$300 Billion

Billion with a B

that is the current price tag that Iran put on their proposal to stand down in the Strait of Hormuz and let things slowly return to some semblance of normal

I’ve been thinking on this, and the more I think, the more it sounds like an honest bargain

Before you all start lining up with claims of outrage about rewarding a “rogue regime” that sponsors regional proxies and the horrific things those proxies have done, allow me to say that you’re 💯 right about that

It is outrageous

And…

It’s still a bargain. Let me explain my thinking

Given the three broad options that the US has to resolve the situation, this is - by far - the least expensive, and is also the best opportunity for a long-term solution for the region as a whole

Wait, what?

Let’s walk through this

Option 1, inaction (allowing the situation to continue as it is, in the hope that Iran will somehow change their minds and become more amenable to US and Israeli demands)

In about six weeks - mid-July - most of the world’s strategic petroleum reserves run dry. China and Japan are the notable exceptions here, but for the rest of us? The buffers that have so far eased the economic impact of the supply shock will be gone. The economic impact of this on a global scale runs into the trillions. Trillions with a T. Oil futures that have been kept artificially low will adjust to match the actual spot prices that everyone is quietly paying already. The shortages of fertilizer, sulphur, helium, LNG - the industrial and agricultural inputs that underpin a big chunk of the global economy - become more acute. Six weeks is a very short runway, with a cliff sitting at the end.

Option 2, re-starting the kinetic war in the hopes that this will shift Iran towards being “more reasonable”

First, the war itself burns through billions of dollars a day in munitions alone.

Second, Iran has already stated that their targets, if this happens, will be the core infrastructure in the GCC States, and they’ve already demonstrated that they can achieve this, despite our best efforts (even a 95% interception rate means that 5% leak through and hit their targets). The economic costs of the resulting supply destruction (as opposed to the “simple” disruption we’ve experienced to date) quickly run to a global GDP loss comparable to the worst years of the Great Depression. And this is assuming that they don’t hit the desalination plants that most of the GCC States rely on for fresh water. Hit those and those states potentially have to actually evacuate their cities. This compounds the costs even further.

And there’s exactly zero guarantee that the strikes in Iran would actually achieve the intended goal, at least not before they cripple the global economy on a scale of years-to-decades

Option 3 - negotiated settlement based in the current terms in the table, or some close variation therof

Cost - sanction relief and reconstruction costs, some strategic embarrassment for the US and Israel, a slight shift in the dynamics of power and influence in the region

Compared to the other two? Seriously? This is a fire-sale level bargain.

Take the bargain and run with it. Call it a victory and walk away. Negotiate on the nuclear question towards something close to the JCPOA (that was already in place before Trump tore it up in a fit of pique because it had Obama’s name on the dotted line). This also creates a bit of a window towards nudging both Iran and Israel towards a broader settlement vis-a-vis Gaza, the Palestinians, and Lebanon (with the follow-on effect of addressing the horrific situation on the ground for all concerned)

Think about this.

Really think about this. Do the math yourself

And then tell me if you still think I’m wrong