The Podcast of the Lotus Eaters - March 18, 2026


PREVIEW LIVE： Brokenomics ｜ The Iran War

Hosted by
Callum Edmunds Carl Benjamin Connor Tomlinson Harry Robinson John Wheatley Joshua Ferme Edward McLaren Elizabeth Heverin
Mentioned
George Soros Hormuz Saud
PREVIEW： Realpolitik #32 ｜ Iran war？ The Podcast of the Lotus Eaters #1378

Episode Stats


Length

24 minutes

Words per minute

151.2

Word count

3,681

Sentence count

—

Harmful content

Hate speech

9

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

In this episode of Brokonomics I talk about the Iranian strikes on Iran and the impact on the global financial markets, risk repricing and the role of the oil tanker disaster on the Persian Gulf. I also discuss the impact of the strike on the Iranian regime and how this impacts the financial markets and the rest of the world.

Transcript

Transcript generated with Whisper (turbo).
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00.000 Hello and welcome to Brokonomics. Now, this one I am doing live and there is a reason for that. 0.98
00:00:06.140 The reason is that I spent two weeks in Asia and I thought that I had more recorded episodes than
00:00:13.360 I actually did and I came in this morning and found out that I didn't. So that's fine. I get
00:00:18.540 to spend time with you lovely people and because it's a live, the chat is open should anyone wish
00:00:25.420 to post a comment although because i didn't tell anyone that i was doing a live episode i don't
00:00:30.060 think there is anyone in the chat i can i'm looking at the chat now and there's only one
00:00:33.940 message and it says hello fans from me um to complete silence so anyway um if you do happen
00:00:41.520 to watch these um the moment they come out then then you you can respond to it now the fact that
00:00:46.500 i was in asia for those two weeks um gives me a sort of interesting anecdote to sort of start
00:00:52.360 this one off you see because the flight that I was on um as it turned out and I did check this later
00:00:58.920 uh was almost exactly over Tehran at the moment that the strikes began um I I flew out um sort of
00:01:08.260 you know obviously several hours earlier on that and I know that I was over Tehran because
00:01:12.020 we can see it on the in-flight map and also I could look out the window and um yeah it it later
00:01:20.260 transpired when I did the maths that if I wasn't directly over Tehran at the time the missiles
00:01:26.420 were flying I would have missed it by no more than about 20 to 30 minutes and I mean that just
00:01:34.720 gives us a bit of pause for thought doesn't it because how differently we would have viewed the
00:01:40.980 war if in the first few minutes we had lost one of our best and brightest the impact that that
00:01:47.640 would have on us all I mean especially me um I'm just envisaging the plane getting clipped
00:01:53.080 by some sort of incoming hypersonic missile and breaking apart and I would then would have been
00:01:59.060 sort of flapping and flailing as it as it took about two and a half three minutes to tumble to
00:02:06.280 the ground to land on the outskirts of Tehran wondering in that time what I was going to do
00:02:10.620 with the rest of my life which would not be very long at all so that that's how close we came
00:02:16.940 ladies and gentlemen that's how close we came that's worth thinking about but no so um my
00:02:22.860 thoughts on the iran war now because i'm coming to this a couple of weeks late um i'm i'm not
00:02:30.080 going to give you the standard sort of spiel that you probably heard 50 times already about who's
00:02:35.060 gonna you know win the war and all that kind of stuff i i'm looking at this from a different
00:02:40.220 perspective i'm looking at this from the point of view of risk repricing and i don't just mean
00:02:46.540 insurance rates or anything like that what's really happening here you've got this sort of
00:02:50.940 global um multi-agent um risk re-evaluation going on or based on incomplete information
00:02:59.620 and that is everything from um the decisions that this state of iran is making the state of israel
00:03:05.840 the us the shipping agents the energy markets the financial markets the voters in the various
00:03:11.920 countries fascinatingly the the set of decisions that the gulf state has to make um the decisions
00:03:18.260 that you know the the rest of the BRICS countries that europe has to make so i mean there's there's
00:03:23.400 a considerable number of people that are going to be forced to re-evaluate on this um and and as
00:03:30.360 well as that and they've each got their own they they're each seeing different risks and they're
00:03:39.040 and they've all got different time horizons and they're all reacting at different speeds to this
00:03:44.580 so what you've got is a system that was was previously in balance which is now
00:03:49.580 completely out of sync with itself
00:03:52.140 and i don't think it's going to proceed linearly as as we go through this this is going to be
00:03:59.580 threshold driven and the the early thresholds came early on with the closing of the straits
00:04:05.560 of humus and i don't believe at this time we've lost a single tanker but if that were to happen
00:04:10.180 um you know if if one oil tanker were to go down or you know god forbid three or five or something
00:04:17.260 the knock-on effects for the decision making that the rest of the system has to make is is going to
00:04:23.920 be enormous and i'm kind of reminded um to bring this back to a sort of financial angle of the
00:04:30.240 George Soros idea of reflexivity now I know Soros is just the embodiment of evil these days and just
00:04:37.080 spends his time trying to destroy the western world as fast as he possibly can but when he was
00:04:42.320 in finance he was actually genuinely quite brilliant and the reflexivity model is something
00:04:46.200 I've been trying to think about this through and that is not just that you know reality informs
00:04:51.880 people's perception of events but your perception changes your behavior that then changes reality
00:04:58.960 that then changes your perception and so on and so on it's it's it's a recurring loop so you know
00:05:04.920 behavioral changes can come from the way of which the the risk of a set of events or the risk of
00:05:12.220 pricing something is is considered as you go through it then of course we've got the whole
00:05:16.380 dynamic of the asymmetric risk that the different actors are facing within all of this so iran has
00:05:23.640 the ability to make these fairly low cost disruptions low cost in terms of its attack the
00:05:30.840 the attacks of which it is receiving of course of significant cost to it the US can bear the cost
00:05:40.880 of making expensive attacks but the cost to the system is what I really want to get into
00:05:46.140 the destabilization the Gulf states are having to consider the fact that they have got very
00:05:53.320 high cost exposure in all of this i mean not least from being able to ship just their just
00:05:59.980 their oil which is existential for them because of course the it's it's not just a one-way oil
00:06:05.400 trade it's it's it's a two-way oil for food technology um electronics tourism everything
00:06:12.860 that keeps a desalination plants running it's it's as significant to them um as we talked about
00:06:18.940 china and india how they decide to in russia how they decide to eat to play this as well um and
00:06:25.240 then europe as well who at the moment are being largely passive and choosing not to involve but
00:06:32.260 they've got a such a degraded energy system which was already running at the point of
00:06:38.760 very close to insufficiency very much relying on you know last minute just-in-time deliveries
00:06:47.100 the the start of the ukraine war was uh i mean you faced a mini energy crisis at that point
00:06:56.280 so it just doesn't have any resilience at this point it's only been made up through
00:07:00.740 us-based um liquid natural gas uh and and if the straits of hormuz stay shut for any length of
00:07:08.080 time what will happen is is the us will simply start limiting energy exports and i don't see
00:07:16.340 the solution that europe has other than to go crawling on its hands and knees to russia which 0.66
00:07:21.040 completely undermines the geopolitical stance that they've adopted over the last well whatever
00:07:26.520 it is four years at this point so we're in a we're in a flux in the system which favors people who
00:07:35.320 can inject risk cheaply and that's iran um and perhaps to a lesser extent israel as well they
00:07:45.380 don't bear this this this this whole burden of costs other than the fact that israeli support
00:07:52.600 in the western world is declining significantly i looked at some numbers the other day
00:07:56.460 and it split down israel support in the u.s by age group and amongst young people support for
00:08:05.740 israel had literally halved now it wasn't that high to begin with i think it was something like
00:08:09.480 40 but that's that's halved to just below 20 and even the oldest generations even though they're
00:08:15.880 much more resilient because they've been raised on this their whole life even then it's turned
00:08:21.800 from um something like 60 support to under 50 which is again uh significant for a state which
00:08:29.740 requires strong western support um we have to consider the optionality as we go through this
00:08:41.520 so some actors have high optionality um the u.s if it is willing to bear the
00:08:52.440 reputational cost the cost of walking away have the ability to do that they can they can step
00:08:59.940 away although it would be humiliating and it would also play into the loss of empire which
00:09:05.320 they are likely to be faced with and we talk about that as we go through iran has lots of
00:09:12.580 optionality um and and they are using that optionality at the moment to endure significant
00:09:19.080 punishment in order to raise the costs of acting against them significantly um the options of
00:09:27.060 people like europe are constrained but the optionality facing china and russia are also
00:09:32.980 fascinating to what degree do they wish to lend assistance to what degree do they want to place
00:09:38.280 pressure um on the us or israel um particularly with the upcoming conference that that trump
00:09:45.900 will be doing to china and it's all starting to get quite reminiscent of the suiz crisis in 1956
00:09:53.880 so in the suiz crisis the uk and france um obviously got into a dispute with the
00:10:01.580 egyptian government at the time and tried intervention and what ultimately ended it
00:10:07.280 was not the fact that the uk and france were unable to militarily achieve its objectives
00:10:13.760 even though it proved difficult I mean ultimately what got them is that the rising global superpower
00:10:19.920 the US in that post-war period was unwilling to bear the second order costs that came as a result
00:10:28.020 of the Suez crisis and they placed pressure on the UK and France to basically withdraw and they did
00:10:34.220 are we going to be looking at a similar situation where the rising the new rising global superpower
00:10:41.040 China is going to exert influence on the US to say no we we are not willing to bear these costs
00:10:50.100 and if you continue to put us in this situation we will we will punish you for it one way or
00:10:56.360 another and again China has plenty of options there so you know some people are fully committed
00:11:02.060 while other people you know they have some exit paths but but all of them are constrained
00:11:08.920 risk is going to show up in a whole number of ways it's going to show up in pricing
00:11:16.620 I mean insurance obviously the physical flow of the energy itself the narrative is going to be
00:11:26.000 a huge effect especially on domestic populations in in Europe and US and and it's probably going
00:11:32.100 to reprice policy costs over the next few decades so you know the the the hidden constraints that
00:11:42.200 we have here is this is a coordination failure and you know most of the actors i'm going to be
00:11:49.220 talking about here what they prefer is stability and they prefer continued trade but we're starting
00:11:55.920 to realize that in this globalist system that cannot be offered and and this is this is a
00:12:02.260 significant blow coming after the covid era which demonstrated that actually no you you cannot rely
00:12:10.220 on a fully globalized system you cannot rely on a just-in-time delivery model you cannot run down
00:12:17.180 your domestic energy and um you know strategic reserves or strategic industries of whatever it is
00:12:24.180 and this is just going to be a you know a second nail in the coffin for that globalist system so
00:12:34.560 i think what we've i think what we've got to start doing is
00:12:44.040 not asking the straightforward questions which has been you know discussed endlessly on
00:12:52.440 um you know a whole bunch of channels that you would have seen analysis that you would have seen
00:12:56.540 on this stuff but we we got to ask a little bit more fundamentally what is the set of decisions
00:13:02.780 and risk pricing that everybody involved in this conflict is is going to have to calculate
00:13:07.500 but i mean let's start with um first of all what i think each side in this is trying to achieve
00:13:14.320 because even answering that question has been problematic for everybody so starting with the
00:13:20.360 U.S., I think they are trying to degrade Iran's ability to be a regional power, which is 0.68
00:13:32.500 increasingly emerging as, because it is not a U.S. client state, it has strategic depth,
00:13:39.620 it has a coherent and motivated population to take action. I mean, yes, I know that's
00:13:46.680 been under question yes i know there's been protests within iran but this is this is sort
00:13:51.260 of served as a galvanizing function for them so the us can degrade iran as a um as as a regional
00:14:01.600 power well by default it is the regional power um and therefore it can exercise its will more
00:14:08.600 clearly iran i think has different set of um choices ahead of it i think iran wants the long
00:14:20.300 term inviability of um iran so israel has the long-term inviability of iran and for them
00:14:29.360 the best outcome is probably going to be to instigate so much chaos that it effectively
00:14:35.560 becomes a failed state over the next 30 years i think something similar to iraq where after the
00:14:42.780 invasion of iraq they then spent the next 20 years um devolving into competing warlords
00:14:49.100 and no strong centralized government i suspect that is what they are looking for which is a much
00:14:59.860 broader and expansive goal than perhaps the u.s has um but of course if they can get the u.s to
00:15:05.500 fight their war um then then why wouldn't you take that and it would effectively leave them
00:15:10.760 as a much more dominant regional player than they are i think for iran what they're looking to do
00:15:19.080 is i think they're trying to raise the cost of being a u.s ally in the region i think they they
00:15:30.360 have they have decided that if they continue along the status quo they will get hit regularly
00:15:37.660 because for whatever reason the influence that israel has on the u.s and the set of decisions
00:15:45.320 that the US has to make
00:15:46.500 about how does it preserve
00:15:48.160 its regional hegemon.
00:15:52.300 They feel that
00:15:54.240 it is unacceptable
00:15:56.320 to be continually exposed
00:15:58.560 to a series of,
00:16:01.300 you know, 12-day wars
00:16:02.680 like we saw last year.
00:16:05.460 And that it is better
00:16:07.300 to receive an actual pounding
00:16:09.940 if it can raise the costs of the war to the global level which has certainly been achieved 0.96
00:16:18.380 at this point um i mean an additional factor for the u.s i should probably mention is they are no
00:16:25.360 doubt concerned about the creeping influence of china in this with iran being a chinese ally i
00:16:30.880 think i think that one is going to backfire spectacularly the gulf states they've got to
00:16:36.580 consider um the least risk patron at this point perhaps Saudi Arabia has the potential to be a
00:16:47.840 um the the dominant regional power but certainly none of the rest of them do
00:16:52.700 and for whatever reason um Saudi has not really demonstrated the sort of military coherence that
00:17:01.600 that might suggest that they're in that place so I think the Gulf states understand that they are
00:17:06.560 client state but is the u.s able to provide the protection i mean the u.s has effectively been
00:17:15.800 running for the last well since breton woods really it was since since since the mid 70s
00:17:21.720 certainly the u.s has been running a protection racket in the gulf states they've they've basically
00:17:27.980 well they started off and then this is the sort of formation of the petrodollars they went to
00:17:32.720 the house of Saud and said we will guarantee your security you've got a lot of nice oil
00:17:39.040 but you've got a population that would drag you into the streets and do unspeakable things to
00:17:45.880 you if they could and you've got hostile you know warring Arab states around you and of course the 0.73
00:17:54.000 Arabs do like to fight amongst themselves so we will provide security for you and in return you 1.00
00:17:59.100 will sell your oil in dollars and only dollars and thus the birth of the petro system petrodollar
00:18:06.720 system which was exactly what the u.s dollar needed after 1971 and it came off gold and the
00:18:13.740 the value of the petrodollar system and i mean i've talked about it before a number of times
00:18:17.200 on brokonomic but it can't be overstated um but that does rely on the protection rack and work
00:18:25.220 protection racket working if the u.s is not able to um upkeep its side of the bargain
00:18:33.480 which is the security in exchange for you will only sell in dollars
00:18:37.960 it is rational for the gulf states to start to consider what other patronage options they have
00:18:46.100 it doesn't have to be iran but it it could be some combination of the bricks as a whole
00:18:52.720 Russia and China I mean Russia and China is a powerful combination because with that you get
00:18:58.920 the military expertise of the Russians you get the the market of the Chinese in India 0.53
00:19:05.240 you get the technical support of the Chinese at what point does it become
00:19:11.280 viable for these Gulf states to seek their protection from BRICS as opposed to the US
00:19:20.120 now bear in mind the u.s has already had a rather humiliating retreat from afghanistan
00:19:27.480 and it has launched this this war without clear objectives presumably hoping for a short war
00:19:37.020 to remind the region who's boss and it doesn't appear to be working out that way
00:19:43.580 um the brick states um china russia perhaps to a lesser extent india and some of the rest of them
00:19:52.180 um of course it's in their interests if the u.s um ceases to be a global power they would probably
00:20:02.840 much prefer them to become a regional power and and that process is already underway you could
00:20:07.120 already see the trump administration reprioritizing from being a global power to being to shoring up
00:20:14.680 its own um theater of influence and thus increased actions in um south america um thus increasing
00:20:24.400 concern about the way that western europe is driving itself off a cliff nevertheless it has
00:20:30.860 its key clients in other parts of the world the middle east being a key one of those and you know
00:20:37.360 taiwan perhaps being another one but if you can if you can break um u.s global um dominance
00:20:46.880 which this war has the signs of being able to do then the world will move to a multi 0.91
00:20:55.900 polar world and some people say we're already in there i don't think we are necessarily because
00:21:03.240 china does not yet show any ability to project force it would probably be a more whole of bricks 1.00
00:21:11.560 effort if they were to come to that um but that would give them considerable further leverage
00:21:17.740 And then finally, Europe, they cannot maintain their energy situation without the Straits of Hormuz opening.
00:21:33.980 And that is not because the Strait of Hormuz is primarily supplying Europe.
00:21:39.540 Most of what goes through the Straits of Hormuz is going to be going towards Asia.
00:21:47.740 a lot of it goes to China but it's very important for India and Japan as well the problem that
00:21:56.260 Europe have got is that because it is a global energy market by raising the marginal cost of
00:22:02.820 energy they're already strained to the point where their system is insufficiently holding
00:22:12.780 on anyway domestic energy prices have been a huge issue in britain over the last uh well i mean
00:22:19.640 since covid uh certainly since the beginning of the ukraine war it has been a um constant issue
00:22:27.400 and what will happen if energy prices go up is it will simply cause the um rerouting of energy
00:22:35.460 supplies from lower bidders to higher bidders and europe being relatively rich at the moment
00:22:42.420 although for how much longer its paper money is is given that credence I don't know but think back
00:22:48.700 to and this was a few years ago what was what ultimately was the issue in Sri Lanka which if
00:22:57.580 you recall led to you know a changed government it led to the president's compound being broken
00:23:04.840 open and his collection of nice cars being pushed into river um you know it led to basically in a
00:23:12.820 sort of internal revolution and ultimately the cause for that is because Sri Lanka ran out of
00:23:17.840 dollars meaning that it couldn't buy oil now I don't think we're necessarily at the point of
00:23:23.800 dollars running out because the US can just print more whenever it damn well pleases
00:23:29.580 but if the oil just literally isn't there to be bought it is going to get redirected towards the
00:23:36.940 higher bidders now the people who are bidding more for that are going to bear the costs associated
00:23:40.300 with that and the demand destruction that comes which then leads to i mean demand destruction is
00:23:45.500 basically just being people deciding to use less because it's no longer in their economic sense in
00:23:51.920 order to spend the energy but then further afield um how many developing nations are going to be
00:24:02.240 effectively priced out which in turn then means their yield of agricultural goods or commodities
00:24:08.900 or whatever it is that they produce is also going to be constrained which then feeds back into the
00:24:15.180 western system as well so that's the broad overview of of what i'm going to be trying to look at