A second round of negotiations between the United States and Iran is expected to take place before the two-week ceasefire runs its course. After the collapse of the weekend talks in Islamabad, President Donald Trump upped the ante by ordering a blockade of Iranian ports in the Strait of Hormuz. Did this rare maritime action strip Tehran of its final ace? And just what does each side bring to the table in the anticipated negotiations?
Hitting Iran in the Wallet
The Iran war is entering its seventh week, and depending on where you get your news, it’s either a total victory for Trump or a total disaster as regime change has not yet occurred. And certainly, the fact that the Tehran government is still in place (with new faces) suggests that, by surviving, it has held off the American threat. But Iran is in a difficult position with what seems like no cards left to play.
Its navy is largely gathering rust at the bottom of the sea; its air force is spent, and it is about to take a very large hit to the already strained economy. Holding the Strait of Hormuz appears to have been the regime’s last leverage. That particular chess piece is now off the board, and the fiscal pain is on its way.
As Liberty Nation News Economics Editor Andrew Moran reported on April 14, “A fleet of tankers is traveling through the Cape of Good Hope in southern Africa, passing by Latin America, and parking at the Gulf of America.” He continued:
“Out of nowhere, the United States is now in control of approximately 20% of the world’s crude supply, which is on top of the large amount of liquefied natural gas (LNG) that is exported daily to the tune of 15 billion cubic feet.”
Prior to hostilities, Iran was producing a little more than 3 million barrels of oil per day and exporting roughly 50% of it. While persistent sanctions forced the country to diversify its economy, oil exports still accounted for more than 50% of its total cash take. But times have changed.
If the Iranian ports remain blockaded, the economy tumbles. Less cash means a limited ability to either produce or buy munitions with which to wage war. And to cap it off, it’s a safe assumption that the leadership will try to rejig the regular industry to a wartime footing – meaning the people of Iran will lose what little independence they now possess. It’s worth noting that the mullahs maintain power only because the large merchant class supports them. Fractures in this base are already appearing.
Leverage
So, what precisely does Iran have left to offer? One might first ask, what is the United States willing to give, but the brutal reality is that – barring oppositional action by Congress – America is in a pretty good position.
Blockading ports is something that can go on almost indefinitely, and with the world turning to the United States for its energy needs, the current economy will likely recover in time for the midterms in November – especially as the US, thanks to January’s Venezuelan adventure, is now in control of approximately 300 billion barrels of oil reserves. The fair-weather allies who refused to get involved in the early days of the conflict are now coming, cap in hand, to sup from the world’s most reliable provider of energy.
And while support for the war effort overall is in negative territory (roughly 55% opposed), this appears largely because of concerns that it could morph into yet another Middle Eastern Forever War. So that leaves Trump two major options.
The first is to conclude the conflict. As mentioned, Iran’s military and nuclear ambitions are in tatters, and its leadership must contend with the reality that the United States could come back and repeat the whole painful process whenever the mood strikes. Trump has exposed the fragility of relying on an intemperate regime for oil and invited the world to partake in America’s bounty. If the war stopped today, it would be a fair assessment that Old Glory was the victor.
The second option is for Trump to push Iran to capitulate on two key points: Stop making demands over the Strait of Hormuz and commit to the permanent end of nuclear enrichment. While critics may argue that this was the status quo before the war, it’s just not true. As LNN recently reported:
“If Iran were seeking to use nuclear material only for civilian aims (power stations), it would need to be at 3-5% enrichment. Even if the leadership wanted to go for the most cutting-edge facilities, that would require a rough maximum of 20%. Iran admits that it has enriched to 60%, which is not viable for use in power plants. It could be making nuclear submarines, but again, this is not the stated aim.”
The notion that President Barack Obama’s Iran deal was preventing Tehran from building nuclear bombs is as farcical as it is willfully blind.
Iran would have to agree to the removal of its nuclear material (most of it) and stand back as ships traverse the strait. It would be a blow to the leadership’s collective ego, but it is also an opportunity.
The Profits of Peace
Since 1979, Iran has been on the outside – a semi-pariah state that threatened enemies and allies alike and continued its reign only through oppression. Diplomatically and politically, it is not a trusted partner.
A new era of cooperation, or, as Trump suggested, a “golden age,” is within grasp. A resource-rich state ready for investment would be as transformative today as the fall of the Shah was almost 50 years ago. Or it could decide to carry on in a similar vein, as its economy shrinks and its citizens become more and more restless.
It’s a choice between ego and existence, and many throughout history have made the wrong decision. They are just not here now to tell us about it.
