Who blinks first in the standoff could determine whether the eight-week war ends soon or escalates into something worse. It is a new stage of a conflict that points to prolonged pain for Iranians, Americans and a global economy that is being starved of critical energy supplies.<\/p>\n
\u201cThe battlefield has moved from the military to the economy, for right now,\u201d said Dan Pickering of Pickering Energy Partners, an energy-focused financial services platform. \u201cWe\u2019ve stopped dropping bombs, and now we\u2019re just trying to squeeze each other. And I think both sides are probably showing more resilience than you would have expected.\u201d\u00a0<\/p>\n
But Iran has the clear advantage when it comes to enduring economic pain, most experts on the global oil trade and Iran\u2019s economy told MS NOW.<\/p>\n
\u201cThe Iranian economy obviously has been sanctioned, isolated for a long time,\u201d said Alex Vatanka, a senior fellow at the Middle East Institute. \u201cIt\u2019s a regime that doesn\u2019t really care that much in terms of public opinion in Iran, or it doesn\u2019t have to, doesn\u2019t feel it needs to answer to its own people. So it\u2019s positioned much better than the United States as a democracy where public opinion matters. People\u2019s anger will be felt at a political level.\u201d<\/p>\n
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Aaron David Miller, a senior fellow at the Carnegie Endowment for International Peace and veteran Middle East expert, agreed that Iran\u2019s authoritarian regime, which recently killed up to 30,000 pro-democracy protesters, could endure more economic pain because it is not answerable to its people. \u201cThere is no political accountability,\u201d he said.<\/p>\n
Pickering added that the U.S. fumbled its own economic leverage by delaying the blockade.<\/p>\n
\u201cThis has been squeezing the globe financially longer than it\u2019s been squeezing Iran because the U.S. didn\u2019t want to take those extra barrels off the market, and they allowed them to be produced even while we were bombing them,\u201d he said. \u201cMy fear is the Iranians have more staying power than the U.S.\u201d\u00a0<\/p>\n
But Robin Brooks, a fellow at the Brookings Institution and former foreign exchange strategist at Goldman Sachs, predicted that the U.S. could endure more economic pain than Iran.\u00a0\u00a0<\/p>\n
\u201cThe consensus is that Iran has more leverage because the regime doesn\u2019t care about the welfare of its own people, but I think that\u2019s debatable,\u201d Brooks told MS NOW, acknowledging that other experts disagree with him. \u201cThe blockade has a medium-term effect via lower oil exports and a short-term effect via panic and capital flight. This panic channel hits now and compounds all the damage the war has done to Iran. So Iran is vulnerable.\u201d\u00a0<\/p>\n
Others are skeptical that panic will materialize. Ellen Wald, senior fellow at the Atlantic Council\u2019s Global Energy Center, argued that Iran\u2019s decades under sanctions have made the country unusually tolerant of economic hardship.<\/p>\n
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\u201cIran\u2019s economy has been under duress for decades,\u201d Wald told MS NOW. \u201cIranians and Iran, they\u2019re very used to sacrifice, and so I think that their ability to tolerate economic hardship is greater than other economies in the world.\u201d At the same time, Wald noted the U.S. is more insulated from the global effects since it is less reliant on oil from the Persian Gulf, and thus, \u201cthe pressure to blink will not be as great.\u201d<\/p>\n
The U.S. blockade will eventually cut off Iran\u2019s oil revenues, said Barbara Leaf, a former career foreign service officer who served as the Biden administration\u2019s top State Department official for the Middle East. But decades of sanctions \u2014 including sweeping ones imposed by Trump in 2018 \u2014 have made parts of Iran\u2019s economy far less dependent on foreign trade and more resilient to external shocks.<\/p>\n
The more pressing concern, Leaf argued, is a \u201cticking clock\u201d on the American side: If the Strait of Hormuz remains closed past the end of April, she said, shortages of gasoline, other refined products and fertilizer already spreading through Asia and other parts of the world will begin arriving in the U.S. as significant price shocks.<\/p>\n
\u201cThey\u2019ve been under lacerating sanctions since 2018,\u201d Leaf told MS NOW, referring to Iran. \u201cI just don\u2019t see them breaking fast enough compared to the ticking clock on our side of the table.\u201d<\/p>\n
On Thursday, Trump scoffed at reporting that he is \u201canxious\u201d to end the war with Iran.\u00a0<\/p>\n
\u201cPlease be advised that I am possibly the least pressured person ever to be in this position,\u201d the president wrote on Truth Social<\/a>.\u201d I have all the time in the World, but Iran doesn\u2019t \u2014 The clock is ticking!\u201d<\/p>\n The clock is what Pickering is watching most closely. He does not think Trump can fold now that Iran has learned it can wield the Strait of Hormuz as a lever of influence \u2014 but $5-a-gallon gasoline, potentially just a month or two away, could pressure the president to change course.<\/p>\n \u201cThat, to me, is just so visible and so prevalent for everyone that it\u2019s going to force the change in strategy,\u201d Pickering told MS NOW. \u201cFor the Iranians, we don\u2019t know yet how bad is bad, but I think their willingness to allow their people to feel pain is probably fairly high at this point.\u201d<\/p>\n \t\t\t\t\t\t\t
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<\/p>\n","protected":false},"excerpt":{"rendered":"A race is on to see whose economy breaks first in the war with Iran. President Donald Trump…\n","protected":false},"author":2,"featured_media":603464,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-603463","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/603463","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=603463"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/603463\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/603464"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=603463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=603463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=603463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}