The substance of Iran’s decision to widen the conflict to Gulf energy routes is to cause economic pain not only to the region but also to the world at large
US attacks on Iran are continuing with the military objective of completely degrading its capacity to project conventional power beyond its borders. In keeping with this aim, since February 28, Washington has destroyed Iran’s missiles, drones and their launchers. It has also targeted missile and drone manufacturing facilities.
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In addition, it has bombed and destroyed naval ships. US military commanders have stated that they have attacked 5,500 targets in Iran. Yet despite these attacks, Iran on March 12 launched missiles and drones targeting tankers in Iraq and oil facilities in Oman, the UAE, Kuwait, Bahrain and Saudi Arabia. An Indian sailor was killed in the Iraq attack. Iraq has reportedly suspended port operations.
Energy markets under strain
Iran has also been successful in disrupting maritime traffic through the Strait of Hormuz. This strategic waterway is only about 22 miles wide at its narrowest point, and just two miles of the passage in each direction are used as shipping lanes. Around 20% of the world’s oil passes through the Strait of Hormuz, and its movement has now been disrupted. This has resulted in an increase of around 30% in oil prices. Besides, oil prices have been fluctuating sharply. In addition to oil, Iranian attacks on the Gulf Arab states and disruption of the Strait of Hormuz have crippled natural gas production and flow. The impact of Iranian actions on energy flows has been felt by all countries, including India which is experiencing LPG shortage.
US President Donald Trump said at a gathering of his supporters on March 12 that the US had won the war in the first hour of its joint air action with Israel on February 28. He also said that the operation had to continue till its aim was achieved. Separately, he has said that he can end the war at any time he wants and that it will end soon. From the beginning of the conflict, which he described as a “little excursion,” Trump has not been consistent in his messaging. On several occasions since February 28, he has issued statements aimed at calming the oil and stock markets.
For the time being, Trump seems to have given up his initial aim of deciding who will be the leader of Iran after the conflict or expecting the Iranians to announce a leader who will be acceptable to him. The US and Israel carried out a decapitating strike against Iran at the start of their air campaign. In this, they killed Iran’s Supreme Leader, Ayatollah Ali Khamenei, and top-ranking officials. Trump has been disappointed that Khamenei’s son, Ayatollah Mojtaba Khamenei, has been selected by the Assembly of Experts as his father’s successor.
Mojtaba Khamenei has said that the closing of the Strait of Hormuz should be used as leverage in the ongoing war against the US and Israel. He further stated that Iran will continue attacking neighbouring countries in the Gulf. In his first statement since being appointed as the country’s supreme Leader, Mojtaba vowed to avenge those killed in the war, including in a strike on a school.
Iran escalates regional conflict
Trump had also hoped that the minorities and the anti-Vilayat-e-Faqih (VeF) elements would rise against the system. These hopes have been belied so far. The anti-VeF elements have been coerced into silence by the security apparatus. Iran’s innate nationalism is also strong, and that is a factor at play at present.
Iran’s strategy in response to the US and Israeli assault was to expand the scope of the conflict and take it to US bases in the Gulf region, as well as to those states that harbour them. Confronting an existential crisis, the VeF went on the offensive. While Trump may have thought that it had made a great mistake in attacking the Gulf states, it was part of a well-thought-out advance strategy. This is because it was set in motion despite the elimination of the Supreme Leader, who had led the country for 37 years, and many heads of Iran’s institutions. It is difficult to imagine that a system in disarray could have made a decision to take the conflict abroad to Iran’s Gulf maritime neighbours.
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The substance of the Iranian decision is to cause economic pain not only to the Gulf states and the region but also to the world at large. This may mean that large parts of the world, which are suffering the consequences of the Iranian response to the US and Israeli attacks, would look upon Iran’s strategy negatively, but that is obviously a factor that the Shia state is willing to live with.
The consequence of Iran’s strategy has caused turmoil in the world economy. That will only grow as this conflict continues. Hence, the world has a stake in its earliest termination. What are the prospects that it would end early?
War objectives under debate
Trump claims that his basic objectives have been met. At present, Iran’s ability to strike abroad has been curtailed but not entirely eliminated. This has been seen in its actions of March 12. The US has destroyed a great number of Iranian naval ships, including mine-layers. However, Iran’s disruption of maritime traffic in the Strait of Hormuz can take place through small non-naval vessels too. These are not easy to fully eliminate through air action.
The Iranian capacity to develop its nuclear programme was greatly impaired through US and Israel’s strikes against its nuclear facilities last year. Reports indicate that this time too the two countries bombed the Natanz nuclear facility. In his press conference on March 9, Trump had this to say on Iran’s nuclear capability: “On the very first day I came down the escalator in 2015, I said, quote, ‘I will stop Iran from getting nuclear weapons,’ and all I’m doing is keeping my promise. Think of that. That was in 2015 I said it. It was a threat then and a much bigger threat now, but no longer a threat — not for a long time, anyway. We want to keep it that way.” The operative part of Trump’s assessment is contained in his last two sentences.
Conflict tests global economy
The US economy is facing the fallout of the closure of the Strait of Hormuz. Though the US has enough energy, the price of petroleum products has risen. As this is a mid-term election year, Trump or the Republican Party does not want any inflation. Trump is also conscious that the oil availability of US allies, which are dependent on Gulf oil, has been hit. Besides, the world oil market is in disarray. To calm it, the International Energy Agency, which is an organisation of mainly Western countries, has announced that it will release 400 million barrels of oil. It remains to be seen how this will impact the market. In any event, Trump is under some pressure on this score.
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The main issue is whether Trump will declare victory and announce the closure of the US air campaign against Iran. He could compel Israel to do so too. The question will then be how Iran would respond. Iranian President Masoud Pezeshkian put out on X on the night of March 11: “Talking to leaders of Russia and Pakistan, I reaffirmed Iran’s commitment to peace in the region. The only way to end this war, ignited by the Zionist regime and the US, is recognising Iran’s legitimate rights, payment of reparations, and firm international guarantees against future aggression.” It is unlikely that the US and Israel would be willing to agree to this. However, can it lead to the resumption of talks between the US and Iran and the halt of hostilities?
The next few days will be crucial and hold an answer to this question.
(The Federal seeks to present views and opinions from all sides of the spectrum. The information, ideas or opinions in the articles are of the author and do not necessarily reflect the views of The Federal.)
