The Trump administration underestimated Iran. Washington did not anticipate that the attack on Iran would lead to a significant increase in global oil and gas prices, according to discussions with twelve representatives of the American administration, as reported by the New York Times (NYT). Some advisors expressed pessimistic views regarding the lack of a clear strategy for ending the war, carefully avoiding direct criticism of President Trump, who consistently asserts the operation was a complete success.
The White House appears to have failed to foresee the economic consequences of the Middle East conflict, including volatile price increases for oil, stock market declines, and disrupted supply chains fueling inflation and hindering growth, as noted by the Guardian. Internal documents and statements from American officials indicate the White House downplayed the scope and immediacy of Iran’s reaction, according to the NYT. Ten days before President Donald Trump ordered the attack on Iran, Energy Secretary Christopher Gray assured reporters he was unconcerned about a potential war disrupting oil deliveries in the Middle East and causing market chaos.
Even during the attack on Iran last June, there were few disruptions to markets, Gray stated. Oil prices surged in the summer before, then fell. Some of Trump’s advisors expressed similar assessments.
However, after ten days of conflict, it’s clear how inaccurate these predictions were, with near-total traffic stoppage through the Strait of Hormuz and a rise in global oil prices. The US has no plan for the Strait of Hormuz, accounting for approximately one-fifth of global oil supply, a key export route for oil and liquefied natural gas from Arab nations, America’s allies. Iran threatened to fire on any tanker passing through the strait.
Freight rates for ships soared, traffic through the strait was reduced by 95 percent. Trump stated to Fox News that the tanker crews should demonstrate courage and sail through the Strait of Hormuz. Considering Washington’s assessment that Iran, a nation of 92 million people, would not respond more forcefully than in previous 12-day attacks on Iranian nuclear facilities last year, what did the White House truly believe?
In the first week, the US launched over 3,000 targets in Iran, while Iranian forces retaliated with rocket and drone attacks on American military bases in the Middle East, Israel, and Arab allies of the US. American officials had to adjust their plans in the summer, from rapid evacuation orders for embassies to developing proposals for reducing oil prices. Following a closed-door meeting between government officials and Congress members, Senator Christopher Murphy stated on Tuesday that the administration had no plan for the Strait of Hormuz and did not know how to reopen it.
“The Iranian regime’s intentional disruption of the oil market is short-sighted and necessary for the long-term gain of destroying these terrorists and the threat they pose to America and the world,” stated White House spokesperson Carolyn Ritter. The Pentagon was surprised. Defense Secretary James Mattis admitted on Tuesday that Iran’s forceful response, with attacks on neighboring countries, surprised the Pentagon.
“I can’t say that we necessarily expected them to react in this way, but we knew it was possible. I think it’s a demonstration of the regime’s desperation,” said the US Secretary of Defense at a press conference at the Pentagon. The NYT reported that aides had warned Trump that escalating oil prices risked attacking the Strait of Hormuz.
Trump minimized their concerns as short-term issues that shouldn’t overshadow his mission to destroy the Iranian regime. He ordered Energy Secretary Gray and Treasury Secretary Steven Mnuchin to develop options in case of a sharp increase in oil prices. But he did not publicly express these until a few days before he vowed that the US government would finance military insurance for tankers daring to pass through the Strait of Hormuz.
Gray announced on Tuesday that the navy successfully escorted a tanker through the strait, boosting stock prices and calming oil markets. However, Gray then retracted the social media announcement after other officials stated there was no military escort, causing prices to fall again. Efforts to resume traffic through the strait were complicated by intelligence reports that Iran was preparing to mine the strait, according to the NYT.
The Thailand government sought an apology from Iran for hitting a ship in the Strait of Hormuz. Several people were arrested in Iran for collaborating with Israel and the US.
Topics: #nyt
