‘No Exit Ramp’: Markets Fear War Spiral After Kharg Strikes

The Strait of Hormuz is “open to everyone.” Everyone, that is, except America, its friends and those complicit in ongoing attacks against Iran.

That’s according to Iranian foreign minister Abbas Araghchi who, in a series of remarks Sunday, said Tehran’s “studying” a hodgepodge of de-escalation proposals floated by Iran’s neighbors.

It strikes me that between reports of India-flagged LNG vessels safely transiting the Strait and the assumption that all Chinese-affiliated or China-bound ships in the Gulf are secure, some readers might harbor misconceptions about the severity of this predicament. To be clear: The Strait’s closed for all intents and purposes.

The vast, vast majority of non-Iranian energy that typically transits that waterway is in some way, shape or form affiliated with the US or nations that Iran considers, for the purposes of the war, American allies.

Further, this isn’t a police sobriety checkpoint. It’s not as if you can just line up, wait your turn, present yourself to an IRGC naval officer as credibly non-aligned then go on your merry way. This is a war zone and it’s commensurately chaotic.

Over the weekend, Donald Trump performed an unwitting impression of George W Bush’s Iraq consensus-building effort, suggesting The White House is cobbling together a coalition of the willing to send battleships into the Gulf.

“Many Countries… will be sending War Ships, in conjunction with the United States of America, to keep the Strait open and safe,” he said, adding that he “hopes” China, France, Japan, South Korea and the UK will join the effort.

Regardless, he went on, America “will be bombing the hell out of the shoreline.” (And yes, that’s a real quote from the President of the United States.)

Trump’s decision to “bomb the hell out of” Kharg Island has traders on edge. As one energy forecasting firm put it, in remarks to Bloomberg, “We are still hurtling down the highway at breakneck speed, in the left lane, with no sign of when we’re going to be able to veer off onto the exit ramp.”

That’s an apt description, but I’d suggest one edit: It’s probably more accurate to say we’re “hurtling down the highway at breakneck speed in the wrong lane.” Donald Trump’s Del Griffith and Pete Hegseth’s Neal Page.

Trump’s feeling the heat. Or at least he’s cognizant that the problem’s urgent. About five hours after calling for an international warship coalition, he reiterated the point, only more politely.

“Countries of the World that receive Oil through the Hormuz Strait must take care of that passage, and we will help — A LOT! ” he shouted, promising a choreographed “team effort” that’ll “bring the World together toward Harmony, Security, and Everlasting Peace!”

Meanwhile, the UAE’s effectively at war with Iran thanks to Trump. The Emirates had to temporarily halt operations at Fujairah over the weekend, which is notable because that hub doesn’t depend on the Strait. It’s on the sea side of the chokepoint in the Gulf of Oman, and it’s fed by a pipeline running from fields in Abu Dhabi.

Although Iranian projectiles fired at the port were intercepted, falling debris caused a fire on Saturday. Fast forward to Sunday and the UAE was still fending off incoming drones and missiles from Iran. Dubai residents are now subjected regularly to the sound of explosions from interceptors. All told, Iran’s fired nearly 2,000 drones and missiles at the UAE this month.

Araghchi on Sunday blamed the Emirates for providing a staging ground for Trump’s attacks on Kharg. Officials in Abu Dhabi didn’t exactly deny that, but they did accuse Iran of resorting to “terrorism” in the course of asserting a “right to self-defense.”

It’s not just energy under threat. On Sunday, Bahrain began shuttering a state-run aluminum smelter in a bid to conserve resources with feedstock shipments through the Strait throttled.

Trump continued to insist that Iran’s conventional military capabilities are by now so degraded as to be useless, but said that “no matter how badly defeated they are,” it’s still “easy” for the IRGC to “send a drone or two, drop a mine, or deliver a close-range missile” anywhere in the region, including the Strait.


 

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10 thoughts on “‘No Exit Ramp’: Markets Fear War Spiral After Kharg Strikes

  1. Trump went from 7 days ago: “The United Kingdom, our once Great Ally, maybe the Greatest of them ?all, is finally giving serious thought to sending two aircraft carriers to the Middle East,” Trump said.
    “That’s OK, Prime Minister Starmer, we don’t need them any longer — But we will remember. We don’t need people that join Wars after ?we’ve already won!”
    To: “Please send ships, I need help.”

  2. Ah yes. The clown carries on. And on and on. Asking China for help opening the Strait after he (Trump) started the war reminds me of Trump asking the Korean workers wrongfully shackled and locked up in GA to stay and help train American workers after the Koreans were freed. I was in Mokpo Korea soon after that happened…Koreans understandably wondered what was wrong with “US President”.

    Trump is helping those who have never experienced it personally learn what it means to be self-destructive. How many times will he announce the war is over and/or the Iranians are desperate to negotiate an end to the war before it happens? Will his pace accelerate if their are more terrorist attacks in the US. Is Patel having drinks somewhere w/ one of Putin’s friends or is back in the US?

  3. France and the UK will not and should not send any ships. Only when there is already a truce and it’s no longer needed. Let the US wear itself down both militarily (ammo, morale), diplomatically (allies in the middle east) and reputationally (US looking like fools and scared chickens after 2 weeks of high oil).

    Europeans remember the US is a hostile nation that threatened to invade just 2 months ago.

  4. “We may hit it a few more times just for fun,” said the US leader.

    I found this quote to be even worse than the one you included. What the actual hell is that statement?

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