After the Iran/US truce, Trump put a blockade on vessels going to Iran for oil. This resulted in Iran not opening the Strait of Hormuz as they had originally intended.

At first the blockade was not very effective, but it appears to have tightened and is now stopping most oil export from Iran. It appears that it will take over 2 months for oil storage to fill up.

There are two suppositions here, on the US part:

1) Iran needs the money;

2) Iran can’t shut down oil production without harming its oil fields in the long run.

Iran does, of course, need the money, but it isn’t completely reliant on shipping oil for income and it seems likely it can get enough to keep the key parts of the government and the military running.

As for the second, a detailed analysis shows that Iran’s fields mostly aren’t type that are damaged by shut downs. Key graph from a long analytical piece.

This analysis suggests that the U.S. blockade of Iran’s oil exports will not cause catastrophic, or even very serious, damage to its upstream oil industry. If and when the blockade is relaxed, Iran will probably be able to resume production promptly at about 70 percent and regain most of its pre-war capacity within a few months.

It’s also worth noting that Iran does have a military option. While the US blockade is widespread, for it to be effective some ships have to be in range of Iran’s missiles and drones. It wouldn’t be all that hard to deplete the on-ship stocks of missile interceptors and force a withdrawal, and it’s quite possible Iran could sink some ships if they attacked with enough drones and missiles to overwhelm defenses.

Iran has, historically, been unwilling to start hostilities. It has always absorbed the first hit. Will it continue to do so? Is it willing to end the cease-fire? The new leader is far more hawkish than the old one, and while Iran still has “moderates” in some positions of power, hard liners are far more powerful than they were under the previous supreme leader.

What we have is an endurance race. Can the US withstand high priced oil longer than Iran can survive without significant oil exports?

If Iran breaks first, the question is whether it will offer the US a better peace deal, or if it will go back to the military option.

Under the old leadership the smart bet would have been concessions. Under the new leadership? I don’t know. If it were my decision, I’d go kinetic. There’s no deal Trump is willing to give while he thinks he’s winning that will not cripple Iran in the long run.

For Iran to win, Trump has to believe America has lost. And right now he thinks America is winning.

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