The Iran War: A Comprehensive (sort of) Review

Breakfast with Bwana

By Anil Madan

It is undeniable that wars are easy to start. What the Iran war has taught us — once again — is that wars are sometimes, also easy to stop. All it takes is for the parties to agree to a ceasefire. And often, the unlikeliest mediator emerges as the catalyst for the ceasefire. Pakistan was instrumental in getting the initial ceasefire organized and then in convincing President Trump to extend the ceasefire.

Similar success in getting to a ceasefire in Ukraine has been elusive. But perhaps there is hope. Now, there is news that President Zelensky is seeking Turkiye’s assistance in bringing about an end to that war, perhaps even a face-to-face meeting with Putin.

The Iran war has caused devastation and hardship to third parties, the Gulf nations have suffered missile, and drone strikes and destruction of their energy infrastructure and other facilities. Nations around the world are feeling the shock of the sudden interruption of energy supplies, and critical supply chain materials, with inflated prices for what little is available.

The Strait of Hormuz is the war’s fulcrum. At times, it appears that Iran and the US are each sitting on opposite ends of a seesaw. Iran has effectively closed the strait, and the US has responded with a naval blockade of Iranian ports. Both sides close a strait that each demands remain open.

The key dynamics include:

* Iran is seizing or firing on commercial vessels (e.g., MSC Francesca, Epaminondas, Euphoria).

* The US Navy is blocking ships entering or leaving Iranian ports.

* The British maritime agency has recorded 34 security incidents since March 1.

* Commercial shipping is nearly paralyzed; oil and LNG flows have collapsed.

Iran’s semiofficial news agency stated: “Disrupting the order and security of the Strait of Hormuz is our red line.”

Global Aftershocks: Economic Collapse and Supply Chains

The strategic impact is that Iran uses closure of the strait to pressure the global economy and force concessions. The US uses the blockade to strangle Iran’s oil revenue and force negotiations.

The military situation is that we have a war paused but not officially ended. Even with an indefinite extension of the ceasefire, the entire Middle East quivers in an uneasy state between war and peace.

Each side acts as if it has won the war and although expressing a willingness to talk, maintains that it has no appetite for compromise. The posturing is to be expected. What remains unknown is the severity of reports suggesting America has suffered a serious depletion of its missile and interceptor stocks. Similarly, the quantity of usable missiles and drones Iran possesses, as well as the number of launchers it has stored underground, remains unclear. Neither side wishes to confront the reality of its own situation, and the world would rather not know.

Israel’s role should not be overlooked. The IDF conducted extensive strikes on Iranian infrastructure, including petrochemical plants, steel mills, and gas processing hubs.

The resulting military reality is that both sides are escalating at sea despite the cease-fire. Each interdiction risks reigniting full-scale war.

The diplomatic landscape is that the talks seem frozen, while Iran and the US intensify their leverage games.

But there is more here than meets the eye.
Trump said he made the decision to hold off on attacking at the request of Pakistani officials mediating the talks. Pakistani Prime Minister Shehbaz Sharif, lent credence to this when he issued a statement on X thanking Trump “for graciously accepting our request to extend the ceasefire to allow ongoing diplomatic efforts to take their course.” Iran’s ambassador to the United Nations, Amir Saeid Iravani, said Tuesday evening that talks would resume only after Washington ends the blockade. “I think the next round of the negotiations will take place in Islamabad,” he said. He called the naval blockade a violation of the ceasefire and reiterated that lifting it is a condition for new negotiations to take place.

So, at least we seem to have negotiations about negotiations. That is often the best starting point to get to an agreement.

President Xi of China is increasingly vocal, calling for reopening the strait, warning against “the law of the jungle,” balancing ties with Iran and Gulf states as he had a call with Saudi Crown Prince MBS. Keep in mind that China is highly motivated as 40% of its oil passes through Hormuz.

Wouldn’t it be wonderful if China steps up, declares that it will honour the independence of Taiwan, and calls on Russia to end the war on Ukraine, and Iran to abandon its quest for nukes, join the world’s nations as a responsible player and major trader? Xi would go down in history as a great man.

The Gulf states are in shock. Qatar, Saudi Arabia, and the UAE are rethinking their security assumptions. They expected consultation before a U.S.-Iran war. They now see Israel having more influence over Trump than they do.

Auditioning for the role of mediator continues apace. Pakistan is in the driver’s seat. Pakistan, Turkey, Egypt, and Gulf states are trying to restart talks. Progress is minimal except to the extent that Sharif and Munir seem to have Trump’s ear.

The economic impact on Iran has been severe, possibly existential as it has suffered catastrophic damage to its industrial base and infrastructure. Direct war damage includes 17,000+ targets hit by US and Israeli strikes. Petrochemical plants, steel mills, ports, and energy hubs have been destroyed. One source put the estimated reconstruction cost at over $270 billion.

Iran’s economic collapse could mean some 2 million jobs already lost and up to half the workforce, or 12 million jobs at risk. Iran’s currency is in free fall and the Internet blackout — a measure aimed to keep the citizenry in the dark — creates economic paralysis.

The oil crisis affects not only Iran and the Gulf states as producers and refiners, but the whole world. For Iran, the US blockade may force it to shut down oil wells within weeks. Iran’s storage capacity is nearing “tank tops.” The danger is that shut-ins could permanently damage reservoirs and make it nearly impossible or extremely costly to revive the oil production. The process of rebuilding and restoring oil flow could take years.

As one example, Qatar was hit by 700+ Iranian missile/drone attacks. LNG production at its Ras Laffan facility was shut down; repairs may take 5 years. This represents a $20 billion annual revenue loss.

The Strategic Endgame: Diplomacy or Disaster

From a political standpoint, the conflict is existential for the Iranian regime. Those in charge will want to give the impression that they are unlikely to “blink.”

The suffering of the Iranian public is immense, the leadership is expected, however, to prioritize its own survival. Could this be the stress point that results in real regime change?

This war has caused a global economic shock that is slowly evolving and likely to get worse even if there is a peace agreement tomorrow. It will take months, even years to restore energy production and supply chains. This is the worst since the 1973 Oil Crisis.

Some 10 million barrels/day of oil are bottled up, with tankers unable to navigate the strait. Oil prices are up nearly 80% since the war began. LNG disruptions are hitting Asia the hardest, but Europe too is at risk. Fertilizer, helium, and aluminum supply chains are collapsing.

There is a severe shortage of jet fuel around the world. Europe has 6 weeks of jet fuel left. Lufthansa, the German airline has announced that it will cancel 20,000 flights this summer. Similarly, KLM, TAP, Norse, easyJet are all reducing routes or raising prices.

Christine Lagarde suggested that Europe may face food rationing due to the shortage of fertilizer.

The theory of victory

Finally, let us look at what seems to be the strategic logic of both sides. Iran’s theory of victory seems to be that the global economy cannot tolerate a closed strait, Trump cannot tolerate high gas prices in an election year. And Iran can endure more pain than the US or global markets. The Iranians want to believe that Trump cannot hold on for more than a few weeks, perhaps a month at most.

The US theory of victory seems to be that Iran’s economy will collapse under the blockade, Iran’s oil storage capacity will fill; its oil wells will be damaged, and Iran will be forced to negotiate to avoid economic ruin.

It is difficult to say who is right. But we know that Iran has faced economic ruin for a long time. Is this time different? Perhaps when oil wells must be shut down, reality will sink in.

The emerging endgame is most likely a negotiated deal which results in reopening the strait, lifting or easing the blockade (but see below); limits on Iran’s uranium enrichment; a mechanism for the timed release of frozen Iranian funds. (Parenthetically, I note that once people have found a way to make money, they are unlikely to abandon it. The Strait of Hormuz might remain a tollway, perhaps under international supervision. China could be the catalyst here. The revenue would be used to fund reconstruction in Iran and the Gulf states. A charge of $10/barrel on oil at $60 or $70 is not outlandish. If it revives the economies of Iran and the Gulf states, it will be a smart investment by the world.

A second possibility is renewed war. In my view, this is unlikely. Iran will probably get a nuclear arsenal sooner rather than later. The prospect of renewed war in that case is out of the question.

A third possibility is a prolonged state of limbo. The risk of a ship damaged by the US or by Iran and sinking in the waters of the strait with catastrophic environmental damage, a different miscalculation at sea, an attack by Iran on US forces, or the US boarding the wrong vessel at sea, raise dangerous possibilities.

In the final analysis, this war is now primarily economic. While the US and Iran are locked in a mutual pressure campaign, the strait is the battlefield, the global economy is suffering collateral damage. Diplomacy is chaotic and fragile.

It takes two to tango. Despite the protestations from various spokespersons, it appears that the Iranians are ready to come to the dance. A danse macabre by either the US or Iran, while issuing threats is of no value.

Cheerz…
Bwana

Mauritius Times ePaper Friday 24 April 2026