The Iran War: Two major themes; one primary goal.

April 2026 - For over 30 years, multiple U.S. presidents, beginning with Bill Clinton, have maintained a consistent message: “Iran cannot be allowed to have nuclear weapons.” This narrative comes from statements suggesting the destruction of Israel and the U.S. (The Great Satan).

On February 28, 2026, President Trump, in coordination with Israel, launched a pre-emptive strike on Iran. The U.S. and Israeli officials stated that Iran posed an “existential threat.” The U.S. operation was named “Epic Fury” and the Israelis named their attack “Roaring Lion.” The primary objective was to hit their nuclear and ballistic missile facilities. The strikes killed Iran’s Supreme Leader and dozens of senior leaders in the Islamic Revolutionary Guard. Also targeted were Iranian oil and gas sites, including Kharg Island.

President Trump and White House officials stated the attacks were necessary to eliminate “imminent threats” to U.S. forces, military bases, and regional allies. Another objective was to bring about regime change in Iran to reshape the Middle East security policies. The strikes were to also degrade Iran’s ability to interfere with global shipping in the Strait of Hormuz. Finally, in January, Iranian protestors went to the streets in massive anti-government protests. Protests occurred in over 400 cities, and protestors were met with brutal response from Iranian military, resulting in many casualties.

As mentioned earlier, Kharg Island was also a strategic target of the attack. Kharg Island is 16 miles off the coast of Iran in the Persian Gulf. It is a small island, roughly 7.7 square miles in size. It provides a deep-water seaport that exports 90% of Iran’s oil products and storage for up to 30 million barrels of oil. Military bases on the island were also bombed in the attack on February 28th.

The recounting of the February attack is intended to provide context for the position of previous Presidents, and to review how President Trump became the President that took action. Why him, and why now?

In 1987, at the age of 41, Donald Trump was interviewed by Barbara Walters. Although she interviewed him several times, during this interview he mentioned how the U.S. had been taken advantage of by Iran and said, “the next time Iran attacks this country, we should go in and grab one of their big oil installations and keep it.” He reposted this interview on March 30, 2026, showing that he hasn’t changed his mind since 1987.

The two major themes are:

1. 1. Eradicate Iran’s ability to produce a nuclear weapon.

2. 2. Take control of Kharg Island and the oil, removing the leverage Iran has with oil exports (especially China).

The first step occurred on February 28th with the combined U.S. and Israeli attacks. The second theme has not been fully addressed to date. China can effectively get all the oil they want from Iran, while cutting off oil through the Strait of Hormuz. We saw this in March: the exports to China from Iran went up, while the exports from Iraq and Saudi Arabia through the Gulf were down 66% and 25% respectively.

President Trump has not had overwhelming international support from our NATO allies. The United Kingdom, France, and Spain, are among the countries that did not provide military support or airspace accommodations requested by the U.S. Trump reacted angrily and named the UK and France specifically.

To be sure, many of the countries that refused to participate in the attack are suffering because of the Gulf shut down. The prices they are paying for oil and gas are up to six times higher than those in the U.S. Inflation in the eurozone has risen from 1.9% to 2.5% since the attack. Since the Strait of Hormuz has shut down again, the full energy and inflation shock has not materialized for them. Europe will be increasing interest rates, not reducing them, if this situation lasts much longer. Higher interest rates are the last thing that weak economies, like Italy, need. Their debt is already 137% of GDP.

Since the war started, the oil markets have shot up over 30%. Recently, very small gas price decreases have been seen in some markets. As of April 20th, the Strait of Hormuz is shut down again. Iran stopped two ships, fired on them and announced that it was closed. The ceasefire is set to end on April 23rd. Tanker transits have been down 90% since February 27th, the day before the attack. Normally, 135 vessels pass through the Strait of Hormuz, but the first week of April only 16 were allowed through. The terms that the U.S. had for the peace agreement and the conditions Iran allowed for the Strait to be open are NOT the same. This situation will continue to seesaw back and forth until a real deal is struck or it escalates. A U.S. delegation is again headed to Pakistan, but it is unclear if Iran will attend further talks at this point.

The S&P dropped 9% by March 30th. Although there were several sentiment messages or press release rallies, they were short lived. As of April 20th, the three major stock indexes are at all-time highs. Europe is not faring as well, as their energy prices are dependent on oil coming through the Gulf. Germany’s DAX is almost 6% below pre-war levels. Some of the reasons the U.S. markets have recovered, like sentiment and press release rallies, are not the big story. Jamie Dimon (CEO of JP Morgan) attributed “increased fiscal stimulus, the benefits of deregulation, AI-driven capital investment and the FED’s asset purchases.” U.S. Treasury Secretary Scott Bessent addressed the IMF and World Bank meetings this spring, outlining the U.S. growth agenda. He stated, the “lack of sustainable growth” was the largest threat to Europe and the second biggest threat was the “global trade imbalances.” He said, “the world cannot take a China with a trillion-dollar trade surplus.”

President Trump has made many comments about the unfair trade policies of China and the cost to U.S. manufacturing jobs and has sought to address this imbalance through policy and tariffs. He has also made his position on Iran clear regarding oil and the regimes statements regarding the U.S. and Israel as well as made several statements about Europe’s decision to make themselves dependent on Russian oil and gas, making them subject to Iran’s export policies.

Bryan Rich (Billionaire’s Portfolio) said, “The war in Iran restructures energy. The confrontation with China restructures trade. The AI buildout restructures technology. It’s not a temporary war. It’s about structural change. And it’s following the playbook that built American dominance more than eighty years ago. Stocks are at record highs because the market sees it.”

On April 20th, after the markets closed, Jim Reid (Deutsche Bank) said, “The S&P Index has done better than the average and median performance roughly 30 trading days after a geopolitical event.”

IMF official Tobias Adrian says the IMF has developed three scenarios for the war’s impact on global markets. The best case, or most likely scenario, is a “benign” outcome, in which there is some decline in output and some increase in inflation from the war, but the global economy can digest it. Financial markets should continue to function well in this case. The second scenario puts inflation pressure higher, forcing central banks to raise interest rates. That would spark inflation, then dampen growth. The third, more severe scenario, is one in which financial conditions tighten in a meaningful way and vulnerabilities kick in, generating nonlinear behavior. He said the second and third options are less likely than the first.

The one primary goal? Restore U.S./European alignment and isolate China. China is the main focus, and it has been since President Trump’s first term in office. Winning the AI race is also a major part of this.

As with any President, we will never be able to have a candid and open discussion about the details of their objectives and plans to accomplish them. President Trump is committed to his objectives, recruiting and pruning his “A Team” and resolute in accomplishing his goals. With the mid-term elections in view, he faces time constraints that could make structural changes in Europe and Iran more difficult to accomplish. We could be in for a volatile summer leading into the mid-term elections. Hopefully, prudence, wisdom and real leadership will prevail in those decisions.

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