Israel Pushes the US to Burn the Global Economy Down

Welcome to The Geopolity’s What We’re Watching (3W), our daily look at the interconnected worlds of Geopolitics, Economics and Energy. Curated from the world’s leading sources of information, our analysis and commentary is designed to help you make sense of the events driving the major developments in the world.

According to The Atlantic, the real US assessment of its War on Iran is almost the opposite of what it announces to the public including its own “state media”. Iran retains two-thirds of its air force, the bulk of its missile-launching capability, and most of its small, fast boats, which can lay mines and harass traffic in the Strait of Hormuz, the real assessments state. Meanwhile, the US’s use of key weapons—including interceptors and offensive weapons such as Tomahawk and Joint Air-to-Surface Standoff missiles—has produced a serious shortage, despite an effort to quickly manufacture replacements. Already, the United States may have gone through more than half of its prewar supply of four key munitions – a supply that was already low as stockpiles had by then been drained by lethargic manufacturing and munitions donations to Ukraine and Israel.

As to our remark regarding “state media”, 3W is in fact dead serious. Take for example the “highly respected” Wall Street Journal. In the midst of the US – Israel Alliance War on Iran, it asked the question “Why the International Criminal Court Isn’t Taking On Iran”, arguing that “After firing more than 400 missiles over nearly a month”: Iran hadn’t hit a single Israeli military target. It then contrasted this statistic with Israel’s operations in Gaza, during which, WSJ said, 30% to 40% of the casualties were military – “Impressive by the standards of urban warfare”, WSJ said. 3W notes the WSJ did mention the source of these dubious statistics, undoubtedly because they can only have come from the Israeli military (directly or indirectly). In addition, 3W notes that based on the standards of the Ukraine War, Israel’s War on Iran can only be called an “unprovoked war of aggression”. How could an honest journalist of editorial team have missed this? Yesterday, the Wall Street Journal then built upon this storyline by accusing the head prosecutor of the International Criminal Court, Karim Khan, of being a secret agent of Qatar, and framing the ICC’s genocide case against Israel as “antisemitism”, based on “anonymous sources” and “leaked audio” of unknown people with no direct connection to the ICC or Khan. In this case, however, WSJ makes the point that because “Hamas attacked first” Israel cannot possibly have committed any crimes in Gaza, while regarding Iran it ignored the fact that Israel attacked first. This cannot be considered serious journalism, 3W notes. This is not only the regurgitation of hardcore state propaganda – so obvious that the editors are WSJ must have been fully aware of it – but active support for propaganda operations. In other words, the WSJ knowingly and willingly performs this “service” to the (Zionist) war machines inside the US and Israel – if it had been Iranian, the Wall Street Journal would have been called an “IRGC mouthpiece”.

Maintaining the current status quo would of course devastate the global economy, as it is leading to acute shortages of critical inputs including energy, petrochemicals, fertilizers and helium.

Back to the US – Israel War on Iran. The US has refused Iran’s latest proposal for ceasefire negotiations, which 3W discussed yesterday. Iran had proposed to discuss terms for a reopening of the Strait of Hormuz, ending the US naval blockade, and a permanent end to US – Israeli hostilities against it, leaving the “nuclear issue” for a later moment. The New York Times writes that while it is not exactly clear why the US has refused this Iranian offer, it is believed that main reason for it is that the nuclear issue is an Israeli – excuse us, US priority subject that it does not want to keep separate from any ceasefire negotiations. NYT notes that US president Trump used the Iranian offer to again push his narrative that the Iranian leadership is disunited. “Iran is having a very hard time figuring out who their leader is! They just don’t know!”, Trump wrote on social media last week. “The infighting is between the ‘Hardliners,’ who have been losing BADLY on the battlefield, and the ‘Moderates,’ who are not very moderate at all (but gaining respect!), is CRAZY!”. Last week 3W already noted this “developing narrative”, and at that time we explained why it was nonsense.

Iran expert – Trita Parsi of The Quincy Institute said this narrative is convenient, because it allows Trump to maintain the current status quo in a face-saving manner. Now, Trump can claim that Iran is in disarray because of the US military operation, i.e. “we won”. This, of course, is nonsense. Even Germany’s chancellor Merz – not exactly known for deep independent analysis and thinking, notes 3W – realizes that the US has been “humiliated” by the US, writes Bloomberg.

Putting this all together, as 3W discussed yesterday, maintaining the current status quo is probably the “least bad option” available to the US. Returning to war would be repeating what was done previously, and should therefore be expected to have less of an effect, as Iran is now more prepared. But it would further deplete US military stockpiles, worsen the embarrassment of the “strongest military in history” not being able to decisively defeat a country that has been under international sanctions for most of the past 40 years, and further expose the weakness of the “US security umbrella” as the US military would not be able to effectively defend its military bases in the Gulf countries, or their hosts, from Iranian retaliatory strikes.

Maintaining the current status quo would of course devastate the global economy, as it is leading to acute shortages of critical inputs including energy, petrochemicals, fertilizers and helium. But, as many historians have noted, empires in decline tend to see a “burning down” of the world around them as the least bad option – Nero burned down Rome, after all. So the US would not be a historical aberration if it were to be “okay” with this outcome of its War on Iran, now that it realizes it cannot decisively win it.

Any entity (read: Israel) that would want the US to take this particular course of action, rather than, say, return to the negotiating table with Iran in earnest to find a structural solution for the current problem, would probably also argue that the current “least bad” option is not really so bad. It could point to the fact that the US can easily be self-sufficient in energy, petrochemicals and fertilizers, especially when one factors in the US dominance over the Americas region. And it could add that the US’s main adversary, China, is actually hurting more than the US is. The New York Times writes that even China, despite having massive inventories of oil and gas, is starting to feel the economic pain resulting from the supply chain disruption caused by the closure of the Strait of Hormuz. So relatively speaking, the entity that would want prevent the US and Iran talking to each other in earnest could argue, the current status quo is a win for the US, something to be treasured and preserved! In this manner, this entity could create the impression among US policymakers that maintaining maximum pressure on Iran is actually good for the US, as it is in accordance with the geostrategy set out by Elbridge Colby, US undersecretary for defense, in his book “The Strategy of Denial: American Defense in an Age of Great Power Conflict”.

At 3W we note, however, that if the US strategy is indeed about containing China, which is the basic principle underpinning Colby’s book, then a wiser US approach would be to solve its issues with Iran. Colby also argues that in order to focus on China, the US should de-prioritize other regions, including the Middle East. The US could therefore offer a deal to Iran in which it gives Iran complete sanctions relief, reintegration into the US-led economic hemisphere, as well as a controlled civilian nuclear project, in return for Iran entering the US orbit, i.e. limits its energy deals with China. Considering the fact that Iran has on many occasions offered significant compromises to the US, not only JCPOA but also during the more recent nuclear negotiations, this deal, or a variation of it, would likely be accepted by Iran. In this case, the US could probably do more damage to China, as it isolates China.

This raises the question: why did the US not take this course of action regarding Iran, if it is also based on the “Strategy of Denial”. In the 3W view, the answer is the fact that this alternative course of action regarding Iran does not align with Israel’s foreign policy, unlike the course of action that is based on continued maximum US pressure on Iran.

And that, we at 3W belief, fundamentally explains the situation the world finds itself in – and why the US is likely to maintain the current status quo that will burn the global economy down.