So the Iranians wouldn’t give up their uranium enrichment or dismantle their enrichment facilities. Or hand over their already enriched uranium.
So President Trump turned the tables, applied some Trumpian Jiu-Jitsu, and put a United States naval blockade on the Strait of Hormuz that will be enforced in the Gulf of Oman.
I’m not sure anybody yet knows how this is all going to go down, but at least beginning today, here’s what America’s Central Command said: “Any vessel entering or departing the blockaded area without authorization is subject to interception, diversion, and capture. The blockade will not impede neutral transit passage through the Strait of Hormuz to or from non-Iranian destinations.”
To my way of thinking, what that means is that anybody that does business with Iran is going to have their ships blockaded. And if the Iranian motorboats take pot shots at our Navy, we will obliterate them just the way we did with all those Venezuelan drug boats.
To a large extent, Mr. Trump has adopted the Venezuela model. Iran sells no oil, makes no money, therefore can’t disperse any money they don’t have, and America takes de facto control of the whole Persian Gulf area.
The president had to say about all of this: “It’s called all in, and all out.” He added: “We think that numerous countries are going to be helping us with this also, but we’re putting on a complete blockade. We’re not going to let Iran make money on selling oil to people that they like, and not people that they don’t like or whatever it is. It’s going to be all or none,” and “I predict they come back and give us everything we want.”
I say good. Then there’s the question of when will Iran go completely bankrupt?
Some quick numbers from several sources, including TIPP Insights and Foundation for Defense of Democracies more than 90 percent of Iran’s nearly 110 billion in annual trade transits the Persian Gulf, crude oil alone was earning $139 million per day before the war started. Petrochemicals earn another $54 million per day.
So at $435 million a day in lost revenues, that comes to $159 billion over a year. That $159 billion loss of revenues is roughly 50 percent more than the entire Iranian budget which comes to roughly $100 billion. At what point does bankruptcy come into play? I honestly don’t know yet.
According to sources, on-shore oil storage in Iran begins to top out in about 13 days. So that means the infrastructure shutting will cause permanent damage. Whether this economic obliteration will bring Iran back to the negotiating table remains to be seen.
There’s a couple of Iranian Islamic Revolutionary Guard Corps crazies that seem to be leaders right now, Mojtaba Vehedi, and Mohammad-Bagher Ghalibaf.
So I wouldn’t be so sure about any benevolent regime change. The big question is how long will it take to starve them out?
Larry Kudlow is a columnist for the New York Sun. From Mr. Kudlow’s broadcast on Fox Business Network.
