Asymmetrical War, Asymmetrical Victory

How Iran Wins with a Drawn Game

The economies of asymmetrical warfare, at asymmetrical global chokepoints are, in fact, very asymmetrical. In late 2023, when the Houthi’s got restless about Gaza, they throttled Red Sea traffic at the Bab el Mandeb Strait with attack drones they were getting from Iran for a few thousand dollars each. Which were mostly checked by US interceptors costing you and me $2 million a pop. I’ve got no way of seeing the Houthi - Iran books, but the US has spent roughly $2 billion to, more or less, fight a state-less Militia to a draw at one of the world’s busiest sea-lanes.

So it’s a good thing that the White House is claiming a deal as done on the Iran War as the  balance sheet there isn’t much better: The US military is checking $35,00 Shahed drones with $3 million Patriot rounds. The whole outing is costing the US close to $30 billion. Although claims of a deal might be an example of “diplomatic asymmetry” as Tehran still thinks they are negotiating and Tel Aviv isn’t part of it.

Victory in a Drawn Game

Like the humble AK-47, introduced in the 1950’s to give every revolutionary group an army, the unmanned cheap, the Shahed “Kamikaze” drone gives every the militia of the world an air force and missile program. Since Russia’s invasion, Ukraine has honed cheap drone technology, later paired with AI, to become a master class in how a scrappy, homegrown defense industry can level the calculus of asymmetrical warfare – equalizing firepower between rouge states, terrorists freedom fighters and even super-powers: The US is now producing Shahed knock-offs called LUCAS - Low-cost Un-Crewed Attack System – to answer the threat.

The real asymmetry in all of this, however, is in the definition of victory. The US has to dominate a sworn enemy with a high pain threshold and control its littoral territory to free up the Strait. At this point Iran wins with merely a drawn game. Which, it’s worth noting, is where we sit with the Houthis over in Yemen.

Pay the Toll

In absolute terms, America can keep this asymmetrical wheel spinning much longer than Tehran can. Practically, maybe not: Eventually the debt markets and voters will weigh in.

The energy markets have largely priced in a longer conflict and that alone will tamp down on some of the volatility and markets start to rewire themselves around the pinch. More supply will come on line and Gulf production will ramp back up, but don’t expect to hit pre-war levels for a year. The longer term problem, though, has more to do with global trade as a whole.

If navigational freedom in the heavily trafficked littoral sea-lanes is replaced by a system of nationalized tolling, the result will be higher costs for everyone in time, insurance, paperwork and political foolishness. Whatever happens with the deal that may or may not be struck this weekend, a global pain point have been exposed. We have to assume that those chokepoint tolls at the Straits of Hormuz, Bab el Mandeb, Taiwan and Malacca heading into the South China Sea will, if normalized, soon be wielded like tariffs as leverage in trade disputes. The knock-on, then becomes moving more commercial traffic into deep blue water.

Neither Washington nor Tehran can afford to keep this game of Persian chicken indefinitely, and both sides know it. We could continue to pummel Iran until they see it our way, but the blow back on Gulf allies won’t be worth it. There is Trump’s threat to seize Kharg Island if talks stall. Again, in absolute terms, the Marines definitely could take the terminal to hollow out Iran’s ability to fund itself. Seizing the terminal would be the easy part, holding under a barrage of cheap missiles and drones would be tricky.

So What?

If Kharg Island is erased, the regime will likely go with it. Then it’s God’s own private mystery who takes over but the smart money is that they are in Beijing’s pocket, and we will have solved our only peer rival’s energy problem.

Barring that, the world is getting used to the idea of tolled sea-lanes to flex nationalist muscle. That will effectively be a global drag on commerce, but as with most things, the drag will be felt in different places. Pinching trade between China, along the south coast of Asia and through Suez to Europe will hurt both sides of the Eurasian landmass worse that the United States. The US can’t realistically be challenged in the tight Arctic or Bering Straits or Panama. And the rest of North America is currently surrounded by nothing but deep blue water.

So take that flat-Earthers!