Episode summary
Oil, Dollar Rise as Trump Says Iran Conflict May Last Weeks | Bloomberg Surveillance
Bloomberg Surveillance
· · 26 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr, Alexis Christoforous · Guests: Javier Blas, Henrietta Treyz, Kathy Jones, Ethan Bronner
Summary
The episode focused on the market and political consequences of the widening U.S.-Israel conflict with Iran, especially the risk that oil prices, inflation expectations, and regional security could shift quickly if the fighting lasts beyond a few days. Javier Blas argued that the oil market is still underpricing the duration risk: Brent was around $79 and WTI around $72, but if the conflict drags on for weeks and the Strait of Hormuz stays effectively shut to large tankers, prices would need to move much higher. He said Iran’s oil production is larger than commonly recognized and that China and India are the biggest exposed buyers.
Henrietta Treyz said the domestic political response is already building, with Texas primaries, war-powers politics, and public opinion likely to shape how Congress reacts. She argued the war powers resolution is unlikely to become a real check on the president, but even the vote would signal strain in Washington. She also said Americans are more likely to expect a conflict lasting weeks, not days.
Kathy Jones said the fixed-income market has been contained so far because investors had already positioned for Middle East risk. She does not expect the Fed to hike preemptively at the March meeting, but she said policymakers will likely wait to see whether the oil shock is temporary. Ethan Bronner described life in Tel Aviv as tense but hopeful, with Israelis expecting the U.S. partnership to weaken Iran and strengthen Netanyahu politically if the campaign succeeds.
Key takeaways
- Javier Blas said the market is still too calm for a conflict that could last four or five weeks rather than four or five days.
- Blas said Iran is producing more than 4.5 million barrels a day including liquids, which is higher than many investors assume.
- Henrietta Treyz said the war powers resolution is unlikely to pass with veto-proof margins, but the vote itself would send a damaging political signal.
- Kathy Jones said fixed income is contained for now and the Fed is more likely to wait and see than to hike rates in March.
- Ethan Bronner said Israelis see the U.S. entry as a chance to weaken Iran decisively, even as daily life in Tel Aviv remains under threat.
Notable quotes
“If this goes at this pace for more than four or five days I think that we need to move much much higher than we are today”
“When you put all that number together, it comes to more than 4 and a.5 million barrels a day and is the highest in 46 years”
“for big tankers certainly is close because no one is taking that risk”
“I would say it's contained”
How the episode opens
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Eastern on Apple CarPlay or Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. I don't want to turn this into a history lesson with Jav Bloss, but I can do that.
The wide acclaim for his book of a few years ago, the world for sale, money, power, and the traders who barter earth resources encyclopedic on what we see uh within the Middle East and hydrocarbons as well. Javier, I want to narrow down to one little image and this is in southwestern Iran where British Petroleum or its precursors agreed with the Sha of Iran in 1901 to set up what became Abdan which is the refinery site literally back to 1912. Is our goal to take out those kind of oil infrastructures?
I don't know what is the goal of the United States of Israel. We have seen uh President Trump making an argument for several goals in in Iran from the nuclear power uh program to overthrow the regime to destroy the Iranian navy. But it's not very clear other than I think that President Trump wants all of the above with with Iran.
I don't think that Iranian oil can be taken uh no without involving ground troops. that is something that both President Trump and the White House have said that this is not the intention of the US government. So I don't think that the Iranian oil can be grabbed.
Um no not at all. Javier, if I if I look at the arc of the oil uh business now, I was really quite taken yesterday by the size of Iran's oil production even now belleaguered as compared to across the Gulf, United Arab Emirates.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- oil prices
- u.s. dollar
- iran strikes
- bond market reaction
- regional war israel lebanon
Companies and tickers mentioned
- SCHW
- Charles Schwab
- Veda Partners
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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