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Iran War: Iran Disses Witkoff and Kushner in Doha but Does Not Get $6 Billion in Frozen Assets; Strait of Hormuz Traffic Sub-Par but Continues on Oman Side as Talks Over Future Management Continue

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[Today’s Iran war update yet again launched before complete. Please return at 8:00 AM EDT for a final version]

We’ll soon discuss the fact that the Memorandum of Understanding is clearly never going to get done and consider what might come when it officially breaks down.

Janta Ka makes his lead item the fact that Trump set up Witkoff and Kushner for humiliation by trying to bounce Iran into a meeting in Doha with them to which Iran had never agreed and rejected:

But in the modern information war analogue to the question, “If a tree falls in the forest and no one hears it, has it made a sound?” what if “If you are dissed but the media that matters to you pretends otherwise, have you been humiliated?”

Mind you, Trump has such an extreme need to dominate that once he finds out about this slight, he is likely to get all bent out of shape on Truth Social. Right now, he is preoccupied with nursing his rage over his Supreme Court loss on birthright citizenship. This is the latest tweet I could find from him on the Middle East:

But more important, the meetings the Iranians had set in Doha were to get $6 billion in frozen funds held in Qatar released, as had been agreed under the Biden Administration and the US of course reneged. Doha News’ Facebook page has a short video of the Qatar foreign ministry spokesperson basically throwing up his hands. He says Qatar is just the middleman, and the transfer of funds has not yet occurred. Moreover, the Qatar spokesman say Iran was to use these monies in accordance with that deal, only for humanitarian purposes, meaning there were strings attached.1 So the Trump team might be trying to hang its hat on the old Biden deal to say it can restrict Iran’s use of these monies.

From the Doha News article, Qatar confirms no high-level U.S.-Iran talks in Doha, clarifies status of $6bn frozen funds:

During a weekly briefing on Tuesday, Qatar’s Foreign Ministry spokesperson Majed Al Ansari stated that while Doha continues to facilitate diplomatic engagement, no direct negotiations between Washington and Tehran are taking place.

“There is no high-level meeting currently scheduled between the US and Iran,” Al Ansari confirmed….

On the issue of Iranian assets, Al Ansari addressed reports concerning the potential release of $6 billion in frozen funds.

He confirmed that Qatar continues to act solely as a financial intermediary under a 2023 agreement between the United States and Iran, which established a humanitarian channel for the use of the funds.

“Qatar does not own these funds. It is only acting as the financial intermediary to manage these accounts within the framework of this agreement between the parties,” Al Ansari reaffirmed.

He added that any transfer of funds depends on mutual agreement between Washington and Tehran and progress in negotiations, which has not yet occurred.

So despite Iran scoring a PR win by blowing off the truly dreadful Kushner-Witkoff tag team, it still does not have any of its frozen funds. Recall that Iran had earlier attempted to have the US return some as a condition of entering into the Memorandum of Understanding.

So aside from the US ending the blockade and giving Iran oil sanctions relief so it can sell its oil without hassles, Iran seems to be nowhere on getting the US to honor the MOU.

It looks as if Iran assumed because $6 billion was formally in Qatar’s possession and had been agreed to be returned in a Biden era deal, that it would be best place to set the precedent of the US returning frozen funds because it could be spun in a way by the Trump team to be less controversial. But instead, the US is pointing to terms in that Biden deal that restrict the use of the assets to “humanitarian” purposes, which translates into the US restricting/supervising their use.

Not only is Qatar backing that position, but it seems further to be falling in line with the US position that there has to be negotiation progress on other issues before it can free up the funds. See from the Qatar remarks in footnote 1:

…the matter of transferring the funds or not is done according to mutual agreement between both parties and according to progress of the negotiations, which has not happened so far.

And the US seems to be further holding up discussion of any other frozen asset releases until this $6 billion is settled.

And recall that the US gave Iran a 30 day waiver for its oil at sea during the war. That was because the US wanted to keep oil supplies as high as possible, given the givens, to contain prices. So this area of compliance is in the US’ interest.

Reports on whether the US is even withdrawing its extra forces are contested. Larry Johnson points out in a fresh talk with Nima that Pete Hegseth signed an order to pull out forces and that all the military flight activity reported on Twitter is presumably pursuant to that, as opposed to bringing more assets and men in. Daniel Davis has also said he has heard about redeployment order having been issued.

Yet DropSite News is one of the most highly connected news outlets in the region. This is admittedly a remark in passing but Ryan Grim is part of the reporting team even though he was not on in this segment. Breaking Points reports a force buildup yesterday’s show (see at 11:20, showing a tweet from MintPress):

Similarly:

We’ll turn in a minute to the various accounts of Iran and Oman discussing possible Strait of Hormuz arrangements. The short version is Oman is sticking to UNCLOS, which it has signed. Crudely speaking, UNCLOS requires that states who have territorial waters that must be crossed to allow passage to commercial vessels to open seas (aks transit passage). UNCLOS severely limits the fees that may be charged to vessels transiting natural waterways, as opposed to canals or waterways where investments in dredging were made to facilitate traffic.2

One wonders where Iran thinks these talks and the much bigger fight for regional dominance are going.

On paper, Iran has all the leverage, given its ability to kill the global economy by choking Strait of Hormuz traffic. Trump’s sudden surrender to the MOU demands and his remarks that he didn’t want to be the next Herbert Hoover seemed to be an admission that the US recognized the weakness of its position.

Yet Iran should have recognized that the MOU contained promises (or conceded to Iran demands) that the US could not honor.

The US can’t deliver the $300 billion. The MOU does not have the US on the hook for it and the US cannot make non-signatories cough up the money. The US compel other countries, notably the Europeans and any others who are honoring the JCPOA snapback, to give sanctions relief.

It is not impossible but certainly far from easy to compel the Israelis to leave southern Lebanon. The US can remove its forces deployed during the war but has not done so yet.

Even before getting to the fact that the US could never deliver on the MOU in full, US intransigence, as shown with its fight over the Iranian frozen assets and its effort to cement an Israel presence in southern Lebanon by midwifing a potential Israel-Lebanon pact says the US is acting like it still has cards to play, even when independent military and geopolitical experts almost to a person say otherwise.

Does the US believe that it can get enough oil out of the Strait of Hormuz in a tit-for-tat exchanges scenario to escape the oil cliff, based on a belief that Iran does not want to go back to a hot war and will not if the US keeps its provocations below a certain level? Or have members of the Trump team convinced themselves that even if the world economy goes tits up, the US will not be much harmed? Bloomberg oil reporter Javier Blas has regularly been flogging information tidbits supporting the idea that all is well on the supply side, so perhaps the Trump Administration is on the receiving end of similar cheery takes:

Or have the US and Israel convinced themselves that they have a game-changing clever trick up their sleeves?3

Traffic in Hormuz is less than wonderful but there are still transits on the Oman side:

And Lloyd’s List is making optimistic noises. Notice the use of the word “surges” in Shipping sustains pragmatic approach to Hormuz transits amid political uncertainty

  • Traffic through Hormuz is growing again following recent US-Iran strikes, with shipowners relying on political guarantees, shifting security corridors and improvised convoys to move vessels through a still‑fragile chokepoint
  • Iran and Oman pushing competing control plans for the strait, while US-Iran talks in Doha remain uncertain and fees proposed by Middle East Gulf states threaten to stall any long‑term agreement
  • Shipping is adapting through temporary workarounds, including VLCC shuttle operations and dark transits

Hormuz traffic surges as US-Iran talks are set to resume, but a long‑term plan is still elusive and shipping is enacting temporary workarounds not a strategic return

Nevertheless, a sanity check:

A fresh report (after the initial launch of this post) suggests Iran has resumed discipling ships that try to transit on the Oman side:

A late update: Iran reportedly took credit for the grounding:

Lloyd’s List in theory should have a better view of what is happening than other outlets. NO1 highlights the divergence in reports on amount shipped: From his latest daily report:

Export figures diverge and both should be surfaced: Iran claims 40-50M barrels since the blockade lifted (~two weeks), which HormuzReport frames as 3.4M bpd, double the pre-war 1.7M; TankerTrackers pegs the June monthly average at 1.66M bpd.

I am not about to belabor the talks between Iran and Oman right now. Oman so far is clear it will stick to UNCLOS which allows for fees but not at the “enough to serve as part of reparations” level. Iran keeps using the word “control” with respect to the Strait of Hormuz, which is also not compatible with UNCLOS. So it seems likely that Oman and Iran will find it hard to bridge the gap, particularly if Iran sticks to the position expressed in remarks by Dr. Moshen Rezaei, a senior military adviser to the Supreme Leader, in a video clip in the Breaking Points segment above. From Rezaei’s translated remarks in a lightly cleaned up machine transcript:

But regarding fees, there is a cost dimension to this matter. There is a tolls discussion, a fees discussion. Our current discussion is about service costs in the Strait of Hormuz. Yes, we want to maintain the security of the Strait of Hormuz. We want to protect the environment of the Strait of Hormuz. We must establish insurance mechanisms so that if incidents occur, ships that encounter problems are covered to reduce their risk. And when we provide all of this, these costs cannot come out of the pockets of the Iranian people. These costs must be collected from those who are transporting oil through this Strait.

This is not the first time that Iranian officials have suggested providing insurance. Insurance could get to big enough fee levels to be meaningful.

But let us not kid ourselves. Insurance is a right to sue the insurer to get paid in the event of a valid claim. Do you think anyone with an operating brain cell (save perhaps Chinese vessel operators) would assign any commercial value to an Iranian insurance policy, where they would presumably have to go to courts in Iran in the event of a dispute?

I hate to put on my cynic’s hat, but it is Iran that has been shooting at transiting vessels of late. It would not be hard to depict an Iranian insurance scheme as an open Mafia-like extortion racket. At a minimum, this would put Iran’s desire to present itself as having the moral high ground (which it has so far given that the US and Israel started the war for no defensible reason and continue to act like jerks) with its desire to secure its position as a regional power, which means it would have to continue to hold the world economy hostage.

As reader Safety First mused in comments yesterday:

Yesterday, the Middle East Spectator published the following. Note that I have not seen this reflected in either Pars Today or IRNA (official news agencies), so not sure where he got it from (Tasnim?).

—–

https://t.me/Middle_East_Spectator/33990

Iran’s Foreign Ministry:

‘We are still in discussions with Oman regarding the future management of the Strait of Hormuz.

If Oman is not interested in a joint mechanism for fees and services, we’ll simply manage the Strait ourselves.’

—–

IF this is true, then Iran appears to be getting ready for a power play for the Strait, the MoU language and various international laws notwithstanding. [Unless it’s all a gigantic bluff or something.] Which would match the more bellicose language coming out from the “Khamenei faction” in Iran, not to mention the IRGC. But I stress, Pars and IRNA, despite posting a bunch of quotes yesterday and today from Baghaei, the foreign ministry press guy, did NOT post this particular one, so I wonder about the sourcing a bit.

And I cannot imagine the Chinese would be happy about such a power play, if it were to take place, but then, as Alexander Mercouris has repeatedly pointed out, Iran has previously burned at least a couple of bridges with both the Chinese and the Russians when this was not strictly or at all necessary to do.

In general, I am beginning to think the fulcrum of the situation will not be US or Israeli actions, especially as both have now gone into Minsk 3.0 stalling mode, but rather Iran’s choices in the next few weeks. Specifically with respect to the Strait, and with respect to Lebanon (i.e. direct military action against Israel). If the Iranians bend, the US “wins” (notwithstanding prolonged energy-related problems), and the war restarts, say, after the midterms. If the Iranians force one or both issues, then the war restarts now (probably), we face a much deeper economic crisis (definitely), and at that point Iran cannot afford to stop until achieving full regional hegemony (but will it actually have the legs to go that far, especially if the Chinese get miffed?).

Maybe they’re hoping the US and the Israelis pile up enough MoU violations for the Iranians to walk away without damaging their diplomatic credibility too much…

Great powers are not nice and the US has become even more openly thuggish under Trump.

But the Israelis have a saying: “Love your enemy, for you will become him.”

Is Iran set to stoop to US levels to win this struggle for dominance?
____

1 Starting from the top:

First of course, regarding the USD six billion, which are the Iranian frozen funds, these date back to an agreement announced in 2023 between the United States and Iran to establish a humanitarian channel here in Qatar. The original purpose of these funds is to be used within the framework of purchases for humanitarian purposes according to the agreement that was in place at the time.

As you know, as stated in the [US-Iran] memorandum of understanding, the issue of frozen funds is certainly part of it, but the matter of transferring the funds or not is done according to mutual agreement between both parties and according to progress of the negotiations, which has not happened so far.

2 A useful short recap from Maritime Cyprus:

Natural Straits: International Waterways and the Right of Transit Passage

In contrast, a strait is a naturally occurring narrow passage connecting two larger bodies of water that is customarily used for international navigation. These waterways predate modern states and are regarded as part of the global maritime commons.

  • Authority to Charge Fees: Under UNCLOS, coastal states generally may not impose general transit fees or tolls on vessels exercising the right of innocent or transit passage.
  • Right of Transit Passage: Part III of UNCLOS grants ships and aircraft the right of “transit passage” through straits used for international navigation. This right allows continuous and expeditious transit without impediment, suspension, or taxation solely for the act of passage. Coastal states retain the right to regulate for safety, pollution prevention, and other legitimate purposes, and may charge for specific services rendered (such as compulsory pilotage or emergency assistance), but not for mere passage.
  • Prominent Examples: The Strait of Hormuz, the Strait of Malacca, the Strait of Gibraltar, and the Bab el-Mandeb Strait.

The Strait of Hormuz: Legal Limits on Iranian Claims

Recent statements by Iran regarding the possible imposition of transit fees in the Strait of Hormuz have raised concerns in global energy markets. Because Iran has not ratified UNCLOS, it is not directly bound by the treaty’s transit passage regime. Nevertheless, legal experts maintain that a general toll on international shipping would still violate broader principles of customary international law and freedom of navigation, which predate and exist independently of UNCLOS.

The Strait of Hormuz constitutes a classic international strait, serving as a critical chokepoint through which approximately 20% of global petroleum and liquefied natural gas transits. Any unilateral attempt to charge vessels simply for passage would likely be viewed as an unlawful interference with international navigation rights and could trigger significant diplomatic and legal challenges.

Coastal states may, however, recover costs associated with concrete services—such as search and rescue capabilities, navigational aids, or environmental protection—provided the fees are non-discriminatory and proportionate.

As an aside, it is weird to see Iran insist that the MOU gives them control of the Strait of Hormuz when even if you accept their reading of the opening line (which I do not and others say it is at best ambiguous) when the later section, on what happens after the 60 days, invokes international law and other concepts that do not support Iranian control.

In addition, the MOU did NOT give Iran exclusive control even for the first 60 days. There is nothing in the text to support a claim of exclusivity. In fact, one can read the “best efforts” language as setting the stage for action by other parties if Iran does not perform. In additional, neither Iran nor the US can make legally valid commitments over Omanian territorial waters.

3 I am not even remotely suggesting that the US and Israel have a show-stopper. But this seems to be their thinking, that they can manage to escape the consequences of their present course of action:

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168 comments

    1. Hickory

      It actually says there was an increase in distillate levels, which includes diesel. I think it’s a typo as it says levels increased 12.9 barrels. But I’m surprised it would increase at all.

      Reply ↓
      1. David J.

        Topped off my car yesterday. Kentucky. What struck me as interesting was the spread between regular gas ($3.44 gl) and diesel ($4.74 gl). We all know that much of the country’s commerce runs on diesel, so I’m thinking that the price reflects a growing scarcity/difficulty in producing the product.

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      1. DD GE

        So finally the number came back up, to 19,666 thousand barrels in Cushing.
        I can’t remember where (farmboy maybe ?) but last week I read a take that basically said that they could move barrels around in order to maintain levels above the operational-stress-mini, so the facility is able to function.
        Maybe that’s what we see here, stiffing Peter to stuff Paul. Moving the draw somewhere else.

        Reply ↓
        1. amfortas

          and exporting all our stuff to keep the WTI stable.
          stupid is as stupid does.
          another example of the terminal disease in our elite class of short term thinking.

          Reply ↓
    3. ilsm

      API did not report on SPR crude oil draw which will be reported as DD GE said by EIA at 10:30 EDT today.

      Gasoline has been tracking down yoy while diesel and kerosene somewhat steady Yoy.

      Again, 10:30! Lots of annexes to study.

      Thus far SoH transits may slow rate of draw on crude reserves….

      Reply ↓
      1. Yves Smith Post author

        I don’t think any exiting oil could have reached its destination save maybe India and Pakistan. Admittedly a lot of fuel is refined in Malaysia and exported.

        The big issue is that IMHO too many commentators are helping Trump by estimating the SPR minimum operating level + its assumed 10% emergency buffer as higher than it is. Those salt caves were never intended to be used for 40+ years. And experts have reported that one cavern that was drained had a lot less oil in it than they thought.

        This is from 2016, so the situation has to be even worse now:

        Approved for construction by the 1975 Energy Policy and Conservation Act (EPCA), the storage sites were envisioned to be needed for 25 years and are subject to an estimated five drawdown cycles (Shages, 2014). In retrospect, the design has not matched actual use, and this has led to degradation of the SPR and impacted its ability to perform its function.

        The SPR stores crude oil (either sweet or sour) in 62 underground salt caverns located at four different sites in Texas and Louisiana. The official storage capacity is 727 million barrels, based on sonic measurements. A 2010 study concluded there was a significant mismatch in design and use of the storage caverns. Instead of the initial estimated five large drawdown cycles, a large number of small drawdowns occurred over the previous 20 years. From 1996 through 2014, there were 14 instances of oil removals less than 10 million barrels. These multiple drawdowns have caused cavern deformation, salt falls and other damage to the cavern integrity. In addition, these underground salt caverns are shrinking due to tectonic stresses. The cavern shrinkage (aka closure) is estimated to be approximately two million barrels per year – but may be significantly higher.

        Salt is a unique geologic material with complex mechanical properties. It is often modeled as a non-Newtonian fluid. At high temperatures and pressures salt behaves like a plastic. It will behave more like a liquid in the sense that it flows even under small deviatoric stresses. Salt domes make a perfect storage medium in that they do not react with the oil and are self-healing. The plastic behavior of salt will cause it to naturally close fractures or gaps and prevent any leakage. However, salt domes also are under constant geologic pressure (i.e. salt creep) and these stresses are causing the caverns to shrink (Shages, 2014). The SPR attempts to manage the shrinkage by leaving a bed of salt brine at the bottom of each cavern and by keeping their caverns under a pressure of approximately 800 psi (personal communication, SPR personnel). Salt leaching offsets some of the shrinkage. Crude oil is extracted from the cavern by injecting fresh water or under-saturated brine down one well and produced in a secondary well. The injection causes, for example, 15 barrels (2.38 m3) of salt to be dissolved for every 100 barrels of oil removed from a cavern.

        The mismatch between original design and actual utilization of the SPR’s caverns has led to the development of significant negative impacts to cavern integrity, wellbore integrity and the ability to maintain optimal mission readiness. One operational limitation is that whenever work is done to the cavern or well, the caverns must be depressurized. Removing cavern pressure causes the rate of shrinkage to increase rapidly.

        Thus, the repeated removal of small volumes of oil over the life of a cavern has led to serious consequences on the shape and integrity of the caverns:

        Dissolution of salt during a drawdown always begins at bottom of cavern.
        If cavern is only partially emptied,the shape of cavern will become distorted with a bulge at the bottom.
        Gravity puts stress on the overhanging salt formation.
        Massive falls can occur and damage hanging steel tubulars.
        Cavern deformation and shrinkage is damaging well casings and cement.

        https://www.aapg.org/news-and-media/explorer/the-good-the-bad-and-the-ugly-the-strategic-petroleum-reserve/?srsltid=AfmBOorO5nbXrTsJL9wDvb2_OYKPrCWvFHlI5qSlHlqBAmcbXVtRUEin

        This is why I give weight to Robert Pape’s claim that the minimum is between 270 and 300 million barrels. A large group of economists and oil experts came to a recent University of Chicago for a conference on the Iran War. He managed to get some oil experts to talk to him and he interrogated them together. The 270 and 300 million estimate was their consensus view.

        Reply ↓
      2. ilsm

        Per EIA week of 26 June

        SPR 325 mbbl -5.5 w on w

        Gas. 214 down -2.3 wow

        Distillates. 108.6. Up +2.5 mbbl w o w, +4.8%. Y o Y

        Kerosene. 48. up 1.7 mbbl. W o W +6.3 y o y

        Looking to annexes. US refinery utilization 96%.

        Crude inputs to refinery >17 mbbl.

        Keep flowing fuel…..

        Reply ↓
      3. Yves Smith Post author

        Wellie, your surmise seems better than mine. If I read the comment in Aljazeera correctly, the SPR draw this past week was only 5.5 million barrels v. 8-9 million barrels in recent weeks.

        Reply ↓
        1. ilsm

          Yes SPR draw is noticeably less the latest report.

          Yes EIA reported a 5.5 mbbl draw on SPR.

          It could that that net imports of crude were about 1.2 mbbl per day last week up a little as the four week average is about 1 mbbl

          Although drawing conclusions on inventory change from one observation is not wise. Lesson learned in my youth managing inventories.

          I do not check API which is a day ahead of EIA. It used to be pay walled.

          Reply ↓
          1. Yves Smith Post author

            ZOMG I have to turn in but would this affect the SPR draw? This is what they seem to say, that it was 6.4 million, not 5.5 million. Still lower than the new normal but not as low.

            Reply ↓
            1. ilsm

              A couple million barrels over 340 million observer or instrument variation is to be expected.

              I do not know about salt domes, I do know about finished fuel in tanks, above ground level. Depths were measured sometime with rods, I am talking 1970’s. Then a temperature was recorded and charts told a multiple to account for temperature related volume effects.

              Knowing that I have often not totally filled my car tank in summer.

              I presume there are similar effects for crude, varying by blend and so forth.

              My fuel experience was mainly stock control and distribution more study transport and storage site optimization before laptops/desktop. I was around a bit of planning early Desert Shield.

              I spent the second 2/3 of my career using logistics experience in designing support plans and fielding support in DoD acquisition programs.

              Reply ↓
              1. amfortas

                i just hung around some of the SPR places, accidentally…and also accidentally talked to folks who either made them, or worked on them, 35 years ago.
                after also growing up sorta embedded in oil industry back of the house in houston, since birth.
                precocious child, i picked up a lot.
                got me into geology at an early age.
                those salt caverns are gonna fail before anyone expects them to.
                i remember guys my dad took fishing talkin about that 40+ years ago.
                experts were worried about it way back then.(80’s)

                Reply ↓
    4. Jason Boxman

      I had my first dream of queuing in line for gasoline last night; preferable to my nuclear war dream of a few years ago though.

      Reply ↓
      1. ilsm

        My nightmare Tuesday AM was all the stuff I had was on a flatbed hand cart……. I could not walk where needed to be in 5 minutes bc I misplaced the book I needed.

        Thankfully I woke up before missing my appointment.

        Reply ↓
  2. Ron con Coma

    I was wondering:

    1. How does the Shite-Sunni rivalry affect this war?

    and

    2. Does Iran have the capability of sending troops through Iraq to Syria (to directly confront Israel)?

    Reply ↓
    1. ambrit

      Re. number 2.
      Iran doesn’t have to. Hezbollah is doing it for them, and, if reports are accurate, doing a pretty good job of it. Iran and its proxies don’t have to physically occupy Israel to win. All they have to do is degrade the morale of the denizens of Israel. A lot of the more “enlightened” Israelis have already left the country.
      Once it devolves to “Festung Israel,” the game is basically over.
      Stay safe.

      Reply ↓
        2. ilsm

          Nothing new there!

          The Sunni Wahabbi default to AQ and ISIS, who are also U.S. IDF tools.

          Iraq PMF and Quds defeated them soundly where U.S.’ Iraqis and Kurds could (would) not.

          Note there is now a Pakistan military presence in KSA.

          Reply ↓
          1. amfortas

            cia, and mi-5 before them, have been driving an already existing difference of opinion, into a full fledge schism forever….same with the thousand year old catholic/rorthodox, sic schism. betcha dollar that pentacostilism has risen remarkably in Ukraine these last 2 decades.
            new jesuits.
            also, see latin america.
            ive got mexican american familia that dont talk to us anymore, due to their weird new religion.

            Reply ↓
      2. motorslug

        It’s highly unlikely Turkey (who has designs on Syria themselves) would tolerate that anyway, Iran sending troops into or through.
        A much better option would be for Jordanians to overthrow their USrael lackey rulers and become a bulwark against further zionist expansion and would open yet another front to contain the vermin.

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        1. John k

          Yes. Millions of Palestinians there. But army has the guns.
          If it did happen might see small arms sent across the Jordan.

          Reply ↓
          1. amfortas

            pro-tip: we prolly shouldnt use the vermin rhetoric.
            makes us all look bad, and the intertubes are forever.
            not trying to be a karen, or anything.
            but this is all a public record.
            and its amfortas the hippie sayin this,lolie. we should be careful…from a guy who has variously advocated: cannibalism of the rich, feedin them to the poor, feeding them to the chickens…

            Reply ↓
            1. amfortas

              now im sayin “wait” its all comin down, at last, and theyre doin it to themselves.
              the weight and complexity of it all
              “civilisations die by suicide, not by murder”-A. Toynbee.

              Reply ↓
            2. amfortas

              or pigs…thats actually more efficient(see:”Deadwood”, but backed up by meat science,lol))…i dont have a reliable supply of rich bastids , though…so i have yet to do pigs.

              Reply ↓
    2. ChrisFromGA

      I recall a commenter pointing out that the depth of that side of the Strait could be quite shallow, with only 20′ of clearance between the hull of a larger ship and rock bottom in spots. Little margin for error.

      Now there is an additional hazard. Mother Nature bats last.

      Reply ↓
    3. Yves Smith Post author

      This is in the post. Please re-read the post as we had advised.

      There is skepticism about the running around part on Twitter. The waters were more than deep enough for the draught of the vessel.

      Reply ↓
      1. The Rev Kev

        I have no idea of local conditions in this part of the world but could it possibly be caused by shifting underwater sands in combination with deferred dredging because of the war?

        Reply ↓
        1. Yves Smith Post author

          No, the Oman coast is rocky.

          And Iran friendly Hormuz Letter says Iran forced the grounding. I will add this to the post even though late:

          Reply ↓
          1. ChrisFromGA

            “Forced grounding” could get interesting; a couple of thoughts come to mind:

            1. GPS spoofing sending autopilot systems haywire
            2. Cheap FPV drones sent towards the bridge cause the Skipper to panic, steer away from them towards trouble.

            Taco isn’t the only player in the game of “Perfidy.”

            Reply ↓
            1. amfortas

              wouldnt surprise me if this was a “stray” mine, that drifted,lol..laid by “HOODDOO THEAH?”…yet another mythical terrist group we’re to fear and loathe.
              for AMERICA! $uck yeah.
              i expect insanity this weekend, and might even cut off all contact.
              figger it out monday.
              F&ck all that. i aint doin it.
              nothing to celebrate
              we’re a failed state.
              “they” dont work for us, dont care about us, and for a fact dont represent us.

              Reply ↓
  4. TJBuff

    So Vance just admits in an interview that Trump signing the Mou was just an op, they are just playing for time, and have zero intention of doing anything. How can you be so stupid as to admit this?

    Reply ↓
    2. The Rev Kev

      That is one thing that I have noticed about both Trump officials and Israeli officials. It is not enough to do stuff like this but they have a psychological need to boast about it afterwards, even if it damages them. It’s like they want to be seen as the smartest people in the room and for everybody to see it.

      Reply ↓
      1. XXYY

        It’s like they want to be seen as the smartest people in the room and for everybody to see it.

        Devious != Smart.

        Taking advantage of someone’s belief in you is not the same as outsmarting them. Any idiot can tell a lie.

        Recall Animal House: “Flounder! You f*cked up! You believed us!”

        Reply ↓
    3. Yves Smith Post author

      I was remiss in not including this. Nailing down the status of the $6 billion took more time than I anticipated:

      Reply ↓
      1. motorslug

        I’m sure Asia really appreciates this and I’m glad Iran seems to be taking full advantage of the situation. What does that do for US and Europe proles though? We know trump doesn’t care about either, so it must be just to graft more market opportunities for family and friends.

        Reply ↓
    4. vao

      As stated in the post: “both [Israel and the USA] have now gone into Minsk 3.0 stalling mode”.

      Their open admission confirms that the MoU truly is a Minsk III agreement. Now is just the pause before the third round, after the 12-days war in 2025 (first round) and the Ramadan war of February-June 2026 (second round). I just wonder what will ignite the deflagration.

      The problem: in the future, Israel and the USA may find themselves in a situation where another party can play the same game to their detriment.

      Reply ↓
  5. TimH

    Considering July 4th is Saturday, I suspect Trump wants a spectacular event after market this week so that he can say that he, the POTUS, has brought Independence Day to Iran, and can save the people by rebuilding the government for them.

    My suspicion is for syncronised decapitation events bombing military, religious, civilian seats of power with the leaders inside.

    Reply ↓
    1. ambrit

      I’m wondering about the funeral for the late Ayatollah this weekend in several places in Iran. Crowds will be huge and all the top leaders must be seen to be attending for political reasons if nothing else. America has form in this, much less Israel. Anyone remember America droning weddings and other innocent public gatherings in the Middle East over the last few years?
      See: https://en.irna.ir/news/86181449/Iran-announces-funeral-schedule-for-martyred-Leader-Ayatollah
      As I mentioned the other day, beware the “Dead Hand Launch Mechanism” for the Iranian drone and missile forces.
      Stay safe.

      Reply ↓
      1. Lefty Godot

        Israel has been rallying people for a strike “inside Iran” soon, which probably means another Mossad instigated public disorder (with bombing of police stations and random shootings) along with an attempt to kill more Iranian leaders. Khameini’s funeral mass celebration is a 3+ day event that would obviously be the best opportunity to inflict maximum mayhem, and K2 will probably be having to make some public appearance during it. So, yes, Iran would have to be in a complete stupor to let even more of its leadership get snuffed thanks to a US/Israel created mass casualty event. I hope they have all the most significant Empire assets targeted for instant and extreme retaliation if we see another “surprise” attack.

        Reply ↓
        1. amfortas

          the funeral…which should be fucking off limits!, were we or israhell honorable countries.
          i expect a decapitation strike this weekend.
          its who we are, and who we have ever been.
          its just out in the open, now.
          america(f$ck yeah!) has always presented itself as this Moral Arbiter.
          and yet,lol…we have done nothing of the sort.
          our money was spent, instead, on killing millions of people, so our Corps(es) could move in and extract whatever, without interference.
          thats what “America!(f$ck yeah!!!)” actually is.

          Reply ↓
    2. SeventyTwoTrillion

      It would be profoundly disappointing to see the Iranian leadership sleepwalk into another mass decapitation event; I really hope that that lessons have finally been learned in this regard. Perhaps I’m more cowardly than others, but if I was Khamenei, I wouldn’t exit my bunker until the ink of the final deal had spent a week or two dry, and certainly not during the MoU period at all.

      The speculation that the MoU isn’t being conducted in good faith, and that it’s just a delaying tactic, has now been directly confirmed by the second-highest ranking US official. For Iran to let its guard down now, even for something as religiously and politically important as the late Khamenei’s funeral, would suggest to me that maybe we really are going to just be going round and round on Iran Wars for the next decade or two as Iran gets repeatedly fooled by a great power they don’t think could possibly stoop any lower in their underhanded tactics. In my most pessimistic moods, I start to imagine that we’ll be discussing the exciting developments of True Promise 19 before we reach 2040.

      But right now at least, I do have hope that Iran has properly developed their early warning systems and has set up anti-terrorism measures, and won’t start stuffing 20 high-ranking IRGC officials all into the same limousine.

      Reply ↓
    3. ISL

      You are probably right, but if the US is to have a military success to parade, I am not sure a decapitation does anything since the missiles respond in minutes. I nominate the Iraqi Kurds for self-immolation and a small land grab. Alternatively, the US can seize Karg (or other) Island for the 4th weekend (not hold for longer) as a birthday gift to dear leader.

      Larry Johnson has an interesting piece (on some of his “readers'” deeply held views) that makes one wonder what type of info-swamp US leadership is mucking about in. The administration has repeatedly shown its unwillingness to accept alternative views of reality (e.g., Supreme Court rulings on ICE or the Ukraine collapse) with effective silencing of opposing views internally (even when factual).

      So, in addition to “Scott Ritter w/Nima today – Russia believes that ” Trump is irrational – aka, not sane – Trumpland is an alternative reality, information-wise of low persistence – 0.2-2 hours, i.e., the Trump self-contradiction time. So, predictions of US actions must consider the irrational, self-defeating, and insane options as presented to dear leader in the prior few hours. Aka Bibi knows when to call.

      Reply ↓
  6. The Rev Kev

    Regarding that $6 billion. If I recall correctly, that money was originally money owed to Iran by South Korea but was “temporarily” transferred to Qatar pending final release to Iran. I’m guessing that the US under Trump will keep on holding that money back until Iran finally agrees to use it to buy something like GM soy beans so that Trump can make himself popular with base in rural regions in the lead up to the Midterms. If this happened, no doubt Trump will boast how he forced Iran to spend their own money in America instead of in Iran. I can’t see Iran agreeing to this as, well, it is actually their own money.

    Reply ↓
    1. Yves Smith Post author

      From Iran International in May:

      The release of frozen Iranian assets has emerged as the main sticking point in talks between Iran and the United States, with officials in Tehran insisting that guaranteed access to funds must come before any preliminary agreement can move forward….

      The current focus appears to center on roughly $6 billion in Iranian assets transferred from South Korea to Qatar in 2023 under a US-Iran prisoner exchange deal….

      The funds were later re-frozen following the October 7 Hamas attack on Israel and the subsequent deterioration in relations between Tehran and Washington….

      The IRGC-linked Tasnim news agency, citing what it described as an informed source, reported Sunday that Tehran had made clear it would reject any preliminary arrangement lacking a concrete first step by Washington on the assets issue.

      “Iran has emphasized that without the release of a specific portion of the blocked assets in the very first step, and without a clear and guaranteed mechanism for the release of all frozen assets, no agreement will be possible,” the source told Tasnim.

      https://www.iranintl.com/en/202605252488

      Reply ↓
  7. The Heretic

    Only after Iran has buried Khamenei with proper ceremony will we know its true stance on US intransigence on the MOU.

    Conversely, they should not wait too long, especially if Israel had managed a huge penetrating bomb on an underground bunker in Lebanon.

    Reply ↓
    1. Yves Smith Post author

      That is a good point. Israel is completely capable of a mass casualty event at the Khamenei ceremonies. They have to know if they tried that, it would raise the hatred across the Muslim world to a new explosive level. The only way I can see that making sense is if they intend to provoke responses that they can use to give a thin justification for using nuclear weapons.

      Reply ↓
      1. ilsm

        I have been thinking.

        If IDF can give “thin justification for using nuclear weapons”. What might DPRK learn?

        Nuclear weapons employment are pandora’s box!

        Reply ↓
    2. motorslug

      Does anyone have any further details about what exactly that was? Did the US give izzys a MOAB? I haven’t seen much anywhere on the details yet.

      Reply ↓
      1. ISL

        My assumption, too. But can the Izzy’s fly a MOAB? Or did the US loan a B52?

        In any case, the number of MOABs is quite limited (15-20), though they seem useless against Iran, which dug deep enough. Probably several were used. Rather surprised that Hezbollah would keep a large cache in one place rather than distributed into many smaller caches. I wonder what three MOABs tail to nose would look like – 33 tons of TNT. Perhaps what we saw?

        Reply ↓
    1. ambrit

      You have another teeny tiny inset object just below the Janta Ka tweet embed.
      Please let it be a Truth Social post so I can enjoy the spectacle reduced to its appropriate size.

      Reply ↓
  9. Tom Stone

    Donald Trump is not a rational actor, he is a grandiose narcissist whose mental and physical health is in obvious decline and whose need to dominate is existential.
    He has also surrounded himself with ass kissers and religious nut jobs.
    Guessing what he will do next is futile, assuming that it will be flashy, stupid and violent is reasonable (!) given the circumstances.

    Reply ↓
    1. JonnyJames

      The mass media monopolies create “reality” for most of the propagandized population. As noted in the post, the media pretended not to notice that the two Zionist/Jewish real estate grifters were humiliated, so no problem. (It sure looks like the idiot emperor deliberately insists on these assholes to irritate the Iranians)
      The mass media pretend that the irrational, reckless, bizarre behavior of the emperor with no marbles is normal, and no one seems to notice. The US (and vassals) people have been subjected to decades of the most sophisticated, pervasive system of misinformation and psychological conditioning in world history. At least in the Soviet Union, people did not believe Pravda or the mainstream news. Here, most people take media messaging as gospel. “as seen on TV” (or now the internet)

      Reply ↓
    2. Frank

      He has also surrounded himself with ass kissers and religious nut jobs.

      “To these accumulated honors, the policy of Augustus soon added the
      splendid as well as important dignities of supreme pontiff, and of censor.
      By the former he acquired the management of the religion, and by the
      latter a legal inspection over the manners and fortunes, of the Roman
      people. If so many distinct and independent powers did not exactly unite
      with each other, the complaisance of the senate was prepared to supply
      every deficiency by the most ample and extraordinary concessions”

      Excerpt From
      History of the Decline and Fall of the Roman Empire — Volume 1
      Edward Gibbon

      Reply ↓
  10. neogeshel

    This moralizing is a bit odd. If they perceive establishing effective deterrence through control of the straight as essential to their future survival, then surely they will do so, what cost would compare if that is their assessment? And who are we to cast judgements on such a decision? The question is not should they do so, but can they and will they. If they think they have to, it seems to me that they will.

    “Is Iran set to stoop to US levels to win this struggle for dominance?”

    Reply ↓
    1. ilsm

      Is Iran set to stoop…… ask the millions killed by US.

      Causing Great Depression II would not approach empire level evil.

      Reply ↓
      1. Yves Smith Post author

        I suggest you look at the perspective from Asia, particularly given the large populations at subsistence levels in many countries, and redo your math.

        The closure of the Strait has caused fertilizer and diesel price increases that have led many farmers to leave their fields fallow. Depending on the crop type, that does not just lead to current loss of food but lowers the productivity of the land on a going forward basis, and for some crops, particularly rice, the ongoing productivity loss is large.

        So this = potentially deaths in the tens to hundreds of millions.

        This is not as morally clear cut as you would like.

        Reply ↓
        2. urdsama

          Agreed, but asking Iran to give up their “commodity nuke” to essentially cave to Trump is a big ask. Which is worse – the current scenario or massive nuclear proliferation if Iran gets a nuke of their own?

          The global powers have routinely played with millions of lives with very little pushback. The fact that Iran has been forced into this position by the US may be a form of cruel karma.

          Reply ↓
        3. ilsm

          Trump could fold.

          In the prisoner game who will blink before slaughtering the hostage.

          I doubt Trump knows of Tom Schelling’s work early in Cold War for RAND, helped USAF with their “more bombers” cry!

          My conclusion on game theory in conflict is it is illogical and also immoral. That is certainly the minority opinion.

          I have become a pacifist in my maturity.

          Reply ↓
        4. John k

          Iran May see this as existential. China might think it’s not, that it can get enough oil from Russia. The smaller Asians, and others, too, will certainly be hurt, especially if this goes on much longer.
          Speculating freely…
          Us/israel started the war to crush/break up Iran, I assume to give israel free rein to expand into and/or dominate surrounding states. But trump was fresh from Venezuela. Perhaps the thought was that if Iran was down the us would then control the gulf and would be free to set up a protection racket and charge tolls and/or simply divert shipments to us. The 5th fleet hq is conveniently located in bahrein, granted in need of repairs.
          In this case us would not just control oil and oil products, they would also control everything that comes out of the gulf including fertilizer, sulfur, helium etc. Why not? They already control Iraq revenues. And it’s just more rules based order. Perhaps China and others have similarly speculated, though the Arab gulf states seem to be more optimistic.

          Reply ↓
        5. In Cold Chud

          This is really the major threat to Iran’s claim on the moral high ground. The West is fully in the grips of its imperial death drive, Russia and China will survive regardless, but the vulnerability of the global South potentially undermines the righteousness of Iran’s cause.

          I can’t imagine invocations of international law by the West being met with anything but contempt, at this point, but famine would be something more difficult to dismiss.

          I’m only speculating, but if there are ways to hurt the US economy while avoiding catastrophe elsewhere (maybe there aren’t), it seems likely that Iran has at least considered them. The localization of physical oil markets; the precarity of American consumers, combined with our world-historical softness as humans; the AI bubble; the refusal of the American state to manage a supply shock rationally; all these could be exploitable.

          Reply ↓
    2. Yves Smith Post author

      Yes, I am explicitly pushing back against the tendencies in too many anti-imperial circles to treat Iran as a paragon because the US and Israel have behaved in such a destructive and self serving manner.

      I object to Manichaeanism because it interferes with getting a clear view of what is happening.

      Iran has made a big point of occupying the moral high ground in its messaging. See Professor Marandi.

      So they set this standard, not me.

      Reply ↓
      1. JonnyJames

        I think that is an important point, we have the “hard power” calculus and then we have “soft power” and PR considerations. I would guess that by pursuing a moral, legal, political, “high ground” Iran pleases leaders in Russia/China and the Global South. The Russians, Chinese, and Iranians appear to want to show the rest of the world they are trustworthy, law-abiding, and credible while the US and vassals are not. I would guess that Iran’s “soft power” has increased significantly, as well as “hard power” in the region.

        We would all like to see some sort of “justice” or even revenge in regards to these conflicts, however “justice” is rarely achieved in IR. As much as that might be disappointing to me (and many others), it is almost always raw coercive power and pursuit of interests that determine outcomes

        Reply ↓
      2. North Star

        I would point out that Marandi has made it clear that Iran wants to take the high ground, but US intransigence necessitates that Iran must threaten to and if needed take drastic action to force the US to meet their MOU obligations. The ball has been in the US court since the MOU signing.

        Reply ↓
        1. J.B

          I wish Prof Marandi would not misrepresent the mou. It makes sense for the Iranians to misrepresent it and claim the high ground. But i dont get how and why all these other commentators like larry johnson, etc are doing it. Its getting kind of obnoxious because they keep bringing it up and misrepresenting it. Im with Yves Smith on this one. Iran screwed up signing it as formulated. Needless to say the Iranians had to know this kind of maneuvering using Oman was a likely outcome. So why did they sign it? They understood this mou would just be a pause and also calculated they could benefit from it as much or more than u.s and israel?

          Reply ↓
      3. Socal Rhino

        The alternative would be building a nuclear weapon, leading to similar programs in other countries. Given that Iran is at war with the self-described global military super power, and losing would look like Libya or Syria, those look like the only choices.

        Reply ↓
  11. eg

    Maybe Iran just figures that the US force posture is unsustainable and that they’re inevitably just going to end up leaving?

    Reply ↓
    1. ilsm

      US has numerous AF and Marine Corp fighter units itching to get battle streamers.

      The US has probably rotated most of the first deployed fighters; replaced with fresh units “beefed up” by 60 days preparation.

      USN a little mre stressed!

      Reply ↓
        2. ilsm

          Note Desert Storm started in Feb 1991, Op Iraqi Freedom in March 2003.

          Pilots wear g suits, crew chiefs, repair techs, armorers and fuelers have to work in the sun….

          Summer not good, but US flew in Vietnam summers. The troops get it done. Lots of hydration and cooling sheds.

          Reply ↓
  12. Hands Off the Loot

    I wonder if we will ever get some sort of definitive resolution to this. If both sides try to muddle their way out of this, what would that look like? Maybe Iran steps back, and forbids all transit on their side of the Strait. The Omani side probably can’t handle the full amount of traffic from before the start of this war, and if anything happens, we could have a situation similar to when that carrier got stuck in the Suez Canal a few years ago. In which case, they could use the Iranian side, but for just a modest fee, of course. Not an ideal outcome, but probably more palatable for other countries in the region.

    Just throwing some ideas out there – wars are easy to start, and really hard to end, and rarely with any clarity.

    Reply ↓
  13. The Rev Kev

    ‘Drop Site
    @DropSiteNews
    🔴 Vance Says US Is Using the Iran Deal to “Refill” the Oil Market, Then “See Where the Hand Is” ‘

    Sounds like an idea – kinda. But the negotiating period is only for 60 days. By now we must be about a quarter of the way through that 60 days but then what? Another surprise attack? It may be easing the oil situation – for now – but what about things like helium, sulphur, naphtha, fertilizer, etc? How are they faring? Vance’s idea may get the US past the 4th July but there are only about *checks notes* 125 days until the Midterms. By then it could all be a dog’s breakfast.

    Reply ↓
    1. KD

      As it appears, the US is either going to have to acquiesce to full Iranian control over the Strait moving forward, or Iran will end up shutting or partially shutting the Strait in a way harmful to America and its allies, and probably returning to missile strikes on at least Israel. If they acquiesce to Iran in order to reopen oil flows, its going to be much harder to put the genie back in the bottle after the “midterms” or whatever they are thinking, and Iran will just shut things down again. Its going to take years to build back supply to withstand another Strait closure, frankly.

      Reply ↓
    2. SeventyTwoTrillion

      I’ll admit that I’m personally unsure how to evaluate all the moves and countermoves and countercountermoves at this point. Outwardly, Vance’s statement doesn’t really seem to have a bearing in reality, and seems to be geared towards the domestic audience: “Aha! We’re fooling those stupid Iranians by just stalling for time and undermining their leverage to refill the SPR!” Except, of course, the US physically *isn’t* going to be able to refill the SPR with what is trickling out of Hormuz. It might reduce the amount of oil that they have to release weekly, which allows them to bend the curve, but Hormuz operating at a quarter or a third of its daily transit volumes after months of near-zero daily traffic seems like way too little, way too late.

      So if Vance’s statement does actually reflect the US’s strategy for the MoU period, then why is the US doing so much to provoke Iran into reducing transit volumes by violating the MoU clauses? Would the US not go to Israel and say “Okay, look, we have a plan. We’re going to fool Iran and lull them into a false sense of security, and then strike them after the MoU window is over. We’re going to temporarily agree to use the Iranian transit corridor, and also slow-walk our other commitments as much as possible. In southern Lebanon, how about you say you’re withdrawing but, y’know, take an extra long time getting all your soldiers and equipment out, citing miscellaneous problems and delays, and only withdraw from a few villages over the next two months and greatly reduce your rate of ethnic cleansing, and then – BAM! Operation Epic Fury 2.0, coming August/September!”

      Alternatively, if Vance’s statement is instead the misdirection and the US does sincerely want a deal to avoid the oil cliff and Vance’s statement truly is just for domestic consumption, then… the US should probably stop trying to violate all the clauses? Surely it’s taken stock of how the first round went and concluded that the US will run out of weapons before Iran does?

      To me, the only remaining possibility I can currently think of is that the US and Israel have come up with a new plan – perhaps same as the old plan, like mass decapitation, but with a couple new tricks and weapons. Maybe involving some kind of use of Special Forces or Marines or, IDK, begging the Iraqis or Kurds or *some* willing group to get involved again.

      That being said, I do see Iran’s reticent to return to war despite being given justification after justification on a silver platter as a big practical indicator that not all is well in Iran. Optimistically (i.e. Marandi’s interpretation), this is because Iran is taking advantage of the pause too, to regroup and rearm and learn and disseminate lessons and get their oil out of the Persian Gulf, and that Iran might indeed be benefitting more from the pause than the US is. Pessimistically, perhaps there’s various known and unknown stresses on Iran’s military and economy and politics that are forcing Khamenei to not take all the myriad casus bellis he’s being handed on a weekly basis.

      Reply ↓
      1. KD

        The US did pressure Israel into a “Ceasefire with Israeli characteristics” in Lebanon, and now Lebanon signed a “peace deal” with Israel, so Paragraph 1 is all set from the US perspective. As far as letting Iran control the Strait, I think the US (correctly) perceives that acquiescence, even of a purportedly temporary nature, will make Iranian control of the Strait a fait accompli. So they are going to F around and put as much pressure on Oman as they can, and keep the Gulf riled up. I would guess that the Saudi’s will scream bloody murder if the US waivers on the Strait in the slightest. But the US doesn’t want to go back to war until after the mid-terms.

        I think at this point, because their de facto control of the Strait, Iran holds the world economy hostage, and they have enormous leverage over the US. The US has no serious military response left at this time, they did air war, they did naval war, and they don’t have the troops or the deployment areas to conduct a ground war. The Saudis are not agreeing to use of their air space for strikes on Iran which seriously hampers US operations. I think if Iran could work something out with the Saudi’s and Qatari’s that everyone could live with (which probably won’t be a $1 a barrel transit fee), you might have a deal provided the Americans did not screw it up.

        Reply ↓
      2. Yves Smith Post author

        Any ships connected to Europe cannot use the Iranian corridor. The E-3 implemented the JCOPA snapback, even though Russia and China (MHO correctly) take the position it was procedurally improper and therefore invalid.

        The JCPOA are UN sanctions and therefore binding on UN members. I have no idea how many hew to the E-3 view v. the Russia/China view (Thailand got a a ship out on the Iran side during the war as did Japan, so I infer Asia is generally ignoring the snapback, but I do not know for sure).

        Reply ↓
  14. KD

    but will it actually have the legs to go that far, especially if the Chinese get miffed

    It is interesting to think about where the Chinese are with this situation. It appears that there is some kind of agreement with Trump to stop buying oil off the world market which has lead to stability in oil prices. However, this hands the Chinese quite a bit of leverage if they come back in to really stick it to the Americans, which they could exert. It would be surprising if they were interested in force projection in the ME given all their other issues/concerns like Taiwan.

    My guess is that the preferred Chinese solution for the Strait of Hormuz is that the situation return to the status quo. However, an Iranian controlled Strait with insurance fees is probably preferrable to the Strait being closed for business while the US/Israel and Iran fight a long war over Middle East real estate. Further, the more America and Israel are weakened, geopolitically, this can only benefit China. In addition, as far as international law goes, China has a unique take on territorial waters (by engineering strategically placed islands and claims on other islands), and has repudiated a ruling against it by the Permanent Court of Arbitration at the Hague:

    https://www.cfr.org/global-conflict-tracker/conflict/territorial-disputes-south-china-sea

    Reply ↓
  15. Curious

    I get why Iran wants to hew to international law for the high ground.

    However, in this case, I think it’s much Cleaner and better argument to just say our head of state was assassinated in our country was bomb 33,000 times causing hundreds billions of dollars in damage. Our enemies will never pay reparations, and therefore we will be collecting fees through the Strait of Hormuz until we are made whole.

    Don’t like it? Then complain to the aggressors about their actions. We’re completely justified in this action given what happened.

    Why don’t they say things like that?

    Reply ↓
    1. KD

      For the same reason the US hews to international law for the high ground. Here we see the US bravely defending the principles of the UNCLOS treaty, a treaty which it has never and will never ratify, and the same principles which it has never and will never follow unless it suits the US.

      Reply ↓
          1. JonnyJames

            And there be US (and British) Pirates on the high seas matey, arrrr

            (prof. Marandi says the US violated JCPOA even during Obama regime, an AI search said no. but the US is not capable of agreement after all, so why expect otherwise?)

            Reply ↓
    2. Yves Smith Post author

      Because this will cause a global depression and risk the loss of the quiet but very important support of China and Russia.

      China in particular is Not Happy with the Iran plan to control the Strait of Hormuz. I don’t see how this works over Gulf State and now Oman de facto opposition (Oman going only as far as UNCLOS is short of what Iran wants).

      Iran wouldl have to be on an ongoing war footing in the Strait of Hormuz to maintain control. That will kill all but Iranian and Chinese transits (the EU can’t submit due to JCPOA snapback sanctions and Macron has set the bar even higher than MOU terms for cancelling them). That will put the global economy in a depression. The Chinese domestic economy is weak now and it needs the export sector to perform adequately.

      On top of that, a Strait of Hormuz precedent would give Indonesia grounds for seeking to control and charge fees for the Strait of Malacca. Indonesia is in terrible financial shape now so its motivation would be high.

      China has made repeated efforts to bypass the Strait of Malacca. One was a pipeline through Myanmar, which the war (and no doubt US interference) has made a non-starter.

      China tried to get a canal cut through Thailand, which if I have the history right, was morphed into a train link. That proposal failed a few years back. A fresh attempt to revive it (literally in the last month or so) has again been nixed due to opposition of residents in affected areas (NIMBY-ism plus doubts the claimed economic benefits will materialize).

      Reply ↓
      1. ISL

        Given Israel in the mix, China certainly sees a return to war as a highly likely outcome, so alternative scenarios may be preferable (not desirable, but preferable) to the likely permanent destruction of the oil infrastructure when Israel does as it always does if the US supports Israel (though Donald can always have another go).

        Reply ↓
      2. Es s Ce Tera

        Iran would have to be on an ongoing war footing regardless, given American intent is hostile and any agreement with the US is not reliable. And this is probably true of Turkey, China and Russia, as well. And perhaps Canada, Greenland, Cuba…

        Reply ↓
      3. redleg

        The threat or reality of a global depression may give incentive for the rest of the world (everyone except the USrael and their orbiting vassals) to forge a new agreement regarding Hormuz. Iran isn’t going to give up control, by fire not administrative, until the war ends. They either win and dictate terms, or lose and will cease to exist as a unified nation. IMO international law isn’t dead yet, but it’s not looking good.

        Reply ↓
  16. jefemt

    Apparently Trump and other former US presidents may be in Medora, ND, over the Big 250th to celebrate the very delayed opening of a T R Presidential library, Medora being the locale of TR’s western US cowboy- hunt times, TR National Park, etc.

    Trump purportedly also will be in SD… I fear some Mt Rushmore shenanigans, but the tin foil in my chapeau has been mis-reading tea leaves of late.

    However, there are lots of ruby red voters in the dakotas, some significant airbases and military, so a 250th birthday timed major attack on Iran would not surprise me in the least, and his adoring Dakota throng would provide the warm cloak of affirmation Big T requires.

    I find it interesting Trump will not be in DC for 250th—maybe he will fly in for fireworks– he has access to jets and jet fuel.

    Reply ↓
    2. motorslug

      I doubt the Dakotas are as ruby red anymore as you think. There are tons of farmers between the 2 that have been getting railed since the tariffs and now Iran. They haven’t approached the AL/MS levels of misery yet mainly because ND has their own state bank and SD is haven for tax-evading corporations and oligarchs.
      Saw a piece where it said he’s due back in DC by Saturday morn.

      Reply ↓
    3. dave -- just dave

      CBS News tells me

      This Fourth will include “the largest display of fireworks our city has ever seen,” D.C. Metropolitan Police Department Interim Chief Jeff Carroll said at a news conference. Usually the fireworks begin at around 9 p.m., but this year, they are expected to begin at 11 p.m. and are “going to be longer than in previous years, we are told,” Mayor Muriel Bowser told reporters.

      Freedom 250, the show’s organizer, said that the fireworks would start around 10:30 p.m.

      President Trump has said he plans to speak at 9 p.m., ahead of the fireworks.

      https://www.cbsnews.com/news/dc-july-4-fireworks-tsa-style-security-wont-start-until-11-pm/

      Interestingly, the usual PBS “A Capitol Fourth” Concert plus fireworks is going to be on Friday, July 3, with the fireworks display televised from Mount Vernon, George Washington’s home. On the Fourth both my local PBS stations, WETA for the Washington, DC area and WMPT for Maryland, will broadcast “America Made in Virginia: 250 Years Together”, “from historical Williamsburg with live musical performances, historical interpretation and fireworks.” I note that these observances will apparently NOT have our president in them. Good.

      Reply ↓
  17. Ann

    0705 PDT

    ‘End American Aid’: Netanyahu Says Israel No Longer Needs US Assistance

    https://www.news18.com/world/end-american-aid-netanyahu-says-israel-no-longer-needs-us-assistance-ws-l-10183183.html

    Japanese torpedo sends US ship to the ocean floor during Valiant Shield exercise

    https://www.militarytimes.com/news/your-navy/2026/06/30/japanese-torpedo-sends-us-ship-to-the-ocean-floor-during-valiant-shield-exercise

    US drives rise in global emissions as utilities turn back to coal, report shows

    https://www.reuters.com/business/energy/us-leads-global-co2-emissions-increase-2025-report-finds-2026-06-29/

    Iraq gives pro-Iran militias until Sept. 30 to dissolve

    https://www.timesofisrael.com/iraq-gives-pro-iran-militias-until-sept-30-to-dissolve/

    Spreading Kurdish militant attacks pressure Tehran as regime navigates fragile US diplomacy

    https://www.jpost.com/middle-east/iran-news/article-901083

    Iran says it is selling oil at 20% premium as end of U.S. blockade sees 40 million barrels exported

    https://www.cnbc.com/2026/07/01/iran-us-mou-negotiation-war-oil-exports-strait-of-hormuz-.html

    Trump weighed return to all-out war with Iran, holds back to save nuclear disarmament deal – report

    https://www.jpost.com/middle-east/iran-news/article-901026

    Reply ↓
    1. JonnyJames

      Had a laugh at the “stop US aid” blah blah by the Crime Minister of “Israel”.
      Everyone, including him, knows that Israel would cease to exist as we know it if all US “aid” was stopped. Political “aid” and “legal” cover for genocides etc., intelligence, surveillance reconnaissance sharing, direct and indirect military support, weaponry, financial support of all sorts, etc.

      Reply ↓
      1. Lefty Godot

        Israel supposedly has those “Samson Option” nukes targeting Paris, Rome, Berlin, Vienna, and Moscow, so they could probably increase their level of support from the counties subject to extortion that way. Whether that would be enough to compensate for loss of US military support is uncertain. And how much the extorted countries would believe in Israel’s ability to make good such a threat is doubly so.

        Reply ↓
        1. JonnyJames

          In a simplistic and crude way to put it: The entire “West” has become a suicide-death cult. Either “we” maintain hegemony, or we blow up the world.

          Reply ↓
        2. motorslug

          I have never seen a report alleging that izzys have missiles capable of hitting targets that far, especially with nukes on board. Jericho and Lora are both maxed at 500km, Arrow 3 is supposedly 2400km but that class is surface to air.
          Moscow is 2600km, Paris 3200km, Rome 2200km, Berlin 2900km and Vienna 2400km

          Reply ↓
    2. ilsm

      Japanese submarine sinking U.S. Navy ship.

      Not a good look. They could have let an Ozzie push the button.

      Reply ↓
  18. James T.

    I find the conversation about International Law interesting. So the US and the rest of the west can stop tankers anywhere in the world and then hold Iran accountable to UNCLOS? If China, Russia, and Iran keep following the rule of law they lose. The West will lie, cheat, and do anything like sign more fake agreements to victory and global dominance again. Who is going to stop them, BRICS, yeah sure. They better decide to take the gloves off and smash the bullies in the face or they will will just be the next vassals on the list. IMHO

    Reply ↓
    1. lyman alpha blob

      Agreed. I do not think Iran will lose any moral high ground by not adhering to every tenet of the UNCLOS agreement. How many people around the world are even aware of UNCLOS, an agreement that not every country involved in the current conflict is even a signatory to? That’s policy wonk stuff that makes the average person’s eyes glaze over. People do understand a nation’s leader being assassinated, 168 children deliberately targeted and murdered, and piracy on the high seas, to name just a few examples of the US/Israel trampling on international law.

      The law is generally written by the victors. Iran has the advantage here. It can work with other nations to create new laws, the UN be damned.

      One reason for this current war is to keep BRICS from becoming a coherent entity capable of challenging Western aggression. The West has made inroads with India and Brazil in recent years. One would hope the leadership of the rest of the world would notice this divide and conquer strategy for what it is and resist it, no matter how venal the ruler of any given country might be. Nobody likes a sellout, as we are seeing in Bolivia and Lebanon right now, among others. Any leader looking to cash in by making deals with the West that will net them FU money would be wise to watch recent videos from Hezbollah. Apparently just about anyone can now steal a credit card and purchase the equipment for a lethal GPS guided drone off the internet. Anyone can be targeted. Modi would do well to remember who his actual geographical neighbors are and not throw in his lot with Westerners from half way around the globe who have never showed any great love for brown people. The West will pull the bait and switch on him once they get what they want, just like they have repeatedly with the Kurds.

      Solidarity against Western aggression is needed more than ever right now. I do suspect that there is a lot going on behind the scenes we are not aware of. Apparently other countries don’t do all their negotiating by bloviating in the middle of the night on social media.

      Reply ↓
      1. Mikel

        “Apparently other countries don’t do all their negotiating by bloviating in the middle of the night on social media.”

        That Truth Social account is more of a campaign, fund raising, and marketing site, not a negotiation and policy site.

        Reply ↓
  19. XXYY

    It is not impossible but certainly far from easy to compel the Israelis to leave southern Lebanon.

    Well, if the question is “does the US have the means to compel compliance from Israel on virtually any issue?”, the answer is certainly yes. Israel as a country is completely on life support and the US is the one running the ventilator. This has been the case for many decades, but it’s certainly the case now as Israeli military forces are crumbling, it’s industry is moribund, and its citizens are fleeing the country.

    If the question is “would it be politically difficult for US politicians to withdraw support for a country that is supplying huge amounts of their campaign contributions?”, the answer is almost certainly yes, although that’s not as clear-cut as it has been in the past. As we saw in the recent New York primaries, it’s now possible for US politicians to champion an anti-israel platform and attract voters with it. (I don’t know whether New York is a best case or a worst case jurisdiction on this issue.)

    It would actually be a huge political winner for Trump to cut off funding to Israel given a tremendous unpopularity of both the war and Israel itself amongst US citizens, especially if he were to explain and emphasize the danger to the world economy that an Israeli-oriented foreign policy is presenting. For some reason, this does not seem to carry much weight with Trump so far.

    Reply ↓
    1. Yves Smith Post author

      I am not sure you appreciate what the US is.

      First, Israel does have existing budgetary allocations. There were big legal rows under DOGE about withholding a lot. My dim recollection is that Trump lost most of the legal challenges. Admittedly. slow-walking stuff Israel needs might suffice.

      Second, under Trump 1.0, the military refused to execute his order to leave Afghanistan. Colonel Macgregor has told this story long form many times.

      Third, the Israel military and intel are about to be merged into the US’ so this will soon be moot. Trump will be unable to drop the hammer even if he wanted to. Specifically, he could not cut off SIGINT which would be the big way to stop Israel in its tracks.

      Reply ↓
      1. XXYY

        …under Trump 1.0, the military refused to execute his order to leave Afghanistan. Colonel Macgregor has told this story long form many times.

        I seem to have missed this.

        I will say that Afghanistan was extensively positioned in the wake of 9/11 as an enemy of the US (and not Saudi Arabia, which supplied the people carrying out the attack). So I’m speculating that US military deployed in Afghanistan felt, perhaps with some justification, that they were defending their own country, or at least fighting a self-declared enemy of their country.

        I would be curious to know how US military members feel about Israel (not that they are monolithic by any means). It’s obvious that Israel’s military adventures don’t have anything to do with the US, and US soldiers are mostly a bought and paid for (well, maybe not paid for) mercenary force for the country. Also, anyone who has been watching the media the last few years has been repulsed by the genocidal actions of the Zionist government, and even some IDF members are having a hard time with it.

        This would be a good poll of US military people, not that anyone will ever do it.

        Reply ↓
    2. motorslug

      Sadly, NYC was a near-worst case jurisdiction.
      Evangelical xians, which are way more zionist than most US jews, rarely crawl out from under their rock in the boroughs. In fact, I would wager the vast majority of ECs have a seething hatred for those ‘uppity east coast liberal jews’. Talk about anti jewish-ism.
      As far as jews themselves, NYC has millions with zionist ones being the minority. The ultra-Orthodox oppose zionism and some like Hasidic don’t even recognize that fake state. And the results did show that anti-zionist candidates won large majorities of reform and liberal jews.

      Reply ↓
  20. XXYY

    It would not be hard to depict an Iranian insurance scheme as an open Mafia-like extortion racket.

    “That’s a really nice oil tanker you have there. Shame if anything were to happen to it…”

    Reply ↓
  21. urdsama

    While I don’t disagree with the bulk of what Safety First posted yesterday, I feel they over-stress what China can do.

    Iran is in a fight for survival, China is not. At the end of the day, if China fails to help Iran (or makes things more difficult for them) and the US wins, that makes things far worse for China than if Iran controls the SOH. So China itself is in a bit of a trap in that it has to be careful about how much it does to make Iran compliant.

    I think we are seeing another downside of the unipolar and multipolar world when rising powers flex their influence for their own purposes – unrealistic views of what other countries will do when their existence is threatened, and the belief that they can still shape events on a global scale. In this regard I think Russia has been the best at adjusting and the US the worst.

    Reply ↓
    1. JonnyJames

      Good points. The situation is messy for China and everyone involved, no clear optimal option exists. If Iran goes down, the geo-political and strategic interests of China/Russia will suffer greatly. Also related to this:The US is engaging in the historically-predictable “overstretch” or over-reach of a declining empire desperate to maintain global primacy. The reckless, dangerous behavior (even disregarding the unhinged leadership in the US) of the US could well backfire. It already has backfired by attacking Iran, and it could get much worse as many are predicting

      Reply ↓
    2. Keith Newman

      @urdsama at 11:10 am
      “Iran is in a fight for survival, China is not.”
      That’s how I see it too. The US/West has been relentless over the last 47 years in trying to destroy Iran. The US is ruthless and won’t stop until Iran ceases to exist as a country and a civilisation even if it takes another 47 years. Iran will need to protect itself and may need to ruffle the feathers of Russia and China to do so but those countries know they are next if Iran falls. So how much are they really going to constrain Iran?
      The same goes for Iran respecting international treaties and the sovereignty of Oman despite its past neutrality. The reality for Iran is be destroyed or control the straight of Hormuz. If the people governing Iran chose to defend their country’s existence niceties will not be followed.

      Reply ↓
      1. ISL

        Also, as Russia’s attrition of the US military benefited Iran, Iranian attrition of US military production benefits Russia and its upcoming war, with both attritions benefiting China (and the US promised and oft-stated soon-to-be war with China) in case of war with the US.

        So the perspectives of China and Russia are certainly mixed – skewed towards a preference for stability in this highly unstable (overly dynamic) world.

        Reply ↓
        1. Tom Stone

          How would the AI bubble popping in August affect the War with Iran?
          It’s looking increasingly wobbly since the Space X IPO and the decision of Open AI not to go public.

          Reply ↓
          1. urdsama

            Well considering the SpaceX IPO was pure grift and leveraged on a cult of personality, I don’t feel it is a good indicator of AI. However, Open AI and the overall shaky state of AI are…

            Reply ↓
  23. Ramon

    From the start I thought a ceasefire was a mistake. Unbelievable how stupid those people are when having access to so many resources.

    I didn’t follow the whole China thing so I can’t say which bridges are burned. But China did it to themselves. Before the war (2-3 weeks) I opted for China to mobilize and defend Iran. China would had the capacity to move troops and assets to Iran. I said that because China had to draw a red line for once. Do you think the US would have started this war when Iran was under Chinese protection? I think not, China had to say no to this illegal war. The economic cost now is much higher. Most problems of China and Russia come from passivity.
    I know my idea might sound crazy but what’s happening now isn’t better right? The war isn’t over, the end result might be devastation.

    Reply ↓
    1. Yves Smith Post author

      See the comment I just freed by Safety First. China does not want to be a military power. It wants to be an economic power. Plus even then, practically it could be at most a regional power and Iran is not in its region.

      In addition, Iran really pissed China off when China tried to help years ago with a major investment agreement and then Iran sought investment from Western firms (this must have been right after the JCPOA went live). Alexander Mercouris has described this episode in detail but I cannot find a news story summarizing it.

      But consider also Why China Is Unlikely to Rally Behind Iran After US-Israeli Strikes from Bloomberg in early March:

      China is Iran’s most important economic partner, buying some 90% of its oil exports and providing a financial lifeline to the heavily sanctioned regime. But as US and Israeli strikes pummel Iran, Beijing has shown little support for Tehran’s defense besides criticizing the attacks.

      The reasons go beyond military restraint. The relationship between China and Iran is far more lopsided and less strategic than commonly assumed. Beijing’s investment in Iran has fallen dramatically short of headline agreements, its military ties are limited and its broader Middle East strategy depends on balancing relations with Iran’s regional rivals. With a Trump-Xi summit weeks away, China has every incentive to stand aside and position itself as a voice of stability rather than an active participant in the conflict.

      Ties with Tehran matter to Beijing, but far less than those with Russia. China’s relationship with Iran appears grounded in pragmatism rather than deep strategic alignment….

      But China has long pursued what analysts describe as a dual-track approach in the Middle East, balancing ties with Iran against its relationships with the US and its regional allies. She Gangzheng, a professor of international relations at Tsinghua University in Beijing, said military support for Iran is “not the way that China does things in the region.”

      https://www.bloomberg.com/news/articles/2026-03-02/china-iran-relations-why-beijing-won-t-throw-tehran-a-lifeline-after-attack

      Reply ↓
  24. Verifyfirst

    IF Iran believes an energy cliff is coming soon, then they are getting what they want for now–their oil is getting out, that of the other Gulf states is still very reduced via the Hormuz route. China may also be content to let the West keep drawing down its stores. And Iran gets time to re-arm, which is likely to require much shorter time cycles than US/Israel re-arming, due to the difference in weapons types? Although the West is hopping to the drone thing now too. Even the funeral of the Supreme Leader seems like a nice way to stall, for Iran.

    So stalling for time seems to benefit Iran more than anybody, IF a cliff is a coming. It is odd that actual energy supplies cannot be (it seems) more accurately calculated–even just ship crossings through Hormuz–surely there are commercial and government satellite systems which can easily count the ships passing through?

    I don’t see why Iran should give a fig leaf about international law, nobody else does (unless it somehow otherwise suits their purpose anyway). When you are attacked, you have the right to defend yourself by any means necessary, including asymmetric warfare, when those are the tools available to you. If Iran had politely lost the war, as the US/Israel/Gulf states apparently anticipated they would (so not bombing US bases in the Gulf, not closing Hormuz, etc., not retaliating on Gulf energy and other infrastructure), they would today be implementing the terms of their surrender (again, as many times since 1979).

    Things get murkier when you talk about civilian and civilian infrastructure targets, cuz ….oh wait, US and Israel target those on the daily, all over the world….never mind. I’m not bitter….

    We should also not forget Iran is extremely repressive internally–one of the very worst in the world. About as bad as the Saudis, our dear dear friends. Of course, only 21% of humans today live in a “free” society, according to the latest report from Freedom House (yes I know, methodology, western bias, etc.).

    Reply ↓
    1. Yves Smith Post author

      Because Iran is making a big deal of holding the US to strict compliance with the terms of the MOU (which it is 100% within its rights to do). That very same MOU Iran signed calls for:

      The Islamic Republic of Iran will conduct dialog with the Sultanate of Oman to define the future administration and maritime services in the Strait of Hormuz in discussion with other Persian Gulf littoral states in line with the applicable international law and the sovereign rights of coastal states of the Strait of Hormuz.

      Iran cannot have this both ways. If it wants the US to adhere to its “deal” terms, Iran also has to comply with the considerably fewer undertakings it agreed to.

      Reply ↓
      1. John k

        But the us is not and will not adhere to the MOU, so why should Iran? Sure, the 300b was never possible, but that’s just 300b of evidence us never intended to honor it.
        Does Iran have to formally withdraw in order to retain a higher ground than us?

        Reply ↓
        1. Yves Smith Post author

          Iran IS asking that the US adhere to the MOU, as DropSite is reporting NOW from the negotiators in Doha.

          Iran cannot ask for compliance and not be expected to act in the same way.

          It either needs to officially abandon the MOU, WHICH IT HAS NOT, or do its part when it is insisting the US do so.

          Reply ↓
        2. Polar Socialist

          In case you want to know what Iran considers the applicable international law and the sovereign rights see a recent clarification (mfa.ir) from the Iranian ministry of Foreign Affairs.

          Iran has always opposed the “right to transit” imposed by the superpowers* upon it in 1982 instead of the (more constricted) “innocent passage” defined in the 1958 Geneva Conventions on the Law of the Sea as it violates Iran’s sovereignty over the Strait. For example, the innocent passage would allow Iran to restrict transit during armed conflict.

          As neither Iran or US has ratified the UNCLOS, one wonders which international law would be applicable here, in the MOU between the two parties.

          * in order for the coastal states to get 12 nautical mile territorial sea, the superpowers (like USA and UK) demanded this unrestricted right to transit trough strategic straits in exchange.

          Reply ↓
          1. Yves Smith Post author

            Sorry, Iran does not get to dictate what “applicable international law and the sovereign rights are.” This is a consensus position in the international community. I have discussed innocent passage v. transit passage before. UNCLOS and there transit passage is applicable law for Oman and the Gulf state referenced in the same passage. The US hews to transit passage even though it has not signed UNCLOS and Oman has agreed to UNCLOS. Iran cannot extend the reach of its views to Oman.

            I ran this e-mail from a lawyer who has worked with shipping companies before:

            I have done a certain amount of maritime law and though I am no expert on UNCLOS my view here is actually even harsher that that of Lascaris and of your good self [we said Iran might have a strained argument for its view]

            Legally speaking I don’t think the Iranians have a leg to stand on. I doubt that you could find a single maritime lawyer of any integrity or competence who would say that they do.

            Bear in mind that until 28th February 2026, when the US-Israeli attack began, they appeared to share the same view of the status of the Strait of Hormuz as everyone else.

            Reply ↓
            1. Polar Socialist

              No need to apologize, I was only referring the Iranian, apparently official, stance in the issue. The document I linked to even explains why Iran seemed to oblige and won’t do it anymore. They are using this crisis to change the status of the Strait and gain sovereignty over it.

              Reply ↓
  25. Michael Hudson

    What do you think of this claim ma deIn an interview with Nima’s Dialogue Works (June 30), Elijah Magnier argued that international law states that straits like Hormuz can be completely regulated by littoral states as they see fit when a state of war exists. He earlier had written that
    Elijah J. Magnier, “Hormuz After the War: Iran’s New Price for Safe Passage,” June 26, 2026.
    Does a state of war provide an exception?

    Reply ↓
    1. Yves Smith Post author

      There is now what both sides are officially treating as a ceasefire in place, despite the violations, so a war is not on.

      And Iran has NO rights with respect to Omani territorial waters, particularly since Oman is neutral.

      Reply ↓
      1. John k

        The MOU includes Lebanon. Imo us/israel are at war with Iran/lebanon, no matter what the Lebanese leaders agree to. And imo attacking Iran are acts of war.
        I agree this shouldn’t include neutral Oman, but wars often affect innocent bystanders.

        Reply ↓
        1. Yves Smith Post author

          I am really bothered by these strained defenses of Iran. This is big time halo effect cognitive bias, or needing to see people or groups as all good or all bad.

          This site is about promoting critical thinking. Responses like this fall well below the reasoning standards we seek to promote.

          Since when is shooting at a commercial ship minding its own business well away from Iran justified?

          This is not even remotely the case of collateral damage to civilians in or near a fire zone, which is what your “innocent bystanders” insinuates.

          Iran went all the way across the Strait of Hormuz into Oman’s territory to strike a non-military vessel which no way no how was a threat to Iran.

          Reply ↓
          1. urdsama

            Speaking strictly for myself, I feel that the MOU is a lot more vague and the strict scrutiny being used may be leading to the current amount of disagreement of terms. I tend to agree with Polar Socialist in that the MOU allows for wiggle room on which international law applies (if I understood the post correctly).

            I have tried to guard against the halo effect, and related types of bias, but I still feel Iran is coming under more critical review than the context warrants. While I do feel Iran is trying to have its cake and eat it to a degree (on the SOH), they are fighting for their existence, so I have a hard time really making this a major issue.

            But that is a personal judgement call, and each person will come to their own conclusion. I raise this point as I feel that something else may be going on besides a halo (or related) bias effect. This may even fall into the realm of being a wicked issue.

            Reply ↓
            1. Yves Smith Post author

              I agree that the US is behaving very badly on the rest of the MOU. But Iran is making a huge stink about the SOH when it does not have a good case since:

              1. Neither the US or Iran could make ANY commitments with respect to Oman or its territorial waters

              2. Oman could be expected to and is hewing to UNCLOS.

              So I don’t see the issues on that point as being vague. Iran is arguing for a clear overreach.

              Reply ↓
        2. motorslug

          Not really though. Officially, izzys are at war with Hezbollah who, although part of the government in Lebanon, are not the government ‘in charge’ that can sign treaties, write laws, issue money, etc.
          Just like Gaza: the zionazis are ‘at war with Hamas’ not the beautiful people of Gaza who they do everything in their most moral army way to avoid hurting. Dang, if they would just rat on the evildoers we could all live happily together.

          Reply ↓
      2. urdsama

        This is a honest question – isn’t a war still considered active even during a ceasefire? I hate to get even more in the weeds, but it appears the current “state” of the war might be in play.

        But this would not address the Oman issue so maybe it is not relevant in this scenario.

        Reply ↓
        1. dt1964

          Further to above. If a state of war did not continue to exist, the US would not have a right to overfly Omani territorial waters. Oman has not issued any diplomatic protest as far as I know. But for Washington to fly over Omani waters absent a state of peace, Oman would have to officially provide permission. They have not done this either as far as I know

          Reply ↓
  26. Yves Smith Post author

    So was Iran lying about that grounded container? Shipping expert Sal Mercogliano suggests so:

    This is so disappointing if Iran is stooping to the same sort of fabrications that the US and CENTCOM do.

    Reply ↓
      1. Yves Smith Post author

        Sal Mercogliano called out a second false claim about the ship grounding, which used photos from the Iranian shooting and sinking of a Thai container ship in March. So that tweet was removed.

        I hope he does a video on this matter. He is pretty careful so he would say whether the claims looked valid or were fishy or complete bullshit.

        Reply ↓
  27. Safety First

    Hoisted not on my own petard for two days in a row? I’m all verklempt…thanks Yves!

    —–

    Just wanted to briefly chime in on today’s “international law” discussion in the comment section.

    I am not a neorealist like Mearsheimer, but I do agree with neorealists that the default state for international relations is a “law of the jungle”. In fact, if you read your Thucydides carefully, he basically states that war (or, if you will, competition for scarce resources) is the default state of humanity, with periods of peace used mainly to rearm for the next go-around.

    Throughout history you see many examples of great powers, or regional powers, try to set up a mechanism to reduce periods of war and increase periods of peace. Delineating spheres of influence. Alliances and alliance systems. Treaties with grand sounding names. “League of Nations” type institutions, meant to be a means for resolving disputes without resorting to military force. Egypt and the Hittites did this (successfully), Rome and Carthage did this (unsuccessfully, due to Rome “cheating”), the Holy Alliance after the Napoleonic Wars was partially supposed to do this, the League of Nations and the UN were supposed to do this…it just goes on. We keep trying, or, rather, the established powers do, because war is expensive and unpredictable, and if you can protect your security or wealth without going to war, why not try.

    It sometimes works, for a time, but it never lasts, because ultimately there is no planet-spanning central authority to enforce any rules we come up with. We have to police ourselves, and we cannot be trusted not to cheat when we think we can get away with it. And also because history is never static, nor are economics, so eventually circumstances change, generations change, and someone calculates, rightly or wrongly, that war (or use of force) is more beneficial than peace (or institutionalism).

    Now to China and Russia. Richard Wolfe had a great talk on the Glenn Diesen podcast a week or two ago, where he basically posed the question – is China going to turn into an empire like the US, and ultimately follow the same dead end trajectory, or is it going to figure some other way out of the empire trap. Because it cannot continue to have its cake and eat it too – acting economically like an empire, but foregoing the “force” component of being an empire. Or, to go back to Thucydides, it is the weak states that talk about law and morality, while the strong states act in their own perceived interest, and that is really the lesson at the core of his narrative on the destruction of both Melos and Plataea. [Both “small states” who implored Athens and Sparta, respectively, not to just use brute force to get what they want.]

    Today, it appears to me that China is “acting like a weak state” because it does not want to shift from a period of peace to a period of war. Better to cling on to the hope that treaties and international institutions, say, will enforce its nominal ownership of Taiwan, or its transit rights through the Malacca Strait, than for the Chinese army and navy to try and settle both issues by force. Or for the Chinese state to use colonialist methods to do same. And so you have to pay a lot of lip service to these selfsame institutions, so as not to undermine their credibility nor seem a hypocrite – even if you know the “other guy”, the US, is cheating. This cannot possibly be sustainable over the long term, even if the US hadn’t existed. But again, I don’t think it’s about being “morally superior” to the US, but rather the basic reluctance to endure the costs of a law-of-the-jungle type of foreign policy, especially after such a long period of relative peace (for China).

    The Russians in Ukraine are in kind-of-sort-of a similar position, except they are much further along the spectrum towards brute force than the Chinese, thanks to the whole Ukraine mess. They spent a long, long time wishing and hoping that they wouldn’t have to use force, that negotiations and international institutions would somehow sort the issue out. Even in early 2022 they – my read of it – thought they could have a tiny little war like Ossetia 2008, followed by an agreement with all involved, and wouldn’t have to mobilize the economy or the military to settle the issue by brute force. And I would argue that this allowed the problem to fester to the point where now, over 100k Russian soldiers and over 20k Russian civilians are dead (counting the 15k between 2014 and 2022), and the issue isn’t nearly settled yet. Only more recently, finally, have the public statements of Putin-Lavrov-whomever shifted more towards – treaties are well and good, but boots on the ground ultimately settle things type of stance. Not the least due to years of absolutely pigheaded US diplomacy, but that is another issue altogether…

    So now Iran. Again, my read of it is that China, say, wants Iran to play by the rules and stick to international laws and signed agreements in part because this would help China itself pay lip service to those same rules, and not have to shift into law-of-the-jungle mode. The problem is that Iran is playing a card game with potentially existential stakes against a cheater, the US. China can sacrifice Iran for the sake of sticking to the, for lack of a better term, “rules-based international order” (I know, I know) for another few years, but Iran can hardly sacrifice itself, can it?

    But on the other hand, for Iran not to sacrifice itself it has to basically blow up things like the MoU, or violate Oman’s sovereignty (by stopping ship transit through its territorial waters), or go for broke against Israel, or basically use law-of-the-jungle methods to get what it wants. Because the US will not be dissuaded any other way. Which, of course, puts it on the same trajectory that the US arguably is on now, just on a different scale and over a different time horizon…

    …hey, this IS brief. For me.

    Reply ↓
    1. schmoe

      Lengthy but very worthwhile.

      A few days ago, I posted a comment that China’s passivity and failure to help Russia develop defenses against drones is very strange given they are next on the menu. The should want to test at least defensive weapons. Their airline and semiconductor industries are hostage to American and European replacement parts, but the trade war has demonstrated they have cards to play. Also, the Power of Siberia pipeline could easily be disrupted by Ukrainian drones.
      I am sure they are providing parts for certain military hardware, but they could do much more.

      Reply ↓
    2. John k

      Pretty succinct for the topic, thanks.
      If China wants Iran to follow western rules/treaties when the west doesn’t, they’re not just setting Iran up for failure imo they’re also setting themselves up. If Iran loses this war they get crushed, and I wouldn’t depend on us to not take over the gulf and control and/or take all its exports. I don’t see this any different from the western expectation they would take over/break up Russia (which would not have been good for China), in fact I think I saw there was an Israeli plan to break up Iran along ethnic lines. And Imo both China and gulf states should consider what us/israel will do if Iran falls; the west has been law of the jungle for some time now.

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    3. KD

      People seem to forget, looking at Britain or the Dutch, what comes first is international trade, and then events take over and States are required to use force to protect trade networks. Economic integration and the instability of the world necessitate what becomes empire. Once that happens, you then have political institutions which are invested in maintaining the empire and the rest of it. I do not see how China remains as export focused and technologically dominant focused (which goes in hand with colonization generally) as they are without ultimately having to flex their military muscles, whether they want or not, to protect trade networks.

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    4. F. Foundling

      ‘for lack of a better term, “rules-based international order”’

      It’s called ‘international law’. ‘Rules-based international order’ is a deliberately vague Western propaganda term that pretends to mean ‘international law’ while actually meaning ‘Western hegemony’. The two are not the same, although both Western imperial propagandists and anti-Western fascists pretend that they are. Yes, the weak talk about the law, because it’s in the interest of the weak that the law should be upheld. But this isn’t just empty talk – the weak can act in solidarity against the strong in order to uphold it. Furthermore, the strong can sometimes also find it to be in their interests that the law should be maintained (you contradicted yourself on that). So it is not impossible for the law to limit the actions of the strong to some extent. And yes, you can have norms that function to some extent even in the absence of an absolutely dominant force that enforces them. That’s how many communities function in part even in modern state societies. Certainly the current system needs to be reformed so as to make sure international law is upheld to a greater extent. Saying it should simply be ditched instead means calling for tyranny and fascism.

      As for Iran, I agree that it should be cut some slack given its situation and the actions of its opponents. (Certainly what prevents Iran from hitting Israel harder isn’t international law – Israel has committed aggression against it and will do so again.) What I object to is jettisoning the very mode of thinking behind the word ‘should’. If you reject the concept of justice in international relations, why would you care about this conflict and side with Iran and China and not with the US? Stories of genocide in classical antiquity shouldn’t be read as normative guides for foreign policy in the 21st century.

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  28. Tom Stone

    Enough time has passed that any shred of legality regarding “Operation AIPAC Fury” has disappeared, making every American Commander involved guilty of Murder in the first degree, with special circumstances.
    So, what is the Party of Peace and the People doing about it?
    They already sent a stern letter of reproof, so they are dialing for dollars.
    What are those exemplars of Morality, the “Law and Order” Republicans doing about it?
    Cruising Grindr and dialing for dollars.
    Nothing to see here, move along..

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  29. stefan

    Iran has been sneak attacked twice recently, with the active complicity of nearly all the Arab nations in their vicinity. There is little love lost between Arab and Persian.

    Merely in the name of public safety, why would Iranians cooperate with any of these neighbors, especially while US and Israeli policy makers insistently threaten additional attacks, attacks that they almost certainly will make again and again in the near future? Under these circumstances, the notion that Iran ought comply with “broader principles of customary international law and freedom of navigation, which predate and exist independently of UNCLOS” is entirely laughable.

    Maybe Americans would like a Chinese destroyer to sail up the Chesapeake Bay?

    US policy has got to be pretty lousy to make the rulers of Teheran look like a bunch of principled heroes.

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  30. Verifyfirst

    For me at least I’m not trying to defend or attack Iran, that’s why I thought it was important to note, as I did earlier, that Iran is NOT a country anyone on this blog would want to live in. We would all be dead posting freely as we do.

    But I don’t hold Iran to a higher standard than any other country in this war, why would I? A ship transiting Hormuz without Iranian permission at this particular point in time is very much a threat to their interests, as they perceive them, especially since they have received almost nothing of all the things promised in the MOU (and never will, according to Mr. Vance–I’m sure he only said that on that show because he knows no one in Iran could ever see that clip, right? Lol.)

    I just don’t see anything new or unusual going on here–all the parties are behaving as parties do in conflicts such as this. Why would we expect anything else? It has ever been thus, it will ever be thus.

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    1. Yves Smith Post author

      Iran has no rights with respect to Oman waters, particularly with respect to commercial ships EXITING THE STRAIT which means they cannot be bringing in weapons, which would be the only self-defense-y justification.

      Iran did not attempt to board or inspect ships. It is just shooting at them to prevent transits.

      I hate to come down on your, but readers are going all knee-jerk tribal on me and not reasoning through these issue is enormously frustrating.

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      1. Johnmichael

        You’re talking about rights and Verifyfirst is talking about power. The US+Israel didn’t have a right to bomb the piss out of Iran and decapitate their leaders – they chose to do that to preserve or expand their power.

        If Iran is attacking boats in Omani water as a way to exert total control over the strait, that’s not about rights, it’s a way to preserve or expand their power, especially their leverage over US and by extension Israel that have repeatedly threatened them with total destruction.

        If I were Iran, I’d be focused on survival. And if I needed to control the Strait to survive, and if international laws or implicit understandings need to be adjusted for me to have that control, then so be it. If “playing by the rules” causes me to lose the only major leverage I have over the US which attacked me twice in the past year, then the rules need to change. Because the alternative might be to lose everything.

        Not saying I support Iran. There’re no good guys here. But I can understand why the Iranians wouldn’t care about the laws around passage through Omani water at this point. That’s Verifyfirst’s point: states can generally be expected to maximize their power, or their leverage over others. As far as I can tell, “rights” only exist under laws that codify power relationships. When the power relationships change, the laws and “rights” will eventually follow.

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        1. Yves Smith Post author

          As I have discussed before, Iran cannot be on a permanent war footing to secure control of the Strait of Hormuz, which is where your stance takes you.

          Taking that posture assures a global depression, worse-than-Israel level hatred of of the rest of the world, and pretty much no transit fees since there will be pretty much no transits in a war zone. Look at the UN resolutio nagainst Iran, early in the war, condemning it over the closure of the Strait. Not only did it get a record number of co-sponsors, but despite the efforts of Russia and China, it did not include language criticizing the US and Israel for attacking Iran! And the opposition to Iran was so heated that Russia and China merely abstained, as oppose to voting against the resolution.

          Confirming my view (as unpacked further in the post that just launched), Iran has stooped to trying to depict a months-old accidental grounding of an Iran ship as the fresh result of IRCG action. This does not even rise to the level of a scarecrow.

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          1. skippy

            I disagree YS …

            Iran is not beholden to post WWII politics after the ousting of a democratically elected head of state for seeking an audit of oil revenues, compounded by Rayguns antics in releasing hostages to get elected. Furthermore all the nations sanctioned by West if not neoliberal compliant are now seeing a potential for a different path. Not to mention social dysfunction in the West compared to others.

            US under Trump the breakers of all contracts …. does not bode well historically …

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            1. F. Foundling

              What is this ‘post-WWII politics’ that Iran is not beholden to? And what is the preferable alternative that Iran should aspire to? Perhaps ‘1930s politics’? Or ‘Scramble for Africa era politics’? Or ‘Genghis Khan era politics’? I’m not sure that’s a good idea, Iran didn’t like it the first time around.

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        2. F. Foundling

          I find Iran’s actions understandable given the ways in which it has been wronged, although I think it should use its leverage to demand justice and a return to international law, not just seek to exploit it as much as it can for the foreseeable future. However, what you are proclaiming as a general principle here is just total cynicism. In individual human behaviour, the ‘anything goes’ attitude to rights, rules and power that you present as normal is called immorality and criminality, and the behaviour of states is not exempt from the same kind of judgement. International law as it exists is not a codification of Western hegemony, it is an impediment to Western hegemony, hence the US violations of it; rejecting it is not in the interests of those opposed to Western hegemony. I keep encountering this sort of cynical attitude to international law, norms and institutions in Americans, even in those critical of the status quo, and I think that it is an internalisation of their native Empire’s arrogant lawlessness and an expression of the very mentality that fuels its crimes.

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  31. Tom Stone

    The desire for “Good Guys” and “Bad Guys” is very Human, I see it in every conflict I have studied.
    It is a persistent delusion of the Human race, which means it must have some survival value.
    And it is essentially Tribal, for some of us “Us” is all living creatures, for some it’s only people with red hair named Eddie.
    Manichean thinking is very useful for the Elites in every society…
    Which accounts for some of its persistence.

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  32. Anthony Martin

    On the eve of the USA’s two hundred and fiftieth birthday, Trump should be remembered as the modern kin to
    Judas Iscariot. The man who sold his country’s birthright for the imaginary worth of crypto.. A poor bargain, all the way around.

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  33. The Rev Kev

    When that headline said that Witkoff and Kushner had positive talks in Doha on the Iran deal, did they mean with each other? The US again negotiating with itself?

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  35. Brian M

    Let me just start by saying I don’t have a “side” here. My side is peace. The sooner and longer lasting the better. That said…

    Iran was attacked by Israel and the US. Both of these nations have made public, explicit statements about wanting to destroy Iran. In short, they have made it clear that this is an existential war for Iran.

    In an existential situation, it seems like there is little incentive for Iran to limit themselves to the “high road” or “moral high ground”. This seems especially true when confronted with two nuclear states with decades-long histories of a) being agreement incapable, b) serially ignoring and violating international law and UNSC dictates, c) repeated instances of surprise attacks during negotiations, d) multiple assassinations, and e) copious use of recognized terrorist organizations and cells. It’s hard to fathom why Iran would hamstring itself by saying, “Sure, they’re scumbags, but we are going to stick to the Marquis of Queensbury Rules.”

    I just don’t see it. Maybe in some kind of fringe or proxy situation, but not in an existential one. The US and Israel chose to make this existential for Iran, and publicly so. In this situation, if Iran has to choose between existence and taking the high road, I think you can safely kiss the high road goodbye. And, frankly, in their situation, rightly so.

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