00:00Oil is taking a breather after a six-session gain, with futures edging lower as traders waited for signs on
00:06progress of reopening the Strait of Hormuz.
00:09President Donald Trump says he thinks the United States will keep total control of the waterway, betting once again that
00:16suffocating economic pressure will do the job.
00:20Meanwhile, Pakistan's defense minister has said both sides are, quote, close to some sort of arrangement over the Strait of
00:28Hormuz.
00:29To discuss all of this, we're now joined by Onur and Bloomberg's managing editor for the Middle East and North
00:37Africa, joining us from Istanbul this week.
00:41Onur, good morning. Good to have you with us.
00:43The latest, again, we're seeing the back and forth continue into the second week, really, about the deal and the
00:50Strait of Hormuz and just the wider implications that President Trump has touted.
00:54Where does this back and forth leave us in terms of the wider negotiations, Onur?
01:02I think looking at the oil markets gives you a clear idea of where we stand.
01:06Although there was a little bit of a pullback, we're still seeing oil trading near $88 a barrel after it
01:12added more than 10% over the six previous consecutive sessions.
01:16The broader picture hasn't really changed, Abir.
01:20The talks between the U.S. and Iran over the reopening of the Strait of Hormuz remain essentially deadlocked, with
01:27Iran digging in on its position that the U.S. must meet its demands to reopen the Strait.
01:33And those demands are very significant, including the lifting of sanctions and an end to the war on Iran-backed
01:40groups across the Middle East, including in Gaza and Lebanon.
01:43But there is another diplomatic track I think that's worth watching, and that's the talks between Iran and Oman.
01:48We know that the key sticking point there is that Iran is seeking to collect tolls from ships that may
01:54be able to transit the Strait of Hormuz once the waterway reopens.
01:58And we got another indication of that just a few hours ago when Iranian foreign ministry spokesman said that ships
02:05that want to use the Strait must remediate the environmental harm that they cause,
02:10which is, again, another sign that they want to collect tolls from ships going forward.
02:17And, Honor, President Trump has been saying or has been touting this line about having Iran succumb to economic pressure
02:23over the past few days.
02:24Just how realistic is it, that expectation of Iran just succumbing to the economic pressure that the U.S. is
02:32putting through?
02:33Would that shift the needle in any meaningful manner?
02:38No, probably not a very realistic expectation, at least not in terms of the kind of impact that President Trump
02:44or others may be seeking to see in the short term.
02:48Iran has been under some form of economic pressure, a form of economic pressure for much of the last 47
02:56years, and increasingly so in the last 10 years or so.
02:59In fact, during Trump's first term, it was called maximum pressure.
03:03And that's something that the American officials have been doubling down on.
03:06But the people that we are talking with, the consensus is that, yes, there is pressure that is caused by
03:13this war on Iran,
03:14everything from destruction of infrastructure, civilian and military, to the cost of life, high inflation, the drop in currency.
03:22But is this a kind of depreciation or is this the kind of economic erosion that will cause a sudden
03:28shift in popular sentiment against the government
03:31after what happened just six, seven months ago when thousands died because of the police crackdown on protesters,
03:39which were, again, on the streets because of economic hardships?
03:41It's very hard to say yes. It's very hard to answer that question, yes, which is why a lot of
03:48the people that we are talking with
03:50don't think, don't seem to think that this is going to have the kind of impact that Trump is seeking
03:54in the short term.
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