Iran Just Created a VIP List for Global Trade

37 minutes ago

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Iran has given ships from India, China, Iraq and Qatar unrestricted access to the Strait of Hormuz, while everyone else faces limits. This is more than a pressure tactic. It may be a new VIP list for global trade. The rest of the world could begin routing goods through these four nations, turning them into the new middlemen. Iran could offer the same access to Europe in exchange for sanctions relief or technology. And BRICS gains something it never had before: real privileges.

Expert Perspective: Analysis by Abishur Prakash ("Mr. Geopolitics"), one of the world's leading geopolitical speakers and author of six books, advising companies on the fractured world. Prakash delivers keynotes in Toronto, NYC, London, Dubai, Warsaw, and worldwide.

Full transcript: Abishur Prakash ("Mr. Geopolitics") on Iran's new rules in the Strait of Hormuz for India, China, Iraq, and Qatar

As President Trump threatens to destroy the rest of Iran, as there's some headway being made with diplomacy between the US, Iran, and Qatar, as the IRGC says it's shot down two American drones, there is also significant action underway in the Strait of Hormuz.

Now, since February, the Strait of Hormuz has effectively been weaponized by Iran, and this is a card that the Iranian regime warned it would play for 30 years, that if you attack us, we will cut trade in the Strait of Hormuz, we will lay mines in the Strait of Hormuz, This has all happened. And of course, the data speaks for itself, where before the war began. There was, on average, 140 to 150 vessels, transiting the Strait of Hormuz daily. Today, that number has fallen to less than 10. Of course, some of the data shows that the oil movements have reached their pre-war levels or 80% of pre-war levels. That of course, is disputed.

Nonetheless, Iran is now making even more changes to the Strait of Hormuz that fundamentally change the global trade architecture. Now, Iran has been giving access to the Strait of Hormuz to countries it's geopolitically aligned with. Iran has been weaponizing the Strait of Hormuz in the hope that this will pressure Washington and Tel Aviv to stop attacking and to seek some kind of off ramp. So this has been a temporary move by Tehran, not a permanent move, even though the Iranians have been framing it as the new status quo in the Strait of Hormuz.

All of this has been to pressure the US and Israel, and to go after the global economy and indirectly pressure the U.S. by causing economic challenges elsewhere, because oil, helium, fertilizer, none of it can transit this critical chokepoint.

Iran Picks Winners

But in the last 48 hours, Iran is going beyond this. And the Iranians have announced that India, China, Iraq, and Qatar now have unfettered access to the Strait of Hormuz.

Now this is not permanent. Iranians are not saying that this is the new permanent carve out. But the Iranians, by doing this, are signaling what is on the horizon, as the likelihood of another all out war between the U.S. and Iran rises. Iran is redesigning the Strait of Hormuz. In ways that most people may be missing. By giving India, China, Qatar, and Iraq, unfettered access to this chokepoint.

The New Middlemen

One of the biggest shockwaves is not only that the West is cut off, the US and countries that align with America are now going to have to think differently about access to the Strait of Hormuz, but the biggest consequence is that global trade may be rerouted through India, China, Iraq, and Qatar. If those nations and those nations vessels are not being shot down, are able to transit the Strait of Hormuz without limits, then the rest of the global economy may push their trade through these four nations.

So vessels from these four nations, the flag of these four nations, now grants special trade privileges and allows others in the global economy to move trade through the Strait of Hormuz without limits. So China, India, Iraq, and Qatar no longer are just importers, and exporters. They are fast becoming the new middlemen, for parts of the global economy, to transit the Strait of Hormuz.

So Iran is not just redesigning the Strait of Hormuz, it's effectively positioning Delhi, Beijing, Doha, and Baghdad, in a new tier, giving them a new status, giving them a new position in the global economy when it comes to global trade. These nations may be about to play a new role.

Europe's Temptation

At the same time, Iran has effectively drawn up a new VIP list, if you will, for the Strait of Hormuz. And considering that the world is not humming as it was 20 years ago, where America called the shots, everybody followed, U.S. allies, and that relation between the U.S. and Allies were ironclad, considering there is now a lot of space between the U.S. and its strategic relationships, its alliances, its partnerships, Iran may leverage this VIP list and offer to other nations, starting with the Europeans. Iran could very well knock on Europe's door and offer them unfettered access to the Strait of Hormuz, same as India, China, Iraq, and Qatar, in exchange for tariff relief, or sanctions relief, in exchange for access to European technology, in exchange for some kind of barter trade. where Iran exports oil and gets European machinery and other industrial equipment.

So, Iran is, again, not simply pressuring the U.S. to end the war. Iran is not imposing a temporary setup in the Strait of Hormuz. Iran is redesigning the Strait of Hormuz permanently. And this new VIP list is reflective of that. And Iran could use this VIP list in ways that strain U.S. relationships across the world, exploit the distance between U.S. and key allies, and effectively pressure key U.S. partners to pick between America, which is increasingly acting unpredictably, and is sometimes hostile towards its allies. And those nations' economic security, those nations' energy security, those nations' access to critical commodities. That is now what's on the table.

So, all of this is to say, that what Iran has just announced regarding India, China, Iraq, and Qatar, is no small business. This is the start of a new setup that we haven't seen in the Strait of Hormuz, because this is no longer temporary. Iran could very well make this permanent. Iran could very well use this as a signal that those that align with Tehran or those that do not align with Washington, gain serious economic and trade benefits.

BRICS Gets Perks

Then there's also the question of BRICS. China, India, are part of BRICS. Iran is part of BRICS. Russia supporting Iran, through satellite imagery, is part of BRICS. UAE is part of BRICS. All of this elevates the position of BRICS in the world as a geopolitical bloc.

Now, this is something I've talked about since February 28th, when the war began between the U.S. and Iran, that, as Iran weaponizes Strait of Hormuz, as Iran imposed a toll booth, as Iran, said it would not create the same obstacles for BRICS members as it would for non-BRICS members, paraphrasing here, as this happened, the position and status and relevance of BRICS has grown exponentially.

The BRICS has gone from being simply a diplomatic forum where leaders of the global south meet once a year, to a geoeconomic forum that carries actual privileges. If you are part of BRICS, you can access one of the world's most critical chokepoints. That is an actual privilege, that is a card, a VIP card that you're given.

So BRICS now is further being elevated. Because 50%, two of the four nations that Iran is giving these special privileges to are BRICS nations. And again, this is a signal to the world that joining BRICS, standing with BRICS, carries actual concrete, economic, and geopolitical privileges.

Iran's Last Stand?

Now, the big elephant in the room is whether, if an all out war between the U.S. and Iran is about to begin, which many signs point to, the probability of the U.S. and Iran returning to war is steadily rising, if that happens, what is the end goal for the U.S.? Is it to decimate the Iranian government, the Iranian regime completely? Is it to go out after the passage? Is it to go after the IRGC in ways that we haven't seen before? And if this is Iran's last stand? And Iran's regime is destroyed somehow, because that is the U.S. military objective, then can Iran maintain this control over the Strait of Hormuz?

If Iran cannot fight this war indefinitely, it's in a situation economically that is unprecedented, where people are having to take on loans just to buy meat and eggs, and of course, the U.S. and Israel need to finish the job, because this, this is a war that has gone on far longer than either side intended. This was a war where there was no clear objectives. This was a war where Iran's nuclear program remains intact. Iran's regime remains intact. Iran's alliances remain intact. Iran's economy has not collapsed. The US has to finish the job. That's clear.

What is not clear is whether in the pursuit of finishing the job in an all out war between the U.S. and Iran, in a war where Iran has dwindling resources, economically and military. Can Iran keep this setup over the Strait of Hormuz. And if not, then what becomes of this critical chokepoint in an all out war.

So a lot to think about. And of course, the other side is, Iran maintains control over the Strait of Hormuz. Iran imposes this new setup. Others around the world controlling their own Hormuz, like the Strait of Malacca, take note, take heed, and this begins to multiply across the global economy.

Regardless as it stands right now, Strait of Hormuz is operating according to new rules, four nations now have unfettered access, and governments around the world will slowly align and adapt to this. And one of the ways they do that is by routing trade through nations that are more geopolitically secure than ever before.

So I hope today's note resonated with you, leave your comments below on whether you think the global economy or parts of the global economy will reroute trade through China, India, Qatar, and Iraq. Don't forget to like, and subscribe, and talk soon.