Iran Conflict – Who Has the ‘Trump’ Card
When Trump aspires to reaching a deal, he thinks in either black or white. But whether it be political, economic or military the reality is that the world is always various shades of grey. This is very much evident in the way the Iran conflict was planned by the U.S. – the expected clear and rapid victory not having occurred, not least as the aims were never fully thought out. Instead, the current situation is one of deadlock, with both sides wanting no return to hostilities, albeit for different reason but where both are accusing the other of ceasefire violations. While this suggest that the ceasefire Trump has now extended may persist it will be a delicate one and is unlikely to see any formal peace deal in the near future. Both sides are far apart and bridging the gaps in aspiration could take years, if at all! What is clear is that Iran has the ‘trump’ card (forgive the pun) in its control over the Straits of Hormuz. More likely than not, Iran will gradually open the Straits up, but the global economy will have an-energy and supply chain related cloud overhanging for some time to come. An end to hostilities is a necessary condition for energy prices to drop, but it is not a sufficient one!
Seemingly the ceasefire has been extended, not surprising given Trump’s repeated about-turns (even on Tuesday alone) and the fact that both Iran and the US want peace, the latter enough to temper any attempt by Israel to resume hostilities ahead of its election due later this year. Each side has an obvious different rationale for this; Iran is exhausted economically and militarily while the U.S knows the growing risks to it and the world economy if the Straits remain effectively closed, blocking off oil and other vital commodities. Meanwhile, the U.S is realising at least implicitly that it has persistently over-estimated its ability to use its undoubted military superiority to reach its goals regarding Iran. But the U.S still seems to be over-estimating Iran’s ability and willingness to reach a so-called ‘deal’ in the very short-term. Iran may re-open the Straits in due course (chiming with our base line scenario) but any peace deal may be far off, if at all; after all Iran and the U.S have been at loggerhead of nearly 50 years!
Partly this reflects the mutual distrust between both sides and partly the gaping hole between what each wants. But there is also a growing realisation by Iran that it can and should act calmly and probably slowly to counter the ever-more chaotic diplomatic forays the U.S. has attempted. Iran has clear goals including a continued ceasefire regarding Lebanon and an end to the U.S blockade. It also is very wary of meeting what it thinks are excessive, ever-changing and sometimes contradictory U.S. demands. But in just having suggested it is "preparing to show new cards on the battlefield", Iran is evermore also aware the growing bargaining tool it has given its effective control of Straits of Hormuz which deals it an effective trump card. Indeed, Iran knows that Trump could destroy Iran’s ability to control the Straits by a major further military attack but this would trigger simultaneous retaliation by Iran in taking out much Gulf oil infrastructure that would man an even longer curtailment to energy and commodity supply from the region.
Indeed, with the Straits in effect closed, Trump clearly has assessed his array of bad options and decided to try diplomacy again. But among the key divisions is Iran’s determination to maintain a right to enrich uranium on Iranian soil. And this underscores how difficult reaching any near-term deal will be; the Iran nuclear deal signed in 2015 — and then ripped up by Trump in 2018 — took almost three years to nail down.