Strategic Risk Brief: Managing the Markets?
Trump's suspension of his threats for five days is oddly convenient.
After threatening to destroy Iran’s power sector, American President Donald Trump announced that he would suspend strikes on energy and power infrastructure for five days while previously unannounced talks continued.
Is this credible?
There are some reasons to believe Trump, including:
Iraqi pro-Iran militias had agreed to a 24-hour ceasefire in Iraq to allow the Americans to withdraw from Camp Victory near the Baghdad International Airport. This could not have happened without some communications.
Moreover, the Iranians have shown that they can hit targets that they want to hit. Strikes on power would almost certainly be met in kind, just as the strikes on Iran’s energy were. Air defence systems have shown their severe limits.
Without this kind of destruction, the Iranians could hold out for many months, requiring an unfeasible ground intervention or an open-ended war that wrecks Gulf energy.
The Omanis, Qataris, Turks, Egyptians, and Russians have been contacted to mediate the conflict.
It is evident that a major economic collapse would result from this war continuing. This was the main reason we thought that a war would have to be brief.
There was always the possibility of Trump backing down.
