Over the weekend, the military picture did not change much, despite Donald Trump’s strike on the non-oil parts of Kharq Island. Iranian drone retaliation against the Gulf region continued at a level clearly indicative of their ability to continue to project power into the Strait of Hormuz, effectively closing it for the vast majority of the usual traffic through the Strait and indicative of a continuing shortage of physical barrels of oil on the global markets, and hence an at least gradually rising global crude oil price with the risk of a rising number of downstream and geographically demarcated oil products markets exhibiting higher levels of volatility. In short, this is not a war that, despite ongoing and likely rising traditional military superiority over Iran proper, is currently going Donald Trump’s way.
The President faces a choice – either he rolls the dice and doubles down on coercing Iran by changing strategy and escalating the war with many new targets over Iran, triggering escalatory and possibly successful Iranian retaliation against the Gulf Region. Or he accepts that he will not reach all pre-war goals, and gives the green light for an explicit or below-the-radar negotiation process, so as to cut his otherwise likely rising political and economic losses from continuing a war that his strategy to date has not won him. Since the United States is not going to launch a full ground invasion of Iran and regime change from the air continues to look unlikely, eventually this conflict must find a diplomatic solution. As between Russia and Ukraine, until the party that started a war unable to subdue the target recognizes this, the fighting will not stop.
As noted, Iran clearly retains the capacity to retaliate against the Gulf region and as such continue to de facto close the Strait of Hormuz. Retaliation against the smaller Gulf states tracked in earlier notes show this quite clearly (Figure 1, 2 and 3).
Some indication of a further decline in Iranian retaliation against these three smaller Gulf states on March 15th is visible, especially against UAE. However, press reports continue to imply that Iranian retaliation against Saudi Arabia especially via drone attacks has picked up in recent days, suggesting that there is a reorientation of Iranian strikes against the Gulf region from the smaller states towards Saudi Arabia.
The lack of daily consistently reported attack data from the Saudi authorities makes this trend difficult to validly capture. Press report from Saudi Arabia and the data in figures 1-3 however makes it clear that Iran retains to capacity to project material destructive power into the gulf region and by extension the Strait of Hormuz. This remains the crucially important point for this war.
Prospects for naval escorts of tankers through the Strait of Hormuz under these military circumstances does not look imminent, and the Trump Administration’s call for “the rest of the world” to join in such escorts will surely be interpreted by the Iranian leadership as a sign of U.S. military weakness in the Gulf region. Tehran will surely know that very few, if any, capable traditional U.S. allies (Japan’s Prime Minister Takaichi visiting Washington D.C. soon better have a good answer for President Trump!) will want to join Donald Trump in escorting tankers through the Strait while Donald Trump refuses any negotiation with Iran.
The high-profile air strike on Kharq Island this weekend, combined with the messaging surrounding the departure a U.S. Marine Corps Expeditionary Unit, has signaled a hypothetical U.S. interest in launching a ground assault on the island. Given the self-evident and grave difficulties of the U.S. armed forces of logistically supporting such an operation in a naval theater in the Persian Gulf in which the U.S. Navy appears hesitant at sailing war ships into, the probability however of such an operation remains very low.
If Donald Trump chooses to escalate this conflict, he will have to do so in the sphere where the coalition already enjoys a clear military advantage, namely in the air space over Iran. Such an escalation could still change the military and political calculus in Tehran, should it succeed over time in degrading Iran’s retaliatory capacity through both missiles and drones much further. Escalation would, however, almost invariably be associated with an intensifying regional conflict causing oil prices to rise further in the near-term.
Without unlikely short-term auxiliary policy initiated relief to global oil markets, the direction of oil prices hence looks likely to head upwards until the time when Donald Trump decides the war needs to wind down.
Jacob
