The Journal. - Iran Thinks It’s Winning the War

Episode Date: March 24, 2026

Learn more about our L.A. live show here! Just weeks after the war started, Iran believes it is winning, but not because it has more firepower than the US and Israel. The regime wants its control over the Strait of Hormuz to become a permanent economic weapon. WSJ's Chief Foreign-Affairs Correspondent Yaroslav Trofimov reports on the steep price Iran wants to end the war. Ryan Knutson hosts. Further Listening: - The Escalating Crisis at the Strait of Hormuz - Will Gas Prices Go Up Because of the Iran War? Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, it's Jess. And Ryan. Before we kick off today's episode, we have a fun announcement to make. We are doing a live show again. We love doing our live show in New York so much that we decided to take it on the road. This time we'll be in Los Angeles at the L.Rae Theater on Tuesday, April 28th. And just like last time, we're going to have special guests. And since we'll be in L.A., you can prepare for a night of money, business, and power conversations about Hollywood.

And after the show, Ryan and I will stick around to meet you all. Tickets go on sale this Wednesday, March 25th at 10 a.m. Pacific. You can find the link in our show notes. And again, the show is going to be at the L. Ray Theater in L.A. on Tuesday, April 28th. Tickets go on sale this Wednesday, March 25th. Hope to see you there. Nobody thought we took a little excursion because we felt we had to do that to get rid of some evil. And I think you'll see it's going to be a short-term excursion.

How good is our military? Since the war in Iran started, President Trump has been saying that it would be over quickly, thanks to a swift military campaign. And the campaign has been swift. The U.S. and Israel have delivered a significant blow to much of Iran's military capabilities. The campaign has killed Iran's supreme leader, along with dozens of others in the country's leadership, destroyed many of its missile launchers, decimated its navy, and inflicted even more damage to its nuclear program. But despite the success, Iran seems to think that it has the upper hand.

By control the threat of Hormuz, you control the price of oil, therefore you control the clock. Yarslav Trophimov is the journal's chief foreign affairs correspondent. And he says that Iran has taken the strait of Hormuz, a historically open waterway where a quarter of the world's oil passes through, and turn it into a powerful economic weapon by threatening to attack any ships that dare enter. So the longer this goes on, the higher the prices get, the more severe the shortages around the world. And the more pressure there is in President Trump from the energy markets, but also from bond markets, to accept Iranian demands. And so, I mean, the Iranian calculation is that as long as they control of the strait, time works in their favor. After talking with sources throughout the region, Yaroslav says it's now clear what Iran wants to get out of this war and what its envy.

game is, to turn the Strait of Hormuz into a massive toll booth. What Iran is doing is saying, look, now it's our waters, anybody passing through here must pay us at all and get permission from us. And so they are trying to basically transform this international waterway into a toll booth that will sustain the regime going forward. And if that is allowed to happen, that would really transform the balance of power in the in the Middle East and the world, because Iran will be dominating global energy markets. So now they are in a way in a much stronger position than the way before the war. And if the war ends with them still controlling the Strait of Burmuz, that would be a strategic

victory for the Islamic Republic of Iran. Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudsen. It's Tuesday, March 24th. Coming up on the show. show what Iran wants from this war. This episode is brought to you by Fidelity. You check how well something performs before you buy it.

Why should investing be any different? Fidelity gets that performance matters most. With sound financial advice and quality investment products, they're here to help accelerate your dreams. Chat with your advisor or visit Fidelity.ca. Performance to learn more. Commission's fees and expenses may apply. Read the funds or ETSs prospectus before investing.

funds and ETFs are not guaranteed. Their values change and past performance may not be repeated. This episode is brought to you by Volkswagen. Want to go electric without sacrificing fun? The Volkswagen ID4 is all-electric and thoughtfully designed to elevate your modern lifestyle. It's fun to drive with instant acceleration that makes city streets feel like open roads. Plus, a refined interior with innovative technology always at your fingertips. The all-electric ID4, you deserve more fun. Visit vW.ca to learn more.

SUVW, German engineered for all. Can you take me inside the Iranian regime? What is left of it at this point? Well, I think, you know, the Iranian system was always very complicated because you had, on the surface, elections and the parliament and a president who is still there, but who really holds very little actual power.

Then you have the Revolutionary Guard, the IRC, that is really the strongest force and has the strongest military muscle. On top of this entire system is the supreme leader. The last one was killed at the start of the war. And after his death, his son, Mostabah Hamenei, was named as a new supreme leader, but nobody has seen him, nobody has heard him since then. It's not clear whether he's alive, and if he's alive, if he's been injured and how badly.

And so, in fact, the power seems to have come to the Revolutionary Guard. The Revolutionary Guard is described as a state within a state. It's a tough military force that was hardened by a long and bloody war with Iraq in the 1980s. So the commanders, they are determined to keep fighting. You know, this is a very solid organization with many layers. They've been preparing for this war against what they call the Great Satan and the Little Satan since the revolution in 1979. They knew it was going to happen. And they made plans, perhaps unlike the U.S. And so, and now they're executing it. One of the ways to fight against the U.S. and Israel, what Iran calls the Great Satan and Little Satan,

involves the Strait of Hormuz. It's a 100-mile stretch of waterway that connects the Persian Gulf with the rest of the world. At its narrowest point, it's just 21 miles across. About 20% of the world's natural gas passes through it, as well as about a quarter of the world's oil. There's also aluminum and fertilizer. And then again, if you look at the Gulf states, a lot of the world's oil. of the imports that sustain them, food, cement, you name it, it's all coming to their ports through the Strait of Hermuz. So it's really one of the most vital waterways in the world.

And Iran is holding the Strait hostage by threatening to unleash missiles, drones, or underwater mines at any passing ship. And for the past couple of weeks, no ships have passed through the Strait without Iran's explicit permission. They're letting a few very small numbers from so-called friendly countries like China and India but they are talking about making this a permanent system and insisting that the NECIS fire will lead with the U.S.

will involve a new international arrangement for the Strait of Hormuz. I'm honestly a little bit surprised that Iran hasn't tried to create a toll booth out of the Strait of Hormuz in the past given how much leverage it gives the country. Why haven't they? Well, you know, Iran's strategy through the decades was to create this network of proxies,

like Hezbollah and Lebanon, like the Houthis in Yemen, who would fight its enemies and would absorb the blows, while the Iranian mainland was not bombarded by anyone and the Iranian and they could tell the Iranian people that, you know, we are maintaining the country at peace. So directly intervening the state in the strait of Burmuz would have brought war on to Iranian shores, something that they tried at all costs to avoid. I see, but now that war has arrived on its shores, regardless, Well, exactly. Now that the U.S. and Israel launched this war in Iran, they have nothing to lose.

The regime is in the survival mode, and they're using every point of leverage that they can possibly get to survive. Exercising this leverage has allowed Iran to have a huge impact on the world's economy. Well, the impact has been colossal. The price of oil at some point almost doubled. There is also a disparity between oil features. and the price of physical oil because you have actual shortages in some of countries like Bangladesh and Sri Lanka that are cutting short to work week

and imposing rationing. Obviously, there is a lot less impact in the U.S. because the U.S. is the world-largest producer and now exporter of oil. But again, you know, if prices rise globally, they're also rising in the U.S., and people are seeing this at the pump. Gas at this station here in Maryland,

quickly approaching $4 a gallon, and that is becoming the norm. across the country. Gas jumping nationwide from an average of 292 in Kansas to more than $5 a gallon in California. It's still a dollar higher than it was a month ago. The impact on the global oil market has been so severe that the U.S. decided to lift sanctions on Iranian oil

that was already at sea. While the decision will release some oil onto global markets, it could also result in billions of dollars going to the regime. And if you listen to the administration, they were arguing that the money will not necessarily end up, in Iranian hands, but that's still a drop in an ocean that doesn't really do much to offset the colossal shortage that is being caused by this blockade of the Strait of Ramos. By taking control of the strait during the conflict, Iran now has control over the strait,

and they aren't going to give it up easily, meaning the U.S. can't just pull out of the region without making a bad situation permanent. If the U.S. just declares victory and cuts and runs, well, you know, that's a lot of the U. That would leave Iran empowered, that would leave Iran in control of the strait. There's talk in Iran now of passing new legislation that would actually formalize this control and require every passing ship to pay money, lots of money, to the Iranian state. And that would transform the geopolitical situation in the Gulf. It would turn all these Gulf countries into, in a way, dependence of Iran, because they will

not be able to do anything with their own oil and gas without Iranian permission. And that is a strategic victory for Iran, if that happens, and it would be a massive defeat for the United States. So how can the U.S. turn things around? That's next. This episode is brought to you by IG Private Wealth. When your financial life gets more complex, having a clear plan matters. IG advisors build personalized, integrated financial plans that connect your investments, tax strategies, retirement income, and estate planning. into one coordinated plan.

They will help you make confident decisions about your wealth and your future. Get financial advice that puts you at the center. Visit IGPrivatewealth.com to find an advisor near you. This episode is brought to you by Volkswagen. Need a vehicle that isn't afraid to make a splash? That's the Volkswagen Touse. Capable and confident.

It's fit for everyday life. Nimble in traffic, agile and tight spots, and still spacious enough for weekend getaways, While available, four-motion all-wheel drive gives confidence in rain and snow, the capable Taos. You deserve more confidence. Visit vw.ca to learn more. SUV-W, German engineered for all. Yaro, so now that Iran has effectively taken control of the strait and doesn't seem likely to give it up easily, what are the U.S. military's options for reopening it?

Well, none of the options are really good. It's a mountainous area. You now have drones. You now have portable missiles. So any military operation to reopen it will likely cause significant casualties. One option would be for the U.S. to seize the island of Karg, which is where Iran's primary oil export terminal is located. And use that as leverage in negotiations with the Iranian regime to say, okay, well, you know, if you want to export oil, let's open up the strait and then, you know, you can have your oil terminal back. The challenge is that the island is located deep in the Persian Gulf.

and the U.S. would have to pass through the Strait of Ormuz to access it. Another option is to use the U.S. military to escort tankers. Back in the 1980s, the U.S. and other nations were escorting tankerships through the strait out of the Persian Gulf. That's a little bit more difficult, much more difficult now, because technology has changed, because now Iranians have access to drones that are really hard to detect,

that can fly the entire breadth of this strait, and strike ships. And the Iranians are currently attacking tankers in the vicinity of the strait with drones almost every day. On Saturday, President Trump took to truth social and gave Iran an ultimatum. The regime had 48 hours to reopen the strait. If it didn't, the president said the U.S. would, quote,

obliterate Iran's energy infrastructure. But before the deadline expired, Trump said the U.S. would hold off on those infrastructure attacks. because he said the two countries were making headway on negotiations. We'll see how that goes. And if it goes well, we're going to end up with settling this. Otherwise, we'll just keep bombing our little hearts out. So actually I want to back up for a second to make sure I understand this correctly.

So Iran has the control of the Strait of Hormuz. Trump is frustrated by that. And so he makes a threat, right? He says that I'm going to escalate by bombing energy infrastructure if Iran doesn't reopen this. And then he said, actually, there's been productive talks, so we're going to not do that yet. Correct. Correct.

So the Iranian response to this was, well, it was an empty threat and we called his bluff. Iranians also said there actually weren't any talks taking place between the U.S. and Iran. So it's a little unclear what's happening. The positions are still very much far apart because Iran thinks it's winning, and Iran thinks the time is on its side. And this statement by Trump was seen in Iran as a victory, because the Iranians have warned that if Trump strikes Iranian energy infrastructure, they will strike back across the Gulf and plunge Gulf countries into darkness.

Under what conditions does Iran say it will end the war? The demands they are issuing right now officially are a massive reparations, so billions and billions of dollars to be paid by the U.S. taxpayers to Iran to compensate for all the destruction in the last three weeks, be the removal of all-American bases from the military. Middle East. So America has to basically surrender the Middle East to Iranian domination. And three permanent Iranian control over the Strait of Removes would Iran be impaid by a relationship that passes through it. Wow, that does not sound like a country that's negotiating from

a position of weakness. They're asking for the whole shebang, basically. Correct, correct. And that's what they're holding out for. And that's obviously something that neither the U.S. nor the Gulf states find palatable. So it seems like the U.S. and Iran are extremely far apart on coming to any sort of agreement over how to resolve this conflict. Well, absolutely. Absolutely. They are very far apart. And so the very fact that they are talking doesn't necessarily mean, if they're talking, as President Trump says,

that it doesn't necessarily mean that any agreement is possible in the foreseeable future. Let's also remember that Russia and Ukraine have had negotiations since March 22 and went out four years later and they're still at war. If Iran were to control the Strait of Hormuz indefinitely, oil prices would remain high, affecting everything from the price of gas to food to plastics. And at this point, it appears reopening the Strait will take months, meaning what was once envisioned as a short military excursion could turn into something much longer. And the question is, is the American Public Companion ready for several more months of this conflict?

is the American public opinion ready for casualties that will have to be encouraged to reopen the strait. How do you see this ending? Well, it's really hard to predict because we don't know if we're in the beginning or in the end of this war or in the middle. I think there are no easy options for President Trump and how to extricate the U.S. from this war.

I mean, the two main sort of pathways, it's either you acquies largely to Iranian demands, and undercut America's global role as a result and allow Iran to proclaim victory, or you go in with the ground forces and double down, then it could become a former war. So with casualties, and maybe also at the end of the day,

lead to U.S. defeat months or years later. And so, unfortunately, wars are easy to start, but very hard to end. On Tuesday, the Pentagon said it was planning to order a deployment of 3,000 soldiers to the Middle East in order to support operations in Iran. That's all for today. Tuesday, March 24th. The journal is a co-production of Spotify

and the Wall Street Journal. Additional reporting in this episode by Laura Seligman. Thanks for listening. See you tomorrow.