About a quarter of the world’s seaborne oil and natural gas trade passes through the Strait of Hormuz (the Strait), according to the International Energy Agency (IEA). The Strait of Hormuz is a critical global energy trade chokepoint that, despite Operation Epic Fury, is likely to remain under Iranian control.

Since Operation Epic Fury, Iran has blocked the Strait, preventing enemy oil tankers from getting through. In fact, Iran has guarded the Strait with missiles, gunboats, and mines, making any attempt to get through the Strait impossible. In addition to the damage Epic Fury has done to Iran's oil-producing infrastructure, the Strait blockade continues to put upward pressure on oil prices.  

The United States and Iran have reached a short-term cease-fire agreement with the goal of reaching a long-term solution regarding Iran’s nuclear program. In short, the U.S. is demanding Iran scuttle its nuclear arms program. Iran, meanwhile, refuses and is using the Strait as leverage to get its way. President Donald Trump has responded by threatening Iran with more violence, yet Iran will not back down.

The reason is that the Strait is very difficult to extract from Iran, as Iran controls the banks of the Strait. Any ships trying to move through the Strait are sitting ducks for the Iranian army and its terrorist cells.  Only a ground invasion can stop that, and the costs in lives, money, and political power are too great. President Trump’s popularity is at an all-time low, and a ground invasion will only make matters worse. The midterm congressional elections are coming. Already, the Republicans are suffering overall due to the war. Escalation is likely to result in the Republicans' loss of both Houses of Congress.

So, despite Trump’s public declaration that he is about to solve the Iran crisis, that will not happen. Iran will remain in control of nearly a quarter of the world’s oil and gas flow. Iran’s nuclear program will continue to build. The lives lost in Epic Fury are likely to have been lost in vain.  The recent fall in oil prices is merely a head fake. They will resume their upward surge. Inflation will continue to run ahead of plan, putting a tax on global economic growth. 

Stagflation, which is a combination of slow economic growth and higher inflation,  is on its way. The picture is bleak, and, for now, there is no way to straighten it out.