Let me get this strait: the Iran-war escalation risk

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0:38The Economist.

0:45Hello and welcome to The Intelligence from The Economist. I'm Jason Palmer.

0:49Rosie Blau: And I'm Rosie Bloor. Every weekday, we provide a fresh perspective on the events shaping your world.

1:00In the realm of humanoid robots, China seems to be making huge progress. They're even showing up at state-sponsored events. The question is whether they can get past the bit-of-fun stage and into the real-world jobs they should be suited to do.

1:17Rosie Blau: And the PowerNap has always remained a little elusive to me. How long, how useful, and if you're in the office, where to do it. Today, our correspondent guides us gently through the art and science of the daytime sleep.

1:36First up, though.

1:45Donald Trump needs a hand. As America and Israel continue bombing hundreds of Iranian targets, Iran is firing back at Israel and at Gulf states, targets, military and civilian. But the real focus isn't what's on land. It's on the water of a narrow strait through which about 15 % of the world's oil is shipped, or was, until Iran's threats caused a de facto closure. Mr. Trump wants badly to open it back up. He says he's in talks with several unnamed governments about help with naval escorts through the strait. Those who are saying anything, like Australia and Japan, are saying, nope, not us. In one of his signature pronouncements, both vague and sinister, Mr.

2:31Trump most recently said it would be very bad for the future of NATO if the alliance didn't help out. This impasse over the impassable could make for a far wider conflict.

2:44Jason Palmer: In many ways, this feels like a war over the Strait of Hormuz at this point. Greg Karlstrom is a Middle East correspondent for The Economist. The Trump administration, by all indications, did not expect that the strait was going to shut the way it did. It's scrambling to come up with a response, but it doesn't have any easy options to reopen the strait. And so this dilemma, this standoff over the waterway may lead the president to consider some very risky escalation elsewhere in the Gulf. But do you have any sense as to why the Trump administration did not expect that to happen in Hormuz? It's a strategic vulnerability, not unlike the Red Sea Strait, attacked by the Houthis for years now with similar kinds of market conniptions.

3:31Jason Palmer: It's a very clear vulnerability, and it's one that planners at the Pentagon have been thinking about for decades. But I think the Trump administration just didn't take the possibility seriously. They thought this war was going to end quicker than it did. They were imagining perhaps a Venezuela-like scenario or perhaps a situation where the regime simply collapsed. We saw mass protests and popular unrest and none of that happened. And so I think it's just the case of the political folks in the administration not giving credence to the warnings that they received from the Pentagon, from military planners who did expect this as a possible scenario.

4:10So talk me through the options here, both for America trying to change what is now the status quo and Iran's options?

4:18Jason Palmer: So when we talk about the strait being closed, we're not talking about Iranian naval ships imposing a physical blockade, cutting off the waterway. What's happened is Iran has threatened vessels, warned them not to transit the strait, and it's carried out a number of attacks on ships both in the strait and elsewhere in the Persian Gulf using missiles, drones. It hasn't carried out a huge number of those attacks, but just the threat of being attacked is enough to scare off shippers and insurers. And that's one problem for America when it tries to wrench open the strait, is that it just doesn't take much.

4:58Jason Palmer: If Iran can continue carrying out an attack every week or something, that is probably enough to maintain a de facto closure of the strait. That's one problem for America. The other is just simply the geography of it. The strait is only 54 kilometers wide at its narrowest point. It's very mountainous terrain on the Iranian side. So when you're sending ships through, if Trump manages to stand up these naval escorts that he's been talking about and pressuring other countries to join, if Iran were to try and strike at those convoys, you only have a few seconds to respond. And you hinted darkly at escalation elsewhere.

5:37What do you mean

5:38Jason Palmer: by that? For some reason, Donald Trump has had a fixation for almost half a century with Harg Island, which is a very small wedge of land off Iran's coast in the Persian Gulf that is home to Iran's main oil export terminal. Something like 90 % of its oil exports are processed on Harg Island. And one thing we know about Trump is that the things he was obsessed with in the 1980s tend to still be fixations of his today. And sure enough, over the weekend, he ordered American strikes on Iranian military positions on Khark Island. The oil terminal was not touched, which Trump said was done for reasons of decency.

6:18Jason Palmer: But there's a belief that this may have been the U.S. trying to soften up Iranian military positions on the island in advance of potentially trying to seize it. And how would that go if that is in fact America's plan? I think America could certainly take the island. It's moved a marine force that's trained to do exactly this sort of mission from Japan to the Middle East. But what happens next? American troops would have to hold this very tiny piece of land that is within easy range of missiles and drones fired from the Iranian mainland. And then what do you do with it? Maybe you try to hold it in the hope that you can use it as leverage to pressure the regime into making a deal.

7:00Jason Palmer: You cut off its oil exports, you cut off its main source of hard currency. But the regime has proven very, very stubborn, not just during this war, but in years of negotiations with the United States. And I'm skeptical that they would be willing to cut a deal even if the US sees the island. Meanwhile, oil markets are not going to like this. Trump wants to get oil prices down, but by seizing the island, he may end up at least in the short term doing the opposite. And about the short term and what the rest of the region is doing, what other means do countries have to move oil now that the Strait of Hormuz is pinched?

7:34Jason Palmer: Oil markets would be in a much worse position right now if it wasn't for two partial workarounds that exist in Saudi Arabia and the UAE to bypass the strait. The Saudis have what's known as the East-West Pipeline, which takes oil from where it's produced in the eastern part of the kingdom to its ports on the Red Sea in the West. It can move about 7 million barrels a day, which is two-thirds of Saudi oil output. And then there's a similar pipeline in the UAE, which connects to the port of Fujairah on the east coast of the Emirates that's outside the Strait of Hormuz. It can move about half of the UAE's 3.6 million barrels a day of production.

8:14Jason Palmer: So it's not a complete solution, but nonetheless, it's allowing some Gulf oil to flow. And so sure enough, we've seen the Iranians over the past few days already begin to step up their efforts to target both oil facilities in Saudi Arabia and the port in the UAE that is working. So whatever workarounds there are, the wisdom here is that Iran is going to try to disrupt those as well. I think it will. If the strategy here for Iran is inflict economic pain on the region and on the world to compel America to stop fighting and to deter it from attacking in the future. If closing Hormuz isn't enough to achieve that goal, then you need to escalate further.

8:58Jason Palmer: So the past few nights, there have been dozens of drones launched at oil facilities in Saudi Arabia. On Saturday, there was an attempted drone strike on that port of Fujero. Iran could try and hit the pipelines themselves. They're narrow targets, but long ones. And then there's also a concern that they might ask the Houthis in Yemen to resume their attacks on commercial shipping. If you look at a map of shipping traffic right now, there are dozens of big tankers redirecting from the area in the Indian Ocean and the Gulf of Oman. They're heading towards the Red Sea to collect oil from that Saudi port that is operational.

9:36Jason Palmer: If the Houthis were to take, I think, even one shot at one of those vessels, it would probably scare many of them off. It would send oil markets into a panic. The consequences of that would be quite severe. And we get closer to the thing that has been hinted at from the start of this war is that it becomes a regional one rather than a U.S.-Israel-Iran war. All of the Gulf states have been pretty clear, either in public or in private, that they regard serious attacks on their oil infrastructure as a red line. The Saudis have said that publicly, that they would get involved in this war themselves if Iran were really to damage their oil infrastructure.

10:14Jason Palmer: And so I think that's the dilemma on both sides here. The Americans are trying to find a way to open the straits and push down oil prices, but they don't have any easy options to do that. Trump is going to consider escalation on Khark Island or elsewhere. The Iranians have managed to disrupt energy markets, but again, they haven't managed to stop the war. and so that might lead them to escalation as well. Both sides, the incentives here are pushing them to widen the conflict. Craig, thanks very much for speaking to us. Thank you, Jason.

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11:44The Spring Festival Gala is an incredibly important event in China. It takes place on the eve of the Chinese New Year. It's a showcase of everything the Chinese government wants people to see. Don Wineland is our China business and finance editor. The centerpiece of this year's event was humanoid robot dancers, and there were several different routines that featured them. There was one where they were brandishing swords and flipping around on stage with actual human dancers alongside them. It was very impressive to watch. The message was very, very clear this year that humanoid robots are the thing to be watching.

12:28so what we're to take from this is that the the chinese government wants to to point out that humanoid robots are very much a thing in china at the moment that's right so in 2025 deliveries of humanoid robots was up by four times over the previous year there's about 14 000 15 000 of them that have been delivered recently i was in a robot rental service company and had the pleasure of chatting with one of these robots. Hello, can you speak English? Yes, I can speak English. How can I assist you today? What do you like to do in your spare time? I enjoy sports like lifting weights and playing with vehicles such as scooters, hoverboards, bicycles, and go-karts.

13:16But tell me about the industry, though, Don. Is this just one superstar state-backed company that's making all these things? So last year, during the Spring Festival Gala, there was one Chinese humanoid robot maker that was featured. It's called Unitree. This year, there were four of them that were able to feature their humanoid robots on stage. There are many, many companies that are actually producing humanoid robots. We think that there's about 100, maybe 120 that are selling these human-looking things. And then there's thousands and thousands of companies that are producing the parts of the robot.

13:54So China's supply chain is really humming right now and delivering up all of the components that need to go into these things. So in that sense, it's a broader business story than just about the companies that are making the finished product. Absolutely. And I have the pleasure of living essentially at the center of this supply chain. So I live in Shanghai. Shanghai itself and many of the surrounding cities are probably the world's most robust supply chain for humanoid robotics. If you look at the number of Western companies that are actually selling robots at this point, there's not very many.

14:26So Tesla is creating this robot called Optimus, and it's shipped an estimated 150 units. And it's also worth pointing out that Optimus sources many, many of its parts from the cities around where I live. I took a trip to the city of Changzhou, which is an hour north of Shanghai by high-speed rail, and went to this specific district called Wujing District. And when you're talking with the companies that are supplying the parts for humanoids, they like to talk about how 90 % of what you need to make one of these humanoids can be sourced just from that district alone. One really interesting thing about what's going on here is if you were to go to these same places, these same manufacturing districts 10 years ago, a lot of these companies already existed, but they were making parts for the EV industry.

15:13And what's happened over the past five years is many of these companies have transitioned to creating parts for humanoid robots. So that's a snapshot of the makers of these things. Who are the buyers? It's not clear who has bought these 14 ,000 or 15 ,000 robots that have been sold in China this year. But it seems like, from what people are saying, that local governments are one of the biggest buyers at this point. But to do what? I mean, so far you've only mentioned sort of dancing, chatting, that these things must have presumably an intended industrial use. One would think so, and that is the goal years from now.

15:53But at this point, they're really only for entertainment purposes. So perhaps a coffee shop might want to rent one and have it greet customers as they walk in. Local governments seem to like to have them walk into events and sometimes do a jump or they can be programmed to dance. But that can't be the final point. There must be a push for these things to do something other than, you know, glitz up your party a bit. Of course. And this is something that analysts and companies are really focused on. They want these humanoids to be working in factories, carrying heavy stuff around, carrying out industrial tasks.

16:35That is what they're really designed to do. But at this point, they don't actually have the data that is necessary to perform these tasks. But how are the companies going to get the data they need without putting the robots in those kinds of situations to gather the data that will ultimately be the training. At this point, about 95 % of the data that companies are using is simulated data. It's not from real activities. These companies need to get their robots into real situations where they're doing real work, not just saying hello to people at coffee shops. But obviously, to get them into factories, they need to be able to do these tasks.

17:14It's a chicken and egg problem. It's what the industry is focused on right now, and it's not really clear exactly how long that is going to take. The prize presumably is big. People are very much geared up for that transition. It's easy to make estimates for industries that are 10, 15 years out. Morgan Stanley, the bank, is saying that there could be a billion robots walking around us by 2050, annual spending of something like$7.5 trillion on this industry. I'm not saying that that's not going to happen, but there are a lot of hiccups in the road that need to be figured out ahead of time. And one advantage that China has on this is that the government can be very, very active in supporting these things, like with the electric vehicles market.

18:02So when the government needs to step in and help out and make sure companies don't just all die off, I think it will be there to do that. Don, thanks very much for joining us. Thank you.

18:30It turns out that trading in your afternoon coffee for a power nap will actually do you a lot better in the afternoons.

18:36Rosie Blau: Harry Taunton you're one of our audience editors and you've been bravely pioneering the idea of sleeping while in the office at The Economist what's going on well coffee is a popular antidote to midday drowsiness but it turns out the science suggests that a nappuccino might be a little better for you so you've been taking the method approach to writing an article then I take my health tips from Winston Churchill so it's said that you know after a good boozy lunch a couple of glasses of bubbly and a measure of brandy. The former British Prime Minister would nip upstairs for an afternoon nap and then he'd be able to work right through to the early hours of the morning.

19:11So I try and take that approach as well as I can.

19:14Rosie Blau: You haven't just been emulating Winston Church but you've been looking at the science of all of this. What are the benefits of a nap? Well absolutely the science suggests that Winston was on to something. We have this natural dip in the circadian rhythm just after lunchtime and modern working life tells you to plough on through but really you should be listening to that feeling and there's a neuroscientist called Matthew Walker who wrote a book called Why We Sleep a Little While Back and just to quote him he said humans are not sleeping the way nature intended. The number of sleep bouts he says, the duration of sleep and when sleep occurs have all been comprehensively distorted by modernity.

19:48There was a landmark study back in 2007 of 23 ,000 Greek adults and they tracked them over about six years and found that those who gave up their afternoon siesta, they had a 37 % increased risk of heart disease. So it goes to show that we're actually meant to have a nap in the afternoon to get us through to that kind of biphasic sleep patterns, something where you'd split your slumber into two sections rather than the traditional way that we all do, where we head on home and we have that seven-hour sleep at night.

20:18Rosie Blau: So I'm a devotee of coffee. What does a nap do that coffee doesn't? Well, there was a study that found that power naps are actually more effective than caffeine at improving alertness and memory in the afternoon. And research published last year suggested that a midday dose could even reverse the effects of a bad night's sleep. But that's not to say that you can just power nap your way through the afternoon. You actually need to have that full seven hours sleep because there are so many more restorative benefits to getting those six sleep cycles rather than just the one power nap. It's a bit like having a healthy snack versus having a full square meal.

20:51You need both.

20:52Rosie Blau: So unfortunately, The Economist, we don't have sleeping pods ready for us. But you're saying it really would be an investment in our physical health and our mental agility if we did? Absolutely. Well, there are some offices, especially in Japan, where they will have a sleep pod ready and raring for the office workers because they recognise that sleeping on a job is not something to be frowned upon, but something that actually will give you more energy to get through your work in the afternoon. There have been studies that have shown that if you take somewhere between a 10 to 30 minute nap in the afternoon, it really improves alertness and mood.

21:25And that's the window that you're looking at somewhere between 10 and 30 minutes. So a sleep cycle is normally about 90 minutes long and at night we'll go through about six of these. The thing with a power nap is that you stick to 10 to 30 minutes because within that 90 minute sleep cycle, it's divided up into light sleep and deep sleep. So the idea with a power nap is that you stay asleep long enough to benefit from that light sleep without going into the deep sleep and waking up feeling worse than when you got to sleep.

21:49Rosie Blau: So the definition of a power nap then is that it's short and sweet, but you do get some sleep. Exactly. So there's a sweet spot that you really want to stay inside with a power nap. And in 1994, NASA came up with this study and they found that a 26-minute power nap improved pilots' physiological awareness and performance. Okay, so we've got 26 minutes, the magic number. When should we sleep? Well, the ideal time frame, they say, is between 1 and 3 p.m., where production of cortisol might be slightly down, that hormone that produces that alert feeling, and the core body temperature might be a little bit lower.

22:24And also when your body's suggesting food, it's taking a little bit more energy to do that. So you'll feel a little bit more inclined to sleep anyway. So it's worth listening to that feeling. If you're starting to nap later than that, towards five, six, that's when it's going to start disrupting your late night sleep. So it's worth, if you're going to do it, do it earlier rather than later.

22:42Rosie Blau: And how do you just fall asleep? I mean, surely you've got to build in some time to get to sleep. Well, some people might find it harder than others just to get straight off to sleep. But there are some benefits to just resting your eyes for 15 minutes. You might not get the full whack, but at least you'll be giving your brain a chance to recharge for those 15 minutes. And is there a benefit to napping every day or is it something you can do kind of once or twice a week? So the idea that you can just have one power nap when you're done, that's not really going to have the same cumulative effect of doing it over time.

23:13It's a bit like working out. You have to do it over time in order to build that muscle. They did a study of healthy American adults and they found that over time these power naps gave them a 37 % lower risk of heart disease. But if you're sleeping for too long, if you start having regular naps over the 60 minute mark, it can actually have some damaging effects on your health. So there's been a study that found that the risk of diabetes and associated cardiovascular trouble went up if you're napping for too long on a regular basis.

23:40Rosie Blau: Harry, thank you so much. Thank you, Rosie.

24:01Rosie Blau: That's all for this episode of The Intelligence. See you back here tomorrow.

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