00:00Will, it is great to have you here with us. As we saw what happened late yesterday, overnight, and hearing
00:07these comments from the president this morning, I think we're really trying to figure out these tit-for-tat skirmishes
00:12between the United States and Iran. Is there something more serious going on? Was there never really a concrete peace
00:18accord? And, you know, where is Iran in all of this?
00:23Yeah, well, thank you so much for having me. No, we do not have a concrete peace accord. This was
00:29an MOU framework agreement that was meant to set up 60 days of negotiations to work out the answers to
00:37those really tricky questions.
00:40The status of the Strait of Hormuz, what happens in Lebanon, and of course, also Iran's nuclear file, and its
00:48program. And so in many ways, there was a deliberate degree of ambiguity embedded into that agreement to buy time
00:58for both sides to try and stop the fighting, or at least to really lower the intensity of the fighting,
01:04while they could have more serious negotiations about those things.
01:08And I think what we're seeing right now and over the last 24 hours as it relates to the Strait
01:13of Hormuz is a fundamental difference in how the Iranian side interpreted the text of the MOU and how the
01:21US side interpreted it.
01:23For the Iranians, they are very keen to maintain some degree of control over the Strait of Hormuz going forward.
01:31They see this as potentially a long-term stream of income for them, but also they consider this to be
01:38their most powerful strategic tool that they have or card they have to play.
01:43Whereas for the US, they felt that the MOU did not give Iran the control over the Strait of Hormuz.
01:50And so they had been helping ships try to transit the Strait by sticking much closer to Oman.
01:58And I think that's where we saw then these tensions escalate and result in Iran firing on two ships just
02:07yesterday, because these ships were trying to circumvent it.
02:11And for them, they saw this as a fundamental challenge to their longer-term control over the Strait going forward.
02:18Well, you mentioned the phrase fundamental difference, fundamental challenge, all around the control of the Strait of Hormuz.
02:26How do we see the US and Iran get to level footing or an agreement?
02:31How does that fundamental difference play out given the events of the last 20 hours?
02:38It's very difficult, because it does seem like President Trump is trying to return to the status quo ante before
02:47he began his strikes on Iran on the 28th of February.
02:50He wants to see the Strait of Hormuz open to all maritime traffic.
02:54Of course, that is a huge boost for the global economy or help send oil prices down.
03:02And those are things that he very much wants to see.
03:05But for the Iranians, that's a non-starter.
03:08They chose to play this card.
03:11They saw the power in it.
03:13They saw that they could wreak havoc on the global economy.
03:16And so they want to maintain their ability to use that tool again going forward,
03:21if they're not getting what they want on the other terms of the agreement,
03:26as it relates to the investment that has been promised in Iran,
03:30as it relates to the unfreezing of their frozen assets.
03:34So I think, if anything, the grounds for some potential agreement would be some giving by the U.S. side,
03:44where they might agree that Iran is able to set up a system whereby ships need to register with them
03:52to go through,
03:53so long as they continue to promise not to charge fees for doing that.
03:56That might allow both sides to save face.
04:00But I think it's going to be tricky to get there.
04:03And there's so much distrust between the two sides that what we're seeing now is each sort of jostling
04:09to try to secure the terms of the agreement as they believed they were signing up to it.
04:18And so that makes it very hard to see an easy off-ramp here.
04:24I have to say, Will, with the straight, it's either, OK, they're going to charge, they're not.
04:27To me, it seems pretty straightforward.
04:28And I'm just trying to figure out, is there something else?
04:30What about, you know, nuclear weapons and the nuclear issues, which I thought this was all about?
04:37Yeah, that's a good point.
04:39I mean, that was the whole motive for beginning this military campaign back in February.
04:46And that has really fallen off the priority list.
04:49And I think it's fallen off the priority list not just for the U.S.
04:53as they sought to reopen the strait and allow traffic to move freely through it, but also for the Iranians,
04:59because they realized that in many ways the strait was even more potent leverage for them
05:04than continuing to play this game where they get closer and closer to nuclear weapons capabilities
05:11without actually crossing that threshold.
05:13So, yes, I think, you know, in the 60-day negotiations that we were expecting,
05:21they were meant to start talking about the nuclear file.
05:23But my understanding is this shows just how central the Strait of Hormuz is.
05:28And it also, I think, underscores the point that there were so many difficult issues for them to try to
05:33cover in these 60 days.
05:34It was never realistic that they would come to, that the two sides would come to a comprehensive deal
05:39on nuclear weapons or the nuclear program on the strait of Hormuz and on what happens in Lebanon.
05:45Well, war is tricky and peace is tricky.
05:48We get that.
05:50Does Iran want to extend the war throughout the region?
05:52I think I heard something on with the balance of power team on in the one o'clock hour.
05:59What's your take on this?
06:00I mean, are we going to be talking about still war between these two nations at midterms in 2027?
06:06Real quickly.
06:08I don't think we're likely to be talking about an all-out war to the levels of intensity that we
06:14saw beforehand
06:15as we get closer to the midterms.
06:16I think the economic costs for both sides would be too great if we got to that point.
06:23But I think the chances of a lower intensity conflict that continues to bubble away and sees outbreaks like we've
06:30seen over the past 24 hours is more likely.
06:33I think fundamentally it's not in either side's interest to resort to the full-scale conflict now,
06:40because they don't think that they can reach their desired end state.
06:44In many ways, this war has shown that neither side can really win, and so they have to make compromises.
06:49Hopefully at some point cooler heads prevail, but we will see.
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