2026-06-29

US desperation for peace grows

By RN Bhaskar Sakeena Bari Sayyed

Image: ChatGPT

Even while peace negotiations were going on in Switzerland, Trump suddenly exploded with profanities (https://www.msn.com/en-gb/news/world/trump-sends-foul-mouthed-10-word-warning-to-iran-over-strait-of-hormuz/ar-AA26cGdC).  He warned Iran that he would soon start bombing its cities, take over the Hormuz Strait and even begin levying toll charges on vessels passing through. He made these remarks while speaking to his favourite channel, Fox News (https://www.theguardian.com/us-news/2026/jun/22/trump-administration-latest-updates-today).

Blowing a fuse

The immediate cause of this outburst was Iran’s decision to blockade the strait once again on Saturday 20 June 2026.  Iran resorted to this blockade primarily because the ceasefire agreed upon between the US and Iran was being violated by Israel which has continued to bomb Lebanon and kill its people (https://www.aljazeera.com/news/2026/6/20/us-envoy-headed-for-switzerland-israeli-strikes-on-lebanon-threaten-talks).

Talks stop

After the impolite outburst by President Trump, The Guardian quoted Iranian state media (https://www.theguardian.com/us-news/2026/jun/22/trump-administration-latest-updates-today) which said that the negotiation had entered a “difficult phase”.
The negotiating team recessed after the “publication of an insulting message by the US president.” The Iranian delegation met (Pakistani and) Qatari mediators and then left the negotiating site.”

People wondered what caused Trump to lose his temper even while negotiations were underway.  Was it because the tension was beginning to tell on his nerves?  Or was it that he thought threats would make the Iranians acquiesce and become more flexible at the negotiating table?  If it was the latter, Trump would be horribly wrong again.  The Iranians are savvy and seasoned negotiators. Trump and Vance are not.  Less so Steve Witkoff and Jared Kushner, often referred to pejoratively as the real estate duo by popular media.

Even during these negotiations, the Iranians came in after making the American team wait for a while.  They refused to shake hands.  They spoke only to the Qatari and Pakistani intermediaries; they remained unwavering in their demands and expectations.

It would therefore mean that Trump was losing his nerve.  That would be understandable.  Trump is currently terrified.  He is hounded by dire possibilities posed by at least four entities –

• Iran and its demands.
• AIPAC — the American Israel Public Affairs Committee, a powerful, nonpartisan U.S. lobbying group that advocates for pro-Israel policies. It is also the group that organises funding for almost all Congressmen in the US, provided they too promote and protect Israel’s causes.
• Israel – whose vicious prime minister has resorted to every method to bludgeon the Palestinians and the Lebanese into submission – even authorising the killing of children.
• The US economy. If this tanks, Trump can kiss the forthcoming elections in November a sad farewell.  No president survives an economic disaster (it is the economy, stupid!).

The US economy is at a crossroads.  It is on the brink of a total collapse.

The US Economy

Trump inherited an economy that was already burdened by debt.  But his war spending made the debt burden grow.  He has already asked Congress to raise the defence budget to a staggering $1.5 trillion.

His attempts to raise funds through tariffs has hit a wall put up by US courts.  His plans to sell H1-B visas too has come a cropper.  His Venezuelan takeover could work, provided the country agrees to remain a vassal state of the US for long.  Latin America is no stranger to coups and a growing anti-US sentiment.

Even China has refused to buy goods from the US, partly because Trump banned the sale of critical equipment to China, and partly because China won’t have any of US agricultural imports as a reciprocal gesture.

Trump is now left with a weak-kneed India to get some money into US coffers, either through India purchases of agro produce, or through oil and arms sales to India.  The Indian policymaking group is too shell-shocked at the moment – possibly because it is being blackmailed, as Sergei Lavrov stated publicly in 2023 at the Raisina Conference in New Delhi (https://asiaconverge.com/2026/05/india-ensnared-ready-for-breakup/).

And if that is not enough, his big plans for oil (“drill baby drill”) could also push him down a slippery slope.

This slope has been made slippery on account of Iran.  It has proved to be more formidable a foe than anyone could have imagined in February 2026.  Its ability to hold the entire global economy to ransom must have surprised the Iranians as well.

The US economy could have muddled through, had Trump not made the cardinal mistake of trusting Israel.  He believed the story that Netanyahu and his Mossad wove for him. Trump believed that he could emerge as the saviour of this planet by defanging Evil Iran.  He even began entertaining visions of obliterating their nuclear arsenal and their war machine.

It is also possible that Trump was still wallowing in his own grandiose dreams of emerging as the most powerful president of the US.

Possibly, Trump was still swaying under the intoxication caused by his painless annexation of Venezuela.  He believed Netanyahu’s claim that Iran too would collapse like a house of cards. He is now beginning to realise that Netanyahu and Mossad have sold him a lemon. His anger against Israel is immense, but he is hemmed in by the money the Israel lobby (through AIPAC) brings to him and his Republican Party.

He, therefore, chose to embrace these visions in the past.  He disdainfully dismissed the advice of some of his seniormost staff, that waging a war against Iran would not only be dangerous – it could be suicidal.

The Oil problem

Make no mistake.  The US has enough oil.  It remains a net exporter of oil. What it does is to take the oil it extracts and blends it with imported oil.  It then refines it and makes value-added products.  As EIA puts it, “Only a small amount of crude oil is directly consumed in the United States. Nearly all the crude oil that is produced in or imported into the United States is refined into petroleum products, such as gasoline, diesel fuel, heating oil, and jet fuel, which are then consumed. Liquids produced from natural gas processing are also consumed as petroleum products. Renewable biofuels, such as ethanol and biodiesel, are used as substitutes for or as additives to refined petroleum products (https://www.eia.gov/tools/faqs/faq.php?id=33&t=6).

As a result, US consumption of oil is over 20 million barrels each day.  EIA data confirms that it was around 20.6 million barrels of petroleum per day, or a total of about 7.52 billion barrels of petroleum in 2025 (https://www.eia.gov/tools/faqs/faq.php?id=33&t=6).

But the ongoing war against Iran has caused these consumption levels to rise exponentially.  Warplanes and warships – stationed in full readiness for combat even when not dropping bombs or firing missiles — guzzle quadrillions of barrels of oil daily.  That should not have been a problem if the US could import additional oil.  But the blocking of the Hormuz Strait has hobbled such a possibility.  More imports result in a flare-up of prices.  That hurts US consumers, who are extremely sensitive to any increases in petrol pump prices.

Oil prices at the pump have already doubled over the past three months. To ensure that prices don’t go up further, the US has had to dip into its strategic petroleum reserves (SPR).

The SPR problem

On paper, there does not appear to be any problem with the SPR.  Even at the end of 2025, the US had the second largest SPR in the world, after China.  Since the US used to consume around 20.6 million barrels daily, the reserves looked adequate because overall the US remained a net exporter.

But war changed much of that.  In the past few months, the US has been guzzling oil.  By April 2026, the US has seen its SPR decline by at least 100 million barrels. Officially, the SPR stands at approximately 340.3 million barrels of crude oil. According to the EIA (https://www.eia.gov/todayinenergy/detail.php?id=67625), in just a week’s time, — between the week ending March 20 and the week ending April 24 — the U.S. Department of Energy (DOE) released a total of 17.5 million barrels of crude oil from the SPR.

Unfortunately, even at 340.3 million barrels, this is the lowest inventory level recorded since 1983 (https://www.industrialinfo.com/iirenergy/industry-news/article/us-strategic-oil-reserves-lowest-in-nearly-40-years–359149). This was obviously driven by coordinated global emergency releases during the recent geopolitical conflict and supply disruptions in the Middle East.

Thus, May and June have seen the reserves dip alarmingly.  Some say it is down to as low as 200 million barrels.  The US has not provided any details after April 2026. Some say that the US has enough reserves to last barely 2-3 months.

If the reserves are not replenished by then, oil prices could shoot skywards – over $150 a barrel, maybe even higher than $200.  That would incense US consumers who are also voters.  It could destabilise the entire global economy. With mid-term elections slated for November this year, that could be the death knell for Trump.  Losing the elections could result in a variety of cases being reopened against him.  He could lose both money and personal freedom. The Epstein files are also a nightmare.   They could put him behind bars for participating in, or abetting, trafficking of underage girls.

If he has to replenish his oil reserves, he must get the Hormuz Strait unblocked.  He, therefore, desperately needs peace and a pact with Iran to ensure that this happens.

Dire straits

That could explain why the US team wants the Hormuz Strait to be unblocked for at least 60 days  — without charges for safe passage.  The US wants to use this opportunity to buy oil and replenish its rapidly depleting reserves.

But Iran, adroitly, has demanded money upfront, before this is allowed.  The money demanded by Iran is a bit over $120 billion of its own money (principal and interest) impounded by the banks on US instructions (https://www.aljazeera.com/news/2026/4/15/what-are-irans-100bn-in-frozen-assets-and-where-are-they-held).

Trump had no choice.  Not returning the money would have meant a blocked Hormuz Strait.  He also knows that blockading Iran won’t be easy (free subscription — https://bhaskarr.substack.com/p/blockading-iran-a-chimera). A blocked strait will mean that US oil reserves will fall further resulting in a flareup of pump-prices in two months’ time.

Either way Trump loses.  He had to agree to the terms set out by Iran.

Israel – the spoiler

Trump’s gambit might have worked.  Get the strait opened.  Replenish US oil reserves.  And get ready for war thereafter if required.

But Israel isn’t happy.  The release of funds to Iran will help it give some of it to its own people, some for rebuilding key infrastructure, as well as further fortifying its defences.  None of this is acceptable to Israel.

So, what does Israel do?  It provokes a war with Lebanon, knowing that Iran will consider this a breach of ceasefire and the MoU it has with the US. It may begin bombing the Houthis in Yemen as well. It needs the war.

Listen to Amnesty International (https://amnesty.ca/human-rights-news/lebanon-israel-mass-evacuation-orders-war-crime-unlawful-transfer/).  Israel is intent on staying in those parts of Lebanon which it occupies.  Just a few days ago, it bombed parts of Lebanon to further provoke the situation.

But Israel is finding the going extremely difficult. The Hezbollah has now finessed its war strategies and his hunting for Israeli soldiers (https://www.youtube.com/watch?v=OxoTB_ARfh0). The Israeli army is quite close to a revolt. The trouble is that if the war stops, the Israeli public will begin pointing fingers at Netanyahu and Ben Gvir (his defence minister) for leading the country to a useless war.

Many other Israeli soldiers also voice such sentiments.

Moreover, if Netanyahu loses the forthcoming national elections in October 2026, his corruption trials will resume, and he will go to prison.  So, a war suits him, no matter what the cost. He must run with the ultra-right whose support keeps him in office.

That could explain why the pro-Israel lobby has been on a major PR campaign to rally Americans against Trump for giving away so many concessions to Iran.  But that is ridiculous, points out John Mearsheimber, from the University of Chicago.  Listen to his and other views in a discussion (https://www.youtube.com/watch?v=okSltilmp-o) with Trita Parsi from the Quincy Institute for Responsible Statecraft on the Tom Switzer show posted on 22 June 2026.  Focus on timeline 24:44 to 25:23).  You will find out that the war has already been lost by both the US and by Israel.

The problem is how to break news about this defeat to the American public.

That is why the Lebanon sideshow is a good way to distract the American people.  Mearsheimer explains the situation quite well in his blog titled Ceasefire in Lebanon … without ceasing fire (https://substack.com/home/post/p-202939447). On the one hand the US insists that Israel ends the war with Lebanon.  On the other hand, the US hosts discussions from the Lebanon government and Israel.  Do remember that the current government is Lebanon comprises terrorists proscribed by the US earlier — https://www.gov.uk/government/publications/proscribed-terror-groups-or-organisations–2/proscribed-terrorist-groups-or-organisations-accessible-version).  Israel and the US want to use this government to rein in Hezbollah. The meetings in USA are aimed at crafting a pact that Hezbollah be disarmed.  But disarming Hezbollah will be difficult, if not impossible. Will that allow Israel to continue its war against Lebanon?

A lot will depend on how Iran plays out this game. Its biggest trump-card (pun intended) is the Hormuz Strait.  It will stop all movement of ships.  It knows that the US will bleed more. Iran can afford to wait.  But the US cannot.  The election clock is ticking away.  So is the financial clock. Trump is desperate. The only country that can help him out will be Iran – possibly through the offices of China and Russia.

The USA will have to accede to the demands of Russia and China as well.

It is then that one understands Trump’s desperation. That explains Trump’s foul-mouthed response on Fox News (“You close it and you won’t have a country. You won’t even make it back to your fucking country,” reported by The Guardian at https://www.theguardian.com/us-news/2026/jun/22/trump-administration-latest-updates-today).  It also explains his delusional tweets on Truth Social (https://truthsocial.com/@realDonaldTrump)

=============

Watch our latest podcast on the desperation of Donald Trump.  You can find it at https://www.youtube.com/watch?v=SDNFJghAFys

=============

Also watch my comments on Republic World on the earthquake in Venezuela and its effects on India’s oil supplies. You can find it at https://www.youtube.com/watch?v=wrLCTIVjb1g

=============

Do also view our News Behind the News:

• Passport downgraded; President status demeaned
• El Nino will hit India hard
• Expect Indian markets to be choppy

You can find it at https://www.youtube.com/live/hp_GDoll4Ig?si=TZHpQH9kJV1C3nou

=============