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00:00We are joined now by Bloomberg News White House correspondent Skylar Woodhouse and by Bloomberg News Middle East correspondent Abir
00:04Abu Omar.
00:05Abir, let me start with you and pick up on the metaphor there used by the vice president that we're
00:08in the middle of this game.
00:10Get us up to speed on what's happened here recently.
00:12We have an attack in Saudi Arabia on Saudi Aramco's jazz and oil refinery.
00:17Abu Dhabi's national oil company saying missiles targeted one of its vessels while transiting Hormuz on Saturday.
00:23It has been another busy weekend providing the backdrop to this conversation about a potential conversation here between the U
00:29.S. and Iran.
00:31Yeah, good morning, guys.
00:32A busy week, as a matter of fact.
00:34We've been reporting on this deal between Oman and Iran that was taking place or the discussions about this deal
00:39to essentially reopen the Strait of Hormuz.
00:42But a few caveats to bear in mind here from the Iranian side.
00:45They say that this reopening is temporary.
00:48They also added their own caveats saying that in this temporary agreement, they're not going to allow U.S. and
00:53Israeli flagships to pass through the Strait of Hormuz.
00:56And they will start charging tolls to countries that they deem hostile.
01:00And so a lot of traders had viewed that term hostile as referring to countries from the GCC.
01:06And then over the weekend, as you mentioned, David, we saw an Adnok-flag carrier, that is the national oil
01:12company in Abu Dhabi, being hit.
01:14Adnok reported that one fatality had happened and over a dozen injuries there.
01:20And then we also saw that the Houthis in Saudi Arabia earlier had claimed that they attacked an Aramco facility
01:26in Jisan.
01:27Aramco did not respond to Bloomberg requests for comment, but they did confirm that there was a fire at an
01:34Aramco facility.
01:35So you're seeing this escalation in the region over and over, really, and then no resolution in sight.
01:41And this deal that we've been talking about, about the reopening of the Strait of Hormuz or the interim reopening
01:47of the Strait of Hormuz, that really is all what it's about right now.
01:51We're not talking about a return to the MOU.
01:53We're not talking about a return to those major concessions that were reached in Switzerland.
01:59Some hardliners in Iran, to be sure, are saying that the U.S. needs to compensate Iran.
02:05And then we saw a return to those concessions, including the blocked assets, the frozen, the oil sanctions as well
02:12being lifted.
02:12But that is not the official line that we're getting from the diplomats or the officials in Iran that we've
02:18been hearing from since the beginning of this war.
02:21That includes the foreign minister. That includes the spokesperson for the foreign ministry.
02:25And so it looks like it calms down a little bit and then escalates again.
02:31But one thing is for sure here. I was sitting to Vice President J.D. Vance speaking.
02:35Iran maintains that Washington is not a part of those discussions, despite what we've heard from President Trump and the
02:42vice president about them being part of those discussions.
02:45Iran maintains that mediators, assumingly Qatar at this point, are the ones that are delivering messages.
02:52We also understand that Qatar is doing its own draft to start mediating to have those wider discussions.
02:59But for the time being, Hrmuz stays paralyzed pretty much.
03:03Attacks continue to happen.
03:04And we don't have a formalized draft between Iran and Oman about that deal.
03:10Skylar, I want to ask you about exactly that.
03:12It seems like the U.S. is saying they're monitoring talks and you're getting that messaging from the White House.
03:17But folks I've talked to and the reporting says they don't seem to be in the room.
03:22Is the U.S. involved?
03:23It seems at this point it's pretty much a bipartisan, a bilateral discussion, excuse me, between Iran and Oman.
03:28And also some of these lists of demands that you heard Abir going through, a list of the U.S.
03:32naval blockade, withdraw the U.S. military, reparations, release of frozen Iranian assets.
03:37Those seem like non-starters for the U.S.
03:39What does the White House do with all this?
03:42Yeah, good morning, guys.
03:44I mean, look, these talks are extremely fragile.
03:46And since this war started, that is exactly what we've seen.
03:51There's just been a continuing of being up and down.
03:54Obviously, the president wants to make it appear that things are going well, that talks are going well,
04:01or that things are potentially moving along as there are a lot of rough patches happening right now.
04:08You know, what we've been what we've seen in reporting and Bloomberg's own reporting as well is that, you know,
04:13the president feels a bit boxed in right now and is really sort of trying to navigate what his next
04:19step is.
04:20And as he listens to his advisers, whether that's Secretary of State Marco Rubio, Vice President J.D.
04:26Vance or Defense Secretary Pete Hegseth, you know, it's really raising questions as to what is the goal right now,
04:36especially as it seems that these conversations are really not going, you know, well,
04:43especially as we, you know, learn and as Iran, you know, says that the U.S. is sort of not
04:49really involved right now.
04:50And it's raising questions on, well, who is the U.S. really talking to right now in this war?
04:57Yeah, yeah.
04:58I want to play a bit more sound here with the vice president in conversation with Kayleigh McEnany,
05:01the former press secretary now on Fox News, talking about the White House's expectations. Let's take a listen.
05:06The Iranians, through different methods, have broadcasted that they look to tighten their grip on the Strait of Hormuz.
05:12So in a theoretical deal, what would an acceptable status quo be for the strait?
05:18Well, our expectation is you're going to see the same amount of oil and gas come out of the Gulf
05:22that you saw before the conflict started.
05:25That is what the Iranians have told us that they are going to do.
05:27That's what the entire Gulf coalition wants to do as well.
05:31But, you know, we don't trust. We verify.
05:34We actually look not at people's words, but at people's deeds.
05:37You see some people within the Iranian system, of course, talk about tolling.
05:40The Iranians have told us they have no plans to toll the Strait of Hormuz.
05:44But again, we're going to see what actions actually happen.
05:48Abir, on that notion of looking at people's words and trusting but verifying,
05:51you mentioned the Iranian foreign minister, and Bloomberg has reported that he said that
05:55were there to be some sort of agreement, we would not see kind of an instantaneous return to the level
05:58of energy
05:59passing through that strait that we saw before this war began.
06:02Could you talk a bit more about that, kind of the White House's expectations for normality,
06:06which seem increasingly kind of pie in the sky in light of what we've been through here over the last
06:10five or six months?
06:12Yeah, you're right, David.
06:13And I mean, you don't have to go by the words of, and I know this will probably sound surprising,
06:17but you don't have to go by the words of either part of the warring parties.
06:22Essentially, traitors don't even assume that this is going to be happening,
06:26or that this is even a realistic situation purely due to the physicality of getting those stuck oil barrels
06:33that are in the Strait of Hormuz.
06:34So there's a reality situation here to be confronted once this happens.
06:39And then we're not even talking about a full reopening of the Strait of Hormuz.
06:42It's from the Iranian side, the U.S. side seems more and more and more optimistic about once a deal
06:47is finalized
06:49or once a deal is here that we're going to see the Strait of Hormuz immediately all of a sudden
06:53open
06:53and all these oil barrels start making their way through the globe.
06:57You're talking about countries in the region who've had their infrastructure damaged.
07:01You're talking about attacks on energy infrastructure that is still happening up until the early hours of the morning.
07:07And so there is the physical aspect of actually getting those oil barrels across.
07:12I was talking to a lot of ship owners and a lot of traders over the past week,
07:16and they confirmed that even if there was an immediate reopening of Hormuz, let's say tomorrow, theoretically, of course,
07:22it'll take weeks in a best-case scenario, if not months,
07:27to actually start seeing a normal trickle of oil barrels through the Strait of Hormuz.
07:31And that is not a base-case scenario, David, right?
07:33Because we expect that this conflict will be back and forth for a while to come,
07:39especially with Iran's waking up to this fact at the start of this war that it can assert dominance over
07:46the Strait of Hormuz.
07:47And it doesn't have to hit hard, right?
07:49The mere threat of Iran sending a drone to a ship or a vessel that is passing through the Strait
07:55of Hormuz
07:55is already causing enough jitters in the market and causing ships to really stay still
08:00until they're sure they can move across the waterway.
08:03And so we're not even expecting the immediate reopening of the Strait of Hormuz
08:07because this is, according to the Iranian side, not what is going to happen.
08:12Skylar, in that vein, it's been interesting to watch the messaging from the White House from the beginning of the
08:17war,
08:17which is, we're going to win, we're going to do this, we're going to do this,
08:20to trying to almost redefine what a win looks like.
08:24And in that vein, the Treasury Secretary, Scott Bessent, talked to a local Arizona journalist
08:28and was saying, among other things,
08:31well, the Strait of Hormuz is going to become irrelevant in two years
08:34because we'll have other ways to transport this energy.
08:37Overall, is that what you're seeing from the White House is more of a recognition
08:41is they can't move the needle as much as they want to, so they're moving the messaging?
08:44And do you think that's going to be successful, especially ahead of the midterms,
08:48where things like gas prices are really going to matter
08:50and they're really going to matter to this president?
08:53Yeah, well, look, they want to paint a pretty picture
08:55and they want it to seem like they're in control of everything
08:58and that things are going well in their favor as they launch this war,
09:03especially as the November midterms creep up
09:06and, you know, American voters are, have not really,
09:09polls have shown that they are not highly supportive
09:12of what the president decided to do in regards to the war with Iran.
09:16So, look, what we've seen throughout the messaging
09:19from the Trump administration, really, since the president
09:22came, returned back to office,
09:24is that, you know, they are seeking other ways.
09:26So, you know, when trade deals were being disrupted left and right,
09:30the messaging was that, you know,
09:32we're starting new trade deals with other countries
09:34or we're going to have trade deals coming in other ways
09:38to offset those longstanding trade deals that were disrupted.
09:42So we've seen that sort of messaging before,
09:44that they pivot to something else to really amplify
09:47and to cover, you know, what is currently going on.
09:50And really only time will tell to see how that really resonates
09:54with voters, especially as these midterms near.
09:58Abir, when we talk about opening the strait,
10:00there were some reports this week that Iran might be speaking to
10:03or might be willing to speak to the EU to come up with some sort of mine-clearing capacity.
10:09If you remember, we've talked about before,
10:10the U.S. kind of outsourced that capacity to NATO about 10 years ago.
10:15So most of those minesweepers are within the NATO realm, within the Europeans.
10:19Have you heard anything more?
10:20Does that seem realistic?
10:22And what is the status of those mines?
10:24Is that something that's really front of mind for all these shippers
10:26and people you were just talking to?
10:30100%.
10:30I mean, that is one of their biggest concerns, right?
10:32Because there is the aspect of trying to move their way through the Strait of Hormuz
10:37without having the risk of being hit.
10:39But then there's also the risk of mining.
10:41And we've recently reported that Iran might be softening its stance
10:45when it comes to involving EU nations.
10:47If you remember, Christina, about a month or so ago,
10:50there was this little back and forth between Iranian officials
10:53and President Macron, specifically in France,
10:56who said that France would be one of the countries
10:58that is willing to come and demine.
11:00And the response from the Iranian side was vehement refusal to this.
11:04But we've reported, citing our own sources recently, about a week or so ago,
11:08that Iran might be holding discussions with EU nations
11:11to help the demining processes in the Strait of Hormuz.
11:16And while that is a positive signal, of course,
11:19the fact that Iran might be softening its stance,
11:21we're still talking about a deal between itself and Oman without Washington involved,
11:26having with Washington or the United States still having its naval blockade in place.
11:31So a third party that is important in all of this is not included in the discussions,
11:36again, according to the Iranian side.
11:38So we have to get over the hurdle of getting through these negotiations with Oman
11:42and what exactly the mechanism will look like
11:45before we get into any kind of discussion about removing those mines.
11:49Iran is keeping a really hard line about its dominance over the Strait of Hormuz.
11:54And the mechanism sounds really complicated.
11:56But everything around it just suggests that Iran wants to maintain its dominance.
12:02And it looks like for the people who have skin in the game,
12:05for the ship owners who have to make their way through the Strait of Hormuz,
12:09they are seemingly tilting more to listening to the Iranian side.
12:14They've been seeking permission from the Iranian side
12:16to be able to make their way through the very crucial waterway.
12:19Which, yes, according to the U.S., you know, U.S. officials,
12:23is not going to be crucial in the next couple of years.
12:26That argument, according to many people, is not the base case scenario.
12:31Again, it might lose significance, but it will not be insignificant.
12:34Now, you know, I don't know.
12:34You know, I don't know.
12:34You know, I don't know.
12:34You know, that's because it is not something that is not sufficient.
12:35Let's go.
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