The willingness of the Trump administration to let Iran keep selling oil shows that we’re not willing to endure pain in a war that it all about enduring pain.
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Transcript
If you want to understand how things are going in Iran and why it looks increasingly likely that the United States is going to lose this thing in every sense that matters, follow the oil money.
Hi, Paul Krugman with another not very happy update Sunday afternoon. Yesterday, Donald Trump threatened Iran with basically a massive war crime, saying that if they don’t open the Strait of Hormuz by 48 hours from the time of the post, which would be tomorrow, that he will order attacks on Iranian power plants, on civilian infrastructure, which is, you know, it is a war crime, not something that has never been done, not something that the United States has never done, but not something that you kind of just openly announce — that we’re going to try and terrorize you with this bombing campaign.
But at the same time, the United States is allowing Iran, and only Iran, to export oil, shipping it out through the Strait of Hormuz. The United States isn’t stopping other countries from doing it, but Iran is, and we are allowing them to grant safe passage only to ships that they approve going through that strait. Now that is wild. Sounds completely crazy. It’s not completely crazy, but what it is is it’s a demonstration of incredible weakness. Why would the United States allow Iranian oil to continue to be exported? Or shouldn’t we be trying to, you know, we’re at war with these people, and their revenue base depends basically on selling oil. So why are we allowing them to do that? It would be very easy as a matter of military force for the United States to just stop those oil exports.
And the answer is that, well, the two million barrels a day or something like that that Iran is managing to export are two million barrels a day of world oil supply. And we’re in a world in which the total supply to the world market is down substantially. down something like 10 million barrels or more per day because of the closure of the straits to everybody but the Iranians. And the United States is afraid to worsen the shortage by stopping the Iranians from selling oil, presumably because the Trump administration is afraid of the political backlash from higher gas prices. It’s already frantic enough to threaten war crimes in order to try and get oil flowing and gas prices down. But they’re apparently frightened enough of gas prices that they’re willing to allow the enemy to keep making money selling oil in order to keep those prices somewhat lower than they would otherwise have been.
That’s an admission, implicitly, of enormous weakness. It’s an admission that the Trump administration is not willing to accept sustained pain as part of this war. They’re willing to drop bombs and all of that, but they’re not willing to accept economic pain in the United States, even enough to shut off the revenue flow to the Iranian government.
And this war is fundamentally about who can stand the pain. It’s the United States doing lots of damage to Iran, but the Iranian government seems to think it can handle that. And the Iranians trying to inflict enough pain through hurting the world’s supply of oil that the United States ceases and desists.
And given the behavior, who would you bet on in this situation? So this is looking, I don’t want to say this, right? I mean, I do not want to see, obviously for domestic political reasons, I don’t want a Trump victory parade.
But a world in which the United States loses this war is going to be really a very dangerous world for all of us. But I’m afraid that that’s the direction we’re heading.
Have a nice rest of your weekend.
