U.S. considering ‘winding down’ military effort in Iran, Trump says as ground operation still possible
With Files from Bloomberg
U.S.
officials have said the White House is ordering hundreds of Marines to be
deployed to the Middle East as it weighs a possible plan to seize Kharg Island
President
Donald Trump said he was considering “winding down” U.S. military efforts
against Iran, saying that the U.S. was close to achieving its objectives as the
conflict, which has roiled financial markets and the region, nears a fourth
week.
“We are
getting very close to meeting our objectives as we consider winding down our
great Military efforts in the Middle East,” Trump said in a social-media post
on Friday. He cast those objectives as “Completely degrading” Iran’s missile
capabilities, “destroying” the country’s defense industrial base, eliminating
their navy and air force, never allowing Tehran to get close to a “Nuclear
Capability” and protecting Middle Eastern allies.
Trump’s
comments came shortly after he ruled out a ceasefire and kept the door open to
deploying ground troops, highlighting how the president continues to send
wildly divergent signals about his objectives and plans for the U.S. and
Israeli war on Iran.
It is also
unclear how Iran would respond to any unilateral decision by the U.S. to pause
strikes after recent attacks that targeted the country’s energy infrastructure
and killed more high-profile officials, including security chief Ali Larijani.
Iranian officials have become reluctant to even discuss reopening the Strait of
Hormuz as Tehran continues to launch retaliatory strikes at Gulf Arab
neighbors.
Trump also
addressed the strait, a critical waterway that carries roughly a fifth of
global oil and natural gas flows and has been all but closed since hostilities
began. Trump has been pressuring allies to help the U.S. secure the strait
militarily but indicated Friday that he will leave that effort to other
nations.
“The Hormuz
Strait will have to be guarded and policed, as necessary, by other Nations who
use it — The United States does not!” Trump said. “If asked, we will help these
Countries in their Hormuz efforts, but it shouldn’t be necessary once Iran’s
threat is eradicated. Importantly, it will be an easy Military Operation for
them.”
Trump’s
suggestion that the nations most reliant on Mideast energy and other goods
shipped through the strait should have the responsibility of policing it belies
the global reach of the oil market.
Even though
the U.S. is pumping a record amount of oil, crude prices are set in a world
market, so supply shocks tied to the strait will ripple from Beijing to
Washington, affecting consumers in the U.S.. The U.S. may be more immune from
the physical shock of millions of barrels not making it to market — but it
remains intractably tied to the price impacts.
Trump’s
comments capped a tumultuous Friday in financial markets following a Bloomberg
News report that an increasingly dug-in Iranian regime was refusing to
negotiate over Hormuz and with reports the U.S. is preparing options to deploy
ground troops.
Oil prices
surged again Friday with global benchmark Brent closing above US$112 a barrel,
the highest since mid-2022. Prices eased to trade near US$108 a barrel in thin
post-settlement trading on Trump’s comments about possibly winding down the
conflict.
Global
stocks extended their losses, with the U.S. equity benchmark falling steeply to
end the week nearly 2% lower. Treasury yields climbed, as traders priced in a
50% chance of a Federal Reserve hike by October. Meanwhile gold saw its worst
week in four decades.
Trump, a
little over an hour before his social media post, had rejected the idea of
declaring a halt to hostilities and expressed confidence Hormuz would reopen
“itself” despite allies’ reluctance to offer assistance.
“I don’t
want to do a ceasefire. You know, you don’t do a ceasefire when you’re
literally obliterating the other side,” the president had said at the White
House. “We’re not looking to do that.”
Trump had
expressed growing frustration in recent days after his calls for allies to help
vessels transit the waterway were rebuffed, lashing out at U.S. partners,
including the North Atlantic Treaty Organization as well as China.
“NATO could
help us, but they so far haven’t had the courage to do so. And others could
help us, but we don’t use it,” the president said of the strait. “At a certain
point, it’ll open itself.”
Adding to
the market turmoil was the administration’s consideration of a ground
operation. Trump was evasive when asked by reporters about his plans for Kharg
Island, Iran’s major oil export hub. U.S. officials have said the White House
is ordering hundreds of Marines to be deployed to the Middle East as it weighs
a plan to seize the outpost.
“I may have
a plan or I may not, but how would I ever say that to a reporter?” Trump said.
Any move to
use ground troops to seize control of Iran’s energy facilities would pose risks
for Trump, including by putting American forces at greater danger than they’ve
already been exposed to in the conflict and adding to the cost and scope of the
campaign.
The Pentagon
has asked for an additional US$200 billion from Congress to pay for the war,
sending another mixed signal on how long the administration expects the
conflict to last. The regime in Tehran isn’t close to falling and Iranian
officials are coalescing around the remaining leaders, according to western
intelligence assessments and people familiar with the matter.
Higher gas
prices are another challenge for Trump and his Republican Party ahead of
November midterm elections. Retail gasoline and diesel prices in the U.S. have
jumped to the highest levels since 2022, with California’s energy regulator
already warning against price gouging as some gas stations are charging as much
as US$8 a gallon.
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