Surreal

For several days now, US military forces have been bombing targets all along the southern Iranian coast. Washington claims the attacks were meant to degrade Iranian forces harassing traffic through the Strait of Hormuz.

In response, Iran resumed attacks on US bases in Qatar, Kuwait and even Jordan. Tehran announced that the Strait of Hormuz is again closed indefinitely.

This is all so surreal. Just weeks ago, some sort of memorandum was signed between Washington and Tehran. This is supposed to lead to a 60-day ceasefire while more substantial negotiations happen.

There is little indication that negotiations are underway. There is certainly no indication that a ceasefire is in effect. We are in a no-war, no-peace situation.

Israeli withdrawal from southern Lebanon, a key condition for the ceasefire, never happened. Israeli forces not only continue their occupation of Lebanese territory, they have sustained bombing campaigns through the length of this forsaken country.

The signed document underpinning the ceasefire has not been abrogated, although Trump, with usual recklessness, declared the process over. He even threatened to invade several strategic Iranian islands.

Critics claim the new round of US attacks against Iran are meant to distract attention (again!) from the looming publication of parts of the Einstein files still suppressed. The evidence that could be divulged are said to be absolutely devastating for Trump.

Whatever the reason Trump may have for reopening hostilities against Iran, the situation pertaining at the Persian Gulf adversely affects the rest of the world. Since the apparent resumption of hostilities, oil prices began rising again.

A new round of oil price increases will be harsher than what happened four months before. In this new round of stifled deliveries and higher prices, the global economy is less protected by strategic petroleum reserves.

Those strategic reserves, we now know, moderated the impact of reduced oil deliveries and higher prices. Most of those reserves are now depleted. Many repositories have reached their operational minimum.

What this means is that the industrial economies are now doubly more vulnerable to supply disruptions and price fluctuations. It was the warning that strategic reserves run out by mid-July that propelled Washington to seek a cessation of hostilities with Iran. Now we are exactly at mid-July.

It is not only the absent strategic reserves that the US should be thinking about. The hostilities that began Feb. 28 were so ferocious they depleted America’s weapons stockpiles. It will take years for the US to re-stock on their overpriced munitions. The costs of sustaining hostilities are lopsidedly against America’s favor.

Iran, we would recall, adopted an “asymmetrical” strategy defending itself against US and Israeli attacks. This forced US forces to fire million-dollar air defense missiles to stop thousand-dollar drones. Even Iran’s feared ballistics missiles cost only a fraction of those fired by US forces.

This is what the details of an “asymmetrical” war looks like.

This transfers into the outlook for the renewed hostilities that have broken out. With cheaper mass-produced armaments, it will cost Iran vastly less than the US to sustain a low-grade, high-intensity engagement. Analysts conclude that Iran has managed to replace the weapons consumed since hostilities commenced four months ago.

In addition, Russia and China have committed to supply modern weapons to Iran to help in repelling US and Israeli attacks. Iran has friends that provide an immense and secure rear for its war effort.

The US, for its part, lost the support of its allies. The Europeans, to a man, oppose the attacks against Iran and condemn it as illegal and immoral. They have refused US use of their military bases for the war the US is waging against Iran. The Americans have no rear base to speak of.

Trump has been conducting a short-sighted, one-sided foreign policy that seriously devalued alliances. Today, even America’s allies such as Japan and South Korea refuse to get entangled in America’s cruel effort against Iran.

The new round of constriction on the Strait of Hormuz will harm a global economy that has depleted its strategic petroleum reserves. Since attacks resumed across the Persian Gulf region, oil prices began tracking higher once more. The price relief we thought we had just last month has now dissipated.

The Philippines was badly hit by the troubles in the Gulf region. We paid much higher for oil. Our economy contracted the most. Our currency began to buckle because of our swelling balance of payments deficit.

We are only now beginning to feel the dreaded “second-round” effects of the oil price shock. Our prospects for economic growth have been downgraded by every multilateral institution that matters. We receive only a fraction of the investment flows in our part of the world. In the first quarter, our economy grew by a disappointing 2.8 percent. It has been acknowledged that we are now in the midst of stagflation.

With the resumption of hostilities in the Gulf, we face a second “second-round” effect. Our unemployment rate will rise. Our poverty rate will worsen. Public disillusionment can only worsen the already bad numbers the surveys have dutifully tacked.

Economists use the euphemistic “external headwinds” to describe adverse developments abroad. But it is too easy to blame our predicament entirely on factors we cannot control. The adverse effects of these external factors have been magnified by bad governance at home.

And the bad governance is left to rot in the floods.