Trump Says US May Strike Iran Again, Threatens New Blockade

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**SPEAKER_2** (0:08)
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)
We did see oil jump above $80 a barrel after President Trump said a tentative ceasefire with Iran was overreigniting geopolitical risk premium in prices and triggering investor concern about supply disruptions. He did warn too that oil prices could rise further as the administration molds further strikes in Iran that may include the key export hub of Karg Island. We know this is something that investors barely are watching closely. The president is making these comments earlier from the NATO summit in Turkey.

**Donald Trump** (1:01)
We will take over Karg Island.
We may take over Karg Island. It's not a thing they can do about it, but I said don't hit the pipes, just hit everything else and they hit it. They may hit it again tonight. And we may put down the blockade. We may put it back, the blockade, and it will only be a blockade for Iran. Anybody else can have whatever they want.

**Tim Stenovec** (1:24)
Okay, that again was President Trump earlier from the NATO Summit in Turkey, surrounded for those on radio. He was surrounded by Marco Rubio, of course, his Secretary of State, also Pete Hexeth, Secretary of Defense. All of the officials, Treasury Secretaries, Scott Besson, also there at those meetings. Let's get to it. Trying to understand as there are more attacks between the US and Iran, we want to kind of understand where Iran is in all of this. Will Todman is Chief of Staff of the Geopolitics and Foreign Policy Department and Senior Fellow of the Middle East Program at CSIS, the Center for Strategic and International Studies. He joins Bailey and me from the nation's capital. Will, it is great to have you here with us as we saw what happened late yesterday, overnight, and hearing these comments from the president this morning. I think we're really trying to figure out these tit-for-tat skirmishes between the United States and Iran. Is there something more serious going on? Was there never really a concrete peace accord? Where is Iran in all of this?
Yeah.

**Will Todman** (2:24)
Well, thank you so much for having me. No, we do not have a concrete peace accord. This was an MOU framework agreement that was meant to set up 60 days of negotiations to work out the answers to those really tricky questions.
The status of the Strait of Hormuz, what happens in Lebanon and of course, also Iran's nuclear file and its program.
In many ways, there was a deliberate degree of ambiguity embedded into that agreement to buy time for both sides to try and stop the fighting or at least to really lower the intensity of the fighting while they could have more serious negotiations about those things. I think what we're seeing right now and over the last 24 hours as it relates to the Strait of Hormuz is a fundamental difference in how the Iranian side interpreted the text of the MOU and how the US side interpreted it. For the Iranians, they are very keen to maintain some degree of control over the Strait of Hormuz going forward. They see this as potentially a long-term stream of income for them. But also they consider this to be their most powerful strategic tool that they have or card they have to play. Whereas for the US, they felt that the MOU did not give Iran the control over the Strait of Hormuz. And so they had been helping ships try to transit the Strait by sticking much closer to Oman. And I think that's where we saw then these tensions escalate and result in Iran firing on two ships just yesterday because these ships were trying to circumvent it. And for them, they saw this as a fundamental challenge to their longer term control over the Strait going forward.

**Carol Massar** (4:19)
Well, you mentioned the phrase fundamental difference, fundamental challenge, all around the control of the Strait of Hormuz. How do we see the US and Iran get to level footing or an agreement? How does that fundamental difference play out given the events of the last 20 hours?

**Will Todman** (4:40)
It's very difficult because it does seem like President Trump is trying to return to the status quo ante before he began his strikes on Iran on the 28th of February.
He wants to see the Strait of Hormuz open to all maritime traffic. Of course, that is a huge boost for the global economy or help send oil prices down. Those are things that he very much wants to see. But for the Iranians, that's a non-starter. They chose to play this card. They saw the power in it. They saw that they could wreak havoc on the global economy. And so they want to maintain their ability to use that tool again going forward if they're not getting what they want on the other terms of the agreement as it relates to the investment that has been promised in Iran, as it relates to the unfreezing of their frozen assets. So, I think if anything, the grounds for some potential agreement would be some giving by the US side where they might agree that Iran is able to set up a system whereby ships need to register with them to go through so long as they continue to promise not to charge fees for doing that. That might allow both sides to save face, but I think it's going to be tricky to get there and there's so much distrust between the two sides that what we're seeing now is each sort of jostling to try to secure the terms of the agreement as they believed they were signing up to it.