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This is the Bloomberg Daybaker podcast.

Good morning. It's Thursday the 12th of

March. I'm Caroline Hetka in London

>> and I'm Steven Carroll in Brussels.

Coming up today, oil prices surge back

into triple digits as Iranian strikes

target supply terminals and tankers. The

US starts trade probes into China, the

EU, and others as Trump looks to rebuild

tariffs. Plus, Asia races to contain a

growing energy crunch impacting

everything from farmers to manufacturers

and crerematoriums.

>> Let's start with a roundup of our top

stories.

>> The price of oil has once again

surpassed $100 a barrel after the latest

Iranian attacks caused further

disruption to shipping in the Gulf.

Brand crude soared by as much as 10% as

Oman cleared all ships from its key

export terminal located outside the

straight of Hormuz. The two oil tankers

were attacked in Iraqi waters, prompting

the country's oil terminals to suspend

operations. The news came after the

International Energy Agency announced

that members would release a record 400

million barrels from emergency reserves.

But Jeff Curry, chief strategy officer

of energy pathways at Carile, says it

won't solve the problem. There is no

policy response that can stop this

ascent in crude. None. And yes, you've

heard million barrel headline. Flow rate

is what matters. You know, the maximum

sustainable flow rate is 2 million

barrels per day. So 400 that will take

them 200 days to get that out. Jeff

Curry was speaking there as the US said

it would be releasing 172 million

barrels from its strategic reserve as

part of the IEA move. US energy

secretary Chris Wright spoke about the

announcement on Fox News.

>> The releases certainly out of the US

Strategic Petroleum Reserve, they'll go

over about 4 months. Um, but this

conflict I don't think goes that long. I

think we will have the Straits of Hormuz

open well before then. Uh, exactly when,

you know, I I can't say, but we are

working 24 hours of every day to get

there. But hopefully in the next few

weeks, we will see ship traffic

returning to the straits or muse. But

Chris Wright's words appear to be doing

little to calm markets. Sources tell

Bloomberg that Chinese oil refiners have

now begun cancelling agreed refined fuel

export cargos as Beijing looks for ways

to mitigate the impact of the Iran war.

As the global energy market comes under

unprecedented strain, the war shows no

sign of ending. Strikes are continuing

across the region with Iran especially

hard hit by US and Israeli bombardment.

And with the war now entering its 13th

day, the US President Donald Trump has

asserted that the war would end soon.

But speaking in Kentucky last night, he

also suggested that American forces will

stay as long as it takes.

>> We have hit them harder than virtually

any country in history has been hit, and

we're not finished yet.

>> Donald Trump also said at that event

that quote, "We don't want to leave

early." Right? That's as Iran has told

regional intermediaries that for a

ceasefire the US must guarantee that

neither it nor Israel will strike the

country in the future. And in a post on

X, President Masoud Pzeskan said that

the only way to end the conflict is

recognizing Iran's legitimate rights.

Peskan also said that a truce would be

dependent on payment of reparations.

>> Several top banks are telling staff to

stay away from their offices in Dubai

and other locations in the Middle East.

The instructions come as Iran's attacks

on its Gulf neighbors continue.

Bloomberg's Ta Adio has more.

>> Several major Wall Street banks have

already been allowing their employees to

work from home since the start of the

Iran war. Now, some big names are

instructing colleagues to exit their

offices in the region. Bloomberg

understands that the likes of Goldman

Sachs and Cityroup have told their

staffers to stay away from their Dubai

offices and some lenders have also

offered staff the option to temporarily

leave the country. The news comes as

Iran continues to strike targets in the

Middle East. A representative for

Goldman Sachs declined to comment while

Cityroup said in a statement that all of

its employees are accounted for and safe

in London. Tiwa Adabio, Bloomberg Radio.

The European Union is warning its

inflation rate could rise above 3% this

year if oil and gas prices remain higher

for a prolonged period. Bloomberg

understands the EU's economy

commissioner Valdis Donovskis told

ministers that under that scenario up to

0.4 percentage points could be knocked

off economic growth this year. Traders

are increasing bets on the European

Central Bank hiking interest rates in

the event of a significant rise in

inflation. Meanwhile, the UK's

Chancellor Rachel Reeves says it's too

soon to assess the economic impact of

the war for the UK. She was speaking to

Parliament's Treasury Select Committee.

>> At this stage, I think it would be

unwise to uh speculate on what the

impact on inflation, growth or interest

rates would be. Um but um uh of course

we are uh looking at a number of

scenarios and monitoring very carefully

uh this the situation. Rachel Reeves

appeared to rule out immediate help for

households and businesses. However, she

went on to say nothing is off the table

when it comes to helping firms which

aren't protected by the UK's energy

price cap.

>> The Trump administration has started the

first of several trade investigations

that set the stage for new tariffs. US

trade representative gem Greer has

announced his office will begin a probe

into more than a dozen major economies

including China, the EU, India, and

South Korea under section 301 of the

trade act. Bloomberg's Jesus says it's

the administration's attempt to rebuild

its trade policies after the Supreme

Court ruled against large parts of it.

>> Those executive order tariffs that Trump

announced last year, obviously that was

pretty high-risk strategy for the Trump

administration to pursue. something like

this might go a long way toward actually

laying something down that can hold up

going into the future. Of course, these

types of probes, I will just caution, do

take in many cases months to ultimately

complete before you do see those

tariffs. So, it might be a long ways out

before we actually see something take

effect.

>> Jesus adds that the move is likely to

damage relations with the targeted

countries and comes ahead of a planned

White House trip to Beijing. President

Trump has repeatedly boasted about the

money brought in through his tariffs and

losing that revenue stream is a key

concern for the White House.

>> The UK's Prime Minister Karma appointed

Peter Mandlesen as US ambassador despite

being warned that his ties to disgraced

financier Jeffrey Epstein were

reputational risks. The British

government has been forced to publish

its vetting process in which a top

security adviser described the hiring

procedure as weirdly rushed and raised

concerns about the Labour peer. Chief

Secretary to the Prime Minister Darren

Jones insists that the documents prove

Star did nothing wrong.

>> The advice did not expose the depth and

extent of their relationship with only

became apparent after the release of

further files by Bloomberg and then the

United States Department for Justice.

Despite Darren Jones's defense,

opposition politicians and even some of

SAMA's own MPs are asking why the former

ambassador was paid severance pay. More

documents are expected to be be released

and published after a police

investigation into Mandlesson finishes.

Those are our top stories for you this

morning. Looking at the markets, the

Iran crisis is worsening. You see that

reflected in oil prices. Bren crude did

surge above $100. as it now sits at

$9859, so up by 7.2%. WTI crude futures

at $9325

also up by 7%. European and US stock

futures are deeply in the red. We're

down 9/10en of 1% for US stocks 50

futures as we see a slump in Asia

equities. You've also seen a huge jump

in yields evident in Aussie and Kiwi uh

yields which on the 10-year notes have

jumped by 10 basis points this morning.

Uh gold meanwhile shedding about 30

bucks $5,154

down by about 4/10en of 1%. Those are

the markets right now. In a moment we'll

bring you the latest on the Iranian

attacks that have sent oil prices

spiking higher. Plus how Asian economies

are being hard hit by the supply

disruption from the Middle East. But

another story that we've been reading

this morning on a different subject.

Netflix making a big investment in AI.

Bloomberg's Lucas Shaw reporting the

streaming giant will pay as much as $600

million for Interpositive, which is an

AI movie making company founded by the

actor Ben Affleck. Now, it's interesting

for a few reasons. It's one of the

largest investments in AI by a major

Hollywood studio. It's also a rare

acquisition by Netflix, which has always

said it prefers to build than buy. But

it also feeds into these fears in the

film and TV industry and I think in lots

of other industries as well that AI will

be used to eliminate jobs and cut costs.

But this particular concern that tech

companies would steal their work and use

it to train AI technology without

compensating them. Now Affleck has built

interpositive as a tool for filmmakers.

You have to film the movie first before

any of the tools become useful because

it make can make tweaks in some of the

editing process as well. But I do wonder

if it's going to be enough to calm

industry fears over the impact of AI.

>> Yeah, maybe there'll be a lot of chatter

about it. Obviously, it's the Oscars

this weekend. I mean, amazing Ben

Affleck, not just kind of movie star

good looks and loads of films onto his

pel, but also a massive business

venture. I just thought it was

interesting that Variety reports that

the team at Inter Positive, there are

only 16 of them. So maybe, yeah, so

maybe it won't calm the chatters about,

you know, jobs and so on. Anyway, a very

interesting story on the development of

AI. We'll put a link to it in our show

notes so that you can read it.

>> Let's turn back to events in the Middle

East. Now, our oil prices have jumped

after the latest series of attacks by

Iran targeting oil infrastructure.

Middle East breaking news editor Patrick

Sykes is with us for more. Patrick, good

morning. Can you tell us more about

these attacks? Tankers hit in Iraqi

waters. Bahrain says fuel tanks were

struck and Oman has ordered ships out of

its port in Mina Alahal.

>> That's right. Yeah, we saw a real spike

in attacks on maritime infrastructure

yesterday. some of those particular

ships as you mentioned in Iraqi waters

Iran also claiming them itself which it

doesn't always do and also on ports

themselves if you look at the the map of

the Persian Gulf you see the breadth of

these attacks you see right in the far

northwest end towards Iraqi waters those

attacks happening and right down the far

other end you see this Armani port that

you mentioned that's interesting because

it's actually on the outside of the

straight of Hormuse on the eastern line

that in theory was one of the few safe

places in the region where exports were

continuing but obviously now the risk is

is perceived in Aman uh to be such that

that's also become uh problematic and

they've cleared the ports.

>> Okay. What does that mean then for oil

supplies coming out of the Gulf?

>> It just makes it even harder for supply

to get out of the region. Right. We've

already seen I think that's that's the

headline already and that's why we've

seen the UAE and Saudi turning to those

pipelines they have to to to send crude

to the far side of the Gulf. Uh but that

is still just a peacemail fix, right?

Fundamentally

we still got a lot of tankers stuck in

the inside the the straight of Hormus

and very few making the break to to

cross it. Those that do sometimes

getting targeted. The one thing that

could make a difference is this US naval

escort, but the details of that are

still uncertain and I think there's

still a lot of concern that if and when

it happens, they would themselves become

a new target for Iran.

>> What is the latest that we're hearing

from Iran and from the US about how long

this conflict could last?

>> Yeah, you you pointed to it in the

intro, right? Trump still saying it

could end soon, but also we don't want

to leave early. It's hard to know kind

of where to net those two comments off.

And Iran saying that it wants those

reparations, wants recognition of its

rights, which we have to assume refers

to uranium enrichment and a guarantee

against future aggression. I mean, to

me, that looks like an option that

certainly Israel, likely the US, would

never want to give up. That's actually

something Iran was already seeking

during the nuclear talks that preceded

the war and they weren't able to get it

then. So it's hard to see the US and

Israel agreeing to it now. So I think

for the moment particularly in light of

those maritime incidents, particularly

in light of Bren still coming up above

$100. We're still back in escalatory

territory.

>> Okay, Patrick, thank you so much for

being with us. That is our Middle East

breaking news editor Patrick Sykes with

the latest. Stay with us. More from

Bloomberg Daybreak Cube coming up after

this.

>> Well, the latest spike in oil prices is

putting more pressure on supplies to

Asian countries. Bloomberg has learned

that Chinese oil refiners have begun

cancelling agreed refined fuel export

contracts. Our managing editor for

commodities and energy in Asia. Claraara

Ferrer Marquez joins us now for more.

Claraara, good to talk to you. The

disruption to Middle Eastern oil and gas

supplies is creating an energy crunch in

many parts of Asia. Which countries are

worst affected?

>> I think we're seeing it really across

the region and the it's useful to

remember obviously we talk about a lot

about oil and gas supplies coming out of

the Middle East and out of the Persian

Gulf, but it's also a huge producer of

fuels. And in particular where we're

seeing the sort of sharp end of of

things at the moment, it's liqufied

petroleum gas. So this is for a lot of

parts of Asia. It's essentially cooking

gas. It's used in industrial processes

and the country that is probably feeling

it the the most acutely is India where

we've seen restaurants cutting back

roadside stalls um certain industries

like anything that requires high

temperatures like a paint oven for auto

manufacturers um and of course it feels

direct very directly uh filtering

through to consumers across the rest of

the region you're seeing impact across

the fuel space so this would be gasoline

diesel aviation fuel um and it's partly

shortages, partly the fact that the

fuels aren't arriving and it's also

remember these are emerging economies

for the most part uh very price

sensitive populations. So it is also

about price. Well, what sort of measures

then are governments taking in response

to all of this? Extraordinary measures

really considering we're only sort of

day 13 of this war. I mean already this

week we've seen and even into the back

end of last week we're looking at

countries like Pakistan and the

Philippines cutting working weeks

suspending schools um cutting civil

servants salaries in places like

Pakistan. So that really is quite um

acute and remember that a lot of the

large um Muslim populations in in this

part of the world will also be going

into Eid which in places like Indonesia

involve huge migrations of population.

So a big spike in fuel consumption

coming. Car, what's the significance of

these latest steps being taken by

Chinese refiners?

>> It's interesting. It's China isn't a

sort of fuel exporting powerhouse in in

this part of the world. That would

really be Japan and Korea. Uh but it

does tell you how.

>> This is Bloomberg Daybreak Europe, your

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Look for us on your podcast feed every

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I'm Caroline Hepka.

>> And I'm Steven Carroll. Join us again

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need to start your day right here on

Bloomberg Daybreak Europe.