Dem
53
Ties
3
GOP
44
Yesterday, we snarkily remarked that if Donald Trump really wants to get diesel prices down, he should end the stupid war in Iran. The truth is, it's not that simple anymore.
To start with, nobody believes that Trump has any sort of plan to get the Strait of Hormuz open again. J.P. Morgan effectively gave up on trying to predict oil futures this week, observing that the prediction markets think that the Strait won't reopen until mid-2027, and that they (J.P. Morgan) suspect that might be too optimistic.
More importantly, the linchpin of U.S. oil interests in the Middle East is Saudi Arabia. Way back in 1945, Franklin D. Roosevelt and the then-king struck a devil's bargain to create ARAMCO, which guaranteed the flow of Saudi oil to the U.S. in exchange for U.S. assistance propping up the regime. And at the moment, the regime really needs some industrial-strength propping. Houthis from Yemen, who take their marching orders from Iran, have been hitting the Saudis hard, and have nearly shut off access to the Bab al-Mandab Strait.
The Saudis have two ways to get their oil out of the country and to the rest of the world: Hormuz and Bab al-Mandab. If both are unavailable, no Saudi oil, and the oil crisis gets worse. More significantly, if the Saudis are forced to form an alliance with Iran, or if the Saudi royal family is deposed by Iran, then the U.S. loses its most important ally in the region (even more important than Israel), which will have disastrous geopolitical and economic impacts.
The Saudis have been pleading for help, with even Mohammed bin Salman getting on the phone to twist Trump's arm. And Trump very nearly granted the request. American planes got ready to hit the Houthis this weekend, and may even have been in the air (accounts differ). However, at the last minute, Trump called the attack off, and told MbS that he's on his own, for now.
It's not too hard to figure out what happened here. Trump is peddling the fantasy that the U.S. is winning/has won the war, and that the U.S. controls the Strait of Hormuz. Not too many Americans are buying it, but maybe some are. If there is a U.S. attack, and in particular if one or more Americans die in that attack, then it puts to lie the entire tall tale that the White House is telling. Not a great look when the war is very unpopular, and the elections are 45 days away.
We presume, then, that Trump will become much less restrained around November 4. It's going to be up to the Saudis to find a way to hold on until then. Meanwhile, it's very hard to conceive of exactly how, or when, this war will actually come to an end. If we were forced to guess, we would guess it will not end with a glorious U.S. victory with parades down Fifth Avenue and not before Nov. 3 in any event. (Z)