THE RETURN OF THE GULF WAR / THE ECONOMIST

Middle East Dispatch: The return of the Gulf war

Gregg Carlstrom, our Middle East correspondent, on the reasons for the recent skirmishes

Photograph: AP

Many of you no doubt took a well-deserved holiday in August. 

So did the Gulf war, which went on an extended break—until Sunday night, when America and Iran traded fire for the first time in a month.

At first glance it looked like a rerun of their early-summer skirmishes. 

America says it bombed rocket launchers with which Iran was preparing to mine the Strait of Hormuz (an unorthodox, but real, way of emplacing naval mines). 

Iran retaliated by bombing American bases in Jordan.

But the backstory matters. 

Donald Trump’s administration spent the previous two weeks arguing that it had broken Iran’s grip on Hormuz. 

It claims that more than 8m barrels a day (b/d) of crude oil are slipping out. 

The scheme reportedly relies on ship-to-ship transfers, since it is still too risky to bring the biggest oil tankers, known as VLCCs (very large crude carriers), through the strait. 

Instead smaller tankers ferry the stuff past Hormuz and load it onto VLCCs anchored in the Gulf of Oman.

If that is happening, it makes sense that Iran would seek to disrupt it: the regime insists on maintaining control of the strait. 

Whether it is indeed happening is the subject of some debate, however. 

Goldman Sachs, a bank, believes the administration’s figures are roughly accurate. 

So does Kpler, a data firm. 

Other ship-trackers think the numbers are exaggerated. 

We should have a definitive answer this autumn, because exports from the Gulf will show up as imports elsewhere. 

If Asian countries start reporting larger deliveries of Middle Eastern crude, it will be a sign that the naval escorts are working.

Important as it is, though, the focus on oil-export figures is somewhat reductive. 

First, the strait is a conduit for lots of other commodities. 

It is impossible to transfer liquefied natural gas (LNG) at sea, and no one wants to risk running expensive, scarce LNG carriers through the Hormuz gauntlet. 

Shipments of the stuff from Qatar, one of the world’s biggest exporters, remain near zero. 

Then there are all the other vessels that normally ply the strait, the bulk carriers and container ships that deliver everything from corn to cars. 

They remain frozen out, too, which imposes an enormous cost on import-dependent Gulf states.

Second, the transfers can happen only if America co-ordinates and protects them. 

This is hardly sustainable. 

It will require a prolonged, expensive deployment of American naval and aerial assets, which will continue to burn through their dwindling stockpiles of air-defence interceptors, long-range missiles and other munitions.

Yet even with those caveats, a flow of oil would be a real blow to Iran’s leverage. 

The regime’s strategy throughout the war has been economic: inflict enough pain on America and the world that Mr Trump is forced to sue for peace. 

If Gulf states are indeed exporting large quantities of crude, it will keep a ceiling on prices.

A barrel of Brent crude now costs $92, and a gallon of petrol fetches an average of $4.10 in America. 

Both of these numbers are well above their pre-war levels—but well below their peaks from earlier this year, when they hit $118 and $4.56 respectively. 

That will reduce the pressure on Mr Trump, who also seems to have written off the upcoming midterm elections (which were another piece of Iran’s strategy earlier this year).

Now the regime seems to hope that a big Democratic win in November will tie America’s hands. 

But relying on Congress to end an unpopular war (or, indeed, to do much of anything) seems like a poor reading of America’s recent history. 

And as my colleague David Rennie wrote last week, a wounded, lame-duck Mr Trump is likely to be more aggressive in foreign policy, not less.

Meanwhile, the American blockade of Iranian ports continues to bite. 

In recent weeks motorists have encountered long queues for petrol in Tehran and other cities. 

Iran has lots of crude oil but limited capacity to refine it. 

The war has damaged refineries, further reducing its output, and the blockade means it cannot make up the shortfall with imports.

Iran may have to cut fuel subsidies to reduce demand—a move that has sparked large protests in the past. 

Soon, winter will be coming. 

Iran often struggles with natural-gas shortages during cold weather, and the war has damaged facilities that supply its grid.

For now, this looks like a recipe for a prolonged war of attrition. 

If America can keep oil prices at less-than-catastrophic levels, Mr Trump may be inclined to preserve the status quo. 

Iran’s economy will sink further, but the regime has a long history of tolerating such misery. 

Neither side seems inclined towards a major escalation—but nor are they suffering enough pain to cut a new deal.