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Oil Prices Spiked Anew as the War in Iran Continues, IEA to release Oil Reserves; Iranian Women's Football Team Member Returned Home Despite Asylum Offer from Australia. Aired 3-4a ET

Aired March 12, 2026 - 03:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[03:00:00]

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UNKNOWN (voice-over): This is CNN Breaking News.

ROSEMARY CHURCH, CNN ANCHOR: Hello and welcome to our viewers from all around the world, I'm Rosemary Church.

We are following a fresh wave of strikes launched by Tehran as we enter the 13th day of the war with Iran. In Tel Aviv, sirens sounded overnight as flashes and what appeared to be missile interceptions could be seen in the night sky. Gulf states also intercepting a new wave of Iranian drones and missiles.

In Dubai, officials say a drone fell on a building sparking a minor fire. Off the coast of Iraq, Iran claims to have targeted two foreign oil tankers seen ablaze in this dramatic video. At least one person was killed, dozens were rescued.

Following the attack, the head of Iraq's ports company says oil ports have stopped operations. And this comes as oil prices surge past $100 per barrel again during overnight trading. Despite all of this, U.S. President Donald Trump claimed victory in the Iran war, but later said this.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: I think we're in very good shape. The main thing is we have to win this thing, win it quickly, but win it and there are many people, I'm just watching some of the news, most people say it's already been won. It's just a question of when.

When do we stop? We don't want to let it regrow, and ideally we'd like to see somebody in there that knows what they're doing. In other words, they can build a country.

(END VIDEO CLIP)

CHURCH: Paula Hancocks joins us now from Abu Dhabi. Good to see you, Paula. So what is the latest on new strikes across the region?

PAULA HANCOCKS, CNN CORRESPONDENT: Well, Rosemary, they do appear to be expanding into the energy sector more than anything else. It started, Iran said, as U.S. military and political targets. They then said they were going to look at American tech companies.

But certainly what we're seeing the focus on now is the energy infrastructure around the Gulf. Now, three vessels were targeted just in the past day or so. We know that two of them were oil tankers in Iraqi waters, we know that one, as you say, was killed and 38 were rescued in that particular attack.

There was also a fuel depot in Oman that was targeted. Now, we have video from social media that we have geolocated showing the moment when the drone hits this fuel depot in Oman. You can see an explosion and Omani officials are saying it will take some time in order to be able to bring that blaze under control.

Now, we also heard from Iranian state media, Iran, saying that Oman is a friendly country. They called this incident, quote, "highly suspicious" and are investigating at this point. It's not the first time that Oman would have been targeted, but they certainly have been kept out of much of what we have seen across the rest of the Gulf, which is this continuation of missiles, of drones, many of them being intercepted into the Gulf nations.

Overnight here in Abu Dhabi, there were a couple of waves. We saw in Dubai in the global economic area of Creek Harbor, we saw that there was one building which was hit. It's unclear if it was a drone or whether it was debris of a drone, but you can see that caused a fire as well.

So there's absolutely no letup in the Iranian retaliation. If anything, they are reaching further afield and putting more targets on their list. Rosemary.

CHURCH: And Paula, sources are telling CNN that a U.S. tomahawk hit that elementary girls school in Iran due to outdated intel. What more are you learning about this?

HANCOCKS: So this is information that we've heard from two sources who are familiar with this, the findings of the ongoing military investigation. It has not ended at this point, but they believe that there was the U.S. military accidentally targeted this particular elementary school as they were targeting an IRGC compound next door, the Revolutionary Guard compound. Now, they believe that they had outdated intelligence, outdated information, according to these two sources.

[03:05:05]

As in the past, the two, the school and the compound, had been connected. But in recent years, they were separated. Now, this is an attack that killed more than 168 children and 14 teachers, according to state media.

Now, given the information I've just given you, one of our CNN colleagues asked the President about it.

(BEGIN VIDEO CLIP)

KA.I.TLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: As commander- in-chief, do you --

TRUMP: For what?

COLLINS: -- the strike on the school in Iran? A new report says the military investigation has found it was the United States that struck the school.

TRUMP: I don't know about that.

REPORTER: You just suggested that Iran somehow got its hands on a tomahawk and bombed its own elementary school on the first day of the war. But you're the only person in your government saying this. Why are you the only person saying this?

TRUMP: Because I just don't know enough about it. I think it's something that I was told is under investigation. But tomahawks are used by others, as you know.

Numerous other nations have tomahawks. They buy them from us. But I will certainly, whatever the report shows, I'm willing to live with that report.

(END VIDEO CLIP)

HANCOCKS: Increasing questions about that attack on the school. Also, increasing questions about how long this war might last up until this point. The U.S. President has given some fairly inconsistent answers.

Rosemary?

CHURCH: Paula Hancocks, live in Abu Dhabi with that report. Many thanks.

And these are live pictures coming out of Beirut, Lebanon, where Israel is ramping up attacks on Hezbollah. Israel says it's targeting the Iranian-backed militant group with a large-scale wave of strikes on Beirut's suburbs.

New video shows the aftermath of a deadly drone strike on Beirut's seafront. Lebanon's health ministry says at least eight people were killed. And you can see the scale of destruction in Beirut in new photos taken Wednesday following several attacks across the city.

The European Union is giving $115 million in aid to Lebanon as the country faces a humanitarian crisis. Lebanese officials say more than 800,000 people have been internally displaced. CNN's Isobel Yeung has more.

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ISOBEL YEUNG, CNN CORRESPONDENT: Well, it's a heavy night of bombardment here in Lebanon. You can see the smoke behind me. You can really smell the smoke in the air as well. And we've been hearing jets overhead.

This happened as Hezbollah sent a barrage of rockets into Israeli territory. And Israel responded by sending airstrikes, initially about half a dozen airstrikes. And these are some of the heaviest airstrikes that residents say that they've heard and seen so far.

The IDF has also warned individuals in Dahieh and in the southern suburbs to evacuate immediately and not to return.

As we've been moving around Beirut today, we've really seen this whole city has been turned upside down just in the last few days. Hundreds of thousands of people have been displaced over the last week or so. So many people have just had their entire lives turned upside down.

We've seen people out in the streets, sleeping in tents, sleeping in shelters, in schools, in a sports stadium. Literally wherever they can find space today.

And we've heard them saying that, you know, for many of them, this is not the first time that they've been displaced. Many of them were displaced 16 months ago. And now they're absolutely exhausted to be going through this all over again.

Isobel Yeung, CNN, Beirut.

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CHURCH: CNN's Eleni Giokos is in Abu Dhabi tracking oil prices. And, Eleni, what is the latest on the price of oil? And, of course, this decision to release oil reserves in an effort to ease those prices.

ELENI GIOKOS, CNN CORRESPONDENT: Exactly.

Huge moves. I mean, we're talking about an unprecedented decision by the International Energy Agency to collectively release 400 million barrels of oil. These are by the 23 member states.

We're talking about emergency reserves, strategic reserves that these countries hold on to in case there's an energy shock. And, of course, we're seeing one play out in real time. I just want to give you sort of some context on these numbers.

So the 400 million barrels is a significant number, but we've got to focus on what they call the flow rate. So how quickly will they be able to release this oil into the market?

Experts that I've spoken to say that the maximum we're looking at is around 2 million barrels of oil per day. So that could take around seven months to actually get that total number into the market.

I also want to juxtapose that against what we're seeing in terms of losses because of the Strait of Hormuz being completely disrupted. And only a trickle of oil through shadow fleets is getting into the market. So essentially, the 400 million barrels would equate to around 20 days of what we're seeing in terms of losses out of the Strait of Hormuz. [03:10:01]

So this was an effort to try and bring down oil prices. WTI Crude right now is sitting at $92 a barrel, that's up 5.5 percent. And Brent Crude also going higher.

It hasn't laid fears in terms of what we've been seeing overall in the energy markets because experts are looking at the supply constraints. We're looking at perhaps production losses. We're seeing that story out of Salalah in Oman where that oil depot was evacuated.

We also have heard news of another depot in Bahrain that has been set ablaze just this week. We had news here in Abu Dhabi of the Ruwais Energy Complex that was also impacted. So really important to focus on the energy infrastructure that has been targeted.

But I want you to listen to what the IAEA Executive Director Fatih Birol said yesterday in terms of the move that the IAEA has made.

All right. So we don't have that sound bite, but essentially just talking about how unprecedented this entire move is.

What we really need to focus on going forward is how long this conflict is going to last for, how long the Strait of Hormuz is going to be shut down for. And we don't have visibility because there is such mixed messaging, Rosemary, from the White House.

President Trump says, you know, a week or two. Then we're hearing four weeks. We're hearing a few months.

And that's all being factored in in terms of just how much of an energy shock this is.

CHURCH: All right. Our thanks to Eleni Giokos joining us live with that report from Abu Dhabi.

Well, Iran claims it has inflicted painful blows in the latest wave of strikes on Israel. The statement says more than 50 targets were hit in a coordinated attack with Hezbollah on Wednesday. That is happening as Tehran ramps up the use of cluster munitions.

Jeremy Diamond saw firsthand the damage these smaller bomblets can leave behind.

(BEGIN VIDEOTAPE)

JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT (voice-over): Their orange glow streaks across the night sky. Each speck of light, a small bomb carrying up to 11 pounds of explosives and raining down indiscriminately, sometimes in densely populated areas.

They are cluster munitions and Iran is increasingly packing the heads of its ballistic missiles with dozens of them. Aiming to pierce Israel's sophisticated air defenses.

DIAMOND: One of those small bombs struck the roof of this residential building, and you can see the hole is only a few inches wide. And yet this is the kind of destruction that just one of those small bombs can cause, one of multiple impact points from a single missile.

DIAMOND (voice-over): We confirmed nine separate impacts from that one missile. They include this strike on a Tel Aviv car wash that severely wounded one man and another in a neighboring suburb. The impacts are spread out across seven miles of mostly residential neighborhoods, illustrating why using these munitions in populated areas violates international law.

The next day, another cluster missile attack sends bomblets tumbling south of Tel Aviv. At least five impacts scattered across eight miles, one bomb hit a street here. Nearby, two construction workers were killed.

The first fatalities in Israel caused by these weapons.

Israel's military, which has itself deployed cluster munitions in other wars, says about half of Iran's missile attacks used these munitions. Vehicles overturned, shrapnel slicing through anything near the impact.

Iran's missiles are more destructive when equipped with a single large warhead, but the clusters are much tougher to intercept.

TAL INBAR, SR. RESEARCH FELLOW, MISSILE DEFENSE ADVOCACY ALLIANCE: It's a mechanism to bypass active missile defense. In some cases you can hit the target with an arrow or with a third missile, for example, but the bomblets will continue and will get to the target.

DIAMOND (voice-over): The Israeli military does try and intercept these bomblets, expending a costly and finite quantity of interceptors in the process.

DIAMOND: So if there is a strategy here by Iran, that could be it to try and deplete Israel's air defenses, right?

INBAR: We know it. In some cases the solution by Iran is a salvo of a very large quantity of even single warhead ballistic missiles and try to fire and coordinate the launch sites. I think Iran doesn't have the capability at the moment of orchestrating a large barrage of ballistic missiles.

So if Iran wants to cause a lot of damage, even with a small number of ballistic missiles, then submunition missiles.

Missiles with bomblets will be the weapon of choice.

DIAMOND (voice-over): The weapon of choice as Iran pursues a war of attrition, one missile at a time.

Jeremy Diamond, CNN, Tel Aviv.

(END VIDEOTAPE)

[03:15:05] CHURCH: Sources tell CNN the Pentagon estimates the war with Iran cost at least $11 billion in its first six days. That figure was reportedly shared with lawmakers in a private briefing. CNN previously reported the U.S. military used more than $5 billion of munitions in the first two days of the conflict.

The war is funneling away U.S. dollars and attention from President Trump's domestic agenda, with Americans questioning what's ahead.

Well the war with Iran has sent oil prices skyrocketing, now the agency representing dozens of countries is releasing an historic amount of crude reserves. How that might help markets, we'll take a look. That's next.

Plus, we'll look at China's evolving role in this war and new A.I. videos on Chinese social media that are mocking the U.S. and President Trump.

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[03:20:00]

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TOM FLETCHER, U.N. UNDER SECRETARY-GENERAL FOR HUMANITARIAN AFFAIRS: On the Straits of Hormuz, I'm really worried about food costs, energy costs, as you say, fertilizer costs. I'm worried that actually further escalation will damage other supply routes. All of this has a direct impact on our humanitarian supplies, including going to areas of key need in sub-Saharan Africa. But more broadly, it drives up the prices, and so it drives more people into greater need.

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CHURCH: That was the U.N.'s humanitarian aid chief, Tom Fletcher, calling on the U.N. Security Council to take steps to secure supply routes in the Middle East, including the Strait of Hormuz. The critical waterway is used for the shipment of all goods, not just oil.

Fletcher wants all parties in the war with Iran to grant humanitarian exemptions for ships traveling through the Strait. And he warns that the Middle East is in a moment of grave peril and causing humanitarian needs to rise faster than responders can keep up with.

Well, traffic in the Strait of Hormuz has largely come to a halt since the war began, and it's having a major impact on global trade. Saudi Arabia is redirecting trade to ports in the Red Sea so ships can avoid the vital Strait of Hormuz amid attacks from Iran.

And G7 nations are considering escorting ships through the region. Iran is taking advantage of its dominance in the Strait by loading more crude onto tankers than before the war started.

Data from the U.N. shows how the number of ships transiting through the Strait of Hormuz daily has plummeted since the war started, 20 percent of the world's oil typically travels through this waterway. China, India, Korea and Japan are some of the top consumers of oil and gas from the region and are particularly vulnerable to disruptions. Pakistan and Bangladesh are now raising prices for gasoline and this is all taking a significant toll on ordinary people.

(BEGIN VIDEO CLIP)

UNKNOWN (through translator): I'm a professional rider. I ride my bike every day. Currently, because of the oil shortage, my daily income is reduced. Furthermore, the limit of two liters of oil per day, because of that, we lose two to three working hours.

UNKNOWN (through translator): I've been stuck in this traffic, this queue, for two and a half hours to get petrol on my company bike.

(END VIDEO CLIP)

CHURCH: Let's bring in Neil Beveridge, he is a senior oil and gas analyst at Bernstein. He joins me live this hour from Hong Kong. Good to have you with us.

NEIL BEVERIDGE, SR. OIL AND GAS ANALYST, BERNSTEIN: Good afternoon.

CHURCH: So as Iran now wages war on the global economy, two oil tankers are ablaze in the Persian Gulf and other tankers are stuck in the Strait of Hormuz under fear of attack. And now 400 million barrels of reserves will be released into the global market in an effort to reduce gas prices.

It's a short-term solution, though, isn't it? So what more needs to be done to address this critical issue?

BEVERIDGE: Well, I don't think the release of the strategic reserve is going to work. As you said, it's 400 million barrels. We've lost about 20 million barrels a day, so that's at face value 20 days of supply that that SPR release is going to bring.

But there are critical constraints on how quickly you can flow that oil out. And we think that you will be able to access about maybe two to four million barrels a day.

It won't start immediately, but it will start in one to two weeks. Two to four million barrels a day is nowhere near the 20 million barrels a day that we've lost from the market.

So I think this is a confidence-building measure, I think if you look at history, you see that it rarely is successful. And I think the only thing that's really going to bring about a decline in oil prices is if we see an end to the conflict and a reopening of the Straits of Hormuz.

CHURCH: Yes, I mean, that is the hope, isn't it? But what's been the impact on Asian countries specifically, given some rely heavily on Iran for oil and gas supplies? BEVERIDGE: Yes, well, it's not just Iran. I mean, 90 percent of

Iranian crude was going to China before the conflict. But, you know, something like 85 percent of the LNG and crude that was flowing through the Straits of Hormuz was going to Asia.

So Asia has been particularly, you know, hard hit.

[03:25:02]

And some of the countries closest to the Middle East, Pakistan, Iran, Bangladesh, have been very dependent on oil and gas from the Middle East. I mean, Pakistan, virtually all the LNG imports come from the Middle East. And so that has a critical impact on power supply, particularly in southern Pakistan.

India is also a huge importer of oil and LNG from the Middle East. And, you know, those, you know, LNG supplies and the lack of LNG is really bringing about shortages, you know, for the petrochemical sector and for power. For oil as well, you know, we're seeing curbs on pricing.

And if you go further east into Japan and Korea, something like 80 percent of imports are coming through the Straits of Hormuz. So, you know, it's really a critical risk for these countries. I think for Japan, they do have quite a significant stockpile of oil.

But, you know, as this conflict, you know, goes on, I think the risks are going to be, you know, higher and higher. And, of course, the one country I haven't mentioned, China, which is the biggest buyer of oil and LNG, you know, from the Middle East. It's more diversified, it's built up stockpiles.

So it's probably in a better position, you know, to weather this storm. But again, the longer it goes on, you know, the more restrictions you're going to see, you know, coming into the market.

CHURCH: And, of course, Iran is warning that the price of oil could reach $200 a barrel. What are the likely global economic consequences if that happens?

BEVERIDGE: Well, you know, I think if we do see a prolonged shutdown of the Straits of Hormuz, I think that's likely we're going to see $150, $200 a barrel. I mean, we're 13 days into the conflict and we've seen prices already get to $120 a barrel.

If you look at, you know, the past, you'll see that, you know, when you get oil above, let's say, 5 percent of global GDP or around $150 a barrel, the chances of inducing an energy-led recession, you know, become very high. So if we saw prolonged pricing for, let's say, $150 a barrel for, let's say, a month or so, I think there's a very high chance that it would cause, you know, a significant economic downturn. A recession, you know, such as we saw in 2008, you know, is not impossible.

And so the longer this goes on, I think the higher the chances that that could happen. CHURCH: Neil Beveridge, thanks so much for joining us. I appreciate

it.

We are now learning how much the war with Iran is costing the Middle East travel industry. We will get a live report from Doha after a short break. Stay with us.

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[03:30:00]

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CHURCH: Welcome back to "CNN Newsroom." I'm Rosemary Church. I want to check today's top stories for you.

President Donald Trump claims the U.S. has won the war with Iran. His comment came during a rally in Kentucky and as the 13th day of the conflict is marked by a new wave of strikes. President Trump later said it's now a question of, quote, "when do we stop?"

Two sources tell CNN the U.S. military accidentally struck an Iranian elementary school, likely due to outdated intelligence about a nearby naval base. Those sources were briefed on the preliminary findings of an ongoing military investigation. Iranian state media says the attack in Manab on the first day of the war killed at least 168 children and 14 teachers.

Israel says it's launching a large-scale wave of strikes on Beirut's suburbs, urging residents to evacuate. The Israeli military says it's targeting Hezbollah infrastructure. It comes after Israel fended off dozens of rockets launched by the Iranian-backed militant group.

Emergency crews are battling a fire at the port of Salalah in Amman. Take a look at this video.

It appears to show an Iranian Shahed drone hitting a fuel storage tank at the port, causing a massive explosion. Iran's armed forces are calling the incident highly suspicious, saying Iran is investigating, that is according to Iranian state media. And it comes as other Gulf nations say they're fending off a new wave of Iranian drones and missiles.

So let's turn to CNN producer Antoinette Radford, she joins us live now from Doha, Qatar. Good to see you again, Antoinette. So what is the latest on these strikes across the Gulf region?

ANTOINETTE RADFORD, CNN PRODUCER: So, Rosemary, as we near the two- mark point of this ongoing war, we're seeing a shift from Iran towards targeting energy infrastructure, particularly here in the Persian Gulf.

Overnight, two oil tankers were hit in Iraqi borders off the Persian Gulf. Now, Iran has claimed responsibility for that attack, it said it used underwater drones to hit them. Video showed enormous fires coming from the tankers, large amounts of smoke, 38 people were injured, one person was killed.

Now, separately in the UAE this morning, a unknown projectile hit a container ship there and caused it some minor damage. And yesterday, there were three other attacks on vessels in the Persian Gulf. So in just two days, there have been six attacks on vessels in this region.

[03:35:06]

Now, another country that has had its energy infrastructure targeted in particular is Bahrain. This morning, a fuel tank on fire in Bahrain following an Iranian attack. And during the week this week as well, there were targeted attacks on Bahrain's desalination plant and an oil refinery that actually led its national oil company to issue a force majeure.

So as this continues, we're seeing this deliberate targeting from Iran of energy infrastructure here.

CHURCH: And we're also learning that the Iran war is costing the Middle East travel industry millions of dollars a day. What more can you tell us about that?

RADFORD: Yes, so according to the World Travel and Tourism Council, this war is costing Middle East tourism sectors $600 million a day. Now, to give you an example of some of the reasons why that might be, you mentioned the strike on the port of Salalah.

Salalah is a massive tourism area in Oman. People travel there every year, thousands of people. To visit it during a particular season when it turns into this sort of tropical paradise is how some people would describe it.

Now, this has just been struck by an Iranian drone. People are going to be a bit shocked by this, a bit concerned. This is one of the factors that the council has listed, that this vision of the Gulf in particular as being a place that people come for safety has been completely upturned by these strikes.

Separately as well, they mentioned the impact this has had on air travel. They say that more than 625,000 passengers travel through major hubs like Abu Dhabi, Dubai, Doha and Bahrain every day.

And for the past fortnight, all air travel has been stopped. So all of these factors are combining to cause significant impacts on the tourism industry here in the Middle East.

CHURCH: Our thanks to Antoinette Radford joining us live with that report from Doha. I appreciate it.

Iran is reportedly getting advice from Moscow about how to use its drones in this ongoing war. Still to come, how drone expertise that wreaked havoc in Ukraine may be benefiting Tehran. We'll explain.

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[03:40:00] (COMMERCIAL BREAK)

CHURCH: CNN is learning that Iranian drone units may be benefiting from Russia's experience in Ukraine. Russia has been making its own replicas of Iran Shahed drones and has used them extensively against its neighbor. And one Western official says some lessons learned in that war are being shared with Tehran.

Nick Paton Walsh has our report.

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NICK PATON WALSH, CNN CHIEF INTERNATIONAL SECURITY CORRESPONDENT: U.S. officials have said a few days ago that Russia was providing general information to assist targeting of U.S. assets in the region. But Western intelligence official I spoke to goes one stage further and says that while this general assistance has turned into something they consider to be more concerning and that they believe that Russia is providing targeting strategies to Iran based on their experience inside of Ukraine.

Now the official I spoke to didn't go into precise detail as to what these strategies indeed involve. But we know from seeing Russian drones in action over Ukraine that Russia is employing all sorts of different tricks to try and get through Ukrainian air defenses. They often launch a thousand drones in one particular night against Ukraine.

I've seen them on radars moving in one direction, suddenly changing, going in loops at times as well. Anything to evade Ukraine's constantly adapting air defenses.

And indeed it's that issue I think of the adaptation that's key here. Because we've seen Russia adapting its tactics, Ukraine adapting its interceptors. It now has $2,000 cheap interceptors to hit the Shahids that cost $30,000 each.

And the idea I think that concerns the official I spoke to is that you could potentially take that three years' worth of battlefield experience that Russia's gained in firing these Shaheds, originally of Iranian design, now mass-produced in Russia. These Shahed attack drones at Ukraine and give it all to Iran in just a 10-day period, giving them a massive advantage.

Bear in mind too that the innovation cycle on Ukrainian front lines thought to be about six weeks. That's how fast new ideas come into action.

So this could be a significant advantage. We've already heard Ukraine's President Volodymyr Zelenskyy saying that he believes Russia is giving drones to Iran. He also thinks they're giving missiles too and indeed, I'm in Jordan, one of the several Gulf countries who have indeed asked Ukraine to send experts and indeed technology to help them with the threat of drones, that's something that Ukraine has complied with. So an evidence here I think, certainly according to the official I

spoke to, of a growing Russian involvement in a more real-time granular kind of way to boost Iran. The Kremlin didn't respond to our request for comment but ultimately they may see this after the U.S. intelligence and weaponry assistance to Ukraine to fend off the Russian invasion as some kind of tit-for-tat.

The official I spoke to though, also concerned about the increased threat of sea drones, even low-tech fishing boats, DALs, to be potentially used against U.S. carrier strike groups in that particular region as well. A fast-expanding, changing threat but one, it seems, in which Russia is keen to provide the up-to-the-minute assistance that it can to Iran.

Nick Paton Walsh, CNN, Amman, Jordan.

(END VIDEOTAPE)

CHURCH: Malcolm Davis is a military analyst and senior analyst for defense strategy and capability with the Australian Strategic Policy Institute and he joins me now from Canberra, Australia. I appreciate you being with us.

[03:45:10]

MALCOLM DAVIS, MILITARY ANALYST, AND SR. ANALYST FOR DEFENSE STRATEGY AND CAPABILITY, AUSTRALIAN STRATEGIC POLICY INSTITUTE: Thanks Rosemary, it's great to be here.

CHURCH: So President Trump is declaring victory, saying the U.S. has won this war with Iran but adds that it has to finish the job. What's your military assessment of where this war stands right now and how Iran has been adapting?

DAVIS: Look, I think we're a long way away from being able to declare victory at this point in time. Yes, the Americans and the Israelis have achieved air superiority over Iran and they're hunting down Iranian launching systems for ballistic and cruise missiles and potentially drones but, you know, Iran is a vast country.

The Iranians have large stockpiles of missile systems and drone systems. It's going to be very difficult to actually get all of those destroyed anytime soon.

Secondly, the Iranians are continuing to attack Gulf state oil infrastructure. They're continuing to seek the close of the Straits of Hormuz. We're a long way away from being able to say mission accomplished at this point.

CHURCH: So President Trump says that it's now a question of when to stop. So when does that happen? What does real victory look like and do you think President Trump is eager to find an off-ramp? Is that what it's looking like with this effort to declare victory early?

DAVIS: Look, there's an old saying that every strategic analyst learns the enemy always gets a vote and I think that President Trump saying we can simply declare victory and walk away is very premature. The Iranians will keep on fighting.

They know that they can keep this war going. The Americans really can't stop if the Iranians are keeping on fighting. So I'm not seeing an off-ramp anytime soon.

As I said, I think this war is going to carry on for some weeks, if not longer. There's a greater risk as it continues for what's known as horizontal escalation where the war widens, so drags in other countries potentially, for example, Pakistan or Turkey or countries like that. There's also the greater risk that the Iranians will continue to create havoc on international oil markets and energy markets and so that's going to have a follow-on effect in terms of economic stability.

We're already seeing, as your previous reporter indicated, growing Russian involvement in this war. So I think there are real risks this will continue. There's no off-ramps, there's no easy way out for the Trump administration.

They have to push ahead and try and win this war because if they don't and if the regime stays in power then ultimately in two or three years' time we'll be back here again with the Iranian regime potentially seeking nuclear weapons. We'll be doing the whole thing again.

CHURCH: Right, so how long can Iran keep going with missile and drone attacks up against the combined force of the U.S. and Israel and how far has the U.S. gone in its efforts to eliminate Iran's nuclear program?

DAVIS: Well the nuclear program question is an uncertain one. There's at least 400 kilograms of highly enriched uranium that the Americans do need to capture and seize.

That would require ground forces, it can't be done from the air, so that would require a ground intervention. That's very risky and challenging.

In terms of the Iranians keeping these attacks on oil infrastructure, it really does depend on the Israeli ability to hunt down their launching capabilities and as I said Iran is a very large mountainous country. It's easy to hide small launching systems inside complex terrain or underground. Certainly the Americans have got a technological advantage, they can hunt down those systems, they can detect underground facilities and attack them from the air.

So there is a basically a race between on the one hand Iran's ability to create economic chaos around the world versus the U.S. and Israel's ability to destroy Iran's capabilities that are creating that chaos. And it's really uncertain as to who wins that race and it partly goes down to how much political resolve is there in Washington D.C. to stay the distance because if there's not, if the markets are causing jitters in the Trump administration, maybe you know there is a real risk that that we leave the job unfinished.

CHURCH: Malcolm Davis, joining us live from Canberra, Australia, many thanks.

DAVIS: Thank you.

CHURCH: A member of the Iranian soccer team who was granted asylum in Australia says she wants to return to Iran. Just ahead, why her change of heart alarmed Australian authorities. Back with that in just a moment.

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CHURCH: Welcome back everyone.

Well China, one of Iran's trusted allies is closely watching the widening war in the Middle East and now viral videos are emerging on Chinese social media mocking the United States. It comes ahead of a highly anticipated summit between the U.S. and Chinese leaders. CNN's Will Ripley takes a closer look at the role Beijing is playing in the war.

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WILL RIPLEY, CNN SR. INTERNATIONAL CORRESPONDENT (voice-over): In China, this A.I.-generated video shows President Donald Trump trying to make Iran's supreme leader disappear but instead his son pops up, a not so subtle jab at the United States.

Another viral video goes even further. This one shared by Iran's embassy in Beijing, untouched by China's army of online censors.

Implying President Trump started the war to distract from the Epstein files, showing a U.S. missile bombing a school, then showing the destruction of American military bases, aircraft carriers and the Israeli Prime Minister's compound. Across Chinese social media, the message is blunt. America started this war.

Publicly, President Xi Jinping's government is striking a more diplomatic tone, calling for restraint. China's Foreign Minister Wang Yi says, "this is a war that should never have happened and a war that benefits no one."

China has long been Iran's economic lifeline. Beijing buying most of their oil exports, despite years of U.S.-led sanctions. And now, U.S. officials say they're watching signs Beijing could soon provide more crucial financial support to Tehran.

The war is shaking global energy markets. Oil prices surging to four- year highs, attacks threatening shipping routes in the Middle East.

For China, the world's biggest energy importer, that's a serious risk. But strategically, Beijing may also see opportunity, as the two superpowers compete on the world stage, with the CIA putting out these official recruitment videos, brazenly and openly luring Chinese officials to spy for the U.S.

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Analysts say a prolonged war could pull American attention and military resources back to the Middle East and away from Asia, allowing China to flex its military muscle around Taiwan, in the South China Sea, and disputed islands near Japan, without U.S. interference.

RIPLEY: All of this is unfolding just weeks before a planned meeting between Donald Trump and Xi Jinping, a summit in Beijing expected to focus on trade, technology, and the situation here in Taiwan. For China, the war shows the limit of its clout and ambitions in the Middle East, but it also gives Beijing another chance to present itself as a force for peace and stability, in stark contrast to President Trump's America.

Will Ripley, CNN, Taipei.

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CHURCH: One of the seven members of the Iranian soccer team who accepted an offer of asylum in Australia has changed her mind. Her efforts to return to Iran caused a security scare for the remaining squad members who were offered refuge. CNN's Christina Macfarlane has the details.

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CHRISTINA MACFARLANE, CNN INTERNATIONAL ANCHOR: This is the Iranian women's soccer team arriving in Malaysia after the asylum case involving some of the players in Australia took another twist. One of the players who had initially accepted Australia's offer to stay has now changed her mind.

Australia's Home Affairs Minister said Mohaddesh Zolfi contacted teammates who had already left the country and asked to rejoin them. Australian officials say that Zolfi shared the player's secret location to the Iranian embassy after her teammates and coach advised her to contact it and get collected.

That decision meant the remaining players who had sought refuge in Australia had to be moved immediately from the secret location where they were staying under police protection. It's not yet known what prompted Zolfi's reversal, but this could be part of it.

The head of Iran's Football Federation on state T.V. Tuesday night saying that players who return home will no longer face punishment. The controversy began after members of Iran's team refused to sing their country's national anthem before the opening match of the Asia Cup in Australia. Iranian state media later branded the players traitors.

Australian officials then offered members of the delegation the option for a private meeting away from Iranian government minders. Seven women, six players and a member of the support team were granted humanitarian visas. But Iran's Football Federation has continued to accuse Australian authorities of pressuring the players to seek asylum, something Australian officials deny. Meanwhile the rest of the team has now arrived in Malaysia where

Iran's embassy says they will remain before returning home.

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CHURCH: And thanks so much for your company, I'm Rosemary Church. Rahel Solomon and Becky Anderson take over our breaking news coverage from here.

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