[This Iran war post, as usual, went live early. Please return at 8:00 AM EDT or refresh this page then for the final version]
Again, limited kinetic action and relentless Trump and Administration puffery masks that Trump has no way out of his Iran disaster save an ugly exit, a formal capitulation, or blowing up more stuff in Iran and having Iran destroy the global economy. But the press keeps unquestioningly parroting hopium and Administration/hawk derangement. Oil experts who also called the energy crunch early are citing more evidence of its inevitable arrival, even if it might not be as dramatic as the much-touted “cliff”.
As we and many others reported, Iran has drawn very hard red lines, adding US withdrawal from the Middle East and an end to hostilities on all fronts, including Lebanon, Gaza, and now Yemen, and insisting that MOU requirements, like the return of frozen assets and sanctions relief, happen up front. The new Supreme Leader, Mojtaba Khamenei, has surfaced and even met with President Pezeshkian for over seven hours. He also appointed a new, very hardline secretary, Mohsen Rezaei,1 to Iran’s Supreme National Security Council.
Iran has also named six new military commanders. Commentators see the significance is that Iran naming them, as in exposing to assassination attempts, signals that Iran believes it has sufficiently tightened its security.
And two prurient interest stories: one of the Washington Post reporting that Trump exited the NATO summit in Ankara not on either of his Air Force 1 planes but via another military jet after being covertly transported their on a catering truck. This move stands in stark contrast with Iran’s former Supreme Leader Ali Khamenei rejecting entreaties that he work out of a bunker rather than his office. He was not willing to take advantage of protection not available to ordinary Iranian. By contrast, Trump’s plane switch caper, based on his belief in an assassination threat, meant he was putting staffers and reporters in hare’s way by having them ride in the decoy plane.
Second is a report on Tasnim of a violent fight on the Abraham Lincoln that resulted in seven deaths. While this may seem not credible to Americans, it’s an interesting piece of information warfare, since tales of terrible food and speculation on whether the Gerald Ford laundry fire was sabotage have gotten lots of coverage abroad in addition to at home.
We’ll soon give a bit more detail, including on that attacks on vessels. But we wanted to raise a broader question: many experts, such as Joe Kent, have argued that Trump should “just leave”. But what does that amount to in practice? Keep in mind that Iran has made clear it has a vote and we’ll see it really does.
Also keep in mind that the newly-elevated Secretary of the Supreme National Security Council has set forth Iran’s key demands for opening the Strait of Hormuz. This list is no surprise to those who have been paying attentions, since it is consistent with recent remarks by other officials and informal spokesman like Professor Mohammed Marandi. From Press TV:
Mohsen Rezaei, the newly appointed head of the Supreme National Security Council (SNSC), told Chinese Ambassador to Tehran Zong Piyu in a Tuesday meeting that the US must end the war on Iran and its regional allies and release Iran’s blocked funds for a full reopening of the Strait of Hormuz…
He said Iran has also communicated some other conditions to the US through intermediaries that have been involved in indirect negotiations between the two sides in the past weeks.
Rezaei reiterated that if Iran and Oman, the other littoral state in the Strait of Hormuz, reach an agreement on the transit routes in the waterway, that agreement will have no impact on Iran’s decision to close or reopen the strait.
Superficially, this looks like a retreat from some other demands Iranian officials have indicated, which some have summarized as MOU plus: a return to the MOU, with Iran’s frozen funds released and sanctions relief up front, an end to hostilities on all fronts, and an exit from US bases. But given that the story includes ” Iran has also communicated some other conditions” this list above is partial. So it looks as if Rezaei soft-pedaled Iran’s position in his meeting with the Chinese emissary.
Mohsen Rezaei:
IRAN’s message is clear: the Strait of Hormuz will not reopen until the U.S. ends the war and blockade, releases Iran’s frozen assets, and agrees to a region-wide ceasefire, including in Lebanon and Gaza. Until all conditions are met, the Strait will remain closed. pic.twitter.com/t5KVxr42Ap
— Press TV 🔻 (@PressTV) August 11, 2026
A thin-form unilateral exit would mean ending the blockade and pulling out all the extra manpower, like the Special Forces, that had been deployed to the theater. But it will leave the economic war on so as to continue to punish Iran for its sin of not capitulating to the US and still having a nuclear weapons program.
Readers no doubt can improve on this picture, so consider this discussion to be what consultants call a forcing device. We will greatly simplify the problem by assuming that (again following Joe Kent) that the Administration has firmly and credibly told Israel that it is on its own if it tries to escalate with Iran.2
But the US would still be scheming with Israel to rearm and have a go at Iran as soon as possible.3 The sanctions stay on. Iran gets no frozen assets back. The US is still in Israel and maybe has a toehold in Jordan and other bases.
However, dropping the blockade and de-escalating by removal of extra forces should be a wake-up call to the Gulf States. Would they come to a modus vivendi with Iran (and Oman) and agree to Iran’s oversight and fee regime? Iran would insist they pay reparations. What about the $6 billion in frozen funds sitting in Qatar, agreed to be released under Biden, where the Trump Administration ostentatiously jerked around Iran by saying the Biden deal put restrictions on how the funds would be used (IIRC really vague ones, as in not for military purposes) and then made demands Iran would not accept.4
So it does not seem that progress towards a separate peace of sorts with petrostates could come about all that quickly, even with some, perhaps most, coming to accept that Iran will indeed control the Strait of Hormuz. From The Hormuz Report:
Gulf energy producers have completely lost faith in the Trump administration and are quietly accepting Iran’s permanent control over the Strait of Hormuz — because the alternative, returning to war, would be worse, per WSJ.
Gulf states don’t like the emerging deal that formalizes Iranian oversight of inbound ships. But they see it as “the least-bad option” compared to further military escalation, which would put their energy infrastructure at risk. The conflict has left the region — vital to global energy security — with no good option for countering Iran.
The numbers are stark. Crude exports through the Strait have collapsed to 2.2 million barrels per day from 8.5 million a month ago. Pre-war flows of roughly 20 million barrels per day are now a distant memory. Gulf states’ alternative export routes are also under attack — Saudi Arabia’s Red Sea pipeline hit by Houthi strikes, Egypt’s Damietta port struck by drones.
Iranian officials have declared the new Iranian order in the Strait is “irreversible,” and the U.S. has no alternative but to accept it or face “costs much greater than in the past.” Iran already holds effective control over the strait, with commercial shippers refusing to cross without Tehran’s assurance.
The WSJ’s conclusion is stark: Gulf states are adapting to a new normal where Iran’s veto over their energy exports is permanent. The U.S. has been pushed out of the Gulf militarily. And the alternative to accepting Iran’s control — a return to full-scale war — is worse.
Nevertheless, they seem likely to gag on terms Iran is insisting on now: the ouster of the US and some sort of reparations. The fact that the Gulf states are changing their minds does not mean they have changed their hearts. So odds favor that Strait of Hormuz remains choked as they wrangle with Iran over terms. And will the Saudis get over themselves and make adequate concessions to Ansar Allah to stop the blockade on Saudi transits of the Red Sea?
In the mean time, if the sanctions are still on and the US is still in possession of Iran’s frozen assets, it seems likely that Iran will keep shooting at every US military and dual-use asset in range of its missiles and drones. This would seem to mean Iran starts destroying more intel and surveillance assets like data centers (if Iran could find a big above-ground telecom switch, taking that out could be comparably nasty to cutting cables) and would seem to lead to Iran attacking Israel installations, both IDF and US assets.
In other words, I don’t see a viable exit strategy, or at least one that is an actual exit, as opposed to a de-escalation. And the world economy remains hostage.5
Of course, the Administration is convinced that Iran will break economically, and in pretty short order too. The Wall Street Journal is not convinced. From Iran Is Defying U.S. Pressure by Becoming a ‘Survival Economy’
President Trump is betting the pressure of sanctions and a naval blockade will force Iran to bend. But the country’s rulers are taking time-tested steps to keep their chronically battered economy functioning just enough to resist a drawn-out campaign.
Tehran is rationing scarce goods, limiting access to foreign currency, slashing investment and shifting more of the burden onto households while preserving strategic imports and the essential machinery of the state, analysts say. The result will be a deepening economic malaise that leads to rising poverty and dysfunction, but also more room for Iran’s leaders to stall talks with the U.S.
That leaves Trump’s strategy resting on a risky assumption that Iran will crack before Washington does. Mediators have warned their U.S. counterparts that Iran has been living under sanctions for years and betting that Tehran will compromise because of economic pressure won’t likely yield results. Instead, Iran will likely continue to escalate attacks to raise the price for Washington and its allies.
If Iran can outlast Washington’s expectations, it has less reason to give up leverage over the Strait of Hormuz, prolonging the standoff and the risk of renewed fighting. The longer that standoff lasts, the more pressure shifts back onto Trump as energy and shipping disruptions weigh on the global economy and inflation heading into the midterm elections.
That is before getting to the not-inconsiderable of Trump’s desperate need to be seen as the dominant party. Even if it actually could succeed, starving Iran out takes time and has Trump looking passive. Trump messengers have had to ludicrously claim that Trump can be patient when he’s anything but to make the winning the economic war thesis seem dimly plausible.
Robert Barnes with Brandon Weichert mainly about US politics, but they also plumb some troubling if not surprising tidbits about what Trump’s inner circle believes.
From a lightly-edited machine transcript:
Weichert: This is what I told Mario [Nawfal, the main host] this afternoon because a lot of the audience has been annoyed that I’m not like yelling at these pro-war guests [here with Trump press secretary Sean Spicer], but I keep telling everybody I kind of want them to feel comfortable so they actually tell us what they really think. And you’re you’re hearing the unvarnished ,I think the unvarnished truth that they really believe, oh, we’ve degraded Iran’s air defenses, so if we need to, we can do another round of fighting and not have to worry about it. Oh, there are these great splits among the Iranian elites and we can exploit that. I really think and I think Sean indicated this yesterday is that they really believe it that, that he’s and this is the advice the president and I talked to somebody who’s close to the vice president who works for the vice president and he told me he said, “Oh, 99% of what the president is hearing is the Fox News talking points, the Heritage talking points.” And it shows. I mean, it really shows…..
Barnes: He [Professor Marandi] and some other people were worried on the that that the US is going to go right back in and I was like “Huh?” and I see other people saying, ‘Well look the US just needs a couple of months to restock.” And as you’ve been pointing out Larry Johnson’s been pointing out when you throw in the rare earth components it’s going to take us four years to restock. We’re not restocking in four days, four weeks, four months, four it’s going to take us four years. And Trump keeps pretending that’s not the case. He’s telling people around THE WORLD, “OH YEAH, I’LL just tell him to speed it up and we’ll get it in a month or two and be ready to rock.”
For what it is worth, the delusion is also strong among the mediators, as the Aljazeera landing page attests:
A sanity check:
⚡️🚨 Iran says no ceasefire with US is in effect and no extension discussions are happening. Reuters sources say Tehran views the interim agreement as violated by Washington 48 hours after conclusion, with no progress on US return to the memorandum or implementation timeline. (Al…
— Middle East Observer (@ME_Observer_) August 12, 2026
Now to some short kinetic updates. The US has gotten some licks in. From the Wall Street Journal
A U.S. Navy MH-60 helicopter fired two Hellfire missiles into the engine room of the M/V Vela Nova after its crew ignored warnings from American personnel working to enforce the blockade of Iran’s ports, the military said. The cargo ship was trying to cross the Gulf of Oman for an unspecified Iranian port, the military said.
“The ship is no longer transiting to Iran in violation of the U.S. blockade, which remains in full effect,” said an X post by U.S. Central Command, which oversees operations in the Middle East.
Yemen has intensified its attacks. Its actions at sea have become lethal and it is also hitting land-based targets.
🔥 Commercial vessel linked to Saudi Arabia attacked in the Bab-el-Mandeb Strait.
Reports indicate casualties among the crew. pic.twitter.com/03PDvbVP8m
— 𝕊𝕡𝕣𝕚𝕟𝕥𝕖𝕣 𝕻𝕣𝕖𝕤𝕤 (@SprinterPress) August 11, 2026
#URGENT Houthis launch successive attacks with 10 missiles, 4 drones targeting sites along Yemen’s western coast since Tuesday morning, government-aligned forces say
— Anadolu English (@anadoluagency) August 11, 2026
From PressTV:
Yemen’s Armed Forces have carried out a large-scale missile and drone operation targeting the positions, gathering points, and weapons depots of Saudi-backed mercenaries in the Mokha area of Ta’izz Province and at the Tadawin camp in Ma’rib Province.
Spokesperson Brigadier General Yahya Saree announced the information in a statement on Tuesday, saying the operation involved a large number of ballistic missiles and attack drones, which struck designated targets, including command centers.
Saree added that the strikes killed and wounded dozens, including Saudi nationals.
The operation came after Yemeni forces carried out a wave of strikes against Saudi-backed forces for a second consecutive day.
Aljazeera’ live feed reports a fresh strike, just around 7:00 AM EDT:
Houthis launch new attack on Yemen’s al-Makha port
Yemen’s Houthi rebels have launched new ballistic missile attacks on the strategic port of al-Makha (Mocha) near the Bab al-Mandeb Strait in southwestern Yemen, according to state media.
Saba TV did not provide any further details. There was no immediate comment from the Houthis.
The attack comes a day after Yemeni government forces said the Houthis had launched 10 ballistic missiles and four drones at the city of al-Makha.
These Ansar Allah blows come against a backdropp of insurers licking their big wound from Persian Gulf damage. From LLoyd’s List in Gulf conflict costs marine insurers $2bn to date
- Marine insurers have incurred an estimated $1.5bn-$2bn in claims from about 70 casualties linked to the Middle East Gulf conflict, according to IUMI director general Lars Lange
- Underwriters warn that hundreds of vessels could generate total loss claims after 12 months’ deprivation of use if the Hormuz crisis persists, potentially exposing the market to multibillion dollar liabilities
- Despite escalating war losses, shipping disruption and softening premium rates, insurers insist capacity remains available for high-risk voyages through hotspots such as the Strait of Hormuz
Marine insurers face a mounting bill from the Middle East Gulf conflict, with estimated claims already reaching $2bn and concerns growing that a prolonged disruption could trigger far larger total loss payouts if vessels remain trapped for another six months
However:
Iran and the Houthis aren’t blowing up enough ships to convince dumb traders to update their dumb trading algorithms so they stop picking up these fake news
Furthermore notice how insider traders started to short oil one hour before this manufactured headline timely dropped https://t.co/g3fys6Hw1H
— JustDario (@DarioCpx) August 11, 2026
However, given that Mr. Market continues to ignore any and all bad news (except for briefly), the loss of oil supply via the Bab el-Mandeb strait has yet to register. Recall at the outset of the war, investors and officials took undue comfort from the buffer of inventories at sea, as in cargoes in transit. Ansar Allah declared its naval blockade on July 20. It takes about 3 weeks for shipments to get from Yanbu to Asia. So that pipeline will start running dry now-ish.
____
1
Profile: Who is Mohsen Rezaei, the new head of Iran’s Supreme National Security Council?
Follow: https://t.co/LWoNSpkc2J pic.twitter.com/YEEtYP8zLo
— Press TV 🔻 (@PressTV) August 9, 2026
We pointed out that the Supreme Leader appointed Rezaei also as his personal representative, which allows him to vote. The Secretary does not cast a vote.
2 I do not see that as credible in general given deep Trump ties to Zionists and even less so given the new access and rights that Israel would obtain under Section 219 in the NDAA. New Arab argues it could make the US military the “IDF by proxy”. However, the NDAA has not yet passed so there is theoretically a window for action.
3 Larry Johnson remind us that that will not be any time soon in his new article, Trump Wants 2,000 More Patriot Interceptors a Year, But Xi Jinping Holds the Trump Cards:
The Trump administration, following several media reports of a plague of weapons shortages, is trying to launch a frantic effort to reload. …In late July, the U.S. Army awarded Lockheed Martin a multiyear PAC-3 production contract reported at roughly $53.9 billion, part of a framework meant to lift annual output of the PAC-3 Missile Segment Enhancement (MSE) interceptor from about 600 missiles to 2,000 by 2030. It is one of the largest missile-production commitments in American history.
There is only one tiny problem that the contract cannot fix with money alone — The PAC-3’s guidance system — the part that makes a hit-to-kill interceptor actually hit — depends on two rare-earth inputs whose supply is almost entirely controlled by China. Washington is pressing its defense primes to more than triple output of a weapon whose most irreplaceable components sit at the far end of a supply chain that runs through Beijing. The ambition and the vulnerability are growing at the same time, and they are on a collision course.
Let’s start with why the pressure exists. The Iran war is an air-defense war, and it has been ruinously expensive in interceptors…
The interceptor’s seeker — the guidance head that tracks and closes on an incoming warhead — relies on samarium-cobalt (SmCo) magnets to slew and point. SmCo is not a preference here; it is a requirement…. The same samarium-cobalt material focuses the microwave beam in the traveling-wave tubes of the Patriot’s ground radar. And the radar’s phase shifters, which electronically steer the beam across the sky, are tuned with yttrium — specifically yttrium-iron-garnet.
Samarium and yttrium are the two rare earths at the heart of this story, and on both, China’s grip is close to total.
NO1 also confirms the central role of interceptors in his latest update:
US Patriot inventory is now the binding constraint. More than 1,500 interceptors fired during the war, reportedly fewer than 1,700 remaining, against ~600 produced in all of 2025 — roughly 50 fired in a single day at ~$4M each (sentdefender). The 50-in-a-day figure independently reported as PAC-3s by bonzerbarry; stockpile analysis flagging air-defense interceptors and long-range standoff as the shortfalls from becca_wasser. The Pentagon continues to publicly deny a shortage.
4 The press did not get beyond Trump’s demand Iran buy US soyabeans, which as far as I can tell, the Administration did drop, but they seemed to want to exercise undue control over what Iran did with the funds).
5 Let me clear my throat about the eagerness of too many commentators to treat dodgily-sourced facts as gospel. One was a claim that appears to have started with the Twitter account, Hormuz Letter, that Iran would not negotiate with Trump and would wait until he left office. That is nonsense on its face. In the not-likely even that Trump made serious negotiation overtures, Iran would be under enormous pressure from China, the Global South, particularly India and Pakistan, to talk. Taking some meetings in no way, shape or form means agreeing to anything, But Iran would find it necessary to go through the motions.
Second is the Reuters story that Iran intends to charge up to 5% to 7% fees for Hormuz transits. Trita Parsi pointed out that Reuters has too often been way less than reliable. The 5% to 7% idea looks intended to inflame world opinion against Iran. Note how it was also repeated uncritically as if that was the planned fee level for non-friendlies.
