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Notes -
Bloomberg: JPMorgan and Goldman See Mideast Oil Flows Near Pre-War Levels
Oil is passing coming through the Middle East again, at essentially pre-war levels. Some of this is from oil bypassing the Strait of Hormuz, and some of this is from oil transiting the Strait under American protection.
Diesel and gasoline are still stymied, but, mostly, because Iranian exports are being blockaded by the US.
But other Gulf States are increasing their own exports to compensate for the missing Iranian piece.
It appears that the Iranians are not capable of stopping exports from flowing through the Straits, and so oil exports are returning to normal.
Meanwhile, Iran seemingly wants to end the war, although none dare call it "surrender":
New York Times: Iran Proposes 7-Day Plan to End War
Iran wants, essentially, to return to something close to June's MOU, except on a faster timetable. Iran agrees to "reopen" the Straits in exchange for getting its confiscated $12 Billion, an end of the sanctions and blockade, and then to open discussions as to the future of its nuclear program.
Contrary to expectations that Iran is biding its time in hopes that Democrats will retake Congress, Iran says that it would prefer to reach a deal before the midterms.
Trump, however, is not interested:
AP: Iran indicates it’s received an official US response to its latest offer on ending the war
Iran prefers to call it a "win-win":
So, here's the current state of the war:
Shipping is moving through Hormuz and is increasing week-to-week. Total traffic out of the Gulf is approaching pre-war levels.
Iran has no ability to seriously threaten shipping in the Straits.
Iran is seemingly unable or unwilling to continue striking other American targets and assets in the Gulf
Iran remains blockaded and unable to export its own products, contributing to severe stress on the Iranian economy.
Iran is more interested in negotiating peace than Trump is.
Forgive me for repeating old arguments but I need to be clear about this: Trump was right about Iran and America is winning.
I don't think that many astute geopolitical commenters who weren't blinded by some form of domestic politics bias ever thought that Iran could defeat the US in a war. That's like predicting that a five year old could beat a grown man in a fistfight. Outlast, maybe (and only if, as has so far been the case, the US lacks the political will to launch a ground invasion). Defeat, no. Of course, there are plenty of unastute geopolitical commenters, and there are plenty of people who are blinded by domestic politics bias.
I personally have never argued that Iran had any serious chance of defeating the US in a war.
However, that does not necessarily make the war a good idea for the American people. That's a separate matter.
For me personally, in the sense of my own personal self-interest, I'm not sure whether the war has been good, bad, or neither.
I have probably indirectly been affected by the higher oil prices, but I'm not sure to what extent. I imagine probably badly, but I haven't done the research to find out for sure.
Crude oil prices remain, for now at least, about 1.5 times what they were before the war. It's about the same for retail gasoline and diesel prices in the US. Whatever is going on in the Strait of Hormuz right now, it hasn't translated into lower prices so far at least. I do not think this is because Iranian exports are being blockaded. Iran's share of total world oil and oil products production was not even close to high enough before the war to explain the current high global prices.
I think that the chance of Iran ever using nuclear weapons against the US even if it builds them is so low that it's not something I have ever worried about. In my opinion, the Iranian leadership acts much more like a typical rationally self-interested government than like the "suicidal fanatics who would use a nuke the second they got it" that some consider them. So I'm not significantly more worried about them nuking me, even if they got nukes and delivery systems, than I am about Russia or China nuking me. Which is to say, almost not at all. I believe that almost certainly mutually-assured destruction would hold with Iran. So whatever damage the war has done to Iran's nuclear program, I don't see it as a significant win for myself.
Ironically, I think that Trump supporters might actually have the most to complain about. The war has done significant damage to the populist movement that coalesced around Trump 11 years ago:
I've been in arguments on this website with many who argued exactly that. There are lots more on twitter and throughout the mainstream media. Granted that this is not the most serious anti-war argument and so it shouldn't be the only argument discussed. But I feel compelled to seriously rebuke it because the idea that Iran was winning and America lost has seriously infected a lot of people and it colors other views about other things.
Anyways, I appreciate a fairly neutral take. In my circles I think I have heard the strongest criticisms of the war from MAGA and other Trump supporters. My argument has been that they are wrong because Trump winning in Iran gives Trump more power to renegotiate global trade (which is exactly how he's reindustrializing the American heartland).
Yes, when it comes to people arguing that Iran could militarily (as opposed to politically) defeat the US in a war, I classify those in the unastute or biased category. Or engagement bait. Twitter is mostly made up of engagement bait, as far as I can tell.
Unastute doesn't mean unintelligent. But some people aren't really aware of the enormous difference in military power between the two countries.
What's the mechanism by which winning in Iran would give Trump more power to renegotiate global trade?
It’s like what happened in Venezuela: the more that comes under America’s control, the more leverage America has in negotiating with other countries.
We want to tariff China to avoid them dumping cheap goods and bankrupting our manufacturers, but Europe wants to profit as the middleman mediating Chinese goods, so now we control the supply of oil that feeds Europe and China doesn’t.
We want Asian capital to fuel an American factory build-up so we can wean ourselves off Chinese rare-earth metals, now we control the supply of oil Asia needs.
This is all done out in the open, South Korea planning 8 nuclear power plants in the US, India announcing a $15 Billion steel plant in Iowa, Europe complying with the latest sanctions against Iran. All told Trump is redirecting hundreds of billions of dollars into America’s economy, which is a much more effective use of his time than negotiating with Lisa Murkowski and Mitch McConnell. He’s making good on his campaign to Reindustrialize and he’s using executive power to do it.
This stuff will compound. By acquiring a controlling stake in Venezuelan oil, Trump is making America more powerful in energy than OPEC. So OPEC can either cut deals to supply energy where Trump wants it, or they can suffer outages while Iran festers — America is fine in either outcome, which gives Trump the most leverage. So he can negotiate an expansion of the Abraham Accords, the beginning of a lasting peace in the Middle East, more investment for America, etc.
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