Iran Is Preparing Its Biggest Escalation Yet & America's New Missile Strategy

**Mike Baker** (0:12)
It's Friday, the 17th of July. Welcome to The Presidents Daily Brief. I'm Mike Baker, your eyes and ears on the world stage. All right, let's get briefed. First up, Iran may be looking to expand their efforts to disrupt shipping. We'll explain why the Bab el-Mandeb Strait could become the next flashpoint in this conflict. Later in the show, the Pentagon is embracing a lesson from Ukraine. Cheaper can be better, as the Air Force moves to buy thousands of low-cost cruise missiles. Plus, the United Kingdom is preparing for another leadership change, as Labor's Andy Burnham appears set to become the country's next prime minister. For those of you keeping score at home, that would be seven prime ministers in ten years. In today's Back of the Brief, Secretary of State Marco Rubio unveils a new international counterterrorism focus, arguing that far-left extremist violence has been overlooked for far too long.
But first, today's afternoon spotlight.
We've spent much of the past week examining how the US is adjusting its strategy against Iran. We've talked about the renewed blockade, the strikes on Iranian military infrastructure and the Trump administration's growing pressure campaign against the regime.
But while Washington has been thinking about how to further pressure Tehran, the Iranian regime appears to be preparing what may be the biggest move that it still has left. According to our Reuters report published just yesterday, Iranian leaders have instructed their Houthi allies in Yemen to stand by to close the Bab el-Mandeb Strait, that's the gateway to the Red Sea, if the US follows through on President Trump's threat to strike Iran's power grid. If that happens, well, the war could enter an entirely new phase. To understand why, it's important to recognize something Iran's leadership has understood from the very beginning of this conflict. They can't defeat the US in a conventional war. They obviously can't match American air or sea power. And every additional day of fighting allows the US to chip away at more of Iran's military infrastructure. Instead, Iranian regime leadership has always relied on a different strategy. Rather than trying to beat the US on the battlefield, it looks for pressure points elsewhere, places where relatively inexpensive attacks can impose outsized economic and political costs. And, of course, we've already seen that strategy at play with the Strait of Hormuz. Iran has fired missiles and drones at American facilities in Jordan, Kuwait and Bahrain. And while those attacks may not fundamentally alter the military balance, they force Washington to spread air defenses across multiple countries. And they also remind America's regional partners that they do remain within Iran's reach. Now the Iranian regime appears to be looking toward an even bigger target. For months, the Strait of Hormuz has been the center of gravity in this conflict. By closing that vital waterway, Iran of course threatened the route that once carried roughly one-fifth of the world's oil supplies. But Hormuz is no longer the only game in town. As Gulf states adapted, Saudi Arabia increasingly shifted oil exports west through its east-west pipeline to the Red Sea port of Yanbu, allowing shipments to bypass the Persian Gulf altogether. Reuters reports that the Red Sea now carries around 7% of the world's energy supplies, making the Bab el-Mandeb Strait one of the few remaining lifelines for regional exports. And that appears to be exactly what's captured Tehran's attention. According to Reuters, Khutii forces have already deployed missiles and drones near the Bab el-Mandeb and are waiting for orders from Iran's Islamic Revolutionary Guard Corps, the IRGC.
One regional source described the thinking bluntly, If the US attacks Iran's electrical infrastructure, Iran will respond by threatening the global economy. It's a classic example of asymmetric warfare. Iran doesn't need to sink every commercial ship that passes through the Red Sea. It doesn't even need to permanently close the waterway. It simply needs to make shipping companies, insurers and energy traders believe that the route has become too dangerous, much like what happened with the Strait of Hormuz. As one regional source told Reuters, quote, anybody with a rifle can interrupt the shipping, end quote. Now, that's obviously an exaggeration, but the broader point is accurate. Modern global commerce depends as much on confidence as it does on physical security. A handful of missile launchers, drone attacks or attempted strikes can be enough to send insurance premiums soaring and convince shipping companies to reroute vessels around Africa. That's a journey that has weeks to transit times and significantly increases transportation costs.
Iran is simply trying to raise the economic cost of the war until the rest of the world starts feeling the pressure and then theoretically puts that pressure on the US to end the conflict. And that's why today's Reuters report deserves attention. The Bab el-Mandeb Strait may represent the biggest move that Iran still has left. The regime has already played its strongest card, of course, by closing the Strait of Hormuz. Now, it appears ready to threaten the principal alternative route that Gulf producers have relied on to keep oil flowing. Whether Tehran ultimately gives that order, well, that of course remains to be seen.