He blinked

Donald J. Trump, the king, has blinked. He has agreed to a 14-day ceasefire in the United States-Israel war (“an excursion,” he said) with Iran, effective immediately. He also agreed to negotiating with Iran using Tehran’s 10-point peace plan which he says is a workable basis for negotiations.

Previously, at 8:06 a.m. Tuesday, Trump had vowed “a whole civilization will die tonight, never to be brought back again,” unless the Strait of Hormuz was opened. Ten hours and 26 minutes later, at 6:32 p.m. Eastern time (7:32 a.m. Wednesday in Manila), he withdrew his threat. He said Iran had agreed to a two-week ceasefire.

Crucially, Trump has agreed to Iran’s oversight over the Strait of Hormuz through which passes 20 percent of the world’s crude supply, natural gas and fertilizer shipments. Before the Feb. 28 start of the US-Israel-Iran war, Iran had no business in monitoring the passage of oil tankers through the narrow strait because it was international waters. Today, Hormuz is now effectively Iranian waters (half of it anyway), with seeming right to charge toll fees (as much as $2 million per oil tanker).

Crucially too, Tehran keeps its 400 kilos of 60 percent enriched uranium which, in a matter of weeks, could be enriched to 90 percent – nuclear bomb grade. The 400 kilos are good for 10 nuclear bombs. If before the war, Iran could not be stopped from stockpiling enriched uranium, how much more now that it has a stranglehold on the Strait of Hormuz, making Iran effectively the world’s single biggest exporter of oil – 20 percent of supply.

Here is Donald Trump on the ceasefire:

“Based on conversations with Prime Minister Shehbaz Sharif and Field Marshal Asim Munir of Pakistan, and wherein they requested that I hold off the destructive force being sent tonight to Iran, and subject to the Islamic Republic of Iran agreeing to the complete, immediate and safe opening of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks.

“This will be a double-sided ceasefire! The reason for doing so is that we have already met and exceeded all military objectives and are very far along with a definitive agreement concerning long-term peace with Iran and peace in the Middle East.

“We received a 10-point proposal from Iran and believe it is a workable basis on which to negotiate. Almost all of the various points of past contention have been agreed to between the United States and Iran, but a two-week period will allow the agreement to be finalized and consummated.

“On behalf of the United States of America, as President, and also representing the countries of the Middle East, it is an honor to have this long-term problem close to resolution.

“Thank you for your attention to this matter!” – President Donald J. Trump

My take:

• Being done through third parties, the negotiations could be muddled by bad faith. In two instances, while in direct negotiation on Iran’s uranium stockpile, the US launched an attack on Iran. Any ceasefire thus is fragile. You are not even sure if Israel will agree to any ceasefire. It has its own agenda.

• The Middle East tension will continue. This could mean elevated oil prices. They may not come down below $100 per barrel, for some time, at least two years.

• Supplies of oil, fuel, natural gas, helium, aviation fuel, petrochemicals and anything derived from crude oil will remain tight. Major oil storage, processing, petrochemical and fertilizer manufacturing facilities were damaged, requiring years to reconstruct or upgrade. Expect even higher prices of almost any kind of good and service.

• The 10-point Iranian plan has tough hurdles, including global recognition of Iran’s right to enrich uranium, removal of US forces from its Middle East bases, lifting of economic sanctions and payment by the US and Israel as war damage reparations.

• Barack Obama took two years to negotiate the 2015 nuclear accord whereby Iran agreed for its nuclear enrichment to be monitored. In 2018, Trump blasted the agreement.

What to do:

• Conserve cash and energy. Be judicious in spending.

• To the 20 billionaires of this country who run 70 percent of the economy and own 80 percent of the over 300 listed companies, this is an opportunity to demonstrate extreme generosity.

Remember the rule, taught me by three legendary taipans/tycoons: in the end, no matter how rich you are, it does not mean or worth anything – if you are not in good health, are dying and are not sure whether you are going to heaven or hell. In both cases, you cannot bring your stash of cash, whether in bank vaults or in fancy Rimowas.

Per NBC, developments as of this writing, Wednesday noon:

Trump agrees to suspend attacks: He said just hours ahead of his deadline that he had agreed “to suspend the bombing and attack of Iran for a period of two weeks” on the condition that Iran reopens the Strait of Hormuz. Earlier, Trump had threatened massive US attacks on civilian infrastructure and brushed off concerns about possible war crimes.

Iran to allow passage through Strait: Iran said (Wednesday our time) it will allow safe passage of marine traffic through the Strait of Hormuz for two weeks if vessels coordinate with Iranian armed forces. Foreign Minister Abbas Araghchi also said Iran will stop military attacks as long as it is not attacked.

US strike Kharg Island: An intense wave of strikes was reported on bridges across Iran and on Kharg Island, the country’s key oil export hub. The US military struck dozens of military targets on the island overnight.

Death toll: More than 3,400 people have been killed across the Middle East. Thirteen US service members have been killed, and two more died of noncombat causes.

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