00:00How much money could this raise for Iran and how palatable would this be more broadly for those that need
00:07to get their vessels out?
00:08It's absolutely not palatable, but it's an imperfect situation. Before the war, the straits were open. Now we've had the
00:17war and they're closed.
00:18Iran right now, its parliament is passing laws to work with Oman because the straits on one side is Iran,
00:26on the other side is Oman, to have a transit authority that will manage and govern the straits moving forward.
00:33Estimates I've seen anywhere from $60 billion to $100 billion a year because they are charging each boat today $2
00:42million in cryptocurrency to go through the straits.
00:46So this is a it's a huge win strategically for Iran if they're able to hold on to it.
00:53But it has to be one where they get buy in from the United States, from the GCC states as
00:58well to make this work.
01:01Let's talk about currency because crypto is eye raising. There have been talk about the one, which is sort of
01:06a poke in the eye as you write in your piece to the United States.
01:10Would if they were ever going to get across the table, would it have to be denominated in U.S.
01:13dollars? What do you think about these transactions?
01:15Well, I advocate that it has to be a holistic approach. Iran has suffered a great deal of damage because
01:20of these two wars. They want reparations. They've put that front and center.
01:24Iran's also caused a lot of damage to the GCC states. They are entitled to reparations from Iran. And underlying
01:31all of this is the petrodollar.
01:33Iran should loudly proclaim to the U.S. we will denominate this trade in petrodollars to keep the petrodollar supremacy.
01:41That's a win for the Trump administration. It'll be win for the Treasury Department.
01:45Because if Iran were to do this trade in yuan, in cryptocurrency, it would undermine the supremacy of the petrodollar.
01:51And that has been a concern when it comes to the bond market. I mean, this flows around all sorts
01:55of asset classes.
01:57More broadly, how obvious or not was it that Iran had so much leverage when it comes to the homos,
02:04straight off homos?
02:05Well, it's been obvious for 47 years. This is why every president, every administration hasn't done this.
02:11The Iranian regime has been a bad regime and a bad actor. However, there is first, second, third order of
02:17consequences, magnitude of things that would happen if military action was taken.
02:22It seems this administration has a broken National Security Council apparatus. If the reporting you follow in The New York
02:30Times is correct, the president just decides things on a whim and everyone executes.
02:34And they were taken aback. The president says we were taken aback that Iran would actually hit the neighboring Gulf
02:40states.
02:40But everyone knew they would do that. That's why previous administrations didn't do this.
02:45That's based on New York Times reporting. When we think about more broadly, going back to the currency narrative and
02:51what this just generally means, the amount was pretty significant that you talk of.
02:56How much does that end up being an inflationary pressure on the people that actually run the boats here? How
03:00much can they afford the extra costs?
03:03How much will that be passed on to a consumer when you're thinking about oil, when you think about LNG?
03:07It will ultimately pass on to the consumer.
03:10You have to look at it this way. This war has consequences far beyond Iran, the United States and Israel,
03:16because the Persian Gulf region, the Straits of Hormuz, I argue, is like the carotid artery for the global economy.
03:23So much of Asia relies on the LNG, the oil and gas, as well as Europe.
03:30So ultimately, they're going to have to pay because they need this raw material.
03:34They need this energy to power their economies.
03:39Ultimately, it gets passed on to the end user, and we're going to have inflation.
03:43And you just think about the demand on energy right now.
03:46We were just doing some reporting around the fact that OpenAI is no longer going to be pursuing its Stargate
03:50project over in the U.K.
03:51because the U.K. energy prices are just too high.
03:53And this, of course, has been inflamed in many ways for what's happening in Iran at the moment.
03:57So it's just the narrative goes far and wide.
04:00When you're thinking about what's happening between Israel and Lebanon, as well, that has been the most recent breaking news.
04:04Can you bring your expertise to bear there as to how likely that will be, that we get some sort
04:08of peace process there?
04:09So I think we have two different peace processes right now going on.
04:14Obviously, the United States and Iran are supposed to meet tomorrow in Islamabad.
04:19Iran has tied the peace with Israel and the U.S. to having peace in Lebanon.
04:25Israel and the U.S. have resisted that so far.
04:29The ultimate issue between Israel and Lebanon has always been Hezbollah and disarming of Hezbollah.
04:34And the Lebanese government has not been able to fulfill that promise that they always make that we will disarm
04:39Hezbollah.
04:40Now there's talks that Prime Minister Netanyahu has actually had a breakthrough with the Lebanese prime minister.
04:45That's a good thing.
04:46You see the markets have reacted to that positively.
04:49However, ultimately, can the Lebanese disarm Hezbollah?
04:52If they're going to do that, you're going to have to have buy-in from Iran because Iran controls Hezbollah.
04:58What's the likelihood of that?
04:59Can you just tell us the game of chess that then ensues?
05:03I don't see that likely in the current scenario unless Iran and the U.S. were come to a much
05:09bigger understanding,
05:11some sort of grand bargain in the region whereby everyone has a stake in its success.
05:17Iran being brought in from the cold, having some sort of peace in southern Lebanon where Israel isn't continuing to
05:24go into southern Lebanon,
05:25making sure that Hezbollah isn't shelling northern Israel.
05:28So there's a lot of different moving parts at play.
05:31And if this administration is able to pull this off, I highly doubt.
05:36But if they were, that would be a huge win for global peace and security.
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