What happens when you try to blockade an international waterway when you no longer have a blue-water navy? Iran learned the answer to that question the hard way. The question remains: will they wise up in time to salvage their economy, and possibly, what’s left of their industrial infrastructure?
Perhaps, but not likely. The Wall Street Journal reports that the regime remnants of the IRGC have started to realize the extent of their miscalculation, however:
Tehran thought it was gaining the upper hand after the war started in February as it attacked ships navigating the Strait of Hormuz, shutting down commercial traffic and blocking a fifth of the world’s oil and liquefied natural gas supplies. Six weeks into the conflict, the U.S. responded by blockading shipments from all Iranian ports.
That shut down Iran’s network of shadow ships, which for years defied U.S. sanctions on Iran’s substantial oil exports by going dark at sea before clandestinely transferring their cargoes to China. The tankers have been unable to breach a cordon of U.S. warships that have chased them all the way to the Indian Ocean. …
Alternative trade routes won’t be sufficient. Iran has been working to send some of its oil by rail to China and to import foodstuff by road from the Caucasus and Pakistan. Only 40% of Iran’s trade can be redirected away from blockaded ports, the Iranian Shipping Association said Thursday via the Fars news agency, which is affiliated with Iran’s security services.
That number seems far too optimistic. Iran exported over 90% of its oil through Kharg Island and onto tankers, the most efficient and expeditious method possible. Their fields connect via pipeline to Kharg to make the process even more efficient. Perhaps Iran built a standby capacity to ship by rail, but that seems very unlikely, and at any rate, rail distribution is far slower and has much less capacity. Plus, if the US and Israel restart kinetic offensive operations, those rail systems will be at the top of their target lists, assuming they haven’t already been hit.
Apparently, that lesson hasn’t sunk into the heads of the hardliners yet:
The moderates believe in holding fire and negotiating a favorable deal with President Trump, whom they view as eager to get out of the messy war as soon as possible. They worry Iranians are growing tired of the conflict after an initial nationalist uptick. …
A growing camp of hard-liners believe Iran has to take the military initiative and start a shooting war again to send oil prices soaring higher and increase the pressure on Trump. They argue that the blockade goes beyond the sanctions Iran has faced down in the past and amounts to an act of war that must have a military response.
Don’t forget that the only reason the blockade exists at all is that these same geniuses thought closing the Strait of Hormuz would accomplish the same thing. Trump had agreed to a ceasefire after six weeks of war, during which Trump allowed Iran to export oil normally. The ceasefire agreement required Iran to allow free movement through the Strait and to stop dropping mines in the shipping lanes. The IRGC leadership instead attacked shipping and kept dropping mines, which prompted Trump to order a complete blockade, which he now refuses to lift unless and until the Iranian regime remnants capitulate on the nuclear issues.
Not only has the blockade prompted by Ahmad Vahidi’s Hormuz strategy pushed the Iranian economy to the point of complete collapse, but so has Vahidi’s Internet shutdown. The IRGC has kept the Internet off to the public for its own security, but that has amplified the damage being done by the blockade, the Associated Press reports:
Iran’s state-run news agency IRNA quoted a deputy minister of communications and information technology, Ehsan Chitsaz, as saying the cut to the internet cost Iran between $2.8 to $4.3 million each day.
But the true cost for the Iranian economy could be far higher. The internet monitoring organization NetBlocks estimates each day of an internet shutdown in Iran costs the country over $37 million. …
In 2021 alone, a government estimate suggested Iranian businesses made as much as $833 million a year in sales from social media sites, wrote Dara Conduit, a lecturer at the University of Melbourne in Australia, in an article published by the journal Democratization in June. She cited a separate estimate suggesting internet disruptions around the 2022 Mahsa Amini protests cost the Iranian economy $1.6 billion.
The 2022 internet disruptions’ “far-reaching and blanket economic consequences risked further heightening tensions in Iran and spurring the mobilization of new anti-regime cohorts onto the streets at a time when the regime was already facing one of the most serious existential threats of its lifetime,” Conduit wrote.
The IRGC is losing $450 million a day in the blockade, too. Keeping the internet off may help prevent opposition groups from organizing a popular revolt, but it’s making the rage at the regime worse by the day at the same time.
That may be why the regime is attempting another good-cop offer for the US:
Iran has delivered its response to the latest U.S. amendments to a draft plan to end the war, a regional source confirmed to Axios.
The big picture: The Iranian response is a signal that the diplomacy is not entirely frozen. It comes as President Trump maintains a U.S. naval blockade and considers new military action against Iran.
- Iranian state media also reported on the response delivered to the U.S. on Thursday via Pakistani mediators.
Unless this contains an offer to verifiably transfer Iran’s entire store of highly enriched uranium out of the country, it’s not going to change anything. By this time, the US clearly understands that the IRGC is neither connected to nor willing to be bound by the diplomatic track. That track consists of attempts by the so-called “moderates” – Masoud Pezeshkian and Abbas Araghchi – to sell another ceasefire that the IRGC will refuse to honor. If diplomacy had any value in this situation, the Strait of Hormuz would already be open, and Iran would still be exporting its oil.
That puts Trump at a decision point, albeit not necessarily acute. He can continue to let the IRGC strangle itself and its regime and let matters take their natural course in the collapse. Trump could choose to accelerate that process by reopening offensive kinetic actions, although the IRGC apparently might be stupid enough to start first and let Trump get even more political support for renewed bombings. Don’t be surprised if Trump decides it’s acute enough this weekend to escalate.
Editor’s Note: For decades, former presidents have been all talk and no action. Now, Donald Trump is eliminating the threat from Iran once and for all.
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