Michael Roberts: All roads lead to stagflation

All roads lead to stagflation

by Michael Roberts

In its latest review of the impact of the Middle East conflict on the world’s economies, the IMF summed it up: “Although the war could shape the global economy in different ways, all roads lead to higher prices and slower growth.”

The global benchmark oil price is on course for its largest monthly rise on record in March, higher than in 1990 when Iraq invaded Kuwait. The conflict could end soon, as Trump and Rubio claim (presumably through with a deal with Iran in which the latter basically surrenders to US demands).  Or more likely there is a longer conflict stretching out into April and beyond, possibly involving US troops on the ground attempting to break Iran’s stranglehold over the Strait of Hormuz and searching for its nuclear stockpiles.  

Either way, crude oil prices will stay high for some time (and even more for prices of oil derived products, which have risen even more).

That means two things.  In the short term, global inflation is going to rise.  If the conflict lasts longer, then rising inflation will be joined by falling economic growth and the likelihood that even some of the major economies could slip into a slump.  Stagflation is certain and slumpflation is possible.

If oil and gas installations are permanently damaged or out of operation for a long time, then oil prices will rise further to reach $150/barrel—nearly three times pre-war levels—and natural gas prices would rocket to €120 MWh, or four times the pre-war rate. Such a rise would be comparable to the global supply shock of the late 1970s, which contributed to high inflation and global recession. France’s Finance Minister Roland Lescure reckons that 30–40% of Gulf refining capacity has already been damaged or destroyed by Iran’s retaliatory strikes, leaving a shortage of 11 million barrels a day on global oil markets. Lescure warned it could take up to three years to restore damaged facilities and several months to restart those that were urgently shut down.

Goldman Sachs economists offer three scenarios: the baseline scenario is six weeks disruption where crude oil price rises to $120/barrel before falling back to $80–100, with no lasting infrastructure damage. The second scenario is a medium-term war (ten weeks) where the crude price spikes to $140/barrel, staying at $95+ for a further ten weeks. This  would “scar” production permanently. The third scenario is apocalyptic (with ten weeks of war and lasting damage). Then the oil price rises to $160/barrel and never falls back below $100 for the foreseeable future because of damage to production facilities.

The OECD’s latest economic outlook has already downgraded forecasts for real GDP growth in the major economies this year due to the US-Israel war with Iran. All G7 economies except the US will now grow more slowly this year than previously forecast, with the UK reduced the most—from 1.2% to just 0.7%. The US economy will grow faster than forecast, according to the OECD, because of gains for its oil and gas exports. The OECD has also raised its forecast for inflation in the top G20 economies from a previous 2.8% to 4%. Argentina will have the highest rate of inflation in the G20 at 31% and China the lowest at 1.3%. US inflation will jump to 4.2% from the current 2.9%. If the war continues into the next quarter, expect these growth forecasts to be further reduced and inflation forecasts raised. 

Revised OECD growth forecasts

In my view, contrary to the OECD’s optimistic forecasts on US growth, the US will not escape this downturn. According to Royal Bank of Canada economists, if oil prices hold at $100/barrel, it could cut US real GDP growth by 0.8 percentage points (from the current average 2% a year to near 1%) and US inflation could reach 4% a year.

The World Trade Organization (WTO) forecasts that if energy prices remain persistently high, merchandise trade growth this year will slow from 1.9% to 1.5%. North American export growth will slow a bit, from an expansion of 1.4% to 1.1%, but Europe will be clobbered, with exports shrinking by 0.6% rather than growing by 0.5%. The hit to growth will be equally lopsided: while costly energy could boost GDP growth in North America this year to 2.5% (from a baseline of 2.3%), it would slow GDP growth in Asia to 3.1% from 3.9%. In Europe, a long war would bring the economy almost to a halt, slowing its expansion to 0.4% from a prior estimate of 1.6%. Analysis by the ECB also reckons that a long war would mean a deep, prolonged downturn in output with persistently higher inflation.

The World Trade Organization (WTO) forecasts that if energy prices remain persistently high, merchandise trade growth this year will slow from 1.9% to 1.5%. North American export growth will slow a bit, from an expansion of 1.4% to 1.1%, but Europe will be clobbered, with exports shrinking by 0.6% rather than growing by 0.5%. The hit to growth will be equally lopsided: while costly energy could boost GDP growth in North America this year to 2.5% (from a baseline of 2.3%), it would slow GDP growth in Asia to 3.1% from 3.9%. 

In Europe, a long war would bring the economy almost to a halt, slowing its expansion to 0.4% from a prior estimate of 1.6%. Analysis by the ECB also reckoned that a long war would mean a deep, prolonged downturn in output with persistently higher inflation. Already, Euro area annual inflation climbed to 2.5% in March, up from 1.9% in February.This marked the highest rate since January 2025, pushing inflation above the ECB’s 2% target as energy costs soared 4.9%, the first annual increase in nearly a year and the sharpest since February 2023, driven by the Middle East conflict.

Moreover, an energy price explosion does not just drive up overall inflation, at a certain point, it forces households and businesses to cut back on purchases and investments in order to meet energy bills.  It becomes a tax on growth.  Already, borrowing costs, as expressed in long-term government bond yields, are rising in all the major economies.

How high and for how long must energy (and other key commodity prices) rise for a slump to happen?  There are various estimates.  Paul Krugman, the Keynesian economist, reckons that the price elasticity of demand for crude oil is low — that is, even large price increases only cause small declines in demand (ie GDP). But this time could be different. He reckons that ‘low disruption’ (oil price $100-150/b) would reduce supply by about 8% in the US.  Medium disruption (oil price $120-230/b) would cause a fall of 12% in US economic growth.  High disruption (oil price $155-370/b) would take US supply down 16%. 

A prolonged conflict would hit the Middle East and Asia hardest. The Gulf states would lose their lucrative tourist traffic and airlines may be forced to bypass the area for global transit. The heady days of luxury lifestyles for foreigners would be over in these places. With large infrastructure projects in Gulf countries targeted by strikes, migrant construction workers will have less money to send home—a loss affecting households across the Middle East and South Asia. Workers in Gulf countries send home $88 billion in remittances annually. Countries such as Egypt, Pakistan, and India are the biggest recipients, amounting to tens of billions of dollars per year and accounting for more than half of all remittances received in these economies. Egypt, Pakistan, and Jordan each receive more than 4% of GDP from Gulf remittances.

Société Générale estimates that every $10 sustained increase in oil prices would widen India’s current account deficit—currently around 1% of GDP—by half a percentage point and would cut economic growth by 0.3%. At $100/barrel, that would mean a current deficit of 3% of GDP and a reduction in economic growth from a 2026 forecast of 6.4% to 5%. The Centre for Global Development (CGD), a Washington-based organisation, compiled a list of 17 countries most vulnerable to the shocks of the Iran war. Thirteen of those are African, including Angola, Nigeria, Egypt, Ghana and Ethiopia. In Asia, Pakistan, Bangladesh and Sri Lanka were deemed vulnerable, with Jordan singled out in the Middle East.

Taken together, higher oil prices and exchange rate devaluation will lead to a negative terms-of-trade shock for many countries, making it harder to service external debt and build foreign exchange reserves. Countries that have both high external debt service and low reserves will be especially at risk. For instance, Egypt may need to roll over more than $4 billion in outstanding eurobonds in the next year; Jordan and Pakistan may need to roll over around $1 billion apiece.

About 70% of Brazil’s and 40% of India’s urea imports—essential to their agriculture sector—come from the Gulf through the Strait of Hormuz. Gulf nations import most of their food: 75% of their rice comes through the strait, as well as more than 90% of their corn, soybeans and vegetable oil.¹² On top of all this, countries like Bangladesh, India and Pakistan will be hit by the inevitable drop in remittances from millions of their citizens working in Gulf countries as the war takes a toll on the regional economy.

Three countries will be less affected. The US has plenty of strategic stockpiles and, of course, its own domestic production. Although China relies for much of its oil from the Middle East (mainly Saudi Arabia), it has been building up its strategic stockpiles for just such events and because of worries about US sanctions. Last year, China imported about half of its crude oil and almost one-third of its liquefied natural gas from the Middle East. But it has aggressively built up strategic stockpiles of fossil fuels. China is estimated to hold the world’s largest emergency reserves of petroleum, totalling 1.3 billion barrels.

China has also made significant investments in electrification. Electricity accounts for 30% of the country’s energy consumption—about 50% higher than the US or Europe—making it more insulated from rising global oil prices. (With its rapid solar and wind build-out, it already accounts for roughly one-third of renewable energy generation capacity worldwide.) A diverse energy mix, multiple suppliers and access to routes that bypass the Gulf mean only about 6% of China’s total energy consumption is directly exposed to disruptions in the strait, estimates Goldman Sachs.

So China is well placed to deal with any shortages; and it can still turn to more oil imports from Russia and from South America, where it has been increasing supply in recent years to avoid the Middle East. And ironically, Russia will benefit from increased revenues from its energy exports.

One recent study of all wars since 1870 found that: “output falls by almost 10 percent in the war-site economy, while consumer prices rise by some 20 percent (relative to prewar trends).” And “the economies of belligerent countries and even those of third countries witness similarly unfavourable dynamics if they are exposed to the war site through trade linkages.” Output in close trading partners falls by 2 percent relative to trend. This war will easily surpass these averages if it continues much longer.

Easter week is shaping up as a crucial turning point in the war.  Will a deal be reached or will the US launch a new stage in the conflict with ground troops?  Either way, what is certain is that all roads lead to stagflation. 

Ken Klippenstein: Trump Goes Commando

Trump Goes Commando

Iran "raid" has replaced ground war and you're supposed to clap

Ken Klippenstein March 30 2026

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Most Americans are bracing for a massive ground invasion of Iran, one that military sources tell me will not happen. That’s because there’s another plan entirely.

What’s in store is a “raid,” all of these sources agree.

Of course, it all depends on what Donald Trump orders, and sources say they don’t know what that might be on any given day. So they offer the White House different alternatives, highlighting the cost for operations that they don’t want to undertake and focusing on the epic, derring-do nature of those that they would prefer. 

Planning for small raids onto Iranian soil has taken over as the favored outcome, I’m told, operations that would be carried out by commandos rather than conventional soldiers.

Those missions include taking Kharg Island as leverage to use it as a bargaining chip since it dominates Iranian oil and gas exports, or a similar island raid in the Strait of Hormuz to help open up shipping, or, most spooky and Maduro-like, a “black” operation to seize Iran’s nuclear materials.

And what do the American people think? Millions are afraid of what won’t happen and largely unaware of what could. This is reflected in a recent pollby Reuters/Ipsos finding 65 percent of Americans believe Trump will order troops into a large-scale ground war in Iran, though only seven percent support such a scenario.

Seven percent! In other words, Americans want a ground war like they want to give a hug to Congress (which enjoys a slightly higher approval of 10 percent, per Gallup).

Tucked away in the Reuters poll is another question that no other pollster seems to be asking": whether Americans “support deploying a small number of special forces for targeted operations?”

The results? Some 34 percent of Americans say yes — including 63 percent of Republicans. That is roughly in line with American opinion on the Iran war in general, which clearly hasn’t deterred the White House so far.

Reuters/IPSOS poll

In other words, though a full-scale ground invasion is not politically viable, a special operations raid is. 

A full-scale ground invasion isn’t even logistically feasible (at least for now). The U.S. troop presence in the Middle East has increased just 20 percent since the beginning of mobilization two months ago, The New York Times reported Sunday. And most o of those people are not “boots on the ground” types of forces, but are augmenting operations, logistics, maintenance, air defenses, etc.

When the Marines aboard the USS Tripoli group arrive and the 1st Brigade of the 82nd Airborne Division are deployed and ready, there will be some 5,000 troops at the “ready,” but even here, we’re talking about some 2,500 actual “boots,” fighters with guns.

That’s a significant number of course, but it is hardly the numbers you’d need for an Iraq War-style invasion or occupation. In 2003, for context, 466,985 U.S. personnel were deployed for the Iraq operation using the same count that includes air, ground, and naval forces across the region. Today, there are some 50,000 personnel in the region, roughly 10,000 of which are part of the increased ships and aircraft, etc.

What none of this fiddling includes are the number of special operations forces which are not officially disclosed. This includes special operators from Army special forces groups, Army Rangers, Army aviation from the 160th Special Operations Aviation Regiment, Navy SEALs and “special warfare” personnel, Air Force “special tactics” fighters, Marine commandos, the Joint Special Operations Command that spearheaded the Maduro operation, and supporting intelligence, transport, communications, as well as CIA paramilitaries, clandestine intelligence collectors and others. 

These are exactly the kinds of forces that would carry out the various limited raids.

When I reported last week on the unlikeliness of a conventional ground invasion, it created a flurry in major media which had been starved of any actual reporting on the ins and outs of actual deployments and readiness.

This weekend, CNN broadcast a segment about our story, with anchor Michael Smerconish practically tugging at his collar in discomfort over having to cite me in the absence of someone more mainstream.

“I read something online from a guy who writes provocatively, admittedly, his name is Ken Klipperstein [sic],” Smerconish said, putting to his guest, retired Admiral James Stavridis, my point that a major ground invasion of Iran was simply not in the cards at this time.

Screenshot of CNN segment about my story

A clearly flustered Stavridis, who like other cable news retired military brass was making coin off hyping the war, replied: “It’s not inevitable, obviously,” adding: “inevitable, no; possible, yes.”

That’s what four stars and hundreds of thousands of dollars a year buys you: ‘Well, this could technically happen.’ Admiral, it’s technically possible that an asteroid wipes us all out, or the sun doesn’t rise. Yet you still bother to get out of bed and show up for these cable hits because you know there’s a difference between possible and probable.

What we should focus on is the probable that is the raid(s). Like with the raid that deposed Venezuelan leader Nicolas Maduro in January, or the killing of the Ayatollah, or even the raid on Bin Laden’s compound in Pakistan in 2011, we will likely just wake up and find out it happened after all. In these types of operations, the government has developed a remarkable capacity to evade public scrutiny and make them feel inevitable, like the weather.

Partly that is done through “messaging” and disinformation which encourages the media and even the experts to look in one direction, in this case, a “boots on the ground” invasion. The confusion is stoked by messaging like the letter (embedded below) written by Lt. Gen. Leonard F. Anderson IV, head of the Marine Corps Reserve, which blithely says that “a mass mobilization could become reality.”

With millions of Americans already nervous about a ground war and even a possible draft, one wonders what Gen. Anderson knows that we don’t. I asked and the answer I get from reliable sources is: nothing. There are no preparations for any kind of mobilization and there is not any thought of some draft.

So, see how it works? Boots on the ground, a months-long ground war that smells like Iraq (or even Vietnam for the seniors), a mass mobilization, a draft, such stories fill the media and social media and in the end when the special operators come to the rescue, people are not only relieved but they “support” such an operation. 

Support, of course, when it’s all over, if it’s successful. The cycle of disinformation and secrecy ensures that your only job is to discuss what happened after-the-fact, not whether it should have happened at all.

It’s a style of warfare perfected for decades that limits public involvement and consent because a combination of remote air and drone warfare and the favored clandestine special operators make the war machine impervious to true debate. As the deliberations continue regarding the mythical ground war, or as Donald Trump continues to babble about destroying this or that, the bombing continues. The Pentagon is saying practically nothing about what is being bombed or how much, or what the assessed impact is, and certainly what it is saying is so exaggerated and fact-free that it’s hard to determine what the true effect is.

Meanwhile the media has nothing much to say. Organizations with dozens of reporters on the case focus on every Trump utterance while the actual war “on the ground” is referred to in passing. Retired cable news generals and admirals with conflicts of interest that would make the Wolf of Wall Street blush have nothing to say either.

Bolstered by the “success” of the Maduro raid, Trump will inevitably fall in love with the next seductive briefing involving some slickly produced video that shows jumping and rappelling and shooting all coming together in a cinematic ending. 

The only question is if the American public approve of these operations — assuming the media bothers to report on them.

Subscribe if you would rather not see Trump go commando

No Kings Day. Millions Must Break From the Democratic Party's Stifling Grip and Bring Real Power to the Table

Source: Minnesota Reformer

By Sirantos Fotopoulos

Eight to nine million Americans took to the streets yesterday. That figure, if accurate, represents the single largest day of protest in the history of the republic — a number that ought to inspire something more than a modest, collegial pride in the capacity of a citizenry to inconvenience municipal traffic. And yet, when one examines what was actually said, what was actually demanded, and what the organisers have advertised as the desired outcome, a terrible deflation sets in. The crowd was enormous. The imagination animating it was not.

There is a distinction — one that the liberal mind has spent the better part of a century carefully avoiding — between the politics of expression and the politics of leverage. To march, to carry a sign, to chant in unison, is to engage in the former. It is to signal one's preferences, to perform one's values, to exist, for an afternoon, as a moral actor in a public space. It is not without worth. It is not, however, power. Power is not the expression of a preference; it is the capacity to impose a cost upon those who ignore it. And the cost that eight million Americans imposed on Saturday upon the systems that govern their working lives, their wages, their healthcare, their housing — was precisely nothing.

History is not generous to those who mistake visibility for leverage. Consider what actually broke the back of American apartheid — not the marches alone, magnificent as they were, but examples such as the Montgomery Bus Boycott of 1955, which lasted three hundred and eighty-one days and drained the municipal transit system of the revenue it depended upon. The citizens of Montgomery, Alabama did not merely express their contempt for segregation; they withdrew their economic participation from the machinery that enforced it. They hit the system where systems are built to feel: in the accounting ledger. The result was a Supreme Court ruling that the segregation of public buses was unconstitutional. This was not sentiment. This was organised economic coercion of the most disciplined and principled kind.

Or consider the Flint, Michigan sit-down strike of 1936 and 1937, when workers of the United Auto Workers occupied the General Motors plants at Fisher Body and refused to vacate. They did not petition. They did not rally in a public square and disperse at dusk. They seized the productive apparatus of the then largest corporation in the world and held it for forty-four days until General Motors recognised their union and their right to collective bargaining. The lesson was not lost on American capital, which is precisely why it has spent the ninety years since methodically dismantling the legal and institutional framework that made such actions possible.

The South African anti-apartheid movement succeeded not when it generated sympathetic international coverage, though it did, but when the combination of internal labor strikes and external sanctions made the maintenance of apartheid economically irrational for the white business class. In each of these cases, the mechanism of change was identical: the withdrawal or threatened withdrawal of productive participation. Not the expression of grievance, but the imposition of its costs upon those with the power to remedy it.

 

The question must then be put, with all appropriate directness, to the leadership of the organised American liberal center: why does it consistently channel these energies away from that mechanism and toward the electoral ballot box? The answer is not flattering, and the evidence for it is voluminous. The Democratic Party since Obama's election has had multiple opportunities — unified control of the federal government, enormous popular mandates, genuine public appetite for structural change — and in each instance it has deployed the language of transformation to deliver the reality of management. The Obama administration inherited the worst financial crisis since 1929, the product of a deregulated banking sector whose executives had enriched themselves catastrophically at public expense. Not one senior financial executive went to prison. The banks were recapitalised. The executives kept their bonuses. The foreclosure crisis was managed with instruments carefully calibrated to protect creditor interests. And the Democratic Party called this a rescue.

The party's record on war is, if anything, more damning. It was Obama that expanded the drone assassination programme into a bureaucratised machinery of extrajudicial killing across seven countries, that prosecuted more whistleblowers under the Espionage Act than all previous administrations combined, that continued the military presence in Afghanistan for another decade before a chaotic and humiliating exit, that armed the Saudi coalition in Yemen and presided in silence over one of the worst humanitarian catastrophes of the century. It was under Biden that the genocide in Gaza was not simply ignored, but prosecuted, funded, and armed.

The progressive base of the party organised, marched, donated, and delivered electoral victories — and received in return a programme that any honest foreign policy analyst would recognise as the managerial continuation of American imperial prerogative under a more articulate and palatable executive.

The corporate Democratic Party currently functions to absorb the energy of popular discontent, to translate it into electoral mobilisation, and to return it to the existing order shorn of its structural ambitions. It is the most sophisticated mechanism of co-optation in the democratic world, and it has been performing this function with remarkable consistency for five decades. The unions that appear at rallies like No Kings are not there as power-wielding institutions making demands upon the system; they are there as props, lending their iconography to a movement whose explicit horizon is a midterm election in which the same party, with the same donors and the same structural commitments, seeks to return to office.

None of this is an argument for despair, and anyone reaching for that conclusion has misread both the historical record and the present moment. Eight million people in the streets is not nothing. It is a vast reservoir of organised human will, and reservoirs can be redirected. The Minnesota general strike earlier this year — workers withdrawing their labor in explicit response to a specific act of state violence — demonstrated that the infrastructure for production-side politics exists, that it can be activated, and that it produces a qualitatively different kind of political pressure than any march. The task is not to condemn those eight million people but to argue, with all available force and clarity, for a different theory of change. And the point is to perpetuate such actions beyond a mere performative twenty-four hours.

 

That theory begins with the workplace. Not the polling station, not the consumer boycott, not the performative gestures against creeping authoritarianism — though these have their limited uses — but the site of production, where the worker's indispensability is a structural fact rather than a sentimental aspiration. A sustained general strike with clear demands imposes immediate and quantifiable costs upon the powerful in ways that eight million cleverly-worded signs do not. The rebuilding of genuine trade union power, particularly in the service sector, logistics, healthcare, and the supply chains upon which the entire economy depends, is the long-term project that a serious Left must pursue with the same discipline and patience that the Right has brought to its judicial and legislative programme over the past fifty years.

 

Alongside this, the municipalist tradition offers a more immediate path. Cities and counties can be won, administered, and used to build counter-institutions: public banks, community land trusts, public ownership of resources, and other such cooperative enterprises that remove productive assets from the speculative market and place them under democratic control. This is not utopian; it is the patient, unglamorous, brick-by-brick construction of a parallel economy that reduces dependence on the goodwill of a federal government and a corporate class that have repeatedly demonstrated they do not share the interests of the people who marched on Saturday.

 

The choice, stated plainly, is this: eight million people can return to this arrangement every few months, expressing their displeasure with ever-greater articulacy and ever-diminishing effect, until the next election cycle absorbs them and a party machine converts their passion into donations and voter turnout for candidates who will govern in the interests of the existing ruling class. Or they can ask the harder question — not who shall we vote for, but what shall we refuse to do, what shall we withhold, what shall we build in the spaces the present order cannot reach. The first path is comfortable, photogenic, and historically futile. The second is slow, difficult, unglamorous, and the only one that has ever actually worked.

Johnathan Cooke: Israel is making sure Trump can't find an off-ramp in Iran

Israel is making sure Trump can't find an off-ramp in Iran

Netanyahu pitched the war as a repeat of Israel’s apparent 'audacious feat' of smashing Hezbollah. The US president should have noted instead Israel’s moral and strategic defeat in Gaza

Johnathan Cook March 30th 2026

[First published by Middle East Eye]

Israeli Prime Minister Benjamin Netanyahu must have persuaded Donald Trump that a war on Iran would unfold much like the pager attack in Lebanon 18 months ago.

The two militaries would jointly decapitate the leadership in Tehran, and it would crumble just as Hezbollah had collapsed – or so it then seemed – after Israel assassinated Hassan Nasrallah, the Lebanese group’s spiritual leader and military strategist.

If so, Trump bought deeply into this ruse. He assumed that he would be the US president to “remake the Middle East” – a mission his predecessors had baulked at since George W Bush’s dismal failure to achieve the same goal, alongside Israel, more than 20 years earlier.

Jonathan Cook 10d Trump isn't the first US president tempted by an Israeli plan to destroy Iran and thereby "remake the Middle East", as this extract from my book Israel and the Clash of Civilisations sets out: https://jonathancook.substack.com/p/how-the-us-and-israel-came-close 139 53

Netanyahu directed Trump’s gaze to Israel’s supposed “audacious feat” in Lebanon. The US president should have been looking elsewhere: to Israel’s colossal moral and strategic failure in Gaza.

There, Israel spent two years pummelling the tiny coastal enclave into dust, starving the population, and destroying all civilian infrastructure, including schools and hospitals.

Netanyahu publicly declared that Israel was "eradicating Hamas", Gaza’s civilian government and its armed resistance movement that had refused for two decades to submit to Israel’s illegal occupation and blockade of the territory.

In truth, as pretty much every legal and human rights expert long ago concluded, what Israel was actually doing was committing genocide – and, in the process, tearing up the rules of war that had governed the period following the Second World War.

But two and a half years into Israel’s destruction of Gaza, Hamas is not only still standing, it is in charge of the ruins.

Israel may have shrunk by some 60 per cent the size of the concentration camp the people of Gaza are locked into, but Hamas is far from vanquished.

Rather, Israel is the one that has retreated to a safe zone, from which it is resuming a war of attrition on Gaza’s survivors.

Surprises in store

When considering whether to launch an illegal war on Iran, Trump should have noted Israel’s complete failure to destroy Hamas after pounding this small territory – the size of the US city of Detroit – from the air for two years.

That failure was all the starker given that Washington had provided Israel with an endless supply of munitions.

Even sending in Israeli ground forces failed to quell Hamas’ resistance. These were the strategic lessons the Trump administration should have learnt.

If Israel could not overwhelm Gaza militarily, why would Washington imagine the task of doing so in Iran would prove any easier?

After all, Iran is 4,500 times larger than Gaza. It has a population, and military, 40 times bigger. And it has a fearsome arsenal of missiles, not Hamas’ homemade rockets.

But more important still, as Trump is now apparently learning to his cost, Iran – unlike Hamas in isolated Gaza – has strategic levers to pull with globe-shattering consequences.

Tehran is matching Washington’s climb up the escalation ladder rung by rung: from hitting US military infrastructure in neighbouring Gulf states, and critical civilian infrastructure such as energy grids and desalination plants, to closing the Strait of Hormuz, the passage through which much of the world’s oil and energy supplies are transported.

Tehran is now sanctioning the world, depriving it of the fuel needed to turn the wheels of the global economy, in much the same way that the West sanctioned Iran for decades, depriving it of the essentials needed to sustain its domestic economy.

Unlike Hamas, which had to fight from a network of tunnels under the flat, sandy lands of Gaza, Iran has a terrain massively to its military advantage.

Granite cliffs and narrow coves along the Strait of Hormuz provide endless protected sites from which to launch surprise attacks. Vast mountain ranges in the interior offer innumerable hiding places – for the enriched uranium the US and Israel demand Iran hand over, for soldiers, for drone and missile launch sites, and for weapons production plants.

The US and Israel are smashing Iran’s visible military-related infrastructure, but – just as Israel discovered when it invaded Gaza – they have almost no idea what lies out of sight.

They can be sure of one thing, however: Iran, which has been readying for this fight for decades, has plenty of surprises in store should they dare to invade.

No trust in Trump

The main problem for Trump, the US narcissist-in-chief, is that he is no longer in charge of events – beyond a series of soundbites, alternating between aggression and accommodation, that appear only to have enrichedhis family and friends as oil markets rise and fall on his every utterance.

Trump lost control of the military fight the moment he fell for Netanyahu’s pitch.

He may be commander-in-chief of the strongest military in the world, but he has now found himself unexpectedly in the role of piggy in the middle.

He is largely powerless to bring to an end an illegal war he started. Others now dictate events. Israel, his chief ally in the war, and Iran, his official enemy, hold all the important cards. Trump, despite his bravado, is being dragged along in their tailwind.

He can declare victory, as he has repeatedly sounded close to doing. But, having released the genie from the bottle, there is little he can actually do to bring the fighting to a close.

Unlike the US, Israel and Iran have an investment in keeping the war going for as long as either can endure the pain. Each regime believes – for different reasons – that the struggle between them is existential.

Israel, with its zero-sum worldview, is afraid that, were the military playing field in the Middle East to be levelled by Iran matching Israel’s nuclear-power status, Tel Aviv would no longer exclusively have Washington’s ear.

It would no longer be able, at will, to spread terror across the region. And it would have to reach a settlement with the Palestinians, rather than its preferred plan to commit genocide and ethnically cleanse them.

Similarly, Iran has concluded – based on recent experience – that the US, and especially Trump, can no more be trusted than Israel.

In 2018, in his first term, the US president tore up the nuclear deal signed by his predecessor, Barack Obama. Last summer Trump launched strikes on Iran in the midst of talks. And then late last month he unleashed this war, just as renewed talks were on the brink of success, according to mediators.

Trump’s words are worthless. He could agree to terms tomorrow, but how could Tehran ever be sure that it would not face another round of strikes six months later?

Iran looks to the fate of Gaza over the past two decades. Israel began by blockading the territory, and putting the population on a diet that intensified if they refused to keep quiet in their concentration camp.

Then Israel began “mowing the lawn” every few years – that is, pounding the enclave with air strikes. And Israel ended by unleashing a genocide.

The leaders of Iran are not willing to risk going down that path.

Instead, they believe they need to teach the US a lesson it won’t soon forget. Iran seeks to inflict so much havoc on the global economy, and US client states in the Gulf, that Washington dare not consider a sequel.

This week, the New York Times reported that Iranian strikes had left many of the 13 US military bases in the region “all but uninhabitable”. The 40,000 American troops in the Gulf have had to be “relocated to hotels and office spaces”, including thousands who have been “dispersed… as far away as Europe”.

Stoking the flames

As becomes clearer by the day, US and Israeli interests over Iran are now in opposition.

Trump needs to bring calm back to the markets as soon as possible to avoid a global depression and, with it, the collapse of his domestic support. He must find a way to reimpose stability.

With air strikes failing to dislodge either the ayatollahs or the Revolutionary Guard, he has one of two courses of action open to him: either climb down and engage in humiliating negotiations with Iran, or try to topple the regime through a ground invasion and impose a leader of his choosing.

But given the fact that Iran is not done wreaking damage on the US, and has zero reason to trust Trump’s good faith, Washington is being driven inexorably towards the second path.

Israel, on the other hand, bitterly opposes the first option, negotiations, which would take it back to square one. And it suspects the second option is unachievable.

The primary lesson from Gaza is that Iran’s vast terrain is likely to make invading troops sitting ducks for attack from an unseen enemy.

And there is far too much support for the leadership among Iranians – even if westerners never hear of it – for Israel and the US to foist on the populace the pretender to the throne, Reza Pahlavi, who has been cheering on the bombing of his own people safely from the sidelines.

Israel initiated this war with an entirely different agenda. It seeks chaos in Iran, not stability. That is what it has been trying to engineer in Gaza and Lebanon – and there is every sign it is seeking the same outcome in Iran.

This should have long been understood in Washington.

This week, Jake Sullivan, Joe Biden’s former national security adviser, citedrecent comments by Danny Citrinowicz, a former veteran Israeli military intelligence lead on Iran, that Netanyahu’s aim is to “just break Iran, cause chaos”. Why? “Because,” says Sullivan, “as far as they’re concerned, a broken Iran is less of a threat to Israel.”

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That is the reason Israel keeps assassinating Iranian leaders, as it did earlier in Gaza, in the knowledge that even more belligerent figures will take their place. It wants radicalised, vengeful leaders who refuse to engage, not pragmatists ready to talk.

That is why Israel is targeting civilian infrastructure in Iran, as it did in Gaza and is doing right now in Lebanon, to instil hopelessness and foment division, and to provoke Tehran to lash out in retaliation, provoking more outrage from Iran’s Gulf neighbours and drag the US in still deeper.

That is why Israel has been covertly liaising with – and doubtless arming – minority groups in and around Iran, as it has again done in Gaza and Lebanon, in the hope that it can stoke the flames of internal dissolution yet higher.

States in civil war, consumed by their own internal battles, pose little threat to Israel.

Confusing messages

In typical fashion, Trump is sending confusing messages. He is seeking to negotiate – though with whom is unclear – while amassing troops for a ground invasion.

It is hard to analyse the US president’s intentions because his utterances make precisely no strategic sense.

Last Wednesday night, he told a fundraiser in Washington that Iran wanted to “make a deal so badly”, then added: “They’re afraid to say it because they figure they’ll be killed by their own people. They’re also afraid they’ll be killed by us.”

This is not the logic of a superpower looking to shore up its own authority, and restore order to the region. It is the logic of a cornered crime boss, hoping that a last desperate roll of the dice may disrupt his rivals’ plans sufficiently to turn the tables on them.

That roll of the dice looks likely to be a plan to send US special forces to occupy Kharg Island, the main hub for Iran’s oil exports through the Strait of Hormuz.

Trump appears to think that he can hold the island as ransom, demanding Tehran reopen the Strait or lose its access to its own oil.

According to diplomats, Iran is not only refusing to concede control over the Strait but threatening to carpet-bomb the island – and US forces on it – rather than give Trump leverage. Tehran is also warning that it will start targeting shipping in the Red Sea, a second waterway vital to the transport of oil supplies from the region.

It still has cards to play.

This is a game of chicken Trump will struggle to win. All of which leaves the Israeli leadership sitting pretty.

If Trump ups the stakes, Iran will do so too. If Trump declares victory, Iran will keep firing to underscore that it decides when things come to a halt. And in the unlikely event that the US makes major concessions to Tehran, Israel has manifold ways to stoke the flames again.

In fact, though barely reported by the western media, it is actively fuelling those fires already.

It is destroying south Lebanon, using the levelling of Gaza as the template, and preparing to annex lands south of the Litani River in accordance with its imperial Greater Israel agenda.

It is still killing Palestinians in Gaza, still shrinking the size of their concentration camp, and still blockading aid, food and fuel.

And Israel is stepping up its settler-militia pogroms against Palestinian villages in the occupied West Bank, in preparation for the ethnic cleansing of what was once assumed to be the backbone of a Palestinian state.

Sullivan, Biden’s senior adviser, noted that Israel’s vision of a “broken Iran” was not in America’s interests. It risked prolonged insecurity in the Strait of Hormuz, the collapse of the global economy, and a mass exodus of refugees from the region towards Europe.

That would further deepen a European economic crisis already blamed on immigrants. It would strengthen nativist sentiment that far-right parties are already riding in the polls. It would intensify the legitimacy crisis already faced by European liberal elites, and justify growing authoritarianism.

In other words, it would foment across Europe a political climate even more conducive to Israel’s supremacist, might-is-right agenda.

Trump’s off-ramp is elusive. And Israel will do its level best to make sure it stays that way.