Oil prices soar after US President Donald Trump threatens more Iran strikes

[0:00] Oil prices jumped by nearly 7% on Thursday after US President Donald Trump reiterated [0:06] threats to hit Iran, quote, extremely hard in the coming weeks. [0:10] But he failed to give concrete details on how the war will end. [0:14] Brent crude rose to over $107 a barrel. [0:18] Stock markets are down. [0:20] Meanwhile, a coalition of around 30 countries are meeting to discuss plans to reopen the [0:24] vital Strait of Hormuz shipping lane in the Middle East. [0:28] It is at a virtual summit hosted by the UK today. [0:32] The summit is expected to consider what diplomatic or political steps could be taken to reopen [0:37] that shipping route, though the US isn't due to attend. [0:42] Well, for investors, the fear factor is back. [0:45] There are mixed messages coming from Washington and Tehran, with President Trump's speech [0:50] implying that there could be a further escalation. [0:53] We are systematically dismantling the regime's ability to threaten America or [0:58] project power outside of their borders. [1:02] That means eliminating Iran's navy, which is now absolutely destroyed, hurting their [1:09] air force and their missile program at levels never seen before, and annihilating their [1:15] defense industrial base. [1:16] We've done all of it. [1:18] Their navy is gone. [1:19] Their air force is gone. [1:20] Their missiles are just about used up or beaten. [1:24] Taken together, these actions will cripple Iran military, crush their ability to defend [1:29] their country, and destroy the country's security and the security of their own people. [1:33] They will destroy their ability to support terrorist proxies and deny them the ability [1:37] to build a nuclear bomb. [1:39] Terry Haynes is founder of Pangea Policy, a Washington-based consultant that advises [1:43] Wall Street on US policy decisions. [1:45] We'll hear from him in just a moment. [1:47] But let's get the thoughts of Natalie Tocci, professor of practice at the John Hopkins [1:53] School of Advanced International Studies in Europe. [1:57] Natalie, good to have you here. [1:58] There's so much going on there, isn't there? [1:59] And yet no details about how it ends. [2:01] This just coming off the fact that he'd said the war was practically over, that Iran had [2:05] lost and that America had been successful. [2:08] You can see why markets are confused. [2:11] Well, yeah, I mean, I think, you know, markets are confused because President Trump is confused [2:16] and President Trump is confused because the initial reasons why this war began were never [2:24] really clarified and probably were never really clarified in his own head. [2:27] And so, you know. [2:29] If the goals are basically undefined, what you end up doing is focusing on simply the [2:38] actions of a war. [2:39] You know, we hear a lot about how many targets are being hit nonstop. [2:43] I mean, it actually reminds us a little bit of the kind of narrative that was there during [2:48] the Vietnam War, where, you know, given that you're actually not talking about whether [2:53] or not you're achieving your goals, you just focus on the kind of use of the means, right, [2:58] which obviously went unnoticed. [2:59] And so, you know, I think, you know, there's a lot of uncertainty when it comes to U.S. [3:01] military power. [3:02] Very impressive. [3:03] But, of course, the outcomes of this are very undefined. [3:07] And so I think you have these oscillations which, you know, tend to really map Trump's [3:13] nervousness, particularly as far as markets are concerned. [3:17] So on the one hand, Trump wants out because of the economic repercussions of this war, [3:22] because this war is obviously revealing to be an absolute strategic debacle for the United [3:27] States. [3:28] But on the other hand, precisely because it is and so far it has been such a disaster [3:34] for the United States, he actually knows that he cannot quite get out yet. [3:38] And so you see basically the pendulum swinging violently. [3:41] Yeah. [3:43] And sorry to interrupt. [3:44] I mean, that was the big question, isn't it? [3:45] Because he's talked previously about ending this war, whether or not the Strait of Hormuz [3:48] is reopened. [3:49] And one assumes that is to save face because we know how problematic it has been. [3:53] We know that coalition of 30 or so countries meeting today to work out how to open it. [3:57] And at the same time. [3:58] Tehran saying, well, hang on, maybe we'll reopen it, but you can pay us up to a million [4:02] dollars a ship to get through. [4:04] Well, right. [4:06] And I actually think that it's very likely that this is I mean, Iran has been making [4:11] a number of demands. [4:12] I mean, it demands reparations. [4:14] It demands, you know, a toll now for crossing the Strait of Hormuz. [4:19] I actually think that that latter demand is likely one that will have to be met in one [4:25] way or another. [4:27] Because. [4:28] Going back to the nature of this war, obviously, Iran is being battered militarily, whether [4:36] it has won strategically this war to the extent that it's managed to leverage its asymmetric [4:42] advantages. [4:43] And of course, its main asymmetric advantage precisely lies in wreaking havoc and the ability [4:50] of wreaking havoc in the global economy. [4:52] This is not something that they will want to lose. [4:56] Right. [4:57] Right. [4:58] They don't want to capitalize on this. [5:00] So I think on the one hand, this toll is likely going to last. [5:05] I mean, you know, just think, you know, back to 1956 and the Suez crisis and the Suez war. [5:12] And still today, basically, there is a toll being exercised by Egypt in this respect. [5:18] Natalie, good to talk to you. [5:19] Thank you for your insight. [5:20] We'll check in with you soon. [5:21] Natalie Torture there at the John Hopkins School of Advanced International Studies.