Middle East
Iran War Ceasefire Frays as Major Attacks Resume
What Happened
A dignified exit from the Iran war is distant as ever for the Trump administration:
Disparate US-Israeli war aims became painfully evident over the week. The previous Geopolitics Weekly noted how the Lebanon campaign was insinuating Israel into the heart of US-Iran talks. On June 1, the Iranian authorities suspended bilateral negotiations with Washington and threatened a complete closure of the Strait of Hormuz, citing Israeli ceasefire breaches in Lebanon. Later that day, President Trump called Prime Minister Netanyahu ‘fucking crazy’ in heated telephone exchange where the US president reportedly urged his counterpart to de-escalate in Lebanon.
As in the past, the Trump administration leveraged direct talks between the government of Lebanon and Israel to coax the Iranians back to the table. These US-based talks produced a new ceasefire deal on June 4. But the agreement was never going to stop the fighting in southern Lebanon for several reasons: 1) the deal was rejected outright by Hezbollah; 2) its ‘pilot zone’ scheme of swapping national army units for Hezbollah positions was wildly impractical absent buy-in from Hezbollah; and 3) the ceasefire was undermined out-of-the-gate by ongoing IDF strikes and expanding evacuation orders in southern Lebanon. The undermining became explicit with the strikes on Beirut toward the end of the week, which put not just the April ceasefire to the flame but potentially the Trump-Netanyahu personal relationship as well.
The ceasefire has failed to stop the fighting, as expected. But in the past, a partial de-escalation has saved enough face for the Iranians to resume the bilateral process with Washington. Not so this time. And now with this week’s revelations of Israeli spying on US talks, hostility is spilling into the open. President Trump asserted over the weekend that the Israelis will have ‘no choice’ but to accept whatever the US deal ends up being. In the same FT interview, Trump repeated ‘I call the shots’ several times. Perhaps the president doth protest too much.
Escalatory attacks launched throughout the week. A string of attacks was launched over the week, eroding the integrity of the April ceasefire:
- The US targeted an empty tanker approaching Kharg Island on June 2;
- Iran launched drone and missiles against targets in Bahrain and Kuwait on June 3. One Iranian drone hit the Kuwait International Airport, injuring 60 and killing one;
- The US military launched ‘self-defense strikes against Qeshm Island in the Strait of Hormuz later on the same day;
- CENTCOM announced that it intercepted a wave of Iranian drones targeting Gulf states on June 5;
- The US military attacked radar sites on Qeshm and the city of Goruk on June 5;
- Israel launched airstrikes on southern Beirut on June 7; and
- Iran launched missiles at Israel on June 7, threatening a ‘full week of continuous strikes.’
The attacks highlight a ceasefire that is restricted to the rhetorical sphere, with Iran responding in a predictable pattern to every perceived breach (blockaded tanker, US strikes, Beirut strikes). Such escalations should be expected given that Iran’s response: 1) imposes costs and incentivizes Washington to maintain the integrity of the ceasefire; 2) increases negotiating leverage by maintaining economic pressure on the Trump administration via global markets; and 3) reminds US Gulf allies their structural vulnerabilities and the necessity of reaching a long-term security accommodation with Tehran.
US oil industry warns Trump that status quo in Strait of Hormuz is unsustainable. Politico reports that oil industry figures have been warning the Trump administration to expect major price spikes in the coming weeks unless the Strait of Hormuz is opened. The revelation echoes earlier statements from the CEO of Chevron just one week ago, and recent warnings that commercial reserves are lower than they’ve been in 20 years. Estimates of the remaining runway range from weeks to months.
The global oil prices we see aren’t the result of normal supply-demand dynamics; rather, they are skewed by releases from domestic and international strategic reserves. These so-called shock absorbers are finite. When exhausted, the price movements will become more volatile. In practical terms, this translates into a hard deadline for President Trump’s diplomatic efforts to unblock the Strait of Hormuz. If the deadline is passed, the global economic fallout accelerates.
Economic strains are mounting on the Iranian side as well. Though a protracted internet shutdown and state control of the information sphere may obscure them, signs of economic strain are appearing on the Iranian side. Anecdotal reporting in markets in Tehran reveals mounting cost-of-living pressures, particularly across staples and utilities. Rolling blackouts are being also reported amid a widening state crackdown on dissent.
Deprived of the oil and gas revenues that account for anywhere from 25-30% of its national budget, the Iranian government has limited options to stem the bleed. The US blockade has cost Iran as much as $6 billion in lost oil revenues so far, up to $250 billion a day, and the country is beginning to run out of inventory space for unsold oil.
Asia
Taiwan and China Coast Guards Clash in South China Sea Standoff
What Happened
Chinese coast guard vessels encroached on waters near Taiwan-controlled Pratas Islands, triggering a standoff with the Taiwanese coast guard that is ongoing. This is the second time in as many weeks that Chinese vessels were spotted operating around Pratas, which is home to a Taiwanese national park and the largest island in the South China Sea.
Why It Matters
Pratas lies over 400 km from Taiwan’s main island. Taiwanese sovereignty over it is a relic of the Chinese civil war, with control remaining with the defeated Republic of China (ROC) for lack of any naval capacity to challenge it on the part of the People’s Republic of China (PRC). With the modern expansion of Beijing’s naval power, this no longer holds true.
Pratas, along with the more fortified Taiping Island which lies around 1,000 km from Taiwan, would be a challenge for the ROC Navy to defend, and any decision to do so would necessitate trade-offs regarding the main island’s defenses. A PRC operation to seize the islands would also be diplomatically fraught for Washington, which would be forced to decide whether to extend its ever-ambiguous (non?) security guarantees to Taiwan’s outlying islands.
It is in this context that the Pratas island standoff matters, because it mirrors long-discussed hypotheticals where Beijing starts to ‘slice the salami’ on Taiwanese sovereignty outside the main island. Bear in mind that it’s not just the South China Sea: the Kinmen islands in the Taiwan Strait lie within sight of the skyline of China’s Xiamen.
An escalation of the Pratas standoff in the weeks ahead would be cause for concern for US and Taiwanese officials. This would mirror past escalations in the South China Sea, notably the Scarborough Shoal, where a gradual escalation of ground-level presence fed into a standoff and eventually a permanent transfer of de facto control from Manila to Beijing.
Europe
US House Defies President Trump on Ukraine War Funding
What Happened
The US House of Representatives passed the Ukraine Support Act on June 4 by a margin of 226-195, sending it to a likely death in the Senate. The Act would introduce new sanctions on Russia; establish a reconstruction fund; re-establish military assistance to Ukraine under lend lease terms; and extend intelligence sharing cooperation.
Why It Matters
The bill is doomed to fail, either in the Senate or under the veto pen. But it’s still remarkable that it managed to get through the House despite President Trump’s opposition, and it reflects enduring support within the GOP for the Ukrainian war effort. Should the president’s grip on his party ever begin to slip, the hitherto bilateral consensus for supporting Kyiv would resurface.
World
Supercharged El Niño Risks Compounding Food Security Impacts of Iran War
What Happened
The World Meteorological Organization has put the odds of an El Niño weather event from June to August at 80%, with the potential to continue through to November. This translates into higher-than-average temperatures globally and a higher risk of extreme events such as drought and heavy rainfall.
The last El Niño event was the strongest ever, breaking records for new global average temperatures for two consecutive years in 2023 and 2024. The event marked the first time that the global average exceeded 1.5 degrees from pre-industrial levels, and it coincided with volatile rainfall patterns, floods, and wildfire globally, along with the worst drought to hit southern Africa in over 100 years.
Why It Matters
Two significant stressors now loom over global food production. The first is the input shock of the Iran war, manifest in higher energy and fertilizer costs. The second is the risk of lower yields from extreme weather events. The combination has the World Economic Forum warning of a potential ‘systemic shock’ to global food supply.
The impact of El Niño typically radiates outward from Asia, where signs of stress are already appearing in the planting season, before impacting the Americas later in the cycle. The specific impacts are difficult to predict: some regions may see precipitation relief after years of dry weather, others will be racked by drought.
Powerful El Niño cycles can also correspond with more active wildfire seasons in certain geographies, including Canada. The 2023-24 event coincided with some of the most devastating Canadian wildfires in over a century, and experts have warned of a potential repeat, particularly on the back end of the event.
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. This week’s edition has been made available to all our readers.
