Larry Johnson analyzes the Iran war, Gulf state realignments, and the collapse of US negotiating credibility
Larry Johnson, former CIA analyst and writer at Sonar21, speaks with Glenn Diesen about the ongoing Iran conflict.
Summary
On approximately day 70 of the Iran conflict, former CIA analyst Johnson and host Glenn Diesen argue arguing that negotiations have been a fraud from the outset and that Iran holds firm positions on sanctions relief, nuclear enrichment rights, and control of the Strait of Hormuz that the Trump administration has shown no willingness to meet. He reveals intelligence from a senior Pakistani ISI general suggesting that Saudi Arabia and Qatar are moving to expel US military forces from their territory, and that China and Russia are actively working behind the scenes to restructure the security architecture of the Gulf. He also argues that Iran's economy is performing better than a year ago due to quadrupled oil prices and open land and sea routes through Pakistan, Russia, and Central Asia — directly contradicting the Trump administration's belief that economic pressure will force Iranian capitulation. The discussion concludes with analysis of how the US is likely to rebrand the conflict under a new operation name to reset the War Powers Act clock, and how Iran's distrust of US diplomacy — rooted in the broken JCPOA commitments — makes a negotiated settlement increasingly unlikely.
Key Takeaways
FULL TRANSCRIPT
The state of negotiations and Iran's non-negotiable positions
Glenn Diesen: I wanted to ask where we currently are in this Iran war, because the information war is quite thick and makes it very difficult to follow the situation. From where I'm sitting, the negotiations seem now to have been quite evidently a fraud — often non-existent. The ceasefire has been repeatedly violated. The fighting has now returned over the past 48 hours in a big way. Iran looks like it will retaliate, and predictably the US will scream unprovoked. So where do you see all of this heading? What is actually happening now?
Larry Johnson: The gulf is too wide for a negotiated settlement. And it's not so much that Iran is not willing to have good faith negotiations, but Iran has some established positions that they're not going to move from. These are positions of principle — not issues where they'd like to have something but it's not essential. For example, they want the sanctions lifted immediately. They want their assets unfrozen. They want recognition that they do control the Strait of Hormuz, and they're not going to give that up. And the Israeli attacks on the Palestinians, the Lebanese, and Hezbollah must stop — they're not going to back off from that.
I don't see any inclination on the part of anyone in the Trump team to acquiesce to any of those. They're trying to make it all about the nukes. That's the other thing — Iran is now inflexible on that as well. They're not going to give up their ability to enrich nuclear material. They'll do it within limits, but they're not going to be dictated to. They are a sovereign country and they are a signatory to the Non-Proliferation Treaty, the NPT. So they're going to be treated like any other country — that's what they insist on.
Now, from the US standpoint, they constantly portray Iran as this vicious terrorist country that is hanging homosexuals every day from cranes, that is beating women in the streets if they don't have their hair covered. All of this is false, but the West really believes it. And on top of that, they believe the economy is in such terrible shape in Iran that if the United States just continues to apply this pressure, Iran is going to be forced to surrender. They'll have no out. And on top of that, they believe the leadership is in complete disarray — that the IRGC hardliners and Pezeshkian and Araghchi are supposedly the moderates. This is all nonsense. Nobody in Washington has apparently taken the time to do the basic research to discover that Pezeshkian fought with the IRGC — he was a medic for the IRGC during the war with Iraq. And Araghchi was in the IRGC, as was Ghalibaf. And the Ayatollah. So they're all in the IRGC. Don't tell me they're really at odds with each other — that's just ridiculous.
Iran's economic resilience and the failure of the blockade
Larry Johnson: On the economic front, the United States pretends they have the Strait blockaded and nothing Iranian is going to get out. But then you look north — the Caspian Sea is open to Russia. Tashkent is quite open. Pakistan has now opened seven land transportation routes into Iran to support Iran. And the largest deep-water port in Pakistan is now also receiving Iranian ships and goods.
Something is going on behind the scenes with China and Russia that we don't yet have full visibility into. When Araghchi was in St. Petersburg with Putin a week ago Monday, Putin used the phrase "security architecture of the Gulf." Then when Wang Yi met with Araghchi two days ago, the same phrase came out of the Chinese side. They both talked about the security architecture of the Gulf.
Then we saw the end of Project Freedom as a result of the Saudis telling the United States, "No, you're not going to use our territory or Prince Sultan Air Base for that." Reportedly the Kuwaitis did the same. I was able to confirm that the Saudis did pull the plug on the US conducting those operations. And then I learned today from a senior general in the Pakistani ISI — who told a friend of mine — that Saudi Arabia and Qatar are both going to cut ties with the United States, or at least get the United States out in terms of a military presence.
If that comes to pass, I think that is what both China and Russia are talking about when they refer to restructuring the security architecture. In other words, Saudi Arabia and Qatar in particular — but also Bahrain, Kuwait — will no longer be reliant on the United States having a military presence there to quote protect them. Because that's really what's been going on — it's been a form of extortion. Instead, they'll be brought into a more cooperative, collaborative relationship with China and Russia. They've already seen that the US air defense systems that were promised to protect them were terrible — they didn't work. Russia has combat-proven, effective air defense systems that these countries might be interested in. And neither China nor Russia are going to force these countries to buy Chinese bonds or be economically blackmailed.
That's what's going on behind the scenes right now. I think that in part explains why we've not seen a broader military retaliation by Iran so far — because of what China and Russia are doing with the Saudis, the Qataris, and Oman. The UAE may be unsavable — they may have gone beyond the point of return. But in any event, until that security architecture is in place, I think the United States is going to renew the attack on Iran. It appears they're going to wait until after Trump's trip to China, if that comes off.
The Non-Proliferation Treaty and the logic of inclusive security
Glenn Diesen: What you said about the Non-Proliferation Treaty is very important, because I don't think everyone is quite familiar with it. The reason it is against international law for a non-nuclear weapons state to acquire nuclear weapons is because they have signed the NPT. But by committing to not acquiring nuclear weapons, they also have the guaranteed right to have a civilian nuclear program. The US is now quite explicit that they don't want Iran to even have a civilian one — so in this regard, it is the United States that is in breach of the NPT.
That being said, the NPT under both Article One and Two is about not stationing nuclear weapons in non-nuclear weapons states — so NATO already breached this a long time ago. But putting that aside, what you were saying about this new language coming out of Russia and China about a security architecture for the Middle East also seems quite important. Because you hear the same key phrase in talks about the proxy war in Ukraine — a new security architecture. It makes sense: in the unipolar era, a system based on global primacy will be dependent on dividing regions into allies and adversaries, with one side dependent and the other balanced. But this hegemonic system is essentially what set us up for all of these wars in the Middle East.
How can it be that Iran is completely excluded from security arrangements — that those arrangements are essentially a lining-up system against Iran? If you can't include Iran, which is the largest country in the region in population and territory, how is it supposed to be stable and provide peace? It's the same in Europe — we organized Europe under the EU and NATO where everyone is supposed to be part of it except for the largest country in Europe in terms of territory, population, economy, and military. It just makes sense that this is a bloc system which pushes zero-sum security. As the unipolar era comes to an end, peace will require a more inclusive security architecture which recognizes the security interests of opponents.
I don't see this in the discourse, and I think this is the problem. Much like refusing any diplomacy with the Russians — they will take the territories they need to be safe — the same applies to the Iranians. If they can't get the peace they want through diplomacy, they'll take the Strait of Hormuz. If they control Hormuz, they can pressure the Gulf states into abandoning the American bases, abandoning the petrodollar. They can achieve a lot of these goals. But if we would sit down at the table and address their actual security concerns, there might be common ground. That doesn't appear to be happening.
More specifically, where do you see the fighting happening now? Because I was looking at some reports, mostly on Telegram — explosions in Iran, the UAE, hits on American warships. I'm not sure what is confirmed and what is not at this point.
The military situation and Iran's strategic restraint
Larry Johnson: At this point it's a little bit of tit for tat. Iran retains control over the Strait of Hormuz. While the US keeps claiming its ships are sailing back and forth, I don't conceive of an admiral being stupid enough to try to put a destroyer into the Persian Gulf itself — because then it can get bottled up and has nowhere to go. That's like Iran saying, "Hey, we'll let you pass," and once you pass, you're in a locked room essentially.
I think Iran has been counseled by Russia and China, and through Pakistan, to just try not to respond yet. Because Iran achieved a de facto elimination of the United States from the region by attacking those various bases — the fifteen bases. In most of them, the US has had to withdraw its personnel, and in several of them the key radar systems have been destroyed. When we're talking about security architecture, the old architecture was the presence of these US bases. "We're the trip wire — if you're attacked, we've got your back." But it also came with conditions: while we're here, why don't you buy some of our weapons? And hey, we've got some T-bills — you need to buy some T-bills. So all of a sudden all these countries are up to their eyeballs buying US debt and having to buy US weapons systems, because that's part of the security architecture.
Now that has broken apart. The Gulf countries are starting to sell off their T-bills. They're not lining up to buy more. They're moving into gold and silver.
The economic weight of the Persian Gulf and the coming price shock
Larry Johnson: The more I've delved into the economic foundation of the Persian Gulf, the two critical countries are Saudi Arabia and Qatar. When you go through the numbers — 32% of the world's oil comes out of the Middle East and Persian Gulf region. That means Saudi Arabia, Iraq, Iran, UAE, and Kuwait. For LNG, 20% of the world's supply comes out of there, and that's mainly Qatar. On urea for fertilizer, 36%. On sulfur — which helps produce phosphate fertilizer, does metal ore processing, petroleum refining, and cleaning of semiconductor wafers for computers — 44% of that comes out of there, and Qatar is a big supplier. For helium, 33% — again Qatar, which is the second largest producer of helium in the world after the United States.
When you put all this together, whatever the Saudis and Qataris decide to do is going to have a major international economic impact. And we still haven't fully come to grips with how bad the damage is from now being on day 70 of this war with these resources cut off.
I describe it like this: imagine you've got a water tank connected to watering troughs for livestock. The faucet is turned on, constantly running, keeping the levels up. The water drains out through a pipe lower in the tank, and the cows and bulls and horses and sheep come up and drink. All of a sudden, that faucet gets turned off. There's still water in the tank, but as it falls, the animals are still able to drink — but it keeps falling and falling until there's no more water coming out. That's where we are right now with oil. When they turned off the faucet in the Persian Gulf, oil was still in tankers moving out across the ocean. But now those tankers have been emptied. We're at the point where the water tank that was full, then three-quarters full, then half full — it's now empty. And once it's empty, you've got to come up with alternatives, or there may not be alternatives. The economic impact that's going to strike the world from this — I don't think anybody has really sat down and put pencil to paper to figure the math out, but it's going to be bad.
Strategic reserves, market manipulation, and Trump's messaging
Glenn Diesen: I've also been a bit confused over some of the news reports. For example, when the US and other countries begin to dig into the strategic reserves and release them, somehow this is presented as showing decisiveness — it's putting more oil in the market, so prices drop. I would think it should have the opposite effect. Once you dig into the strategic reserves, if there's no plan B, essentially what happens when those are over — this should signal a lack of confidence. In my opinion, strategic reserves should work the way China uses them: when prices are very high, they tap into the reserve, putting a ceiling on prices. When prices drop low, that's when they refill. There's a plan — it's a way of stabilizing prices. But just digging into strategic reserves when there's no political solution — to use your analogy, when there are no plans to turn on the faucet again — this should be all red flags going up. Instead we see the markets calming. And Trump keeps saying the war is pretty much coming to an end, the Iranians are talking, they're desperate for a deal. He's able to talk down the markets even when the Iranians rebut and say, "We're not even talking to the Americans — what deal is he talking about?" And still Trump is able to talk up the markets and talk down the oil prices. It's deceptive, but kind of impressive at the same time.
Larry Johnson: The idea in economics is that these markets play fair — that if you've got a large supply of something and the demand for it is fixed, the price will fall as that supply increases. It's a dynamic interaction between supply and demand. What we're looking at right now is a dramatic fall in supply with at least steady demand. And now that demand has started to fall because of the fall in supply — Lufthansa, the German airline, has canceled 20,000 flights because they can't guarantee they'll have the fuel to do it. They're reacting to that supply constraint.
The bottom line is that reduced supply means prices should be higher. As you pointed out, many countries — the US and Japan in particular — tried to mitigate the price rise that should have happened by flooding the market with oil reserves. But now they're out. So the next phase is where the price is going to continue to increase dramatically, simply because there are no more reserves to dampen it down. The only thing that would potentially drop the price of oil is if demand crashed — but if demand crashes, that means some very bad things are going on in your economy. Not good things.
This economic drama has been largely excluded from the analysis about what's going on with Iran. And it's fueled one of the problems with Trump and his team. They have been told — I don't know if it was the Foundation for Defense of Democracy, the FDD, or if it was the CIA, maybe a combination — that Iran is in such desperate economic shape that if they continue this economic pressure, Iran will have to store all this oil in tanks, won't be able to pump any more out of the ground, their oil pumping system will collapse, the soldiers aren't getting paid, they have no money. They really believe all this, ignoring the fact that Pakistan has seven transportation routes open into Iran, that the railroad from China passes through Turkmenistan bringing goods in and out of Iran, and that Iran has access to Russia through the Caspian Sea.
In fact, if anything, the Iranian economy right now is doing better than it did a year ago, simply because the price of oil has quadrupled compared to what they were getting paid. And when I say quadrupled, I mean the actual price people are paying for the oil as it comes off the ship — $150, $160. Ignore what it says on oil futures markets. Those things are completely manipulated now. Iran is actually in a better situation. But the West still believes, "Oh my god, all we've got to do is hang on, keep pushing, because they're going to crack any minute now." And connected to that is this belief that there's a great split in the leadership. The media will not allow anybody to come on and explain that the narrative about Iranians being at each other's throats is just not true.
Iran's control of the Strait of Hormuz and Gulf state incentives
Glenn Diesen: When we look at how this war will affect the wider region — the Gulf states accommodating US bases — this seems like one of the key objectives of Iran holding on to the Strait of Hormuz. If they can put up a toll, it's nice to get reparations, but if they can charge a higher toll on countries that sanction Iran or threaten Iran by hosting US bases, suddenly you have very strong systemic incentives for countries to begin to adjust in ways that benefit Iranian security. If I was an adviser to the Iranian government, I would say: by the love of God, if you want security — both economic and military — don't give up on the Strait of Hormuz. Whatever security architecture you think you're going to be able to negotiate with the Americans, they will not give it to you. The Strait of Hormuz is what you need.
But the willingness of the Gulf states to fall in line with what the Iranians want doesn't only depend on this. It also depends on the extent to which the Americans can provide security, and what has actually happened with the bases. Trump made plenty of statements that maybe one or two missiles got through, but I saw in the Wall Street Journal a report that there has been extensive damage to the US bases in the region — well below what has been reported in the media. How extensive exactly is the damage at this point?
Larry Johnson: I think it was pretty extensive. The one that didn't really get hit much is Al Dhafra in the UAE — that will be one of the first to go if the conflict re-engages at full force. We know that at least two radar systems costing over a billion dollars each were destroyed. That destruction led to, for a couple of days anyway, blinding Israeli and US forces in Jordan from being able to see new missile launches coming out of Iran. They compensated for that by bringing in the AWACS — airborne radar platforms trying to help identify where potential missile threats were coming from.
Fifth Fleet headquarters in Bahrain — it's dead. They're not going back there. The Combined Air Operations Center at Al Udeid — I think they've closed down that shop. I don't know where they moved to. The reality of whether they'll be bringing US personnel back to those bases is questionable. The damage done in some areas is so extensive that it makes it too costly for the United States to want to come back in, or they try to shift the cost to the host nation to rebuild it. And that's where, according to this Pakistani general who is part of the ISI, both Saudi Arabia and Qatar have decided the time to cut ties with the United States over this whole issue has come.
Saudi Arabia's refusal and the closing of US air access
Glenn Diesen: That was another thing — we saw the Saudis and others cut access to the airspace for a while, but that appeared to last only 24 or 48 hours before they began to loosen up again. Do we know anything about exactly what happened there? Was it that the US was essentially agreeing to a ceasefire and not retaliating against Iranians? It's unclear to me why they agreed to this and also why they walked away from it so shortly thereafter.
Larry Johnson: All I could confirm was when I heard the NBC report — the essence of which was that Saudi Arabia had blocked further flights in support of Project Freedom, and that Trump had gotten on the phone with Mohammed bin Salman pressing him to reverse himself, and he said no. I was able to confirm that all of that was true, because people who were involved on the US military side planning air operations were scrambling around trying to figure out alternatives on that day. So it did happen.
I have not yet confirmed that the base fully reopened. And if it did, I suspect it probably reopened under some restrictions that the Saudis have imposed, because they are talking to the Chinese, they're talking to the Pakistanis, they're talking to the Russians. They recognize they've got to have some other options here, because the United States is not as powerful as it once seemed to be. And remember, they promised, "Oh yeah, we've got your back, we'll protect you — here are these Patriot missiles." They didn't work. They failed.
Glenn Diesen: Going back to the wider changes in the international system — if you want to see where countries have to shift, they're going to have to start to diversify their security partners. You can't only look to one actor. The US will remain an important, if not the most important, security actor in the international system, but it's not possible to solely link your security to the US. And again, they also have to shift away from alliance systems and pursue more inclusive security arrangements — security not only with the people you agree with, but also with your opponents.
Of all the Gulf states, how do you make sense of the United Arab Emirates? If you look at the Saudis, the Qataris, and especially Oman — which is more accommodating to Iran — the UAE seems prepared to go all the way against Iran. They also seem to bear the brunt of Iran's fury when it retaliates.
The UAE's strategic miscalculation
Larry Johnson: I liken it to going back to World War II — let's say it's August 1944. The United States, the British, and Canadians have retaken Paris. The general running the Italian operation has entered Rome. And Spain says, "Hey, I think this is a good time for me to join with the Nazi Axis." You're signing up with Germany and Italy at the time when they are in retreat. That's exactly what the UAE is doing right now. It's not that Iran, Israel, or the United States is so powerful — they just demonstrated with all their might and power that they've been unable to defeat Iran. And so the UAE is now going to go toe-to-toe with Iran.
I think it's in part a sense of their economic desperation and growing concern. But I also think there are some blackmail factors involving the Epstein files, because there were prominent Emiratis implicated in those files and involved in all sorts of sordid activities. It is certainly curious, because the UAE was the one Gulf state — outside of Oman, though Oman was never being punished the way Kuwait, Bahrain, the Saudis, and Qataris were — that had the port of Fujairah, giving them access to the Gulf of Oman so they could get a million barrels of oil out a day. But that has now come to an end. So they picked a fight they're not going to be very pleased with.
Glenn Diesen: That makes sense. They're hosting America's Fifth Fleet, they have this Shia majority which is being oppressed — you can see why Iran would go there. But the UAE is an interesting case in terms of their motivations and exactly what strategy they're pursuing, because they seem to be gambling a lot on the position they've taken.
Trump's domestic political situation and the War Powers Act
I also wanted to ask about what's happening within the United States. This war is not popular with the public, but it's also a good opportunity for the political opposition to go after Trump. If it had been a success against Iran, they would have celebrated in the streets, but when it goes bad, it's an opportunity to go after him. More specifically, what is Trump's main problem now domestically? I heard that Congress now has to approve the war — is this why he keeps calling it a skirmish or a scuffle?
Larry Johnson: Under the War Powers Act, you have 60 days, and then Congress has to act to say either you can keep going or you've got to bring them home. Well, he declared victory. "Hey, the war is over" — on day 60, Operation Epic Fury, we won, it's over, it's a great victory. And then the following Monday he announced Project Freedom. This is entirely new — this has nothing to do with Epic Fury. That lasted for about 36 hours.
I think the plan now is to provoke an attack by Iran by using the Strait of Hormuz. So even though Iran is engaged in self-defense as it sees it, it will be sold to the American public as an illegal act of piracy on the part of Iran — they've attacked us, so we've got to retaliate. We've been attacked. Let's call this, instead of Gulf of Tonkin, the Persian Gulf 2. They will stage something to justify ramping up an attack on Iran as if Iran was the violator and the one that caused this. And that then starts a new 60-day clock, because that'll be a new war.
Glenn Diesen: It is only about branding essentially. But I can imagine it would work. It's harder to sell it as something completely different. But that would make sense when you assess the statements of Marco Rubio — he made the comment that Operation Epic Fury is concluded, we had victory, we achieved all our objectives, and then Trump announces the start of Operation Freedom. So it could just be a rebranding in order to get around the legal hurdle.
Larry Johnson: That's exactly what it is — that's a good way to describe it. Because the fundamental issues haven't been settled. Whatever the objectives were, there were no objectives relevant to Iran's military position or economic position. I've said in a sarcastic way that one of the US objectives was to further deplete its stock of critical weapons so that they would be able to justify going back to Congress asking for more billions of dollars to flood into the corporations — Raytheon, Lockheed Martin. A very cynical approach.
China, Russia, and the endgame
Glenn Diesen: My last question is about China and Russia, which you referred to before. What do you see as their involvement now that we're going into a new rebranded Iran war? I would assume they both have an interest in expelling the US from the region, and if they can drain some of their weapons inventory, that would make sense too. On the other hand, it seems like the overarching objective for both the Chinese and the Russians will be to put an end to this war, because it is extremely destabilizing.
Larry Johnson: For Russia it's actually been pretty beneficial — their oil revenues are way up. But I think Putin does recognize this is bad and could destabilize not just Europe and the West, but countries in the Global South by virtue of the shortage of fuel and food, for starters. So they want to get an end to it. And that's where I think they are now working energetically behind the scenes — with Iran, with the Gulf Arabs, particularly with the Saudis and the Qataris — to get the commodity markets open and flowing again out of the Persian Gulf.
But at the same time, they're going to support Iran's demand that the sanctions be lifted. And that brings us back to when Trump meets Xi in Beijing later this week — one of his demands will be that China stop the sanctions routine. But Iran is saying, "You're going to lift the sanctions on us right away," because when they signed the JCPOA, the Iranians really thought they would get some immediate sanctions relief, and it never came. The United States, with Great Britain, kept finding ways to drag their feet and not fulfill the obligations. So I think one of the long-game plays here is to basically make it impossible for the United States going forward to impose sanctions that would hurt any of those countries economically.
Glenn Diesen: That's an old game in diplomacy — if you don't think the other side will abide by agreements, you want to break it into many smaller steps. From the Iranian perspective, at every turn they never got what they wanted in the negotiations. As you said with the JCPOA, not only did the US walk away from it unilaterally, but even when it was in force, only the Iranians abided by it. They accepted intrusive inspections by the IAEA, and yet they never got the other side to fulfill their side of the agreement. And of course now they have more reasons why they shouldn't trust negotiations.
Without any trust in diplomacy, I think they will look for the hard option in terms of ensuring their security. So that's bad news — that means the Strait of Hormuz stays in Iranian control. Bad news for the US and the political West. Maybe we run.
Larry Johnson: Wasn't it Araghchi the other day who said, "Hey, the 'trust me, bro' phase of US negotiations is over now"? I love that.
Glenn Diesen: Yeah, he tweeted that out. The "trust me, bro" phase. It feels like they have their finger on the pulse of their audiences. But no — it's very deceptive, and I think the US can only play this game so many times, arguing that yeah, trust them, the Iranians are exhausted, they're divided, they're begging for a deal.
Larry Johnson: Anything but. Anything but.