Transcription
At the end of 281 BC, the Greek king Pyrrhus of Epirus left his country, Epirus, at the head of an army of about 200,000 infantry and 4,000 or 5,000 cavalry, in addition to a squadron of 20 elephants. This army, led by Pyrrhus, entered the famous Battle of Heraclea against the Roman Republic, which had not been defeated before, and achieved a great victory over it. However, after losing a very large part of his army, Pyrrhus went to the temple of Jupiter in Tarentum after the battle. There, he discussed an inscription in which he said, "These who have never been defeated have been defeated by me in battle, and they have defeated me later." Pyrrhus wondered about the meaning of the inscription he had written, and then he said his famous sentence, "One more victory like this, and I will return to my country alone." This means that if I achieve another victory in the same way, I will likely return to my country alone. This sentence may be the best introduction to explaining the predicament the global economy is currently in. After nearly two weeks of the American-Israeli war on Iran, US President Donald Trump and his Secretary of War, Mark Esper, have been talking about achieving a sweeping victory over Iran since the first days of the war, despite the fact that the war does not seem to have a clear end in sight at the present time, given the continued exchange of blows between the two parties and Tehran's retention of offensive capabilities despite the severe blows it has suffered from the Americans and Israelis. In parallel with the American talk of a sweeping victory, the global economy is facing huge risks amid the severe turmoil that the global energy markets are suffering from after Iran's closure of the Strait of Hormuz and its attacks on a number of energy facilities in the Gulf. This means that another two weeks of a sweeping American victory over Iran could, without exaggeration, lead to the destruction of the global economy, especially if oil prices go out of control and reach levels of $150 or $200. This is a scenario that is not unlikely if the Strait of Hormuz crisis continues. So, one more victory like this, and we will not have a global economy. Scenarios like an economic crisis and recession are becoming more likely the longer the crisis lasts. The only practical and quick solution to get out of this predicament and avoid this ominous fate is to stop the war. But is Trump ready for this, and does he have other solutions or options? And why must the Strait of Hormuz crisis be resolved as quickly as possible, or else the whole world will pay the price, whether those who are for the war on Iran or against it? The victory over Iran that Americans talk about all the time may ultimately be a form of Pyrrhic victory, or a costly victory. This is part of what we will discuss together in today's episode. I am Ashraf Ibrahim, the economic correspondent for Plus. In the tenth day of the American-Israeli war on Iran, specifically on March 9, 2026, CNN published an important report titled "The Trump Administration is starting to feel terrified due to the rapid rise in oil prices." In this report, the American network quoted informed sources as saying that Trump's senior aides, who had expected the war on Iran to cause only a slight increase in energy prices in the first days of the war, were surprised or shocked by the market's reaction and its sustainability. The reason for this fear is that the rise in oil prices, and consequently the rise in gasoline prices in the United States, is a fatal blow to Trump's and the Republican Party's plan to contest the midterm congressional elections in November, for which low gasoline prices were supposed to be a cornerstone. This plan is in great danger once the average gasoline prices in the United States rose from less than $3 per gallon to more than $3.5 per gallon, a price Americans have not seen in a long time. In an attempt to get out of this predicament, CNN revealed that officials in the Trump administration have begun to urgently study a wide range of options or solutions aimed at calming financial markets and reducing the impact of rising oil prices on gasoline in the United States. However, in reality, on the ground, the Trump administration's strategy, as of the time of filming the episode, is based on trying to deceive the markets. This strategy began to show its features as soon as oil prices approached $120 per barrel. For example, in a phone interview with CBS News on March 9, Trump said verbatim, "I think the war is very complete, pretty much." This was followed by a statement from US Secretary of War Mark Esper saying, "This is only just the beginning." This led the press to confront Trump later and ask him, "Who is right, you or your Secretary of War? Is the war almost over as you say, or is this just the beginning?" To which Trump replied, "I think you could see both." Choose the answer you like. In fact, Trump's statements in this context are nothing but desperate attempts to solve a serious dilemma he faces after nearly two weeks of the war's beginning. On the one hand, the US President was surprised that the war, which was expected to end in days with the surrender of the Iranians or the collapse of their regime, especially after the successful assassination of the former Iranian Supreme Leader Ali Khamenei, has dragged on and has no clear end in sight, given the Iranians' ability to somehow withstand and maintain their balance despite suffering severe blows, and their success in creating strong economic pressure on Trump and the whole world by closing the Strait of Hormuz. This makes prolonging the war economically and consequently politically costly. On the other hand, the other option, which is to stop the war immediately, is also politically costly because, as of now, the United States cannot claim to have achieved a decisive victory over Iran, given that the main objective of the war, under which Trump and Benjamin Netanyahu entered the war, which is to overthrow the Iranian regime, has not been achieved. The regime has not fallen; on the contrary, it may have become more cohesive and perhaps more hardline after the selection of Mesbah Khamenei, the son of the late Iranian Supreme Leader, as the third Supreme Leader of the Iranian Revolution. In short, the dilemma Trump is in is that stopping the war is costly, and continuing it is also costly. In such circumstances, statements about the end of the war, which initially succeeded in affecting oil prices and reducing them significantly, will not save him from this predicament, simply because they will quickly lose their effectiveness once the market realizes what is actually happening on the ground and that the United States is continuing it along with Israel, and may become more involved if it decides to send ground troops into Iran to control Iran's stock of highly specialized uranium. Perhaps there is no better evidence of the ineffectiveness of manipulative or misleading statements in changing the reality of the global energy crisis caused by the war on Iran than the failed attempt by US Secretary of Energy Chris Wright on the 11th day of the war, specifically on March 10. Wright tweeted on his X account, saying, "The US Navy has successfully escorted an oil tanker through the Strait of Hormuz to ensure the continued flow of oil to global markets." The tweet caused global oil prices to fall rapidly to near $80 per barrel, but this decline did not last long. Oil quickly rose again to near $90. "Go back and forth as you were." What exactly happened? Simply put, the market discovered that the US Secretary of Energy was lying. Reuters at the time quoted the White House as saying that the US military had never approached the Strait of Hormuz and had not escorted any ship passing through it, if any ship had passed at all. And the funny thing is that the US Secretary of Energy quickly deleted the tweet he had written from his account. This farce is, in fact, part of the randomness that characterizes the American management of the war from its very beginning. These false and misleading statements will, over time, make the market not take the words of government officials representing the most powerful country in the world seriously. More importantly, these statements will not change the reality that the Trump administration is trying to escape, which is that there is a global energy crisis at the moment due to the war, the impact of which affects the entire world, including the American citizen. In statements to CNN, Neil Atkinson, former head of the oil industry and markets division at the International Energy Agency, said that in light of the war, it is difficult to expect anything other than continued upward pressure on prices, and that Americans will feel the economic damage at gas stations. More importantly, Atkinson emphasized the idea that the only sure way to stabilize oil markets is to end the war on Iran quickly enough to avoid long-term economic repercussions. He said that the other options available to the US administration, other than ending the war, are very limited because the oil market is suffering from a severe shortage of supply. The closure of the Strait of Hormuz, through which normally 5% of global oil supplies and about 20% of global liquefied natural gas exports pass, is a disaster for the global economy. In statements published on the 11th day of the war, the CEO of Saudi Aramco, Amin Nasser, warned of catastrophic consequences of the current war on global oil markets and indicated that the longer the current turmoil lasts, the more severe its repercussions will be on the global economy. In the same context, he pointed out that despite the market facing turmoil in the past, the current crisis facing the oil and gas sector in the region is the largest ever, by a wide margin, compared to other previous crises. The good news that Nasser pointed out in his statements is that Aramco will be able to export about 5 million barrels per day of crude oil within days from the port of Yanbu in the west of the Kingdom. This is very positive news for Saudi Arabia and for the market in general. However, the energy market remains very far from its normal state. On the same day that the statements of the CEO of Aramco were released, Bloomberg quoted informed sources as saying that Saudi Arabia, Iraq, the UAE, and Kuwait have collectively reduced their oil production by up to 6.7 million barrels per day. According to the agency, Saudi Arabia reduced its production by between 2.5 million barrels per day, the UAE reduced by between 500,000 and 800,000 barrels per day, and Kuwait by about half a million barrels per day. Iraq, on the other hand, had the largest reductions so far, specifically 2.9 million barrels per day, which Iraq reduced from its total production before the war, which was close to 4.3 million barrels per day. This reduction, unfortunately, can be said to have been expected and inevitable given the closure of the Strait of Hormuz on the one hand and the depletion of available storage space in the region on the other. This means that over time, we can expect further production cuts unless the war on Iran ends in some way in the next few days, and a de-escalation occurs, and navigation in the strait returns to normal. This is the most effective and fastest solution to the current crisis in the energy market. Any other solution will either not be as effective or will take a very long time, and the market on the one hand and the producers on the other do not have the luxury of waiting for a long time. In the first days of the war, the two main ideas that the Trump administration resorted to in its attempt to resolve the crisis of closing the Strait of Hormuz were the announcement of the readiness of the US International Development Finance Corporation to provide insurance coverage for ships wishing to cross the strait. However, this initiative can be said to have been born a failure because, firstly, the aforementioned American institution is unable to provide insurance coverage for all ships passing through the strait, and secondly, even if we assume for the sake of argument that it can cover the required amount, this will not significantly affect the willingness of shipping companies to pass through the strait at a time when the Iranians are attacking any ship that violates their orders. As I told you in the previous episode, no one will pass through the strait and risk their ship being hit by missiles or drones and sinking just because their ship is insured. On this basis, shipping companies did not respond to Trump's initiative and did not take it seriously. In this context, the US President made a witty statement quoted by Brian Kilmeade of Fox News, saying, "These ships must cross the Strait of Hormuz and show courage. There is no need to be afraid." I don't know if Trump was serious or joking, but certainly no shipping company will trust his word and take the risk of crossing the Strait of Hormuz, which is currently a death corridor, just because the US President says, "Come, don't be afraid." The same applies to Trump's proposal regarding the escort of American warships for oil and gas tankers to secure them against Iranian attacks while crossing the Strait of Hormuz. This move is not new, by the way. Americans did it in the eighties during the Iran-Iraq War when Baghdad and Tehran got involved in what later became known as the Tanker War, during which they began to attack ships and tankers in the Gulf. In this war, Kuwaiti oil tankers were unfortunately the most prominent victims of attacks from the Iranian side. In this war, especially from late 1986, when attacks on Kuwaiti tankers in the Gulf increased significantly, Kuwait sought the help of the United States to protect its oil tankers in the Gulf. On this basis, the US military launched Operation Earnest Will, which was later renamed in the Persian Gulf. The beginning was in July 1987. The first convoy consisted of two tankers, the first named Bridgeton and the second Gaz Princess. The accompanying American force consisted of a cruiser, a destroyer, and a frigate. The convoy began to move from the Gulf of Oman towards the Gulf on the night of July 21, 1987, and passed through the Strait of Hormuz safely. However, on the morning of July 24, 1987, eight hours before the handover of the two tankers, the tanker Bridgeton was hit by a violent explosion from a mine that the Iranians had planted hours earlier in the tanker's path. The tanker was hit, but no one on board was harmed, and the tanker reached Kuwaiti waters seven hours later. The Americans succeeded in securing navigation in the Strait of Hormuz and clearing the mines, but this experience is difficult to repeat in 2026 for many reasons. First, Iran in the eighties was not facing the existential threat it is facing now in the war against the strongest army in the world, along with the Israeli army, which possesses the most advanced air force in the Middle East. Therefore, its sense of danger, and consequently its insistence on closing the strait regardless of the cost, is much greater now compared to any previous time. Second, and most importantly, Iran now possesses tools that enable it to effectively close the strait, which it did not possess in the eighties. We are talking specifically about drones and precision-guided missiles, and even mines. The Iranians today have one of the largest naval mine stockpiles in the world, with estimates indicating its size reaches 6,000 mines. This makes the approach of the US Navy to the strait a great risk for it, at least at the present time, given the Iranians' ability to fight and launch missiles and drones, and most importantly, given their retention of large stockpiles of mines that they can place in the path of all ships passing through the strait, including American naval vessels. I told you in a previous episode that Iran is currently closing the Strait of Hormuz with fire, meaning with drones and missiles, and that this scenario is much better than mining the strait or deploying mines in it, because mines are ultimately a random weapon, and their removal is complex, long, and difficult. Unfortunately, the scenario of deploying mines in the strait may become a reality now, and perhaps it has already become a reality as you watch this episode. This, unfortunately, means that the war will enter a much worse and uglier phase. On the 11th day of the war, CBS News quoted US officials as saying that Iran is on the verge of deploying naval mines in the Strait of Hormuz in an attempt to disrupt navigation in the strait, using small boats capable of carrying two or three mines and planting them in the strait. Later, CNN quoted intelligence sources as saying that mine-laying operations in the strait are not yet widespread, and that the Iranians have only laid a small number of mines, or tens, in recent days. According to them, Iran still retains between 80% and 90% of its small boats and mine-laying equipment, which practically enables it, if it wishes, to lay hundreds of mines in the strait. Of course, this is very bad and frightening news, but what is more frightening so far is the US administration's handling of this crisis, which, as we said, is characterized by improvisation and randomness to a large extent. As soon as the American press published the news of Iran's attempts to lay mines in the strait, Trump posted a statement on his Truth Social account saying, "We have not received any reports that Iran has laid mines in the Strait of Hormuz. But if they have laid mines there, we demand that they remove them immediately." This was followed by a threat to the Iranians, saying, "If you have indeed laid mines in the strait for any reason and do not remove them immediately, the military consequences for you will be unprecedented. However, if you remove anything you may have laid, that will be a giant step in the right direction." What is surprising, or rather, not surprising, is that exactly 13 minutes after Trump posted this post, he posted another one with information contradicting the first, saying, "I am pleased to announce that in the past few hours, we have struck and completely destroyed 10 inactive mine-laying boats or ships, and we will follow up with more." This, of course, makes you wonder how, in just 13 minutes, the US President went from "We have not received reports confirming that Iran is laying mines" to "We caught Iran laying mines and struck 10 of its boats or ships." Did the US military or intelligence inform the press of this information before informing the President? No one understands anything. This, in fact, can be the slogan for anyone who follows the way the US administration is dealing with the current war on Iran and tries to analyze or rationalize it. In short, no one understands anything. Frankly, this may make us less confident in the Americans' ability to deal with the catastrophe of flooding the strait with mines if it actually happens. As I told you before in the episode on the Fourth Gulf War, the Iranians possess a very advanced naval mine arsenal, including imported types like the Chinese IM-52 and domestically manufactured types like the Maham-2. They can lay these mines or deploy them through the submarines they own, or through fast ships or boats. Once these mines are deployed, the whole world, including Iran, will be in trouble because, first, the mines are capable of causing great damage to any ship attempting to cross the strait, and more dangerously, the water can carry them away and make them reach or approach the ports or coasts of the region's countries. Second, because the process of removing these mines is expected to take a long time, possibly several months, especially if the Iranians do not cooperate. What further complicates this is, as I explained to you before, that American mine-clearing capabilities are not at their best at the moment, given the decommissioning of four Avenger-class US mine-clearing vessels in September. The important thing is that so far, all indications suggest that the war is not nearing its end. Although Trump can surprise us with his decision at any moment, in our humble opinion, the war has no clear end in sight, at least in the next few days. This, unfortunately, is bad news for the global economy because, contrary to what some may think, the pressures resulting from the American-Israeli war on Iran, which led to the closure of the Strait of Hormuz and shook energy markets, are accumulating and increasing exponentially. If they continue at this pace, they will explode soon in everyone's face. What some may not realize is that time is not in anyone's favor, meaning that the longer the war lasts, the fewer solutions will be available to us. For example, at the beginning of the war, production in the Arabian Gulf region was not significantly affected, even with the disruption of navigation in the Strait of Hormuz, because there was storage space and energy facilities outside the scope of targeting at that time. Today, after nearly two weeks, energy facilities have unfortunately entered the scope of targeting more. A number of countries in the region have closed their facilities, either due to damage or as a precautionary measure. At the same time, available storage capacity has decreased. There is no solution but to reduce production, and this is clearly evident, for example, in the case of Iraq. This solution has been taken away from us by time. The second solution that will be taken away from the global economy is strategic oil reserves. Let's start with the Americans. The US Strategic Petroleum Reserve has a maximum capacity of about 714 million barrels of oil. These reserves currently contain only 416 million barrels in total, meaning a fill rate of about 58%. However, it can withdraw a maximum of 4.4 million barrels per day and pump them into the market. Of course, Trump and the Republicans blame President Joe Biden, accusing him of depleting the strategic reserves and being responsible for their decline to this level because he sold about 300 million barrels of them in his first term due to the disruptions resulting from the Russo-Ukrainian War. But Trump is also to blame for this crisis because he promised to fill these reserves as soon as he took office and did almost nothing during the first year of his term, even though oil prices were low. However, regardless of who is to blame, the reality is that American oil reserves are not in their best condition, and therefore there is not much room for maneuver with them. This is perhaps confirmed by the statements of Kevin Hassett, Director of the National Economic Council, who said that releasing strategic oil reserves is not on the table. In the tenth day of the war, the finance ministers of the G7 countries indicated their readiness to launch one of the largest releases of strategic oil reserves in history. The talk is about the possibility of releasing 300 or 400 million barrels into the market, which is a huge amount. But again, it is only a temporary solution, and its effectiveness will decrease over time. This brings us back to the actual and quick solution to this crisis, which is to stop the war, resume navigation in the Strait of Hormuz, and bring the energy facilities in the region back to safe operation. This is the solution that a number of Trump's close associates have begun to push him towards in recent days, according to a report published by The Wall Street Journal on March 9. A number of Trump's advisors are encouraging him to find a quick exit from the war with Iran, fearing severe political backlash due to the war's duration or its repercussions. However, in the same report, the American newspaper quoted a senior US administration official as saying that Trump will not stop the war until he achieves a satisfactory victory. According to sources familiar with Trump's thinking, the US President has at times expressed his surprise at Tehran's refusal to surrender despite the ongoing joint American-Israeli military campaign against it. Trump's surprise at the Iranians' refusal to surrender is related to his unrealistic perceptions of the war's duration and its consequences from the very beginning. Perhaps the best expression of Trump's current feeling is the article published by American journalist Lydia Polgreen on the seventh day of the war on Iran in The New York Times under the title "Trump's Fantasy Is Crashing Down." At the beginning of this article, Polgreen says, "In Donald Trump's fantasy world, America is impregnable. Its military is so advanced and brilliant that it can kidnap the president of a hostile country and put him in a New York City prison without losing a single soldier. It can impose exorbitant tariffs on any country it wishes, and it can abandon long-standing alliances whenever it pleases, and it can bomb any country at any time and blow up any boats suspected of smuggling drugs. America's immense power makes it unbound by any laws and indifferent to any consequences. As a wealthy, sprawling country with a prime geographic location, protected from its enemies by two vast oceans, why shouldn't it do as it pleases? But over the past six days, with Trump plunging the United States into a war with Iran, that fantasy image of absolute power has crashed against reality. This war is being waged for unexplained, and perhaps inexplicable, reasons in a pivotal center of the global economy against a disciplined, well-armed adversary who has nothing to lose. America and Israel killed Ayatollah Ali Khamenei and dozens of Iranian leaders on the first day of fighting, but Trump clearly paid little attention to what would happen later. And with his recklessness, he ignited a raging war with no end in sight. Then she concludes the article by saying, "If war is God's way of teaching Americans geography, then perhaps it will also be a lesson that Trump learns. And it should be a simple lesson: Other places and other peoples are real, and they have their own agendas and independent wills, and America's actions have consequences it cannot control. Anything else is just delusion." This point brings me to the question of the episode: In your opinion, what could force Trump to stop the war on Iran? I will follow all your answers in the comments. In conclusion, if you liked the episode and want to see us again, subscribe to the channel and wait for new episodes, God willing. Peace.