Iran Today

The situation in Iran is so complicated that it is worth breaking it down into a set of questions. With some, it is hard to know the answer because there is so much lying from Trump and the Iranian side as well.

Is Iran a nuclear direct threat to America?

A few months ago, we were told that the nuclear capability of Iran had been smashed. If that is true, then Iran is no longer a threat. If what we heard from Trump was lies, and Iran does have nuclear capability, could it hurt America?

The question is how Iran would deliver a nuclear attack. It appears, at best, it could only produce a handful of bombs, but does it have the missiles with the range to deliver a nuclear attack? Most people think not, although they did fire a longer-range missile at Diego Garcia. Speculation was that it had a small warhead, enabling it to travel so far. In any case, US missile defence would probably shoot down any attack before it reached US soil.

Navel forces are insignificant to America, and the Iranian Air Force is hardly a threat to the US. The answer is that it is highly unlikely that Iran threatens the US. Bigger threats are China, Russia and North Korea. None of these has been attacked.

Is the Iranian government good for the people?

No. The theology imposes restrictions on the Iranian people, limiting their freedom. It is particularly the case with women and gay people. As well as the government, it should not be forgotten that the Iranian people have been subject to sanctions for many years. Goods and services are unavailable due to the Western trade embargo on the country. Even without the theology, life is tough.

Is a democracy the only answer?

We see a democracy as giving them more freedom, but a more liberal autocracy could be equally beneficial. We might take democracy for granted in how we are ruled, but you are talking about a population with little understanding of it.

I often talk about a situation I experienced decades ago. A businessman from a country with a reputation for less than 100% honesty was looking to establish a business in Australia. He had only ever operated in his home country. I was one of several people he was talking with about what would be involved in setting up in Australia.

As I went through government requirements from tax and reporting to insurance, his stock reply to any legal requirement was “Who do I pay?”

We need to factor in that it will be a learning curve for Iranians to instigate, accept and learn to live in a democracy.

Will regime change happen through internal pressure?

Take a step back and ask why the current government structure is in place. After the Shah, a government structure was established to achieve a few objectives. One was to do away with ruling families where control was passed down from father to son. The other was to create a complex structure of bodies that decentralised power.

Behind all this stands the Iranian Revolutionary Guard (IRGC). They are stronger than the Iranian military, navy and air force. Between the Supreme Leader and the IRGC, the other parts of the structure are brought into line.

Members of the IRGC see themselves as the elite of Iran. They are battle-hardened fighters who can be ruthless in crushing rebellion. Many are veterans of the nine-year Iraq-Iran war. If the Supreme Leader wants to stop demonstrations, he has a force that will do it with no concerns about loss of life.

Given the complex power structure and the IRGC’s blind obedience to the Supreme Leader, the likelihood of a successful internal uprising is next to zero.

Can the US win a ground war?

The IRGC is estimated to be between 125,000 and 190,000. The Iranian Military is estimated at 570,000 active regular members and 350,000 reserve members. In total, you have about 1.1 million soldiers, sailors and airmen.

Is America prepared to commit a million military personnel to the war? Are they prepared to commit half? Then there is the question of how long it would take.

Another factor is the terrain. In any invasion, the defenders have an advantage because they know the terrain and have established defensive lines. They have the infrastructure in place, and an invading force has to bring their weapons, food, medical supplies and communications infrastructure. The US troops would not have the experience of fighting in the Iranian conditions. They are at an immediate disadvantage.

Winning a ground war is highly unlikely. The US could not win in Vietnam, Iraq or Afghanistan. Iran would be less likely. It would also be political suicide once the body bags start coming home.

What is/are the objectives?

Trump has given as objectives:

• Regime change
• The threat of nuclear weapons
• Destroying Iran’s Defence Industrial Base
• Eliminating their Navy and Air Force
• Protecting, at the highest level, our Middle Eastern Allies

Regime change is unlikely. Nuclear weapons were supposedly destroyed in the bombing some months ago. Destroying a defence industrial base and eliminating the navy and air force are all temporary measures. In a decade or less, they can be rebuilt, and we will be back to where we are today.

Protecting allies in the area basically means Israel. The Iranians have not been much of a threat to allies such as the UAE and Saudi Arabia until the fighting started. So it appears that helping Netanyahu is the main objective.

What about the Straits of Hormuz?

Trump says he was shocked by the blockade. If he was shocked, he should resign for incompetence. His intelligence chiefs were talking about it, and this is not the first time that Iran has blockaded the straits.

In fact, there have been plans for decades to build oil pipelines and other measures to bypass the Strait of Hormuz. None of them has come to fruition due to a lack of interest from America. They would either not provide investment or actively discourage countries from building infrastructure.

It appears Trump either didn’t believe his own intelligence leaders or didn’t care. Perhaps he thought the world could bear the impact with a few weeks of oil shortages.

How will petrol prices determine the outcome of the war?

As petrol and diesel prices escalate, the very people who voted for Trump are being hit in the most vulnerable spot. Their wallets. It should be remembered that one of the things he campaigned on was to cut the price of petrol.

Even when this is over, there will be no magical drop in prices. Infrastructure has been damaged and will take years to repair. Wells cannot be turned on and off. It will take weeks to get production going again. Governments will be keen to top up oil reserves, which will increase demand for the reduced oil shipments. There are only so many ship berths, so there will be long queues.

Will the loyalty of the MAGA movement remain? Some will, but some will walk away. I suspect that the narcissistic Trump doesn’t care. He is not up for re-election, so why worry? It becomes someone else’s problem.

What else is not getting mentioned?

A couple of things.

• It does get a mention occasionally, but there is a massive impact on the availability and cost of fertiliser, which comes through the Straits.
  Remember the 1960s, when we were talking about peak food? The world was heading towards starvation due to population growth and limitations in food production. That was largely overcome by fertiliser. It is not just the plants we eat. It is the stock feed for beef, lamb and pork. It is cotton crops, oils, wines, sugar cane and tobacco.
• Trump is threatening to hit desalination (or, as he calls them, desalinization) plants. Iran gets most of its water from underground sources; however, if Trump attacks desal plants, Iran might respond with attacks on those aligned with Trump who get up to 90% of their water from desalination.

What is Israel’s role?

Many believe that Netanyahu has played Trump the way Putin has played him. He talked Trump into acting for reasons that do not align with the Israeli agenda. Israel wants to eliminate Iran and the opposition it funds to attack Israel. Even if Trump stops, Israel might keep going, and the oil might not flow.

Where is Trump’s off-ramp?

At the moment, he is stuck. He does not want to move back and is assembling troops. We thought the naval buildup was a bluff, but it wasn’t. It may be that the military buildup is not a bluff either. He will send in troops.

Alternatively, he can do a TACO. Declare victory and go home. That would be the least damaging outcome, even if only he believed he had won.

What will be the repercussions?

Here are a few likely outcomes:

• Petrol prices will gradually decline, but it might take a few years to get back to where they were. They might never fall that far
• Sale of EVs will grow rapidly. The Chinese car makers will see it as a brilliant marketing strategy by Trump and award him the Chinese Marketer of the Year
• Growth in alternative energy will escalate, mimicking China’s surge in wind and solar
• The Middle East will continue to be unstable
• Israel and Iran will have a more open war without the use of proxies such as Hamas and Hezbollah
• Support for Israel from the US will likely fall after this bout of the US getting its fingers burned
• The Iranian government will be even more firmly entrenched, as it will claim to have beaten America
• The Republicans will get an electoral thrashing at the midterms
• Trump will do something more outrageous to atone for his failed Iranian escapade. Cuba, Greenland and any country he dislikes will be in his sights
• Most Western countries will drift away from American alliances as they see the USA as too unpredictable and unreliable
• World defence spending will increase, which will be a boon for US defence companies
• Airlines will suffer massive losses, and some likely fail due to the twin impacts of cancelled flights and high fuel prices
• Countries will build even more substantial buffers with fuel reserves, which will increase demand and keep prices high

Conclusion

The blingingly obvious has come to fruition. MAGA was supposed to mean isolationism. The US was supposed to focus inward and work towards self-sufficiency. The world has become far too enmeshed for that ever to work. If America cannot build an iPhone, what chance does it have in a world built on trade? Oil is just one example of how entwined countries are when it comes to commodities. Even American soybean farmers found that China can make or break them depending on how much China imports.

If the central theme of MAGA is flawed, and a narcissist is put in charge, he will want to make his name somewhere else. Given command of the most technologically advanced war machine, it was too much of a temptation. Trump decided to leave his legacy in the Middle East. An area that has frustrated world leaders for centuries. He will soon join the list of frustrated leaders.

There are some positives. Firstly, it will make countries less dependent on America. As Mark Carney said, middle powers need to form alliances. Secondly, it will accelerate the transition to renewables. Oil dependency is too volatile. Thirdly, there are those Chinese car makers.