The Global Barrel

Pakistan TV, 9 Aug. We discussed the Trump administration’s two retreats from forcefully reopening Hormuz. This is not so simple as who is winning and who is losing.

The first of two key factors to note: It was GCC allies who sharply blocked Trump from executing planned big assaults on Iran to facilitate reopening Hormuz, on fear of Iranian missile punishment which would continue until the US military finished silencing most of Iran’s missile capacities. The Saudis and Qataris were most sharply opposed to accepting this punishment. What are the implications?

a) On the one hand, their refusal to allow Trump to use force to resolve the Hormuz crisis is a de facto success for the Iranian strategy of attacking all GCC states expecting them to then oppose USA military action against Iran.

b) On the other hand, I suspect the Trump-Vance response to GCC allies caving in to Iranian missiles was similar to the attitude the administration took to Europe and NATO in early 2025, for being seen as unwilling to really fight for either Ukraine or their own nations’ security, assuming the bulk of the task would be performed by the USA. Trump’s comments that Gulf allies should “pay the United States” for protecting them once the Straight is reopened, seems a reflection of this mindset.

Interestingly, we then see the rapid emergence of a new “Islamic NATO” mutual defense alliance between Saudi Arabia, Turkey, Pakistan, and perhaps soon Egypt. And simultaneously the Saudi-led new 19-country Red Sea defense league.

These are a striking departure from past Gulf practice. They should be seen, among other things, as an urgent Saudi recognition that the USA either refuses and/or is incapable of continuing to bear the burden of their defense, especially via American “boots on the ground.” I recall when the Obama administration told the Saudis the same, and indeed the Saudis made some military adjustments, including in Yemen, but obviously nothing anywhere like these alliances.

Now, with its new military alliances, the Saudis and their Gulf allies will increasingly be capable of fighting and be expected to actually join in any fight against Iran’s push for hegemony in Hormuz, in the Gulf Region and MENA generally.

The second large factor to note: I also explained how the Iranian leadership’s key lever, their ability to disrupt and partially close Hormuz, is seen by the US administration as a diminishing lever. There are two main indications of this:

• First, the absence of what had been widely predicted to be astronomical oil price spikes after Hormuz was closed and,
• Second, agreements are now in place in several Gulf states that four or five new oil pipelines to be built in the next couple years to bypass the Straight.

In fact, Sec. Bessent said exactly this shortly after my interview where I had anticipated this USA attitude. He (characteristically over-) confidently declared these pipelines mean the Straight will become “irrelevant”. And, shortly thereafter, Sec. of Energy Chris Wright was insistent that USA forces are now escorting eight or nine million barrels per day (mbd) of oil out of the Straight, implying a decreasing capacity of Iran to interrupt shipping.

As I have said before here, this tells the administration that it objectively has much more leeway, timewise, for resolving this crisis than any other administration would have before. This is part of their calculation that they can now, in effect pause any significant offensive military operations and focus on a new (really a second) “economic war” against Iran, to undermine it. However, IMHO, this in-itself cannot, with this particular IRGC-led regime, be sufficient to resolve the Hormuz crisis. In the end, this will require with the use of substantial USA force to accomplish physical occupation, with troops and electronically, of the shore-region of the Straight, and significant further erosion of Iranian missile and drone stocks and capacities to import and/or produce these. Alternatively, a USA back-down, a partial “surrender” is required, which would be almost impossible for any president to accept considering Iranian demands at present, which are hardly conciliatory.