Iran is trying to increase the economic costs on the US, says geo-economics analyst | The Business

Global supply chains face further strain with Iran’s proxies in Yemen – the Houthis – threatening to blockade Saudi Arabia’s exports via the Red Sea. The development comes as international strategists declare the memorandum of understanding between Iran and the United States has collapsed.

Commonwealth Bank’s senior geo-economics analyst Madison Cartwright says the Houthi’s move to block Saudi Arabian oil shipments through the Bab al-Mandeb Strait is a significant development given the oil cargoes have been an important offset from the supply disruption in the Strait of Hormuz. He says Iran is trying to increase the economic costs on the United States because it ultimately wants to exercise authority over the Strait of Hormuz. “I don’t believe that they’re too concerned about extending that authority to the Ban al-Mandeb Strait or the Red Sea,” he said.

As for whether a diplomatic solution is still possible, Madison Cartwright says it is but not on terms the United States will want. He said “Iran will push for control of the Strait of Hormuz. This is a red line for them …. They’re going to have a much harder-line position, we expect, and they’re going to probably demand more upfront concessions from the United States. And this will be much more politically difficult for the United States to do.”

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