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War settles into a global systems crisis

The conflict between the U.S. and Israel with Iran is solidifying as a global systems crisis rather than a conventional military exchange. 

Iranian policy appears comparatively clear: resist at all costs, preserve leverage, and assume the other side does not have strategic patience. 

American policy is harder to read. Washington appears committed to sustaining strikes, force deployments, and pressure on Iran for at least several more weeks, but without yet making the logistical preparations that would point to a major mechanized ground invasion.

At the same time, questions are growing over the relationship between U.S. policy signals and market activity. A series of unusually timed trades in prediction markets and oil futures, including activity shortly before major U.S. decisions, has raised suspicion even though no public evidence has shown that any insider traded or tipped others. The issue adds a new layer of uncertainty to a war already shaped by abrupt messaging shifts, market volatility, and rumor.

The most likely path is no longer either decisive military victory or rapid de-escalation. Instead, the war appears to be settling into a prolonged campaign of coercion under partial corridor management. Iran is not formally closing the Strait of Hormuz, but is instead maintaining a selective and politically discriminatory access regime that allows some traffic to move while preserving constant uncertainty over shipping, insurance, and logistics. That approach keeps pressure on global markets without incurring the costs of a total shutdown.

The consequences are spreading far beyond oil. The war is exerting increasing pressure on LNG, aviation, airport fuel infrastructure, maritime insurance, and wider industrial and agricultural supply chains. GCC states are now active home-front theaters, with repeated missile and drone interceptions, infrastructure incidents, and rising concern over sleeper cells and proxy sabotage. Lebanon and Iraq remain the main secondary fronts, while aviation fuel, LNG availability, and commercial shipping disruptions are transmitting the shock outward faster than crude prices alone.

The broad conclusion is that the center of gravity has shifted. Hormuz remains critical, but it is no longer the only lens through which to understand the conflict. Airport fuel tanks, shipping lanes, LNG deliveries, desalination risk, domestic GCC security, and market confidence are now all part of the same battlespace. 

That makes the war harder to contain, because escalation may no longer come through one dramatic step alone. It can also emerge cumulatively, through repeated disruptions across multiple systems.

For now, the likeliest outcome is a long war of attrition marked by selective maritime coercion, expanding infrastructure stress, and recurring global economic shock. The greatest danger is that this unstable middle ground proves unsustainable, pushing the region from severe disruption into a wider infrastructure war, and with it, a much deeper global crisis.

Washington is intensifying pressure on Iran, but its strategy remains opaque

The White House has offered its clearest sign yet that the Iran campaign may have a time horizon. Karoline Leavitt, the White House press secretary, yesterday reaffirmed a four-to-six-week timeline for the operation, suggesting that Washington is preparing for a sustained period of strikes, force movements, and coercive pressure rather than a short, symbolic exchange.

That is significant, but it does not amount to strategic clarity. The U.S. military says it has now struck 10,000 targets in Iran. Two Marine expeditionary units have been deployed to CENTCOM, alongside elements of the 82nd Airborne. These moves raise the possibility of wider operations. Even so, the U.S. has not yet moved the heavy equipment that would be required for sustained ground warfare inside Iran. That suggests a psychological campaign designed to intensify pressure without committing to a major land invasion, or preparation for smaller ground incursions.

Washington’s messaging, meanwhile, continues to shift in tone. President Donald Trump’s public statements move repeatedly between threats, claims that peace is near, suggestions that Iran is making concessions, and hints that negotiations are under way. This has made U.S. policy unusually hard to parse. Much of it appears flexible, signal-driven, and responsive to fast-moving events, but also impulsive and contradictory.

There are also signs that parts of the Gulf are trying to push Washington toward a firmer line. ADNOC’s chief executive reportedly told Vice President JD Vance that only full free passage through Hormuz can stabilize markets. UAE Ambassador to the U.S. Yousef al-Otaiba said that a simple ceasefire is insufficient. Otaiba argued that any durable outcome must address Iran’s nuclear program, missiles, drones, proxy network, and interference with international sea lanes. He said the UAE wants Iran as a normal neighbor, but not one that attacks neighbors, blockades international waters, or exports extremism.

For now, the most plausible reading is that the U.S. is pursuing a bounded but serious campaign: high intensity in the air and at sea, ambiguous in political messaging, but still stopping short of the commitment required for a full-scale invasion.

Iran is using Hormuz as a filter, not a gate

The Strait of Hormuz remains the central pressure point of the war, but Iran’s approach has become clearer. Tehran is not pursuing a clean, formal shutdown. Instead, it appears to be operating a selective access regime that is coercive, politicized, and commercially disruptive, while still allowing some traffic to move.

That distinction matters. A selective regime preserves ambiguity, and control. It allows Iran to demonstrate its ability to manage the strait to its own advantage, reward or spare “non-hostile” shipping, and impose insurance, routing, and pricing uncertainty on global commerce without fully closing the waterway. It is a more flexible and therefore more sustainable instrument of pressure.

There are now signs of exactly how this model coming to operate. COSCO Shipping (China) has resumed new bookings for general cargo containers from the Far East to Gulf destinations including the UAE, Saudi Arabia, Bahrain, Qatar, Kuwait, and Iraq. But the company has also warned that actual carriage remains subject to change because of regional volatility. This is not normalization. It is partial, cautious movement under stress and Iranian authorization.

The commercial result is increasingly clear. Hormuz is no longer functioning as a reliably open artery of world trade, nor is it fully closed. It is becoming something more damaging in its own way: a controlled corridor where uncertainty is constant, legality is contested, and Iran controls the flow and thus exercises leverage over the global economy.

Iran is under heavier bombardment, but remains defiant

The pace and breadth of strikes inside Iran are intensifying. U.S. and Israeli attacks over the past 24 hours were reportedly the heaviest since the war began, with strikes or reported impacts in Najafabad, the mountains near Khomeini-Shahr, Shiraz, Lamerd Airport, Isfahan, Karaj, Bandar Abbas, Mashhad, and Taybad.

Residents in central Iran reported multiple explosions early Thursday, while widespread fires were seen in mountainous areas near Khomeini-Shahr. The operational message is one of growing pressure. The political message from Tehran, however, remains one of unyielding resistance.

Mohammad Bagher Qalibaf, the speaker of parliament and one of Iran’s most powerful politicians, warned that enemies backed by a regional state were preparing to occupy one of Iran’s islands. He said Iran was monitoring all enemy movements and threatened that, if such a move occurred, the vital infrastructure of the state involved would be struck without limits. The likely targets of the warning were left ambiguous, though Gulf states will not have missed the implication.

Even the regime’s internal messaging has turned more extreme. Reports that Iranian citizens are receiving text messages soliciting donations for a bounty to assassinate President Donald Trump suggest that the state, or parts of it, are leaning further into a narrative of total war and unrestrained confrontation.

This matters because it underlines the central asymmetry of the moment. Washington is escalating militarily while still appearing politically ambiguous. Tehran is taking heavy military punishment while preserving a more coherent political line: no retreat, no submission, no compromise under fire. That does not mean Iran is winning, in pure military terms it is being heavily degraded. But it does mean that its strategic posture remains more stable than that of its adversary. As Clausewitz said: “War is the continuation of politics by other means.”

Lebanon and Iraq are hardening as the main secondary fronts

Lebanon and Iraq remain the two most important secondary theaters of the war, though each is evolving in a different way.

In Lebanon, Israel’s defense minister has said the IDF will occupy the south up to the Litani River. Ground forces have reportedly reached Qantara, while Israeli strikes have targeted fuel stations belonging to the Amana company, which is under U.S. sanctions and is widely regarded as a Hezbollah economic arm. Eleven stations have already been hit, and more may follow. This suggests a campaign not only against Hezbollah’s fighters, but against its financial and logistical network.

At the same time, Lebanon’s state is showing unusual signs of friction with Iran. Lebanese army intelligence reportedly cordoned off a building in the eastern Beirut suburb of Antelias after receiving information about an Iranian figure inside, who was then removed. Over the past week the Lebanese government has banned the IRGC, expelled the Iranian ambassador, and taken action against an Iranian official in a largely Christian residential area. That points to a deeper political rupture, not just a military confrontation.

In Iraq the picture is different. U.S. A-10 aircraft yesterday struck Habaniyeh military base in western Iraq, apparently targeting facilities where pro-Iran militia members were being treated, but killing several Iraqi soldiers. Prime Minister Mohammed Shia al-Sudani responded by ordering the Foreign Ministry to summon the U.S. Embassy’s chargé d’affaires in Baghdad. Sudani is trying to maintain relations with his pro-Iran political backers, while also maintaining good relations with the U.S. It is a difficult balance and becoming increasingly hard to maintain.

Both theaters therefore remain volatile, but in different ways.

Lebanon is moving toward deeper territorial confrontation and a more explicit effort to dismantle Hezbollah-linked infrastructure, with the possibility of intercommunal strife looming.

Iraq remains more constrained politically, but direct U.S.-militia friction is growing. In both cases, the danger is that “secondary” fronts become major escalatory drivers in their own right.

The ultimate complex system

Energy shock is spreading faster refined hyrdocarbons rather than crude oil

The war’s economic shock is no longer being transmitted mainly through crude. Oil still matters, and Brent closed at $102.22 a barrel while WTI ended at $90.32 yesterday. But the wider pattern is that LNG, jet fuel, and fuel distribution are now spreading the crisis faster and more broadly than crude alone.

Part of the reason is that floating stocks are masking the true severity of the oil shock. Nearly 170m barrels of Iranian oil and more than 150m barrels of Russian shadow-fleet oil are reportedly still at sea and being sold into international markets, particularly in Asia. That is cushioning prices for now. But those stocks are finite and could be exhausted within a month or six weeks at current rates of use.

The deeper vulnerability lies elsewhere. QatarEnergy has declared force majeure on LNG contracts with Italy, Belgium, South Korea, and China. And other customers can’t access supplies due to the throttling of the strait. LNG matters not just as a fuel, but as an industrial input for plastics and fertilizer. Strategic oil reserves exist in many countries, even if often in inadequate quantity. Strategic LNG reserves are far less common.

The aviation sector offers another glimpse of how the shock is spreading. IATA says global jet-fuel prices rose 12.6% week on week to $197 a barrel. Carriers across the Gulf are still operating at reduced capacity. Delta has canceled flights to and from Israel until September. Finnair has warned that jet-fuel supplies could run out if Hormuz remains effectively shut. In Africa, around 70% of jet fuel and kerosene imports reportedly transit via Hormuz, while South African coastal airports have seen jet-fuel prices jump sharply.

This is why the conflict increasingly resembles a systems crisis. Oil remains the headline commodity. But LNG, aviation fuel, fertilizers, plastics, and shipping insurance may prove the more dangerous channels of economic contagion.

It’s the U.S. vs China, everyone needs to pick a side

Russia’s oil exports face deep disruption as Ukraine strikes

Russia’s oil-export system is facing what may be its most serious disruption in modern times, after a series of Ukrainian drone strikes, damage to key transport infrastructure, and the seizure of tankers sharply reduced Moscow’s ability to move crude to market.

Reports indicate that as much as 40% of Russia’s oil-export capacity is now halted or impaired after Ukrainian strikes yesterday. The disruption appears to span major Baltic and Black Sea outlets, as well as pipeline infrastructure, hitting the arteries through which Russia earns some of its most important wartime revenue. Although Moscow can still redirect some flows through eastern routes and Pacific ports, the scale of the interruption suggests a new stage in Ukraine’s strategy: from targeting isolated facilities to straining Russia’s entire export machine on a systemic level.

The pressure intensified further in the Black Sea. A drone reportedly struck the Turkish-operated Suezmax tanker Altura, a sanctioned vessel said to be carrying 140,000 tons of Russian crude. The strike caused a large explosion, damaged the bridge, and led to flooding in the engine room. The episode points to rising maritime risk not only for Russian cargoes, but also for commercial traffic moving near one of the region’s most sensitive sea lanes.

At the same time, the diplomatic track appears to be hardening. President Volodymyr Zelensky yesterday in a media interview yesterday that the U.S. had made proposed security guarantees for a peace deal conditional on Ukraine ceding all of the Donbas to Russia. If accurate, that would mark a sharp turn in the terms under discussion, pairing increasing military pressure on Russia’s energy lifeline with a politically unacceptable formula for ending the war.

Trump reschedules Beijing summit with Xi for mid-May

President Donald Trump said he will travel to Beijing on 14 and 15 May for a rescheduled summit with President Xi Jinping, reviving a high-level visit that had been delayed as Washington’s military campaign against Iran absorbed the White House.

§Trump said First Lady Melania Trump would accompany him, and that he and Melania would later host Xi and Madame Peng in Washington for a reciprocal visit later this year. The White House has also confirmed the new dates.

The development matters because it suggests that, even as the war with Iran continues to dominate U.S. foreign policy, both sides still attach importance to steadying the world’s most consequential bilateral relationship. Trump’s trip to Beijing would be his first visit to China in eight years, and the first in-person meeting between the two leaders since their talks in South Korea in October 2025, when they agreed to a trade truce.

The summit is likely to include difficult bargaining. Officials appear to see room for goodwill deals in areas such as agriculture and aircraft parts. But the broader agenda remains fraught: Taiwan, trade tensions, rare earths, technology, and the wider geopolitical consequences of the Iran conflict all weigh on the relationship. The earlier postponement reflected the extent to which the Middle East crisis had disrupted Washington’s effort to reset ties with Beijing, particularly because China remains Iran’s main oil buyer and the war has added pressure to global energy and shipping routes.

Even so, the diplomatic picture is not fully settled. China’s embassy in Washington said it had no information to provide on Trump’s announcement. On 26 March, China’s Foreign Ministry also stopped short of confirming the dates, saying only that the two countries were in communication regarding Trump’s visit. That leaves an unsettling level of uncertainty over this geopolitically significant meeting.

The new Monroe Doctrine & the Trump Corollary 

Venezuela’s return to energy diplomacy

What makes Venezuela important again is not merely rising output, but the simultaneous movement of politics, sanctions policy, and commercial law.

On 25 March, production figures showed that Venezuela’s oil output, including condensate and gas liquids, had reached 1.1 million barrels a day in March, up from 942,000 barrels a day in January.

A week earlier, the U.S. Treasury had issued a general license broadly authorizing U.S. firms to do business with PDVSA. Washington argued that the measure could help attract investment and, over time, raise productive capacity.

That is why energy diplomacy matters here. The question is no longer simply how many barrels Venezuela can pump. It is also about who gets access, under what legal protections, and with what political backing from Washington.

On 5 March, the U.S. and Venezuela agreed to re-establish diplomatic and consular relations. The State Department said the move was intended to support stability, economic recovery, and a peaceful transition. That reopening restores a direct state-to-state channel for energy negotiations, rather than leaving the process to sanctions waivers and improvised corporate bargaining alone.

The commercial constraint is legal certainty. Chevron’s chief executive has said that progress is real, but that large-scale investment still requires firmer rules. Chevron wants clearer fiscal terms, access to international arbitration, and less ambiguity in the revised hydrocarbons law. The company is particularly concerned that the state still retains too much discretion over royalties and incentives. Chevron is already PDVSA’s largest partner and is producing about 250,000 barrels a day, roughly a quarter of the country’s crude output. Its demands therefore carry weight.

Exxon’s position is more telling still. On 25 March, the company had a team in Venezuela assessing oil and gas resources and, crucially, the condition of the infrastructure. But in January Exxon’s chief executive had described the country as “uninvestable” without durable protections for new investment. Interest, in other words, has returned. Confidence has not.

The larger point is that Venezuela is re-entering the Western energy map, but as a negotiated opening rather than a settled comeback. Output is rising, sanctions have eased, and diplomacy has resumed. But until Caracas offers stronger arbitration rights, clearer tax treatment, and more predictable contract enforcement, the major oil companies are likely to regard Venezuela as promising, but still structurally risky.

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