Oil Extends Gain as US and Iran Trade Strikes, Escalating Conflict

**SPEAKER_1** (0:02)
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This is Bloomberg Businessweek Daily, reporting from the magazine that helps global leaders stay ahead, with insight on the people, companies, and trends shaping today's complex economy, plus global business, finance, and tech news as it happens. The Bloomberg Businessweek Daily podcast with Carol Massar and Tim Stenovec on Bloomberg Radio.

**Tim Stenovec** (0:32)
Today's trade, Christine, is really showing what tensions in the Middle East and higher oil prices do across assets.

**Carol Massar** (0:38)
Absolutely, Tim. We're seeing that most clearly really in the bond market. I mean, those yields skyrocketing to the highest levels that we've seen in almost two decades, and it's not just the US, it is a global story and a lot of that reaction function really coming from what we're seeing in oil prices. Brent back above key levels, also is WTI and really doesn't seem like there's any end in sight because we're getting fresh hostilities between the US and Iran.

**Tim Stenovec** (1:03)
So that's our focus for the first part of this hour. And for more, we want to bring in Wendy Benjaminson. She's senior editor for Bloomberg News. She joins us from our Washington, DC Bureau. Wendy, President Trump said the strikes were in retaliation for Iran trying to put mines in the strait and for earlier attacks by the Islamic Republic on a military base. He warned of more attacks to come if Tehran responded. He said, quote, if the failed nation of Iran retaliates for this very justified attack, they will be hit again at a much harder and higher level. He said this in a social media post just a little bit earlier today.
It seems like I have lost track of how many times the president has threatened a bigger and bolder attack. And I wonder your reaction to this and sort of like the reaction out of the Middle East. Like, is he going to follow through with these attacks?

**Wendy Benjaminson** (1:51)
Well, it certainly looks that way, given that this, the hostility sort of renewed themselves on Sunday when the US noticed that the IRGC, the Islamic Revolutionary Guard Corps, were setting up rocket launchers on an island that would shoot mines into the Strait of Hormuz to stop shipping. So the US military took those rocket launchers out. Then Iran responded by hitting some targets, trying to hit some targets of US targets in Jordan, or in, excuse me, somewhere, another country in the Gulf, excuse me. And those missiles were intercepted. Now today, the US is striking again, and Iran says it will retaliate. So it looks like we're right back in the middle of this. And in terms of my initial reaction, I mean, part of this is, this is where we're striking an Iranian military that the president has no longer exists.
So we don't, you know, we're sort of left to figure out, you know, what's left that we're striking. There were explosions heard in the city of Bandar Abbas in Iran today.
So there's a lot of, it looks like we're going to be back at it again. And right before the midterms, this is what Republican candidates are really clutching their pearls about right now.

**Carol Massar** (3:11)
Now, Wendy, as you mentioned, we're right back at it again, which means that we've climbed back down from this very situation just a few weeks and months before only to come back around. Do you see anything that's different this time that would lead all of us to believe that, you know, this is the period of de-escalation being effectively over?

**Wendy Benjaminson** (3:35)
The short answer, Christine, is no. I mean, this is, I think probably the person who most wants to find an off ramp for this right now is Donald Trump himself. I mean, he's trying now with Treasury Secretary Scott Besson to do this economic squeeze. So far, most of the world has been like, yeah, OK, you know, we're not going to play ball on this. This isn't our war.
We, so far, the US has sanctioned the branches of an Egyptian bank that works in the UAE and does some business with Iran. We're expecting another bank to be sanctioned this week. But this is hardly the, and I'm quoting Besant here, financial violence that he proposed. And so in lieu of financial violence, we're actually now getting actual violence again from the United States. And Iran is saying that, look, if you want to go back to the Memorandum of Understanding that we signed in June, that Trump very dramatically signed at Versailles, that they would be fine with that. The US has said they're no longer fine with that. It wasn't a great deal for the United States in the first place. You might remember the reporting then was that that gave a lot back to Iran.