President Trump’s trip to China brings the economic implications of America’s war against Iran into sharper focus. The fact that the Taiwan Strait generated more news than the Strait of Hormuz during the recent news cycle, is a telling indicator.
Critics keep framing this as crass resource politics: oil, opening the Strait of Hormuz waterway, and keeping gas prices down for American consumers.
Granted, we all want the price at the pump to come down, and previous administrations have cried wolf about weapons of mass destruction in the Mideast before, but the naysayers are wrong on the facts about this oil and water paradigm as I call it.
For the U.S. at least, it’s not actually about oil and water, but rather a realpolitik debate about America’s global leadership and the return of historical patterns, many of them economically significant.
The dominant theory, especially prevalent among leftists’ circles, goes something like this. Our involvement in the Mideast boils down to: “We’re only in it for the oil.”
The only problem is that it misses larger points, and furthermore the numbers demolish the oil argument quickly.
The United States produced 22.84 million barrels of oil per day in 2024. Iran produced 4.62 million. America doesn't need Iranian oil. The countries most dependent on Hormuz traffic are Asian nations: China, India, Japan. If this were purely about American petroleum interests, we'd be watching from the sidelines.
The doom and gloom predictions about U.S. current involvement in Iran have similarly not come to pass, at least not yet. Instead, we are seeing time-tested principles return to the fore.
1. The Markets Are the Best Judge: Despite the initial decline, and predictions of an impending crash, the markets are not spooked, quite the contrary. As of mid-May, they have reached record highs, and the overall economy continues to perform well. No doubt, the markets also responded positively to strengthened U.S. ties with the Gulf States and the fact that the UAE, pulled out of OPEC – once thought unthinkable—along with their close alliance with Israel.
2. China (and Russia Too) Always Vigorously Guards Their Interests and Looks to Derail the U.S.: The Chinese purchases of Iranian oil literally keep the regime in business. Just consider that China buys more than 80% of Iran’s shipped oil. And now as the oil sits, unable to flow into its normal distribution channels, the pressure will only mushroom. Bottomline: The Chinese are now playing the Taiwan card as part of their effort to make Project Freedom a failure. The Iranian regime is losing about $435 million a day, a huge chunk from China. If they are not getting their cut, they can't pay their fighters and the regime implodes. Is it any wonder they are resorting to piracy and that the Chinese are doing their best to aggressively protect a key source of their fuel.
3. The Iranian Regime Put Its Interests Supreme at The Expense of Its Own People: Tragically, most of the 92 million Iranians, the non-combatants, are getting crushed. Shortages of food and water, currency hitting record lows, unemployment spiking, while the petro-backed government and military, despite taking a serious blow, are still in charge. Again, although reaching unparallelled levels, it’s all part of the playbook of the Islamic Republic of Iran ,and its notorious IRGC, for the last 47 years.
Although the US Administration’s messaging has been inconsistent and somewhat confusing, the intent and actions of President Trump’s team are spot on. This war is about the mullahs terrorizing and murdering their own people (over 30,000 since the start of the year alone), a long litany of examples of Iran exporting terror and maiming and killing innocents across the globe, including US troops and civilians, and, moreover, their relentless, and now very public, pursuit and development of nuclear weapons as their inherent right.
Late last month, President Trump issued a clarion call that unfortunately got lost in the chatter, "I will tell you that Iran would use the nuclear weapon if they had it. I deal with these people. I know people. They will use their nuclear weapons, and we're not going to give them a chance to do it.”
America carries two competing impulses in its DNA: the isolationist instinct and the drive to be a force for good in the world. Time and again, the better angel wins and it’s always because there’s case to be made that goes well beyond dollars and sense.
It must win here too—not because any one president deserves credit, but because the alternative is unthinkable.
