Four weeks into a conflict that was initially expected to last just four days, the United States is facing a diplomatic stalemate with Iran that is more entrenched than ever. The war has so far cost the US around $30-40 billion and Israel $300 million a day, yet Washington's efforts to persuade Iran to dismantle its nuclear programme have been met with resistance. The situation has become increasingly complex, with the strait of Hormuz, a vital waterway, now being negotiated for passage by Iran. This development is a significant blow to the US, as it had previously relied on the strait remaining open.
The US is now having to negotiate with Iran to reopen the strait, which has been a key concern for the American high command. According to Pete Hegseth, the US secretary of defence, the only thing preventing transit in the strait is Iran shooting at shipping. However, this is not the case, as insurers and tanker owners are instead fearful of Iran shooting at shipping. As a result, the strait remains blocked, with 95% of traffic unable to pass through.
Iran has set up a system where tanker owners can negotiate with the Iranian navy over the toll they are willing to pay for their tankers to be given "free passage". This move is seen as a way for Iran to turn the strait into a lucrative business, with estimates suggesting that the country could raise up to $80 billion a year. The US, along with Israel, continues to bomb Iran, but the situation remains unchanged, with Iran continuing to behave as if it is not being defeated.
The price of oil is a key metric for Iran's success, and the country is using it to its advantage. The price of oil has remained relatively stable, despite the conflict, and experts believe that this is a deliberate move by Iran to disrupt the global economy. The strait of Hormuz is not just a vital waterway for oil, but also for other essential goods such as chemicals, helium, and fertilisers.
The war is having significant consequences for the global economy, and experts believe that it could be one of the biggest strategic failures of the West since World War Two.
The US and Israel's war with Iran is a catastrophic failure that is having far-reaching consequences for the global economy. The US's inability to persuade Iran to dismantle its nuclear programme and the subsequent blockade of the strait of Hormuz are a significant blow to the American presidency, particularly for Donald Trump. The war is a testament to the complexity of international relations and the need for diplomacy and negotiation. As the situation continues to unfold, it is clear that the US and its allies are losing the war, and the consequences will be felt for years to come.
