:23
  They're hoping that, you know, at the moment, I imagine they're
• 23:25
  hoping that, you know, the regime survives, but it's
• 23:27
  greatly weakened. And it will take the regime 1020
• 23:31
  years to rebuild its capacities. In the meantime, you know,
• 23:35
  things change over time, but they're not happy, you know,
• 23:39
  with any of the possible, you know, regime downfall is not
• 23:42
  necessarily good because of the chaos that might ensue.
• 23:45
  A hardened regime is not good. What they want is a kind of more
• 23:49
  attained and more kind of less aggressive, less forward leaning
• 23:54
  regime. I'm not sure that's what they're
• 23:56
  going to get. I mean, certainly Iran will be
• 23:58
  very weakened, but this regime, I suspect, is likely to survive
• 24:01
  because the opposition is very divided.
• 24:04
  There's no leader of the opposition in in Iran.
• 24:08
  And the regime has all the guns and has shown that it's willing
• 24:11
  to kill 10s of thousands of its own citizens to stay in power,
• 24:15
  which is what happened in January, and has no problem
• 24:20
  with, you know, burning the entire region if to, to survive.
• 24:24
  So you you're stuck with, you know, a really bad neighbor.
• 24:28
  And, and how do you think this changes the calculation on the
• 24:30
  Abraham Accord? You know, there's this sort of
• 24:33
  idea that Saudi Arabia will join and there'll be a a great deal
• 24:37
  with Israel at the end, which which the Saudis, you know, to
• 24:41
  date have, you know, have said is impossible given the
• 24:45
  situation in Gaza and the lack of a Palestinian state.
• 24:49
  You know, does the Iran war change the calculation on
• 24:53
  whether or not Saudi will join the Abraham Accords and become
• 24:56
  friends with Israel? I, I don't think so, because I
• 24:59
  think that, you know, the, the, the Saudi position is not just
• 25:03
  that Israel has to, you know, provide some sort of pathway to
• 25:07
  a Palestinian state, you know, and begin negotiations with the
• 25:11
  Palestinians for that. Now.
• 25:13
  They don't, They don't, you know, decide or or impose what
• 25:18
  that Palestinian state would look like.
• 25:19
  That's for the negotiators to decide.
• 25:22
  And Israel effectively has veto power over what what the outcome
• 25:26
  of of these negotiations are likely to be.
• 25:28
  But the but the normalization with Israel was also tied with
• 25:32
  extracting concessions from the United States.
• 25:34
  The Saudis wanted a mutual defense agreement with NATO,
• 25:37
  like Article 5 type guarantees of security.
• 25:41
  They wanted a nuclear agreement. They wanted a number of other
• 25:44
  agreements and, you know, some of these agreements or
• 25:50
  concessions they're unlikely to get from the Americans under
• 25:52
  under President Trump because the votes are not there in the
• 25:55
  Senate for for that. So I think that normalization is
• 25:59
  something that they're going to indefinitely put off into the
• 26:01
  future and use it as sort of bait to try to extract as many
• 26:06
  concessions for themselves without ever actually signing on
• 26:10
  the dotted line. Go ahead.
• 26:13
  Yeah, I wouldn't be surprised if this crisis would end with
• 26:18
  international pressure on Israel to move forward in the peace
• 26:24
  process. This is exactly what happened
• 26:28
  after the big energy crisis of the 1970s and specifically after
• 26:34
  the Yom Kippur War, which was the reason for, you know, the
• 26:37
  first major oil crisis of the post World War 2 Iran, the Arab
• 26:45
  boycott of 1973. So after that, the US pushed
• 26:51
  Israel to relinquish step by And this is how we got the 1979
• 27:01
  campaign accords between Israel and Egypt.
• 27:04
  So I would assume that, you know, countries in the region
• 27:10
  like the Gulf states, but also Europe and in the US, people
• 27:15
  would say, you know, the real source of instability was
• 27:18
  actually Israel. This is how it all started.
• 27:21
  And the way to restore stability to the region is solving the
• 27:27
  Israeli Palestinian conflict, which is how things started on
• 27:31
  7th of October 2023. So this is this might be a
• 27:36
  bigger deal than just the normalization between Saudi
• 27:39
  Arabia and Israel that would create real pressure on Israel
• 27:46
  to solve its own problems. But do you think the politics of
• 27:49
  Israel could get anywhere on that?
• 27:52
  I mean, everyone seems so united.
• 27:55
  Well, that that would be the big obstacle because in the 1970s
• 28:00
  Israel had a relatively pragmatic leadership and very
• 28:06
  dependent on the US, you know, not just in general,
• 28:09
  specifically economically, after the Yom Kippur War, Israel was
• 28:14
  very dependent on aid from the US.
• 28:17
  It is less so now, and the leadership currently is far less
• 28:23
  pragmatic. And the coalition around
• 28:27
  Netanyahu sees, you know, control of the West Bank.
• 28:32
  Like, I don't know, they're Serbs.
• 28:34
  So Kosovo. So it's hard to, I mean, if they
• 28:39
  remain in power after the upcoming election cycle, it's
• 28:45
  hard to see Israel doing compromises.
• 28:48
  It is easy to see Israel more and more under, you know,
• 28:52
  international pressure and. And let me just tell you,
• 28:55
  actually, while we've been talking, I've been sent a
• 28:58
  statement from the Iranian Foreign Ministry spokesman
• 29:01
  warning against any attempt to attack Kag islands, saying that
• 29:07
  Iran has been a graveyard for foreigners when he was asked to
• 29:10
  respond to reports that the US could target the island.
• 29:15
  So I mean, there's something of a warning.
• 29:17
  Don't try it. Yeah, it's it's an issue.
• 29:22
  American drones were spotted next to the island, so it's
• 29:29
  clear that the Iranians would talk about it.
• 29:33
  Let me just stand with you both. Just just, you know, given where
• 29:36
  we are, how you see things unfolding in the short to medium
• 29:40
  term, but what should we expect? My, my sense is that we're going
• 29:47
  to see more escalation from the Iranians.
• 29:49
  I mean, the regime is hardened, It's united.
• 29:52
  The security services are united.
• 29:54
  The Revolutionary Guard Corps is definitely in charge.
• 29:57
  They have a very aggressive and, you know, forward leaning leader
• 30:02
  now in Merstaba, Khamenei. I think that the thing that
• 30:06
  worries me most is if they go for what I would call the
• 30:09
  nuclear option, which is not, not a nuclear bomb, but rather
• 30:13
  they try to attack the desalina tion plants in the Persian Gulf
• 30:17
  and on the Red Sea. You know, if they knock out the
• 30:20
  desalina tion, the water desalina tion plants, it would
• 30:23
  mean that, you know, large cities with seven, 8 million
• 30:25
  people like Riyadh. You know, we're already seeing
• 30:28
  this problem in Bahrain, by the way, because the desal plant
• 30:32
  there was attacked. You know, large cities don't
• 30:34
  have enough water from the aquifers to sustain themselves.
• 30:37
  And you would have a real kind of crisis in, in the Kingdom, in
• 30:42
  the UAE. Dubai wouldn't survive without
• 30:44
  desalina tion and you'd have a a major, major problem for these
• 30:51
  countries. So so if if we start seeing
• 30:53
  desalination plants being attacked, then really all bets
• 30:56
  are off and it's an all out war. And I suspect that it would
• 31:00
  require ground troops to to bring down the regime in Iran
• 31:04
  and. If you if you were whispering in
• 31:06
  Trump's ear and he was listening, what would you say?
• 31:11
  I would probably say, you know, that unless you're willing to go
• 31:15
  long and, and, and sustain, you know, $1015.00 a gallon gasoline
• 31:21
  prices in America and of course lose the November elections,
• 31:26
  then you should call it, call it a win.
• 31:28
  And and and try to find a, a way to kind of to, to de escalate
• 31:36
  and take, you know, and just just try to an off ramp as it
• 31:40
  were from this, from this war. Guy I.
• 31:45
  Largely accept this assessment about the US unable to sustain
• 31:52
  this conflict much longer. So I would expect that we within
• 31:57
  the next week, 2-3 weeks, there'll be some sort of
• 32:01
  ceasefire because the US doesn't have the mechanism.
• 32:04
  It can't ensure convoys going out of the the Straits of
• 32:08
  Hormuzi. It cannot supply insurance to
• 32:11
  tankers coming in and out and it doesn't have enough of its own
• 32:16
  strategic petrol reserve to sustain this conflict.
• 32:21
  And obviously, Trump is troubled by the rising price of oil and
• 32:25
  gas. So I would expect some kind of a
• 32:29
  ceasefire. Trump would say he won, The
• 32:32
  Israelis would say, we won and we're preparing for the next
• 32:35
  round. And the US saying the Iranians,
• 32:38
  OK, we had, we gave you a bloody nose.
• 32:41
  Now let's talk again and see if you're willing to offer us
• 32:44
  something better so you won't be bombed again.
• 32:48
  Thank you both. Very much indeed for your time.
• 32:50
  That's the forecast for today. Bye bye.