Iran War?

[Tamas]

Iran's export to China is continuing,  apparently from another port? One outside the straits.

This is humiliating for the US.

[OttoVonBismarck]

I don't imagine it would be more than a trickle--Iran's export facility on Kharg Island in the far west of the Persian Gulf handles about 90% of all their crude oil exports. They wouldn't have the infrastructure to export their full load so to speak elsewhere.

It is telling Trump isn't taking any action to interdict Iranian oil vessels though, and I imagine there's a couple reasons for that. Most based on Trump being afraid of pissing off China right now.

[Sheilbh]

How do you all reckon China will play this?

At the moment it seems mostly to be "keep your head down and let the US waste political and military capital" I suppose. But what makes more sense for them? Support Iran (clandestinely, of course), to increase the severity of the bleeding for the US? Or put pressure on Iran to free up oil through the Hormuz (which they need), but also thereby implicitly supporting Trump?

I suspect there are planners right now whose goal is to take Taiwan thinking it is very much not an issue for them if the US has to be deploying (and ideally redeploying) resources from the Pacific to the Middle East.

The flipside of that is, as you say, how much of a hit can China take on fuel and the Gulf matters a lot for export to Asia. I think they might be okay - they've been hugely diversifying their energy mix, plus trying to open new routes for energy. As for Europe though if there is a huge reduction in energy getting out of the Middle East then Russia becomes indispensable (and what might they want in return). So that issue may be solvable. I also think China - and other Asia-Pacific countries have quite big oil reserves - I understand that Japan for example basically has a reserve that's enough to deal with 9 months of no Middle Eastern energy exports.

This might also be part of the Houthis staying quiet because a hit on Chinese energy supply from the Middle East, plus Chinese trade with Europe might move the dial for their attitude.

On a different China tack, I wonder to what degree China is taking lessons on Taiwan from this. If Russia gets and expensive and much longer than anticipated quagmire, and the US gets one as well... will China choose to avoid that risk? On the other hand if Xi does oversee a quick successful annexation of Taiwan instead of a quagmire, that'll bolster his credibility. But if it doesn't...?

Maybe - I think the bigger lesson from this is that if you've got big strategic aims (like regime change) you can't go halfway. I think China may still try that through a blockade of some sort but I'm not sure China will draw many negative lessons from this conflict given that there seems to be a very real resistance from the US towards ground troops - I don't think that'd be seen as relevant from a Chinese perspective.

[crazy canuck]

China is likely just sitting back and watching its main rival implode.  After the United States has finished its self destruction, China can assess how best to proceed.  No need for them to rush into anything now.

[Crazy_Ivan80]

China is likely just sitting back and watching its main rival implode.  After the United States has finished its self destruction, China can assess how best to proceed.  No need for them to rush into anything now.

they may not even have to invade taiwan

[viper37]

ISW showing the general decline of Iranian strikes on US/Israel and Gulf States since war began:

https://imgur.com/a/sdOYIXq

Congrats then, you are winning the war and losing the peace.

https://realmwire.com/iran-threatens-to-strike-google-microsoft-nvidia-and-bank-sites/

[The Minsky Moment]

The thing is you can massively degrade Iran's entire country, but not meaningfully reopen the Strait. These tanker ships generally won't move without insurance, and the insurance has been pulled. Sure, the U.S. could do what Trump said and insure ships on a case by case basis--many still will decline, not wanting to actually lose their vessel and crews. Some will likely go along--like Tim posts though it will be nothing more than a trickle.

Insurance depends on the availability of reinsurance market to back catastrophic risk, and marine reinsurance in turn depends on the ability to lay off its own risk on the capital markets, e.g. through insurance linked securities.  The securitization market, however, won't permit taking on war risk.   Trump could deploy the entire US fleet for escort service and it won't fix that problem.

Yes, Trump has proposed providing emergency coverage though the DFC.  However, commercial entities do not operate on social media posts.   Ships move based on properly negotiated executed contracts supported by verifiable financial backing, not because some addled fool in DC posts a "Truth". This is a powerful example of what happens when the Trumpian delusion that social media gyrations can create his own preferred reality smashes headlong into cold hard fact.

Several days ago, JPM oil desk published a report estimating DFC lending capacity at less than half of what would be required to insure traffic through the Gulf.  Bessent clapped back but I doubt anyone serious is going to believe him over the JPM bean counters.  Incredibly, the administration blundered into a war in Persian Gulf without considering the impact on traffic through the Gulf, and specifically without seeking authorization to expand the financial capacity of the agency that was supposed to provide the necessary insurance. Leaving a massive twin financial and credibility gap that no amount of raw bullshit can fill.

But hey no concern, the US still has the best WARRIORS!!!

[The Minsky Moment]

We don't even have a real National Security Adviser—Mike Waltz (himself a disaster) was ousted in May and they've just had SecState Rubio add the duties of NSA to his portfolio. Note that NSA has usually been filled by someone with significant command experience in the military, significant academic defense policy experience, or significant intelligence community experience.

From 1998 - 2025 Rubio's only jobs have been as an elected official in legislative roles.

Rubio's professional training was as a lawyer.

Rubio being completely out of his depth and holding two huge jobs at once is made even worse by the fact that Trump decimated the NSC staff that could have supported him, cutting it by more than half.  The Middle East specialists were cut from 10 to 5.  As expected, the cuts were all for political reasons, and targeted people with expertise that Trump's people considered insufficient politically loyal.  It's doubtful there is anyone with meaningful country expertise in the advisory loop.  Although I suppose no great expertise is needed if your goal to get rid of Khamenei so that he can be replaced with Khamenei.

[Sheilbh]

It is a bit interesting—the world of national security / defense policy wonks has been somewhat undermined in the last 10 years due to the general decline in respect for expertise as a concept. But on Iran this situation is playing out pretty damn close to how the experts were saying it would play out literally 35+ years ago.

Guess their expertise meant something.

I agree in a way - I feel like there's a fairly deep pool of national security/defence policy wonks (able to work for both parties) over the last twenty years who've been pretty open to bombing Iran.

There have always been people on the other side pushing back for exactly the reasons we're seeing and even the occasional (God forbid) Iran expert providing commentary.

But I feel like the lack of expertise is less to do with doing it or not and more, but that the pro-bombing Iran team had more realistic assessments of what could be achieve with what means - so with the last round of bombing, it could degrade the nuclear program but not destroy it, if you want regime change that probably means ground troops.

I think what is really lacking - and can never be provided because these are character flaws in Trump - is judgement and balance.

Although having said that I do sort of wonder if (and this is not just a US thing) the rise of the general national security/defence expert with a decline in deep subject expertise (even at the risk of "going native") is a problem. Just thinking how often Western states seem to struggle to understand another perspective or escape what is "rational" to us.  There's been a similar debate on defence in the UK recently around "jointness" of everything in defence and I think it applies elsewhere too - it's operationally really important but maybe hurts the decision making?

[Sheilbh]

However it works out, war is the kind of thing that is difficult to just bullshit your way out of and change the topic on. The exception is small distant, low-effort colonial wars maybe... but that's not what this war on Iran is.

I also think there's an interesting side on this in terms of economc war.

I think Nicolas Mulder who's written about sanctions as the West's go-to weapon in recent years. And I think this has come up here and in Russia in slightly different ways. But sanctions basically weaponise our economic inter-connectedness.

That means that if you're an economically relevant revisionist power you have incentives to build alternatives and if you're hit by sanctions and are able to build alternative structures then, again, it enables a sort of asymmetry (this is why I think those BRIC projects around payments etc matter). In part it's just a reflection of the relative decline of Western economic power (G7 down from two thirds to one third of the world economy between 1990 and now) but also I think it underpins the surprising resilince of Russia's economy. In this war - the one country who will not be affected by global economic turbulence from disrupting the Gulf is Iran because they're already isolated from that world system.

I think for a very long time including up to now with Iran and with Russia we've been making assumptions about the power of sanctions - seize x assets, freeze central bank assets, shut them out of payments etc. I think we probably need to refresh those assumptions based on the relative weight of the West's economy, the efforts to build alternatives and the relative damage we can do v what we can suffer.

[OttoVonBismarck]

I think that's outdated thinking too though. People, including Joe Biden, were saying the initial sanctions would collapse Russia's economy. More sober analysis would have suggested that is very unlikely. If you're imagining a Zimbabwe style economic collapse--a significant reduction in foreign trade and budget deficits just aren't enough to get there, that requires a unique set of circumstances.

There's no analysis of the Russian economy that makes it look particularly healthy, instead it looks like a war time economy in which said military spending is the only thing keeping the economy moving at all, meanwhile spending on all other sectors has decreased--including numerous sectors that are absolutely essential for Russia's long term competitiveness as a nation.

While not a traditional economic measure--it has also been terrible for Russia's population, which has declined by net 2 million since war began. Russia had even worse demographic woes than many Western societies prior to the war, and this has been exacerbated significantly by the war.

Iran's economy on the other hand was much, much worse off, and almost entirely because of sanctions. This was noted to have limited Iran's abilities in both foreign projection of power and internal stability.

By every measure the economic sanctions appeared to be working quite well. I don't really know why anyone would think an economic sanction can win a war, or collapse a regime. Has that ever happened in history? It would be foolish to imagine it would start now. Economic sanctions impose pain, they aren't going to impose death (in a regime sense).

[OttoVonBismarck]

Also I'm a little suspect of any claims a significant portion of the "defense wonk" establishment would have supported preventive strikes against Iran in the context of how Trump has done them. Particularly if you exclude the name "John Bolton" from the discussion.

Even Bolton in his various, deranged ramblings, vacillated between limited strikes and regime change in his 30 year obsession with the Ayatollah.

[jimmy olsen]

https://vxtwitter.com/BNODesk/status/2031851355413901598?s=20

https://vxtwitter.com/sentdefender/status/2031850300684763595?s=20

Multiple tankers burning off the coast of Basra

[Legbiter]

https://vxtwitter.com/BNODesk/status/2031851355413901598?s=20

https://vxtwitter.com/sentdefender/status/2031850300684763595?s=20

Multiple tankers burning off the coast of Basra

The Iranians don't have to defeat the US to win this war. they just have to defeat the global economy.

[Zanza]

Trump now publicly blamed Hegseth, Kushner, Witkoff and Rubio for the decision to attack. The buck does not stop here.