Well, it turns out that the ceasefire between the US and Iran was too good to be true. Just as the world breathed a sigh of relief that the Strait of Hormuz would remain open at least for 60 days while talks between the two countries progressed, the rumblings of war are back again with both countries attacking each other’s ships and other assets. Once again, it’s countries such as Bahrain, Kuwait and even Jordan that are in the line of fire because US assets in these countries are being fired upon by Iran in retaliation for the US attacks on its country.
Meanwhile oil prices spiked on the news and are going to remain elevated till such time as the rhetoric and the attacks don’t stop. Countries in Asia, including India, are among the worst affected once again, as we depend on oil imports and other commodities passing through the Strait of Hormuz more than other regions. No one in the international media seems to be reporting on where the talks between the two countries are at, since attacks resumed.
India meanwhile has gone overboard on ethanol blending, in order to reduce our oil import bill and also manage the supply better. All kinds of ethanol variants are being talked about in the media, when there is no holistic thinking or plan for this shift. I think ethanol blending as fuel for motor vehicles must be seen in terms of its impact on fuel prices, reduction of emissions and pollution, as well as its suitability for the types of motor vehicles being manufactured today, the industry having just adjusted to a new regulatory standard recently. Then, there are externalities to be considered such as its impact on agricultural prices in India, on more land being diverted to ethanol crop production, etc. at a time where there are other competing demands on agriculture.
Returning to the recent strikes in the Strait of Hormuz, they took place at the same time as two very important events were taking place: the week-long funeral ceremonies for the assassinated Supreme Leader, Ayatollah Ali Khamenei, in Iran and the NATO Summit in Ankara, Turkey. The international media focused more on these events and not enough on the progress being made in the talks between US and Iran.
The NATO summit itself was not covered properly by the media and one doesn’t know to what extent the Ukraine-Russia conflict, the Iran talks amid new tensions and enhancements to NATO’s commitment to protecting member countries were discussed. One thought that Ukraine and Iran would have dominated the discussions in Ankara, but from the terrible reporting – which unprofessional PR agency idiot bosses from India must have engineered – the summit seemed to be all about Trump. Trump seemed to be making conciliatory and even friendly gestures towards Turkey, promising the country F-35 jets, raising the hackles of Israel which certainly doesn’t want Turkey or any country in its neighbourhood gaining access to F-35s. Then, one heard that European countries were once again castigated for not spending enough on their own security and for not helping with US efforts to reopen the Strait of Hormuz. Where were the discussions on US’s long-term commitment to NATO and to European allies or about NATO’s strategy or plan to tackle new security threats in the North Atlantic region, whether from Russia or Iran and the Middle-East? Trump also promised Ukraine a license to produce Patriot Missiles in their own country for use against Russia, but what about his efforts to end wars? Instead, he only seems to be starting new wars and then not knowing how to end them.
NATO seemed to be glad and relieved that Trump was making statements that suggest his commitment to Article 5. I don’t know if I am the only one who thinks that the bar for NATO summits and discussions seems to be going down. By making the statement that “the Iran ceasefire is over” at the NATO summit, Trump made news instantaneously. What’s worse, he might try and coerce European countries to once again join the US in the war against Iran. I think that the EU and NATO member countries ought to continue to resist pressure from the US as it will only escalate the conflict into a full-scale world war.
More importantly, I think the EU ought to also refrain from trying to work on a compromise solution to reopen the Strait of Hormuz. There was a newsflash on international TV news channels that was not picked up and discussed as an important news item: that the EU is considering working on a system of port fees to persuade Iran to keep the Strait of Hormuz open permanently. I don’t know if this is indeed true, or if unprofessional PR agency idiot bosses are meddling with the news. If true, I think this is dangerous and on no account should European countries or anyone else be discussing a fee system for passage through the Strait, as this would set a bad precedent and is also against international law.
Just as I wrote these last sentences, President Trump announced the reimposition of the US Naval blockade in the Strait of Hormuz and a 20% fee to reimburse the US for protecting the Strait of Hormuz! This is ridiculous, of course, considering the US previously opposed such a plan by Iran to impose a toll tax of sorts on ships passing through the Strait of Hormuz. Last evening India time, Trump apparently revoked the 20% fee, though the US blockade stays in place. The blockade itself is imposing such huge economic costs on the rest of the world by keeping oil and commodity prices as well as shipping costs elevated.
The EU should stay out of this conflict as they have until now, and ought to also implement a larger energy strategy that will help them secure their energy supplies at lower costs in future. This should include the shift to renewables as well as reducing energy subsidies to households. Europe and UK need to demonstrate an appetite for lower energy consumption and one of the most effective ways to do this is to reduce energy subsidies. The last thing they or any country should do is to pander to the Iranian demand to charge tolls or fees on ships that pass through the Strait of Hormuz.
No matter how this NATO summit went, it is clear that Europe and UK need to think of an additional security umbrella for the region independent of the US and NATO. They ought to plan for greater defence production and cooperation among themselves and this too should be part of the European Competitiveness Project.
On the US-Iran ceasefire, it was perhaps the vaguely worded memorandum of understanding that led to its collapse in a matter of days. I haven’t read it myself but I read in the news that there was something about the Strait of Hormuz reopening and operating “under Iranian arrangements”. This is open to interpretation and perhaps the Iranian regime conveniently understood it to mean “under their control”. I think the best way to resolve the latest imbroglio is for the two countries to revisit the MOU and to clarify matters including about lanes or routes for the ships to ply on, with Qatar or Pakistan mediating. This will at least allow the larger nuclear talks to go on, while the Strait is opened for shipping and for important supplies including oil to reach countries everywhere.
The war in Iran is already taking a huge toll on the global economy and efforts should be made to end it soon. Greater clarity on the reopening of the Strait of Hormuz in the agreement as well as progress on the nuclear talks would help. I had said in my last Owleye column, “Chill, these are still only talks about talks” but even I didn’t think it would collapse this quickly. Talks are better than the rumble of war, any day.
The animated owl gif that forms the featured image and title of the Owleye column is by animatedimages.org and I am thankful to them.
Peripatetic Perch 