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Terms of US capitulation to Iran presage new era for the region

By Samuel Geddes | Al Mayadeen | June 21, 2026

After a week where it seemed the US-“Israel” and Iran were inevitably sliding back into open war, President Trump finally decided to cut his losses and snatch defeat from the jaws of catastrophe. The terms of his submission to Iran, aptly signed in the Palace of Versailles, enter the historical record as among the most humiliating articles of surrender ever accepted, not least by a supposed global hegemon.

On the sidelines of the G7 summit in Switzerland, no less than Trump himself admitted that his decision to accede to almost all of Iran’s demands was meant to forestall an imminent economic depression triggered by the Hormuz blockade. Still more jarringly, all of the many systemic concessions given by Washington; the ending of the US naval blockade, the immediate suspension of US sanctions against Tehran, the handing over of Iran’s sovereign assets frozen around the world, the muzzling of “Israel” from continuing its pyromaniacal rampage of the last three years- all of this was given by Washington in exchange for the reopening of the Strait of Hormuz (open before the war) and Iran’s willingness to negotiate the status of its nuclear program later on.

Of the agreed conditions, the most jaw-dropping article, which many found exceedingly difficult to take seriously, was the establishment of a fund for the reconstruction and economic development of Iran, amounting to $300 billion. The most up-to-date estimates of the damages caused to the Iranian economy by the US-Israeli aggression totaled $270 billion, a figure likely to be preliminary rather than final. Alongside this eye-watering sum, Tehran has already begun exporting its energy and petrochemical products free from the constraints of US primary and secondary sanctions, something almost certain to become permanent, while its $100 to $150 billions of international assets will bring in an added infusion of economic activity. Added to this the implicit acceptance – or at least not rejection – of Tehran’s right to levy charges on shipping through the Strait of Hormuz (though not for 60 days) and the Islamic Republic emerges from this war the overwhelming beneficiary of its consequences, achieving in four months of war what five decades of intermittent and painstaking diplomacy could not.

The $300 billion sum functions in effect as an indemnity, a tribute extracted from the treasury of the defeated party in exchange for the granting of peace. Scores of Roman emperors knew full well the significance of the principle, as they had to repeatedly perform this ritual of humiliation before the Iranians countless times over the course of their seven-century-long rivalry in the Late Ancient Period.

In both of their efforts to contain the humiliation of this clause, Trump and his deputy, JD Vance, have been at pains to emphasize that Washington will not be paying any of its own funds to the Iranians for this purpose. In his Thursday press conference, the Vice-President identified that regional states – the Gulf Cooperation Council, which he repeatedly labelled the “Gulf Coast Coalition” – would be “free” to invest in the Iranian economy if they wished to.

This is, and would be, a monumental shift for Washington to even countenance such an arrangement. Since 1979, the Islamic Republic has specifically threatened the mechanism through which the US (and to a lesser extent European) economy has siphoned off the wealth of the Arab world and the capital of the Global South, the infamous ‘petro-dollar cycle’. These states exist specifically for the purpose of recycling their energy revenues into the Western economy through arms deals, acquisitions, and investments in Western financial institutions. Trump himself has personified this process more completely than any other president.

That Trump would give his signature, willingly or otherwise, to the GCC pouring hundreds of billions of dollars into the Iranian economy to reconstruct and repair what he destroyed, obviously is demonstrative of which side is the victor in this war. It also signals a shift in the regional balance of power that has truly global ramifications.

If the flow of petro-revenues illustrates the relative strength of the recipient economy, then it shows the war set in motion an increase in Iranian power that grants it competing access to the region’s vast surplus revenues – that is competing with the US.

Even if the process started by the signing of the MoU collapses and the $300 billion fund doesn’t materialize, Tehran’s capacity to challenge – and potentially displace the US as the hegemon of the Persian Gulf, is now a thinkable scenario.

As the consequences of this war continue to unfold and the true increase in the Islamic Republic’s relative power becomes more apparent, it will begin to exert a gravitational pull that makes security under its umbrella a more realistic proposition to the GCC states than the empty promise of American Patriot batteries or fantasies of normalization with “Israel.”

June 21, 2026 Posted by | Wars for Israel | , , | Comments Off on Terms of US capitulation to Iran presage new era for the region

Strategic Oil Reserve Nears Collapse… US Must Choose: Guns or Butter

By Larry C. Johnson | SONAR21 | June 21, 2026

As of the week ending June 12, 2026, the US Strategic Petroleum Reserve (SPR) held approximately 340.25 million barrels of crude oil… Sounds like a lot, but it is approaching the danger zone. In late May, that number was 372 million barrels, which consisted of Sweet crude: ~142 MMB | Sour crude: ~230 MMB, according to the US Department of Energy.

The oil is stored in caverns at four sites:

  • Bryan Mound: ~166 MMB
  • Big Hill: ~90 MMB
  • West Hackberry: ~72 MMB
  • Bayou Choctaw: ~44 MMB

To understand how perilous the situation is you need to know that if the oil level in these caverns falls below a certain level that the structural integrity of the caverns would be jeopardized. The most commonly cited operational floor is around 20% of capacity. Mike Sommers, CEO of the American Petroleum Institute, told CNN that the SPR must be at least 20% full to remain operational — that’s roughly 143 million barrels against the SPR’s ~727 million barrel design capacity.

So subtract 143 barrels from 340.25… That means the US only has 197.25 million barrels left before the caverns could face irreparable damage. If the US consumers, who use 20 million barrels a day, had to rely exclusively on the SPR, the US only has less than a 9-day supply of reserves. If you compare the amount reported at the end of May (i.e., 372 MMb) with the June 15th report, the US is drawing 16 million barrels a week from the reserve. This is the optimistic scenario, i.e., the US has roughly a 12-day supply before the proverbial shit hits the fan.

But wait, it gets worse. The US Military has blown through its jet fuel reserves. The problem is compounded becuase Diesel reserves are at 25 year low. Diesel and Jet Fuel are critical Distillates. So the Trump administration must make a choice: support the military jets with jet fuel, or support the trucking Fleet with enough diesel fuel, to provide food and products to US consumers. Trump can’t wage war and keep the economy going at the current rate because diesel and jet fuel compete with each other when comes to production. So the question is, do you want to wage war or do you wanna save the economy and keep the trucks moving on the road? This is the main reason Trump signed the MoU with Iran.

A friend who is an energy analyst summarized the dilemma as follows:

The strategic warning is that the United States cannot assume it can fight a major fuel-intensive conflict and protect the domestic economy without tradeoffs. Military jet fuel, commercial aviation fuel, diesel, heating oil, and marine fuel all draw from the middle distillate portion of the refined barrel. Refineries can bias output, but they cannot instantly maximize every middle-distillate product at once.

The risk is not that every truck or aircraft stops at once. The risk is that a forced fuel-priority decision creates cascading shortages and price shocks across logistics, aviation, agriculture, construction, and consumer supply chains. A war-time jet-fuel surge could reduce the diesel cushion; a civil-aviation diversion could disrupt passenger movement and air cargo. Either channel can become recessionary because both diesel and jet fuel are operating fuels for the real economy.

The US is not the only country or region facing a massive problem. Europe is screwed. An April 2026 report by Karl Miller — The Iran War, the Strait of Hormuz and Europe’s Compound Energy Trap — spells out the danger facing Europe. Here is the Executive Summary:

This report assesses whether the European Union faces a structural energy-security Prisoner’s Dilemma with Russia, with Germany at its centre and the Persian Gulf crisis as the accelerant. The argument is blunt: the Union has deprived itself of the low-cost Russian oil and gas system that underpinned much of its industrial base, while the Iran war and the Strait of Hormuz disruption have simultaneously impaired the maritime energy system that supplies a decisive share of the world’s oil, refined products and LNG.

Europe is on its knees in strategic terms. It is not literally without emergency stocks, because EU and IEA rules require minimum oil inventories. The harder reality is more damaging: those inventories are finite, unevenly usable, commercially fragile and unable to replace the normal flow of crude, diesel, jet fuel, LPG, naphtha and LNG through global markets. Emergency stocks buy time; they do not restore cheap Russian pipeline gas, reopen Hormuz, rebuild refining flexibility or prevent member states from bidding against one another.

The EU therefore faces a compound trap. Russian gas is being removed by law, Persian Gulf flows are exposed to war, U.S. LNG has become indispensable but expensive, storage refill is costly, and Germany’s industrial model remains dependent on affordable dispatchable energy. Each member state can rationally protect itself through bilateral contracts, subsidies, exemptions and emergency procurement, yet those same choices weaken the Union’s collective bargaining power and deepen fragmentation.

The conclusion is that the EU is locked into a repeated, asymmetric collective-action game. Escaping it requires enforceable solidarity, shared critical-fuels planning, coordinated storage, firm-capacity realism, a diversified LNG portfolio, strategic petroleum-product management, and legal reforms that make cooperation faster and more profitable than national defection.

June 21, 2026 Posted by | Economics, Militarism, Russophobia, Wars for Israel | , | Comments Off on Strategic Oil Reserve Nears Collapse… US Must Choose: Guns or Butter