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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.
Earlier this week, 3W noted that the US speaks with supreme confidence regarding the current situation in the Strait of Hormuz. It is now totally under US control, so the narrative goes. Iran has been defeated, it is being strangled by the US naval blockade, and now it is just a matter of time – days or weeks at most – before Tehran raises the white flag of surrender.
At 3W we explained why this US narrative does not align with all the facts – and ignores the pain that Iran is inflicting on the US. In other words, that the current stalemate is not one of imminent US victory, but rather one of “who of the warring parties will break first?”.
On this question, The New York Times writes that Iran has been launching dozens of drones and missiles at commercial ships in the Strait of Hormuz each week since the beginning of August, on average 30 drone attacks and 10 anti-ship missile attacks per week. Since Sept. 10, at least 13 ships, most of them oil tankers, have officially confirmed they had been struck by projectiles or debris from projectiles.
Since the United Nations gathering, Trump’s refusal of Iran’s latest ceasefire proposal, and the US claims of victory, Tehran has stepped up its attacks, writes The Maritime Executive. A total of six were struck this week alone, in 110 incidents of attack. The Kuwait Oil Tanker Co. crude oil tanker Kazimah III was struck while transiting the Strait of Hormuz on Thursday, October 1. Late on Friday, a Panama-flagged crude oil tanker located about 5.3 nautical miles off the coast of Oman was struck. At least three of the tankers were controlled by the UAE, the Al Ruwais, Sinbad, and Mersin Prosperity.
What this means, we at 3W note, is that every barrel of energy that comes through the Strait at present, comes at a tremendous cost. An unsustainable cost, 3W wrote earlier.
This explains why the current situation has not led to a dramatic decline in energy prices – energy traders simply do not believe that energy flows will return to true normal any time soon.
And that leaves crude oil but especially refined fuels such as diesel and jet fuel at record high prices. The United Nations has estimated that around the world, governments have by now spent $1 trillion on energy subsidies, in order to limit the effect of the US – Israel Alliance War on Iran on ordinary citizens, writes Bloomberg. The ability of governments to provide this “shield” is rapidly approaching its end, however, the UN also found.
The United Nations has estimated that around the world, governments have by now spent $1 trillion on energy subsidies
The Guardian writes that in response, US president Trump threatened the G7 countries that unless they draw supplies from strategic storage immediately, he would ban US exports of these products to lower their price inside the US. The G7 complied and announced on Friday that it would release up to 100 million barrels of their emergency diesel and crude oil stockpiles.
At 3W we note that this is neither a solution for the problem, nor a sustainable one. As to why it is not a solution, in parallel to the G7 move, China has started slowing exports of refined products, writes The New York Times. Shipments are continuing to countries with close ties to Beijing, including Cambodia, but the government has stopped granting new commercial export permits to wider global markets. As to why it is not sustainable, storage can be drawn down temporarily only. Until the storage tanks run empty. Thereafter the problem will return, if the issue in the Straif of Hormuz has not been truly solved and settled.
This makes clear that the US demand to the G7 was to buy time. But for what?
The Wall Street Journal writes the pentagon is sending a third aircraft-carrier strike group and an additional Marine expeditionary unit to the Middle East. In addition, the USS Makin Island Amphibious Ready Group, comprising three amphibious ships carrying Marines from the 13th Marine Expeditionary Unit, was deployed. The ships, jet fighters, Marines and sailors will arrive in the region by the end of November. Trump recently told aides that he expects to resume bombing Iran that same month, The Wall Street Journal earlier reported.
In this context, President Trump’s top cabinet members huddled for hours at Camp David on Friday to discuss next steps in the Iran war and the Saudi-Houthi conflict in Yemen, writes Axios. Among the other participants were Secretary of State Marco Rubio, Secretary of Defense Pete Hegseth, White House envoy Steve Witkoff, CIA director John Ratcliffe and chairman of the Joint Chiefs of Staff Gen. Dan Caine. Vice President Vance chaired the meeting.
Iran says it is preparing a broader and more forceful response if the United States resumes large-scale military attacks, writes Reuters. The planning reflects a conviction within Iran’s leadership that any renewed US campaign must be met with a stronger response than before, Reuters says, adding that Tehran has also instructed allied groups in Lebanon, Yemen and Iraq to be ready to support Iran in the event of a renewed large-scale US attack. Senior Iranian commanders are further reviewing plans to expand potential targets beyond US-linked assets to countries that support US military operations and possibly to locations outside the Middle East. Here, 3W would note that Iran makes a strategic mistake if it only plans to respond to US attacks. If it is essentially certain Iran is going to be attacked again, a much wiser strategy would be to launch a pre-emptive, defensive operation designed to limit the US – Israel Alliance ability to hurt Iran militarily. The US fleet implementing the naval blockade on Iran would be an obvious first target for such an operation.
And this brings us back to the conclusion from our previous update, which was that the US – Israel Alliance War on Iran is not only far from over. It is currently expanding, and likely to intensify over coming weeks.
the US – Israel Alliance War on Iran is not only far from over. It is currently expanding, and likely to intensify over coming weeks
The first of these “intensifying expansions” might not be far off, as Saudi Arabia is planning an offensive against AndarAllah in Yemen, writes Reuters. The operation, expected to be launched in the coming weeks, will be led by Yemeni forces on the ground, which are overseen by Riyadh, and supported by Saudi air strikes. More than 100,000 Yemeni troops could be mobilized in the offensive, but the Saudi themselves aren’t expected to play a direct role in combat operations. The US is only providing military advisers and intelligence including targeting information to support the Saudi operations in Yemen. Turkey and Pakistan, with whom Saudi Arabia signed a joint defence agreement last month, have provided military equipment for use in Yemen, Pakistani officials have said. Pakistani military advisers are also on the ground with Saudi counterparts to support Yemeni forces.
3W thoughts on the above go back to when we first reported on the “blitz” operation that saw AnsarAllah take full control of Yemen’s Red Sea coastline. At that time, we noted that the lack of US response to this operation, despite the problems it created for Saudi Arabia, could be due to one of two reasons. Either the US did not have the capability to provide significant support to Saudi Arabia, or it liked the idea of AnsarAllah turning the thumbscrews on Riyadh such that the Saudi’s would become more willing to fall in line with the US plans for the region.
The unexplained attack on the East – West Pipeline, regarding which Iran said it nor its partners were involved in any way, supports the hypothesis that the US has ulterior motives with its stance regarding Yemen – as does Israel’s strategic interest in seeing the countries across the Arabian Gulf destroy themselves in senseless wars.
To us at 3W it seems that the proposed Saudi operation in Yemen has received US sign off for the exact same reason. It is essentially a copy of the utterly failed 2015 Saudi operation against AnsarAllah, as it relies on mercenaries, who through Saudi air and command & control support are supposed to defeat the battle hardened, professionally trained, and deeply dedicated AnsarAllah fighters of Yemen. In 2015 this ended in failure for the Saudis (and Emiratis). Why would a repeat now have any other outcome? This is so obvious that we suspect the US wants the Saudis to launch this operation, such that it will fail again, such that it will be weakened further, and the US – Israel Alliance will have more leverage over it. The end result in this case will be an Abraham Accord on Israel terms, and full Saudi support for an Alliance attack on Iran, which will lead to the destruction of both the Persian and Arabian sides of the Gulf – leaving Israel ready to deal with Turkiye and Pakistan next, in order to achieve hegemony over the Muslim heartland.