Finding the Drones - It's Hard

Iran is a large country and the drones they use are small. They're hard to find and knock out. Moreover, drones are cheap to make compared to the missiles used to destroy them.

Regional Conflict

The Houthis of Yemen have announced a blockade of the Bab al-Mandab Strait, principally targeting Saudi Arabia. This will have a major effect on the world economy as currently Saudi Arabia has diverted its oil exports to its ports on the Red Sea, away from transiting the Strait of Hormuz, which is also blocked.  

With this move, we can say that the US-Iran war has now gone regional. Yemen's Houthis are backed by Iran.

War on the Ground Against Iran

The US may go to war against Iran on the ground. This is next level stupidity, but the US appears upset that it lost the war.

Claim and Counterclaim

Who to believe? The US and its tame media says that it has delivered a stunning blow to Iran. Meanwhile, Iran says it has caused serious damage to US interests in the Persian Gulf. The below report seems to substantiate the latter; US bases in the Persian Gulf have been severely impacted.

Iran Has the US in a Doom Loop

The 'deal' between the US and Iran hands Iran a huge win. Key in all this is the next 60 days. Over that time, while the final deal is being drafted, global oil reserves will be run down more and yet only a trickle of oil will leave the Persian Gulf. Moreover, oil that does get out will take time to process when it arrives at refineries. Iran can simply shut down the Strait of Hormuz again and completely crush its enemies.

US Lost the War - Confirmed

Iran did not get everything they were after, but they've clearly won the war that the US started. Before the war, the Strait of Hormuz was open, operating as an international waterway. Now, fees will be paid by commercial vessels transiting, and Israeli vessels can be excluded.

Iran do not get sanctions relief, but half of the money held overseas will be freed up. The Gulf States have guaranteed to pay, thus, if the US do not release the funds, then the Gulf States will pay regardless. Basically, Iran is going to be rolling in cash. That'll make Pakistan, China and Russia very happy as Iran will buy more from them.

https://www.theguardian.com/world/2026/jun/14/iranian-hardliners-in-vociferous-push-to-reject-proposed-peace-deal-with-us

War Ramping Up

Oh no, reports are coming in that the US may restart strikes against Iran. This would likely result in Iran targeting desalination plants in the Gulf, just as the region enters the summer months. For those who do not know, countries like the United Arab Emirates and Qatar rely on desalinated sea water for their potable water supply. Dubai, Doha etc will be unliveable without fresh water and their buildings also require air-conditioning because their daily highs can reach 50 degrees Celsius (122 Fahrenheit).

Imagine 15 million people from the region moving out and arriving in the West, all within a month. Yeah, that'd be a problem.

Smuggling Diesel from Iran to Pakistan

The Iranians and Pakistanis are very resourceful and seem to love their Toyotas as much as Kiwi farmers do. As everyone must know by now, you cannot destroy a Toyota pickup truck.

Who Is Winning the US-Iran War?

A quick scorecard, winners and losers:

Winners

Iran - their oil revenues have increased since the outbreak of the war. According to the Wall Street Journal, they're now selling 985,000 barrels of oil per day to China via the rail corridor that runs through the Stans between Iran and China. The marshalling yards for this traffic sit within Turkmenistan, and that's where loads are taken off standard gauge and placed upon the old Soviet wide gauge track. The trains are about 50 wagons long, 66 tons each wagon, and each oil tank holds about 400-500 barrels. Iran charge China's 'teapot' refiners Brent + $1.50. This compares with volumes of about 1.38m bpd via the Strait of Hormuz before the war. Thus, Iran in revenue terms is raking in about the equivalent of 1.5m bpd levels from before the war. They knew they were going to be attacked. Leading up they were shipping a lot of crude and simply parking it out there on the water. The US then lifted sanctions on this oil and Iran profited. They must have laughed. Iran also has rail links with Russia, Pakistan, and via the Caspian Sea and into Russia's Volga-Don canal system and ultimately the Black Sea. Iran now has complete control of the Strait of Hormuz, and it remains shut to those it considers its enemies. 

Israel - they are now the US's only remaining ally in the region. They would have noticed the rise of the UAE, Qatar, Bahrain, Kuwait and in particular, Saudi Arabia. These states have been selling their soft power, with Saudi Arabia using sports promotions like LIV Golf to sell themselves. Israel won't have been happy with this overall, and now they can sit back and watch these states distance themselves from the US.

Russia - they're happy with the high oil prices. They've shut down the pipeline from Kazakhstan to Germany, likely motivated by the incentive of lifting prices.

Losers

USA - their attack has resulted in a massive strategic defeat. They've compromised food security and the world economy generally. American farmers will be livid as the attack on Iran came just before planting - not good timing.

Gulf States - they were mistaken in thinking the US could protect them. Dubai may come back to an extent, but people will never forget, and zero tax doesn't help one bit when a bomb may land on your bonce.

Asia (apart from China) - all Asian countries have been compromised and they'll likely move toward greater independence and away from the US.

China - they'd prefer the Strait of Hormuz to open, for conflict to end. They won't be greatly adversely affected but given their merchant outlook, they'd profit from less conflict, not more.

Oceania - they stand to go out of existence if they don't quickly get their act together. 

Africa - famine is possible, and their oil fields and refineries are only just now being built. This war came at a bad time for them.

Europe - deindustrialisation has proven to be a fool's errand. They're badly exposed with high cost structures and with few allies.

North, South and Central America (apart from the US) - they've been compromised, but countries like Canada have gained from their own oil sales to Asia. The picture is patchy, but overall a loss.

The war has benefited very few interests, and harmed most. End the war now.

Why the Strait of Hormuz Is So Important to Australia and New Zealand

A bit of simple arithmetic is needed to explain why the closing of the Strait of Hormuz could destroy the economies of Australia and New Zealand.

Both countries rely on imported refined product from Asia. New Zealand is wholly dependent while Australia is about 90% dependent. China has ceased exporting product, so cross them off the list. That leaves, for the most part; South Korea, Singapore and Malaysia as suppliers.

South Korea processes up to 3.4m bpd (million barrels per day), 2.5m of which is consumed domestically. 70% of their supply comes from the Middle East.

Singapore processes about 1.5m bpd, and they import 70% of their oil from the Middle East.

Malaysia processes about 900,000 bpb, and they import about 40% of that oil from the Middle East as they have their own oil wells. Domestically, they consume about 77% of the total and export the rest.

I trust you may begin to see the problem. With a huge amount of Middle Eastern oil coming through the Strait, but now shut off, these Asian economies will need to prioritise their own market first, and even then they'll come up short.

South Korea has begun buying oil from Canada, about 800,000 barrels per day. That's well short of the 2.4m bpd needed. They can only just supply themselves, leaving nothing to export. 

Singapore looks set to lose 1.0m bpd, and that equates to the daily consumption of Australia. Forget NZ, they'll just be left to fail.

Malaysia, just to supply its own needs, will have to import from other sources, just as South Korea is doing.

All of this adds up to a very serious predicament Downunder. I see the Philippines has declared a state of emergency, and that is a wise thing to do. Australia and New Zealand need to follow suit as this war in the Middle East could drag on for a long time, that much is obvious. 

Another link - what to do NOW https://kenhorlor.blogspot.com/2026/03/new-zealand-fuel-crisis-action-required.html

Iran's Victory Changes Everything

The Strait of Hormuz will remain closed until all of Iran's demands are met. Iran is calling the shots, and no-one can challenge them.

Iran Wins, US Defeated

If reports are to believed, big IF, then Iran is now one of the big four, and the big three of US, China and Russia have a new member. Iran has defeated the United States.

For a ceasefire to be called, Iran had ten key demands, and Donald Trump announced he's accepted all of them. This leaves Iran in complete control of the Strait of Hormuz, the Persian Gulf is now its lake.

The US defeat in Afghanistan was the biggest defeat of a western country in history, ancient or modern. Now, this surpasses that. But then, the ceasefire may end within 24 hours, who knows? One thing is for certain, countries are going to find it hard still as the oil isn't flowing yet, and it may take a year or two for flows to resume even if the will exists to make it so.

Update: thinking about this some more, this appears to be Iran's Battle of Britain moment. I'll explain, the BoB was a defensive action, with Britain's goal of avoiding outright defeat. The way the Germans saw it, they were simply trying to knock Britain out, then when they'd done that they turned around to deal with the bigger threat, Russia (then known as the USSR). Thus, Britain claims victory as they were still standing when the attacker quit. Germany, however, say they did not lose, they just changed priorities.

The reality was that Germany was losing aircraft at a rate where they could not replace them. Most losses were on the ground in takeoff and landing, in fact, not fighting in the air. If Germany had continued, they'd have simply run out of planes, while Britain's industry could replace theirs. The Germans badly underestimated the industrial output of the British Midlands.

This appears to be a similar situation in the Gulf. The US lost 11 or so aircraft just rescuing one downed airman, and their bases have all been destroyed in the region. Their carrier strike group has had to retreat well into the Arabian Sea, well away from cruise missiles. Scuttlebutt says that Trump did launch an attack on Iran, in line with his ultimatum, but that every Tomahawk cruise missile was taken out by Iran. He buckled after that, and I'm speculating he was told that the US was fast depleting its ordnance and that it couldn't be easily replaced. 

Israel has announced they do not consider their offensive in Lebanon as being covered by the ceasefire, and the Gulf states will be unhappy ending up effectively satraps of the new Iranian empire. Therefore, this ceasefire is unlikely to last any more than a few hours or days - we'll see.

And think, we have a Soccer World Cup coming up, that will be interesting. 

Trump Addresses the Nation

I watched it live, but I have to confess I'm none the wiser. President Trump said what he'd already posted on social media, and left a lot up in the air. What, exactly, was that all about? 

US Defeat?

The suggestion is that the US has used up its ordnance, especially its anti-missile defenses. That explains the sudden shift, from 'unconditional surrender' to now asking for diplomacy. Iran, for its part, seems to have more missiles and drones still. The drones are simple and cheap to make, and being made of balsa wood are very hard to detect with radar. 

Israel is vulnerable. They are small and present an easy target. Iran is not so vulnerable as they present a much larger target. I note that Iran's order of aerial attack is quite clever; to begin with they fired drones without warheads. Nevertheless, they had to be taken down at great expense. Then, gradually Iran ramped up, adding warheads to their drones, then increasing the size of warheads fired by missile. Thus, as Israel's defenses depleted, the weight delivered by Iran grew exponentially.

The uprising within Iran did not eventuate. There appears no groundswell of support for a revolution. 

The risk now is that the Persian Gulf may end up being Iran's lake. I read somewhere that the leaders of Kuwait and Bahrain have left their small principalities, with no immediate intention to return. It looks as if they know Iran has emerged the winner.

Market Manipulation?

It does have the appearance of market manipulation. Donald Trump set a 48-hour deadline, and the markets fell significantly. Then, with the deadline looming, he came up with a potential deal, and the markets rose significantly. Anyone who knew of these announcements could have made a fortune. What do you think?

Size Comparison: Iran vs Europe

People wondering why it is very hard to subjugate Iran need to consider its size. Iran is quite large and mountainous. No doubt they've dispersed their ordnance. It'd be almost impossible to find it, and their missiles and drones are launched from mobile units.

Iran v Europe

Who to Blame?

I always say that given long enough to think about it, the US, all of Europe and Israel will come to the conclusion that it is China's fault. Convince me I'm wrong.

WWIII Now Probable

It looks like WWIII is about to start. Military strikes on Iran's oil and gas facilities may force China and India to join the conflict on the side of Iran. They need to do this, especially India, as they're already experiencing shortages and India, in particular, has a large population that needs gas to cook their food with.

Russia and North Korea could then follow. South Korea are now in dire peril. North Korean artillery can easily bombard Seoul, the capital of South Korea. I don't see how South Korea could hold out.

With China and India involved, they'll be able to get their supplies out of the Gulf, and they'd take effective control of all oil and gas coming out of the Gulf. 

Targeting oil and gas complexes is a massive escalation and an act of utter stupidity.

What Now for Iran?

It appears Iran is settling in for a long war of attrition. Their drone and missile strikes have fallen away, but they're still continuing, albeit at a lower tempo. What I think they're now doing is setting out to cause enough disruption to effectively destroy the Gulf states, and humble Israel.

The Strait of Hormuz appears to be operating like a toll road. Iran are allowing through only those they approve of. Then, they have overland routes from China and Russia for resupplying its arms industry.

No uprising occurred amongst the people of Iran. This looks to have been a minority protesting, such as students, with no widespread support. That's disappointing and there appears no viable strategy for going in on the ground. 

Another angle relates to Iraq. Various militias aligned with Iran may now rise up. Thus, the US and Israel may have made a rod for their own backs.

All said, oil prices are likely to stay high for the foreseeable future.

Ground Troops to the Middle East?

Oh no, going in on the ground in Iran? Iran is mountainous and contains 90 million people. This won't end well. And Afghanistan will be itching to get involved.