U.S. President Donald Trump has been transparent that a renewed bombing campaign is on the table, and Iran – while committing to proportionate responses to what it perceives to be U.S. hostility – has increasingly launched drones and missiles at commercial shipping in the Persian Gulf.
Nevertheless, the key blockers to a permanent peace agreement reflect how the war is being fought.
According to Iran’s proposal, rejected by the U.S. last month, the Strait of Hormuz will reopen if Washington agrees to measures that include a lifting of its ongoing naval blockade and the unfreezing of billions of dollars’ worth of Iranian assets.
Iran is Struggling
Economically, Iran’s campaign is weakening even as it continues.
Traffic through the Strait of Hormuz is falling once again after weeks of covert transit by vessels from the Gulf states, and oil prices remain high.
Commodities such as diesel remain near record levels, which will almost certainly cost Trump and the GOP in next month’s midterm elections and inflict hardship in the U.S. and worldwide.
However, exporters such as Saudi Arabia and the United Arab Emirates are using pipelines to bypass the Strait of Hormuz entirely, with the latter accelerating completion of a second pipeline to early next year.
Smaller exporters such as Qatar and Bahrain are using ship-to-ship cargo transfers, allowing vessels to hug the Omani coast and avoid detection.
While the U.S. Naval blockade has stripped Iran of its ability to export oil from its ports, what’s being sold was either previously exported during the short-term truce, otherwise known as the memorandum of understanding, or moved out of the country by land.
During the brief ceasefire, 60 million barrels left Iranian ports; it’s unclear how much remains. 250,000 barrels, according to Kpler, leave Iran by land each day; almost 2 million left the country in the same time frame before the war began.
U.S. Feels the Pinch
The U.S. has not evaded Iran’s economic action.
Energy prices remain high, as do producer and consumer costs.
Whether the GOP would have retained control of Congress had the war never begun is a redundant question.
Still, barring a miraculous political turnaround, the Democrats will control at least one of Congress’ two chambers in the new year.
Washington’s economic measures are also proving less effective than hoped.
When Treasury Secretary Scott Bessent announced sanctions on Iranian airlines, he told CNBC that “all the Iranian airlines will be shut down around the world by Wednesday, 23rd September. “We know who they are, they know who they are, and we are putting a stop to it,” he said then. Nevertheless, flights to and from Iran continue to operate.
Why the U.S. is Winning
While efforts to convince countries to back aviation sanctions may have struggled, a ban on the banks has proved more fruitful.
“Any entity that facilitates money laundering on behalf of Iran will be removed from the U.S. dollar system,” Bessent said when announcing Operation Economic Outcast.
Days after the UAE sanctioned an Emirati branch of the Iranian-owned Bank Melli, it blocked all branches within its jurisdiction from processing transactions related to Iran.
The U.S. naval blockade has also been mentioned but is worth reiterating.
Tehran’s oil exports are at one-eighth of what they once were, and eventually it will no longer be able to rely on previous export levels.
The blockade is quite literally costing Iran billions of dollars every single month.
The War Will End in a U.S. Victory: Iran Collapse?
That last point may be why the U.S. is winning the economic war, even if it feels like a stalemate.
Eventually, Iran’s income will drop so dramatically that the country will enter the economic turmoil that has marked the end of many regimes that fell before it.
However, economic measures take time to show their effectiveness.
Iran will eventually run out of reserves, but that’s unlikely to happen before the midterms.
Energy prices will fall as exporters diversify their routes beyond the Strait of Hormuz, but that won’t happen overnight.
Trump insists that the war will “end very soon.” Whether that’s a ploy to convince Americans to vote Republican next month or his actual belief remains unknown. A more popular, and maybe even convincing, argument is that the war will “end with a decisive American victory.” The longer the status quo remains, the harder it becomes to see how Iran can emerge as nothing more than a shadow of its former self when all is said and done.
About the Author: Shay Bottomley
Shay Bottomley is a British journalist. He has written for the Western Standard, Business Insider, Maidenhead Advertiser, Slough Express, Windsor Express, Berkshire Live and Southend Echo.
