Excellent strategic framework, particularly the distinction between counterforce and countervalue warfare. One dimension worth adding to the "Day the World Economy Stood Still" section: the financial mechanism that makes the Hormuz closure binding isn't military enforcement alone — it's insurance market collapse. Over 50% of P&I clubs have canceled Gulf war-risk coverage entirely. Premiums for remaining coverage have surged multiple-fold overnight. The US Development Finance Corporation has deployed $20 billion as what amounts to an insurer of last resort — the first institutional admission that private markets cannot price this risk. This means even if the US were to militarily "clear" the Strait, commercial shipping can't resume until the insurance infrastructure reconstitutes. That's a weeks-to-months timeline regardless of military outcomes. It's the financial layer that transforms the tactical-vs-strategic framework you've laid out from a military question into an economic fait accompli.
Exactly right. This seems to have been entirely missed by many quite serious geopolitical and military analysts, including one from the hugely prestigious and well connected US think tank, the Council on Foreign Relations. In fact, it is trivially simple for Iran to restrict significantly traffic through the Gulf: they just have to make passage through it uninsurable, as you point out.
Thank you — and an important observation about the analytical blind spot. The insurance mechanism operates below the threshold of most strategic frameworks because it is commercial infrastructure, not military infrastructure. But it is precisely that commercial layer that determines whether trade routes function in practice.
The uninsurability point is key: once P&I clubs withdraw coverage, vessel operators face unlimited personal liability. No rational shipowner transits under those conditions regardless of military escort availability. That is what makes this a structural closure rather than a tactical blockade — it does not require a single missile to be fired.
Your broader framing of the counterforce versus countervalue distinction in this issue captures something essential about how economic warfare has evolved. Grateful for the series.
Very good piece. This isn't a criticism of you, but an additional point is that too little is made of any potential divergence of agenda between the US and Israel.
Trump may want Venezuela-redux, which a pliant central leader selected from the regime, but Netanyahu would prefer Iran to no longer be a functioning polity, and Israel is not just a 'plus support' akin to UK in Iraq.
It makes the ending of this war even less within Trump's discretion than you outlined.
Excellent Briefing! I have an addition to your Scenario 3: In the CNN interview i linked below an iranian official frames the strategy as rising the economic costs so high that other countries (presumably gulf states and/or china) would intervene as guarantors of a cessation of hostilies against iran and a lasting peace deal. This would solve the problem that iran cannot trust negotiated deals with US / Israel any more.
What do you guys think about that scenario? Not sure China would be willing to step in but the gulf countries could join the agreement and possibly declare the US cannot have bases on their territories. It would still be a humiliating defeat for the US though and i dont think the economic costs have been high enough for this scenario yet.
Our view in general is that, yes, a cessation of hostilities would require Iranian sign off, and that would require security guarantees for Iran. They could only come from non-US great powers, which means China and to a lesser extent Russia. Furthermore, the GCC states shifting from the US side of the ledger to the Iranian/Chinese would help. Herein lies the problem with conflict termination: that would be a resounding strategic defeat for Washington. Iran becoming a garrison state under Beijing's sponsorship? The US being thrust out of the Middle East save Israel? Ouch! They are therefore more likely to escalate than accept any such deal.
Re US "declare victory and move on" - doesn't happen until Israeli leadership cooperates, and if they do they will change their mind in 3 months.
Re "In this scenario, Iran would wish to impose conditions that gave it some reassurance that the US and Israel would not attack again in six months or five years" - I think it necessitates either Iran having nuclear weapons, or Iran hurting Israel with grave infrastructure and decapitation strikes. Full scale (conventional) strategic strike by Iran problematic because of Israeli nukes. Iran developing their own a slow process.
Very possible war goes on by default, with a generational test of energy markets as the side effect.
Your last sentence indeed has a ring of truth to it. From the Iranian perspective, they will have to suffer considerably more reduction in their capacity to fire back in order to consider relenting. And even then, it may be that they start hammering Gulf oil infrastructure directly as they approach that point. From the American perspective, it seems that the political and strategic costs of a ceasefire, given Iran has a vote and would require terms, means far more economic pain would be required to force a stop. Where does that leave us? A continuation for now, all things being equal.
The point about a fractured Iran (Israel's strategic endgame) leading to more, or at least the same, amount of regional instability and attacks on the Strait of Hormuz is a particularly important one.
Philip Pilkington made the point on the podcast a year or two ago about the Houthis' strikes on shipping in the Red Sea, and how this represented a massive historical shift in how naval blockades were enacted. No longer did you need the largest navy in the world; a selection of easy-to-produce and inexpensive drones and missiles allowed a non-state actor to have a completely outsized impact on the global economy.
I think the consequences of Iran becoming a failed state (even if this is unlikely) have not been fully understood by those in the global community whose main concern is the preservation of global trade and energy interdependence.
On a slightly different note, I'd like to ask about the likelihood that this disruption to global trade fits into some warped Trumpian plan to re-industrialise America and cut off its globalist legs, so to speak. With US control over Venezuelan oil seemingly secured (although mighty investment in old and inefficient infrastructure is desperately needed), and with Trump having made his desire for Greenland clear, could it be possible that this war and (if it continues) the collapse of the globalised economy as we know it might allow for the more ruthless imposition of this vision in the US?
I really don't want to give Trump any credit here (this war has been, in my view, a humungous cockup), but is this worth considering? It could be completely nonsensical, but I'd appreciate if someone could explain why!
Regarding your question about re-industrialisation, this will surely be a big hit to globalisation. But if anybody believes that this is Trump playing 13D Chess to get what he wants, I have a gleaming gold Dubai tower to sell them
good write up, the knife is currently in and doing damage and both pulling it out and once its pulled out are basically apocalyptic scenarios for the US- Israeli western block
Excellent strategic framework, particularly the distinction between counterforce and countervalue warfare. One dimension worth adding to the "Day the World Economy Stood Still" section: the financial mechanism that makes the Hormuz closure binding isn't military enforcement alone — it's insurance market collapse. Over 50% of P&I clubs have canceled Gulf war-risk coverage entirely. Premiums for remaining coverage have surged multiple-fold overnight. The US Development Finance Corporation has deployed $20 billion as what amounts to an insurer of last resort — the first institutional admission that private markets cannot price this risk. This means even if the US were to militarily "clear" the Strait, commercial shipping can't resume until the insurance infrastructure reconstitutes. That's a weeks-to-months timeline regardless of military outcomes. It's the financial layer that transforms the tactical-vs-strategic framework you've laid out from a military question into an economic fait accompli.
Exactly right. This seems to have been entirely missed by many quite serious geopolitical and military analysts, including one from the hugely prestigious and well connected US think tank, the Council on Foreign Relations. In fact, it is trivially simple for Iran to restrict significantly traffic through the Gulf: they just have to make passage through it uninsurable, as you point out.
Thank you — and an important observation about the analytical blind spot. The insurance mechanism operates below the threshold of most strategic frameworks because it is commercial infrastructure, not military infrastructure. But it is precisely that commercial layer that determines whether trade routes function in practice.
The uninsurability point is key: once P&I clubs withdraw coverage, vessel operators face unlimited personal liability. No rational shipowner transits under those conditions regardless of military escort availability. That is what makes this a structural closure rather than a tactical blockade — it does not require a single missile to be fired.
Your broader framing of the counterforce versus countervalue distinction in this issue captures something essential about how economic warfare has evolved. Grateful for the series.
Very good piece. This isn't a criticism of you, but an additional point is that too little is made of any potential divergence of agenda between the US and Israel.
Trump may want Venezuela-redux, which a pliant central leader selected from the regime, but Netanyahu would prefer Iran to no longer be a functioning polity, and Israel is not just a 'plus support' akin to UK in Iraq.
It makes the ending of this war even less within Trump's discretion than you outlined.
First. criticise away. We won't cry in the face of well made arguments.
Secondly, regarding Israel's aims, we did indeed cover this point in last week's Brief
Excellent Briefing! I have an addition to your Scenario 3: In the CNN interview i linked below an iranian official frames the strategy as rising the economic costs so high that other countries (presumably gulf states and/or china) would intervene as guarantors of a cessation of hostilies against iran and a lasting peace deal. This would solve the problem that iran cannot trust negotiated deals with US / Israel any more.
https://edition.cnn.com/2026/03/09/world/video/iran-kamal-kharazi-long-frederik-pleitgen-intldsk
listen from minute 3:30
What do you guys think about that scenario? Not sure China would be willing to step in but the gulf countries could join the agreement and possibly declare the US cannot have bases on their territories. It would still be a humiliating defeat for the US though and i dont think the economic costs have been high enough for this scenario yet.
Our view in general is that, yes, a cessation of hostilities would require Iranian sign off, and that would require security guarantees for Iran. They could only come from non-US great powers, which means China and to a lesser extent Russia. Furthermore, the GCC states shifting from the US side of the ledger to the Iranian/Chinese would help. Herein lies the problem with conflict termination: that would be a resounding strategic defeat for Washington. Iran becoming a garrison state under Beijing's sponsorship? The US being thrust out of the Middle East save Israel? Ouch! They are therefore more likely to escalate than accept any such deal.
Thanks! i don't disagree - looks like the global economy is doomed then
Re US "declare victory and move on" - doesn't happen until Israeli leadership cooperates, and if they do they will change their mind in 3 months.
Re "In this scenario, Iran would wish to impose conditions that gave it some reassurance that the US and Israel would not attack again in six months or five years" - I think it necessitates either Iran having nuclear weapons, or Iran hurting Israel with grave infrastructure and decapitation strikes. Full scale (conventional) strategic strike by Iran problematic because of Israeli nukes. Iran developing their own a slow process.
Very possible war goes on by default, with a generational test of energy markets as the side effect.
Your last sentence indeed has a ring of truth to it. From the Iranian perspective, they will have to suffer considerably more reduction in their capacity to fire back in order to consider relenting. And even then, it may be that they start hammering Gulf oil infrastructure directly as they approach that point. From the American perspective, it seems that the political and strategic costs of a ceasefire, given Iran has a vote and would require terms, means far more economic pain would be required to force a stop. Where does that leave us? A continuation for now, all things being equal.
The point about a fractured Iran (Israel's strategic endgame) leading to more, or at least the same, amount of regional instability and attacks on the Strait of Hormuz is a particularly important one.
Philip Pilkington made the point on the podcast a year or two ago about the Houthis' strikes on shipping in the Red Sea, and how this represented a massive historical shift in how naval blockades were enacted. No longer did you need the largest navy in the world; a selection of easy-to-produce and inexpensive drones and missiles allowed a non-state actor to have a completely outsized impact on the global economy.
I think the consequences of Iran becoming a failed state (even if this is unlikely) have not been fully understood by those in the global community whose main concern is the preservation of global trade and energy interdependence.
On a slightly different note, I'd like to ask about the likelihood that this disruption to global trade fits into some warped Trumpian plan to re-industrialise America and cut off its globalist legs, so to speak. With US control over Venezuelan oil seemingly secured (although mighty investment in old and inefficient infrastructure is desperately needed), and with Trump having made his desire for Greenland clear, could it be possible that this war and (if it continues) the collapse of the globalised economy as we know it might allow for the more ruthless imposition of this vision in the US?
I really don't want to give Trump any credit here (this war has been, in my view, a humungous cockup), but is this worth considering? It could be completely nonsensical, but I'd appreciate if someone could explain why!
Regarding your question about re-industrialisation, this will surely be a big hit to globalisation. But if anybody believes that this is Trump playing 13D Chess to get what he wants, I have a gleaming gold Dubai tower to sell them
Yes. As befits his place as the brains of the Multipolarity crew, Philip has been proven prescient.
good write up, the knife is currently in and doing damage and both pulling it out and once its pulled out are basically apocalyptic scenarios for the US- Israeli western block
https://igreaterchina.substack.com/p/strategic-calm-vs-imperial-overstretch?r=gf5z1&utm_campaign=post&utm_medium=web&showWelcomeOnShare=true