Therefore the Iranians will not give up their uranium enrichment or destroy their enrichment facilities. Or hand over their already enriched uranium. So President Trump rolled the dice, applied some Trumpian jiu-jitsu, and imposed a United States naval blockade of the Strait of Hormuz that will be enforced in the Gulf of Oman.
I’m not sure anyone knows yet how this will all go down, but at least as of today, here’s what US Central Command has said: “Any vessel entering or departing the blockade area without authorization is subject to interception, diversion, and capture. The blockade will not disrupt neutral transit routes through the Strait of Hormuz or to non-Iranian destinations.”
To my way of thinking, this means that anyone who trades with Iran will have their ships blocked. And if Iranian motorboats attack our navy, we will destroy them just like we did with all those Venezuelan drug boats. Mr Trump has largely adopted the Venezuelan model. Iran sells no oil, makes no money, so can’t scatter any money it doesn’t have, and the US takes de facto control over the entire Persian Gulf region.
The President had this to say about all this: “It’s called on everyone from the inside and the outside.” He said: “We think a lot of countries are also going to help us with this, but we are doing a complete blockade. We will not let Iran make money by selling oil to people they like, not to people they don’t like or whatever. It will be all or nothing,” and “I predict they will come back and give us everything we want.”
Former US Special Envoy to Ukraine General Keith Kellogg discusses how the US-Iran conflict is affecting China and Russia as the US naval blockade of the Strait of Hormuz takes effect on ‘Kudlow’
I say ok. Then the question is, when will Iran go completely bankrupt? Some quick statistics from multiple sources, including TIPP Insights and the Foundation for Defense of Democracies, show that more than 90 percent of Iran’s approximately $110 billion annual trade passes through the Persian Gulf, with crude oil alone generating $139 million per day before the war began. Petrochemicals earn an additional $54 million per day.
This results in a loss of $435 million in revenue per day, which works out to $159 billion a year. The $159 billion loss of revenue is about 50 percent more than the entire Iranian budget, which comes to about $100 billion. At what point does bankruptcy apply? I honestly don’t know yet.
According to sources, Iran’s onshore oil storage begins to deplete in approximately 13 days. So this means that shutting down the infrastructure will cause permanent damage. It remains to be seen whether this economic devastation will bring Iran back to the negotiating table.
There are some crazy people in the Iranian Islamic Revolutionary Guard Corps who seem to be the leaders at the moment, Mojtaba Vehedi and Mohammad-Bagher Ghalibaf. So I wouldn’t be so sure about any liberal regime change. The big question is how long will it take for them to starve to death?
