Geopolitics Weekly analyzes emerging geopolitical trends around the world, distilling the cacophony of global events into one easy reader. It lands in the inbox of Geopolitical Monitor subscribers every week.

 

Middle East

Ceasefire Extended Indefinitely, Weekend Talks Collapse, and Strait of Hormuz Remains Double-Blockaded

What Happened

Notable events in the Iran war over the past week:

  • The Iran war is depleting ordinance stockpiles and generating ‘near-term risk’ should another conflict breaking out in the next few years, as per CNN reporting based on multiple DoD sources. Elsewhere, CSIS analysis estimates that the US military has run through at least 45% of its precision strike missiles, 50% of THAAD interceptors, and 50% of Patriot interceptors. Previous GPM reports outline how replenishing these stocks will be a slow and costly process. The takeaway is sobering for US military planners: the longer the Iran war drags on, and especially if the ceasefire breaks down, the more military capacity is being eroded in the here and now.
  • Iran has inflicted ‘extensive’ damage on regional US military installations during the war, as per reporting from NBC news. Damages from Iranian strikes on satellite communications, radars, and bases are believed to number in the tens of billions, exceeding what the Trump administration has publicly disclosed. Apart from the inherent political risks of any bad news given an already war-wary US public, an expensive and protracted rebuilding process will influence how Gulf states calibrate their post-war relationships with the US military.
  • At least 26 Iranian vessels have bypassed the US blockade in the Arabian Sea, as per Lloyd’s List reporting on April 20. This is to be expected given the inherent enforcement challenges highlighted in last week’s mailer. However, it doesn’t mean the US blockade is not having a substantial effect on the Iranian economy, gradually increasing US leverage at the negotiating table.
  • Treasury Secretary Scott Bessent told a Senate appropriations committee on April 22 that ‘many’ US allies had requested currency swaps, including Asian states. The testimony comes days after news broke that the UAE was in discussions with the Trump administration to establish a currency swap. The political optics of bailing out an oil-rich emirate would be fraught, but bear in mind the UAE holds about $120 billion worth of US Treasuries. A liquidation of its holdings risks a chain reaction that could ripple through global financial circuits, and particularly at a time when the US dollar’s safe-haven status is no longer taken as a point of faith. This is what Bessent is alluding to when he says that currency swaps are the only way to prevent a ‘disorderly’ sale of US assets. He has framed them as a way to ensure the greenback’s ongoing primacy in global finance.