It is difficult for a hegemonic power to admit defeat at the hand of an underestimated lesser power. It is doubly difficult for an egotistical president like Trump to accept defeat. The issue in the war with Iran was never the nuclear material; it was always going to be the strait of Hormuz and who controls it.
To exist as a hegemonic power armed with the biggest blue sea navy in the world, that power needs to show it controls every strategic sea route. But the US has just lost control of one of the most vital passages, the strait of Hormuz.
After the 40-day war which began in late February, the US signed the memorandum of understanding (MOU) which in principle ceded the strait of Hormuz to its rightful owners, Iran and Oman. In doing so, the US did no more than recognise international law based on the 12-mile territorial waters rule enshrined in the United Nations Convention on the Law of the Sea. No doubt the White House was in a state of shock at the time of signing having been humbled by Iranian missiles.
Since then, it has recovered its mojo and is playing Iranian roulette with Wall Street. The timing of this week’s attacks is interesting. It is corporate reporting season on Wall Street covering the second quarter. Analysts are optimistic about buoyant results and buoyant results prop up the market. Morgan Stanley’s profits shot up 69% thanks to its trading desk. JP Morgan Chase increased profits 41% and Goldman Sachs by 39%, results which shored up the market.
With investors focused on the reporting season, the Pentagon’s wriggle room has improved. But even here there are limits. When Trump threatened to levy a 20% surcharge on ships leaving the strait, he backed down after Wall Street murmurings. Now Trump wants to test boundaries again by threatening to bomb infrastructure, bridges and desalination plants in Iran. Should he do so in the height of summer with temperatures already 46 degrees centigrade in some cities, that would be catastrophic.
A threat to the whole world economy
If Trump, who has once again been belittled by Iranian counterstrikes, especially in Jordan, presses this button, and Iran retaliates by taking out the same facilities on the other side of the strait, then the entire Gulf will become uninhabitable. Never mind Wall Street, the whole world economy will be sunk. No doubt the Saudis, the Kuwaitis and the Emiratis are rushing to the White House begging Trump to hold back.
The western media have condemned Iran for the outbreak of hostilities. This is expected. They have used the example of Iran attacking ships sailing alongside the Omani coast. What they have not said is that it is the US which is forcing ships to use this narrow corridor against the express wishes of the Iranians and against the spirit of the MOU. Iran cannot back down. Besides its missiles, control of the strait is its trump card. It is this control and its effect on the world market, which is the only way it can keep the US at arm’s length.
The US on the other hand cannot afford to be seen to concede. So, the guerilla warfare in the Gulf will continue, but with one combatant absent, Israel. But this may change. Israel has agreed to lift restrictions on the number of US tankers parked at Ben Gurion airport despite some of them blocking civilian aircraft. So, it is becoming an active participant in what will be expanded US air sorties against Iran.
Expect hostilities to continue. It is unlikely that Trump will execute his threats to take out Iran’s infrastructure other than a couple of symbolic strikes. The reserves of oil are rock-bottom in the US and elsewhere. The point of no return is soon approaching as oil supplies are blocked. The US driving season is in full swing and with average gasoline prices at $3.90 approaching the psychological $4 mark, this is a political headwind for Trump.
Doubly so, now that polls are moving towards an outright win for the Democratic Party in the mid-terms in November, imprisoning Trump in his Oval office. Whatever the case, the next few weeks are decisive with the odds still on the Iranians to prevail. After all, only hundreds attended Trump’s bicentennial celebrations whereas tens of millions in Iran mourned the murder of their previous leader demanding justice.
Subscribe to our regular updates to receive the latest articles, analysis and news direct to your inbox at https://theleftlane.media/subscribe/
