The Geopolitical Realities

In an old television program, The A-Team, the actor George Peppard’s character had a catchphrase: “I love it when a plan comes together”. Judging by his recent column in the Washington Post, I don’t think that Fareed Zakharia quite appreciates how the world has changed over the last decade:

“The enemy gets a vote.” U.S. military leaders are fond of using that line. Gen. Jim Mattis used it so often that it is sometimes attributed to him. In fact, it is a nugget of wisdom dating back to Sun Tzu, the Chinese military strategist, who counseled that one must “know the enemy.” It describes the central mistake of President Trump’s Iran policy.

In confidential 2018 cables that were leaked this summer, Britain’s then-ambassador to Washington, Kim Darroch, wrote something that was obvious to most observers: Trump pulled out of the Iran nuclear deal largely because “it was Obama’s deal” and had given little thought toward a “‘day-after’ strategy.” Darroch also noted that Secretary of State Mike Pompeo tried to put some distance between himself and Trump on this issue, privately referring to the move as “the president’s decision.” But while the decision might have been made for domestic political reasons, it has unleashed serious geopolitical consequences.

The Trump administration’s strategy, such as it is, appears to have been to double down on pressure on Iran, force other nations to abide by the United States’ unilateral sanctions and bet that this would cause Iran to capitulate.

Tehran’s initial reaction was restrained. It simply sought to bypass the United States. It continued to adhere to the deal and made efforts to trade with other countries. This failed. Because of the dollar’s centrality to the international financial system, the sanctions worked. Iran’s economy suffered a big blow, and its oil exports have plummeted. European countries, furious about the abuse of the dollar’s role, tried to create an alternative payments mechanism, but so far, it has not succeeded.

Iran’s next effort has been to demonstrate that there is a cost to this kind of maximum pressure. It has harassed ships in the Persian Gulf, reminding everyone that 20 percent of the world’s oil supply goes through that narrow body of water. It shot down a U.S. drone, signaling to the Pentagon that it has the capacity to impede the United States’ intelligence and reconnaissance in the region. And now, Tehran — possibly using proxies and allies in the region — seems to be behind a precision attack on Saudi Arabia’s main oil processing facilities, a strike effective enough that it initially shut down half of the kingdom’s oil production. The message is clear: Hostilities with Iran would spill over throughout the Middle East and disrupt the global oil supply.

I doubt that President Trump planned it this way but the effect of his strategy of “maximum pressure” on Iran was to make Iran reckless.

Let’s look at today’s geopolitical realities rather than the nostrums of a decade ago. Who would be hurt the most if oil transport could not pass through the Straits of Hormuz?

• The petrostates of the Middle East. These are the same people who are funding Islamist terrorists.
• China. Maybe the Chinese can build electric cars fast enough to avoid the worst effects of cutting off their oil flow but they are much more dependent on Middle Eastern oil than they used to be. They could always trim oil consumption subsidies more but that, too, would have implications for their economy and would increase unrest in China at a very inopportune time.
• Japan. Japan imports a lot less oil than it used to and we produce a lot more. I wouldn’t be surprised if Mexico, Canada, and the United States could fill the gap caused by a disruption in supplies from the Middle East.
• Egypt. Egypt would lose fees from oil tankers passing through the Suez. That amounts to about a half mill a pop.

Who would benefit most? Oil producers in the United States, Canada, Mexico, Nigeria, Venezuela and Russia.

All of this presumes that we don’t go to war with Iran. As has been the case for most of our history, our best strategy remains to “put your trust in God, my boys, and keep your powder dry”.