Trump gambled and lost — and there's no going back to normal

Yesterday, the White House went to its favorite gullible reporter to once again create the false impression that the president's war of choice against Iran is going to end any minute now. "Negotiators have reached an agreement on a 60-day memorandum of understanding to extend the ceasefire and launch negotiations on Iran's nuclear program," Barak Ravid said.

Sounds fabulous, except for two premise-cancelling details: "President Trump has yet to give his final approval" and – oh, by the way – "Iran has also not confirmed its acceptance."

For those keeping track at home, this is pretty much the same story that Axios published three weeks ago, on May 6, when Ravid said "the White House believes it's getting close to an agreement with Iran on a one-page memorandum of understanding to end the war."

That story also sounded fabulous, except that Marco Rubio didn't believe the agreement was going to happen. After all, Steve Witkoff and Jared Kushner were negotiating, not him. The details are a bit different, but the goal of each report is pretty much the same: to kick the can down the road and encourage everyone to believe everything's going back to normal soon.

There is no going back to normal. Iran has gained too much from Trump's folly. Forget nukes, the real prize is control of the Strait of Hormuz. Is Iran likely to give that up in peace talks? Never, a career intelligence analyst told me, who goes by the Bluesky handle Shipwreck. "This is the new norm. [Control of the strait is] almost a replacement for their nuclear deterrent."

This is Trump's Catch-22. He can't keep the war going. Iran is burning up the American economy, thus burning up his party's prospects in the coming congressional elections. But he can't stop either. He's deathly afraid of the humiliation of losing a war he started. He keeps chasing after Iran's nuclear program, as if it symbolized victory, but he's too vain to admit he's already given Iran something far more valuable. It now has such a good thing going that other countries want a piece of the action. Oman has said it wants to charge tolls, too.

Whatever our feckless president does, the consequences of his choices will land on us. If Iran throttles the strait, we will pay. If it charges tolls, we will pay. (The cost of paying tribute to Iran, as much as $2 million for each tanker, will be passed on to consumers.) It's so bad investors believe gas prices won't fall to their prewar levels until 2032. That is not a typo.

Trump has lost. He just won't admit it. He will not take his fingers out of his hoary ears long enough to hear anyone say otherwise. His people keep going to reporters like Barak Ravid to maintain the illusion of negotiations proceeding apace. Meanwhile, Iran is said to be able to outlast the US naval blockade for months. If it can hold out until August, a "looming summer oil shock" could threaten "a 2008-style recession," according to the Times of London.

In the end, what has been accomplished? Not much, according to Shipwreck.

The president will try to claim victory, but the real consequences of this war will be "a future in which Iran preserves the ability to build a bomb, its proxies continue harassing Israel, the United States and Gulf neighbors, and another round of fighting becomes inevitable."

"This is the scenario where we see repeated cycles of conflict until the current regime is gone. The problem is that the US has no interest in removing them, so the cycle continues."

What has America gained? Nothing but higher prices on everything.

Here's my interview with Shipwreck.

Is the president believable? Is this war ending?

No, he’s certainly not believable, and the war is not ending. I’d say we’re in a tactical pause, a lull that’s likely to stretch well into the summer and possibly into the fall, marked by short bursts of kinetic action followed by brief negotiation windows.

The Iranians are well‑known for dragging out talks; the [Joint Comprehensive Plan of Action, aka Iran nuclear deal] negotiations alone took nearly nine months before they were finalized. I expect them to continue stretching this process for as long as possible, aiming to weaken US resolve and extract concessions along the way.

The Iranians are masters of this approach. They know how to play the long game, and they will keep at it as long as it serves their strategic interests.

Why do markets keep accepting his lies?

The markets are way too reactive and don’t spend the time to look beyond the immediate future. This is going to drag out. I also think the markets may know this and play the fluctuations to make money. All part of the game.

Will Iran give up control of the strait? It seems too valuable to give up now. What would they ask for in return for "reopening" it?

Never will. This is the new norm. It’s almost a replacement for their nuclear deterrent. The only way they give it up is if we take it by force and we clearly have no appetite for that.

If Iran won't give up its nuke program and won't give up control of the strait, what can be done? Is the naval blockade enough to force Iran to accept a deal? And what would that deal look like?

The naval blockade is impacting them. The longer it goes, the more damage will be done. They are not completely blockaded. Some stuff travels over land and through Caspian Sea, but it has limited their revenue.
Honestly, that’s the million-dollar question and explains the current stalemate. They won’t budge. Their plan is to hope the longterm economic pain softens the US and Trump bails with a bad deal. They are banking on US gas prices going up in the summer and upcoming midterms.
The deal will likely be bad. Trump wants out and will find a way to shape the deal to his constituents. We still may see another round of fighting, but the Iranians are dug in and prepared for that. This will likely drag out until one side blinks. Who that is remains to be seen.

What would the outcome of a bad deal be? Seems to me that Iran would want the price of oil to remain elevated. They would do that by squeezing the straits, charging higher tolls etc.

Likely outcome: some form of Iranian control or influence over the Strait of Hormuz, a nuclear program kept in a diluted or semi‑paused state, and no meaningful limits on proxies or missile forces.
The result is a future in which Iran preserves the ability to build a bomb, its proxies continue harassing Israel, the United States and Gulf neighbors, and another round of fighting becomes inevitable because Israel will not allow Iran to reach a nuclear weapon.

In effect, this is the scenario where we see repeated cycles of conflict until the current regime is gone. The problem is that the US has no interest in removing them, so the cycle continues. Think Gaza and Israel, but on a larger, regional scale going forward.

From the point of view of normal people the world over who are paying for gas, who are paying for things related to gas, this sounds like a future that's not sustainable, all things being equal.

Unfortunately, I think that the prices have been so high for a period of time that the average American has accepted the new norm.
The price is elevated but somewhat stable at its current level, if it goes up dramatically more then I agree, the anger will spill over, likely into the midterms.
On a personal note, this is why I have driven an EV since 2021. The Middle East is too unstable for my liking.

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