[Today’s post is still in progress. Please check back at 8:00 AM EDT for the completed version]
The situation regarding the Iran conflict appears deceptively calm, even while risks are escalating. This is particularly true as the chances of adverse outcomes are rising. The unpredictable shifts in Trump’s approach, the repetitive cycles of military action and negotiations, combined with an oddly optimistic outlook among market players, seem to have dulled the urgency for many. This “normalcy bias” leads individuals in developed nations to believe they will only face gradual economic challenges, rather than a sudden collapse. Market analysts note that cautious traders, who have previously wagered on rising oil prices through leveraged futures, have been burned often enough that they are hesitant to invest again until a definitive bullish trend emerges.
As Nassim Nicholas Taleb has illustrated, the turkey feels most secure the night before Thanksgiving, fully convinced the farmer is a friend because it has only experienced comfort up to that point.
Specifically, Trump is pursuing an aggressive strategy aimed at compelling Iran to retreat, articulated variously as pressuring them to return to negotiations or to allow passage through the Strait of Hormuz. However, Iran is ready to control the Strait on its own terms. The U.S. has ramped up its military attacks, and Iran has responded with fiercer retaliation, specifically targeting logistical support for a potential ground invasion. Additionally, the U.S. has reinstated its blockade, with Trump now threatening further military action against Iranian energy infrastructure if Iran does not capitulate.
However, the U.S. faces a harsh reality known as Stein’s Law: “If something cannot go on forever, it will stop.” Iran is acutely aware that U.S. military aggression can only sustain intense bombardment for a short period, at most four weeks. Attempting a ground invasion would yield catastrophic consequences for the U.S., likely leading to a crushing defeat.
Many experts have noted the challenges of sustaining such an operation, with potential high casualty rates. Iran might even take hostages, further complicating matters. The opportunity for any misguided invasion owing to the region’s extreme weather would not arise until October, by which point energy—mainly diesel—is expected to be significantly more expensive, if not in short supply. Diesel is essential for economies, and shortages of jet fuel are already becoming evident in Europe.
It’s also worth noting that Trump has proven to be indecisive. He has once again backed down from his brash claim regarding imposing a 20 percent fee in an unrealistic scenario where the U.S. gained control of the Strait of Hormuz.
In our view, the constraint on Trump’s actions is the looming “oil cliff,” which he has now put back into play. He will struggle against any notable rise in oil prices. Furthermore, he faces serious challenges managing the potential for higher diesel prices and looming shortages. His administration lacks the expertise to devise a rationing scheme.
When might these pressures escalate? The fragmented nature of energy markets and limited data availability means much guesswork is involved. How far can the U.S. draw from the Strategic Petroleum Reserve?
Trump’s aggressive tactics suggest he will likely authorize a drawdown to the legal minimum of 150 million barrels, perhaps giving him a few more months until October. Many analysts believe that the actual minimum level should be higher due to the deterioration of storage facilities. Given current trends, it seems we are on track to test this limit.
It’s also important to consider that the SPR consists of about 60% sour crude, which would alleviate some diesel supply concerns.
Another unpredictable factor is China’s actions. China has opted to draw down its reserves rather than purchase oil at reduced prices influenced by Trump. They have rejected buying non-sanctioned oil because of perceived high costs. Currently, numerous Iranian oil tankers are at sea, now subject to discounts due to sanctions. With China’s growth targets unmet, it seems likely they will continue supporting the U.S. by minimizing purchases of non-Iranian oil.
Even the normally optimistic commentator Javier Blas from Bloomberg has displayed some uncertainty:
Excluding any US-Iran discussions about Hormuz, China remains the pivotal factor for oil prices over the next 60 days. All eyes on Beijing.
Ex-China Asian oil imports have returned to normal levels, within the 2023-2025 range. What China does next is critical. pic.twitter.com/jJTUd5ZCGR
— Javier Blas (@JavierBlas) July 15, 2026
Despite the optimistic view on trade with China, they have reported a significant drop in oil imports:
China’s oil imports plunged in June
Purchases fell 41% from a year earlier to their lowest level since 2016
Possible reasons:
a) China is drawing down crude stockpiles
b) It is replacing oil with other energy sources
c) It’s consuming less energy https://t.co/qfmLnjPoVU— Ziad Daoud (@ZiadMDaoud) July 15, 2026
The Wall Street Journal has also discussed the pressure mounting on Trump while characterizing Iran as having less resilience than many analysts believe. In other words, questioning, “What part of ‘existential threat’ don’t you understand?” The article from The U.S. and Iran Reckon With Shrinking Options to End the War states:
President Trump would prefer a resolution before the November midterm elections, hoping to avoid a spike in oil prices that could hurt American consumers. Meanwhile, Tehran is strategizing to endure until after the U.S. election, hoping not to provoke a large-scale response from the U.S. and Israel targeting its government.
Both parties have determined that maintaining the conflict at a manageable level while waiting for the other to falter is their best strategy. “It’s really about endurance now,” remarked Hamidreza Azizi, a visiting fellow specializing in Iran at the German Institute for International and Security Affairs.
For Tehran, the immediate objective is to maintain its grip on the Strait of Hormuz, using its significant arsenal of small boats and anti-ship missiles to impede oil tankers and other vessels from leaving the Persian Gulf. Succeeding in this effort would amplify pressure on Trump, as it did earlier in the conflict, but the timeline is tighter now, with U.S. elections approaching.
For Washington, the focus is on finding a means to untangle the complex situation by targeting Iranian military installations threatening shipping and reinstating a naval blockade to restrict Iranian oil exports from the Gulf. This strategy saw limited success early in the conflict, but may yield better results as Iran’s situation deteriorates.
“Iran believes it can damage enough vessels to effectively disrupt shipping in the strait,” noted Rosemary Kelenic, director of the Middle East program at Defense Priorities in Washington. “Trump seems to think that the U.S. can extract significant amounts of oil from Hormuz, even if Iran does not cooperate.”
How often have we encountered the narrative that “Russia is about to run out of missiles”? A sobering check from Chamberlain’s Ghost via Twitter states:
Remember, Iran hasn’t launched even a single anti-ship ballistic missile during this entire conflict, despite possessing a formidable stockpile of such weapons. This is not to suggest they will use one, but rather to highlight that they have effective options at their disposal, along with an estimated 70% or more of their missile inventory still intact. The escalation isn’t going in one direction only.
The perception that the U.S. can retrieve oil from the Gulf is misguided, especially with the imminent threat of a shutdown of the Bab el-Mandeb strait and the already de facto shutdown of Fujairah:
Fujairah is done.
“Sinokor and MSC executives fear the Islamic Revolutionary Guard Corps may continue targeting their vessels to disrupt the shuttle market,” say sources familiar with the matter. At least two captains have opted against navigating through… pic.twitter.com/DzCU5gZXJr
— HFI Research (@HFI_Research) July 15, 2026
JUST IN: Despite the presence of two U.S. aircraft carriers and heavy air support, the U.S. has failed to maintain operations at Gulf’s primary oil bypass. Fujairah Port has effectively ceased operations, removing roughly 6 million barrels per day from the market, according to @HFI_Research.… pic.twitter.com/LGvMl1TviZ
— The Hormuz Report (@HormuzReport) July 15, 2026
Recent traffic data indicates a troubling trend predominantly favoring Iranian movements:
Risks in the Strait of Hormuz intensify despite a slight uptick in vessel crossings
Activity through the Strait of Hormuz saw a minor increase on July 14, with 21 confirmed crossings, as per #MarineTraffic data. Most movements were commercial in nature, involving vessels… pic.twitter.com/oIkrtu2kGl
— MarineTraffic (@MarineTraffic) July 15, 2026
With the U.S. SPR largely depleted, the temporary “surge” of oil from the Strait has been absorbed, Chinese purchases are returning, and the Strait, by any reasonable definition, is “closed.” Charts like these matter once again: pic.twitter.com/iZlIFdxjns
— Eric Nuttall (@ericnuttall) July 14, 2026
A significant issue, as Brandon Weichert elaborated in a recent interview, is that Iran is not primarily a materialistic society. Its governmental legitimacy does not depend on delivering prosperity, which is a key factor enabling it to endure enduring sanctions.
We will now transition to updates while also examining some insightful commentary on the situation.
Current developments indicate an emphasis on displays of threats. From the Guardian’s live blog:
To provide context, recall that the U.S. blockade began on the afternoon of July 14, Eastern Daylight Time. Here’s a summary of Trump’s recent comments, sourced from Anadolu Agency in Trump Press Conference:
U.S. President says the strikes will continue “until I say it’s enough” and asserts that Iran has “no choice” but to negotiate
President Trump stated that strikes against Iran would persist and intensify over the next few days, warning that the U.S. will target Iran’s power plants and bridges unless Tehran returns to the negotiating table.
“We’re hitting them very, very hard. We’re hitting every single thing that they have along the shore, along the waterfront… They will continue until I say it’s enough,” Trump declared during a Fox News interview.
When asked if he was planning to hit energy targets, he responded, “I’ll save the energy targets for last, but ultimately we’ll hit energy targets.”
“Tonight, we’re going to hit them hard. We’re going to hit them hard tomorrow night, and the night after. Then next week, it escalates for them, as we turn our attention to their power plants and bridges. We’re going to eliminate all their power sources and transportation pathways unless they come to the negotiation table,” he emphasized.
Trump believes Iran has “no choice” but to pursue a deal, adding that U.S. representatives were in contact with Iranian officials just before the interview.
“They want a deal… They better make a deal or they may not have anything left,” he added.
The discussion also touches on Trump’s earlier discussions of the 20 percent fee:
Trump affirmed that the U.S. intends to keep the Strait of Hormuz open, saying, “I was going to impose a fee, but they (Gulf states) prefer to invest heavily in the United States, which is preferable since I dislike the idea of a fee. The waterway must remain free, or others might begin to charge fees as well.”
“The only effective negotiation tactic with these people is strength, primarily military strength, and that’s precisely what we’ve achieved,” he said.
“Just two days ago, we had a deal, but they backed out at the last moment,” he noted.
After these comments, the U.S. Central Command (CENTCOM) confirmed another series of strikes against Iran aimed at “continuing to deplete Iranian capabilities used to attack commercial shipping in the Strait of Hormuz.” Following this, CENTCOM also announced that the U.S. had resumed its naval blockade, with over 20 U.S. Navy warships and hundreds of aircraft deployed across the Middle East.
Axios has reported that the administration seeks to project an image of strength: From The Kobeissi Letter on Twitter:
BREAKING: President Trump convened a Situation Room meeting on Tuesday to discuss a “massive offensive” in Iran, Axios reported.
Details include:
- The offensive will encompass strikes broader in scope than the current actions around the Strait of Hormuz.
- Trump was joined in the Situation Room by JD Vance, Marco Rubio, Pete Hegseth, Dan Caine, John Ratcliffe, Steve Witkoff, and other senior officials.
- The meeting concentrated on strategies for “devastating strikes on strategic targets in Iran.”
Trump warned Iran to “better negotiate” or risk losing everything.
Brett Erickson on Twitter remarked that the initial 24 hours of the U.S. blockade will prove crucial due to the narrowed timeline for action:
These are the primary points I’m observing:
- Will the United States attack Iranian vessels loading at oil terminals?
- Will the U.S. intercept vessels outside the blockade zone?
- Will the U.S. strike critical Iranian economic infrastructure?
- Will attacks extend to civilian infrastructure, including roads, bridges, and power stations?
- Will the U.S. provide naval escorts along the Omani Route?
- Will the U.S. conduct an air blockade of Iran?
While it’s not my intention to single out Robert Pape—who usually provides insightful analysis—his recent remarks illustrate the consequences of overestimating one’s understanding of military strategy. Numerous experts, both military and civilian observers, have noted that any U.S. ground operation would likely be a failure due to various obvious factors: Iran’s challenging terrain, logistical hurdles, and the difficulty of deploying forces effectively. Pape suggests a limited invasion as feasible, while implying that Iran would face challenges in dislodging U.S. troops. In reality, the most practical approach would be to deny U.S. resupply and use missile strikes along with drones to engage any ground forces.
What would happen if Iran disseminated videos of small boat attacks on U.S. soldiers, akin to what has become commonplace from Ukraine? Pape proposes that if Iran were to successfully target a U.S. destroyer, it would unify American public support against them. Americans may not be as naive as he suggests. Historical precedents indicate that perceived setbacks can galvanize public opinion against a military campaign.
Turning our attention back to military actions, Aljazeera’s live feed reports:
- U.S. Central Command has commenced a new round of strikes on Iran starting at 6 AM EST (13:00 GMT) targeting coastal military sites aiming to disrupt commercial shipping.
- Over 30 civilians have died and 260 have sustained injuries due to the recent U.S. strikes on southern Iran, according to Iranian officials.
We must reiterate that the notion of the U.S. sufficiently degrading Iran’s capability to threaten ships in the Strait of Hormuz is unrealistic. Iran has the ability to mine the Oman channel and can deploy air strikes using existing drones. They also have numerous small boats hidden across their territory.
Key recent reports from Aljazeera include:
U.S. launches wave of new air strikes on Iran: CENTCOM
The U.S. military confirmed it has initiated a new wave of daylight assaults against Iran, commencing at 6 AM Washington, D.C. time (10:00 GMT, 1:30 PM Tehran time).
“These strikes aim to further weaken the military capabilities that Iranian forces have utilized to threaten commercial shipping in the Strait of Hormuz,” stated the U.S. Central Command in an announcement.
At 6 a.m. ET today, U.S. Central Command forces began launching a wave of strikes against Iran. The strikes are designed to further degrade military capabilities Iranian forces have used to attack commercial shipping in the Strait of Hormuz.
— U.S. Central Command (@CENTCOM) July 15, 2026
Energy for all or none, declares IRGC
The Islamic Revolutionary Guard Corps (IRGC) in Iran issued a warning to cut off all energy exports from the Middle East due to the U.S. reinstatement of a naval blockade on its ports.
“Oil and gas exports from the region will be available to all or none,” they asserted in an official statement.
Patience with Iran over Gulf attacks ‘may collapse very soon’
Zeidon Alkinani from the Arab Perspectives Institute claims that Gulf states under attack may soon face pressure to take sides following U.S. and Israeli aggression toward Iran. “Geopolitically, it is evident that Iran sees this as an opportunity to demonstrate military superiority in the region while attacking even those advocating for diplomacy,” he commented.
“The patience of the Gulf nations and their perception of Iran may rapidly deteriorate,” he added.
As discussed previously, it seems ill-advised for the Saudis to escalate tensions with Ansar Allah over their recent air blockade. They could effectively manage the situation by allowing occasional flights while feigning incompetence in halting them. However, reports suggest that MBS may have asked Trump for the green light to escalate against Ansar Allah, which Trump appears to have provided amidst current heightened tensions. According to Tracy Shuchart on Twitter:
Keep an eye on this: it marks the first time since 2023 that the Houthis have directly targeted Saudi Arabia.
Houthi forces targeted airports in Saudi Arabia, with ballistic missiles intercepted.
Saudi Arabia reported that their air defenses intercepted missiles aimed at the southern part of the country, following reports of Houthi retaliatory strikes on Sanaa airport.
We’ve previously highlighted that the growing hostility between Gulf States and Iran poses a significant obstacle to a resolution. Evidence of this was seen in a recent meeting between Secretary of State Rubio and GCC officials, during which they issued a statement opposing Iranian control over the Strait of Hormuz. While they may resent the U.S., they are equally cautious about becoming vulnerable to Iranian power.
- Claims by Iran regarding military targets hit include air bases like Muwaffaq Salti, Prince Hassan, and King Faisal in Jordan, as well as sites adjacent to the 5th Fleet, Al Udeid in Qatar, and Sheikh Isa in Bahrain. Reports suggest damage occurred at Al Udeid maintenance facilities.
- Open-source intelligence indicates that U.S. Gulf bases are increasingly defenseless as stocks of Patriot/PAC-3 interceptors are depleted—observations point to fewer interceptors than there are incoming missiles.
- MQ-4C Triton and other advanced reconnaissance aircraft have reportedly withdrawn from Jordan, with plans for a U.S. troop withdrawal from Iraq announced for September 30.
The Press TV landing page concisely summarizes Iran’s military actions:
Finally, an evaluation of Iran’s current military strategy:
I disagree. Iran is executing a systematic counter-base campaign with focused targeting of U.S. radar systems. The effectiveness of Iran’s counter-base operations has improved over time—these strategies now incorporate jamming-resistant terminal guidance.
— Policy Tensor (@policytensor) July 14, 2026
Recent reports indicate that the U.S. could not secure operations in the Gulf, leading to diminishing oil supplies:
JUST IN: Despite two U.S. aircraft carriers and substantial air cover, the Gulf’s primary oil bypass remains closed. Fujairah Port has effectively ceased operations, eliminating approximately 6 million barrels per day from the global market.
— The Hormuz Report (@HormuzReport) July 15, 2026
For now, we’ll pause here. Thank you for following, and see you tomorrow!
____
1 This may still hold true—that is, when I worked alongside Japanese colleagues, they often employed very specific economic data.
2 The President may access the statutory minimum should he declare an energy emergency, contingent upon the Secretary of Defense assuring that this action wouldn’t harm national security.
3 Notably, economist Stephen Hanke has asserted that PPP GDP per capita trends indicate that Iran and Saudi Arabia have performed comparably in the region since the 2008 crisis, demonstrating similar, albeit modest, growth patterns. This viewpoint was recently echoed by Nima of Dialogue Works, who noted that upon revisiting Tehran after over a decade, he observed signs of increased prosperity.
