Things will likely get worse before they begin to get better.
Right now, there is high probability the war in the Middle East will rekindle with even greater destructiveness. The possibility for a negotiated end to the hostilities is slimmer.
After weeks of telling the world that a negotiated end to the fighting is close at hand by way of a memorandum of understanding, Donald Trump trashed the latest proposal from Tehran. The door to a negotiated end to the fighting slammed shut.
The only thing holding back resumption of bombardment on Iran is Trump’s scheduled visit to Beijing later this week. He had hoped the situation in Iran would be resolved by this time. But he was basically demanding the impossible: Tehran’s surrender.
Last week, the US tried to run the Iranian blockade at Hormuz under the cover of “Project Freedom.” This ended disastrously for the US Navy. Their destroyers were forced to flee under intense Iranian attacks. Several warships were reported to have been damaged.
Washington is under intense pressure from Tel Aviv to resume bombardment of Iran’s infrastructure. The current standoff is unacceptable for Israel. The disposition of forces leaves Israel vulnerable to Iranian missile bombardment. The longer the standoff, the greater Iran’s opportunity to acquire weaponry from Russia and China.
Urgent US arms deliveries over the past weeks enabled the Israelis to replenish their ability to wage war. With fresh ammunition, Tel Aviv is raring to return to its original mission of completely crippling Iran and paving the way for regime change. Netanyahu is visiting Washington with its warlike agenda.
Saudi Arabia and the UAE are also pressuring Trump to reopen hostilities. Both remain under the threat of Iranian bombardment. Like Israel, they see their future security tied to the military destruction of Iran.
The US maintains a large naval force at the Gulf of Oman. This is a costly force to sustain. It cannot sit and wait forever. At some point, the naval assets will have to be rotated back to their home bases. Their firepower is already depleted and their crews are restless. Several damaged warships will have to be sent home for repair.
All US efforts to break the impasse – from the insertion of elite commandos in the vicinity of Isfahan to the recent effort to run the Hormuz blockade – have all ended in debacles. Trump has run out of options short of an intensive (and genocidal) bombardment of Iran’s power and oil facilities.
But if the US escalates the fighting, there is no assurance its disposition will improve. Along with Israel, US Central Command could hit Iranian missile sites and vital infrastructure. That does not ensure the Hormuz blockade will be broken. Iran has thousands of missiles, fast boats and small submarines embedded in mountain fortresses along its long coast facing the Persian Gulf.
Every military strategist I have heard argue against any attempt to bring in US ground forces. It will be extremely risky and courts the possibility of disaster. Even a scaled down attempt to occupy Kharg island produces no new strategic advantage for the US.
What is certain at this point is that any renewed escalation of fighting will be disastrous for the rest of the world. Immediately, oil prices could jump to $150 per barrel – the critical price level estimated to push the global economy to recession.
Should US forces begin destroying Iranian oil storage and drilling sites, the damage to the global economy becomes long-term. Iran’s strategic advantage in a long standoff is its capacity to absorb pain. The US has no comparable capacity. It has alienated nearly all its allies excepting Israel.
The mere potential for military escalation at the Persian Gulf inflicts costs on the rest of the world. The energy supply chain is at its most vulnerable. Fertilizer costs will eventually translate into intolerable food prices. Hunger will stalk many countries.
Donald Trump himself is not inclined to renew hostilities against Iran. But he has no appetite for losing face. He cannot be seen too obviously losing this war – even if he already did. For this reason, there is high probability he will succumb to the warmongers and attempt one more vain attempt to crush Iran as a nation.
It is just too bad that one man’s oversized ego plays an oversized role in determining the destructive course of events.
I have enumerated several times in this space why the Philippines is particularly vulnerable. We do not have strategic oil reserves to help us weather breakages in the supply chain. We do not even have the storage capacity available for such strategic reserves.
We have exhausted our fiscal headroom. Any further borrowing we will need to make to mitigate the effects of a crisis will be costlier. Further borrowing will only push us closer to a debt crisis.
Our GDP growth numbers are disappointing. The dismal first quarter economic numbers even show a contracting agriculture sector. Money is fleeing our stock market and remittance flows are at risk. Bank economists predict the peso declining to $1:P62 pretty soon. Inflation could hit double digits.
The crisis is real. It is severe.
Yet our political class seems oblivious to the severity of the crisis we confront. We are stuck in bread-and-circuses mode. What our leaders have are public relations strategies – not a contingency plan.