Transcription
The central obstacles are plain to see. The enriched uranium issue keeps returning to the heart of the negotiations, and alongside it sits the demand that Iran surrender control over the Strait of Hormuz. From Tehran's perspective, both of those matters are inseparable from sovereignty and national independence. That is the deeper reality here. These are not minor bargaining chips for Iran. They are core state interests, and because of that, there is every reason to conclude that no agreement is coming. That prospect should be dismissed.
What makes this even more revealing is that we are not speaking directly with the Iranians at all. That point somehow keeps getting blurred, especially when Donald Trump projects the image that a deal is close and that the process has suddenly become more professional. I cannot imagine anything less professional than the people we have sent to negotiate. At this stage, the only realistic expectation is that we are waiting for this conflict to burst back into the open. We are moving closer to that outcome, and after last night's events, a return to a hot war looks disturbingly likely. The Iranian position makes that unmistakably clear.
Publicly, Washington keeps suggesting broad outlines exist and progress is substantial. But the Iranian Foreign Ministry is saying something far less optimistic. Their spokesman has stated that the present focus is ending the war, not resolving the finer points of the nuclear file. He has described threats, pressure campaigns, media distortions, and political theatrics as part of the maneuvering on the other side, while insisting that Iran is working from realities on the ground rather than the imagery manufactured by its opponents. Yes, he acknowledged that many of the subjects under discussion have been covered in large measure. But he also stressed that nobody has the right to interpret that as evidence that an agreement is near.
And this is the critical point. In that same exchange, he explained that the process has consisted largely of intermediaries carrying messages back and forth through Pakistan. Iran is not even prepared to sit down face-to-face until the two sides are genuinely near an actual deal. Because otherwise, there is no reason to perform diplomacy for show. Until both delegations are physically moving toward those direct talks, any claim that a settlement is imminent is fiction. Tehran is saying very plainly that we are nowhere close, regardless of the rosy narrative coming out of Trump's camp.
And while all of that matters, even more serious issues are being ignored in Washington. Here is what most people fail to understand. The negotiations themselves may soon be overshadowed by a far bigger economic disaster. In April, inflation in the United States rose from 3.2% to 3.8%. Now, the pressure created by this war is driving second-quarter inflation projections toward roughly 6%. If that estimate is anywhere near correct, then interest rates should be sitting closer to 7%. But that would be economically devastating. So, rates are being held down artificially at around 3.75% instead. Consider what this actually means. We are watching the entire edifice of our security architecture and diplomatic strategy begin to sink. The structure is giving way, and the reason is not mysterious.
When this war began, about 13 million barrels of oil per day were effectively removed from the market. If the United States resumes the war against Iran in full force, if we go back to striking from the air and the sea with every bomb and missile we can bring forward, Iran has already said it will retaliate by removing an estimated 25 million barrels from the global supply. The United States Strategic Petroleum Reserve currently holds around 374 million barrels, with roughly 25 million of those in Oklahoma, much of it around Cushing, and the remainder concentrated largely in Texas and Louisiana. At the very same time, Trump has just sold 17.8 million barrels from that reserve over the last week at prices below market levels. In practical terms, that means pushing oil down under about $110 a barrel. Nobody is talking about this, but the purpose is obvious. This move is being used to manipulate the oil market and shield American fuel consumers from feeling the true cost of the Iran war. At the present pace, that manipulation empties the Strategic Petroleum Reserve in about 60 days. Do the arithmetic, and the picture becomes alarming. By the end of July, we could be looking at a nearly exhausted reserve.
Now, place China into that equation. China is about 86% self-sufficient in oil, leaving a 14% gap. That shortfall is being covered by several suppliers, chiefly Russia, along with Saudi Arabia and others. So, China is not remotely in a position of acute vulnerability. In fact, it has prepared extensively. It has stockpiled petroleum on a scale no one else can match, holding roughly 1.3 billion barrels in above-ground storage, the largest petroleum reserve in the world. That means it can access those supplies directly.
And this leads to another critical misunderstanding. People keep treating the war in Ukraine as though it exists in a separate compartment from what is unfolding in the Persian Gulf. That is false. At the start of the Ukraine war in 2022, about 3 million barrels a day were pulled out of the global economy. That alone helped push oil up to roughly $120 a barrel. Today, Britain and other European allies are helping the Ukrainians strike refineries and other oil infrastructure inside Russia by providing drone components and targeting support. Those attacks have worked in the sense that they have further tightened global supply, reducing available barrels by roughly 13 million per day. Follow that trend forward, and the long-term implications are staggering. We are looking at the possibility of the global economy contracting by something like 36%. For reference, the Great Depression shrank the world economy by about 20%. And even that comparison understates the danger because the Great Depression occurred under conditions of much lower debt to GDP ratios than the ones now burdening both the United States and Europe. So, if the world loses something on the order of 30% of its productive capacity, we are no longer talking about a recession or even a severe downturn. We are describing a global depression, and we will be dragged straight into it.
That is why the casual language coming out of Washington is so reckless. The idea that we can simply bomb these people into the Stone Age until they yield while inflation is already threatening to hit 6% in the second quarter is beyond irresponsible. It borders on madness. I struggle to think of anything in the last three centuries under any president, any king, any emperor that compares to the scale of irresponsibility we are now showing in the Gulf and in the parallel escalation against Russia through the Ukraine war. That is not rhetoric. That is an indictment of the strategic insanity of the moment.
And the danger extends far beyond oil and gas. If people want to understand the larger picture, they need to listen to voices like Luke Gromen, Jeffrey Gundlach, Ray Dalio, and Peter Schiff. Those men are describing the same underlying reality. And in many ways, they are doing it in even more sobering terms. I am focusing mainly on the oil and gas markets, but once you widen the lens, the damage multiplies. Sulfuric acid matters, for example. Without sulfuric acid, refining processes break down. That immediately cripples copper production. It also affects uranium refinement. Start listing the knock-on effects across industrial supply chains, and the result is catastrophic. And that is only a snapshot. It is merely the tip of the iceberg.
Meanwhile, the United States is moving forward economically like a ship already taking on water. Our economy and our financial system resemble a Titanic that is partially submerged and still trying to steam ahead. By this point, there is no escaping all of the consequences. That door is already closing. But the only chance to limit the damage would be for the president to stop everything immediately and declare that further combat operations must be suspended because the humanitarian consequences now threaten the entire world. That is the obligation attached to the office. Even if he did that today, it would still take months for oil distribution to stabilize again. And rebuilding much of the damaged infrastructure would take two or three years. So, let us be very clear. If he returns to war the way he did before, using American forces for another round of major operations, what we are discussing is not some limited correction. We are discussing Armageddon. And the thought that the finger pushing us toward that outcome may not truly belong to Trump, but to Benjamin Netanyahu, is even more unnerving.
One of the first practical steps toward limiting the economic catastrophe would be reopening the Strait of Hormuz to something close to normal traffic. That means both sets of blockades have to end. Ours against Iran, and Iran's restrictions affecting the GCC states. Iran has indicated that shipping can return to normal if vessels pay transit fees. Marco Rubio rejected that immediately, calling it illegal, unsustainable, and unacceptable. He has argued that no serious country supports a tolling system, that Russia opposes it, that China opposes it, and that the only government backing such an arrangement is Iran. On that basis, he insists the strait must reopen without impediment, without tolls, and without delay.
But here is the deeper reality he is refusing to confront. We spent more than 40 days trying to force Iran to reopen that passage and failed completely. That failure is precisely why we ended up at a ceasefire. So, Rubio can repeat those talking points endlessly, but repetition changes nothing. The real issue is how these two blockades would actually be lifted in the world as it exists, not in the world he prefers to describe. And the world does not see this the way Rubio pretends it does. He is creating the impression that the United States and the rest of the international community are aligned on the Persian Gulf and on this toll issue. They are not. Look at the polling or simply listen to foreign leaders in their public statements. The overwhelming sentiment abroad is that the United States is responsible for closing the Gulf. Other countries are not blaming Iran first. They understand why Iran has done what it has done from a strategic standpoint. That does not mean they approve of it because many do not. But they still hold us responsible for triggering the situation. That distinction matters enormously.
In India, for example, American standing has collapsed from relative popularity to something approaching deep hatred. And this attitude is not confined to India. It is spreading rapidly across Asia, Japan, Korea, China, and beyond. The geopolitical consequences for the United States are disastrous. What makes this even more remarkable is that Trump himself once understood the basic principle at stake. Before he was first elected, he said that if American presidents had simply gone to the beach and enjoyed the sun, the Middle East would be in far better shape. That was an astute observation. It reflected the first rule of foreign policy and diplomacy: do no harm. In other words, if you can avoid sending military power somewhere, your interests are usually better served by staying out. Someone needs to read Trump's own words back to him now because that statement is even truer today than when he first made it. The damage we caused earlier in the Middle East was serious, but it remained recoverable. What we have now done to ourselves and to the wider world in the Persian Gulf, without any real necessity, is almost beyond calculation. Its effects are global.
Even now, Rubio is leaving the door open for renewed war if Washington fails to get the deal at once. Plenty of familiar voices have been calling for that all along: Jack Keane, Keith Kellogg, Mike Pompeo, Mark Levin, Lindsey Graham, and the rest of that chorus. But now another figure has joined in, David Petraeus. He is saying we may need to go back and finish this the hard way. He frames the issue around Iran's stockpile of nearly a thousand pounds of uranium enriched to 60%, only one step below weapons-grade. He adds Iran's future right to enrich, its support for regional proxy groups like Hamas, Hezbollah, Shia militias in Iraq, and the Houthis in Yemen, as well as missile programs and other unresolved disputes. He suggests that very few of these concerns may ever be fully addressed, but says there must at minimum be an agreement to reopen the strait and restore freedom of navigation. He even leaves open the possibility of some modest fee-sharing arrangement involving Iran, Oman, or navigational services. Yet he still concludes that if Iran refuses to abandon control and tolls, war may be necessary to prove we are serious.
That logic collapses the moment it is examined. We already fought a full-scale campaign for more than 40 days and failed to achieve that objective. We are now supposedly going to return with replenished stocks of the same munitions against the same targets and expect a different result. What exactly is Petraeus imagining? Here is what most people fail to understand. To him, war now appears to mean high-altitude bombing and missile strikes from the air and sea, as though that alone constitutes a coherent strategy. But he does not seem to grasp what he is actually describing. This is not Iraq. This is not Afghanistan. Iran is a vast, real nation-state with a genuine civilization behind it. It is not some artificial construct patched together from Arab tribal zones under the Sykes-Picot framework. Iran is historically rooted, territorially real, and nationally coherent. If you are seriously talking about war with Iran, then you are talking about mobilizing the United States. This is not a side operation or a limited affair. People forget scale. Germany had roughly 80 million people in 1942. Iran today has around 93 million. It also possesses highly advanced capabilities across a range of technological sectors and access to sophisticated satellite infrastructure overhead. Yet Petraeus speaks as though another war would simply be a matter of launching more strikes to make a point. That is reckless in the extreme. I am sure the people around him at KKR, many of whom are committed ideological backers of the broader Israeli agenda, will appreciate those remarks. But appreciation from those circles does not make the policy sound. It makes it more dangerous. The United States has no national interest that justifies this kind of action. None at all.
And while we posture this way toward Iran, we should remember another reality. North Korea is constantly described as a state run by a madman. I have never accepted that description. I do not think Kim Jong-un is insane. I think he is quite sober-minded. But many insist he is unstable and dangerous and armed with nuclear weapons. Yet what do we do about North Korea? Nothing. And the reason is obvious. It has nuclear weapons. That is the lesson every other country in the world is drawing. People like Petraeus, along with the wider neo-conservative, globalist, and pro-Israeli network pushing this agenda, are effectively teaching billions of people that the surest way to avoid American or Israeli coercion, disruption, or invasion is to acquire nuclear arms. That is the signal being sent. And that path does not solve the Strait of Hormuz problem. It does not reduce the crisis. It intensifies it. Iran has already made that clear as well. Its position is essentially this: If you come back and escalate, we will escalate in ways that matter. And you are not going to erase our mountains or destroy our missile bases. So even within the distorted internal logic of the neo-conservative camp, I find it hard to see how they can miss the physical reality. Their objective, whatever precisely they imagine it to be, cannot be achieved by the methods they are advocating. And if they try, the damage falls heavily on us as well. That much should be obvious.
So the real mystery is not Iran. The real mystery is Donald Trump. How does a man who once told the New York Times that America would have been better off if its presidents had simply gone to the beach in the Middle East arrive at this point? What happened to that instinct? That earlier statement was balanced, sane, and strategically sound. It reflected the oldest and wisest principle in statecraft: first do no harm. If military intervention can be avoided, it is usually in your interest to avoid it. We have no justification for pursuing the course Petraeus is advocating, none. So, what exactly is Trump doing now? Where is the man who once understood that restraint could serve America better than force? That is the question hanging over all of this, and it may be the most consequential one of all.