Why Iran and Israel are targeting energy facilities

0:00Aya Batrawy:Support for Here and Now Anytime comes from MathWorks, creator of MATLAB and Simulink software for technical computing and model-based design. MathWorks, accelerating the pace of discovery in engineering and science. Learn more at mathworks.com. WBUR Podcasts, Boston.

0:23Cristiana Mesquita:At some point it becomes prohibitively expensive to use warships to get fertilizer through. So that's resulting both not just in higher prices, but also resulting in food shortages. Many warned for years that Iran could wreak havoc on the global economy if it was attacked. So why do some Trump administration officials seem surprised that it's done just that?

0:54Cristiana Mesquita:It is Thursday, March 19th, and this is Here and Now, anytime from NPR and WBR. I'm Chris Bentley.

1:03Cristiana Mesquita:Today on the show, the U.S. oil embargo against Cuba has halted the public transportation network and even some surgeries.

1:11Aya Batrawy:The situation is pretty dire, even for Cuban standards.

1:16Cristiana Mesquita:Also, there's still a partial shutdown at the Department of Homeland Security. More than a month in, many TSA officers are working without pay. And some are staying home.

1:26Aya Batrawy:I don't think you should be worried to fly because, you know, officers are still coming in and they're still doing their job. They took an oath.

1:33Cristiana Mesquita:We'll hear from a TSA union leader in about 10 minutes. But first, the death toll of the U.S. and Israel's war with Iran. is rising. And so is the economic cost. In a major escalation yesterday, Israel attacked an Iranian gas complex, and Iran retaliated against the world's largest liquefied natural gas complex in Qatar. There is extensive damage at oil and gas facilities across the Middle East, but little fuel is making it out of the region anyway, since Iran has effectively closed the Strait of Hormuz. Some European nations and Japan released a statement today saying they're ready to ensure safe passage through the strait.

2:14But the war rages on, and the economic impacts could ripple

2:18Cristiana Mesquita:for years to come. Ali Velshi is our guide today. He's MSNOW host and chief data reporter, and he spoke to Indira Lakshmanan.

2:28Aya Batrawy:Tell us, Ali, prices for Brent crude oil, the international standard, went as high as$119 a barrel earlier today. That's really, let's admit it, staggering. A more than 50 % jump since the war started less than three weeks ago. Everyone with a car has noticed prices at the pump. What are you seeing overall?

2:48Cristiana Mesquita:Well, first of all, the prices in the pump haven't caught up. They're still up about 28, 30 % from when the war started. But the one thing about oil and gas is that they track identically. So in the end, as long as oil prices stay high, gas prices will continue to go up, probably above$4 a gallon. That'll start to change American behavior about how they drive and how they commute. But more importantly, it's not just the oil. There are natural gas facilities that are being attacked, both on the Iranian side and on the Qatari side. And there's a whole lot of other stuff that goes through that pinch point, including fertilizer and things that the world needs, but also all the things that come from oil.

3:30Cristiana Mesquita:So for instance, India gets a lot of its oil from the Strait of Hormuz. That accounts for a lot of the medication that we get. A lot of our generic medication comes from India. So this is going to affect people in many ways. While people are watching the price of gas, it's actually going to affect you, not just your price of gas, but if you're flying or you're buying anything that gets shipped or you're getting anything from a farm that needs fertilizer or needs diesel fuel, it's going to affect almost everything Americans do. The one exception is natural gas because we're not natural gas importers.

3:59Cristiana Mesquita:We actually supply all the natural gas we need in the United States. But pretty much everything else is going to cost more.

4:05Aya Batrawy:All right. Well, before we get to natural gas, I want to dig in a little. You mentioned prescription drug prices. Of course, in America, a lot of people rely on generics. Those generics, as you point out, mostly come from India. India is being hit by all this. So it sounds like you're saying the war could affect prescription drug availability and prices. What about the other shipping logistics for manufacturers that are coming through the Strait of Hormuz? That's got to be a nightmare. What about the effect on supply chains and manufacturing in other industries?

4:36Cristiana Mesquita:Yeah, so this is the problem, right? The shipping industry has relied on the fact that the Strait of Hormuz stays open. Now, there are discussions about U.S. Navy warships escorting ships through the Strait of Hormuz, which is wildly expensive and impractical. But it's one thing for things like oil, which are strategically important to the world because one-fifth of the world's oil goes through that little pinch point. But at some point, it becomes prohibitively expensive to use warships to get fertilizer through. So that's resulting both not in higher prices, not just in higher prices, but also resulting in food shortages.

5:12Cristiana Mesquita:Back to prescription drugs for a second. And about half, about 90 % of drug prescriptions that are filled in the United States are generics. Of that, almost half are generics that have to do with India. And it's not just the ingredients that go into it. It's when you have a gel cap. The gel cap is sometimes made with prescription drugs. There's machinery that comes out. There's plastics that are made from it. So the whole world is going to feel the effect on that. We mostly see it in oil most directly because oil has, as you said, a world price, which is the Brent crude price. and an American price, which is called West Texas Intermediate, which is lower than the Brent crude price, but it tends to track.

5:50Cristiana Mesquita:So that's why we're seeing it mostly in oil first. But this will be almost pandemic style in terms of supply chain disruptions that will end up affecting everybody around the world.

5:59Aya Batrawy:Wow. OK, it sounds like a dire picture. Well, meanwhile, the Federal Reserve met yesterday and ignored President Trump's pressure for a rate cut. They instead held the interest rates steady even as rising gas prices could reignite inflation. So tell us, what is the impact of rising gas prices and everything prices while having a steady interest rate at the same time?

6:22Cristiana Mesquita:So it's tricky because the reason the Fed doesn't want to reduce interest rates is because while there's inflation, they don't want to do something that typically increases demand for things, right? If you reduce interest rates, people will spend more on their credit cards. Companies will borrow money. The problem now is that people are spending more anyway, which is inflationary, because the cost of things are up, first because of tariffs and now because of oil prices and what's going on in the Strait of Hormuz. So you've got a double whammy here. Without even spurring the economy by making money easier to borrow, people are still spending more.

6:54Cristiana Mesquita:So now we're going to see upward inflation pressure, and the Fed doesn't really have any tools in its box to fix this. In theory, the Fed, when it wants to slow people down from buying things, increases interest rates. But you can't do that when prices are already going up because of both tariffs and energy prices. So the Fed's very worried right now that it's stuck between a rock and a hard place. Prices are going up. Inflation continues to be persistent. And it doesn't have a tool in the box to fix it right now. So not cutting interest rates was a smart move yesterday. But what they actually do if this continues, if prices continue to rise, is a real conundrum for the Fed.

7:31Aya Batrawy:Well, and of course, we're going to have to still be watching these days for the impact of Iran attacking the largest LNG facility in Qatar. So we'll have you back. Ali Velshi, MSNOW host and chief data reporter. Thank you so much.

7:43Cristiana Mesquita:My pleasure, Indira. Attacks on oil and gas infrastructure across the Middle East could affect the price of energy and all sorts of goods, as we were just hearing. But maybe nowhere in the world is facing an energy crisis more acute than Cuba. In just a minute, we'll get a glimpse of life on the island under an American blockade.

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8:47Cristiana Mesquita:President Trump this week claimed he can do anything he wants with Cuba, including take it. Cuba has been under an American embargo pretty much since Fidel Castro's 1950 1959 revolution. Today, Cubans are suffering from shortages of food, fuel, and electricity. An economic crisis made worse in January when the U.S. started blocking shipments of oil from Venezuela. We wanted to hear what things are like for average Cubans, so we called up AP editor Christiana Mesquita in Havana. She told Indira, the latest blockade has affected every aspect of life on the island.

9:24Aya Batrawy:Well, the impact has been tremendous. There hasn't been any oil in this island for the past three months. So what we have is public transportation coming to a halt and people having to walk or ride bicycles to go to work or to go shopping or whatever they need to We see trash piling up on street corners because the trucks don't have gas to collect it. We saw yet another blackout, another power outage earlier this week that left millions without electricity. So hospitals, even though they are making an effort to keep the hospitals running, thousands of surgeries had to be postponed. So the situation is pretty dire, you know, even for Cuban standards.

10:24Aya Batrawy:This takes it to another level for sure. Wow. And of course, we know that Cuba has been under pressure for more than half a century from the United States. You know, its economy has chugged along, but with a lot of trouble. Now we hear about people making wood fires to heat water. Cubans are protesting on the streets, banging pots and pans in the middle of the night. Tell us who are Cubans protesting against, against their own government or against Washington's actions by adding this oil embargo? though. It's mostly mothers and women banging tents and pots during the blackout. And that was more a protest against the general situation, the economic crisis on the island.

11:14Aya Batrawy:I wouldn't say that it was a protest against the Cuban government, with the exception of the one we had in a place called Morón, where a protest that is started exactly the same escalated to people actually trying to set fire to the offices of the Communist Party. Are Cubans worried that Trump is going to come and remove their leader, the president Miguel Diaz-Canel, as he did in Venezuela, or would they welcome some kind of U.S. intervention? Well, mixed feelings there. And the last 24 hours, we've been out on the streets talking to people. And we spoke to a woman called Matilde Vissoso.

12:08Aya Batrawy:And she said that if Trump is coming to Cuba, means that she will be able to go to a shop and buy food. Then he's welcome. She would be glad to see Diaz Canel go. Later on, we spoke to a man, actually a doctor, Jose Garcia.

12:33Aya Batrawy:And he said that here in Cuba, he does not believe anyone is going to come in and that the Cuban people will decide their own future. So different opinions there. But I would say that the pervasive mood is of apprehension and anxiety. So the Trump administration is demanding changes to the government, including that Cuban President Miguel Diaz-Canel step down. U.S. Secretary of State Marco Rubio, who's Cuban-American, recently had talks with the grandson of Fidel Castro's brother, Raul Castro, who's seen as the ultimate power broker in the country. But how likely is it that there could be a negotiated exit for the Cuban president that would satisfy both Washington and Havana?

13:21Aya Batrawy:It's hard to say. I mean, there are so many issues. For one thing, you know, they talk about Miguel Diaz-Canel, but Raul Castro is still a very important power broker in Cuba. So the top U.S. diplomat based in Havana, Mike Hammer, recently predicted in a speech he gave in Miami that Cuba's, quote, dictatorship will end this year. What do you think lies ahead? Well, he probably knows better than I do. And I've heard the same from other experts and analysts I've been talking to. Nobody really expects anything as grandiose as, you know, the kidnapping of Diaz-Canel. But they are going to carry on these negotiations for as long as they possibly can.

14:15Aya Batrawy:But I don't think it goes much farther than this year. Cristiana Mesquita is an editor for the Associated Press based in Havana. Thank you so much for joining us, Cristiana. Thank you, Indira.

14:32Cristiana Mesquita:Coming up, some smaller airports say they might have to scale back schedules or even close if the partial government shutdown drags on much longer. TSA workers are calling in sick rather than show up for work without pay. Some are quitting or retiring. After the break, Indira speaks with OneWorker and union leader. Stick around.

15:18Cristiana Mesquita:with Babbel today. Get up to 55 % off your Babbel subscription right now at babbel.com slash NPR, spelled B-A-B-B-E-L dot com slash NPR. Rules and restrictions may apply.

15:35Aya Batrawy:The Department of Homeland Security is under a partial funding freeze as Democrats and Congress demand reforms to immigration enforcement. The partial shutdown means workers in a different part of homeland security, the TSA officers responsible for airport security, have now gone more than a month without pay. Airport security lines are still operating, but TSA says more than 30 percent of their agents at three major airports in Houston, Atlanta, and New Orleans stayed home on Tuesday. TSA workers say they can't afford to continue working without pay, and federal officials warn that if the freeze drags on, smaller airports could be forced to shut down.

16:13Aya Batrawy:Let's check in with Christine Vittel. She's a TSA officer at Chicago O 'Hare International Airport and Executive Vice President of the Union representing airport workers in Illinois and Wisconsin. Welcome, Christine. Hi, how are you? So O 'Hare is one of the busiest airports in the country. What are you seeing now in terms of staffing and wait times and how different does it feel compared to before the shutdown? There hasn't been tremendous wait times at this point, but I can almost guarantee that, you know, if it lasts much longer, it will build up. There are so many checkpoints, but we checked in yesterday with staffing at O 'Hare and our Midway airports in Milwaukee, and so far their wait times are not affected as bad, but it's getting there.

16:57Aya Batrawy:So we're seeing reports of high numbers of agents calling out in many airports. What's driving officers to stay home? Officers can't get to work. You know, they don't have gas money, you know, and they don't have money for anything, if they can find another job, they are doing it, you know, supplement the loss of pay. And some others cannot because, you know, ones with little ones and stuff like that, they can't even pay for babysitting. So, Christine, how is it affecting you personally? Are you seeing an impact on your own family's financial situation? Oh, absolutely. It's only my income. So, you know, I was able to pay everything up until, you know, April 1st, starting April 1st.

17:37Aya Batrawy:I don't know what I'm going to do. I mean, I do have family I could try and lean on, but it's also bad for me because I feel at my age of being with TSA going on 24 years that I should not have to borrow money from a family member just to pay my bills. I mean, why should I have to do that? Beyond the impact that you have seen on the individual workers who We're obviously suffering, getting evicted, not able to pay for gas. What about the larger effect on the country? How is this affecting safety and security at our airports? Should we be worried to fly? No, I don't think you should be worried to fly because, you know, officers are still coming in and they're still doing their job.

18:22Aya Batrawy:They took an oath and they are still, you know, following their protocol and still doing their job. Their main priority is to keep the airway safe. You know, they're not going to stop doing that. These officers are dedicated. How long do you see this lasting and how long are TSA workers willing to work without getting paychecks? How long this is going to last? I could tell you that we're hoping, every one of us are hoping before March 28th they come to some type of agreement. Because I could tell you if we miss another paycheck, it will affect the majority of the officers. Two full paychecks is unacceptable.

19:00Aya Batrawy:And with Congress and senators going on their spring break from March 28th to April 12th will really affect the officers because then we know there'll be no voting or no decision made for them two weeks. So what do you want lawmakers and the public who are concerned about harsh immigration tactics and the killing of U.S. citizens by ICE, what do you want them to understand about how TSA workers are being affected by this partial shutdown of the DHS? We should not be held hostage. Our pay should not be held hostage. We are coming in and doing our job. We've been, what, an agency going on 25 years.