Middle East Roundtable: The Road Back to War.

Hello and welcome to the Middle East Roundtable on fronts.co. This is Evan Maloney. I am here with Kyle Moran for Warfronts and Wilfred Minor, Africa correspondent for Warfronts. And gentlemen, it has been one hell of a week. Our dear listeners, I want to give you a little bit of a story.

So on Monday morning at about 10.30 East African time, so about 9.30 Central European time and very, very early in the morning, Eastern Standard Time, I got an email saying we need an urgent video on war fronts describing the situation that was happening in Iran because it had gotten to a point where we couldn't hold off on a video any longer.

We had been feeling an exhaustion of covering Iran and, you know, it's something we have been covering since the very early days. So we wanted to give other conflicts a chance to be in the limelight, which feels a little bit weird to say.

But, yeah, we did want to move away even slightly from the Iran conflict to highlight other conflicts happening around the world because, again, it's not the only one. But we got pulled in because, and pardon my French here, everything had gone to shit. Iran had attacked ships in the Strait of Homoz. The U.S. had retaliated. Iran had retaliated.

It was basically a cycle of both sides retaliating. And it had gotten to the point where four American soldiers had lost their lives. Three died in attacks on Jordan. And one died after an unexploded ordinance went off. An unexploded ordinance came from a drone.

So that situation has become so toxic, so deeply entrenched that we at Warfront looked at the situation and said, yeah, we're back to a permanent war. So that is the status quo as of the time that we are recording. It's back to a full-fledged war between the U.S. and Iran.

At least for the moment, Israel has chosen not to intervene with an Israeli minister saying they were not going to intervene because the status quo was already something they were happy about. And it's not just the U.S. and Iran that are at war at this point. Iran has activated one of its most dangerous proxies, the Houthis.

And they have threatened to close the Bab el-Mandeb Strait. By the time we're recording this, two ships, two Saudi-flagged ships have been hit in the strait, in the Bab el-Mandeb Strait. And obviously, that is going to discourage any other ships from trying to pass.

It's something that we really, really have to insist here that if the Bab el-Mandeb Strait is closed, and Hormuz is obviously closed, the world is looking at another critical oil shortage because of Strait of Hormuz, about 20-25% of the world's oil flows, Bab el-Mandeb, 5% and taking all that together, we're looking at almost 30% of the world's oil flows

Taken off the market.

So it's not a pretty sight.

And I argued in my most recent piece for Warfronts that a lot of this equation will rest on oil, specifically because Iran was able to move about $6 billion worth of oil, about 170 million barrels, if I remember correctly, out of its ports, out of its refineries, and it relieved a lot of pressure that was on its oil infrastructure.

Like I said, it's a question of oil, whether they're able to move that oil, relieve the pressure on their refineries, on their storage facilities, you know, even on their drilling wells.

And for the US, on the other hand, so many countries are trying to refill their stockpiles, so many countries are trying to stockpile enough oil to survive, you know, whatever happens next, that I felt, I personally felt that they were at a disadvantage.

So again, with the barbell mandap straight now being closed, we are looking at one of the most dire, dire situations. And President Trump isn't taking this lightly.

He posted on Truth Social a little while before we got online, saying, and you'll allow me to quote in here, it's a really long and rumbly tweet in the style of Trump, but I feel that it's important enough that we have to mention it. And I'm quoting Trump here.

A year ago, the United States attacked very powerfully the Houthis for their interference with commerce and trade by shooting at ships. Since that time, and during our conflict with Iran, they have acted very responsibly. Unfortunately, now they are starting up again, shooting at two Saudi Arabian ships last night.

Please let this truth serve to represent that if they do this again, the US will hold Iran responsible, and that the Houthis are a surrogate and a proxy of Iran, and major military punishment will be inflicted upon Iran, and of course, the Houthis themselves, who I am very disappointed with, in that they have until now acted very professionally and smart.

Thank you for your attention to this matter, President DJT.

So this comes after Trump had posted on Truth Social that for every ship that Iran attacked, the US will target a power station, the US will target a bridge, and even those within Tehran, which will be a major, major escalation, and Iran has made it very clear that if the US targets anything they consider civilian infrastructure, they will do the same.

Already we've seen desalination plants. I believe it was in Kuwait that was targeted. And these are countries that are very heavily dependent on desalination to provide them with clean water. I believe Kuwait gets around 47% of its clean water, fresh water rather, not clean water, from desalination plants.

And there are other countries that Iran can very easily target that are a lot more dependent on desalination plants and have a lot less protection, like Qatar and Bahrain. So it's an escalating cycle where everyone seems to be stuck in this mindset that war is the only way forward.

I also want to add that it seems likely that Pakistan will be drawn into this conflict at some point. The Ministry of Foreign Affairs put out a statement, I believe this was yesterday, saying that if any Pakistani flagships were attacked, whether in the Strait of Hormuz or in the Bab el-Mandeep Strait, they reserved the right to act.

But that isn't the important point, because this is something they have said multiple times. The important part of that statement for me was their insistence that any attempt to draw the Kingdom of Saudi Arabia into this conflict would be met by retaliatory attacks from Pakistan.

And we have to remember that Pakistan and Saudi Arabia signed a mutual defence deal way back last year. And it was widely seen as the beginning of something, a wider trend within the region for possibly what could become an Islamic NATO.

So if Pakistan is drawn into this conflict on Saudi Arabia's side to defend their ally, there goes one of the most important mediators in the conflict. It's honestly a very baffling situation. Gentlemen, I cede my time. I know I've talked a lot.

On the Houthi situation, I'm particularly interested because the aspect of holding Iran accountable is an interesting one for me. There's probably, or almost certainly, quite a bit of strategy going on behind the scenes in terms of how they decided to enter this, in terms of testing the waters, basically.

But when they announced their blockade of Saudi Arabia, they did so explicitly on national or Houthi-specific issues. So it's not that they're doing this on behalf of Iran. They're doing this as a response to the blockade that Saudi Arabia has led over Yemen for years at this point.

So on that front, because the Houthis are more, they're certainly very closely allied with Tehran, but they're also more independent than, say, Hezbollah, which is effectively just Iranian proxy. The Houthis are actually sort of their own thing that just happen to be very allied with Tehran. So I'm not necessarily sure how much...

Iran could influence them on this. To be honest, I think if Iran had the ability to have the Houthis close the Bab al-Mendeb to all traffic, I think they would have done that by now. If not during the first round of conflict, then certainly in this latest round, where it's much more no-holds-barred, basically.

So I'm curious as to where exactly this would go, but overall I'm not feeling too optimistic about maritime traffic running through the Red Sea either. I'd like to argue that Iran intentionally held the Houthis back from interfering in this war, specifically as a trump card, as something they could play later on.

And we are seeing them activate it now when the U.S. is actively targeting what Iran considers civilian infrastructure, just something I've been toying around with.

So the thing with that being then that Iran does have significant control over the Houthis in terms of controlling when they do and do not enter, and thus the Saudi blockade is inherently in defense of Tehran, right? Yeah, the Houthis have always been kind of a pet fascination for me, especially as they've been kind of hitting around the fringes of this war.

Just to go back a little bit, the Houthis have not been in great shape recently. They've been dealing with a lot of different internal stressors. They've had some, so this is, we're at risk of going down into a long tangent about Yemen, which, you know, maybe I'll have a chance to give one day, but I don't think today's the day.

Short version is Yemen is very, very like tribal, clan-dependent, like the loyalties that are all over the map. And the Houthis have had a hard time kind of staying in command of this infrastructure that they do technically control. That's changed in the last couple months.

The Houthis have recently started to engage in limited conflicts again with the Saudi-backed international government that exists on the other half of Yemen's territory.

Just before this, right, just before the Houthis started hitting shipping in the Red Sea, they had a little blow-up with Saudi Arabia, where the Saudis actually bombed the airstrip in Sana'a, the capital of Yemen, where a Houthi delegation was coming back from the funeral for Ayatollah Khamenei.

In retaliation, the Houthis bombed an international airport in Saudi Arabia, and that led to this escalation cycle that we're in now, which, if you look at it closely, Iran obviously wants this to frame it, you know, wants this escalation to be framed in context to the wider Middle Eastern conflict.

The Houthis are not looking at it that way, at least based on their public statements. They are looking at this as, Saudi Arabia has been blocking our airspace for the past decade. They've been controlling who comes in and out. We don't like that. It's time for us to break the blockade. Over the last 36 hours prior to us, recording this episode.

It looks like two ships were struck in the Red Sea or thereabouts. Saudi Arabia has acknowledged one, which is now on fire, but it looks like a second one was hit.

These appear to be a much more targeted anti-Saudi action, where the Houthis seem as if they're trying to exploit the broader geopolitical situation because they believe it can get further with Saudi Arabia directly.

That could still very easily turn into control of the Baal Mandin for much larger reasons, in loyalty to Iran and furtherance of Iran's goals, partly because it's a very potentially lucrative operation for the Houthis as well. Egypt tolls the Suez Canal in the north.

The Houthis could, practically speaking, establish an Iran-style toll over the Red Sea's southern entrance. But all of that is to say right now, the Houthis seem to be acting mostly of their own accord in this one. Not to say that they're at cross purposes with Iran. They're certainly not.

But this seems to be about much more for the Houthis than just demonstrating solidarity or expanding Iran's strategic campaign against global shipping to another area. That's part of it, but it's not the whole thing. Yeah, I agree. It's more of a domestically focused issue where a lot of this is specifically in response to the Saudi blockade itself.

Well, I do agree there is a very heavy domestic focus. The end result is still the same because, as we've discussed on this podcast a lot of the times, shipping is very heavily reliant on insurers, and no one is going to insure a ship to pass through waters that have already proven to be dangerous. So the end effect is still the same.

Yeah, that I agree with for sure. If the Houthis do decide to take this action, I don't think there's a way to interpret it that does not at least, I think, hold that this will have much, much larger regional implications.

So the Institute for the Study of War put out something yesterday as of the time of writing, so that would be Wednesday, or as of the time reporting, saying that at least seven vessels have changed course already to avoid passing through the Babamandev.

That's really economically important for Saudi Arabia, largely because, so we've talked about the east-west pipeline on this show before, the large pipeline that runs across most of Saudi territory and allows oil exports into the Red Sea instead of the Persian Gulf, right?

If ships stop transiting to the Red Sea, that pipeline and its relevance go away, right? It'll still be they're still vulnerable to Houthi attack also, but to the extent that it matters now, it stops mattering very quickly if the entire Red Sea is just closed for business.

Yeah, completely, and that's what I'm most concerned about because, again, they have not yet, as Trump was even saying in his post there, they have not yet thrown their full weight behind the run in terms of shutting down the Babila Mendeb.

But if they were to do that on top of Hormuz being closed with oil today sitting at $100 a barrel at time of recording, this is in part because of the recent strikes in the Babila Mendeb, I should add. But that would be quite a knockout blow. Yeah, absolutely.

And I do want to go to you, Kyle, because we had heard Wilford talk about it earlier at the jump of the episode. What do you make of the current U.S. strikes against Iran? We're now on, I believe, day 13 tonight will be of continuous strikes. So how do you see this new escalated campaign playing out? And where do you think it goes from here? Sure.

So we started focusing in the early days of this current wave on coastal targets primarily. So we were really trying to soften up Iranian military infrastructure, bases, etc., along the coastline, which I may add is quite large. Iran is something like a fifth or fourth of the size of the entire continental United States, the lower 48 at least.

So it's quite a big country, geographically speaking. There's a lot of coastline there to hit. So certainly not a small operation.

But overall, I want to go back to something I said in one of the very first episodes we did here, where when it comes to closing Hormuz, this is just inherently such an easy thing for them to do, given current military technology that they have.

It does not take much of anything to have a few IRGC dudes hunkered down and launch some drones at civilian shipping, which can shut down the strait. So when it comes to these strikes, I don't think that it's going to accomplish what Washington would like for it to accomplish.

Over on Warfronts, the episode we put out on is the U.S. preparing for a ground invasion of Iran? Well, obviously the big thing that they'd do it for would be to get Hormuz flowing again. Strikes along the coast I do not think are going to be enough, nor would something like the often floated invasion of Cargill Island be enough to get Hormuz flowing.

So ultimately, that sort of leaves you in a position where you either have to go all out on this, or you have to find another way around. So I do agree with Kyle about not even a siege of Cargill Island being enough to retake the strait of Hormuz.

And I hate to harp on this point, but again, all of this boils down to insurance and no one wanting to risk their ships because ships are very fragile assets. They're very expensive assets. And anyone who works in maritime trade will tell you there's such finicky objects that you don't... really want to mess with them.

So the risk is not commensurate with the reward. And with Iran, as Kyle has rightly pointed out, being in such a geographically favorable position that it can easily close the strait whenever it wishes, with just a couple of drones, a couple of missiles, it's not feasible.

I want to move on to a point that Kyle has made about the locations that the U.S. has been targeting. So this is from the Institute for the Study of War. I believe this is the same report that Evan mentioned earlier. It's a report that they put together with the Critical Threats team, very good friends of the show.

Kyle was a member of that team at one point. So U.S. forces track Iranian military targets across western, northwestern, central, and southern Iran on the 21st and 22nd of July. And CENTCOM said that it struck Iranian military operation centers, maritime capabilities, hangers, drone storage facilities, all the kinds of targets we've come to expect.

So the key takeaway for me here is that the U.S. is increasingly striking targets outside of southern Iran, places where it's not been as aggressive before. So all of this will just be part of Washington's attempt to degrade Iranian military infrastructure and just put themselves on a better footing.

But I am curious what you guys think about the change in targeting strategy. I think it's just sort of a lack of options. So it's sort of throwing stuff at the wall and seeing what sticks.

So I really think Washington is starting to feel the heat in terms of being stuck in this position here, which gets me to a point I wanted to raise with you guys over because there's so much that goes on here where it's like, OK, this isn't working. OK, that's not working.

And I wanted today to throw things in a different direction where we can instead talk about like where things could go from here other than either all out U.S. invasion or total capitulation where Iran has permanent control over Hormuz.

And basically, there's only one option that I could see as something that could even remotely deliver on that, which would be a resumption of the U.S. blockade without the strikes, basically. So it would mean that Hormuz would be, if not fully closed, then largely closed for the foreseeable future.

But basically, a return to the Operation Economic Theory days of, say, April through June before this latest round kicked off. So because there are factions within the Iranian government who were seriously wanting to get a deal underway. But given that. it only lasted a month or two. It really wasn't enough to have that much of an impact.

And Iran never fully ran out of storage for their oil to begin with. So where do you guys see that as an option? Is that even an option? Are there other options that I'm potentially missing? Or what's going on here? Yeah, so I think there is an argument for a total blockade here. We saw the U.S. attempt to do this before.

But even at that time, it was interesting to see how the U.S. was allowing Iranian exports out of the Strait of Hormuz for a fair portion of that. We've seen the U.S. be so responsive to macroeconomic pressure indicators during this war. You mentioned Kyle a moment ago, I think it was, you might have been Wilford, if so, I apologize.

But we actually just got, or at least I did a number of notifications on my phone saying Brent crude is over $100 a barrel again, which just is kind of a further indicator of how this return to more open conflict is already pushing some of these indicators back into the red for the U.S. I think it is worth really taking seriously the fact that even when the

U.S. tried to oppose this blockade prior, even when the U.S. was fully aware of the value of making Iran push to the limits of its storage capacity, it was still allowing Iranian oil to transit out from the Strait.

That I think doesn't really go away as something the U.S. would be willing to do simply because we're back in another round of hostilities where the goal now is to push past what was achieved in this past MOU, which doesn't really seem to have been much of anything really in hindsight, but to try and gain more favorable conditions to end this conflict.

That would require a level of U.S. tenacity and commitment here that I don't know that we've seen. Now, it is better than all of the other alternatives, right?

We've discussed in this podcast before, I think last week as well, an invasion of Karg Island, of Kashm Island, of all of these little islands would be really, really catastrophic for the U.S. A coastal invasion of Iran would be even worse.

The use of, and I've seen this floated around in the last couple of days, which I'm not thrilled about, but the use of a tactical nuclear weapon against the pickaxe mountain range, or pickaxe mountain in its mountain range, would be the kind of escalation here that would really, truly change the fabric of global society for the much, much worse for the

Foreseeable future and ways to go far beyond Iran.

So between all of those other options, that would just be horrific miscalculations in various ways, or this, right, re-imposition of a more total blockade, I think the blockade is clearly the best answer out of that group. But at the same time, if the U.S. has the level of operational commitment required to pull that off, that would be a new Thanks again.

Thank you. development compared to what we've seen. But Wilfred, I'm curious to hear what you think. So I've been following Joe Kent. He's the former national director, excuse me, he's the former director of the National Counterterrorism Center.

And he basically made the exact same point as you two gentlemen, that pulling back and reimposing the blockade, and you're trying that as an option instead of continued strikes that have led nowhere seems like a much better strategy.

But every time I consider that, it hinges on something very important, just the macroeconomic conditions, as Evan has rightly pointed out.

The world is so heavily reliant on oil, and reliant in the sense that we use about 100 million barrels of oil per day, and we produce about 100 million barrels of oil per day, that those two numbers need to be generally consistent.

It's why even during the worst of the war, the US was allowing Iranian oil into the marketplace, because if this demand isn't met, we are looking at one of the most catastrophic economic collapses in world history. And we are still, we still could see it.

The only reason we haven't seen the worst of it is because China cut its imports, its oil imports by such a large volume that it basically saved the entire world. They've done so much to reduce their oil imports that their oil refineries are able to resell the oil that they had stockpiled. It's a marvel that we haven't experienced the worst of the shocks.

And a lot of that credit should go to China. But for some reason, they're not claiming any of that. And that will be a topic we can discuss later. But back to the idea of an economic blockade.

So if the Trump administration chooses to go that way, and it's contingent on a lot of these other countries that are very dependent on the Strait of Hormuz building back channels that transport the oil so that it can reach the market, what's stopping Iran from at any point, you know, striking these, these back channel routes that let's say a country like

Saudi Arabia is developing to bypass the Strait of Hormuz.

Economic pressure can only go so far in both directions, because everyone is so dependent on oil, Iran is dependent on it for revenue. The US is dependent on the global economy not going tits up. It can only go so far. That's what I think. Yeah, I mean, these are all very good points.

So Evan kind of made my point here when it comes to the alternatives, because like fundamentally back in operation economic theory, where it's basically the period of time after Epic Furies. is big kinetic actions were over, we were at a point where diplomacy, even if it looked like it wasn't guaranteed to work, they were in negotiations with Iran on and

Off.

And it looked as though it was at least something that could deliver. Well, that path is, it's done. I mean, it was tried, it got nowhere. And now we're currently here, where Hormuz is effectively closed. There's a few ships getting through, but it's extremely minimal. $300 billion was not enough money to get Iran to open this thing back up.

The constant bombing campaign for the last two weeks, not enough to get Iran to open this thing back up. So ultimately, where did that leave? Okay, well, one, we could massively escalate militarily. So that would involve or include operations in the island.

So we could be talking Carg Island, La Rock, or Kesham Island, or we could be talking outright invasion of coastline. And I have indeed seen discussions of tactical nuclear weapons being used for Pickaxe Mountain. Unfortunately, none of these are exactly good options, to say the least.

So when it comes to higher oil prices, that starts to look like comparative blessing. So what if I can give you guys an alternative that it's not us that's presenting, an alternative that the Trump administration is genuinely considering? I am all ears. They are seriously considering just quitting this entire thing. That's what they're saying.

There's a possibility that Trump will just walk away from this entire war. So this comes from the Atlantic. So I'm going to quote a bit of a long paragraph. So bear with me here. Even some of Trump's closest allies privately acknowledge that he is in a bind.

His choice, escalate the conflict and risk losing more American lives and depleting stockpiles of munitions while hurting Republicans' election chances this fall, or walk away now to cut his political losses while leaving Iran in a stronger strategic position than it has held in decades. That will be the sort of humiliation that Trump loots.

But one Trump ally pointed us to a shift in rhetoric on Fox News in recent days. A number of influential posts, including Laura in Trump, have looted the possibility of abandoning the war in an 11th hour effort to help the GOP at the ballot box. Trump, the ally noted, often uses his favorite cable channel as a gauge of public opinion.

Two people close to the president told us that Trump may at some point consider that sort of exit. So, gentlemen, do we see Trump saying fuck it, this war has been abysmal. It's dragged his poll numbers down.

It's dragged the price of Brent crude. where the price of crude oil, the price is at the gas pump, which is what Americans will see when they're deciding who they're going to vote for. Do we see him actually just saying, okay, I'm out?

I'm going to go out on a limb and say that would be the right decision at this point and has been the right decision for quite a while now. As much as the Trump administration has been loathe to admit it, this has been an unwinnable embarrassment for the United States for quite a while now.

As you said, Wilfred, Iran has been handed some unbelievable concessions through this conflict. We are now going tooth and nail to try to reopen a strait that was not closed before Trump voluntarily elected to begin this conflict.

This has gotten so far out of control for the U.S. that personally I don't believe it to be recoverable in any way, certainly not with the just dismal level of risk acceptance and risk tolerance that the U.S. has shown after deciding voluntarily to get into a war, which is just something I will never understand and I truly just can't muster any empathy for.

So is this the right call in my opinion? Absolutely. Will Trump do it?

I doubt it, mostly because if we're couching this as a play for the midterms in the U.S., it's hard to imagine a political step that would be more damaging to Trump than continuing to engage in this war, but for his own base, deciding to throw his hands up and back out of this war in conditions that would ultimately be tantamount to defeat would be on that

List.

And I do want to raise one possibility here, and Kyle, you've indicated this as well. We've both seen some talk about tactical nuclear weapons in the past couple of days. When I see this and I hear that conversation spinning up, those things do seem as if they have a risk of being tied together, right?

Where is there a world in which the U.S. conducts either, you know, all out conventional strikes on this particular target or potentially even a nuclear strike and says, oh, well, that's the end of Iran's nuclear program. We can claim victory. We can wash our hands of this whole thing.

And that gives an acceptable enough condition for the MAGA wing of the Republican Party to have some shot at success during the midterms. That worries me tremendously if the U.S. political incentives in the United States, regardless of anything in the Middle East, point toward a situation where that would be beneficial to Trump.

But Kyle, I'm very curious as to what you think here. A few weeks ago, I had mentioned strictly in terms of public polling, I thought that was a serious outcome where basically if Trump just quit this thing, he would probably be more popular for it.

And I think that's probably still the case because especially with more looming threats of ground activity, which just does not have popular support in the United States domestic electorate. It's just not it's not there. So it could help him. But I come down on a different angle than Evan.

It would be so irresponsible of the United States to just quit this thing at this point. Now, that does not mean some cost fallacy here where you just have to keep doing more failed things after the other, which is why I was advocating more for the blockade front of things where, OK, even though the Iranians are certainly in a very strong position now.

If you just let the Iran Iranian regime win this, it will have serious ripple effects throughout the international community. There will be plenty of actors and you can see it already. So when I was saying with the Houthis doing this for domestic purposes, I believe that.

But they were also doing it because they feel emboldened by Iranian victories and thus far success. on blockading Hormuz. So if we're already seeing that when it comes to Yemen, I mean, there's no telling what other countries will do it in addition to that.

So I think the U.S. would be grossly irresponsible for simply quitting this at this point after having elected to do this in the first place, especially if it's done exclusively on the basis of saving public polling. Yeah, I just want to come in really quickly and offer my very strong support of that.

Just just to be clear, like I am I'm right there with you in terms of just Iran has managed to spin this war to its own advantage in so many different ways that are going to rewrite geopolitics for years, if not decades to come, most of which are outright disadvantageous to the U.S. and go a long way in helping America's adversaries.

This has been a bigger own goal for the U.S. than Russia, China, Iran, North Korea put together would have been capable of achieving in the next decade, I believe. Like the degree to which the U.S. has rewritten the international order against its own favor is just stunning here.

That being said, the only thing that I would push back on and try to delineate is just I fear that damage has been done.

And to the extent that this situation is recoverable at all, it's recoverable through the means that we've been discussing, right, which is a massive ground deployment, all of these really high cost options that the U.S. one, I don't think should even attempt.

And two, if it were to, it would be tremendously unpopular and even worse for the U.S. than this war has been, right? I don't disagree at all with the idea that this has been an act of gross geopolitical negligence and irresponsibility from the United States. I just, I worry it's too far gone at this point and that there isn't really a path to recover this.

And that possibly the best thing to do now is just cut losses while they are not quite as apocalyptic as they could be in the future, if that makes sense. That makes sense. But will the Trump administration see it that way? Because I've just read the Atlantic passage to you guys.

But does the Trump administration, from what we've seen about it, from everything we've seen, we all know that it will be really beneficial to Trump, to his administration, to the GOP's electoral chances. And, you know, it's horrific that we're talking about a war in terms of how it affects polling. But do we really see them taking this path?

Because we all think it's a good idea. And I think of it in the same way as, and if you'll indulge me for a second, a lot of AI companies right now are spending billions on capital expenditure, CapEx. So it will get to a point where the markets will demand more profits than these companies are capable of generating.

And part of the way to get that is you will be to cut back on the CapEx. So the market will reward whichever AI company decides to cut its capital expenditure first, in the same way, and well, that seems very counterintuitive, in the same way, Trump will be rewarded for pulling back. But is he a person to pull back?

Yeah, when it comes to something like this, I mean, it's a valid question to ask. But he's, he hates pulling back when it makes him look bad. But he's also not somebody who's ever been a fan of long protracted wars. So I was asking it because of something I believe Kyle mentioned that idea of the sunk cost fallacy, like, is he too far gone?

When it comes to the sunk cost fallacy. So I mean, this is something that we always have to be cognizant of. So basically, think Vietnam, think, perhaps even Iraq, where, okay, well, this isn't working. So we need even more forces.

I would argue that something like the blockade combined with targeting Iran's shadow fleet across the world was separate, because not only was it working, because it was having a sensible impact on their exportability. Iran was producing significantly more oil, despite slowing down production, than they were able to get rid of.

Their storage facilities were filling up at a pretty alarming rate, which concerned at least some politicians inside the regime. And if they did reach a total zero storage day, that would have triggered more serious implications for them.

So I would argue that continuing that would not be sunk cost fallacy, because it's something that what we had done, and it wasn't costing American lives. And it wasn't resulting in any ongoing kinetic action.

The biggest problem with the blockade approach is that it's a long drawn out one which the donald trump is known for many things but his patience is not one of them and i don't know if he has it in him to do this for the next six months year i don't know how long it would take but there's also the approach where he like backs off before the midterms and then

Re-engages after them depending on how they go or irrespective of how they go i have seen this floated repeatedly where okay we need some detente going into the elections and then after november it's open season again so yeah and i do want to point out the economic side of this as well because wilford you mentioned ai and has it as it relates to all this it

Does seem unlikely that trump would be willing to just go to the blockade option for months particularly because that is going to keep fuel prices rising the u.s has already shown despite its best efforts that it cannot impose a blockade that both has the discretion to get other ships out of the persian gulf and also the military force to keep iranian ships

In that's just not something that the u.s has been able to consistently achieve on the scale that would be required to resume pre-war shipping levels so as this blockade continues right there's going to be more and more economic strain price of fuel is going to keep on going on price of fertilizer price of petrochemical byproducts are all going to keep on

Ramping up in a way that is going to have plenty of knock-on effects and i want to circle back to that ai idea because this is a somewhat controversial take here but at least here in the u.s there's a fair proportion of economic thinkers and analysts kind of pointing out the broader fragility of the global stock market and especially the u.s stock market

Right now as it relates to these ai companies that are really just kind of stacking value on value on value in a way that doesn't seem to match up with the return on investment that their products have thus far been able to generate if you listen to the most pessimistic assessments which you know i think in our in our capacity is as you know global conflict

Folks we're kind of inclined to just because we always want to have an idea of how horribly things can go before they do usually go horribly some of these takes kind of center around the idea that this whole thing is a bit of a house of cards in a way that goes much beyond the middle east but is susceptible to destabilization from this middle east conflict

If prices are allowed to rise further if consumer confidence in the markets is allowed to drop further if political dissatisfaction in the u.s leads to a level of gridlock that even goes beyond what we've seen thus far so i do wonder whether the economic disincentive to either apply a blockade or to otherwise try and like the disincentives against pulling

Out of a military escalation right now may be enough to keep trump in so i am curious to what you guys think about that so this is such a fascinating question for me because i have i have such negative feelings towards ai specifically because i am on the very far left in the political spectrum but i also hold some neoconservative beliefs when it comes to war

So on a general personal level i see the ai economy as being built on a house of cards to borrow a phrase from the urban because it feels like money is simply flowing in between a couple of companies and it's not really generating value in the way we would associate with other companies so i am really really concerned about how heavily everyone seems to be

Investing in ai and just how limited allow me to speak about south korea for like two minutes south korea just had one of the worst days in its stock exchange because millions of people were invested in had invested their money in that market were linked to two companies samsung and some other company whose name i can't recall right now and when these

Companies when their stock went down millions of people got margin called basically in south korea they take loans to buy stocks because it seems like the only viable way to create wealth in the country and when you get a margin call it's basically the exchange platform you use telling you to deposit money or they will liquidate your position so when that

Part of the ai bubble burst it became clear to me that at some point the ai bubble in the us will also pass and i'm sorry we're diving so deep into like stock trades and whatever's happening in the south korean stock market but i promise it's relevant to the point i'm trying to make with iran gulf countries have invested heavily in ai because they view it as

Part of their strategy to diversify their economies away from oil if trump chooses to disengage chooses to leave this war to allow you to allow the chips to fall where they may to give the republicans a good chance in the midterms and just to say this was a mistake we'll figure out something else it leaves iran in such a good position that it can pressure

Its neighbors for whatever kind of deal it wants and they might not have the money to you know reinvest in these ai companies to build out these data centers that they've been planning on building so that might cause a ripple effect across the American stock market.

I've already explained how much the South Korean stock market gets, in fact, affected the civilians. It could have as much of a ripple effect on the American stock market. So that is enough of an incentive to keep trumping the wall, basically. It's incredible to me that apparently leverage is so widely used in South Korea.

For any listener who has any doubts on this, simply do not trade with leverage. It's not worth it. I myself, yours truly, when I first started investing, did not believe this. I heard the warnings about leverage and thought, ah, what a bunch of losers. And I went in and I used a little leverage and learned the hard way. Not a great idea.

So never did that again. And much better off for having maintained the course, if you will. But more broadly, you are right that the Emirates in particular and the Gulf more broadly have invested in AI to move away from oil, at least in part.

I do think that, I mean, regardless of what the stock market does on a short-term basis, I mean, we've seen just such incredible inflows of funds into this sector. It wouldn't surprise me if we have a correction or even worse in the short term. I mean, I also don't think that these data centers are just going to shut down at some point.

I think they're going to continue to ramp up. And I think the Emirates are going to, in particular, sort of lead the pack on that front, because I don't see AI just, like, going kaput, essentially. China just released, the U.S. is locked in a Cold War race with China.

So basically what happens is we're in this pattern where the U.S. will be steadily sort of in the lead. And then out of nowhere, China will just, like, release this model that is as good, if not better, than the U.S. And, no, it'll be, most of the time it's not, like, incredibly better, but what it is incredibly cheaper to run.

So that's a huge advantage on that front. We just saw that with, I believe it's called Kimi, K-I-M-I, was just released, which is as good as Claude Fable. But moving forward, I anticipate there's just going to be more back and forth. And, again, I don't see that really going away.

So I have a video on the channel about how insurgents are using AI, because I really believe this is the future of warfare, and any country that isn't preparing for it is being really left behind.

So I do want to highlight one incident, just to support the point that Kyle made about how rapidly China is building out these models and just how much of a threat they seem to be. So over the past couple of days, an unreleased model that OpenAI was testing............ into a company called HuggingFace.

It did this in order to solve a test that OpenAI had given. Basically, this model was in a sandbox where it couldn't access the internet, it couldn't access any outside network, but it managed to break free of that, access the internet, find hidden logins to HuggingFace and exploit that to try and find an answer to a very simple question.

And HuggingFace had to use a Chinese-made AI to fight back against this model that ChatGPT was testing. So the existence of such advanced systems and the fact that China has models capable of fighting back against them, models that are already publicly available, is just very concerning. Who the hell are naming these things? HuggingFace? Don't ask me, man.

It's just like, what the heck? Yeah, I just... At a certain point, we're going to run out of names. We got to go with something. Sorry, Wilfred, go ahead. No, no, Evan, you wanted to take us away from the AI discussion. Yes. Here, let me leave it a little bit of dead air.

And I do want to turn us away from the AI conversation briefly, but I would like to keep it international for a bit. So I want to bring out a Reuters report for you guys to react to. This was published yesterday. It's been updated since today.

Essentially saying that Iranian drone attacks have been targeting American CIA facilities across the Middle East in a way that seems to be indicative of targeting information and the use of drone technology that most likely came by way of Russia. So it's not really a secret that Russia has been assisting Iran with targeting in a broader sense.

But this report basically is saying that U.S. intelligence is now trying to figure out whether Russia has directly facilitated the attacks we've seen against CIA sites. So what do you make of that claim? And then what would it mean to you and your view of this conflict if Russia were consistently getting involved in that way and to that purpose?

Yes, unequivocally, essentially. I mean, we've had data on this for several months at the minimum, or even from the outset, I believe, there was reporting that Russian intel was supplying targeting information to the Iranians, to their Revolutionary Guard, specifically on where to hit, both in the Gulf and more broadly for U.S. bases.

Russia has not done a great deal in terms of providing any hardware support for Tehran throughout this conflict. But they remain close allies.

Iran is a relatively good friend of the Russian government, and they will continue to... or coordinate on that type of stuff so every time i hear that russia has helped iran in some way i go back to a story that political reported on a while ago that basically said russian delegates had approached i believe it's special envoy steve whitkoff telling him that

They would gladly abandon iran if the u.s you know let them have ukraine and you know obviously the u.s said no because it would have been a really really bad look even you know with how much this government seems to this like zelinski and you know the entirety of the ukrainian ukrainian regime but it's something we expected to see russia will help iran and

You're with that offer obviously rebuffed they're going to continue helping them as much as they can for me the biggest question is the number of casualties we've already seen reports that the u.s was holding back casualty numbers i would be really curious to see just how much of an impact how many casualties did come about as a result of these attacks in

Order to understand how much strength how many forces the that the cia has deployed into the middle east it will just be very fascinating for me to see yeah i do think that i did see the report that they have been downplaying some of the casualties my understanding is from the conventional military side of things some non-cia basically they have to disclose

All of them and we have had a steady trickle of information on this so we do know the four that were killed over last weekend there was lieutenant tyler james feehan private isabella gonzalez sergeant angel rammer's rempersted and sergeant michael emmanuel swinton but other than that i believe those were the only four since the ceasefire came about in april

But i could be mistaken on that one there yeah i could only speak to my own access and conversations with folks in the defense based on this but i can say for my own part and with the outside research and context that i've gotten a chance to speak to i have heard it from a few different u.s officials now who i'm not going to name essentially that the u.s has

Been declining to disclose a fair number of personnel deaths i can't really give a hard and fast number but you know more than a handful fewer than an exponential increase if that makes sense of fatalities that have that are known that have been cataloged but that have not been made public yet for a number of different reasons some of them relating to the

Circumstances of those deaths particularly around iran's use of long-range drones in ways that were either unexpected or game sensitive in some way but again you know Unfortunately, can't really give a ton of information on that other than just that, you know, we, like any other defense group, we're happy to have contacts in a lot of different places who

We're able to speak to, but we can't always disclose.

But to the extent that we can point out certain things, that is something that I've heard from a few different U.S. officials at this stage. So moving on from this side of things, though, I do want to take a quick pivot over to another international element of this.

So over in Lebanon, IDF forces recently seeded a couple of what are called pilot zones of areas that were under IDF control that are now going to be under the control of the Lebanese military.

In an ideal world, this is supposed to be kind of a bridge to Lebanon getting some of its territory back in a substantive way, Lebanon proving that it can collaborate meaningfully with its regional partners.

But Kyle, as our resident Lebanon all-seeing oracle, could you fill us in a little bit on what's been happening here and whether this has really had any real effect so far? Those are big shoes to fill there, but I'll do my best. Let me know how I do here.

Overall, the Lebanese state has had the first win, I would say, in quite a period of time where we're actually seeing some limited withdrawal. So there were three pilot zones. Now, the problem being is that two of them weren't actually occupied by Israel.

They were inside of the area that Israel claimed to have a right to operate within, so it was within their yellow line, but the IDF did not have a presence there.

So the Amal and Hezbollah-Shia alliance opposed the original deal on this concern because it could essentially allow Israel to have the LAF do the job that it was either unable to in difficult areas or didn't want to do. The good news is that one of the three, Zatar al-Garbiyah, was previously occupied by Israel and has since had the IDF withdrawal from it.

Prime Minister Nawaf Salam visited it with the LAF and had a bit of an Iwo Jima moment himself. He planted the Lebanese flag in a pile of what appeared to be rubble. So it was just sort of a, we have, we're back, basically. This is just phase one, so there will have to be a long drawn-out process here.

I think in general, it's a good thing that the LAF is deploying and will be regaining control of ostensibly more of the Lebanese South than just Zatar al-Garbiyah. But moving forward, I do hope to see this continue at a faster pace. There remains somewhere in the vicinity of a million Lebanese displaced throughout the country. Again, tiny country.

This is a huge amount of the population who doesn't have a home to go back to. And this needs to get done. But at the same time, they cannot afford to screw this up in terms of allowing Hezbollah to maintain a military presence in the south.

If they do, this is just going to happen all over again in a year or two, as we saw was the case after the 2024 war where this was supposed to get taken care of. So I have a good deal of confidence in both Prime Minister Salam as well as President Aoun, who have both worked very closely in tandem to get this deal negotiated and implemented.

Joseph Aoun was in Washington, D.C. the other day. He met with Secretary Rubio. They had quite a photo op where they're standing with a bunch of Lebanese and American flags. And then Aoun met with Donald Trump as well at the White House. It was all smiles there. So certainly close allies going forward.

One thing I will say as a non-Lebanon expert, as someone whose entire knowledge of Lebanon is very limited, I'll keep insisting what I've said throughout multiple editions of this podcast, that Lebanese sovereignty is the most important thing.

And the only way they get that, the only way they can convince Israel to really pull out and disengage is if Hezbollah is completely disarmed, if it's not a threat both to the Lebanese people and to the Israeli people. So hopefully these pilot zones can help with that. Yeah, here's hoping.

I mean, we, as a roundtable, generally tend not to be too, too optimistic about the situation in Lebanon. But then again, I think if we had all been told, say, six weeks ago that this would be what's happening today, I think we would have been pretty pleasantly surprised that this was even on the table at all. So hopefully we'll see a bit more. Yeah.

So and just a bit of insider baseball for insider benefits of listening to the Middle East roundtable. We do have a long tradition at this point of when a country is seriously up against it. We have a certain series that X country is fucked is the title of the video we roll with. Once countries are on that list, none of them to date, zero, have made it off.

But I do think that if this deal goes through and does get the ball rolling, Lebanon may be the first to get the title of how Lebanon unfucked itself. Yeah, I believe Peru was the first, was the debut of the is fucked title and has not yet unfucked itself. So big ups to Peru, big downs to Peru, not doing well in Peru. But.

But. this is of course a middle east round table rather than a latin american round table there's another podcast idea maybe one day and i do want to pivot to one other middle eastern development that we've seen over the last 48 hours which is saudi arabia and the united states basically signing a nuclear civil nuclear cooperation deal this will essentially

See the u.s step up its nuclear collaboration in saudi arabia where there were already some efforts ongoing to pretty substantially increase saudi arabia's civil program but as always this is going to raise nuclear proliferation concerns on the weapons side of things right we've mentioned it before on war fronts a few times over the years that the middle

East is really kind of just on the cusp of a nuclear arms race that could start at any time in a world where let's say iran develops a nuclear weapon it is highly unlikely that saudi arabia wouldn't develop a nuclear weapon that turkey wouldn't if the saudis do then the emiratis do if turkey does then israel will go public with its stuff if israel is public

Egypt's going to feel pressure so on and so forth and it just kind of cascades out of control so obviously because of this new deal there's been more conversation about whether this could be an escalation risk in the long term for the rest of the region there's also an another angle to this which is that through his social media post donald trump has

Essentially stated that these will be contingent on a saudi entry into the abraham accords so curious of what you guys think of the decision to announce a us saudi deal right now whether or not it does pose a proliferation risk if you believe it that it does and then beyond that what if anything do you put in as far as your faith or trust that saudi's

Engagement of this would be contingent on the abraham accords in some way i am very cautious about nuclear any kind of nuclear material just ending up in the middle east because as you rightly said evan we're just a few short steps away from a nuclear arms race that might have us looking down nuclear amageddon much sooner than we expected so i don't know i

Am deeply deeply distrustful of the saudi arabian regime and you know that might just be a personal bias but i simply don't think it's it's a good idea for them to be you know a few short steps away from obtaining nuclear nuclear weapons nuclear material and you know trump has insisted that there won't be any enrichment within saudi arabia but i don't really

Take trump at his word he's not the most trustworthy individual he's he is he is what he is and you know i'll leave that at that but you know i again i'm just very cautious about any nuclear material ending up in the hands of saudi arabia because what happened when a regime that is anti-America comes into power we all we all know the reality that is

Something that can happen really really quickly so do we want to take the risk do we want a situation where we also how fast Mohammed bin Salman MBS came into power how fast he swept away his relatives how fast he just grabbed the reins where someone who is equally ambitious equally as MBS and has a very negative attitude towards the US towards the wider

West do we want such a person with nuclear capabilities in their hands and from Iran's point of view Israel already has nuclear weapons if Saudi gets more nuclear material then yeah I foresee a situation where Iran will rush as much as possible despite the risks to get to get some sort of no matter how rudimentary it might be some sort of nuke and then on

The question of the Abraham Accords it's very weird because if MBS agrees to join the Abraham Accords without some sort of deal on the Palestinian issue he's going to get crucified within Saudi Arabia so that might end up being a non-starter I honestly don't know Kyle well so when it comes to nuclear issues in the Middle East I am also cautious but I do want

To just flag this is not nuclear weapons getting from nuclear enrichment for nuclear energy which the Emirates already have by the way to weapons grade is an enormous jump and is very difficult Iran has had nuclear energy capabilities for decades at this point and has I've they had a German nuclear energy plant a small one but it was operational during the

Islamic revolution it was there in the days of the Shah so there were there's a getting from point a to point b is just because it's it has the term nuclear in it just for audience educational purposes that's not the it's a lot harder than it may sound if Saudi Arabia has no enrichment facilities and they truly cannot do that it would obviously operate under

The IAEA to be honest like Saudi military ambition is not quite as intense as you may think this could be changing given what's going on in the region and I'm not even going to say that they don't want the nuke but again I mean this would be such a massive undertaking and there's not a great way of hiding it so when it comes to nuclear energy I mean if the

Emirates and Iran both have it which they do you then it's kind of a harder sell that the Saudis can't haul.

Yeah, and just to clarify for listeners as well, when we talk about this idea of the Middle East kind of being on the precipice of a nuclear arms race, it's not so much that the Saudis really, really want nukes and the Emiratis really want nukes and the Iranians really want nukes. We've talked about this before.

If Iran really, really wanted a nuclear weapon, they could have gone to at least a breakout attempt much sooner than they actually have, which is to say that they haven't done that at any point. Same with Turkey, same so on and so forth.

The risk here is more that these countries all start to perceive a heightened sense of risk from each other and believe that if they don't work toward a nuclear weapon before or at the same time as others obtain it, that they will be left behind and that they'll be left out of the loop.

And unfortunately, they just have so much money to throw around, so many geopolitical connections, so much ambition, so many or so few really lacks of any checks on their power that it is very easy for the Middle East to sleepwalk their way into a much larger nuclear confrontation if this is not managed correctly.

And it seems, at least from the expert analysts that I've been reading, that is more the fear that the U.S. going at this so brazenly with the Saudis, especially right now, risks kind of setting off a larger progression toward that area.

So we are reaching up to the limitations of our time at this point, so I do want to go around the room just pretty quickly and see what your thoughts are on the coming week. What are you watching across the Middle East, in Iran, in the United States, anywhere else before we convene next time on the Middle East Roundtable? And Kyle, I'll go to you first.

So I'll be watching, especially Iran. I'm very, I'm not going to say that it's like more likely than not even, but I'm very concerned about the possibility that something with ground operations take place with Iran. So that will be my absolute number one focus moving forward for the following week.

For me, my focus will be watching what happens at the Pickaxe Mountain, what the Trump administration chooses to do. And away from Iran, I'm also watching what's happening in Syria because Syrian authorities recently said they intercepted shipment, including missiles, rockets, and drones that seem destined for the Hezbollah group.

So with that path closing for Hezbollah, I'm curious to see what other smuggling routes they choose to use and just how much further Syria will go in trying to contain the group, even within a limited capacity. So yeah, that's what I'm watching. And finally for me, I'll be keeping an eye on the Bob-Amended Strait, the Houthis, of course, also on Washington.

I am very, very interested in whether there is any weight to these reports that we've seen about the U.S. in particular, Donald Trump kind of coming to the conclusion that this may have gotten a bit out of control, which it seems to have actually done a while ago.

But if American political decision makers are kind of waking up to that now, that would be very, very important for the course of this conflict going forward.

So on that note, just wanted to take a brief moment to thank both Kyle and Wilford for coming out as always and chatting on all of the global dismay and discontent that we need to summarize on a weekly basis for you.

If you're listening this far into the podcast and you were almost certainly one of our premium subscribers on Fronts.co, if so, thank you very, very much for your support. We truly could not do any of this without you guys.

So it really does go a long way in letting us maintain our independence, allowing us to dedicate the time and the space that we need to the stories that really matter and that unfortunately a lot of outlets just don't cover in the way that we would like to see.

We have a lot of internal discussions about like trying to be the outlet that we wish we had, if that makes sense. And you guys really go a long way in helping us to do that. So thank you very much. If you were listening to this point and you have not yet become a premium subscriber, please do consider doing so.

We got lots of fun perks, articles, video episodes, the briefing room each week in which we go through a few different under the radar conflict stories we don't get a chance to talk about very often and all sorts of other things, exclusive previews of some of the big projects that we have coming up, stuff like that.

So thank you to everybody again who has listened to the Middle East Roundtable. This is Evan Maloney with Wilford Mina and Kyle Moran. We'll see you next week. Thank you very much.