This War is Going to be Expensive and Trump has lost the Initiative

Within days of launching the United States-Israel war against Iran, cult leader, convicted felon, and failed President Donald Trump began suggesting that it was nearly over. On March 9, for instance, Trump told CBS News that "I think the war is very complete, pretty much." Trump went on to say, "If you look, they have nothing left. There's nothing left in a military sense." The same day, Trump held a press conference and said, "We've already won in many ways, but we haven't won enough." On March 11, Trump told Axios that the war will end "soon" because there is "practically nothing left to target." By March 13, however, Trump was beginning to waver a bit. On Fox News' "The Brian Kilmeade Show," Trump said that "I don’t think it’s going to be long" before the war is over and that he would know the war is over "When I feel it...When I feel it in my bones." It is impossible to know whether Trump truly believed what he was saying or was simply attempting to reassure stock, bond, and oil markets which were reacting negatively to the war. His remarks did have the effect of rallying the markets, at last temporarily. However, the optimism of those days seems to have disappeared as Trump is realizing that the war is not going according to plan. It is increasingly clear that there may be no good way out of this war anytime soon, and the repercussions are going to be long-lasting and almost certainly going to get worse the longer the fighting continues.

Trump once suggested that the war might last four weeks or less. On Saturday, we will be entering the fourth week. There is little indication that a resolution is anywhere close. To the contrary, it appears more likely that the war will continue well past that timeframe. Trump clearly believed that killing Iran's leaders would usher in a new group of moderates who would quickly make a deal, perhaps offering Trump a cut of their oil production. Secretary of Defense Pete Hegseth is in love with using overwhelming force and killing people. Hegseth appears to have believed that if enough bombs were dropped and enough people killed, the Iranians would cower before his masculinity.

What both Trump and Hegseth are now learning is that bluster, bombs, and death are not enough to win a war against a determined enemy. Hegseth has eliminated "stupid" rules of engagement and encouraged "lethality." The result has been the death of over 150 Iranian schoolgirls and a war that gets worse every day. Whereas Trump once suggested that the U.S. had hit almost all of its targets, Hegseth daily says that the amount of munitions being deployed will be the largest yet. Just this morning, Hegseth reiterated his strategy for the war:

That is overwhelming force applied with precision. And again today will be the largest strike package yet. Just like yesterday was. As I said from day one, our capabilities continue to build. Iran's continue to degrade. We are hunting and striking death and destruction from above.

One problem with Hegseth's strategy is that it does not appear to be working. According to Hegseth, yesterday's "strike package" was the biggest yet, though apparently not as large as today's will be. Nevertheless, yesterday Iran displayed its continued abilities to launch attacks, firing missiles at Israel and damaging oil facilities throughout the Gulf. The Strait of Hormuz remains closed to all traffic not authorized by Iran.

Hegseth may brag about the size of his package, but it does not appear to be large enough to get the job done. Now he is deploying ground forces.

On March 13, U.S. defense officials ordered a Marine Expeditionary Unit stationed in Japan to deploy to the Persian Gulf. Reports at the time said that it would take two weeks for the force to arrive. That means that the Marines might be arriving at the beginning of the fifth week of the war. So much for Trump's four-week war. Reuters reported yesterday that:

Trump administration considering deploying thousands of additional troops to the Middle East as the military prepares options for the possible next phase of the Iran war. One option for securing the Strait of Hormuz includes deploying troops to Iranian shores.

This is starting to look like the sort of incrementalism that led to our disastrous involvement in Vietnam. Trump thought that he would repeat what happened in Venezuela. Instead, he is turning into the second coming of Lyndon B. Johnson.

Another problem with Hegseth's strategy is that it is expensive. The first six days of the war cost $11.3 billion according to the Defense Department. The Guardian reports today that the cost is "likely to have exceeded $18bn – and the meter is still running." On March 3, shortly after the start of the war, Reuters reported that the Pentagon might seek around $50 billion in supplemental appropriations to budget for the war. Yesterday, however, the Washington Post reported that "The Pentagon has asked the White House to approve a more than $200 billion request to Congress to fund the war in Iran." When asked about the $200 billion this morning, Hegseth said, "I think that number could move," but didn't indicate that there would be big changes in the request. He also blamed this on former President Joe Biden, just in case you were wondering about Hegseth's seriousness.

The war has already sent oil and gas prices skyrocketing. In December, West Texas Crude was selling for less than $60 a barrel. As I write, WTI is selling for over $97 a barrel. Brent Crude was selling for around $70 a barrel a month ago. Right now, it is selling for over $112. Not only are these prices showing up at the gas tank for Americans, with the national average for gas reaching $4 per gallon, but the price increases will soon be impacting other goods and services that rely on petroleum. For instance, yesterday Dow Chemical's CEO said that up to 50% of the world's polyethylene supply is impacted by Middle East disruptions. This is used in plastic bags and plastic containers, all of which are likely to become more expensive. Today, Oilprice.com published an article quoting industry analysts as saying that if the war continues for two more weeks — something that it appears almost guaranteed to do — oil could reach $150 per barrel or more. This is going to be terrible news for the U.S. economy.

Moreover, each day the chance for a quick recovery gets worse. As oil storage facilities reach capacity, producers are forced to stop production. It will take months to restart some of those wells. Moreover, oil and gas facilities are being attacked and heavily damaged. After Israel attacked Iran's South Pars gas field, Iran took revenge on facilities in the Gulf states. One target was Qatar's Ras Laffan liquefied natural gas plant, the world's largest. As a result of the attack, 17% of Qatar's LNG capacity has been lost for up to five years. This will impact global LNG prices well into the future.

Trump seemed to realize the danger of tit-for-tat oil facility attacks — or perhaps the Qataris contacted him to remind him who had recently given him a luxury aircraft — and posted an insane post on Truth Social. I'll quote that in its entirety:

Israel, out of anger for what has taken place in the Middle East, has violently lashed out at a major facility known as South Pars Gas Field in Iran. A relatively small section of the whole has been hit. The United States knew nothing about this particular attack, and the country of Qatar was in no way, shape, or form involved with it, nor did it have any idea that it was going to happen. Unfortunately, Iran did not know this, or any of the pertinent facts pertaining to the South Pars attack, and unjustifiably and unfairly attacked a portion of Qatar’s LNG Gas facility. NO MORE ATTACKS WILL BE MADE BY ISRAEL pertaining to this extremely important and valuable South Pars Field unless Iran unwisely decides to attack a very innocent, in this case, Qatar - In which instance the United States of America, with or without the help or consent of Israel, will massively blow up the entirety of the South Pars Gas Field at an amount of strength and power that Iran has never seen or witnessed before. I do not want to authorize this level of violence and destruction because of the long-term implications that it will have on the future of Iran, but if Qatar’s LNG is again attacked, I will not hesitate to do so. Thank you for your attention to this matter. President DONALD J. TRUMP

First, Trump threw Israel under the bus and claimed to know nothing about the attack. This contradicted reporting throughout the day yesterday, saying that Trump had personally approved the strike. Trump even excused the Iranians for retaliating. But the second half of the post in which Trump made all kinds of threats highlighted the dilemma in which Trump finds himself. As long as Iran maintains retaliatory capacity, Trump's threats are basically hollow. For instance, if Trump carried through on his threat to "massively blow up the entirety" of South Pars, Iran would certainly respond by attacking petroleum facilities in the Gulf states. This would take more capacity offline, possibly for an extended length of time, and raise world petroleum prices further.

Oil and gas prices have become Iran's weapon in this war. By causing prices to rise, Iran is punishing the world. However, as I wrote earlier this week, Iran has the capacity to reward its friends because it allows its own tankers and oil through the Strait of Hormuz. Iran has very clearly sent the message that countries can still receive Gulf oil if they play by Iran's rules. I noted yesterday that the U.S. is allowing Iranian tankers freedom of movement because Iran's oil is helping to steady oil prices. This morning, U.S. Treasury Secretary Scott Bessent made things even more absurd and said that the U.S. may lift sanctions on Iranian oil as the administration has done for Russian oil. So, just to be clear, Trump has started a war that rewards Russia, Iran (our purported enemy in the war), and China (the primary purchaser of Iran's oil), but punishes Qatar, Bahrain, Oman, the United Arab Emirates, Iraq, and Saudi Arabia (who are our allies in the war). The art of the deal, indeed.

Worst of all, the United States has lost the initiative in the war. You can forget about any of the U.S.'s original objectives, whatever they were, since the administration has never been able to articulate them. Now the U.S. has one goal: free passage through the Strait of Hormuz. This is really all that matters at the moment. Ironically, Trump did not believe that Iran would close the strait, so there were no plans for reopening it. The U.S. recently decommissioned its minesweepers and now doesn't have any to use in the Gulf if Iran mines it. No other countries have offered to use their minesweepers either. The U.S. has been bombing the shoreline, but troops on the ground may be needed to root out the Iranian troops and weapons. It is fairly easy to predict that things will get worse, probably much worse, before they get better. But this is what you get when you have a cognitively impaired narcissist and a roided-out television host running things.