“US Victory” – Trump Style

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.

The global economic crisis caused by the US – Israel Alliance War on Iran continues.

On Tuesday, the Australian government said it secured three shipments of jet ​fuel from China and more agricultural-grade urea from Brunei writes Reuters. Some 600,000 barrels, or about 100 million litres, of jet ​fuel are now to arrive early June, following discussions between ​Prime Minister Anthony Albanese and Chinese Premier Li Qiang. From Brunei will come some 38,500 metric tons of urea. 3W notes that such announcements in fact indicate the depth of the crisis, not the opposite. The jet fuel represents about 1% of Australia’s annual consumption, meaning the head of the Australian state had to personally speak to China and ask for a volume of jet fuel that is just a drop in the ocean.

In addition, India on Tuesday again increased fuel prices in the country, writes The National. This increase followed India’s first rise in four years last Friday when it raised petrol and diesel prices by three rupees a litre.

Across sub-Saharan Africa, rising energy prices have already led to protests and forced countries to take emergency measures, writes The Financial Times.

Meanwhile, global stockpiles of crude oil and refined products are being drawn down at a record pace, writes Bloomberg based on a Goldman Sachs assessment. Visible inventories shrank by a record 8.7 million barrels a day so far in May, almost double the average pace since the conflict began. In this situation, physical shortages could strike Europe by the end of May, writes CNBC. At that moment, the currently elevated prices for energy will really go through the roof, says Jeff Currie, former head of commodities at Goldman. “Then we find out what the willingness is of somebody to pay for that last molecule.”

As to how the phase of physical shortages will play out, first it will drive prices significantly higher from current elevated levels, writes The Financial Times. This will lower demand but increase inflation. That, central banks will try to manage by raising interest rates. That will depress economic activity across the board.

This is the backdrop to developments around the US – Israel Alliance War on Iran, because as we at 3W said before, the US cannot simply walk away from the current status quo, for a variety of reasons but most importantly the economic fallout of the continued closure of the Strait of Hormuz. And that leaves just two options on the table: renewed fighting to force Iran into submission; or real negotiations involving significant American compromises and US distancing from Israeli demands.

the US cannot simply walk away from the current status quo, for a variety of reasons but most importantly the economic fallout of the continued closure of the Strait of Hormuz

In this regard, on Sunday US president Trump warned that a new Alliance attack on Iran was imminent, writes Axios. Trump told Axios in a phone call on Sunday, before the US had received Iran’s latest offer, that “the clock is ticking” and if Iran doesn’t show flexibility, “they are going to get hit much harder.”

Then on Monday, Trump announced on social media that he had told his top military officials to prepare for a “full, large scale assault of Iran”, if “an acceptable Deal is not reached”, writes The New York Times. But later that same day, NYT adds, Trump told reporters, “We were getting ready to do a very major attack tomorrow, and I put it off for a little while, hopefully maybe forever, but possibly for a little while, because we’ve had very big discussions with Iran, and we’ll see what they amount to.” Trump said the leaders of Qatar, Saudi Arabia and the United Arab Emirates asked him to postpone military strikes because they believed they could strike a deal with Iran that would satisfy the US. “So I was called by these three countries, plus others, and they’re dealing directly with our people, and right now Iran, and there seems to be a very good chance that they can work something out,” Trump said. “If we can do that without bombing the hell out of them, I’d be very happy.” Interestingly, in the 3W view, Trump said that he would require any deal to prohibit Iran from obtaining nuclear weapons. That, we note, is in fact a significant pullback from earlier demands, which were about no Iranian enrichment capabilities and removal of all enriched material.

With all the above in mind, the 3W assessment of the “Trump show” on Sunday and Monday is as follows.

First, talks must actually be underway. Likely, this confirms what 3W reported on Sunday, that Saudi Arabia has proposed a non-aggression pact with Iran to get to out of the current impasse.

Second, as these negotiations are underway, Trump in his usual style tried to play the tough guy, the strong guy, who bullies people into acceptance of his demands. Hence his threat to restart the war. At this stage, however, at 3W we don’t believe in this anymore. Since the start of the ceasefire we have said the US has no more military options left. It does not have the military resources in the Middle East region to undertake a large land invasion, and it does not have the stomach to accept the casualties that would inevitably result from a limited land operation. The US also does not have the capabilities to restart its air-war against Iran – and even if it did, it would not make a meaningful difference. It would be nothing more than “making rubble bounce”, in the words of John Mearsheimer. Iran, meanwhile, maintains the capability to strike back painfully hard in response to any US – Israel Alliance attack on its energy infrastructure: destroy the Arabian Gulf’s energy infrastructure, its underseas internet cables, and the US associated business interests, including (in particular) the UAE’s tech industry. At 3W we note that since we first articulated this point of view, US media has carried a number of articles which included information from US military and/or intelligence sources on the US military’s degraded inventories of weapons systems and ammunitions, and Iran’s continued military strength despite the bombing campaign. The above referenced NYT article also includes a section in which a “US military official who spoke on condition of anonymity” talks about Iran restoring its missile capabilities, digging out the sites bombed by the US – Israel Alliance, and together with Russia studied the flight patterns of American fighter jets and bombers, enabling Iran to defend against them more capably. These articles, in our view, are examples of the Deep state pushing back against the idea of restarting the War on Iran.

It [the US] does not have the military resources in the Middle East region to undertake a large land invasion, and it does not have the stomach to accept the casualties that would inevitably result from a limited land operation

Third, if indeed the US has walked back its demands regarding Iran’s nuclear program, an agreement is in reach because Iran has never demanded the right to develop a nuclear weapon – and according to US intelligence estimates has not had a program to develop such weapons for decades already. In 2025 the US Director of National Intelligence Tulsi Gabbard said there was no evidence Iran was building a nuclear weapon, and in 2026 she said that following the 12 Day War there was no evidence Iran was rebuilding its capabilities in this regard.

Fourth, at 3W we mentioned before that a deal can only be reached if the US significantly reduces its demands, but we also said this was unlikely due to the arrogant mindset in Washington DC, where people still see themselves as an “absolute superpower” that does not negotiate but dictate. Trump stressing that he is allowing negotiations on the request of the Arabian Gulf countries could be a response from this mindset, as it enables him to cut a deal based on reduced US demands and then present it not as a US defeat but as a “magnanimous gift” by the US to its allies in the Arabian Gulf.

In conclusion, therefore, at 3W we see the developments of Monday as positive, since in our view they indicate the US is becoming more willing to find a real solution to the crisis it created. But, we add, not should not be ruled out that Monday was another “bait and switch” move by the US – Israel Alliance designed to trick Iran into a sense of security before another attack is launched. This is almost certainly what Israel will be pushing for and it can and will bring enormous pressure to bear upon Trump and those around him to prevent any kind of deal, and to instead restart the fighting.

According to Axios, the 3W assessment of Sunday – Monday – Tuesday is exactly what played out on Wednesday, when Trump and Israeli prime minister Netanyahu had a call to discuss the current situation regarding Iran. Netanyahu is highly skeptical about the negotiations and wants to resume the war to further degrade Iran’s military capabilities and weaken the regime by destroying its critical infrastructure, Axios says . But Trump is preferring a negotiated solution, Axios also says, which led to a conversation after which Netanyahu’s “hair was on fire”. Apparently. In the 3W view, unfortunately, Axios has proved it cannot be trusted at all on any subject related to Israel – see this Salon report on Axios’ history of spreading false news to manipulate financial markets and enable Trump insiders to make money. So we don’t attach much value to its reporting – it can be true, or it can be another attempt to trick and mislead.

But negotiations are certainly taking place, as Iranian’s ‌state-run agency Nour News quoted Foreign Ministry spokesperson Esmaeil Baghaei as saying, “We have received US views and are reviewing them”, writes Reuters. Pakistan’s interior minister was in Tehran on Wednesday for the purpose of facilitating the negotiations.

But Trump also threatened to resume attacks in the coming days if Iran didn’t agree to his terms, writes Bloomberg. “We’ll either have a deal or we’re going to do some things that are a little bit nasty,” he said. “But hopefully that won’t happen.” Iranian President Masoud Pezeshkian insisted the country was not on the brink of giving in. “Forcing Iran to surrender through coercion is nothing but an illusion,” he posted on X. Iran’s Islamic Revolutionary Guard Corps added, according to the semi-official Tasnim news agency, “If aggression against Iran is repeated, the regional war that had been promised will this time extend beyond the region”.

This, 3W notes, we have all heard before. The US simply demands, not realizing it needs to negotiate. And Iran recognizing the strength of its current position, and therefore refusing to submit to threats of war. It means, in our 3W view, the negotiations remain stuck as they have been throughout May.

In the background to all this, on the heels of Trump, Russian president Putin visited Chinese president Xi in Beijing. Where Trump did not get anything concrete from Xi, as 3W noted on Sunday, Putting and Xi signed a joint statement detailing a deepened “comprehensive strategic partnership”, write the BBC and Nikkei Asia. The statement declares that the “era of the unipolar world order is nearing its end,”, calls for “a multipolar world and a new type of international relations”, and criticizes US military actions, including US-Israeli strikes against Iran and the “Golden Dome” defense plan, calling them violations of international law. It also expresses concern about Japan’s defense policies and stated that any NATO expansion into the Asia-Pacific is “incompatible” with regional security. The two sides pledged closer ties in technology, economics, and energy, signing an additional m20 agreements during Putin’s visit Almost all bilateral trade is now conducted in rubles and yuan to avoid sanctions. But the two sides failed to finalize the “Power of Siberia 2” gas pipeline project, only reaching a “general understanding”.

So, while the US searches for a way out of the mess it created in the Persian Gulf, the global economy collapses and its main geopolitical adversaries enhance their collaboration and coordination. This is “US Victory”, Trump style…