00:00U.S. Vice President J.D. Vance is set to lead talks with Iran in Pakistan on Saturday morning local
00:05time.
00:06It comes, though, as Tehran says, the ceasefire has been violated after Israel continued its attacks on Hezbollah militia in
00:13Lebanon.
00:14If Iran wants to let this negotiation fall apart in a conflict where they were getting hammered over Lebanon,
00:21which has nothing to do with them and which the United States never once said was part of the ceasefire,
00:27that's ultimately their choice.
00:30Let's bring in Bloomberg Economics Senior, Geo-economics Analyst for Asia Pacific, Adam Farrar.
00:35Adam, it's the uncertainty of how the next few days and two weeks will play out, right?
00:41Even to the question of what happens with Hezbollah and the Iranian proxies,
00:46we know that Pakistan's announcement included Lebanon,
00:49but clearly there are different views if you're speaking to Israel, for example.
00:56That's absolutely right.
00:57I mean, I think the next 24 to 48 hours will be incredibly important for these immediate tests of the
01:03ceasefire,
01:04particularly some sign that the Strait of Hormuz is opening.
01:07But more generally, despite, obviously, market rally and deep kind of relief coming out of the announcement from the president,
01:15it seems that uncertainty still reigns as to what is actually happening, what is being negotiated,
01:20and what terms are really on the table for what comes next.
01:23I think just in the last 24 hours since the announcement we've seen, as you've already highlighted,
01:28continued strikes in the region, particularly involving Israel and Hezbollah, but also other Gulf states.
01:33And so the question becomes, are we on our way to at least a pause in this near term as
01:39the vice president's head to Pakistan?
01:41Or could this even collapse before then?
01:43Right now, it does look like the vice president will get there and we'll see some talks.
01:47But beyond that, you know, it remains an open question.
01:51Where are we on the rhetoric surrounding the Strait of Hormuz?
01:54Because we're now hearing from President Trump that he wants a joint venture with Iran to collect tolls there.
01:59I mean, is a reopening the key part here in actually having this ceasefire last?
02:09I think it obviously has become a central point for the president, despite his assurances earlier in the last several
02:16weeks that,
02:17in fact, the Strait of Hormuz is not the U.S. concern, right?
02:19At times he was pushing other countries, particularly in Europe, to take on that responsibility.
02:24But as he laid out this ceasefire, it became central again.
02:27And I think that reflects the broader impact of higher energy prices and the risks to inflation and growth that
02:33we've been talking about now for several weeks.
02:36It is very likely that we're going to see more ships start moving through the Strait of Hormuz as shippers
02:41get some clarity from Iran as to how that's going to work.
02:44But likely very much under Iranian terms and potentially defacing Iranian fees.
02:49In terms of what it looks like after these two weeks, it's just unknown at this point.
02:53And I think that's just going to weigh on energy markets as they try and understand what a new normal
02:59looks like.
03:00Obviously, as you said, the president has thrown out a lot of different ideas.
03:03This idea of a joint venture with Iran where they're both accepting payments.
03:08That seems unlikely.
03:10But overall, I think what we can say is that the freedom of navigation through the Strait of Hormuz does
03:16not seem likely to return as it was before the conflict.
03:18So, let's look at it.
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