America’s China Strategy Backfires and the World is Changing | Silk and Steel

Carl Zha (0:02)

Hello, and welcome to another episode of the Silk and Steel Podcast. I'm your host, Carl Zha. Today, I have back on my show, Dr. Warwick Powell from Australia, who is an expert on geopolitics and everything related to China.

We have a lot to talk about. First of all, welcome back to the show, Warwick.

Warwick Powell (0:23)

It's great to be with you again, Kyle.

Carl Zha (0:28)

As always, we always have a lot to talk about. Recently, the war in the Strait of Hormuz just escalated. United States launched attack on Iranian tankers parked near Cork Island and in retaliation, Iran has launched a massive barrage of missiles to our US base in Jordan and as well as two US missile destroyers parked in the region. And from the reports that's coming in, it looks like United States have launched a massive amount of missile interceptors. I don't know how long they're going to keep up with that pace, but it looks like Iranian missiles and drones are still getting through.

And now the oil price is hovering. It's about to break 100

You know, this is definitely concerning because Trump is trying to win an election. That's coming up. And everything is definitely not going well for him. But this is a big drag on the world economy because, you know, this is the whole, anytime the energy price goes up, it affects everyone. So I would like to get your take of this situation.

Warwick Powell (1:48)

The fact that the situation in the Persian Gulf has escalated again is not surprising.

The problem, there's a short term problem and a long term problem. The short term problem revolves around the status of the Strait of Hormuz and the ability to exercise or exert control over the movement of ships up and down through that strait. Over the course of the last month and a half to two months, since the MOU was signed and then, you know, it fell apart, they've been contending narratives around who controls the Strait of Hormuz. Iran has been insistent that it does exercise effective control. The Americans and others within the sort of broader Western media landscape have periodically published claims that the oil is flowing and that, you know, X number of ships are able to get through. Seeking to undermine the claims that Iran makes as far as control over the straits is concerned, and in doing so, trying to affect expectations concerning future oil supply, obviously, but also as part of a tactical arm twisting, if you will, around the resolution of this Hormuz Straits question. The fact that oil prices are going up, the fact that diesel prices in the United States, for example, continues to be extremely high, would suggest actually that claims made about the flow of ships is a bit of an exaggeration. The, there are ships that get through. Most of them, incidentally, headed to China.

Most of them are going through because Iran lets them go through, would be my proposition. There may be the odd leakage here and there of non-permitted ships getting through, but the numbers are incredibly low, particularly compared to the volumes of ships going through the Straits in January and February. So I think the idea that the United States has effective control over the Straits is less likely to be true than the reverse claim, which is that Iran actually is still in the driver's seat. Bodies of water aren't easy to fully contain, right? There's always going to be some leakage. The question for mine is the extent to which the what movements there are actually part of a controlled geopolitical management. I think that there's a much more of that than simply a case of the Americans are managing to evade the Iranians.

So that's your thought term tactical question as to who is able to exercise control over Strait of Hormuz. The broader consideration, though, actually goes to what the objectives are, particularly from an Iranian point of view, in light of the fact that they were attacked. And the objectives, and it's becoming increasingly clear, but they were stated back in May, and they've been re-stated since on a number of occasions, that the aim is to fashion a new regional security architecture that is based, that is created by the states of the region, for the region, and run by the states of the region.

The code, then, is a security architecture that does not include the United States as a dominant security provider. And that process remains one which is certainly not mature. It certainly hasn't stabilized. But you can see threads of it emerging in things like that trilateral agreement between Saudi Arabia, Pakistan, and Turkey. There's talk that others are being invited to join it. We've had Lavrov mention Algeria and Egypt, for example.