Haymaker Daily
Guest Edition: Gavekal's Tom Holland
Hello, Subscribers:
Can it last?
That question and myriad variations of it are doubtless populating minds around the globe today. Can the ceasefire last beyond its intended two-week extent?
As our guest contributor, Tom Holland of Gavekal Research, points out, there is virtually no overlap between the Trump administration’s stated peace goals and what the Iranian regime is demanding. Like, basically none. How can that possibly be reconciled in a mere fortnight, or even in a year?
Maybe it can’t and maybe it’s inevitable that the most significant result of Trump’s Iran campaign will not be an Iranian population freed of their cultural/political shackles, but a vital waterway choked off by state and independent actors who stand to strategically benefit from its restriction. Not quite the “big win” to which Trump is accustomed, but at least… well, nothing, really.
Given that Iran is now effectively targeting Saudi Arabia’s increasingly vital East-West Pipeline, a possibility we brought to your attention last week, it’s not clear the ceasefire is sustainable for even two days. Its duration is additionally questionable based on Iran's response to Israel’s military actions against Hezbollah: threatening the Strait with closure. In reality, traffic moving through it is a mere trickle and even that is under Iran's control. This is another reason to expect this ceasefire will soon cease to exist.
Tom’s case is essentially that with geopolitical differences this intractable, there is no logical endpoint in which both the U.S. and Iran come away from the negotiation table with terms satisfactory to both parties, nor to the world’s energy-hungry nations whose economic fates are tied either directly or laterally to the flow of oil through Hormuz. Uncertainty of outcomes and inconsistency of shipping transits are the most likely effects of a war whose first act was as effective as its second has been chaotic.
The Haymaker Team
The Peace That Passes All Understanding
Tom Holland
Asian stocks jumped, oil prices fell and the US dollar softened early Wednesday after the US and Iran agreed to a Pakistani-brokered 14-day ceasefire pending negotiations to secure a permanent peace deal. However, the obstacles to a lasting peace are formidable, and markets will continue to price in a substantial war risk premium for the time being.
