🇮🇱/🇮🇷/🇺🇸: Let’s try to bring some order to the current situation between the US and Iran after the signing of the MOU. The MOU amounts to an American defeat, and there is no sugarcoating it. Major concessions were made by the US, with basically zero concessions made by the Iranian side. Nevertheless, this war, although branded as a disaster, might ultimately bear fruit.
What did Iran get, and what did Iran lose?
So far, Iran has received very little. It gets a temporary 60-day waiver on its oil, petrochemicals, and derivative products. Is this a huge victory and a massive inflow of money for the regime? Let’s look at it in more depth.
The oil market is a market that loathes instability. Given the world’s dependence on oil, every minor change in prices or supply chains is felt like an earthquake. When Donald Trump reimposed sanctions on Iran in 2018, oil prices skyrocketed to $86 a barrel. Then, two months later, they went back down to $50 despite the sanctions. The oil market is very volatile, yes, but it is also very resilient. More importantly, supply is abundant. By leaving OPEC, which was limiting oil production, the UAE has already indicated what its next move will be: we can supply more, and we will.
The world has adapted and survived without Iranian oil. Now it is back — temporarily. And that makes all the difference. As resilient as the market is, consumers would prefer to avoid temporary rises in oil prices. That is why they will not rush toward Iranian oil. Is it cheaper? Yes. But it comes at a steep price: uncertainty. Relying on Iranian oil means taking the risk of losing your supplier and consequently dealing with the consequences. These may be short-term consequences, given the resilience of the oil market, but they can still be disastrous for any politician.
Choosing Iran as a long-term partner for oil supply is a huge bet. And politicians do not bet. They go for certainty. They would rather pay $70 a barrel to the Saudis than $60 to the Iranians, knowing that their supplier will still be there in two months. With the Islamic Republic, you cannot be sure.
Is this temporary waiver a victory for Iran? Yes. Is it a major game changer? No. IRIB predicted that Iran would reach $10 billion in revenue from this temporary waiver over the next two months. This will not happen. Iranian oil is a curse, and everyone knows it. As long as the Trump administration stands firm on these waivers being temporary, Iran will only get minimal revenue — not the huge financial relief expected.
As of the time of writing, this is the only concession granted to the Iranians. Their funds still have not been unfrozen. The Trump administration claims that those funds will be used only to buy American goods, in order to prevent them from being used to fund terrorism. We shall see. As of now, the money is not in Iran’s hands, meaning it is still a card the US can play.
The US has granted Iran sovereignty over the Strait of Hormuz.
Pretty neat, eh? Every Iranian channel keeps repeating this, saying that this is what is written in the MOU, so the matter is settled. Well, let me break it to you: it will not happen. Iran knows it. And there are many reasons why.
A. It is objectively illegal. Nothing more, nothing less. One could argue that lying does not really bother the Iranians — “peaceful” and “civilian” nuclear program, yet uranium enriched to 60%, while 5% would be enough. The world did not buy Iranian lies before, and it still will not. This time, it would directly affect consumers around the world if Iran were to impose tolls. Not only the US, but basically every country on the planet would reject it. Even China and Russia have voiced their opposition.
The Islamic Republic seems to believe that by imposing a new reality, the world will eventually accept it out of fatalism. At first, one could think they are not entirely wrong. What will the world do, after all? They cannot open the Strait by force — even the US acknowledges that — and they need the Strait.
What did Iran get, and what did Iran lose?
So far, Iran has received very little. It gets a temporary 60-day waiver on its oil, petrochemicals, and derivative products. Is this a huge victory and a massive inflow of money for the regime? Let’s look at it in more depth.
The oil market is a market that loathes instability. Given the world’s dependence on oil, every minor change in prices or supply chains is felt like an earthquake. When Donald Trump reimposed sanctions on Iran in 2018, oil prices skyrocketed to $86 a barrel. Then, two months later, they went back down to $50 despite the sanctions. The oil market is very volatile, yes, but it is also very resilient. More importantly, supply is abundant. By leaving OPEC, which was limiting oil production, the UAE has already indicated what its next move will be: we can supply more, and we will.
The world has adapted and survived without Iranian oil. Now it is back — temporarily. And that makes all the difference. As resilient as the market is, consumers would prefer to avoid temporary rises in oil prices. That is why they will not rush toward Iranian oil. Is it cheaper? Yes. But it comes at a steep price: uncertainty. Relying on Iranian oil means taking the risk of losing your supplier and consequently dealing with the consequences. These may be short-term consequences, given the resilience of the oil market, but they can still be disastrous for any politician.
Choosing Iran as a long-term partner for oil supply is a huge bet. And politicians do not bet. They go for certainty. They would rather pay $70 a barrel to the Saudis than $60 to the Iranians, knowing that their supplier will still be there in two months. With the Islamic Republic, you cannot be sure.
Is this temporary waiver a victory for Iran? Yes. Is it a major game changer? No. IRIB predicted that Iran would reach $10 billion in revenue from this temporary waiver over the next two months. This will not happen. Iranian oil is a curse, and everyone knows it. As long as the Trump administration stands firm on these waivers being temporary, Iran will only get minimal revenue — not the huge financial relief expected.
As of the time of writing, this is the only concession granted to the Iranians. Their funds still have not been unfrozen. The Trump administration claims that those funds will be used only to buy American goods, in order to prevent them from being used to fund terrorism. We shall see. As of now, the money is not in Iran’s hands, meaning it is still a card the US can play.
The US has granted Iran sovereignty over the Strait of Hormuz.
Pretty neat, eh? Every Iranian channel keeps repeating this, saying that this is what is written in the MOU, so the matter is settled. Well, let me break it to you: it will not happen. Iran knows it. And there are many reasons why.
A. It is objectively illegal. Nothing more, nothing less. One could argue that lying does not really bother the Iranians — “peaceful” and “civilian” nuclear program, yet uranium enriched to 60%, while 5% would be enough. The world did not buy Iranian lies before, and it still will not. This time, it would directly affect consumers around the world if Iran were to impose tolls. Not only the US, but basically every country on the planet would reject it. Even China and Russia have voiced their opposition.
The Islamic Republic seems to believe that by imposing a new reality, the world will eventually accept it out of fatalism. At first, one could think they are not entirely wrong. What will the world do, after all? They cannot open the Strait by force — even the US acknowledges that — and they need the Strait.
(2) So it is either you follow Iran’s rules or there are no rules at all. Smart logic. Except it is deeply flawed.
Why? Because of who uses the Strait.
The Gulf countries, of course. But even more importantly, consider whom they export their oil to. They do not export primarily to Europe or the United States, the so-called “great enemies” of the Islamic Republic. No. They export overwhelmingly to Asian countries, with India and China representing the largest share.
So who would these fees actually affect? The United States? European countries? No. Asian countries.
According to the EIA, roughly 90% of the crude oil flowing through the Strait of Hormuz is destined for Asia. China, India, Japan, and South Korea alone account for approximately 75% of all Hormuz crude flows.
Would Iran really be willing to impose fees on major powers with which it maintains relatively good relations? Probably not. Doing so would amount to diplomatic suicide. If Iran acts rationally and refrains from imposing fees on these “friendly” countries, perhaps granting them exemptions or special waivers, what would be left?
Would it impose fees on the relatively small amount of oil linked to the United States? Only about 2% of US petroleum consumption is connected to flows through the Strait. Europe faces similarly limited exposure.
Iran cannot realistically leverage the Strait against its principal adversaries because it is used overwhelmingly by countries that either maintain workable relations with Tehran or would strongly oppose such an unlawful move. Iran may retain some authority over the Strait “on paper,” but it is unlikely to earn any meaningful revenue from it.
B. Iran gained the capability to effectively threaten the Strait.
This point is true. However, like any strategic asset, once it is used, its value begins to diminish.
The UAE has already understood this and has started taking steps to reduce its dependence on the Strait of Hormuz, with the long-term objective of minimizing that dependence as much as possible. Iran has played its ace card, and the consequences are already visible.
The Gulf states will now look for ways to circumvent the Strait and reduce their vulnerability to Iranian pressure should another conflict erupt. And make no mistake: another conflict eventually will.
The next time, however, Hormuz alone may not be enough to force the world to bend or to give in to the demands of the IRGC. Its deterrent value will remain significant, but every use of that threat encourages other countries to invest in alternatives and reduce their dependence on it.
Why? Because of who uses the Strait.
The Gulf countries, of course. But even more importantly, consider whom they export their oil to. They do not export primarily to Europe or the United States, the so-called “great enemies” of the Islamic Republic. No. They export overwhelmingly to Asian countries, with India and China representing the largest share.
So who would these fees actually affect? The United States? European countries? No. Asian countries.
According to the EIA, roughly 90% of the crude oil flowing through the Strait of Hormuz is destined for Asia. China, India, Japan, and South Korea alone account for approximately 75% of all Hormuz crude flows.
Would Iran really be willing to impose fees on major powers with which it maintains relatively good relations? Probably not. Doing so would amount to diplomatic suicide. If Iran acts rationally and refrains from imposing fees on these “friendly” countries, perhaps granting them exemptions or special waivers, what would be left?
Would it impose fees on the relatively small amount of oil linked to the United States? Only about 2% of US petroleum consumption is connected to flows through the Strait. Europe faces similarly limited exposure.
Iran cannot realistically leverage the Strait against its principal adversaries because it is used overwhelmingly by countries that either maintain workable relations with Tehran or would strongly oppose such an unlawful move. Iran may retain some authority over the Strait “on paper,” but it is unlikely to earn any meaningful revenue from it.
B. Iran gained the capability to effectively threaten the Strait.
This point is true. However, like any strategic asset, once it is used, its value begins to diminish.
The UAE has already understood this and has started taking steps to reduce its dependence on the Strait of Hormuz, with the long-term objective of minimizing that dependence as much as possible. Iran has played its ace card, and the consequences are already visible.
The Gulf states will now look for ways to circumvent the Strait and reduce their vulnerability to Iranian pressure should another conflict erupt. And make no mistake: another conflict eventually will.
The next time, however, Hormuz alone may not be enough to force the world to bend or to give in to the demands of the IRGC. Its deterrent value will remain significant, but every use of that threat encourages other countries to invest in alternatives and reduce their dependence on it.
🇮🇱/🇱🇧: The Israeli minister of Defense Israel Katz just announced Israel will not withdraw from Southern Lebanon even if pressured by the US
Middle East Coverage
🇮🇱/🇱🇧: The Israeli minister of Defense Israel Katz just announced Israel will not withdraw from Southern Lebanon even if pressured by the US
Small symbolics withdrawals from the most advanced zones are expected in order to maintain the negotiations with Iran on track
🇵🇸/🇮🇱: Two Hamas operatives in Gaza almost reached the Kerem Shalom cross point in a zone supposedly under total IDF control. One operative was captured and the second is still at large. The event is being investigated by the Israeli authorities
🇾🇪/🇮🇱: "The Houthi leader is hiding in tunnels—if he’s in our sights, he will be killed." Israeli Defense minister Israel Katz
💯1
🇪🇺/🇮🇱/🇱🇧: EU diplomats discussed the possibility of sending a mission to support the Lebanese Armed Forces and Internal Security Forces
Reuters
Reuters
🇮🇱/🇱🇧:The IDF announced the elimination of two Hezbollah operatives near the Ali Al Taher ridge calling it a violation of the ceasefire. Attached are the pictures of the two deceased operatives
🔥2
Middle East Coverage
🇪🇺/🇮🇱/🇱🇧: EU diplomats discussed the possibility of sending a mission to support the Lebanese Armed Forces and Internal Security Forces Reuters
🇪🇺/🇱🇧: The European Union is sending a three-year military and civilian mission to advise and train Lebanese forces.
The mission will focus on strengthening land border regiments, improving intelligence capabilities, and enhancing maritime security.
Reuters
The mission will focus on strengthening land border regiments, improving intelligence capabilities, and enhancing maritime security.
Reuters
-🇮🇱/🇱🇧 BREAKING ❗️: According to preliminary reports the IDF just struck a car in the region of Nabatiyeh.
Middle East Coverage
-🇮🇱/🇱🇧 BREAKING ❗️: According to preliminary reports the IDF just struck a car in the region of Nabatiyeh.
Reports indicate at least two dead so far
🇱🇧/🇮🇱 : The Israeli Army announced the death of an Israeli soldier last night during clashes with Hezbollah near Nabatyieh