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What's on Haag Island?
Haag Island is the central hub of Iran's mainly oil export.
1,700,000 barrels per day, and that's roughly 1.5% of global oil supply.
It's World Business Report from the BBC World Service.
This is Andrew Peach.
On the way, we'll learn more about the Iranian oil terminal, which President Trump says he'll either seize or blow up if talks to end the war don't succeed.
Also today, as NASA prepares for a mission around the moon, we ask who's paying for it and what the rewards could be, and how fast fashion is tempting young shoppers away from traditional markets in India.
First, the White House has been deflecting questions about President Trump's threat to hit Iranian energy infrastructure, saying he expects Iran to make a deal to end the war.
Earlier on social media, the president said, if they didn't, he'd strike targets including electricity plants, Iran's main oil exporting site, Haag Island, and possibly desalination plants.
Global oil prices have risen again, with Brent crude hitting 116 a barrel at one point, before falling back a bit.
Here's our North America business correspondent, Michelle Flurry.
The oil price, again, you know, up above $110 a barrel for Brent crude.
In terms of the US main stock markets, it was kind of something of a mixed day.
It started with some early gains.
But if you look at the S&P, couldn't hold on to that.
And by the end, it actually fell significantly.
What is going on is that traders are trying to kind of figure out what they need to be focusing on.
In other words, is it comments, for example from Donald Trump saying that he is very keen to try and end the war?
Or is it the threats to take out Iran's energy plants?
If talks don't go well.
And so you see that kind of back and forth, the vacillation, and that is really what's driving markets, because they are forward looking.
So they hear from the White House that desire for an end.
But at the same time, the reality is, you know it may not be easy to achieve and also slow news to pile up.
So they're trying to call which way it's going to go and i was going to ask you what you make of those conflicting messages.
On the one hand, president trump, very keen to talk about the conflict coming to an end and the being a process in place that might achieve that.
On the other, talking about taking out more iranian infrastructure.
The only way I can describe it is really quite weird.
So if you look, for example, back at last week typically, when the price of oil went up, US stocks went down and vice versa.
This morning, what we saw was US stocks going up and the price of oil going up.
And the reason I say that's weird is because it was mixed signals that the traders were picking up on.
Because obviously, if there is destruction of Iran's energy plants, that would signal potential escalation of the conflict and potentially much more economic damage which would, you know, in the big picture, be negative.
On the other hand, there is also these ongoing conversations about talks going on which the Iranians deny.
But the way traders and investors are interpreting that is a positive sign that you know there is a desire to try and resolve this.
And if you want to focus on the positive, markets tend to kind of look ahead.
And so that's why you're seeing this slight disconnect, despite the fact that, in economic terms, when you listen to forecasters, they are actually increasingly predicting rising prices, worries about inflation and, in some cases stagflation, which is where you get that awful mix of rising inflation and slow growth.
And if there were further damage to infrastructure in the Middle East inside and outside Iran.
The effect on the global economy is not only acute but also very long-lasting.
Yeah, and the reason that is is initially, everyone can relate to the fact that if you've been to a petrol pump lately tried to fill up your car, you can immediately see the impact of sort of squeezes on oil supply.
But you and I have talked in the past about fertilizer prices, but also the cost of diesel which is used, certainly here in America, for shipping of goods.
That starts to then trickle down to things like food prices or anything that is carried using diesel.
So anything that goods and services that rely on fuel.
As those costs go up, you're going to start to see that knock-on effect.
When we talk about fertilizer, there's again a delayed reaction rate.
They're paying higher costs right now for fertilizer but that doesn't go through to the sort of food chain and to the grocery store until maybe six months to a year.
So all of this will kind of compound, it will add up. but not necessarily all at once.
It is slow moving.
And that's why you're starting to see agencies talking to governments around the world organizations like the World Bank and others about sort of you know what governments can do to try and ease what they see as a growing problem, whether it's food or petrol and fuel shortages.
Down the road.
This is Michelle Flurry with me from New York.
So for more on the significance of the oil refinery on Haag Island, I've been talking to Humayun Falakshahi, who's head of the Crude Oil Analysis Unit at the market intelligence firm KPLER, and first Dr Anahita Motazad-Rudd, who's a senior fellow at the London School of Economics.
The Khark Island is the central hub of Iran's mainly oil export.
And if I want to put it in very simple terms, it's the point that Iran's oil reaches the global market.
So it also handles the vast majority of Iran's crude oil exports, something even around 90 or even over that, which makes it absolutely critical to countries' economic survival, especially at this critical moment.
So what sort of proportion of the world's oil supply passes through Haag Island?
We hear how much goes through the Strait of Hormuz.
What sort of proportion are we talking about using these refinery facilities?
Indeed, this is not important just for Iran, I think.
It makes it very important because it's a critical juncture also for transferring of oil through the Hormuz Strait for the global market.
So it's not something that we just believe that it's very important in terms of Iran.
I think it's very important for the other great powers, including China and even the Europe and also the other countries in the Persian Gulf as well.
Just not having any disruption of the oil flows from this island.
Hermione, let me ask you, is it usual to have so much refinement focused in one place?
Because that's what's making it vulnerable.
That's why President Trump can threaten to attack it and have such a big impact.
I would say it could be.
It could actually be usual.
You look at the other countries in the region.
Saudi Arabia also has one key export facility on the east around Ras Tanoura.
Iraq only depends on one installation too, Basra.
Kuwait is the same.
So I would say maybe for the size of the country it's pretty unusual because Saudi Arabia has different facilities.
So Rastan has stopped exporting because the Strait of Hormuz is closed, or almost stopped, because we have actually seen one cargo head to Pakistan and pass through the strait.
I think two days ago from Saudi Arabia.
But Saudi Arabia has other facilities on the Red Sea as well.
But I would say it's not really unusual.
Most of these countries depend overwhelmingly on one export facility.
But as Anaita said, Kharag Island represents more than 90% of Iran's oil exports.
And in terms of global oil supply, the average that we've seen year to date is around 17 million barrels per day, 1700000 barrels per day.
And that's roughly 1.5% of global oil supply.
Let's talk about the difference between damaging infrastructure and actually damaging production, because the effect of those two things is quite different in scale.
Yeah, I think you know, if you look at the facilities around the region, the oil fields are pretty scattered usually.
You know, you have fields over hundreds of kilometers of territory, sometimes at sea as well.
But obviously you know that oil coming from multiple, sometimes hundreds, of oil fields has to be gathered someplace in order to be exported.
And that is what makes Harg Island pretty critical.
Especially for Iran's oil infrastructure, but also for, you know, oil markets globally and especially to China, because Iran exports primarily to China.
So you know, it's almost like you have most of, like the gathering point for oil, most of the oil produced in one country.
So for Iran, it's hard guideline.
But again, if you look at the other countries in the region too, you have one key facility doing that job.
And I think that's also part of the reason why It is going to be risky for the US to potentially seize Khorog Island, because I assume that the Islamic Republic is going to retaliate on maybe one of the other key facilities in the region.
And that could be problematic, because then it wouldn't just be a question of when the war ends, but also even after the war ends, it's a question of how long will it take to rebuild those facilities that will have been impacted by the US and by Iran on the other side.
I see.
So Anahita, to an extent the importance of Haag Island is the inevitable reprisals that would follow if it were attacked or seized.
Obviously, it could just be a negotiating position on the part of the US.
But if they did go through with that, what happens next?
I think it's very important just to notify about exactly what Mohammad Baber-Khalibov mentioned.
I think today
Because he framed Iran's war strategy around a three-dimensional framework, missiles the streets and the Strait of Hormuz.
And this reflects, in a way, an integrated approach combining both military pressure, control over global energy flows and also sustained domestic mobilization.
The other important thing is that we have the Houthis and they have entered into the conflict.
And now they're in try has raised many concerns about the security of the Red Sea and bubble mandate as well, which shows explicit threats to the potentially disrupt shipping in the REX region under certain circumstances, including failing any kind of negotiation.
However, we still don't know really.
We are not so much certain.
Even this negotiation are happening at this time.
So this, I think, shows that how much extending this kind of I think you know beyond the Persian Gulf, The war's geographic scope continues to widen, but at the same time, Iran can create more damages and more threats to the countries in the Persian Gulf, mainly the Arab states in the Persian Gulf, as well as the US assets.
And, Humayun, let me pick that point that Anahisha made up with you.
We've talked a lot about the impact on the rest of the world.
What about the impact on the economy of Iran and its ability to continue fighting the war?
I think the impact longer term would be huge, because this is again the main gateway for Iran's oil exports.
Oil exports represent a huge chunk of Iran's total government revenues.
If you look at the government revenues, it's roughly around 30% that is fed by oil exports.
That said, all the export revenues from the oil sector isn't actually going to the government because over the past few years the IRGC has had a stronger clout on these trades and how the oil is sold.
And so actually a big chunk of the revenues, of the profits, actually make it back just to the IRGC, not even to the Iranian government.
But so if we imagine that the island is seized or the facility is destroyed, Down the line you would have a lot less exports.
And again, we're talking about 30% of Iran's government revenues.
It's also, I would say, roughly around 15% of the country's GDP.
So the consequences would be huge for Iran's economy.
I would just add that in the short term though, it wouldn't impact immediate revenues, because the oil that is loaded and exported usually it takes about two months to reach the final consumer in China to discharge in China.
And the payments made to either the middleman, so most of the time the RGC, or to the government, via the state-owned company NIOC, usually are made two, three months after the discharge.
So it would only impact the revenues four or five months from now of Iran, not the immediate revenues, but obviously the impact will still be huge down the line.
Well, that was Humayun Falakshahi from KPLER.
I also spoke to Dr. Anahita Motazedrad from the London School of Economics.
And now we go live to Chicago and Peter Jankowskis, Chief Investment Officer at Arbor Financial Services.
Peter, give me your take on what's been going on with oil prices today, up and down again.
Yes, indeed.
We are going back and forth on the news, the various announcements coming out of the Trump administration, Iran coming back the other way.
The market does seem to be more sensitive to energy prices around the world, as opposed to just some of the main benchmarks.
We're seeing a lot of pressure in the Asia market and I think that showed up somewhat in the price of technology shares today.
A lot of chip makers were down fairly substantially as there's growing difficulty in getting the oil that's needed in Asia.
And what about a broader look at stocks in other energy companies in related industries?
Well, as you've looked at some of the companies that could benefit as things are being reconstructed, that's an area that we've seen some movement.
Slumber's A was actually down quite a deal more than the energy sector as a whole.
So there seems to be some concerns that there's going to be difficulty in further exploration, that things will be directed more toward reconstructing existing fields.
Let's talk a bit about tariffs.
The Federal Reserve Chair Jerome Powell has been talking to students at Harvard about this.
Let's just have a listen to what he said about how tariff inflation is affecting goods and services.
The tariff inflation is visible and we think it's really just a one-time price increase.
That's been our thinking since the beginning.
Right now, we think it's adding somewhere between a half and a full percentage point to inflation.
But that's a much smaller thing than we saw during the pandemic inflation.
And, of course, now we're facing events in the Middle East which will certainly affect gas prices.
And we feel like our policy is in a good place for us to wait and see how that turns out.
So, in terms of the impact of tariffs, no doubt there's an inflationary effect, but are we saying it's less inflationary than everyone expected?
I think that is some of what he's saying.
I think he's just reemphasizing more that it's a one-time event, that you don't see this persisting.
People will adjust prices one time for the higher tariff level and it won't be a source of ongoing inflation.
That's more of what I take from his message there.
Right.
So no one's saying that the body of economists have suddenly decided it's a good idea.
But we don't want to overplay the inflationary effects either.
Right, right.
That it's something that will wash out of the system and shouldn't feed on itself.
That's really the message that Chairman Powell was saying.
And that suggests that there won't be a need to raise rates, which had been a growing concern in the marketplace over the past couple of months.
Peter, thank you.
This is World Business Report from the BBC World Service.
I'm Andrew Peach.
The family dramas behind some of the world's biggest companies inheritance from the bbc world service.
Season one explores the triumphs, tragedies and controversies surrounding the family that owns one of south korea's biggest success stories samsung.
I did interview a family member from Samsung.
This is what they often say.
Look, we built the nation.
And without us, South Korea as it exists today would simply not be here.
Search for Inheritance Samsung wherever you get your BBC podcasts.
NASA is aiming to launch its first crewed mission around the moon in more than 50 years this week.
The Artemis II mission, which will last about 10 days, will take astronauts further into space than anyone's gone before.
But why now?
Laurie Garver is a former deputy administrator at NASA and told me more about it from Denver, Colorado.
This is the second mission of this program.
NASA has been working on it for Really 20 years, but it was named Artemis, the sister of Apollo, in the first Trump administration.
It is about returning to the moon.
This mission is not going to land on the moon.
It's going to go around the moon.
And this is the first time they've put crew on these vehicles.
It launched three and a half years ago.
Successfully mostly.
There were some concerns, which is why there were delays between that flight and now.
You say NASA has been working on this for 20 years.
How is it being paid for?
Well, NASA, the American public, has been paying for this for 20 years.
The program in 2005 started in the second Bush administration.
And that was the Orion capsule that is on the top.
They've been getting about a billion dollars a year for the last 20 plus years.
The rocket itself is derived from the space shuttle program.
So, as the space shuttle program was winding down, People in Congress were very upset that we and it was a we at that time I was the deputy administrator in the Obama administration were not proposing that we continue with this big, expensive rocket and instead to do things commercially.
Congress didn't agree and they started funding the SLS rocket in 2010, and it's received about 30 billion since that time.
So together, I think to get to this mission, we spent almost $60 billion.
But there's also a lot of commercial interest in space exploration.
And there's growing interest in other countries too, in China and India, in many parts of the world.
So something tells me that it's the confluence of all those things that's making it happen now.
Yes, I do think there has been an evolution of space.
Of course, what happens typically, after all, space is just the next domain.
We have first crossed the oceans and took to the air, and now we can operate in space.
So it isn't just governments.
And one of the things we did in the Obama administration was invest in commercial partnerships, the most successful of those having been SpaceX.
And so you had this sort of government program that has been more recently articulating this as a race with China.
Yeah, and obviously there might be some financial return for all the investment at the end of all of that.
Something else that's happening this week concerns SpaceX particularly, and the possibility of a much larger number of US investors getting a piece of it.
Yes, indeed.
After many, many years of saying they weren't going to go public, SpaceX is doing that and lining things up.
There is a lot of excitement for that, as we've had other space companies go public, some with mixed success.
But overall I think it is a really positive way to take advantage of the new frontier of space is to utilize the private sector in a way that maximizes their potential and economic return.
We can hear your passion for this, Laurie.
After a period where it feels like we haven't advanced perhaps as quickly as things had in the past.
You must be pretty excited to be in this moment now where the possibilities feel endless.
You know, the chance of real developments in space travel and exploration and the benefits that might flow from that in the next 10 20, 30 years are extraordinary.
Sure.
I've been doing this though for 40 years and I guess I have felt that way the whole time.
This is an adventure that has never been done.
If you're somebody growing up today, or even Growing up any time in the last 50 years, that's where a lot of excitement is.
So sure it is great to see the world paying a little more attention on both the spectrum of, I think, SpaceX and private sector launch, as well as doing things like going beyond where we have been in low Earth orbit back to the moon space.
And with all the excitement of people talking about it now, is there any part of you that misses being at the heart of it at NASA?
Oh, of course.
I've had two tours at NASA and there's really nothing better than being somebody who is helping to shape what it is we should be doing.
Well, that's Laurie Garver, who's a former deputy administrator at NASA.
And the window of opportunity for Artemis 2 begins on Wednesday and ends next Monday.
So they're hoping that it will leave at some point in that window between the 1st and the 6th of April.
India is known for its vibrant bazaars selling clothes and handmade goods.
But cheaper, fast fashion brands backed by billionaires are starting to expand their footprint in India.
In small towns, new stores are enticing young shoppers away from the traditional markets.
Let's hear more from my colleague, Nikhil Inamdar, who's been to one in the town of Mirage in western India.
Physiotherapy student Pallavi and her friends are on a midweek shopping trip at the gleaming three-storey outlet of Reliance Trends.
It's a budget fast fashion brand run by Asia's richest man, Mukesh Ambani.
Experience the fashion of now at Trans.
We're in the women's section, stacked with aisles of clothing of all kinds, from weathered jeans and fitted t-shirts to Indian ethnic wear in vibrant colours.
So tell me what you're shopping for today and why you've come here rather than going to the local bazaar.
The prices here are affordable.
The choices are much bigger compared to the bazaar, even though perhaps I'm paying just a little more.
In the last four, five years, there are so many such shops that have opened here.
So fast fashion outlets like this one are a relatively new phenomenon in a small town like this.
In fact, I grew up about half a mile from here and even about 10 years ago there was literally nothing here other than a few residential blocks.
Now however, it's an area that's teeming with stores, mostly selling cheap branded clothes, as well as electronics.
The growth in affordable fast fashion has come at the cost of family-owned stores.
But now many are choosing to spend their money on cheaper branded clothes instead.
And this shows a clear shift in behavior, according to Kushal Bhatnagar of Red Seer Consulting from Bengaluru.
There's been a wallet shift.
The consumer isn't consuming more.
But if you go back, where was the consumer actually buying the products from?
They were actually buying these from these local, street, general stores or local street markets.
And now the consumer is able to get the products at similar price points.
While having a very good purchase experience.
So there are trial rooms, there is a staff that attends to them.
So that is an upgrade in the way they were purchasing the same product.
This boom is however, accompanied by growing worries about fast fashion's ecological impact on India.
Less than 1% of used clothing is recycled into new garments and fibres globally.
In India, the textile industry is the third largest contributor to daily municipal solid waste.
But for now, style and savings appear to have trumped concerns of sustainability, as India's young spend more in affordable brands than ever before.
That's Nikhil Inamdar reporting from Mirage in Western India.
That's it from World Business Report for today.
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