Hi All,

If you have not noticed, the shooting war between the USA and Iran has been heating up over the past week. There have been regular exchanges of fire, the sinking of merchant ships by the USA, attacks on US naval ships by the Iranians, and mass Iranian missile attacks on US bases in Jordan (requiring very expensive US interceptions). This is a sign of the strategic dilemma that the US faces. The Trump Administration wants to fight an economic pressure war with no fighting (for obvious reasons). And the US press far too often debates the war within this ridiculous confine, as if the wishes of the Trump administration determine reality.

However as this week reinforced in spades, the shooting war is back, precisely because it serves Iran’s interests (and those of China and Russia—much more on that below). We are watching the real-time degradation of US military power in the Gulf—so much so that it might represent the end of an era. However the discussion in the US is bizarrely over whether the US is now winning the war.

What we should really be discussing is whether the US retreat from the Middle East can be deftly handled or will turn into a strategic rout. It is the US which is running short of vital equipment, the US which has bases it might never rebuild, and the US which is losing influence in the area. And this week, indeed Monday/Tuesday night, provided the perfect indication of why this is so. I will start with that story, and then move to the larger questions of US withdrawal from the region.

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The US may want to fight just an economic war with Iran—but once again all those applauding that strategy are going to have to learn the lesson that the USA is not powerful enough to control things like it thinks it can (or tries to convince others that it can). This overestimation of US power is a cancer eating away at America’s position in the world. It is now metastasizing and could get much worse much sooner than you realize.

Iran has no interest in just sitting back and letting the US strangle its trade with no response. The Iranians seem to want (quite sensibly from a strategic point of view) to both impose itself on shipping in the Strait of Hormuz and to bleed the USA of vital military equipment. They have one particularly vital area that they are clearly aiming for, to denude the USA of Patriot interceptors.

This is all part of an Iranian ability to opt for sideways escalation, a phrase I have been using for a while. That is by attacking facilities in US partner states in the region, which force the US to expend weapons such as Patriots, to defend them. In that way, even successful US interceptions end up weakening the US position.

On the evening of September 8 we had a prime example of this sideways escalation in operation. Jordan said that evening Iran had fired 20 ballistic missiles at it, 18 of which had been intercepted (and claimed that the other two failed to hit their target). If normal US protocol had been followed, and two patriots had been fired at each incoming missile, that means 36 more Patriots were used on just this one interception mission. That seems, unfortunately for the US, a gross underestimate. The skies over Jordan were full of Patriots, and different OSINT accounts are indicating that at least 60 patriots were fired in the operation (some say up to 100, but I would stay with the lower figure).

This is an unsustainable exchange for the USA—not Iran. In late August the situation for Patriot interceptors in Europe was described as “beyond critical”. There is a very good estimate that in late July, the US had somewhere between 700-800 Patriots left.

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You see where this is going. The US cannot keep up this pace—and now the Chinese and Russians have the US exactly where they want them. They can keep providing Iran the components and technical help to build more missiles, and the Iranians will continue to bleed the US dry. Indeed, Iranian capacity to rebuild its missile strike force is more adaptive and powerful than the US ever imagined, according to this report.

This degradation of US power will matter much more than a short term fall in Iranian cash (which is actually a situation Iran helps with these military operations—by pushing up the price of oil). Look, I understand why the administration wants the war to be framed now as one of economic pressure and not fighting. It serves their political interest ideally. As for the US press, it has shown repeatedly that it will adopt administration framing out of fear or laziness.

Imagine what would happen if the US begins to run out of Patriots? We can see what this has done to Ukraine. Imagine, the US being unable to defend its partners in the Middle East from Iranian sideways escalation attacks—it could be catastrophic. $100 a barrel oil would seem like a bargain.

And this is not all. The Iranians are escalating in different ways, ones both dangerous and ominous for the USA. Three days ago the Iranians fired missiles at US naval vessels, reportedly including a new faster missile at a US aircraft carrier. In response the US has attacked five Iranian oil tankers.

Look, the US was unprepared for this war, drastically underestimated what a war actually is, and has wasted years that it could have been spent improving its military industrial base. That cannot be changed. It has left the country’s military forces in a dangerous situation—and hoping this problem just goes away is not a strategy.

Every Patriot the USA fires above replacement numbers, is a sign of this defeat. The USA is not as powerful as it likes to think—the tragedy being that it might not admit this until it is too late.

One of the reasons the discussion of whether the US is “winning” the war against Iran seems so surreal, is that it is looking more and more likely that the result of the war will be a historic withdrawal from the Persian Gulf area and maybe even much of the Middle East.

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Now, there will be attempts to provide cover for this humiliation. One of the ones being trialed now is that the US will make Israel its major staging post in the region. I can think of nothing more disastrous than this. The US position in the region was built on cooperation with Arabs and Israelis. If the US becomes dependent on Israel overwhelmingly, that will make it even more suspect and help the Chinese and Russians.

Of course, as I have tried to argue for years, the US needs to withdraw from the Middle East for its sake and the region’s sake. However, it needed to do it on its own terms and through the cooperation of partners. Being forced out with its tail between its legs, by having its bases destroyed by Iran in such a way that they cannot be rebuilt, is the worst way possible to leave the region.

However, that is where we are. More and more the evidence points to the end of the US age in the Middle East, as I started outlining just over a month ago. The way this is happening is a direct result of the overestimation of US power.

The US military is bleeding out in front of our eyes and I imagine that the Chinese and Russians cannot believe their luck. They can see the USA doing exactly what they want, weakening itself in numerous ways small and large, and all they have to do is provide aid to the Iranians to keep this up. In geopolitical terms, they could not have scripted this better.

To call the present Pentagon a “mess” is a compliment to a mess. It is an organization that is clearly failing. It is waging a war terribly, and expending (or just losing) some of America’s most important military equipment—all while weakening the country.

This week we had another depressing example of this. The USA, it seems, just lost one of its newest, AI-equipped, sea drones to the Iranians. Naval News released this picture with evidence that it was indeed an advanced American system that the Iranians now possessed.

This sea drone was supposedly a very new development, constructed with the help of Anduril, and now the Iranians have it. We can be pretty sure that the Iranians will give the Chinese and Russians a look under the hood.

And all of these benefits are going to China and Russia while those two states can sit back and provide support for Iran to keep it going and while the US president goes out of his way to defend them for doing so. Trump has numerous times over the last few months defended Chinese and Russian help for Iran—either minimizing its importance or even saying it was fine by him because that is what the USA would do if it was in their shoes. He even defends them when they attack US allies (or onetime allies).

Of course we have an example of why this is not true. The USA could have helped Ukraine devastate the Russian military in 2022 and 2023, and improved American security markedly—however it chose to strictly limit the aid to Ukraine and thus provided Russia with the time to rebuild. The USA did not do what China and Russia are doing to it.

Trump looks patently ridiculous doing this, but still publicly defends China and Russia.

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And yet the US press is seriously debating whether Trump is winning. It is madness. The real debate is just how much the US has weakened itself and at this point the minimum answer is a great deal. The Chinese and Russians must understand this.

And they will be in no rush to let the USA off the hook as the US did to Russia when it had the chance.