The U.S. Is Walking Into Iran’s Escalation Trap

“I feel like a jackass caught in a Texas hailstorm -- I can’t run, I can’t hide and I can’t make it stop.” U.S. President Lyndon B. Johnson’s desperate comment to aide, Bill Moyers, came after a massive and sustained aerial bombing campaign in North Vietnam -- codenamed ‘Operation Rolling Thunder’ -- had failed in its aim of pressuring the North Vietnamese leadership into peace talks to end the spiralling conflict that became the 19-year Vietnam War. Shortly after, on 8 March 1965, following advice from his military advisers, Johnson authorised the deployment of 3,500 U.S. combat troops on the ground in South Vietnam with the explicit mission of protecting the air base the Americans were using for the bombing raids they were conducting against North Vietnam -- the first use of regular American soldiers in the country, over and above the military advisers that were already operating there. By the end of that year, nearly 200,000 U.S. troops were committed in-country, highlighting the truth behind Johnson’s earlier comment to his National Security Advisor, McGeorge Bundy: “It’s damn easy to get into a war, but it’s going to be awful hard to ever extricate yourself if you get in.” The military advice had been that it is impossible to win a war with air power alone, which is true -- not a single war has been won in such a fashion. Over 60 years on, and five months after the onset of current U.S. President Donald Trump’s ‘Operation Epic Fury’ aerial bombing campaign, senior security sources in Washington and London have told OilPrice.com that he faces the same dilemma as Johnson. “It’s pretty clear now that Iran won’t capitulate militarily, and they won’t give an inch on getting everything they asked for [in the 14-point memorandum of understanding for peace], because they see anything other than a surrender as a victory,” one senior Washington-based source who works closely with the U.S. Treasury exclusively told OilPrice.com last week. “So, Trump’s options are extremely limited now,” he underlined. The most immediate problem Trump is the effective closure of the world’s key energy transit route, the Strait of Hormuz, through which up to 30% of the globe’s oil has historically been shipped and around 10% of its liquefied natural gas (LNG). Regardless of the optimistic soundbites from the White House and US Central Command (CENTCOM) that the waterway “remains open” and encouragement for ships to use a supposedly U.S.-secured southern corridor, the reality is that global shipping firms see the Strait as a lethal gamble. As analysed by OilPrice.com, meaningful workarounds for moving oil through other routes are at least two years away, and the short-term measures to keep oil prices more subdued than they would otherwise be are running out fast. Astonishingly, according to a London-based senior energy security source who works closely with the U.S. administration, Trump’s political advisers downplayed the likelihood of Tehran closing the Strait of Hormuz if attacked. His military advisers did, though, highlighting Iran’s response in 1983 during the peak of the Iran-Iraq War after France supplied Iraq with advanced Super Étendard fighter jets and Exocet anti-ship missiles, giving Iraq the capability to heavily target Iran's primary oil export infrastructure at Kharg Island. At that time, Iran’s government declared that if Iraqi attacks crippled its ability to sell oil, it would retaliate by cutting off the global energy supply. Then-President Ali Khamenei backed up the government’s warning, saying that if Iran’s oil exports were cut to zero: “The Persian Gulf will be closed altogether, and no one will be allowed to export oil from this region.” Related: Oil Market's Glut Narrative Just Blew Up As disastrous as the effective closure of the Strait of Hormuz already is, it is set to become much worse. The Iran-backed Houthis in Yemen last week announced a maritime blockade on Saudi Arabian ports and ships using the Bab el-Mandeb strait at the entrance to the Red Sea after claiming that the Kingdom targeted civilian infrastructure alongside the military targets struck by Riyadh in Hodeida and Kamaran island. This 16-mile-wide waterway flows between the west coast of Yemen on the one side, and the east coasts initially of Djibouti and then of Eritrea on the other, before it joins the Red Sea, and historically has seen up to 12% of total global seaborne-traded oil flow through it and roughly 8% of the world’s LNG. Although Houthi spokesman Mohammed Abdusalam stated that there is no closure of the Bab el-Mandeb Strait for the global fleet, the notion of a selective blockade on it is just an illusion. In reality, the Houthis could easily close the entire Strait overnight by ‘accidentally’ sinking a single VLCC due to the ‘misidentification’ of a vessel, a ' malfunctioning’ drone or missile, or a ‘drifting’ sea mine, among the many explanatory options open to them. Moreover, even without these, the blockading of Saudi Arabia’s record 4 million barrels per day of crude oil that it was exporting through the East-West pipeline straight to the Red Sea port of Yanbu, using the Bab el-Mandeb Strait, has cut off this escape hatch for it from the blockaded Strait of Hormuz. The implication for vessels from other countries is clear, which is why many commercial ships immediately aborted their transits through the Bab el-Mandeb Strait and reversed course, and why the oil price spiked again through US$100 per barrel at that point. “It’s difficult to believe that Iran’s not behind this [the Houthi actions against Saudi ports and ships] as a means to drawing the U.S. further into the conflict,” said the London-based source last week. “They know how important oil prices are to Trump, and they have been angling to get him to commit troops on the ground from day one of the conflict, and that’s why it’s so difficult for him to just walk away,” he added. More specifically, the importance to Trump of further rises in the global oil price is twofold -- one economic reason and one political one, although the two are interlinked. As analysed in full in my latest book on the new global oil market order, historical data shows that every US$10 per barrel or so change in the price of crude oil results in around a 25-30 cent change in the price of a gallon of gasoline. And for every 1 cent that the average price per gallon of gasoline rises, more than US$1 billion or so per year in consumer spending is lost, so damaging the economy. The political importance of this is that since 1896, the sitting U.S. president and his party have won re-election 11 times out of 11 if the economy was not in recession within two years of an upcoming election. However, sitting U.S. presidents who went into a re-election campaign with the economy in recession won only once out of seven occasions. The same pattern pertains to mid-term elections too, and although Trump cannot seek re-election, he will not only want to avoid being a lame duck figure in his last two and a half years but may also envision a Trump political dynasty that will require the goodwill of the Republican Party. Previous wargaming discussions in the Pentagon over Iran involving Trump apparently focused on ‘limited landings’ of U.S. troops in key coastal areas in and around the Strait of Hormuz to secure unimpeded transit for vessels through that waterway, according to the Washington- and London-based sources exclusively spoken to by OilPrice.com. However, as President Johnson found back in 1965 -- and countless other leaders have discovered before and after that -- there are three distinct problems in doing so. The first, as the French found in ?i?n Biên Ph? in its own Vietnam adventure in 1954, was that a standing foreign force in a foreign country -- regardless of size -- is easy prey for the resident forces across a country to destroy via a siege bombing campaign. Of the near-11,00 troops in place before the perpetual bombardment for 56 days from North Vietnamese forces began, around a third were killed, with the remainder being captured after the French surrender. It has since become the military gold standard of ‘enclave theory’ catastrophe and the limitations again of air power. The second problem is that limited troop numbers rarely stay that way because -- even before the dramatic reduction of the ‘safe rear’ part of a military position by the extension of the lethal front line by drone technology -- more troops would eventually be required to protect the operating positions established by initial troop landings. And the final problem is that such manoeuvres are often expected by the indigenous enemy. This is certainly the case with Iran, with the Commander-in-Chief of the Iranian Army, Major General Amir Hatami, saying in early April that: “In the event the enemy attempts a ground operation, no one should survive.” By Simon Watkins for Oilprice.com More Top Reads From Oilprice.com