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Oil and Water

The Oil and Water War – and Will American Soldiers Land on Iran’s Shores?

At the beginning of the war, during Operation Epic Fury, President Donald Trump promised that it would be a sharp, focused, and short operation. According to him, the campaign would end within weeks.

But if there is one certainty about wars, it is that they almost never unfold according to plan. Russia believed the war in Ukraine would end within days, and Israel’s Operation Peace for Galilee also began with similar promises.

Since the start of the war, Iran has worked to export the conflict beyond its borders and involve as many countries in the region as possible. Even countries considered relatively friendly, such as the United Arab Emirates, have suffered significant damage.

The Iranian strategy is clear –
to expand the battlefield and create political and economic disruption that will increase pressure on the United States, which Tehran believes struggles to sustain long wars.

One of the main arenas is, of course, the Strait of Hormuz. Roughly 25–30% of the world’s energy supply passes through these straits – about 20 million barrels of oil per day.

A sharp rise in oil prices immediately affects global supply chains and can lead to price increases and even shortages of various goods.

The challenge for the United States is that even if the Iranian navy suffers severe damage, it does not take a large military to disrupt traffic in the Strait of Hormuz. Naval mines, drones, missiles, or small submarines could be enough.

The actual shipping lane used by vessels is extremely narrow – sometimes only about 3 kilometers wide – which makes the area particularly vulnerable.

In such a scenario, the United States might be forced to deploy ground forces at strategic points to ensure the safe passage of ships and the continuation of international trade.

And that is precisely the kind of scenario the Trump administration would find very difficult to sell to the American public.

Iran itself is also paying a price. It exports about 1.5 million barrels of oil per day to China – roughly 90% of its oil exports. Most of this oil passes through Kharg Island, located about 25 kilometers off Iran’s coast.

Some analysts even estimate that the United States might attempt to seize the island in order to control Iranian oil exports – a move that, to a certain extent, has precedent in previous conflicts such as Iraq.

Either way – whether it involves Kharg Island or control over the Strait of Hormuz coastline – the possibility of American soldiers on Iranian soil no longer seems imaginary.

In fact, according to various reports, special forces may already be operating inside Iran.

“Boots on the ground” may already be a reality – the real question is how far this will expand.

At the same time, another front is opening – the water war.

This week we saw reciprocal strikes on desalination facilities. For the Gulf states, this is a critical vulnerability. In countries such as Saudi Arabia and the United Arab Emirates, a large portion of water supply comes from desalination.

Saudi Arabia, for example, does not have a single river.

Striking oil facilities is economically painful –
but striking water infrastructure could create civilian and political chaos.

And as always in wars – you may know how they begin,
but it is very difficult to know how they will end.

(Revolt of the Khaliphs)

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December 25, 2025
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Ground Invasion

🇺🇸🇮🇷⚡️- “U.S. Central Command (CENTCOM) completed another round of strikes against Iran at 9 p.m. ET, July 20.
U.S. forces struck Iranian military command centers, maritime capabilities, missile and drone launch sites, and air defense systems to degrade Iran's ability to continue attacking commercial vessels flowing through the Strait of Hormuz.
Commercial vessel transits through the vital international maritime corridor continue. Since early May, CENTCOM forces have helped facilitate the transit of approximately 900 commercial vessels and 450 million barrels of crude oil.
American forces remain postured and prepared to hold Iran accountable for unwarranted aggression toward civilian mariners seeking to freely and openly transit the strait.” - U.S. Central Command.

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Markets

🌆 Market News Digest
[2026-07-19 17:00–2026-07-20 16:30 EST]

🔥 Top Stories
• U.S.-Iran conflict escalates — fresh U.S. strikes, Iranian retaliation, and talks/ceasefire chatter keep markets on edge
• Oil surges on Hormuz risk — Brent topped $90 intraday, WTI near $83, with tanker incidents and Saudi/Hormuz shipping threats
• Trump escalates pressure on Iran — says Iran will “pay” for U.S. deaths; U.S. adds aircraft and signals next campaign phase
• Canada CPI cools — headline CPI eased to 2.8% y/y, supporting easier BoC path and denting CAD
• UK government reset — Starmer resigned; Burnham took over with a reshuffled cabinet, pledging fiscal rules but more flexibility

⛽ Oil & Energy
• Tankers hit / shipping disrupted — fires, explosions and drone threats in Strait of Hormuz, Bahrain, Kuwait and off Oman
• Chevron shuts Petronius output — Gulf platform shut-in as storm risk adds to energy supply worries
• CPC oil loadings suspended — attacks on tankers halt Kazakhstan ...

🛢 Analysts estimate the U.S. has about 43 days until its crude oil inventory is empty.

🔗 Barchart

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Inflation

⛽️ While the price of crude oil is still below the prices seen during the peak of the 3rd Gulf War fighting, diesel prices on the other hand are surging and surpassed their peak in May.

Diesel is the most important fuel for the global economy, widely used in agriculture to fuel tractors and combine-harvesters.

@CIG_telegram

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