Oil prices hit highest since 2022 after Trump reportedly to be briefed on new Iran plans — BBC News

[0:00] Hello, I'm Anita McVeigh and this is the Iran War Today, our daily briefing, bringing you up [0:09] to date with all you need to know on day 62 of the U.S.-Israel war with Iran. And let's start [0:16] with some of today's key developments. Oil prices rise to their highest since the U.S.-Israel war [0:22] on Iran began. It follows reports the U.S. military is planning a new wave of attacks on Iran to break [0:29] the deadlock in negotiations with Tehran. U.S. media reports that America is pushing for a new [0:35] international coalition to restart commercial shipping in the Strait of Hormuz. Meanwhile, [0:42] a new message issued in the name of Iran's supreme leader brings up the idea of a new management of [0:49] the Strait of Hormuz. And let's begin with oil prices jumping to their highest level since 2022 [0:58] after a report that the U.S. military is set to brief President Trump on new plans for [1:04] potential action in the Iran War. Brent crude rose by almost 7 percent to more than $126 a barrel at [1:12] one point. That's the highest since Russia's full-scale invasion of Ukraine. It fell back [1:17] slightly in later trading, but the trend for the week remains strongly upward. The potential impact [1:23] is wider than just petrol and diesel prices. The U.K. government has warned people could face higher [1:29] energy, food and flight ticket prices as a result of the war. And let's get more on this with our [1:35] business correspondent Ben King. So Ben, let's start with where the price of a barrel of oil is at [1:41] right now after that high. Well, the last time I checked, it was about $114 a barrel for the benchmark [1:47] Brent crude oil price. It's been a day of extraordinary volatility and some of that exaggerated by some [1:53] quite technical factors to do with it being the end of the month. But nonetheless, it shows how dramatically [2:00] the market responds to any kind of movement in the negotiations about how to resolve the conflict in [2:07] Hormuz. And a lot of analysts say that actually still the oil price doesn't fully price in the prospect [2:14] of a long protracted closure to that to that strait and would in that scenario have the potential to go [2:22] even higher. And Ben, we heard the governor of the Bank of England speaking today of an energy price [2:27] shock and warned that lower income households will suffer the most. So what sort of scenarios are being [2:32] looked at by the bank in terms of any action by them? Yes. So today was the day the Bank of England [2:37] announced its decision on interest rates. They kept them on hold. But in their new way of presenting [2:43] information, they outlined scenarios. And there were two scenarios that saw a relatively swift [2:49] resolution of the situation in the Gulf and energy prices coming back down. And in those situations, [2:56] they wouldn't necessarily have to put up oil prices. But they also underlined a third scenario, [3:01] which saw oil prices staying above $100 a barrel through to the end of next year. And that would see [3:06] inflation in the UK above 6%. And they would have to put up interest rates above 5% to deal with that. [3:13] And the bank also talked about the impact not just on oil, but also on food. They say that [3:18] in the last oil shock in 2022, they were surprised by how much energy prices fed through into the cost [3:25] of food. Not only energy being an important component of the price of processed food, obviously you have to [3:32] cook it and package it and transport it, but also fertilizers. Lots of our fertilizers come from the Gulf. [3:39] Those will be less available. They'll be less available around the world. And that could lead [3:43] to higher food prices. And that's something that affects the poorest households the most. [3:47] Okay, Ben. Thank you very much. Ben King. [3:50] Well, as we mentioned, today's spike in oil prices was largely blamed on concerns that the Iran war could [3:55] worsen and lead to a protracted Middle East supply disruption. The US outlet Axios reported that Donald [4:03] Trump was set to receive a briefing today on plans for a series of military strikes on Iran. The idea [4:10] being that the US hopes it would make Tehran more flexible on the nuclear issue. Well, let's go live [4:17] to Washington and our correspondent Shaima Khalil. And Shaima, hello to you. Obviously, there are lots [4:23] of elements to any discussions that are going on between the US and Iran or hopes of discussions going [4:29] on, including the nuclear issue, but others, and not least the Strait of Hormuz and what happens [4:34] there. What are you hearing in Washington about any further potential military action by the US? [4:42] Well, we're hearing that reporting from Axios about CENTCOM either briefing or having briefed [4:47] President Trump on military options against Iran. Now, if confirmed, and I must say we did reach out [4:52] to CENTCOM and they haven't confirmed that. But if confirmed, it means that the Trump administration [4:57] is considering restarting military combat operations in Iran. Because remember that we've been in a [5:03] holding pattern of a ceasefire for some time now. We don't know how long it's going to last, [5:09] but essentially there's a ceasefire. The conflict itself continues because the US blockade on Iranian [5:15] ports is still in place. It's been in place from April 13th. So over two weeks now. And it has been [5:22] quite affecting and suffocating the economy. It has been quite effective in making it hard for the [5:28] Iranian people inside Iran. What it hasn't done is that it hasn't brought Iran to the negotiating table [5:34] yet. What are the options in front of President Trump with this unconfirmed report? Well, the reporting [5:40] is that they're either looking at a wave of big strikes or aimed at infrastructure. That's one option. [5:48] Or he's also looking at or would be looking at taking over part of the Strait of Hormuz to ease [5:55] commercial shipping. The thing about that is that that would require boots on the ground. So that's [6:03] a big issue right there. But also remember that we don't know if shipping companies would be confident [6:09] enough in that option. But what it signals to you is that the Trump administration might be getting [6:15] impatient with Iran, essentially not caving. But it doesn't take into account the Iranian reaction. [6:23] How would Iran react to renewed military options? What we've seen in the past is that with any [6:30] military option, with any military operation, with any strike, Iran struck back into its neighbors. [6:36] So are we going to see that again? But remember that all of this is happening while Pete Hegsitt, [6:41] that the Secretary of Defense is being grilled in Congress. This is the second day now. And I must [6:46] say it's been split along political lines and along party lines in how this has been received. Being [6:53] asked about the effectiveness of the operation, the length of the operation, and crucially the cost of [6:58] the operation. $25 billion is a rough estimate so far with all of these economic ramifications, [7:05] not least the price of oil, you know, reaching as high as it is right now. [7:10] Okay, Shaima, thank you very much for that. Shaima Khalil in Washington. [7:14] Well, Iran's Supreme Leader has declared that the United States had suffered a shameful defeat, [7:20] rejecting a warning from Donald Trump that the U.S. naval blockade could be enforced for months to come. [7:25] A statement attributed to Mojtaba Khamenei, read on Iranian television, said Tehran would secure the Gulf [7:33] region, adding that new management of the Strait of Hormuz would bring economic benefits to all [7:38] nations in the region. Well, with me here in the studio is BBC Persian correspondent Parham Gobadi. [7:43] Parham, good to see you. Tell us first of all about the tone of this message, message said to be from [7:49] the Supreme Leader, because of course we still haven't seen him, have we? [7:52] No, and that's very correct. So again, it's a written statement and it's really important to [7:57] understand that there is still no video and no audio of him. And that fuels a speculation about [8:02] his health condition and whether he is really at the helm of the matters and is effectively running [8:08] the country. Regardless, his message was a message of defiance. So he still again said that, [8:14] mentioned the Strait of Hormuz. He said that's a strategic asset for Iranians. He said, as you [8:19] mentioned, he said that U.S. has suffered a humiliating and shameful defeat. And he has also [8:26] mentioned that this is a new chapter for the country. Like his late father who was killed [8:31] in the first day of the war, he again said that America, he called for American expulsion from [8:37] the region because that was his father's dream, to expel American from the Middle East and from [8:42] the region. And he also said that the destiny of the neighboring countries, Iran and its neighboring [8:47] countries, is in our own hands and we should, it should not be determined by forces that come from [8:52] thousands of kilometers away, which probably Arab countries have a hard time to believe after Iran [8:58] attacked all these countries with ballistic missiles and drone attacks. And he also said [9:02] that the primary source of all these tensions in the region, he put the blame on the Americans. [9:08] And what do we know about this new legal framework and management of the Strait of Hormuz, [9:13] as mentioned in the statement, what could that mean exactly? [9:16] So at the end, he said that, as you mentioned, he said that there's going to be a legal framework. [9:21] Previously, Iranian authorities have mentioned that they want to impose some tolls or taxes [9:26] on the ships that go through the Strait of Hormuz. We have to understand that Iran for decades, [9:32] nuclear program for Iranians was a leverage. However, during this war, they've realized that [9:36] the Strait of Hormuz is a much better leverage because it's a leverage that can be monetized. [9:42] For a country that has been under sanctions for decades, for a country that has been economically hit [9:47] because of the war, because of this recent war, they've realized that this is a great economic [9:52] opportunity. [9:53] So Strait of Hormuz at the moment has become this war of endurance. For Trump, the soaring oil prices [9:59] and the fuel prices in the United States. For a president who is known for being impatient, [10:04] enduring this is quite difficult. On the other hand, for Iranians, Strait of Hormuz, [10:10] the USA has put a blockade, sea naval blockade on Iran. And it's really, it's still unknown whether Iran [10:17] can manage to store its oil that is extracting from the underground, and how long they can endure [10:22] that and how long they can keep it because it can sustain irreparable damage to their oil fields [10:28] and their pipelines. [10:29] And just time to ask you, Parham, about the reaction from the IRGC, the Iranian Revolutionary [10:34] Guard Corps, to this news from the U.S. that they are looking at plans to carry out more strikes, [10:40] potentially. [10:41] Yeah. So, revolutionary guards have said once and again and repeatedly that they have other [10:46] options. And their other option, one of the things that they kept mentioning, several Iranian [10:50] authorities, is that through Houthis in Yemen, they're going to block Bab al-Manda, which is another [10:56] strait in the Red Sea. And that is going to be consequential. Plus, Iranians have said that through also [11:04] Houthis and themselves, they can attack oil fields, refineries in the region in Saudi Arabia, United Arab [11:11] Emirates, and other countries. And that can become a war of attrition, which is very different from now. [11:16] Okay, Parham Gobadi from BBC Persian. Thank you very much. [11:20] And whether you're joining us on YouTube, TikTok, sounds, radio, or TV, thank you very much for your [11:26] time. And we will be back at the same time tomorrow with the Iran war today.