Another War of Attrition: Iran

Tom Hunter
No Minister

1. Blocking Iran’s Oil Exports
2. Operation Economic Outcast
3. The Hormuz Southern Corridor
4. The Regime Response
5. The People

============================

The Ukraine-Russia war is about to enter its fifth year, but I doubt the US-Iran one will last anywhere near that long, given the full-spectrum pressure the USA is applying to the regime and their inability to effectively fight back, as well as the irrational ways they’ve chosen to do so.

Aside from anything else it doesn’t seem to be much of a war at present, with very little shooting going on. This, plus the lack of a second oil crisis as foretold by the usual suspects, has meant that the war has largely dropped out of the MSM news.

What the USA is doing is the following:

1. Strangling the last of Iran’s oil export capability, thus denying them cash to pay their IRGC and Mahdi Army thugs. This is being done via two methods.
   • A military blockade by the US Navy that has shut down Iranian ports and tankers.
   • Economic sanctions on anybody dealing with Iran, basically the black market operations by which they’ve evaded sanctions over the past 50 years.
     
2. Strangling the rest of the Iranian economy via the same economic means (Operation Economic Outcast). This has been aided by Iranian stupidity.
   
3. Opening and guarding a southern corridor in the Strait of Hormuz for non-Iranian oil tankers to pass.

Looking at these in turn.

============================

Blocking Iran’s Oil Exports

Iranian oil shipments to Asia have nearly dried up as US pressure on Tehran disrupts supplies. Chinese refiners are facing tighter availability, with Iranian crude prices shifting from a discount to a premium of around $4 a barrel. A major factor behind the shortage is the impact of US efforts to block Iranian oil shipments. Loaded Iranian tankers have been unable to leave the Persian Gulf, while empty vessels remain stranded outside the region.

Their currency has dropped to a record low of two million rials to the US dollar, which is worsening an economic situation that was already so bad it led to mass riots by the people back in January – and mass shootings by the regime – even before the USA attacked.

Moreover they are literally running out of petrol themselves, because even oil exporting nations don’t have 100 per cent refining capability.

Iran’s drawdown of strategic fuel reserves has reached a “red alert” level and could exhaust remaining stocks within weeks, fueling disagreement between President Masoud Pezeshkian and the Revolutionary Guards, informed sources told Iran International on Wednesday. The reserves, intended to cushion severe shortages and emergencies, have been tapped at a pace in recent weeks that has prompted warnings from experts within the state about the consequences of continuing, the sources said.

============================

Operation Economic Outcast

Even before the US Secretary of the Treasury, Scott Bessent, started this effort, the Iranians had already shot themselves in the foot:

Iran’s regime fired two ballistic missiles toward shipping traffic in the Persian Gulf on Tuesday. The United Arab Emirates has had enough. Abu Dhabi responded by severing every trade, commercial, and financial transaction with the terror state, effective immediately.
…
UAE Foreign Ministry spokeswoman Afra Al Hameli made it official Wednesday. No end date. No conditions. Just a hard stop tied to Iran’s escalating aggression.

“All trade, commercial exchanges, and financial transactions with Iran have been halted until further notice.”

Incredible! The Iranians basically just torched a $28 billion a year economic lifeline ($7 billion of exports, $21 billion of imports). And it’s not like the missiles even did anything militarily meaningful; they both hit the sea, one in the UAE’s territorial waters and one outside.

The Iranians immediately denied this, as usual, which seems even more stupid when the UAE had previously reported that Iran had fired more than 550 ballistic missiles, 29 cruise missiles, and 2,265 drones at them since February 28. Clearly, this was the last straw. They didn’t even put qualifications or a timeline on the ban. And this comes after the UAE ignored US demands going back two decades to cut this lifeline.

A few days later Bessent laid out in detail how they were going after Iran’s remaining economic links to the outside world, which are basically these:

• Digital assets (meaning crypto currencies)
• Technology (technology for nuclear, missiles and cyber warfare)
• Gold
• Aviation
• Shipping

The sanctions are being applied to things as varied as individual ships, to companies trading with Iran, to individuals. Countries like Russia, China and North Korea have multiple reasons to keep Iran alive but even they will be re-calculating how to fulfil their needs from other sources. If you wanted to know why Trump is paying attention to North Korea again for the first time in years, this is likely it, given that all they’ve got to sell to Iran is nuclear weapons technology.

============================

The Hormuz Southern Corridor

The plan has been very simple, if difficult to achieve. The so-called southern route is the one through the Strait of Hormuz that is closest to Oman, and the US Navy has opened it up to commercial shipping by wiping out almost all Iran’s military means of attacking shipping, from missiles to drones to mines, and is now escorting tankers through the route, just in case Iran takes any potshots. Tankers have also been switching off their locator beacons as they’re escorted, just to make it even harder for Iran.

Despite not being easy it is being done, with oil shipping quantities rapidly increasing to some 10 million barrels a day which, although still about half of pre-war volumes, has meant the pressure on global oil prices, and thus the global economy, has eased. Some nights have peaked at between 15–20 million barrels, and the longer this goes on the smoother it will become.

One point I have not seen mentioned has to do with the insurance of such vessels. What happened earlier this year when traffic stopped was more due to insurance actuaries than Iranian weapons. Basically the actuaries for the shipping insurers got hit with a new environment and new information, which they could not calculate risks for, effectively shutting the insurance market for Hormuz oil tankers and thus shipping traffic.

But as the months have passed they’ve had new information to feed into their risk models. First, that the Iranian threats haven’t materialised as imagined, either in ability to take shots at tankers or even badly damage them, let alone sink them if they do hit them. Second, that the US Navy and shipping are handling these threats quite well. Sure, the risks are still higher than before and hence the premiums, but it’s not an unknown or poorly understood factor any longer. The models have adjusted.

In addition the Saudis and other Gulf nations are pumping larger volumes of oil than ever before through desert pipelines running West, away from Iran, and they’re apparently preparing to build more of them. In other words Iran’s actions have caused them to lose their sole remaining bargaining chip, which was control of the Strait of Hormuz.

============================

The Regime Response

There’s been the usual bluster and threats of course – even about targeting Trump’s youngest son, Baron – but there have also been blunt admissions from people who count:

• Their parliamentary speaker Mohammad Bagher Ghalibaf admitted they were running out of time and said, “No matter how strong we are militarily, if the people are hungry and we do not have financial circulation, economic growth and domestic production, we will not endure.” 
  
• Executive Vice President Mohammad Jafar Ghaempanah confirmed that Iran cannot import gasoline because of the US naval blockade and is warning that the current fuel situation cannot continue, the state-run IRNA news agency said on Wednesday. “Continuing on this path is impossible,” Ghaempanah declared, explaining that the domestic gasoline production was insufficient and that “with the US naval blockade, we cannot import gasoline.”

Having been unable to bend the world to their will via oil, they likely planned to just pull the same stunt as they have before with the US: simply wait them out. In this case they’re waiting for two things in the US, the mid-term elections later this year and the departure of Trump in January 2029.

But increasingly it seems that Trump is not willing to bargain with Iran to save the GOP at the mid-terms. Even if he caved completely it’s doubtful that gasoline prices at the pump would drop soon enough to help, and in any case his political advisors will have informed him that there is a 90 per cent chance the GOP will lose those House no matter what he does or what happens.

• Time to remind people again that, of the 20 mid-term elections since WWII, the president’s party has lost House seats, and usually Senate seats as well, in 18 of them.

Trump will fight the mid-terms because that’s what he does, but if the Iranians think it’s another bargaining lever they’re wrong.

As to waiting out his departure, all of the above suggests that they can’t hold out against this pressure for more than another two years – and they might have to deal with a President Rubio anyway, while even Vance appears to have given up on dealing with them.

But as I pointed out back in January, here and here, the Mullahs have survived a major war with Iraq, Israeli attacks, US sanctions and countless protests and near-uprisings from their own people. As I argued in the latter post, looking for a Eastern European-style end to the Iranian regime is to misunderstand what happened there: it wasn’t a ‘Peoples Revolt’ so much as those governments losing confidence in themselves and giving up. There is no sign of that with the Mullahs and the IRGC.

As retired US Army Special Forces Lieutenant Colonel Stephen D Cook explained here (H/T to Gravedodger for finding this), Why the Theocrats Will Not Trade the Republic for Luxury:

These are not oligarchs who happened to put on clerical robes or Revolutionary Guard uniforms. They are products of a system that has spent nearly five decades teaching that the Islamic Republic itself is the sacred vessel of God’s will on earth. Personal wealth is a tool and a byproduct of the system. The regime, the ideology, the confrontation with America and the eventual destruction of Israel are the ends. When those ends conflict with personal finance, the ends win. Every time.

The People

Thus, as has been understood from the beginning, the end of this war lies with the Iranian people: how much longer can they be suppressed by the regime and how can they fight back when they’re basically unarmed?

There are literally thousands like those young woman, and as many young men, whose cases are being alerted to the outside world. As such, Persians in the West give short shrift to Western sympathisers of the regime who wish to talk only of things like the USA hitting that girls school in the opening days of the conflict.

But without weapons it cannot be done. That’s the next thing the US needs to do, and should be doing already, if they can – arming the people of Persia.

This article was originally published by No Minister.