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Iran war, and regional, situation update

As we move into the third week of the Iran war, it has entered a longer, harsher, and more unpredictable phase than Washington appears to have expected.

U.S. and Israeli strikes have inflicted heavy damage on Iran’s senior leadership, command networks, missile infrastructure, and nuclear-related assets. But they have not broken the regime nor stripped it of its ability to impose costs across the region. Instead, Iran looks less like a collapsing state than a fragmented but still cohesive coercive system, in which formal political leaders appear sidelined while the Islamic Revolutionary Guard Corps sustains military operations, pressure on Gulf states, and disruption around the Strait of Hormuz.

That has made de-escalation harder, not easier. The decapitation of senior Iranian leaders has narrowed the pool of credible interlocutors for any future U.S. negotiation, even if both sides later look for a way out.

At the same time, the conflict is spreading beyond Iran itself. Iraq and Lebanon are emerging as the most dangerous secondary fronts, Gulf monarchies remain under steady missile and drone pressure, and the shock from Hormuz is beginning to reverberate through global trade, especially in Asia.

For the Trump administration, the campaign now looks harder to contain than first expected. Iranian retaliation has already damaged elements of the U.S.-led Gulf air-defense network, including the loss of an AN/TPY-2 radar in Jordan and reported damage to Qatar’s early-warning radar. In response, Washington has adjusted its posture. The deployment of the 31st Marine Expeditionary Unit from Okinawa, embarked on the USS Tripoli and related amphibious ships, points to a growing need for flexible crisis-response forces around Hormuz rather than to any imminent ground invasion of Iran. The halt to a major 82nd Airborne exercise at Fort Bragg suggests further contingency planning may be under way.

Military flexibility abroad is being matched by political fragility at home. U.S. polling suggests the war is unpopular, especially any prospect of ground deployment. Americans remain uneasy about casualties, unclear objectives, and rising gasoline prices. Kevin Hassett, a senior Trump economic advisor, has said yesterday that the war has already cost $12 billion. President Donald Trump appears committed to continuing operations for now and may announce a coalition to escort shipping through Hormuz. But the likelier medium-term path is a declaration of partial success followed by a drawdown of major U.S. assets, while selective strikes continue.

Iran, for its part, is displaying the resilience of a system built for wartime fragmentation. President Masoud Pezeshkian and Foreign Minister Abbas Araghchi appear unable to direct the military campaign in any meaningful way. Araghchi apologized for attacks on Oman on 1 March, only for IRGC units to strike Oman again almost immediately. Pezeshkian apologized for attacks on GCC states on 7 March, after which IRGC-linked media diluted his comments and attacks continued. The pattern suggests that the formal state is no longer setting the tempo.

The real center of gravity lies in the IRGC’s decentralized structure. Divided into 31 regional commands and long prepared to operate after the degradation of centralized command and control, the Guards appear to be functioning much as designed. Iran’s missile and drone launches against Israel and the Gulf have fallen sharply, by about 90% from the early days of the war, indicating successful U.S.-Israeli attrition. But Iran does not need high launch volumes to remain strategically dangerous. It can still harass Gulf states, disrupt shipping, and impose costs through low-level asymmetric pressure. Without a ground invasion, regime change by airpower alone remains improbable.

Nowhere is the spillover more dangerous than Iraq. The country is becoming a major secondary front, with U.S. and Israeli strikes on pro-Iran militias intensifying and militia attacks on U.S., Kurdish, and foreign targets widening in scope. In Baghdad, a strike on 14 March killed three senior Kataib Hezbollah members. The same day, the U.S. embassy compound was hit by a militia missile. Further U.S. airstrikes followed in south Baghdad, Kirkuk, Salahaddin, and western Anbar. Militias have also struck sites near Baghdad airport and Erbil, and one attack killed a French soldier and wounded six others. Another attempted drone strike on the U.S. embassy in Baghdad was shot down, while U.S. forces at Balad Air Base also came under attack.

This military deterioration is unfolding inside an Iraqi state already hollowed out by political paralysis and financial strain. Iraq still has no new government after its November 2025 election. Pro-Iran factions remain deeply embedded in both politics and security. Meanwhile, the throttling of Hormuz and attacks on shipping near Basra have slashed Iraq’s crude output, leaving most of its export capacity offline. Officials are quietly warning that salaries may not be paid next month if exports do not recover. Iraq is not collapsing, but it is moving toward a dangerous convergence of militia warfare, state dysfunction, blackouts, protests, and cash shortages.

Lebanon is sliding deeper into war as well. Three Israeli divisions are operating in the south, with heavy fighting around Khiam and reports that the IDF now controls about 40% of the town. Although Israel initially presented its aim as the consolidation of a narrow border buffer, many in Beirut believe a broader territorial push is under way, potentially extending much deeper into southern Lebanon. Nearly 1 million Lebanese have been displaced, evacuations have stretched as far as the Zahrani River, and bridges across the Litani have been destroyed. Hezbollah continues intermittent strikes into northern Israel, but not at a level sufficient to halt Israeli advances. Lebanon’s state remains too weak to confront Hezbollah directly and risks fracture if forced to try.

Across the Gulf, Iran’s attacks have been heavy but have not broken state resilience. The UAE has borne the brunt (including a strike this morning that closed Dubai airport), with hundreds of missiles and more than 1,600 drones reported between 28 February and today, though volumes appear to be falling. Kuwait has also come under serious pressure, including drone strikes that damaged radar systems at Kuwait International Airport. Even so, there is no hard evidence that Gulf air defenses are running short. Civilian supplies remain manageable, especially in the UAE, but the longer the war lasts, the more the economic strain will build, with expatriate departures and delayed investment likely to increase.

The greatest strategic danger, however, lies at sea. The Strait of Hormuz is not fully closed, but it is being throttled, and even partial disruption is already sending shockwaves through oil, LNG, fertilizers, shipping, aviation, and Asian supply chains. Some ships, especially those linked to India and China, still appear able to transit, sometimes by switching off transponders (we have counted seven ships transiting the strait since Saturday). But the broader effect is already plain: higher fuel costs, industrial stress, and rising inflation risks. If the Bab al-Mandab is also drawn in, the consequences could become global and severe.

That possibility is no longer distant. The Houthis have stayed out of the conflict so far, but Iranian-linked messaging suggests they may not do so indefinitely. If attacks spread to the Bab al-Mandab, another major chokepoint, the economic damage would deepen sharply. 

Syria, by contrast, is unlikely to enter the war directly, though it may see localized clashes with Hezbollah near the Lebanese border.

Israel remains militarily effective, but it too is under strain. Iranian missile fire has declined sharply, allowing some easing of civilian restrictions. Public support for the war remains high despite widespread fear. But Israel is reportedly running low on U.S.-sourced ballistic-missile interceptors (though Israeli made interceptors are not in short supply), and a long war will bring mounting economic costs and greater domestic political friction.

The most likely outcome, then, is not decisive victory but an extended conflict of attrition: selective strikes, persistent maritime disruption, deepening strain on Iraq and Lebanon, continued pressure on the Gulf, and a rising risk of terrorism and civil disorder well beyond the region. The war is no longer simply a military contest over Iran. It is becoming a broader test of whether the region, and the wider world economy, can absorb a slow-burning conflict with no clear end in sight.

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

U.S.-China trade diplomacy runs into Hormuz pressure

U.S.-China trade talks opened in Paris on 16 March, as U.S. Treasury Secretary Scott Bessent met Chinese Vice Premier He Lifeng ahead of a planned summit between President Donald Trump and Xi Jinping from 31 March to 2 April.

The talks matter not only because of tariffs, but also because they touch supply chains, technology controls, critical minerals, and the broader strategic balance between the world’s two biggest economies.

But the diplomatic opening has been complicated by the war in and around the Gulf. In an interview with the Financial Times, Trump said he could delay the summit with Xi and suggested that he expected Beijing to help reopen the Strait of Hormuz before he travels. That adds another layer of pressure to a relationship already strained by tariffs and export controls.

Washington is now seeking to connect economic stabilization to a security crisis in which China has major energy interests but little desire to align openly with a U.S.-led military effort.

The result is an uneasy overlap between trade diplomacy and hard geopolitics. On one track, both sides are exploring a narrower accommodation on commerce. On another, the Trump administration is indicating that access to a high-level summit may depend partly on how far China is willing to help manage a crisis in the Gulf. That raises the stakes well beyond bilateral tariffs. The question now is whether Washington and Beijing can steady economic ties while remaining at odds over the use of power, maritime security, and the political terms of global order.

China resumes pressure on Taiwan after a brief lull

China has resumed a heavier pattern of military activity around Taiwan after an unusual pause, a reminder that any developments in U.S.-China diplomacy are unfolding alongside continued pressure on Taipei.

Taiwan’s defense ministry said it detected 26 Chinese military aircraft and seven naval vessels near the island over a 24-hour period on 15 March, with 16 aircraft crossing the median line of the Taiwan Strait or entering Taiwan’s air-defense identification zone. That was the largest such air operation since 25 February.

The change matters less because it points to an imminent attack than because it shows how elevated the baseline of pressure remains. Chinese military aircraft had been noticeably quieter for roughly 10 days, prompting speculation that Beijing might be recalibrating its posture, pausing during its annual political meetings, or seeking to reduce friction ahead of the latest U.S.-China diplomatic contacts. Chinese naval activity around Taiwan, however, did not stop, suggesting that the pause was limited rather than a genuine easing of pressure.

North Korea ties itself more tightly to Russia’s war

North Korea is again reminding its neighbors that the Korean Peninsula cannot be treated as a self-contained security problem.

On 14 March, Pyongyang fired about ten ballistic missiles into the eastern sea, according to South Korea’s military, in a fresh show of force timed to coincide with the annual Freedom Shield exercises held by South Korea and the U.S. A day later, North Korean state media said Kim Jong Un had overseen a live-fire drill involving 600-millimeter (23.6-inch) multiple rocket launchers that Pyongyang describes as capable of delivering tactical nuclear strikes.

The immediate message was familiar enough. North Korea continues to use missile activity to answer allied military exercises and to show that diplomacy remains frozen. But the broader context is more consequential. Pyongyang’s growing military partnership with Russia has tied tensions on the Korean Peninsula to the war in Ukraine and to the wider contest between the U.S. and an increasingly aligned bloc of revisionist powers. North Korea has supplied Russia with ammunition, missiles, and manpower, in return for economic support, political backing, and possibly military technology.

That matters for three reasons. First, North Korea is no longer merely a local irritant for Seoul and Tokyo; it is helping sustain a European war while increasing pressure in East Asia. Second, any gains Pyongyang secures from Russian assistance, especially in missile, satellite, or submarine-related technology, could improve its ability to threaten South Korea, Japan, and U.S. forces in the region. Third, the overlap between Europe and Asia is becoming harder for Washington and its allies to ignore: the same coalition trying to support Ukraine must also deter North Korea and manage China.

For South Korea and Japan, the practical result is a more complicated deterrence problem. They must respond not only to the latest launches, but also to the possibility that North Korea is learning from an active war, gaining hard currency and materiel, and embedding itself more deeply in an anti-Western strategic network. The Korean Peninsula, in other words, is becoming one front in a broader Eurasian security crisis rather than a discrete theater of its own.

The ultimate complex system

Asia’s energy squeeze spreads from fuel pumps to power grids

Asia’s energy shortage is no longer merely an oil story. Disruption around the Strait of Hormuz, combined with the loss of Qatari LNG and China’s decision to hold back fuel exports, is hitting the region’s import-dependent economies through several channels at once: higher crude and refined-fuel prices, tighter jet-fuel supply, more expensive LNG, and mounting pressure on electricity systems.

The first effects are already visible in aviation, transport, and consumer prices. The next wave could weigh more heavily on industry, agriculture, and power supply across the region.

Australia is among the most exposed importers of refined fuel. It imports about 900,000 barrels a day, much of it diesel, and officials have warned that reserve cover remains limited, even after recent improvements. Canberra has responded by releasing gasoline and diesel from emergency reserves, making available up to 762m liters (201m gallons), or about 5m barrels, and by easing fuel-quality standards for 60 days so that more imports can enter the market. The immediate aim is to keep regional supply flowing, especially for farmers, fishers, miners, and remote communities. The broader danger is that higher diesel and jet-fuel costs feed through into mining, freight, and air travel.

Japan’s vulnerability is different. It is less concerned about running out of fuel tomorrow than about securing enough crude and LNG over time at bearable prices. Japan depends on the Middle East for about 95% of its crude and 11% of its LNG, with part of that LNG normally passing through Hormuz. Tokyo has responded by asking Australia to raise LNG output and by joining the International Energy Agency’s coordinated stockpile release, to which it is contributing 80m barrels. At the corporate level, JERA, Japan’s biggest LNG buyer, is seeking additional supplies and preparing domestic contingency measures, including energy saving and the possible restart of idle generation assets if the crisis persists.

Vietnam is facing one of the sharpest near-term fuel squeezes, particularly in aviation. The government has urged businesses to let staff work from home in order to save fuel and has tapped its fuel-price stabilization fund to soften retail increases. But the larger shock is in jet fuel. Vietnam now warns that flight cuts may begin in April after China and Thailand halted jet-fuel exports, while imports from Singapore have also weakened. Major suppliers say they can guarantee fuel only through March. Hanoi is now seeking help from both China and Thailand, and is separately asking Japan and South Korea to help improve access to crude.

The new Monroe Doctrine & the Trump Corollary 

Cuba’s weekend of pressure and maneuver

Over the past few days, the main developments in Cuba have fallen into three categories: confirmed talks with the Trump administration, a renewed burst of anti-government unrest linked to blackouts and shortages, and a prisoner-release move that appears at least partly intended to create diplomatic room.

On Friday, 13 March, President Miguel Díaz-Canel confirmed publicly that Cuba had been holding talks with Washington as the island’s energy and economic crisis worsens. The discussions come amid acute fuel shortages, widespread power cuts, and mounting pressure on Havana. President Donald Trump said on Monday that the talks were continuing, though he suggested that Iran remained his immediate priority.

Also on Friday and into Saturday, protests in Morón, in Ciego de Ávila province, became one of the most striking episodes of unrest on the island in recent months. According to state-linked and international reporting, demonstrators angered by prolonged blackouts and shortages of food and medicine attacked a local Communist Party office; the authorities later arrested five people. Separate reporting suggests that nighttime cacerolazo-style protests (protests where people bang pots, pans, and other household utensils to make noise in public or from their windows and balconies) have also spread in Havana and elsewhere, aided by the cover of power cuts.

A third notable development was Cuba’s announcement, reported on 13 March, that it would release 51 prisoners. Havana presented the move as a goodwill gesture linked to its ties with the Vatican, though outside observers are watching closely to see whether political prisoners are included and whether the release becomes part of a broader diplomatic opening with the U.S.

A related security development is Cuba’s statement that the FBI would help investigate a late-February speedboat incursion by Cuban exiles, a rare example of limited practical cooperation despite the wider confrontation between Havana and Washington.

The overall picture since Friday is of a regime under greater domestic pressure, but not one that appears close to losing control. The immediate driver is the energy crisis: blackouts, fuel scarcity, and broader economic breakdown are fueling unrest. At the same time, Havana appears to be opening a narrow diplomatic channel with Washington, perhaps in an effort to ease the pressure without surrendering political control.

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