MARKET PERSPECTIVES

By J Mulraj

June 20-26, 2025

And mistook nuclear policy with unclear policy

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If a nuclear policy turns into an unclear policy, it may, perhaps, indicate that the policy maker is dyslexic. If not, he is, driven by instinct, exceedingly bold. The attack launched by USA under  Trump, on 3 nuclear sites of Iran, (Fordo, Natanz and Isfahan) caused grave concern, globally, that the world was closer to a nuclear war. The Doomsday Clock  now reads 89 seconds to midnight, but is revised only once a year. Retaliatory action by Iran was expected.

The three sites housed centrifuges (which are machines, used to make fuel for power plants,or for weapons), underground, in mountain tunnels. The deepest storage is in Fordo. Because they are deep under the mountains, an attacker needs the GBU-57 Massive Ordinance Penetrator (MOP), aka bunker buster bombs, to be able to destroy the facility. Only USA has them. Each MOP weighs 30,000 pounds, hence can pierce through and travel vertically downwards, to detonate at a certain depth. Their 30,000 lb weight can be transported only by a B-2 bomber.

In the attack seven B-2 bombers flew for 18 hours, with mid air refueling, dropping, as per a report in FT dated Monday June 23, a total of 14 MOP bombs.

Trump declared the attack successful and Iran’s ability to make a nuclear bomb destroyed.

Iran claims that the centrifuges had been moved out of these sites, in anticipation of the attack. It claims that it’s nuclear program is for peaceful purposes, mainly for power generation but also for healthcare (cancer treatment) and agriculture (improving crop yields).

Here are some questions that don’t seem to have been asked.

1. The levelized cost of electricity, LCOE, is highest for nuclear power (USD 69-222/MWh, much higher than thermal, hydro, solar PV ($ 30-92) or wind (24-75). Why, then, is Iran pursuing a course of generating nuclear energy, when, as the figures show, far cheaper alternatives are available? Nuclear power plants carry huge risks and have blown up in Russia (Chernobyl), USA (Three Mile Island) and Japan (Fukushima).
2. The U-235 isotope in uranium needs to be purified only upto 3-5% for civilian nuclear use. Iran seems to have gone to 60%, perhaps trying to reach the 90% level needed to create an N bomb. This leads to the conclusion the program is not for peaceful purposes.
3. If the enriched uranium is only meant for peaceful purposes, why is it stored in three underground storage facilities?
4. If, as Iran claims, the centrifuges and enriched uranium had been moved out earlier, why could the movement not be detected by Israel? It proved it’s ability to track, and eliminate, IRGC seniors and nuclear scientists, with precision bombing. Why would it be unable to track trucks?

In the aftermath of the American attack, the price of Brent crude shot up to $90/b after Iran threatened to block the Strait of Hormuz, through which around 40% of the crude oil passes. Both Iran and Israel continued to attack each other, with missiles and drones.

On Tuesday June 24, Trump announced that both countries had agreed to a ceasefire, to be implemented once the existing military operations which were underway, were completed. Iran refuted that, saying that talks on a ceasefire would only commence after cessation of attacks. Brent crude has fallen to $78/b. After some flip flops, the ceasefire seems to be surviving, but tenuously.

Some analyst foresee that even if the bunker bombs couldn’t reach the depth where the enriched uranium was stored, would be able to detonate in the tunnels, collapse the mountain, and irretrievably bury it.

Moving over to developments in CCP in China, rumors are swirling of a likely displacement of Xi Jinping by senior party leaders. Politically led by Hu Jintao, former President of CCP (who had been forcibly removed from an earlier Plenary session, humiliated on international television) and former premier, Wen Jiabao, after General Zhang Youxia purged Xi loyalists. (Chinese politics is secretive, and no one knows Hu will revolt or Wen he will be purged). It is possible that, if this is true, a post Xi dispensation may work closely with USA. Economically, after the real estate collapse followed by tariff wars, there is high youth unemployment, and a threat of deflation as domestic demand wanes.

India continues to deliver advances in new technologies including in the military domain. A Chennai based start up called Agnikul Cosmos P Ltd has become the first company in the world to develop and launch a single piece 3-D printed Agnibaan rocket, which was launched into space by ISRO. 3D printing is a new technology which produces things by adding the material layer upon layer, as compared to current manufacturing processes which are a deductive  process (eg take a block of marble and create a statue by chipping away any marble that is not the statue). Because it is additive, there is no wastage of raw material, thereby significantly lowering cost.

Another example is the AI powered automatic light machine gun, successfully tested by the army, produced by an Indian  company BSS. The gun automatically detects and engages targets at long distances.

Last week the BSE Sensex ended at  84058 for a weekly gain of 2350 points.

The steadiness of stock markets despite the conflict in the Middle East erupting as it did, and moving the Doomsday Clock closer to midnight, is perplexing. The ceasefire reached after Trump uttered the undiplomatic word, the sixth in the alphabet, is tenuous.

One can only hope that there is clarity in nuclear policy.

Comments may be sent to jmulraj@asiaconverge.com