Lost amidst the cacophony of the media’s pathological anti-Trumpism, Paul Manafort tax trial updates, and Stormy Daniels deep-dives, are the legitimately important things that are happening in the world. High on this list should be the current troubles in Iran.
While we are usually supportive of the mullahs’ difficulties, there are scenarios where a rapid decline of the Iranian state causes problems for America and the world.
While the imminent end of the mullahcracy has been incorrectly prophesied many times since the 1979 Islamic Revolution, nothing lasts forever.
The trend is pointing to conflict…
Iran is once again under concerted economic pressure from the U.S. Earlier this year, President Trump withdrew from the Obama-era Iran nuclear agreement, the Joint Comprehensive Plan of Action (JCPOA).
Trump and his national security team didn’t like several provisions in that agreement – which the president has referred to publicly as “horrible and laughable.” Notably, the JCPOA left a range of malignant Iranian non-nuclear activity unaddressed, and ultimately had sunset provisions that would have allowed the mullahs to bide their time and eventually achieve breakout capability after years of entrenching themselves in the international economy and building up their conventional military forces.
Now the economic sanctions have kicked in, and the Iranians are feeling the pinch. The regime in Tehran has been stockpiling gold and other hard assets in anticipation of the economic pain to come. Iran’s currency will once again spiral down and the cost of living will skyrocket. The months ahead will not be happy ones.
Plenty of wars have started over what in retrospect look like almost unthinkably foolish miscalculations.
Theoretically, this could turn out for America’s interests. While the imminent end of the mullahcracy has been incorrectly prophesied many times since the 1979 Islamic Revolution, nothing lasts forever. Maybe the mullahs are running out of time. Iranians have already taken to the streets in protest. Instead of the usual anti-America, anti-Israel theatrics, they have been chanting “death to the dictator.”
On the other hand, the Iranian hardliners are no strangers to economic pain, political repression, and desperate measures. They’ve withstood plenty of nascent revolts before. And when looking at their strategic situation across the Middle East, their Islamic revolution by proxy has never been stronger. Whether it’s Shia militias in Iraq, the Houthis in Yemen, the Assad regime in Syria, or Hezbollah in Lebanon, the Iranians have plenty of very nasty friends who will do their bidding.
And then there’s the Strait of Hormuz…
This is one of the most important – and most vulnerable – geostrategic areas in the world. The Strait of Hormuz is where the Persian Gulf connects to the Arabian Sea. At its narrowest point, the Strait is only about 30 miles across. And it is the single most important transit route for oil on the planet.
Around 20% of total global oil output transits this small area. In 2016, about 18.5 million barrels floated down this waterway every day. Of that output, about 3.8 million came from Iran. But the threat is not that Iran would pull its supplies off the market – it’s that the Iranians would pull everyone’s supply through the Strait off the market by attacking transiting oil tankers. And most of the ways they could do so would be difficult, if not impossible, to stop.
Earlier this month, Iran conducted military exercises in the Strait that were effectively a reminder to the world that it would be easy for it to shut down 20% of the world’s energy supplies.
Iran has a navy that, while a joke compared to U.S. and allied blue-water fleets, is more than capable of fast-moving littoral operations against lumbering, defenseless oil tankers. Additionally, Iran’s nearby land-based missiles could easily take out passing supertankers, causing vast ecological as well as economic damage.
Of course, the Iranians have been saber-rattling around the Strait of Hormuz for decades. The most likely scenario is that they will threaten the Strait without taking any direct action. As bloodthirsty and underhanded as the Iranian Revolutionary Guard Corps may be, it hasn’t shown a willingness to provoke direct military confrontation with the U.S. on the high seas. Plus, if it crashed the global oil market, it would annihilate their own economy too.
But Iran is running out of options. Trump’s national security team is a far cry from the “deal first, negotiate later” approach of the Obama squad. The current White House won’t throw the mullahs an economic lifeline unless they yield on their nuclear program with real cessation and destruction of it, which the mullahs in turn are almost certain to refuse.
Plenty of wars have started over what in retrospect look like almost unthinkably foolish miscalculations. The Iranians have been holding the Sword of Damocles over the Strait of Hormuz for a long time, and if they decide to drop it, the global energy market will drop along with it – and nobody knows how much, or for how long.
Buck Sexton is host of the nationally syndicated talk radio program, Buck Sexton with America Now, heard on over 100 stations across the country.
A former CIA and NYC Police Department Intelligence Officer, Buck is also the co-host of Stansberry Investor Hour, a weekly radio show that you can subscribe to for free right here: http://investorhour.com.
