[This Iran war post yet again launched before complete, today due to Links. Please return at 8:00 AM EDT for the finished version]
Despite the furor in the US over the shock resignation of MAGA diehard Joe Kent, #2 at the Department of National Intelligence, and sticking the knife in Trump and twisting by saying that Iran posed no threat to the US and we went to war because Israel, this event is a highly-visible mark-to-market of falling support for the conflict in the US, as opposed to something that will change its trajectory.1
Despite efforts at intensification, both sides in the Iran war for the moment are staying on the same level in the escalation ladder, in an attritional slugfest. The Israeli assassination of military chief Ali Larijani is a continuation of its futile efforts to bring Iran into leadership disarray via decapitation strikes. But commentators also pointed out that Larijani, like Ali Khamenei, was moderate, and Larijani could conceivably have supported de-escalation once Iran felt it had made its point. Thus many experts contend that Israel martyred Larijani to make the possibility of some sort of settlement even more remote. For instance:
Why did Israel target Ali Larijani, and what are the implications if it is confirmed that he was killed?
I see three potential motivations behind the assassination attempt:
1. Israel is trying to literally kill off Trump’s off ramps: Larijani was not only a key figure within…
— Trita Parsi (@tparsi) March 17, 2026
And from Bloomberg in Will Larijani Killing Weaken Chance of US Exit Strategy for Iran War?:
Israel’s killing of Ali Larijani leaves Iran’s wartime leadership largely in the hands of hardliners who may be less likely to seek a diplomatic pathway out of the war.
Larijani’s death could block potential diplomatic efforts to end the war quickly, as he was seen as a figure who could potentially act as a conduit to talks.
The killing of Larijani may accelerate the empowerment of hardline and security elements within the Islamic Republic of Iran, with his death potentially leading to further hardline consolidation at the top.
On top of that, in response, Iran has simply and publicly doubled down on it planning for assassinations:
Similarly, the US show of force by sending in 5,000 pound bombs to hit what it claims were missile sites on the Strait of Hormuz may excite the hawks but is ineffective in reopening the Strait. Iran has among other things underwater drones that can sink ships. Former US army officer Stanislav Krapivnik has colorfully described how easy it would be to drive an old truck to the cliffs overlooking the Strait of Hormuz with drones operated by young men who’d just lost family members in the war, and have them take out vessels in the Strait.
Having said that, and I will return to this incident later in the past (or in comments), since the report broke as I was still composing this article, there may have been a failed attempt to move up the escalation ladder, in the form of a strike on the grounds of the Bushear nuclear plant. This may be, like the attack on Kharg Island, which did not target the critical oil infrastructure, intended as threat display. From Associated Press:
Iran and Russia both allege a projectile struck the grounds of the Bushehr nuclear power plant in the Islamic Republic, raising the specter of a radiological incident as Tehran’s war with Israel and the United States rages.
Neither Iran nor Russia say there was any release of nuclear material in the incident on Tuesday evening, but it again underlines a longtime worry of Iran’s neighbors — that the power plant on the shores of the Persian Gulf could be hit by either an attack or an earthquake…
Russia’s state-run Tass news agency quoted Rosatom CEO Alexey Likhachev late Tuesday as claiming “a strike hit the area adjacent to the metrology service building located at the Bushehr Nuclear Power Plant site, in close proximity to the operating power unit.” Russian technicians from Rosatom operate the plant, using Russian-made, low-enriched uranium.
“There were no casualties among Rosatom State Corporation personnel,” Likhachev said. “The radiation situation at the site is normal.”…
The Atomic Energy Organization of Iran later issued a statement saying “no financial, technical, or human damage occurred and no part of the plant was harmed.” Iran blamed the incident on the United States and Israel, Tass later reported.
The International Atomic Energy Agency, which has had its inspections of Iran restricted over years of tensions over Tehran’s program after Trump unilaterally withdrew America from the 2015 nuclear deal with world powers, issued a carefully worded statement early Wednesday.
“The IAEA has been informed by Iran that a projectile hit the premises of the Bushehr NPP on Tuesday evening,” the United Nations agency said, using an acronym for nuclear power plant. “No damage to the plant or injuries to staff reported.”
This dangerous provocation seems set to produce even more harsh Iranian strikes, even after it upped the ferocity of its pounding of Israel and Gulf states after Larijani was killed.
Even so, despite the kinetic action, what will prove to be dispositive is the tsunami of economic effects about to overwhelm and even potentially sweep away significant parts of the global. Many are in the phase where the water recedes far far further out than normal, and do not recognize what that portends, that they need to flee for higher ground if they can. Admittedly, that retreat is also providing a bit of a spectacle in revealing who has been swimming naked.
But (to mix images) as William Gibson observed, “The future is already here – it’s just not evenly distributed.” Some economies and sectors are already experiencing serious dislocations due to the Strait of Hormuz closure, and can infer the trajectory if things don’t change very soon.
But unlike a real-world tsunami, the continuation of the closure has effects as if the ocean retreated even further from land accumulating even more weight of water before it turns and smashes into the shore.
Yet denialism and lack of comprehension, even among otherwise well-informed commentators reigns even as the destructive forces become more powerful. The Trump Administration’s version of the Friedman unit is its patter that the war might take another three, at worst six weeks, as if a closure of the Strait for that long would not be devastating. Israel is also talking in terms of a few weeks, although apparently also occasionally messages that the war in Lebanon might take as long as a year,
By contrast, Professor Mohammed Marandi has said that Iran is prepared to fight past the midterms and into 2027.
Iran had also warned before the conflict began that if it was attacked, it would close the Strait of Hormuz for at least two to three months.
Three months of closure, given how long it would take to get oil and gas production back to their old normal and unsnarl shipping, translates into at best a very deep recession. Six months would mean a global economic collapse.
If you did not view this short clip in comments yesterday, please watch it now. Even though Iran has offered some variants on themes for its demands for ending the war, as you can see below, it has two essential requirements, the end of US military bases in the Middle East, and regime change in Israel:
2024 IRAN WAR PREDICTION WAS INSANELY ACCURATE
Listening to Iran’s Seyed Mohammad Marandi in 2024 predicting EXACTLY what would happen if Israel/U.S. started war with Iran.
Man, that was not a bluff. pic.twitter.com/dI0LWXE6cU
— Radar 𝘸 Archie🚨 (@RadarHits) March 14, 2026
Astonishingly, even Foreign Affairs, the premier US foreign policy magazine, is warning the US cannot win, in a piece larded with Iran-hate. From How America’s War on Iran Backfired; Tehran Will Now Set the Terms for Peace Foreign Affairs. Please take the time to read it in full.
Trump likely wants to declare victory soon. The Iranian military has been severely degraded. Israel may be running low on missile interceptors, and keeping global markets stable will require reopening the Strait of Hormuz, which Iran has declared closed to its enemies. But he cannot force surrender on a government that refuses it. Even after the heavy damage to Iran’s military, the regime that Khamenei put in place has powerful incentives to pursue continued conflict, and it retains a variety of tools to sustain a war of attrition.
Larry Wilkerson has had several terrific talks in the past 24 hours. Even though his second one, with Glenn Diesen, is in some ways more consequential, in the first with Nima he discusses how Netanyahu is committed to the war even if it results in the destruction of Israel. He also discusses at length how the US depends on NATO allies for key specialty functions like minesweeping, what convoy operations look like, how tabletop exercise for forcing open the Strait of Hormuz showed it would be a bloodbath, and dynamics in the region.
Wilkerson also discusses what he sees as progressing dementia in Trump, including that he has been told that those who get near Trump say he smells putrid.
Wilkerson’s later chat with Glenn Diesen looks more at the geopolitical consequences. He also discusses at some length the operational as well as political impossibility of reinstituting the draft on any useful timetable:
And another cheery sighing on how the war is going from Hindustan Times:
Briefly, some additional kinetic war sightings before turning to Joe Kent and the increasing potential for very dire economic outcomes.
On the US deploying bunker busters along the Strait of Hormuz. From the BBC’s live blog:
US hits Iranian missile sites near Strait of Hormuz
The US military says it has struck Iranian missile sites along the Strait of Hormuz with powerful bombs that are capable of penetrating bunkers.
In a post on X, the US Central Command said US forces had “successfully employed multiple 5,000-pound deep penetrator munitions on hardened Iranian missile sites” along Iran’s coastline of the strait.
“The Iranian anti-ship cruise missiles in these sites posed a risk to international shipping in the strait,” the US military says.
Iran’s effective closure of the waterway – through which roughly 20% of the world’s oil shipments move – has sharply disrupted maritime traffic and contributed to rising global oil prices.
The huge bombs are likely to be similar to the “bunker busters” that the US used when it attacked three underground nuclear sites in Iran last year.
Unlike conventional bombs, bunker busters are not designed to explode in the air, on the ground or surface of a target. They are encased in heavy, hardened steel and are made to penetrate deep into the ground before detonating.
And:
BREAKING 🚨
🇺🇸 🇮🇷 U.S. forces struck underground Iranian missile sites along the Hormuz coastline using 5,000-lb GBU-72 bunker-buster bombs, per CENTCOM.
Targets included hardened anti-ship positions threatening commercial shipping.
🎥 Representative video shows the strike… pic.twitter.com/jXw5cvOH5a
— FalconUpdatesHQ (@FalconUpdatesHQ) March 18, 2026
On Iran’s retaliation for the Larijani murder:
More:
Iran launched 100 missiles on Israel, carrying between one and two tons of explosives, in retaliation to the target assassination of Ali Larijani.
— Elijah J. Magnier 🇪🇺 (@ejmalrai) March 18, 2026
Iran is continuing to pound the Gulf States, in particular the UAE. You’ll notices a bizarre whistling-past-the-graveyard posture in this segment, of “Of course we will rebuild.” I am told Kuwait never recovered from its early 1990s invasion by Iraq.
Note also that the segment above stresses the success in interceptions. Pray tell, how long can that continue?
On background developments, from VT Foreign Policy in Russia’s $900M Missile System Just Landed in Iran — America Has No Defense Against It:
Russia just delivered a $900 million integrated weapons package to Iran.
• 4 S-400 battalions with 384 missiles
• 24 Iskander-M launchers threatening every US base in the Gulf
• 8 Bastion-P coastal systems with 64 anti-ship missiles
• Nebo-M radar that can detect stealth aircraft at 600km .
The Pentagon has privately admitted: “Assume all offensive operations are now contested.”
Russia just delivered a weapons package to Iran that makes everything America has built in the Middle East over the last 40 years strategically obsolete.
Not a single missile system, not a symbolic transfer, not the kind of arms deal that shifts balance marginally and gives both sides time to adjust. Russia delivered an integrated $900 million combined strike and defense architecture that the Pentagon has privately admitted it cannot defeat.
Last but not least on the kinetic war front:
JUST IN: The US Navy is investigating whether sailors aboard the USS Gerald R. Ford deliberately set fire to their own ship to end the deployment.
That is the sentence. Read it again.
The $13 billion carrier, the most expensive warship ever built, is now diverting to Souda… https://t.co/LOop7FJIYG pic.twitter.com/VBGKPtZ4QY
— Shanaka Anslem Perera ⚡ (@shanaka86) March 17, 2026
On Joe Kent, perhaps I am unduly cynical, I see this event as more a confirmation of of political deterioration of Trump’s position, already reflected in his falling polling numbers, than likely to produce more fractures on its own. Recall that some compared the Kent resignation to Charlie Kirk deciding he had to abandon his support for Israel, which became public despite him being assassinated. Gabbard disgracefully and quickly fell in line (see for instance Gabbard: Trump concluded Iran posed an imminent threat from The Hill). Larry Johnson excoriates her in Joe Kent Hero… Tulsi Gabbard, a Contemptible, Craven Zero.
His resignation letter is embedded in this tweet:
After much reflection, I have decided to resign from my position as Director of the National Counterterrorism Center, effective today.
I cannot in good conscience support the ongoing war in Iran. Iran posed no imminent threat to our nation, and it is clear that we started this… pic.twitter.com/prtu86DpEr
— Joe Kent (@joekent16jan19) March 17, 2026
Many commentators, as Wilkerson did in both his talks above, stressed that Kent was the epitome of MAGA, and a pretty close contact of Trump’s, which makes his claim that that he didn’t know much about Kent characteristically disgraceful.
The New York Times (see Joe Kent, a Top U.S. Counterterrorism Official, Resigns Over the Iran War ) and The Hill, among many others, were fast out with coverage, with The Hill also reporting on speedy pushback (Johnson refutes Joe Kent on Iran: ‘There was clearly an imminent threat’ in The Hill, for instance).
However, Kent is also a from-central-casting epitome of the current US fantasy of a warrior, sure to widely interviewed.
I expect Kent to get the John Kirakou treatment, of the Administration finding a pretext to prosecute him.
Now to the economic front. The Financial Times has a fine piece on the way real world oil prices are becoming disconnected from “paper oil.” From Oil in Oman soars above $150 as buyers rush to replace Gulf barrels :
Oil buyers are scrambling to replace supplies from the Gulf, causing price leaps for grades around the world from Norway to Kazakhstan and driving crude traded in Oman to a record of more than $150 a barrel.
The closure of the Strait of Hormuz due to the war in the Middle East has severed about a fifth of the world’s oil production from global markets, boosting demand for grades of crude with similar characteristics to those produced in the Gulf.
The growing disruption to supplies has driven a number of regional price benchmarks to all-time highs, even as global marker Brent has fallen back to just above $100 a barrel after jumping to nearly $120 in the early stages of the Iran war.
“It’s sheer physical scarcity driving prices,” David Fyfe, chief economist at Argus Media.
The price of a barrel of oil in Oman — which exports from ports outside the Strait of Hormuz — soared to nearly $154 on Tuesday, driven by intense competition for the small volumes still leaving the Middle East….
Buyers seeking alternatives to Gulf crude have also had to pay far more than usual to transport cargoes because of increased demand for tankers, longer routes and soaring shipping fuel prices.
Even when a comparable oil grade is available, some refineries might not want to use it because they were unsure how the switch would affect their output, said Philip Jones-Lux, senior analyst at Sparta Commodities. Older refineries in Japan, Thailand, Indonesia, Vietnam and some in Singapore might fall into this category, he said.
The cost of crude for Asian refineries had “roughly doubled” since before the war, Jones-Lux said.
As the war progresses, the difference between prices quoted on widely used oil benchmarks Brent and US WTI and prices paid for physical deliveries has become more stark.
Those benchmarks have not risen as much in part because they reflect prices for light crude with low sulphur levels, whereas the trapped oil in the Gulf is typically heavier and with more sulphur content.
“The Hormuz crisis mostly impacts medium-sour crude flows to Asia and there are very limited options to offset flows,” Ivan Mathews, head of APAC analysis at energy data company Vortexa.
Brent and WTI futures also reflect prices for oil delivered in May, by which time some traders hope that flows through Hormuz will have at least partially resumed, whereas physical purchases need to arrive much sooner.
“Right now it feels like the paper and the physical market has dislocated,” said Ole Hansen, head of commodity strategy at Saxo Bank. “[This is] the biggest disruption since the 1970s and Brent can barely hold above $100.”
This is a much weaker manifestation of the result foretold in The Naphtha Heart Attack article we discussed last week, which argued that the very light crude of WTI would not just fall in price but even violently invert. So this article could prove to be correct, but seems more likely to have overstated its case of what happens as heavier crudes are even more fiercely bid up and go into shortage as now-much-less-desired light crude is in comparative oversupply.
You do not have to look hard to find signs of worry and rising distress in Asia. A few sightings:
From a Nikkei e-mail: South Asia Watch: Gas and Goldilocks:
India’s restaurants have emerged as the highest-profile victims of the country’s current liquefied petroleum gas (LPG) shortages stemming from the Iran war, although the hit to energy supplies has affected the ceramics industry and others, too… its LPG imports through the strait.
Panic gripped India last week as LPG supplies to restaurants were stopped and rerouted to homes, with news reports of the hoarding and trading of LPG cylinders on the black market…
“Brent crude oil settling at [$100 per barrel] may eventually necessitate the raising of retail fuel prices, which will directly feed into CPI (consumer price index) inflation,” economists at Barclays said in a note to clients last week.
“We estimate a direct impact of about 0.5 percentage points from a 10% increase in petrol and diesel prices,” the note added. India has yet to pass on a significant portion of the oil price rise to consumers….
Although wins like temporary passage of oil tankers through the Strait of Hormuz help, they only serve as Band-Aids over a gaping wound. For India, which needs to keep up growth rates to employ its young population and raise income levels, an end to the war is the only solution.
Every Wednesday a public holiday: Sri Lanka announces measure to conserve fuel Hindustan Times (hat tip retaj)
Diesel crisis hits services, everyday life Bangkok Post
OilPrice has an informative article on the considerable knock-on effects of the seize-up of oil flows and oil payments. I vastly prefer its “petrocapital” concept to the very misleading invocation of “petrodollar”. It puts the focus squarely on what State Department now-declassified archives (including meeting notes from negotiations with Saudi officials) show that Kissinger and other top officials worried about during the oil shock: how the Saudi massive capital surpluses would be recycled. The US priority was that a large portion not go into the accumulation of investments that would give the oil producing states political leverage, like equities, factories, farmland, but bonds, which produce income but not ownership rights.
From How the Iran War Could Trigger a Global Credit Crunch:
The Iran war is disrupting the petrocapital cycle—the flow of oil revenues from Gulf producers into global financial markets—raising the risk of a global credit crunch.
Ongoing attacks, the Strait of Hormuz closure, and financial center instability (e.g., Dubai) are weakening Gulf economies and limiting their ability to recycle capital into global markets.
With financial systems already under strain, reduced petrocapital flows could amplify market volatility, tighten credit, and trigger broader economic shocks beyond energy…
Petrocapital in the 70s and 80s was best understood as a regular flow of invested profits from oil exporters. As globalization set in and Persian Gulf leaders sought to diversify their economies away from oil, a growing stream of Middle Eastern capital originating from financial hubs like Dubai and Kuwait has since emerged. Countries like the United Arab Emirates have further encouraged these trends by courting investment in real estate and offering sanctuary for tax exiles, promises which were premised on the assumption that the Persian Gulf would remain stable, peaceful, and a safe place to invest or relocate. Increasing diversification has only encouraged these trends, and the Persian Gulf, before the war, was hailed as a major center for investment and financial capital, as attested by the estimated $1.4 trillion of assets held by the United Arab Emirates’ financial sector as of November 2025….
This disruption to both capital flows and regular operations comes just as global credit markets are already facing growing signs of turbulence. Global stock markets have posted steady declines as rising tensions in the region have fueled fears of a global energy crisis. This comes as debt markets show growing stresses, with one OECD official stating inflationary pressures, like those driven by the present energy crisis, would be a “big stress test”. Private credit markets are also increasingly running low on lucrative contracts and have been forced into tight competition over less and less desirable bids. Bond markets, as recently as the end of February, were also showing signs of high demand in the face of growing economic uncertainty, suggesting there already was a lot of money chasing a dwindling pool of safe assets before the war began.
Done for today. Back tomorrow!
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1 The analogy is the Nixon Administration Saturday Night massacre. But that triggered Nixon’s impeachment, when nothing of the sort will happen to Trump soon, if at all.
