00:00I think this is a crucial week for hopefully restarting some diplomatic activity around a
00:06resolution to this war. Clearly, that's what leaders in the region are seeking. Certainly
00:11the neighbors of Iran that have been implicated in this war and continue to face attacks both
00:17from Iran and from the Houthi militia, which has a close alignment with Iran. And we've seen that
00:25even today with attacks on the Riyadh airport from the Houthis. So they're looking for some kind of
00:31an arrangement that will at least draw close to the active phase of this conflict, create more
00:37certainty and predictability about transit through the Strait of Hormuz, and really put this conflict
00:43on the back burner. The president, for his part, is looking for something that he can brandish as a
00:48victory. And so those two theories of the case may not align well. It's such an interesting time
00:54to be covering UNGA. I was telling David, I had a source of mine who's been coming to this for
00:58decades. Text me, I'll see you at possibly the last UN General Assembly ever. I think that's a tad
01:04fatalistic, but it is indicative a bit of where multilateralism is at this time. And the UN in
01:10particular. And the UN in particular. Has this become outdated? Is this effective anymore, other
01:16than it does get a lot of these people in the room together? But is that almost as far as
01:20it goes?
01:22Well, look, there's an enormous amount of activity that goes around along with UNGA every year. There's
01:28an enormous amount of work around climate issues, around development issues, around global education.
01:33And so this is not purely an opportunity for security. I think that there are a lot of people
01:40who would like to see some reform to the United Nations system, including President Trump,
01:44who would like to see this become a more effective body. But it is still a conduit for the types
01:50of
01:50conversations and gatherings that can actually make progress at an incremental level on some of
01:55the very big issues that are facing the world. And I think it is a unique opportunity and gathering
02:00in which we not only have Gulf leaders, Israeli leaders, but also Iranian leaders coming to New York.
02:06And we have seen in the past that that offers on the sidelines at least some pathway for conversation
02:12and dialogue.
02:14Suzanne, your specialty is energy and energy in the context of the Middle East. And there was this
02:19announcement yesterday from Saudi Aramco that they're not going to be able to deliver oil to
02:22Europe. And I'm curious what that says, obviously a great disappointment to Europe, obviously compounding
02:27the problems that we've seen with refining globally means for the global energy market. How should we
02:32think about, yes, the damage that its east-west pipeline has sustained and what that means for
02:36the oil market and oil and energy going forward here?
02:41I think we're just seeing a huge amount of unpredictability about energy markets. We've
02:45seen some progress in terms of the United States being able to help guide ships and enable at least
02:52some passage through the Strait of Hormuz that has restored about five to seven million barrels a day
02:57of oil coming out of the Gulf. But of course, the Iranians and the Houthis have responded in ways that
03:04have now compromised some of the workarounds, particularly the east-west pipeline and transit
03:09through the Red Sea and the Battle of Mendeb now being potentially locked as a result of the latest
03:15Houthis offensive there. And so, you know, I think what we're hearing from J.T. Morgan and other
03:21analysts is just that we really can't predict how energy markets are going to unfold. We are in a
03:27tight position, but we haven't seen the kind of exponential escalation in prices that would have
03:33catastrophic impact on the global economy. We've been able to muddle through in part because of
03:38the willingness of the Chinese to downgrade some of their own demand. If that continues to be the
03:45case, we probably can muddle through till the end of the year. But I think there's going to be
03:50increasing anxiety. And obviously, there are political implications around the world here at
03:55home for the midterms and for other governments that are facing rising public dissatisfaction with
04:00increased prices. Christina, Suzanne Maloney reading the same note as you, that same J.P.
04:04I know. That made me feel like I did something right there. I appreciate that. When you look at
04:10the Middle East and the difficulties they're having in getting their product to market,
04:16how do you think that plays into the power structures in the region that this becomes a
04:20consistent problem? You know, that is a source of income for many of these governments.
04:23They are trying to diversify. Can they diversify fast enough? And is this going to become
04:28an issue for some of these states that rely on these funds to keep their populations happy?
04:34Well, it already is an issue for a number of governments. We've seen the hardest hit are
04:39countries like Qatar and Kuwait that are effectively very much blocked from export markets. The Qataris
04:45built an incredible economy on the basis of their natural gas and their ability to produce and supply
04:53and very quick fashion. And that is compromised in a way that's hard to see a long-term solution that
05:00doesn't involve some kind of a diplomatic resolution of the Strait of Hormuz. There are no workarounds
05:05for the, you know, massive gas industry in Qatar right now. So we're already seeing those
05:12implications. I think, you know, it's not just a question of how quickly can these countries make a
05:18transition to a post-petroleum economy. The war has implications, very negative implications for that
05:25transition, because what we've seen is the Iranians, certainly during the active phase of the war and now
05:30the Houthis as well, targeting economic infrastructure, whether it's airports, hotels, data centers, which is a
05:37big part of the push for advanced technology and transitioning the economies. So, you know, all of this
05:46it really does come down to one important priority and imperative for all the governments in the region,
05:53which is to find some kind of a denouement to this war, even if it is not a full-fledged
05:58resolution,
05:59something that it does enable them to return to their really ambitious plans for remaking their
06:05economies and their societies. Suzanne, I know we want to get to China here because, of course,
06:09we have this big summit taking place in Washington this week. So let me do it in this fashion. I
06:13was
06:13struck, and I think I have the sequencing right here, that we had Riyadh pressuring Beijing to
06:18pressure Tehran to do something about the Houthis. And I'm curious of how you see China's involvement
06:24in this conflict. Of course, we've seen many representatives of these Middle Eastern nations
06:28making their way to Beijing to meet with leadership there. China has not been actively involved here.
06:33Do you see them playing a more forceful role here in trying to find some resolution to this conflict
06:37in the months ahead? I think that's unlikely. I think the Chinese are quite happy with the current
06:44set of circumstances in which the United States is bogged down in a war, once again, that it appears
06:50to be underperforming in the Middle East. And that really does distract Washington from perhaps a
06:59different approach to China. And it really diverts some of the resources that the United States would
07:05need to have a more active military presence in the Indo-Pacific. So this is a conflict that the
07:12Chinese have been able to utilize to demonstrate their own energy resilience. There's always been a
07:18lot of discussion about the fact that China is so heavily reliant on oil that emanates from the Gulf
07:26States, whereas the United States is now one of the leading oil producers in the world. In fact,
07:32because the Chinese have built up such an incredible strategic reserve, and because they have also moved
07:39so quickly to electrify their own economy, they have demonstrated that they're able to ride out even the
07:44most significant disruption to energy in history. And I think that that in many respects is probably boosting
07:50China's soft power around the world. Do we have any insight yet into how or why the Chinese pulled back
07:56from their
07:57imports at the start of the war so significantly?
08:01I think it's a, you know, one factor that many analysts were not anticipating. And the fact that we've been
08:07able to ride out
08:08this disruption without even higher prices around the world, particularly in Asia, I think has been a real credit to
08:15the
08:15Chinese decision to do so. They had begun to resume purchases. It's going to be interesting to watch how they
08:20navigate this latest
08:21period, where we are seeing more, more oil come out of the Gulf, but also new disruptions to the Red
08:28Sea and to the
08:29Babel Mendeb. So, you know, the Chinese, I think, obviously want to avoid a collapse of their own export markets.
08:36So they had a
08:37stake in trying to ensure that there wasn't a global economic catastrophe as a result of this war.
08:44Suzanne, you've seen many state visits like the one that we're going to see this week. I know that you
08:48worked for Condoleezza Rice in policy planning, and you've kind of lived through the laying of the
08:52groundwork leading up to these summits. And I'm curious what you make of this one in particular,
08:57and what you think is likely to come out of it. I think, you know, candidly, a few weeks back,
09:00I thought it was going to be almost entirely focused on trade and rare earths. And now we have
09:03AI taking such a principal role here, as we see, at least in terms of the conversations that are going
09:09to be
09:09taking place. What are your expectations and what deliverables do you anticipate they're coming out
09:14of this, if any? Well, I will refer to one of my colleagues, Ryan Haas, who directs our China
09:20Center at Brookings, who earlier this week described the outcomes as likely to be no real breakthrough,
09:27but also no real breakdown in the relationship. Both sides are invested in ensuring that this is
09:32both perceived in their own capitals as a successful summit. There's likely to be, as we've heard from
09:39the Treasury Secretary, a short-term extension of the, you know, denouement of the trade war
09:46between the two countries, perhaps not a long-term extension. And, you know, I think we're, the real
09:51question is, how many more summits will we see in the months to come between President Trump and
09:56Chairman Xi? And what will this mean for the United States economy and for the global economy, if, in
10:02fact, we see continued cooperation between the two sides?
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