Iran launches missiles at US airbase
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This is Andrew Peach with World Business Report from the BBC. Good to have your company. Iran launches missiles at a key US airbase in Qatar in response to the US attacks on its nuclear sites. In a moment, we'll look at the impact on aviation, on shipping, and hear what the markets seem to think is going to happen next.

Later, China's dominance in electric vehicles. Chinese are thinking about a future where they manufacture just about every single car for the world. And the trend in India for super-fast deliveries. It takes five to seven minutes for a two-kilometre delivery, and the pressure to make it fast puts our lives at risk.

First, the US Department of Defence has confirmed that Iran fired short and medium-range ballistic missiles at its base in Qatar. Donald Trump, who was actually in a security briefing with senior US officials when it happened, posted on social media to say Iran's response had been very weak. He went on to thank Tehran for giving the US early notice...

and said the warning made it possible for no lives to be lost. The strikes were audible from the streets of Doha, lots of people recording footage on their mobile phones.

Soon after Iran confirmed it and launched the strikes, this was the announcement from Colonel Iman Tajik of the Iranian Revolutionary Guard. The message of the decisive action by the sons of the nation in the armed forces is clear and direct to the White House and its allies.

The Islamic Republic of Iran, relying on Almighty God and the steadfast support of its devout and proud people, will not leave any act of aggression against its territorial integrity, sovereignty or national security unanswered.

under any circumstances. Well, the rising tensions have led to Qatar, Bahrain, Kuwait, Saudi Arabia and Jordan all closing airspace. Let's talk to Anita Menderata, aviation consultant, advisor to the UN Secretary General. Anita, thank you very much indeed for being with us on World Business Report.

Obviously, the Gulf is a crucial flight hub. So closing down this airspace causes all sorts of issues. Talk us through what it means.

Your use of the word hub, Andrew, is very important because when we look at the GCC, the Gulf region itself, it's not simply people and cargo traveling into the region. It's traveling through the region. So as an example, for instance, Doha Airport, 77% of the people who travel through Doha Airport are flying in transit. They're not actually going to Doha.

So the disruption today caused ultimately over 500 flights to be impacted around the region itself. Doha had over 100 diversions. And we're looking at about 3,000 cancellations per day if this continues across 20 airlines. So there's no geographic limitation to the airlines that are being impacted. It's global airlines reaching global routes.

and global passengers and cargo that are getting caught literally in the crossfire. So in terms of people, first of all, that's a huge number of journeys disrupted. I suppose we're ticking into sort of airlines having to compensate for not getting people where they're supposed to be, people having additional expenditure. And then if we look on a day or two, people starting to cancel trips because they think, well, who knows what's going to happen?

You're absolutely right. And if we take those one by one, the issue of duty of care, as we saw quite honestly here at Heathrow when the airport shut down for a day, the duty of care is an expense that is absorbed by the airlines. Because ultimately, if a flight is disrupted, if it's diverted, if it's cancelled, it's the airlines that need to step in and take care of passengers.

And we can look at this at a very financial level, at a very technical level. But I like putting it in the context of unaccompanied minors. If there's an eight-year-old child that's an unaccompanied minor traveling from point A to point B and the flight is diverted, whatever the situation might be, imagine the trauma the child goes through, not to mention the parents.

Who takes care of that individual? So we're looking at, from a duty of care perspective, a minimum of £5 million per day for duty of care to the airlines. And that's at a starting point because that doesn't even take into account premium passengers that have higher costs for hotels, for the logistical support, for food and beverage services.

Plus you have the crews that are being put into locations they're not supposed to be and aircraft. So it's complete and utter confusion that the airlines are used to dealing with. But the human factor can't be taken out of that mix. Sorry, go ahead. I was just saying if it costs the airlines in the end, it costs us because we're going to have to pay for it as passengers at some point.

Indeed, in some point, and quite honestly, as shoppers, because in the bellies of those aircraft is cargo. And if you look at Qatar Airways, which is based in Doha, it's ultimately the second largest cargo shipment company in the world after FedEx.

So it's looking at the cost to cargo disruptions, which is more supply chain disruption, which is going to be more time and more cost. And ultimately, as you're saying, it is the passenger and it is the shopper who's going to pay the extra in either waiting or increased fares. And obviously, we have other bits of airspace closed as well, particularly I'm thinking about the conflict in

in Ukraine. So how difficult does that make it to get anywhere if you're trying to operate a long-haul flight?

There are many airlines, Andrew, that are just simply deciding we're going to ground the aircraft. Because exactly as you're saying, Russia and Ukraine has been blocked off because of conflict now for several years. Plus, we have the conflict in Gaza and Israel. That's also had air space limitations. And now on top of this, we have the Iran-Qatar zone. So when we look at aircraft, they either have to divert, which is increased fuel and increased time.

either send the aircraft back or they simply don't leave at all. So it is extremely difficult now for flights to be able to go into the region and through the region. And that's why I emphasize so many of these aircraft are not necessarily leaving people in the region. They're in transit.

And those transit corridors, major corridors operated by Qatar Airways and Qatar, by Emirates, for instance, in the UAE, when you block those corridors, those hubs shut down and they shut down the ecosystem far beyond the region itself. And I'm trying to think of the logistics, finally, of trying to run an airline amid all of this. We don't actually know what's going to happen in the next few days in terms of the

conflict in terms of the response of your customers in all of this. It's like a logistical nightmare because aviation is that on a good day, right? Indeed. And that's why the leaders of airlines, airports, air traffic controls are masters. They really are. They combine engineering and artistry in one. And thankfully, they're also a very strong community of leaders that connect as an ecosystem community.

Because ultimately, if the airlines are not functioning, airports are impacted, air traffic control, every link in the chain relies on the other. So we have very strong, very capable people who very sadly are getting used to operating in crisis because that's the world we live in now. Nita, thank you very much indeed for your wisdom. From aviation to shipping and all the focus on the Strait of Hormuz through which so much of the world's oil is shipped.

Iran's parliament had actually voted to close it. And then we saw supertankers making U-turns, but that was all before the strikes on Qatar. It's now unclear as to whether there'll be any attempt to disrupt the Strait of Hormuz. Let's talk to Captain John Conrad, shipping expert and author on this. John, before we talk about the impact of all this, just give us the geography of the Strait of Hormuz and why it's so important.

Thank you for having me. The Strait of Hormuz is about a 90-mile stretch that links the Persian Gulf into the Indian Ocean, and it goes right past Iran's shoreline. You know, Iran has most of the northern shore of the Persian Gulf, but its ships have to not only get through this 90 miles, but it's a large U-turn where they have to, you know,

tight waters that they sometimes have to slow down in. Okay, let's talk about what the impact would be if Iran saw through this idea of blocking it, of stopping oil and other goods being transported through the strait. What would that do?

Well, first I want to say easier said than done. Iran has challenged this, has given this idea, has threatened to close the Straits of Hormuz many times before. And they actually launched mine layers in the late 80s. One of them hit a U.S. Navy ship, the Samuel Roberts in 1988.

And they were attacking U.S. flagged oil tankers back then, but they were not able to actually close the strait. If they did, it would be disastrous for the world economy. About 20 to 25 percent of the world oil goes through there and also about 20 percent of natural gas. So you're talking higher energy prices everywhere. You're talking about higher energy for the factories. But there are knock on effects here.

We saw in the Red Sea where the Houthis have slowed down shipping in the Red Sea. Most of Western world's shipping has gone around Africa. Well, the way they're able to do that is that China is producing a large number of new container ships to help with that surge traffic.

But the International Maritime Organization there in London, the UN body, has made it very difficult because of these climate change initiatives to build new tankers. So what we have is what we have. We don't have much spare capacity. If those tankers have to go somewhere else for oil, there's going to be a shortage of oil tankers and it's going to make the problem much worse. And finally, the LNG gas, that is a major input into fertilizer. So now you have the potentials

And final thought, John, that's the potential impact of actually disrupting the shipping, of course, as an impact already of just the expectation that that could happen.

Right. Like I said before, it is very unlikely that Iran is able to close these straits. One thing about straits is they would have to bring all of their mines into that region. They'd have to bring their anti-ship missiles and their drones. They have very capable drones, as we have seen, because they're supplying Russia in the Russia-Ukraine war. But to concentrate it on that region is difficult because of the spy satellites the U.S. and Israel have.

So likely, if someone saw them loading the ships with mines, that would show up on radar and probably launch an attack. They do have some submarines with mines on them, so it is a possibility, but it seems like an unlikely outcome at this thing. What's more likely is what the Houthis did, stretching that attack along the entire coast of Red Sea. Iran has a long coast, so...

So instead of shutting down the strait, they could start harassing ships throughout the Persian Gulf. And that is going to cause insurance, which is, you know, really centered around the London insurance market where the maritime insurance is to skyrocket. And then it makes it very economically unfeasible to move a lot of these goods.

That plus we are a lot more aware as a society of the dangers of seafarers. In the 80s, a lot of seafarers died during the tanker wars, Iran and Iraq. If that happened today, there would be, I think, a lot more outreach and companies like Frontline, which had a ship collide with one of these shadow tankers bringing oil from Iran to Iraq.

China, the CEO stepped up and they said, if this gets worse, we're not going to put those sailors at risk like we did in the 80s. John, thank you very much indeed. Now live to Peter Jankowskis to have a look at the impact of all this on the markets. Peter, first of all, let's look at oil, which has been up and down all over the place. What's the deal with it now?

It actually fell quite sharply during today's trading, was down about 8%, basically returning to levels that were seen just before Israeli forces attacked Iran more than a week ago.

OK, and just talk us through what's going on with the oil price there. It looks to me as though the markets have concluded that actually maybe we're not going to see any more conflict or any more drama in the region, at least right now.

Well, I, I think it could be that, uh, it could also simply be, you know, a reflection of how degraded Iran's capabilities are that even if they, they wanted to move forward and it, it certainly was just their parliament that said that you still have to get to their ruling council, uh, to make a decision. But even if the decision was to move forward, um, you know, Israel has demonstrated they have total command of the skies. Uh,

And it's likely that any efforts made by Iran would be turned around fairly quickly. OK. And impact on gas prices as well? Because, of course, there's a whole ripple effect into other sectors.

Um, actually, I was somewhat surprised. I expected on the initial news of the bombing that we'd see oil spikes or gasoline price spikes here in my area. But there's been very little movement at all. So it's it's most people I think we're discounting already that there would be very limited fallout from from all of this.

And I mean, it is the job of markets to predict what's going to happen in a situation like this where no one knows what's going to happen. That's the question everyone's asking. But the best indication that the people who are moving the markets are giving is what would you say, Peter?

At this point, they are waiting for some evidence of a negative movement before they take an action on prices. They've seen several false starts in this area. And rather than listen to all the doom and gloom pronouncements, they're waiting to see an actual strong negative outcome to come. And so far, we haven't seen it.

OK. And just one other story I wanted to ask you about, Peter, while I've got you, and that's about Truth Social, Donald Trump's social media platform, which has been in action in the last few hours. Once more for him to express his thoughts about what's happening in the Middle East. What is this buying back of hundreds of millions of dollars worth of shares? Why is that going on?

Well, typically that's done to try to encourage people to recognize that the stock is undervalued. In this case, the stock rallied basically 100% after it was introduced. It's basically given back all of those gains simultaneously.

So the management is trying to signal that they think the company's a good buy by moving forward. And it is hundreds of millions of dollars and represents about 8% of the outstanding shares in the marketplace. So potentially a significant move. Overall, the market,

I suppose it might have been bigger news were it not for everything else going on, but then the president also would have known that.

Yes, that's true. That's true. So I doubt that he's coordinating as closely as some people suspect. His ownership is held in a blind trust.

So technically, he should not have insight into those sorts of things or direct control over them. But, you know, I think overall, he was taking the actions that were necessary, that he felt were necessary for the country as a whole. Peter, thank you very much. Thank you.

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Indeed. This is World Business Report with Andrew Peach here on the BBC World Service. Now, Argentina has published economic growth figures today for the first quarter. Its economy is expanding by 5.8%. So how has the growth that's proving so elusive elsewhere been achieved? Luis Aguero is Professor of Economics at Belgrano University. I asked him if he was surprised by the figures.

I don't think they surprised me. We were expecting a certain rebound on the economy. 5.8% of growth is strong for any country, but Argentina has been into a depression for the last couple of years. So the Argentine economy is recovering from that depression.

We are not still growing from the previous moment from this depression that started to be as a recession two years ago. Okay, so in a way it's off the back of disappointing figures in the past, but does this show that...

Javier Millet is on the right track? I think it is. First, because we have to understand that the economy had many imbalances when Javier Millet became president. We had many subsidies. The tax level was very high. The investment level was very low. Inflation reached over 200% in 2023. So,

very strong adjustments were needed in the economy. So this led to a worsening of the economic activity, the recession became a depression, and then things got a little more stable. The inflation declined. We had a very good number last month that inflation was below the 2% level per month.

So we are back on track to being a normal economy, I hope. So this time, even though when we compare the economy of Argentina from 2023 or 2022 to 2025, we see no economic growth. Yes, we are in a better position to face what is coming with a government that has achieved

fiscal surplus and with a strong currency with much better investment environment. A lot of countries, a lot of governments will be looking enviously at these kind of numbers. Has Malay managed to achieve this without huge pain?

No. I think the pain has been quite important for the population. But Millet got elected and people elected Millet when he promised that we would have

have to go through these tough moments. So it was a very particular campaign where he promised these tough adjustments to the economy that people were going to suffer, but that in the midterm were going to be better. We start to feel this in a way from a macroeconomic point of view. I mean,

As I said, inflation reduced to below the 2% per month level and economic activity is recovering. But yet we have many problems regarding the increase of unemployment, the lack of

creation of jobs, but we still have many bright spots, I would say, as, for example, the growth in the production of fuels, especially oil and gas, that are increasing quite fast and are becoming a very important part of the Argentine economy. And what would you expect to happen next? Are these kind of numbers sustainable?

I think the 5.8% that we have seen today, it is not going to continue in the long run. Probably we will see a decline because we will have to compare the growth of, say, the third or fourth quarter of this year to the growth we had in the third or fourth quarter of 2024 when the economy was starting to stabilize itself. So the numbers are going to be much less impressive today

But yes, I hope that in the midterm, in the long run, Argentina can achieve a decent rate of growth and based on the agricultural production, the energy production and then a restart of private consumption that has been quite hit by this depression. Luis Aguero from Belgrano University.

The boss of a leading Chinese EV maker has told us there's been tremendous interest from customers since they launched in the UK and Europe. Brian Gu says he hopes Xpeng's cars will help people make the switch. In the West, still a lot of suspicion about what Chinese dominance in this market will mean. Here's our transport correspondent, Nick Marsh.

This is a battery swapping station in Shanghai. There are thousands of them for the city's legions of electric vehicles. You simply drive in and the machines do the rest. In a matter of minutes, your flat battery is taken out and replaced with a fully charged new one. It's state-of-the-art technology for less than the price of a full tank. It's very convenient to change batteries.

I've had my eye on an EV for a while, this school teacher tells us. She says all her friends and family drive EVs. Even the southern city of Guangzhou, known for its polluting factories, is today a sea of green number plates. When I was there, the roar of rush hour had been reduced to a gentle hum. So green means it's an EV and blue means that it's not an EV. Now we have green here.

Another green behind, an electric moped. Here's another green one here. The point is that for most countries, EV is seen as the future of driving. But for China, the future has arrived. It's here now. None of this is an accident. For the past two decades, China's been on a mission to dominate the technologies of tomorrow, and it's thrown the full weight of its economy into it.

You've got to think completely differently when we step into China because there's subsidies in every possible form. Michael Dunn is an auto industry analyst who spent two decades in Asia. What we're facing is this thing called state capitalism, where the government is actively working hand in hand with companies to say auto industry, electrics.

Goal is to dominate it. Here's how we're going to get it done. What other resources do you need? He calls it state capitalism. Western countries call it unfair. The truth is that they're worried.

Today, seven of the world's top 10 EV producers are Chinese, and many of them are recent startups like XPeng. I met with their president, Brian Gu, in Guangzhou. We are selling well in Europe. We just launched in UK in March. We see tremendous interest in our products.

After barely 10 years, Xpeng's fought off fierce competition within China. And now it's ready to go international. It is traditionally a stigma attached to some Chinese products. But I would say probably it's more related to older generation of Chinese products. We actually see a lot of encouraging signs, European and UK customers seeing China can produce Xpeng.

As I was given a tour of the showroom, it felt more like being in Silicon Valley rather than China's old industrial heartland. After the showroom, I was invited on a test drive of their latest model. Okay.

Their newest car has voice activation, an in-built entertainment system. This is video streaming. Correct. It's also got genuinely impressive self-driving capability. The car's just slowed down by itself. The total price for this car...

$20,000. It seems that China has made luxury mainstream. Here's Michael Dunn again. "Chinese are thinking about a future where they manufacture just about every single car for the world. They're looking around saying anybody can do it better than us? Yeah, we're going to pretty much build every car in the world, okay?"

Now, in a world that's scrambling to meet climate targets, this might be considered great news. But there's politics at stake too. And instead of thanking China, countries are slapping tariffs on their EVs. It's a desperate attempt to try and buy some time and catch up in the green tech race. But the way things are going, that may already be too late.

Our transport correspondent, Nick Marsh, reporting from China. There's more about today's global business stories at bbc.com slash news. From me, Andrew Peach, and the team here on World Business Report, thanks for being with us on the BBC World Service.