(Quick Observations) Iran & the promise to not attack GCC countries

An interesting move by the Iranian president this morning, saying that he must apologise for Iranian attacks on Gulf States, and that all such attacks will stop unless attacks on Iran originate in their territories. Shroud tactics. This is a direct statement to the leadership of the Gulf States that they can stop any attacks on themselves by withdrawing support for and allowing the US to use their bases.  

 

This will have zero effect today or tomorrow. But in two weeks, the cracks will begin, as the US continues to attack Iran, and the Gulf States cannot export oil, or even have their airports function. And their comparatively large populations, most of them non-citizens, may begin to feel pressure to access food, if imports cannot arrive via the Straits.  

 

Iran does not need to attack the GCC countries to close the Straits, although attacks on shipping will be attacks in the Omani section of the waterway. They simply need to hit one of the 90+ tankers that transit per day. And the American Navy, no matter how good it is, will have a very difficult time protecting all of those ships. There will be burning ships if they try to pass through, and no matter what level of “insurance” Trump is willing to sell them, shipping companies would rather have ships than insurance payouts. 

 

When it comes time, we probably won’t see any big announcements, just a quiet stopping of US assets using bases in Gulf states. There may be a temper tantrum from Washington for the first, but by the time a country is ready to remove Washington, they will already have gamed out their response. Then another country will, equally quietly, tell the Americans to pack up and move on. Eventually, the US will be forced either to occupy their bases, simply refusing to abide by the host countries' demands, or stretch their supply lines even further. If they decide to ignore the host countries’ demands, they will continue their war from ‘up close’, but will have a very difficult diplomatic future once the war ends.  

 

The Gulf States know that they are in the crosshairs because of Trump’s erratic and deranged behaviour, and know that this will not change as long as he is in power. So they will turn to their own power, the economic power of oil, to ensure prices stay high and the US economy suffers.  

 

Ukraine will also be suggesting that the US needs to support them a bit more if the US is to gain access to Ukrainian drone specialists, people who are not ‘extra’ because they are desperately needed inside Ukraine. I don’t think JD Vance will be told to “say Thank You”, but I suspect the Ukrainian position on the availability of people will not be as straightforward as Washington expects.  

  

Venezuela - Scenarios and Predictions

On 3 January 2026, the United States military, under the pretence of "law enforcement", invaded Venezuela and apprehended Nicolas Maduro, the sitting president (the legitimacy of his presidency is irrelevant to the nature of the action), and whisked him away to New York to stand trial. It took less than a day for the president to pivot from "it's the drugs" to "it's the oil, and we want it".

As soon as the news calmed down, I was asked to write my thoughts on the event. This paper is the result of that thinking and writing. Using a Risk Management paradigm that identifies and considers scenarios, I have attempted to outline the background and then describe several potential scenarios. I've included my completely arbitrary assessment of the probability of the scenarios occurring, and an equally arbitrary estimate of the timeframe.

It is, however, worth repeating a quote from Stephen Miller, President Trump's Assistant Chief of Staff, who is reputed to have the president's ear and trust.

“We live in a world, in the real world, Jake, that is governed by strength, that is governed by force, that is governed by power. These are the iron laws of the world since the beginning of time. We set the terms and conditions. We have a complete embargo on all of their oil and their ability to do commerce. So, for them to do commerce, they need our permission. For them to be able to run an economy, they need our permission. So the United States is in charge. The United States is running the country.”

Instead of outlining the document in detail, I'll include two Infographics produced by ChatGPT from it. One considers the document from the US American perspective, and the other from the Venezuelan perspective.

The US American Perspective:

The Venezuelan Perspective:

I would add that this post marks my first attempt to use AI to create an infographic from my content. The entire process of using AI to review and 'improve' my thinking has been unnerving, and there can be little doubt that the use of AI will alter people's creative processes. I am not yet convinced that the improvement will be for the better.

Trunp's "Golden Age" is on hold, no matter what lies they tell

The US is in deep trouble, and the administration is not making it any better. Tariffs, healthcare cost increases, inflation, collapsing transparency and trust in official numbers, an almost complete lack of confidence in any cabinet-level leadership of the country, and most importantly, employment ’growth’ that is not growing. Do not expect Trump's "Golden Age" to arrive any time soon, and not before the Midterms for sure.

 

Two areas (among many) I’m looking at are Employment figures and oil prices. One (employment) provides figures that are not transparent, and therefore of limited value for projection, while the other (oil) is extremely transparent and has huge potential implications. 

 

Employment 

 

Looking at employment alone, the total number of employed people has actually fallen from July through November 2025. Not static but fallen. And that does not include federal government employment, which President Trump claimed was the real reason total employment is falling. 

 

 

 

Government employment numbers cannot be trusted, but ADP, the payroll processing company, produces a jobs report every month. That report shows that in July 2025, there were 134,561,000 privately employed people. In November 2025, there were 134,544,000. Absolutely stagnant employment numbers over the past five months. 

 

It is important to note that these numbers do not include federal or state (or local) employment figures. We know that federal employment has fallen, but the impact has been phased over several months through deferred early retirement and administrative leave arrangements. The biggest problem with government figures, however, comes from the exploitation of the recent shutdown to also inject uncertainty into the Bureau of Labor Statistics (BLS) employment data, and explicit political interference in the independence of the BLS with Trump firing the head of the BLS statistical arm after a less rosy July jobs report. 

 

Other sources become essential, as trust in the BLS numbers falls. For example, the total number of layoffs for the year comes not from the BLS, but from a private company. 

 

Employers have cut more than 1.1 million jobs through November, the most since 2020, when companies laid off 2.2 million workers as the pandemic was slamming the U.S. economy, according to a new report from outplacement firm Challenger, Gray & Christmas.  

  

The layoffs represent a 54% increase from the same period a year earlier, when employers cut 761,358 jobs, according to the firm. It's also only the sixth time since 1993 that job cuts during the first 11 months of the year have risen above 1.1 million.  

 

(https://www.cbsnews.com/news/employers-cut-1-1-million-jobs-2025-why-layoffs-rising/) 

 

Unemployment is going to get worse, not better, as costs increase and people spend the same money for fewer products. Consumer sentiment is at record lows, which will keep people out of the shops, or reduce significant capital item expenditure, especially as many larger personal items were purchased earlier in the year to avoid tariffs. 

 

Oil 

 

Inflation has been held “under control” at around 3% through unrealistic reporting and through international market conditions that are, temporarily, favourable. 

 

Oil has been falling in price over the past year, from a peak of $80/barrel down to a low of $56/b last week and now hovering around $60/b. The oil price is a key element in the overall inflation picture, and of course, a significant indicator that Trump continues to point to, claiming that he has brought costs down. 

 

But the oil price that we are seeing is not sustainable. Saudi Arabia has the ability to influence the price of oil, and finds it politically expedient to keep the prices low, for now. But Saudi Arabia cannot continue to keep the price down, and will not. Lower oil prices are a temporary benefit for Saudi Arabia, as it pushed other producers into financial difficulty (especially US fracking wells) to reduce competition. This allows Saudi Arabia to (expectantly or unexpectedly) reduce output, thus driving up the price.  

 

And Saudi Arabia needs a higher price than it is getting today, and indeed for the past years. Only five of the past fifteen years (and only one of the past ten years) have the price of oil been higher than the “Breakeven Fiscal Oil Price for Saudi Arabia”; the price that Saudi Arabia needs for their national budget to break even. For ten of the past fifteen years, and nine of the past ten years, Saudi Arabia has needed to draw down national reserves to meet its budget. This cannot continue, and will not.  

 

Therefore, we should expect to see oil production tighten over the coming year, and the price of oil to increase ‘dramatically’, at least back to the $80 - $90/b level that is required by Saudi Arabia simply to balance their books.  

 

 

 

"Saudi Arabia is likely to rely on debt financing, and it will have to delay or scale back some planned contracting awards given 2024 was already in a twin deficit," said Karen Young, senior research scholar at Columbia University's Center on Global Energy Policy, referring to fiscal and current account deficits. 

 

Before the U.S. tariffs announcement, she said analysts had expected Saudi public debt to surge by $100 billion in the next three years. It jumped 16% to over $324 billion in 2024, official figures show. 

 

(https://www.reuters.com/markets/commodities/how-oil-price-plunge-complicates-saudi-arabias-economic-agenda-2025-04-08/) 

 

So the oil price-driven reduction or stabilisation of the US inflation figures will be temporary only, and energy price rises should be expected over the coming year, further undermining Trump’s assertion that the US Economy is in a good place. 

 

And as long as the lower oil price persists, it will have a negative impact on US employment figures, as the number of “rigs” drilling new wells declines. Over the past year, the number of rigs in the US has reduced by almost 9%. 

 

 

 

Each rig taken out of service not only reduces direct employment but also reduces the number of downstream jobs produced. The numbers are not huge, but each rig removed also has a (very minor, for sure) negative impact on barrels of oil produced in the US, supporting conditions that will enable a rapid rise in the price of oil when Saudi Arabia decides the time has come. 

 

Summary, 

 

IF we cannot trust the numbers coming out of government, we will need to look to other, non-government providers of economic information. The government employment numbers cannot be trusted, and the latest GDP print seems wildly outside any projections, and was produced by a department that is under the control of a president who lies as he breathes. This will be the first time I've seen completely flat employment but very high GDP growth. 

 

Private information, such as the ADP Employment Report and publicly available information about the oil market (just two of many publicly available indicators across a range of economic activities), would suggest that the coming months will be less rosy than the oft-repeated promises of a “Golden Age”.