Month: June 2026

Ukraine’s Offensive War

by Dave

Offense attacks can be the best defense.

Ukraine is succeeding on many fronts. Belarus agreed to shut down the relay stations which have been helping Russia guide their drones. See link:

Belarus halts Russian drone relay stations after Ukraine ultimatum

This means Ukraine has some political leverage over Belarus. At least for now. Lukashenko is setting some boundaries on what it will provide to Putin’s war.

Ukraine is making the war more costly for Russia with drone attacks to the south, in Crimea. Russia is claiming to have shot down many of the drones.

Ukraine unleashes one of its heaviest drone bombardments of Russia

There is no question to Ukraine’s strategy, which is to put Russia on the defensive. Pretty much what is done is asymmetrical warfare, to manufacture your own drones, then find the targets which will do the most economic harm like oil storage facilities and refineries.

It is a case of the “Mouse that roared” or “David and Goliath.” Ukraine is getting strong support from its European allies, but the US should be doing much more. It is in our national interest to stop Putin’s use of his military in a brazen land grab. It is not a border dispute between two countries, but a Russian invasion into Ukraine.

How to end the war, is not complicated. Russia needs to withdraw its troops from Ukraine. With Russia out of Ukraine, Ukraine would cease their attacks.

Zelensky is right. To bring Russia to the negotiating table, they must feel the pain, they have inflicted on Ukraine.

Stay tuned,

Dave

The roads to peace – Iran and Ukraine

by Dave

Iran Road to Peace:

Trump’s attack on Iran was a failure. What Iran is demanding is the unfreezing of Iranian assets (24 billion dollars) for a demined Strait of Hormuz. Iran stated they have no intentions of developing a nuclear weapon. They said that when Obama was president eleven years ago. So, it is no concession as a result of the war.

Obama’s plan (JCPOA) would have worked, inspections of enrichment of uranium in return for the lifting of sanctions. Trump has to lift sanctions if he wants ships to be able to pass through the Strait of Hormuz, and bring down the price of oil worldwide. It is not our oil that passes through the Strait, but oil prices depend on the global supply and demand.

Whether the MOU is a prelude to peace or war, is hard to say. It left more issues on table than off. I like to call it a 60 day cease fire agreement. Already, Trump is setting up JD Vance to take the blame for Iran negotiations failure. Trump is seeing this as a transactional deal, we pay you and get what in return? A demined strait and promises to limit enrichment? Likely much less than Obama negotiated 11 years ago.

Ironically, it was not a war that JD Vance supported. JD Vance will have little to show for agreeing to unfreeze assets, except the Strait of Hormuz will continue to be open.

‘If it doesn’t work out, I’m blaming JD’: Vance’s risky gambit on Iran peace efforts

Ukraine Road to Peace:

Putin’s invasion of Ukraine is a failure. The latest attack on Moscow showed this. What Russia needs to do now, is withdraw it’s troops from Ukraine. This is Ukraine’s demand. The US should be 100% behind Ukraine. Instead, at every opportunity, we talk of reducing military support for NATO and our allies. Ultimately, Ukraine must become part of NATO, which is a mutual defense organizations for democratic European countries

It is a humiliating defeat for Putin. He doesn’t have a convenient JD Vance to blame.

Neither road is easy. Trump’s tearing up of the negotiated JCPOA and bombing Iran has been counterproductive to any objective he has stated.

Putin by himself, will not make peace with Ukraine. It must be the others in power that force him to withdraw the troops.

Stay tuned,

Dave

Ukraine’s retaliatory strike on Russia

by Dave

“We do not want this war and never have – everyone knows this, and our partners know this,” he told reporters. “But if Ukraine is engulfed in flames, so will your Moscow be. That is why we emphasize once again that it is time to end the aggression; it is time to end this war.”

Their attack was very successful as CNN reported:

Ukraine launches largest attack on Moscow since start of full-scale war

It was good timing, as reported by CNN, “On Thursday, at a gathering of NATO defense ministers in Brussels, Secretary-General Mark Rutte said he and Zelensky had discussed the war during a meeting a day earlier.”

US Secretary of Defense, Pete Hegseth, could have easily backed statements by Zelensky, by saying we would support Ukraine and that Russia’s invasion had failed miserably. Instead, he talked about reducing support for NATO, following Trump’s isolationist policies. See above link.

Dave

The 60-day Ceasefire begins June 19

by Dave

The text of the MOU will not be released until after it is signed in Geneva on June 19. From news reports, the deal leaves a lot on the table. JD Vance described it as a “very general document.”

Already, different versions are circulating, so it is difficult to know what was resolved.

Trump: The Strait will be opened immediately and permanently Iran: The process of opening the Strait (demining) will be concurrent with negotiations.

Demining operations will begin and the intent is to allow free passage of vessels in the Strait. The Iranian version of the MOU according to their news service Fars, is:

Iran plans to impose fees after that period (60 days), with Fars saying Iran “intends to benefit financially from commercial shipping traffic through the Strait.”

Per Reuters:

“U.S. and Iranian officials say the deal could eventually deliver substantial economic benefits to Iran by lifting sanctions and unfreezing foreign assets. It could also set ​up a $300 billion reconstruction fund, paid for by neighbouring Gulf states that host U.S. military bases and were hit by Iranian attacks during the war.”

The frozen assets has been reported by Iran as 24 billion dollars.

See other details in this link:

US-Iran deal promises end to war but how it will work remains unclear

“Iranian officials, who have always denied intending to build a nuclear weapon, say they have given up little by agreeing to resume diplomatic discussions over Iran’s uranium enrichment programme that were interrupted by the war.”

Prelude to war or peace? We’ll know more on Friday.

Stay tuned,

Dave

The Staged Approach to US-Iran Negotiations

by Dave

Both Iran and the US want a 60-day cease-fire. That’s the easy one. It’s best to call it a cease-fire agreement or an interim agreement or a Memorandum of Understanding (MOU). What appears to be close to done is a very fragile deal. MOU’s are frequently signed by countries to help diplomats bridge differences.

The deal can be a prelude to peace or war. If it is the latter, it will be a highly destructive war with Iran attacking US bases in the region.

I believe at its core, it will be promises of money to Iran (unfreezing of assets) in exchange for passage of ships through the the Strait. Iran is demanding the unfreezing of 24 billion dollars. Iran will not relinquish control of the Strait, but allow the passage of ships. In this way, Iran can declare victory, because this will be a major concession.

It is an agreement which will clarify points of disagreement to be hammered out during the 60 day period. What is still on the table might be more than what the agreement has taken off the table. So, I expect disappointment, rather than relief when the MOU is released.

Iran will promise not to fund terrorist groups. That’s an easy one. They fund Hezbollah, and do not consider it a terrorist group. Iran will promise not to use its uranium to make a nuclear weapon. They’ve agreed to this since the JCPOA. So, the MOU will list points Iran agreed to that have nothing to do with this conflict.

US will agree to end its blockade of Iranian ships in the Persian Gulf. It will not withdraw its 3 to 4 warships in the area, but leave this to further negotiations. Israel will not like the agreement because I believe the language related to reducing their uranium stockpile will not sufficiently specific. Just a lot of good intentions with the details to be worked out later.

In sum, I believe the ability to safely transit the Strait, will be linked to the unfreezing of assets. Bloomberg correctly identifies this as a staged approach, with the 60 day window to work on a more permanent agreement.

No question we are at the crossroads with the outcome depending on how each side judges the outcome of continued war verses compromises to peace.

Stay tuned,

Dave

Why is oil so cheap?

by Dave

Cheap? What are you talking about? Benchmark Brent Futures Contracts currently is $95.6/bbl. Average US gas price is $4.16. But, experts in this area expected prices to be much higher. They, as a whole, overestimated the affect of the closure of the Strait of Hormuz based on supply-demand dynamics. (bbl = barrel, 42 gallons).

Forecasters were looking for the Brent crude to exceed $120/bbl if passage through the Strait continued to be blocked. Gas prices were supposed to be at least a dollar higher. They may ultimately be right, just off on the timing.

Total demand for oil worldwide is estimated to be 105 million bbl/day and about 20 million bbl/day was coming through the Strait of Hormuz, pre-war. This is a huge drop in supply and the dire forecasts really did make sense.

The forecasters say that prices should be much higher IF all other means of supplying oil to the world market were to stay the same. So, the modeling flaw was China’s decision to supply oil from their inventory instead of importing it. This is a delaying action, not a fix.

Every oil exporting country is keenly aware of the action of China and is looking for new routes for their oil. Of course, importing countries are also looking to add to inventories (very difficult at these prices) and cut oil demand. I like the comment by UAE’s energy minister, Sultan al-Jaber:

“Energy security is no longer just about your ability to continue to produce. “It is about routes, access, storage and redundancy.”

This is really the key strategy for oil exporters, in the short term, to get their crude to the worldwide market.

See link below:

Post-War Oil Trade Could Look Nothing Like It Did Before Hormuz

Stay tuned,

Dave

Iran and Ukraine Peace Deals

by Dave

I will start with Iran. By blocking the Strait of Hormuz, Iran has played a winning card and oil prices have shot up worldwide. A deal for the US must include opening up the Strait. I believe that Iran will agree to opening the Strait as long as all other conditions of the agreement are satisfied. This of course, will not make Trump happy, as he is famous for agreeing to a deal and then breaking it, claiming the other side has not lived up to the spirit of the deal.

A lot of other more complicated issues can be worked into a deal. Iran will likely not agree to the total elimination of enriched uranium, but I think they would be willing to settle for enrichment limits along the lines of the JCPOA as negotiated by Obama in 2015. This would require inspections.

So, what could US give Iran in return? Very simply, money. This relates to frozen assets, which Iran claims the US owes them. Iran is requesting the upfront release of up to $25 billion in overseas assets frozen by U.S. sanctions. Of course, the US would like a deal where they open the Strait first, and then the payment is left for future negotiations.

It would be an enormous humiliation to Trump, to make a payment. He relentlessly campaigned that Obama’s payment of 1.3 billion dollars was ransom money. It was not. It was a debt originating before 1979 on military equipment bought by Iran for 400 million dollars and never delivered. The interest on the debt came to 900 million dollars.

The other demand of Iran is a halt to the attacks of Lebanon by Israel. Trump is seriously trying to meet Iran’s demand through discussions with Israel.

So, as I see it, it is all about Trump accepting that none of the objectives of the war have been realized, and to get the Strait open, he has to accept the unfreezing of assets. This comes with terrible political consequences for Republicans who backed the war.

Next is Ukraine. Peace will only come when the political powers surrounding Putin, force him to withdraw from Ukraine. They can withdraw to the pre-2022 borders, and agree that Crimea will be part of Russia as it has been since 2014. The idea of a “buffer zone” will not work, and just be the source of new conflicts.

Putin knows that the Russian private economy is in terrible shape absent of the thriving military-industrial complex, from the war effort. I discussed this in my previous blog. So, for the war to end in Ukraine, requires another humiliation this time for Putin. In fact, if he is forced to withdraw troops, he may be forced out at the same time. There will be no deal that includes barring Ukraine from joining NATO. Trump’s great indifference to help fund Ukraine’s survival, I would say is an additional stumbling block.

This is the way I see it. Money is the stumbling block for peace in Iran. Russian withdrawal is the stumbling block for peace in Ukraine. Trump and Putin will have to accept defeat for the wars they caused and can not win.

Stay tuned,

Dave

Zelensky’s Gambit

by Dave

President Zelensky offered a face-to-face meeting with Putin. Russia rejected this offer as meaningless. As long as Russia’s goal is total control of Ukraine, this meeting was to be for public relations only. Putin want to portray this war as defending their territory (he considers Ukraine belongs to Russia) against NATO powers. He does not want to share a stage with Zelensky.

Ukraine targets St. Petersburg again after Putin rejects Zelenskyy’s offer for direct talks

So, by suggesting a face-to-face meeting and having Putin reject it, Zelensky can come off as the “peacemaker.”

Ukraine is proving that it can successfully attack deep inside Russia. St. Petersburg is Putin’s hometown, and he is likely furious at Ukraine’s attack. Russian military strategists are likely now looking at a much larger circle of vulnerability in their country. perhaps 1000 km from their eastern border. . The simple strategy of depleting Ukraine’s defenses is now not so easy. If Russia puts all efforts into offense and taking more territory, Ukraine will strike behind the front lines and target everything that supplies the war effort. .

It is essential to understand what Putin seeks to gain from the war as the gains on the battlefield are nominal and supply chains are strained. Economic advisors to Putin are likely busy calculating the trade offs of war verses peace for Russia, and may be advising Putin of dire economic consequences of peace. Very perverse thinking, as peace means Russians not dying on the front lines in Ukraine. But nevertheless, a reality.

The article below, really brings home the point of the peace being an undesirable for the Russian economy, now geared to supplying the needs of military. The term “military-industrial complex” was coined after World War II, but is very applicable to Russia today.

“On one side sits a state-subsidized, demand-guaranteed military-industrial complex, expanding at a pace that would be the envy of any peacetime planner. On the other hand, a civilian economy is slowly hollowing out, starved of labor, capital, and credit.”

and then concludes:

“The military-industrial complex is not simply growing alongside the civilian economy, but is crowding it out.”

Russia’s Economy: Bent Out of Shape

So, if peace broke out with a Russian withdrawal and security needs assured by Western powers, Ukraine’s economy would soar and Russia’s economy would plummet. Ukraine could finally join NATO. And Putin’s reign would be in jeopardy.

A continued war offers little to Putin, if Ukraine can continue getting funding from the West. But peace via a withdrawal of troops brings the risk of economic collapse and enormous humiliation.

So, Zelensky had to make a political gesture, that he wants peace. The best strategy for the US is a total commitment to Ukraine, but Trump is getting more entrenched in the idea of being the peace broker, which has failed.

Stay tuned,

Dave