Foreign Policy Live

“And that is indeed what they've been trying to do, to normalize and formalize this new order in which the Strait of Hormuz is their Panama Canal. You know, something that they collect resources and revenue from and it's an enormous source of leverage for them. And that is something that is going to be difficult to totally reverse because they've seen, it's a more powerful tool than anything they've had before.”

“Asian economies account for 40 percent of the world's energy demand. Almost all of them are net importers. Pakistan, for example, gets 80 percent of its crude from the Gulf. Bangladesh imports 95 percent of its energy. Energy shocks are like a triple whammy for these countries. They are more dependent, so they have very few options. They have to buy energy in dollars that are more expensive, and they're already in economic trouble.”

“So, what President Trump has done is to significantly reduce his demands of Iran over the last six weeks. If you go back to the speech that he gave at the outset of the war, he had very grand ambitions to destroy Iran's nuclear program, destroy its missiles and drones, destroy its regional proxies, and potentially even bring down the regime. And now, six weeks later, the missiles and drones, as far as we know, are not even part of the negotiations.”

“I think you're absolutely right that what they perhaps have discovered over the last five weeks, that Hormuz enrichment is a far more potent tool for them than the uranium enrichment because most citizens around the world are not really impacted by Iran's nuclear program. But when the Strait of Hormuz is blocked, and as you said, a fifth of the world's oil and natural gas and fertilizer are locked up, then citizens all over the world feel that impact.”

“In my view, if you're looking around the world at which countries are better off now than they were before the war two months ago, the only one I would say with confidence as of now is Russia, and that Russia is just a lot wealthier than it was a few months ago because of the spike in oil prices and the risk premium to energy. With America bogged down in Iran, it has less time to think about Ukraine.”

“One shorthand way of thinking of them is that the principle is that they fear that if Iran reforms, it could end up like the Soviet Union. The pragmatists, I think the model in their head is China. When after Chairman Mao died and Deng Xiaoping came and, as I said, prioritize economic interests before the Cultural Revolution. And at the moment, given the profound mistrust between the United States and Iran, the cynicism of the principalists is difficult for anyone to disregard.”

“I thought Iran as North Korea was the least likely outcome. Unfortunately right now, at least in the immediate term, that may be the most likely outcome of this war, that we have, and again, it depends somewhat on what is the health of Mostafa Khamenei. But as of right now, it looks like it's another hereditary, ideological dictatorship with nuclear ambitions. And they've proven themselves willing to kill potentially tens of thousands of people to stay in power.”

“The United States has some key advantages that most other countries don't. It is geographically blessed with no real adversaries nearby. It has become a true energy superpower, the world's biggest producer of oil and natural gas. It enjoys what is known as the exorbitant privilege of dollar supremacy. Ninety percent of all international commodities are traded in dollars. A strong dollar benefits US importers.”