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Iran War: Trump Insanity Escalates, Administration Doubles Down on Failed Economic Strangulation as Iran Digs In and Costs to World Rise; Israel Destruction of South Lebanon Continues

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[This Iran war post launched before complete because your humble blogger is fuzzy headed as a result of 2x nearly 40 hours of travel in 8 days, which also led to my screwing up as to who was on duty for what yesterday and thus preparing Links (when Conor had been on for that) and not putting up an Iran war post instead. So please forgive this piece for being thin and I anticipate a bit heavy on tweets. The final version should be up by 8:00 AM EST, so if you are an early arrival so please refresh this page then]

The press is giving less attention to the Iran war due to the reduction in kinetic activity. The so-called ceasefire, violated by Israel continuing to pound Lebanon, the US keeping up its only partially effective blockade, and then Iran retaliating by re-imposing restrictions on Strait of Hormuz access, nevertheless has resulted in the US and its allies and Iran not shooting at each other. That of course may be primarily the result of the US and Israel not simply exhausting defensive missiles but even getting low on offensive precision weapons. Hence even as the assembly of materiel and manpower suggests that the US and Israel are still planning to launch a few days of punishing air strikes, insider-leakers and more and more commentators are pointing out that at best, this would result in more self-harm, via unproductive arms depletion, and risks Iran delivering on its promise to end energy production in the Middle East and send the world into a lasting famine while ending modern civilization as we know it.

But a continued impasse and de facto closure of the Strait of Hormuz will also produce famine and deepen the damage to what passes for civilization, from drug shortages to lower chip output to a big drop in air traffic. The last example may not seem as consequential until you consider the knock-on effects to tourism, and with that the survival of hotels and restaurants in destination spots, jobs, and even real estate values.

So the current seeming stasis masks economic pressures building up along many fault lines. And the longer it persists, the worse the eventual earthquake is likely to be.

The even greater screechiness from Trump may signal that his lack of good options, yet pressing need to Do Something is weighing even more on him.

An additional factor that may be adding to Trump’s tsuris is that he seems to be losing his magic Mr. Market touch. Oil rose another 1% early Wednesday despite the blather above.

It may be that the media noise about Administration divisions and military worries about another big set of Iran strikes damaging overall preparedness is simply to get Iran off guard. Or Team Trump could be trying to talk Israel out of taking action on its own, which would necessitate the US piling on (yes I know in theory that the US can stop Israel by not providing SIGINT and other goodies, but in practice, the power of the Zionists in the Administration and Congress means the perceived political cost of employing the choke chain is too high).

As much as he might like to (and this would be the least of his bad options) it is inconceivable that Trump would simply toss up his hands and exit, leaving control of the Strait of Hormuz in the hands of Iran (and Oman). That degree of humiliation, and the resulting considerable strengthening of Iran, both geopolitically and economically by being able to export oil freely and collect tolls, is not something the US can swallow. It has to suffer a lot more pain, even if the much of the rest of the world will be first in the firing line.

However, it appears instead that the Trump Administration is doubling down on economic sanctions, despite that backfiring with Russia and not being effective with Iran when the US first cheated on and then withdrew from the JCPOA. Iran may not be as much of an autarky as Russia but it is awfully close.

Bloomberg describes the Trump effort to escalate on the economic front in US Signals No Letup of Naval Blockade as It Aims to Squeeze Iran. We feel compelled to clear our throat and point out that Bloomberg, which has of late become an uncritical amplifier of Administration messaging, fails to point out that the US blockade is mighty leaky. First, ships can hug the coast of Pakistan and India on their way out; the US has not yet and seems not likely to take action in their territorial waters. That means, even when the navy actually does capture a vessel, it is well away from the Middle East. Larry Johnson has pointed out that these abducted ships must be escorted back to a port, tying up already limited capacity. I have not seen great data here; as of mid-month, Lloyd’s List had identified 26 ships that had slipped past the US cordon even as CENTCOM huffily gave a non-denial denial by asserting that they had gotten 29 to turn back. Johnson maintained in a new talk with Pyotr Kurzinthat about 90% of China-bound ships were getting through but did not provide a source.

Now to Bloomberg:

The blockade lies at the heart of the impasse between the US and Iran, with the Islamic Republic insisting it won’t restart negotiations or reopen the Strait of Hormuz as long as the naval restrictions stay in place. Trump says he won’t halt the operation until Iran agrees on a peace deal to end a war that, while now in a ceasefire, began more than two months ago, causing chaos across the Middle East and energy prices to surge.

Let us start with a blindingly obvious point: Iran would not be conditioning negotiations on reversing the blockade if it would suffer unendurable harm by having them persist. Iran would instead be running at top speed to the negotiating table to trade to get the blockade removed. Iran’s conduct says it is confident it can stand whatever pain that produces.

So the idea that the Administration can use the continuation of the blockade as a bludgeon is just silly, or at best aimed at Mr. Market (“Iran won’t be able to hold out much longer, so things will be back to the old normal real soon!”).

But Bloomberg dutifully harps on the idea that Iran will really really suffer because its storage will fill up and it will soon have to turn off oil production! As if that has not already occurred across the rest of the Gulf? We were told then that it would be take some doing to shut them down, that restarting them would take time, and if they were shut for a long time (as in months plus) that could harm output. But with Iran, the message is that well shutdowns = immediate damage. Are we to believe that Iran, which is full of engineers, is less capable of managing its production assets than other states in the region?

But let us indulge the official propaganda. More from Bloomberg:

It’s unclear how much storage and time Iran has left before it would need to close down wells, which may damage them permanently. Analytics firm Kpler estimates it has another 12 to 22 days.

Trump has told his aides to prepare for an extended blockade and that it carries less of a risk for the US than resuming hostilities or walking away from the conflict without a deal that curbs Iran’s nuclear activities.

Larry Johnson’s latest post provided an unadulterated version via quoting Treasury Secretary Scott Bessent:

The Treasury Department, through Economic Fury, has targeted Iran’s international shadow banking infrastructure, access to crypto, shadow fleet, weapons procurement networks, funding for terrorist proxies in the region, and independent Chinese “teapot” refineries that support Iran’s oil trade. These actions have disrupted tens of billions of dollars in revenue that would be used to fund terrorism.

Under President Trump’s’ maximum pressure campaign, Tehran’s inflation has doubled and its currency has rapidly depreciated.

Kharg Island, Iran’s primary oil export terminal, is soon nearing storage capacity, which will force the regime to reduce oil production, resulting in an additional approximately $170 million per day in lost revenue, and causing permanent damage to Iran’s oil infrastructure. Treasury will continue to exert maximum pressure and any person, vessel, or entity facilitating illicit flows to Tehran risks exposure to U.S. sanctions.

Oh, and get a load of the Wall Street Journal in Iranians Feel the Pain as Their Economy Descends Into a Death Spiral. After an anecdata-heavy account, it concedes at the very end:

“Iranians will suffer hardship,” said Mohamed Amersi, an Iran expert and member of the Global Advisory Council of the Wilson Center, a Washington think tank. “But their pain tolerance threshold is higher.”

The mainstream media, as far as I can tell, has also not sufficiently registered that Iran has toughened its terms. Earth to base, this means that Iran feels even more, not less, confident as the Administration is visibly flailing about. Iran has said it is no longer willing to discuss nuclear enrichment (“not now” can be translated to mean “not ever”).

Weirdly, a lot of pundits, even ones on the Iran beat, are still depicting a more stringent version of the JCPOA (which Iran had offered before the US and Israel attacked Iran) as a face-saving way out for Trump and could conceivably be sold to and in Israel. The fact that that Iran has pulled that issue off the table suggests that Iran, which already knew that talking to the US was both pointless (the US and Israel do not adhere to agreements) as well as risky ot the negotiators, looks now to be trying to carry itself so as to feign being willing to entertain talks for the benefit of economic victims across the globe while taking select concrete steps to make sure they don’t happen, or at least not in person.

And Iran actually is getting more friends. It was just voted in to a key UN post, becoming vice president of the Nuclear Non‑Proliferation Treaty Review Conference. And the backing came not from BRICS (which we have long depicted as over-rated as a geopolitical force, although it could become one eventually) but the old Non-Aligned Movement, which dates to 1961.

This clip is worth watching if nothing else to see the heads of US officials explode.

And as for that US blockade being at best partly effective, it can also be circumvented by simply using other export routes. Iran is ramping up the use of a new a rail link to China. It can’t carry as much oil in total as tankers can, but transit times are much faster:

Larry Wilkerson provided additional salient detail about other export routes open to Iran. Note he is focusing mainly on Iran’s supply needs but the same corridors can be used for exports of various sorts with a bit of investment.

And as far as the ‘Stans go, Tajikistan, Kazakhstan, all those countries that are awash now with the power that China’s magnet has pulled towards the east are going to be right there with them. Not because they were once SSRs of the Soviet Union, but because they see the reality of power shifting. And that reflects you take out your map and look at the Caspian Sea and see how the Caspian Sea is essentially a lake, a huge lake across which Russia can resupply Iran till hell freezes over with no interference because all the countries that are littoral to the Caspian Sea are on their side in this or at least are neutral and not going to interdict the shipping. So you could send everything you wanted to send. It’s a reverse of what we did for the Soviet Union in World War II along the Persian Gulf through Iran and on up into Staling Gro would never have survived if it hadn’t been for that supply chain. Now it’s reversed. It’s reversed in terms of direction and it’s reversed in terms of interested parties. The interested parties are those affiliated with the SEO, with Russia, with BRICS, and are very much, as you just pointed out, on Iran’s side in this conflict for not sentimental reasons, but for very understandable power reasons. They’re on Iran’s side. And the main power reason is the demented power on the other side of the Atlantic that they see now cannot be dealt with. And you’re right, they’ve seen it now for about 12 years. They’ve seen it with Trump, Biden, and Trump.

And as we pointed out yesterday in Links:

Needless to say, the wags are having none of it:

Now to some updates on the economic cost front, first from Michael Shedlock in National Gasoline Prices Hit the Highest Level Since Start of War in Iran:

We will skip over the furor of the UAE leaving OPEC in May. With no shipments out of the Gulf now, this move has no immediate effect. The UAE apparently wants to pump freely when it can. But that also assumes that there will be a UAE when the conflict ends.

And from Nikkei’s South Asia Watch:

Its [India’s] exporters are largely absorbing the sharp cost escalation in crude-linked inputs as buyers in the U.S. and Europe resist price hikes on current contracts. While they anticipate negotiating raising prices by 15% to 30% for new contracts, there is also the risk of losing clients.

Supply shocks from the Iran war have also impacted the oil and gas units of Reliance Industries, India’s largest conglomerate. Profits for the January-March quarter fell more than 8% year-on-year. Chairman Mukesh Ambani, Asia’s second richest man, cited “unprecedented dislocation in global supply chains.”

Neither are fund managers immune. Venture capital firms in India count the Middle East as one of their largest sources of capital. Now, with the region plunged into chaos, negotiations have slowed, raising concerns that firms seeking fresh inflows may have to scale back operations. These funds are now increasingly wooing investors from Europe and parts of Asia.

Other sightings:

For the technically minded:

Apologies for giving Lebanon short shrift. We also have some updates in Links:

Stopping for today. Back tomorrow.

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118 comments

    1. Matthew

      Yes, and thanks–as always! Day in, day out, this is the most valuable source of information that I–I suspect many of us–have to resort to. Despite the apology at the head, I am finding this one of your very best bird’s eye view takes.

      Balancing a certain schadenfreude about Trump’s straits (tsurisis quite the right word) and the real possibility that his fumbles make it harder to declare martial law and prevent a big looming erosion of R/authoritarian power in November–which could be hugely important for both the American people and world–balancing a certain hopefulness on that front against awareness of the ferocious economic tsunami welling up internationally is hard to do from the standpoint of a reader’s emotional stability! I expect that there will be a concomitant slowing of climate destruction, to go with the advance of said destruction through bombing and freely-burning petroleum products at present. Don’t see how there won’t be a surge of cancers and lung disease throughout West Asia. . .

      If these events move the nonaligned countries out of the consumerist path of Western dependency toward the kind of autarchy that Samir Amin counseled. . . good; if it strengthens that movement anew, even better. I noticed that John Casidy gives Amin a section in Capitalism and Its Critics; don’t think he’s getting it all right there vis a vis Amin’s enormous contribution to the thinking of people outside the US and Europe, but that’s a useful book.

      1. thistlebreath

        Excellent point about possible unforeseen knock-on effects.

        To cite a historic example, consider the shift from videotape to digital cards in cameras for TV/film in 2011. It was because of an earthquake. https://www.nbcnews.com/id/wbna42248619

        Here in the USA, the change within the media industry was fast and permanent. 15 years later, tape is archive-only. An entire post production facility ecosystem in LA vanished within two years.

    2. eg

      Thank you, Yves — this site remains an indispensable first visit every morning and the last visit before retiring for the evening.

  2. The Rev Kev

    ‘Are we to believe that Iran, which is full of engineers, is less capable of managing its production assets than other states in the region?’

    They are probably more capable than the other Gulf countries. It will be Iranian engineers working to sustain those oil fields and protect future production. They will be readily available and probably well trained. It is my understanding that with the Gulf states though, they they rely on foreign contract workers to maintain those oil fields and most of them are from America or Europe. How many are still there in those countries? How many will be willing to go back to those Gulf states knowing that Trump could plunge that whole region into war once again – based on a hunch of his – that would endanger the lives of those contractors? Risky business that.

    1. ilsm

      I took the London to Doha leg in 2004. The airplane was half filled with Brits who run Qatar’s gas facilities. Yes, they can come back if the strait opens, unless they have other work.

      Qatar host schools for their children.

    2. Yves Smith Post author

      Saudi Aramco famously is or at least was the best petroleum operation in the world. Ex the Saudis your guess is probably correct.

  3. AG

    Does William Schryver not follow NC???

    April 24
    Existential Imperative
    https://imetatronink.substack.com/p/existential-imperative

    –“I have long argued that, in my estimation, the security and continued sovereignty of Iran has become an existential imperative for both Russia and China.

    Almost no one agrees with my assessment of this situation. Vanishingly few geopolitical analysts believe Russia or China will step in to prevent the attempted destruction of the Islamic Republic of Iran at the hands of the United States and Israel, such as we are now witnessing.I have long argued that, in my estimation, the security and continued sovereignty of Iran has become an existential imperative for both Russia and China.”

    –“This is what the otherwise eroding American empire is now attempting to achieve.

    Many very smart people believe they will succeed — and it is not hard to understand why they think so.”

    Huh? Has Schryver got trapped in the Land of Oz?

    2. hereweare

      “Vanishingly few geopolitical analysts believe Russia or China will step in … the security and continued sovereignty of Iran has become an existential imperative for both Russia and China.”
      It seems self-contradictory, unless the idea is that Iran, China and Russia have hardly any geopolitical analysts, or the ones they do have are unaware of this existential imperative – neither of which appears likely to me. What is Schryver getting at?

  4. Adam1

    “It’s a reverse of what we did for the Soviet Union in World War II along the Persian Gulf through Iran”

    I’ve said this before, which you’re echoing, Russia and China need Iran to survive. They’ll pull a pre-Pearl Harbor FDR strategy of doing everything short of declaring war on the US to keep Iran from falling. How the administration doesn’t seem to get that is insanely negligent.

    1. Sibiriak

      “It’s a reverse of what we did for the Soviet Union in World War II along the Persian Gulf through Iran and on up into Staling Gro would never have survived if it hadn’t been for that supply chain.”

      That should be “Stalingrad”, of course. (auto-transcript error)

      1. Michaelmas

        Worth getting a sense a scale of the Persian Corridor, so-called, to create which the UK and USSR, as allies, took over Iran. Note the photos of the train and truck convoys, and the Indian Army soldiers with Brit officers —

        https://en.wikipedia.org/wiki/Persian_Corridor

        ‘…in June 1941 … Britain and the Soviet Union saw the newly opened Trans-Iranian Railway as an attractive route to transport supplies from the Persian Gulf to the Soviet Union. Both countries used concessions extracted in previous interventions to pressure neutral Iran…In August 1941, because Reza Shah refused to expel all German nationals and come down clearly on the Allied side, Britain and the Soviet Union invaded Iran, arrested the monarch, sent him into exile to South Africa and took control of Iran’s communications and the coveted railway.

        ‘In 1942 the U.S., now an ally of Britain and the Soviet Union in World War II, sent a military force to Iran to help maintain and operate … the railway. The British and Soviet authorities allowed Reza Shah’s system of government to collapse and limited the constitutional government interfaces. They installed Reza Shah’s son, Mohammad Reza Pahlavi, onto the Iranian/Persian throne….’

        1. hk

          And left in place a very messed up political system in which who had what power was very murky. Cue some constitutional crises and eventually 1953.

    1. The Rev Kev

      ‘Every accusation is a confession.’ This is probably the WSJ floating this story to get back into Trump’s good books once more.

      1. Cocomaan

        Yea I could see that. On the other hand it could also be true that Iran is suffering.

        I can only speak for myself but I paid $4.41 for gas yesterday and I’m glad I topped off my heating oil two weeks ago. Brent spot is up 3% this morning and it’s just been a steady climb.

        I’m always interested in seasonality and the timing of all this is pretty bad – fall is usually when things go sideways in the stock market but here we are with an oil shock and some bad tech headlines.

        Given how mercurial and stupid Trump has been, I would not be surprised if we end up with “delayed” midterm elections. National security and all.

        A Democrat I know said that nobody would put up with that, it would be a crisis. I’m not sure I believe that.

        1. ACF

          Trump can only interfere with the timing of elections through martial law; the states each run their own elections, and there’s always more on the ballot than the federal races, and the states print the ballots. Short of forcing states not to conduct elections at the barrel of a gun–the President cannot delay the election.

          Congress, however, could change Election Day by law. Nonetheless the Constitution ends the current Congress’ terms on Jan 3 of next year, so it seems rather pointless for them to move the date and I don’t see a world in which even a Republican Congress still beholden to Trump does that.

          1. hereweare

            “Trump can only interfere with the timing of elections through martial law”
            His statements and behaviour strongly indicate he’d love martial law.

            1. juno mas

              The facts are: There are not enough federal agents available to stop state-run election processes. See recent federal attempt at controlling Minneapolis.

              Trump is done after the mid-terms.

          2. ChrisPacific

            I remember looking into the US electoral system a year or two back to try and understand why it sometimes took so long to produce results, and being appalled at how decentralised and fragmented it was. Even saying it’s under state control understates the complexity – in most cases it’s managed operationally at county level.

            Fast forward to today and it’s looking much more like a feature than a bug.

        2. Richard

          “…’delayed’ midterm elections.”
          Very hard to do, I think. Elections are run by the states, not the US. The states might just decide to go ahead, regardless of instructions from feds. Maybe the R states, would delay/cancel; their loss. If there is any push-back from the D states (esp.), the Trumps would be looking at some degree of force. Use the FBI, ICE, Army, (nationalize) the guard to shut down elections across 50 states? I’d have to see it. Ignore elections; deny new electeds their seats in the House, Senate? I’d have to see that too. Nothing would be easy. All would be discrediting — a coup.

        3. motorslug

          ‘Muricans are more likely to mass revolt if Epstein Fury resulted in delays or cancellation of the football season rather than elections.

        4. lyman alpha blob

          For what it’s worth, a high ranking Congressional Democrat told me recently that there would definitely be midterms, despite all the febrile rhetoric across the interwebs.

        5. albrt

          I paid $3.85 in northwest Ohio yesterday. This morning it was around $4.29 and by evening it was $4.79 to $4.99, far above the scare numbers that were floating around the internet during the trading day.

          Up $1.00 per gallon in one day.

    2. Yves Smith Post author

      The final version has a link to that but thanks for making sure readers did not miss it.

      Very heavy on anecdata and makes a big deal of interventions which are not dissimilar to ones underway across Asia….and no one is depicting even hard-hit countries like India as in a death spiral.

      1. Cocomaan

        That’s a really good point, I have not seen articles about the billions of people being impacted by this on the front page of WSJ for awhile.

    3. Wukchumni

      Casting aspersions is what we do well~

      When you’ve gone from 5 Rials to the $ in the 70’s to over a million to equal a buck-well before Torah! Torah! Torah! struck, it isn’t as if you haven’t faced down economic uncertainty before, in fact it was your stock in trade.

  6. Adam1

    Oil by train… back in like 2014 I lived near the main east-west rain through upstate NY during the shale oil boom before the pipelines were reworked. The oil trains ran through town like every 30 minutes every day, 24/7 for months. You can move a ton of oil by rail just by keeping the trains moving.

    1. Afro

      This network of alliances is hard to follow.

      So Pakistan is aiding Iran? In spite of the fact they have a defense pact with Saudi Arabia, and a CIA coup removed their last leader and installed their current leadership?

      Is Azerbaijan still an Israeli ally? Will they seek to annex Northern Iran?

      1. hk

        Pakistanis are, historically, good at working with multiple sides. See Kissinger’s talks with China, for example.

      2. Pearl Rangefinder

        No matter what else, the Pakistani’s still need oil and gas, and the Hormuz situation means they are suffering crippling energy shortages like much of the rest of Asia. IEA Strait of Hormuz Factsheet

        Bangladesh, India and Pakistan imported almost two-thirds of their total LNG supplies via the Strait of Hormuz in 2025, making them particularly vulnerable to potential disruptions to transit flows.

        Moreover, natural gas dominates the power sector of Bangladesh and Pakistan, with gas-fired generation accounting for 50% and 25% of their electricity supply mix, respectively, in 2024. Inadequate LNG supplies would cause a deterioration of electricity supply security in those price sensitive markets and could lead to production curtailments in their gas-intensive industries, including fertilisers.

        Anything that can keep The Spice flowing is desperately needed good news from their point of view.

    2. lyman alpha blob

      You can, but given the eroding infrastructure and declining safety measures in the industry coupled with the usual corporate greed, be careful what you wish for.

      After a good portion of Lac-Mégantic went up in flames, if I recall correctly, the industry vehemently protested adding even one more employee per train for safely purposes, even though these trains carrying very large and valuable amounts of oil were staffed by just one or two people to begin with.

  7. Tom Stone

    I think it is important to keep in mind that Trump is not sane and that he has surrounded himself with bootlickers.
    There’s no fig leaf, this Administration is both openly evil and stupid to the point of insanity, unless Trump goes soon a civilizational collapse is the most likely outcome.
    It would be enlightening to see the psychological evaluations of Trump by the Russians and the Chinese, I suspect they could be summarized as “Oh Shit!”

    1. ChrisFromGA

      Trump is certainly suffering from a pathological ego. The same trait or affliction is seen in mass murderers and megalomaniacs. So far, the only restraining force seems to be Thom Tillis, who defeated his evil attack on Jay Powell, and Thomas Massie, M T-G, and maybe Nancy Mace.

      Notably absent from that list – a single Democrat.

    1. Huey

      Much appreciated Yves, regardless of the timing. Especially considering your hectic, and uncomfortable, flight schedule. Please take some time to rest when you are able.

    2. Oregon Lawhobbit

      Coming off a 17 hour flight (with long layover – those travel lounges are worth every penny!) from Taiwan, while I can’t feel your pain, I can certainly SEE your pain from where I am…

      Good to have you back and glad everything – travel-wise, at least – went well.

  9. JohnH

    UAE’s leaving OPEC is most likely connected to the SWAP lines being negotiated with the US, Breaking OPEC is more in the US’ self interest that UAE’s.

    1. Yves Smith Post author

      No, if the US understands its interests, it will happily extend those swaps lines. Otherwise UAE banks and investors dump dollar assets to meet dollar obligations. This is about both preserving (to the extend possible) the UAE as a dollar financial center and preventing US asset-value tanking forced sales

    2. Who Cares

      Sort of.
      UAE is trying to diversify away from oil. That means that the price they need for a barrel of oil to keep the government running is closer to the cost to extract said oil. Saudi Arabia for example went through a costly failed invasion of Yemen and then spent more to bribe the various factions to pacify them.
      That creates a conflict of interests. And apparently the gap is now big enough that UAE is thinking it is better to front load the diversification by accepting a lower price for oil then to maximize value by trying to set the price to the level of what others need to finance their government expenses.

    3. Yves Smith Post author

      Bloomberg confirms that the UAE and the (dominant) Saudis were at loggerheads for a long time. From UAE Bristled at Saudis for Years Before Iran War Tipped Scales:

      The United Arab Emirates’ worsening rift with Saudi Arabia was at the heart of its shock decision to quit OPEC.

      The rivalry has been building for years but it was the fallout from the US and Israel’s war on Iran that provided the opportunity for Tuesday’s announcement from the UAE, according to several people familiar with the matter. It was, one of them said, akin to ‘little brother’ no longer wanting to be tied down by ‘big brother.’

      Beyond quitting OPEC, the UAE is considering its membership of two regional bodies in which Saudi Arabia holds plenty of sway, according to some of the people, who asked not to be identified given the sensitivity of the matter.

      While a final decision hasn’t been made, Abu Dhabi may freeze its seat at the Cairo-based Arab League and take a similar move with the Jeddah-headquartered Organization of Islamic Cooperation, they said.

      https://www.bloomberg.com/news/articles/2026-04-29/uae-bristled-at-saudis-for-years-before-iran-war-tipped-scales?srnd=homepage-middle-east

      1. hk

        I wonder how this will shape out Gulf countries align globally.

        At first, I was a bit surprised and bemused when UAE officially joined BRICS in 2024, even as the Saudis were dancing around the idea of joining it, too. They were also getting involved in Lebanon and Yemen, sort if backing “similar but rival factions.” They were, of late, both aligning towards US and, in a way, even more so Israel, as rival supplicants, which became more overt as the shooting started.

        They remind me of, well, Hungary and Romania before and, even more so, during World War 2. Basically, involved in a mostly “local” disputes (I have trouble imagining either with a serious “global” vision, other than drawing money to themselves from global players, esp UAE), and engaged in a race to attract foreign supporters to help them one up their rival, which leads them to align even more so in the same direction.

  10. Carolinian

    The Hudson/Wolff/Nima talks are always good and Michael Hudson posts the welcome transcripts awhile later on his website.

    https://michael-hudson.com/2026/04/wall-streets-exit-plan-is-you/

    Hudson:

    People seem paralyzed to realize that the only way that they can avoid a depression that’s going to be as serious as the depression of the 1930s is to actively stop the United States by imposing sanctions on the United States itself, by refusing to go along with this. That’s what’s so crazy about this.[…]

    The world has to wake up, and it’s not. The U.S. says, we’re in a fight, a clash of civilization, our democracy. We’re supporting world democracy. We’re supporting democracy in Israel. We’re supporting democracy in Ukraine. That’s what we’re doing.

    Obviously not. This is not a clash of civilization. This is a fight led by the United States against all of the basic principles of civilization, as they’ve been developed in the last few centuries. That’s what’s really at stake in all this. And the working out of this is exactly what Iran is seeing. And, apparently, no other countries are willing to confront them yet.

    And it’s not just Trump of course because with Obama foaming runways and Biden blowing up pipelines and the MSM pretending all of this is normal it’s our ruling class that is wildly steering the car over the cliff.

    1. .Tom

      Yves wrote: “it is inconceivable that Trump would simply toss up his hands and exit, leaving control of the Strait of Hormuz in the hands of Iran (and Oman).” And it doesn’t like Iran is going to budge. So this sets up an interesting next phase of geopolitics. SoH will be closed indefinitely. Which side are you on?

      Who started this war is perfectly clear. Iran is doing amazingly well in the global PR department, like never before. Trump and Netanyahu, quite the opposite. So, which side are you on in this “fight led by the United States against all of the basic principles of civilization, as they’ve been developed in the last few centuries.” ? It’s interesting.

      1. The Rev Kev

        Of course Trump treating all the allies of the US as trash vassals and most of the other countries of the world even worse is starting to isolate the US leading to most people in the world supporting Iran, no matter what their leaders say. The effects may not be immediate of this sea change but will increase over time. All those alliances and relationships that the US carefully built up over the past 80 years are now being thrown on the barbecue.

      2. Bill Carson

        WRT how Iran is doing in the PR department, I vaguely remember the news coverage of the 1980 hostage crisis. (I was 12 or 13.). Back then the television news, including Nightline, showed the same footage of the Ayatollah over and over again, and it really dehumanized them and made the country look backwards. The difference between then and now is stark. IMO, the Iranians are doing a magnificent job both trolling the Trump regime and appearing like the adults in the room. (I don’t watch Fox. I presume they are still showing the old footage from 1980.)

        1. Yves Smith Post author

          In 1980 Iran had a very new government and there was no alternative media. If you think they could ever have gotten even a semi-fair treatment from NBC, the New York Times, BBC, or the Economist, I have a bridge to sell you.

    2. hereweare

      “This is a fight led by the United States against all of the basic principles of civilization”
      It’s perfectly clear who the enemy is, unless you’re one of the barbarians who support US and Israeli foreign policy.

  11. The Rev Kev

    ‘Ebrahim Zolfaghari
    @Irantimes02
    🚨 🇮🇷 Iran will NOT accept any deal that restricts nuclear enrichment.
    Tehran will only negotiate:
    • End of the war
    • Full control over Strait of Hormuz
    • War reparations
    • Sanctions relief + lifting naval blockade’

    It occurs to me that if Iran gets their toll booth going on the Strait of Hormuz, then the two subjects of reparations and sanctions relief could be negotiated away as they would no longer need either. After that you would only need for the war to end and for the blockade to end – and Trump can’t keep those ships out there forever.

    1. Huey

      Potentially they could still negotiate for them, I think. Reparations should largely come from USrael, if my understanding is correct, independent of any other profit lran makes post this conflict’s outcome. The sanctions in particular I feel might be a matter of principle. At the same time, thoughm negotiations for an end to hostilities (if undeinably guaranteed) may be worth foregoing these demands for, as you suggested.

      1. The Rev Kev

        I don’t think that the US or Israel would ever pay reparations. As I said in a previous comment, both nations would convert to Islam first. Sanctions relief is more tricky. You have Pakistan for example opening up trade routes but there is nothing to say that Trump or a future President would not announce 150% sanctions unless those trade routes were shut down.

        1. motorslug

          Definitely not the izzys, they never pay for anything. Like trump, they are experts and victimizing others’ taxpayers by playing the victim.

        2. Oregon Lawhobbit

          Maybe not directly, but those tolls on Hormuz passage are gonna be the reparations that keep on giving.

    2. Lefty Godot

      Who would guarantee a treaty (or less formal agreement to end the hostilities)? The US and Israel never fulfill their commitments, in writing or not. They just make up fictional violations that you’re supposedly guilty of so they can violate at will. The European leaders will never hold Israel and the US to account, and Russia keeps supporting Israel even as they assist Iran with its defense. China is unlikely to want the enforcer role.

      Maybe Iran is just stalling, because they know the US Armada can’t stay at sea forever when resupply is fraught with challenges. And meanwhile they can get up to speed on the newer Russian AAD systems they’ve received and continue replenishing their missile and drone stocks. Hopefully Iran still has undiscovered intelligence assets in Israel that can keep them abreast of what the leaders there are up to.

    3. Samuel Conner

      I don’t think they can flex much on sanctions relief. The toll income is less useful if they are highly constrained in which nations they can spend it due to sanctions.

      —

      If the Press really wanted to mess with DJT’s head (not that this would be prudent), a reporter could ask him what he plans to do about North Korea’s nuclear weapons programme.

  12. Tom Stone

    We are looking at a lot of unnecessary deaths from the Iran War already due to second and third order effects.
    100,000,000 seems a modest guess.
    Trump is facing either admitting he screwed up big time or doubling down and causing the collapse of modern Civilization.
    Based on his recent behavior, admitting he screwed up is not likely, what’s left of Trump’s brain is an existential need to Dominate, Rage, and Greed.
    Build community where you are and you might survive.

    1. ChrisFromGA

      Trump will never admit he screwed up. That’s the number one trait of a narcissist – they see admitting wrongs as weakness.

      He also lacks the self-awareness to see how his own pathological ego creates problems for him. For example, he picked a senseless fight with Fed Chair Jerome Powell, attempting to dominate him through bullying and name-calling. When that failed, he escalated into a shady legal attack, using his minions in the DoJ to do his bidding. That eventually failed, too, when one Senator stood up to him and put a hold on the incoming nominee Kevin Warsh.

      Now Jerome Powell has announced he is sticking around for a while, rather than retiring. He’ll become a thorn in Taco’s side. Trump cannot see how his own pathological need to dominate creates enemies who resist his madness.

      As a footnote, it is kind of sad to see a decent guy like Jerome Powell dragged down into the level of being a foil to a nutjob’s ego. But it is good that he is standing up to him. No doubt it will further enrage Trump and lead to more mistakes and self-defeating behavior.

      1. The Rev Kev

        Certainly all true that. He also attacked the Pope out of the blue and for no good reason, alienating any number of Catholics in the process which includes American Catholic voters. He has a very thin skin when it comes to his ego.

  13. Ann

    How traffic through the Strait of Hormuz shrank to a trickle – a visual deep dive

    https://www.cnn.com/2026/04/29/world/iran-war-gulf-hormuz-shipping-maps-intl-vis

    Russia to hold Victory Day parade without military equipment for 1st time in nearly two decades

    https://apnews.com/article/russia-victory-day-parade-3c0e2619140194148dd94c730775ee3f

    South Korea sweetens submarine bid, will manufacture armoured vehicles in Canada if chosen

    https://www.ctvnews.ca/business/article/south-korea-sweetens-submarine-bid-will-manufacture-armoured-vehicles-in-canada-if-chosen/

    Ukraine is worried the US is diverting military support away from its war.

    https://www.newyorker.com/news/the-lede/how-putin-and-zelensky-view-the-war-in-iran

    1. Huey

      Lmao, Zelensky is that kid crashing on his parents’ couch while he ‘figures himself out’. Now, suddenly, big bro Benjamin’s passing through town and he’s in the garage with a blanket while his parents fix the couch up for themselves so Benny can take the master bed.

  14. The Rev Kev

    ‘Arab News
    Apr 29, 2026
    @arabnews
    #BREAKING: Israeli Foreign Minister to AlArabiya English: We have no territorial ambitions in Lebanon.’

    Pretty sure what he meant to say was ‘It is the last territorial demand I shall make in (the Middle East). Now where have I heard that before?

  15. ilsm

    EIA Petroleum Balance Sheet week ended 24 April.

    Net draw on commercial and SPR stock 13 million barrels!

    US Net exporter crude, 600 thousand barrel per day, normal about 2 million barrels imported per day.

    US helping out!

  16. Ann

    Iran’s Guards seize wartime power, blunting Supreme Leader’s role

    https://www.reuters.com/world/asia-pacific/irans-guards-seize-wartime-power-blunting-supreme-leaders-role-2026-04-28/

    German finance minister doesn’t rule out emergency borrowing as ‘Trump’s irresponsible war’ bites

    https://www.politico.eu/article/germany-finance-minister-lars-klingbeil-emergency-borrowing-donald-trump-war-iran/

    Oil price jumps to $115 after reports of ‘extended’ Iran blockade

    https://www.bbc.co.uk/news/articles/cj4pxr0gr02o

  17. Wukchumni

    At some point the boy that cried wolf schtick isn’t going to stick, not that the rest of the world isn’t Teflon coated already.

    Does it just end in inanity in-between threats not followed through on?

    1. Yves Smith Post author

      The flight departures were 8 days apart. The flights (with layovers) were 33+ hours. So add a day on the back end

      I also went a day early to Bangkok. :-)

        1. Yves Smith Post author

          I just went to a nice airport hotel to make the outbound trip less taxing. Packing, a long taxi ride, and then dealing with Immigration and security is more stress than I need.

          1. Don

            Ah, memories of Thailand!

            On our last night in Bangkok (several decades ago), we had to barricade ourselves in our hotel room — with furniture — in a nice hotel booked for us by Air Bangladesh which had overbooked our flight, when the desk (belatedly) decided that my Chinese-Canadian partner and I were violating hotel rules which prohibited “prostitutes staying with hotel guests in rooms”, which provided more stress than we needed but also provided us with a story to dine out on for months to come..

            1. TimH

              Interesting, since lots of farangs have a Thai wife (as opposed to GF), including my Dad (married over 40 years now)…

          2. ChrisPacific

            I am a big believer in breaking long gruelling trips up into more manageable legs with hotel stays. I used to prefer to get them over with in one long sleep-deprived marathon, but that’s a young person’s game.

  19. Ghost in the Machine

    The markets (oil, stocks, and bonds) remaining irrationally sanguine for so long is making things much more dangerous in the longer term, given the markets are some of the few things Trump cares about. My feeling is that these markets breaking downward would put pressure on Trump to cave in a helpful way (really opening the straight up). This would finally wake up the top 10% in the US as well, I imagine. For the top 10% in the US, most of whom are not really paying attention, the only thing they feel is somewhat higher gas and food prices which they can easily absorb. Something needs to happen to wake them up and apply political pressure. But, the longer that doesn’t happen the higher the chances of a greater depression and widespread famine. It seems something like that is baked in, but the outcome is getting worse and worse by the day. The markets “strength” now is only making their eventual slaughter worse.

    1. Samuel Conner

      I recall reading years ago that Ben Bernanke, in writing about the unconventional options available to the Bank of Japan to prevent deflation, went so far as to mention the possibility of even CB direct intervention (i.e., share purchases) in equities.markets.

      1. Ghost in the Machine

        I have wondered about this possibility as well. If a central bank is determined enough, could they completely detach the market from reality? I guess you would put money in the stock market as a kind of inflation hedge rather than an investment in that case. I have trouble investing in much of the stock market on moral grounds. Investing in war? The protection racket health care system? Poisonous food? Peter Thiel’s fantasy of enslaving me in a 1984 surveillance society? AI slop? I am hoping a big AI bubble bust will set back the surveillance state, but could the FED make it happen no matter how bad the economics are because they want the surveillance state?

        1. Samuel Conner

          I recall reading some years ago a proposal that businesses above a certain size be nationalized and operated as public utilities in the public interest (rather than, as at present, for share price appreciation and senior management enrichment). Smaller businesses would operate more or less as they now do. Nationalization would be at a fair value; owners who did not want to cash out would manage their enterprises to stay smaller than the threshold for nationalization.

          The thought occurs that Fed intervention in equities markets under crisis conditions could have the effect of putting public interest representation onto the Boards of large corporations. Probably won’t happen; USG had the chance to change the banks back in 2008 and took a pass.

      2. Yalt

        @realDonaldTrump
        52m
        Intel Stock continues to rise. I’m very proud of that Company in that I am responsible for making the United States of America over 30 Billion Dollars in the last 90 days on that stock alone. There are others that, likewise, I have been very successful with by taking pieces of the Equity for support. Congratulations to Intel on doing such a great job and, more importantly, congratulations to the People of the United States for making such a good investment! President DONALD J. TRUMP

        Who needs a central bank when you have President Atlas, condemned to hold up the stock market for eternity?

        (A delightfully contronymic phrase, that “holding up.”)

    2. albrt

      UST 10 year rate hit 4.4% today. Nearing the top of the recent range usually triggers a TACO. Not sure what Trump can chicken out of right now, so maybe he will do something aggressive instead. Consider hiding under your desk for half an hour or so after market close.

      1. Will

        Trump is hosting King Charles. I’m assuming Trump is too focused on frivolity to do anything until Chuck leaves tomorrow.

    1. Yves Smith Post author

      The belief in your first link was reported earlier. That was insinuated (IIRC by Bloomberg) as why the failed US raid was staged nearby.

      The last time the IAEA was in Iran was October 2025. So their knowledge is stale. Why the hell would the Iranians NOT have moved some or all if it had been there and Iran knew the IAEA knew or suspected it was there? Ted Postol says it would all fit an a pickup truck. Not hard to shift plus have a lot of decoy action to obscure any footprints.

      1. A Little Bird

        If the end result was the fish in a barrel debacle we saw with the alleged attempted raid, I don’t have a hard time believing Iran was perfectly happy to let them think that material was just waiting for them.

    2. hereweare

      Trump urges Iran to sign a deal after report suggests US may extend blockade
      Here’s a working link for that:
      https://www.reuters.com/world/asia-pacific/trump-urges-iran-sign-deal-after-report-suggests-us-may-extend-blockade-2026-04-29/

      Trump said on Truth Social, “Iran can’t get their act together. They don’t know how to sign a nonnuclear deal. They better get smart soon! President DJT”.
      Nothing unusual there, but the accompanying picture is something else – The Don as a gangster (or is he meant to be Rambo or James Bond – or a doctor again?).

      2. nyleta

        The head military logistics people from Iran and Russia met in Bishkek yesterday apparently,,would have loved to be a fly on the wall for that meeting,
        .
        The Empire will not let Australia tax LNG exports even in the present circumstances and our pollies are looking stupid as a result. Mysterious flights from Diego Garcia and the Middle East continue into Western Australia, it takes a while but as the Ben Roberts case shows there are still consequences in Australia for helping with war crimes.

        Food grade resin from Singapore to Australia has doubled in price already,,more to come.

  22. DG Bear

    “However, it appears instead that the Trump Administration is doubling down on economic sanctions, despite that backfiring with Russia and not being effective with Iran…”

    The more I learn about sanctions the more appalled I am. Iraq, and now Venezuela, have their oil revenues deposited in foreign banks under the control of the USA government. There is no dignity nor sovereignty in such an arrangement. I would put that under high crimes.

    Sanctioned ship hijacked at sea. Piracy.

    I knew 2007 marked the time of Russia planning to break free from the USA. I now believe China’s turn to renewable energy 20 years ago was to be free of the USA interdiction of oil supplies. I now believe that they both realized the War on Terror was a domination ploy.

    Sanctions are an act of war as far as I am concerned. Are we really at war with half the world?

    2. hereweare

      ‘Are we really at war with half the world?’
      No. At war with the rest of the world. It’s not as if Trump makes that much of a secret. (Not to mention he’s at war with at least half the US population too, which he’s equally open about.)

    3. Acacia

      Depends on the “we”, and to support your point about piracy, whatever else we may think of Richard Medhurst’s broader reading of the situation, his claim that the U.S. has become a “pirate state” doesn’t seem so far fetched now.

  23. Jason Boxman

    What’s really amazing is, with the kinetic war on pause, how little coverage there really is of what’s about to happen. This is week 9 of the spice not flowing, with no obviously credible endgame in sight from Trump. If he folds without the magic dust, he’s The Loser. Iran continues to hold all the cards. A continuation of kinetics is merely going to worsen the situation for Trump and Israel and Trump’s gulf allies. I’d be shocked if America ultimately outlasts Iran, which has been under some kind of international economic siege or another for decades now. And Iran isn’t giving Trump any opportunity to save face, with nuclear negotiations off the table until Trump makes concessions he cannot make.

    All in all, pretty lit.

    1. ThirtyOne

      “asked U.S. oil companies about ways to mitigate the impact of a potentially months-long U.S. blockade of Iranian ports.”

      I’m guessing ditching Trump and his entire cabinet is off the table.

    2. Acacia

      WSJ reporting this as well:

      Trump Tells Aides to Prepare for Extended Blockade of Iran
      https://archive.md/DMXkM (de-paywalled)

      Of course, DJT may change his tune after “cousin Charles” returns to the UK, but methinks the phrase “indefinite blockade” may do some damage.

  26. Ann

    Russia ships India’s fourth S-400 system, to be deployed by May end

    https://www.hindustantimes.com/india-news/russia-ships-india-s-fourth-s-400-system-to-be-deployed-by-may-end-exclusive-101777358791952.html

    Canada selected to host new multinational defence bank, sources say

    https://www.theglobeandmail.com/business/article-canada-host-multinational-defence-bank/

    Brussels weighs letting fossil fuel companies break EU pollution limits

    https://www.politico.eu/article/brussels-weighs-a-no-fines-holiday-for-fossil-fuel-companies/

  27. Ann

    Israel engineered ‘special’ rats to attack Palestinians in Gaza, radical Fatah officials claim

    https://www.jpost.com/middle-east/article-894280

    Trump says US will look at reducing number of troops in Germany after clash with Merz

    https://www.independent.co.uk/news/world/europe/trump-germany-us-troops-merz-nato-b2967672.html

    Chinese hackers breach the Cuban embassy in the U.S. and gain access to sensitive emails

    https://en.cibercuba.com/noticias/2026-04-29-u1-e208933-s27061-nid327603-hackers-chinos-entran-embajada-cubana-eeuu-acceden

    US to give $100 million to repair damaged Chornobyl nuclear shelter, Kyiv says

    https://www.reuters.com/business/aerospace-defense/us-give-100-million-repair-damaged-chornobyl-nuclear-shelter-kyiv-says-2026-04-29/

    1. eg

      “Trump says US will look at reducing number of troops in Germany after clash with Merz”

      I imagine many Germans may be thinking, “don’t threaten me with a good time!

      1. hk

        Curious how much public support there is in Germany for having US forces pull out totally.

        Honestly, US bases abroad are not something that should exist: they are broadly unpopular in US, they are generally unpopular and controversial in most host countries. Only some “foreign policy leaders,” ie swamp creatures, in DC and foreign capitals want them. They are an affront to the idea of democracy.

    1. Acacia

      BTW, thank you AG, for sharing the LARB obit on Alexander Kluge yesterday. His work really does reward closer attention.

      It’s been many years since I saw Die Artisten in der Zirkuskuppel: Ratlos (1968), but I still recall the strong impression.

      Regarding the “9.5-hour epic” News from Ideological Antiquity: Marx/Eisenstein/Capital (2008), there is a 90-minute theatrical cut, which Kluge prepared for the Biennale Arte 2015. It is available here (free streaming) with English hardsubs:

      https://www.dctp.tv/filme/nachrichten-aus-der-ideologischen-antike-sub

      For anybody curious to read more, many texts are available, but Kluge’s 1988 interview for October is an excellent starting point:

      https://www.jstor.org/stable/778677

      Lastly, from the LARB article:

      It is worth noting that Kluge, unlike the vast majority of German intellectuals from his generation, responded to the growing alarmism about the place of Muslims in German society with energetic dissent, producing an extensive series of programs exploring Islamic history and culture. Even more unusually, Kluge proved capable of distinguishing anti-Zionism from antisemitism, willing to voice his opposition to Israeli apartheid publicly.

      We really need more voices like A.K. in the present. His departure is truly a great loss.

      1. AG

        Thanks for the October piece.
        Yeah I was happy and surprised to see the LARB entry.
        The group of people who could write a good piece about AK have thinned out.
        Unlike with Habermas.
        But that´s the nature of power just as your quote illustrates.

  29. DD

    Not that I can stop it, but the constant referring to Trump as TACO is concerning. Those of us against bombings and war should want Trump to chicken out. Aggressive rhetoric without follow through is much better than the alternative. It seems odd to goad Trump into continuing down the dark road of escalation.

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