Iran War Day 189: White House Downplays War in Press Conference, as U.S. Diesel Prices Hit Record High In a Thursday press conference, Vice President J.D. Vance sought to play down the seriousness of the ongoing war with Iran. “I wouldn’t call it a war,” he said in response to a question, adding that—despite multiple exchanges with Iran this week—the U.

S. was no longer conducting “major combat operations.” The vice president also said he was unsure when the conflict would end, and expressed skepticism concerning reports the U.S. military had killed civilians in a Tuesday strike on a residential area (though he noted the claims were under review).

U.S. Central Command has separately confirmed it is looking into the incident. In Israel, Prime Minister Benjamin Netanyahu said his country continues to seek regime change in Iran. “I am confident in our ability to remove this threat once and for all—in other words, to topple this regime,” the Israeli leader stated in a Thursday meeting with the IDF’s general staff.

“That is the central mission that still lies ahead of us, but it is close. It is not impossible. It is within reach.” Oil prices remained elevated, with U.S. diesel prices hitting a record high of $5.85 per gallon on Friday. (Because of diesel’s importance in freight and delivery, spikes in its price can have outsize effects on broader inflation.

) Brent crude was trading at around $90 per barrel Friday morning, and the average price of gas in the U.S. is $4.15, according to AAA.

Rabobank: "The World As We Knew It No Longer Exists"

Via Rabobank,

As we move towards the end of another trading week, most action was again dominated by the now ubiquitous market bugbear of geopolitics. Central banks are trying to reassert themselves, but under that shadow, and as everything they understand starts to fall apart around them.

Putin suggested he’s open to peace vs. Ukraine. That would be wonderful. It would also be remarkable given everything we have seen to date and the rumours we hear of imminent escalation – unless the peace is on his terms, of course. Notably, the Ukrainian press says another hard winter looms, which the government is not prepared for, and so does a possible new Russian northern front towards Kyiv.

Trump considered declaring the Iran war over, again, days after he floated renaming Hormuz the Strait of America. We then got other stories pointing out that the White House thinks it’s better to pause this war until after the November midterms, then ramp things up again, as is our base case. The economic war vs. Iran obviously stays in place the while time.

South Korea might send its forces to Hormuz to support the US, becoming the first ally to do so, showing US pressure on Seoul, which had many analysts’ eyes rolling, might achieve a result that could help reduce oil prices. Israel claimed regime change in Tehran is its main goal, which is close to being achieved, and that Hamas and Iran are planning attacks on its citizens globally over next few weeks that it will respond to directly should they occur. That is not to include the substantial risk that these two wars become openly conflated into one larger one on at least two fronts, as open and tacit cooperation between Iran, Russia, North Korea, and China is slowly noticed by a wider circle of Western experts.

Even Argentina is rattling its sabre at the UK over the Falklands again, a claim the US may support if the British refuse to lead on NATO defence spending according to some – as the current UK is incapable of projecting a naval task force to the South Atlantic like it did back in 1982, speaking to a general western decline.

It’s not for nothing that oil, while off yesterday’s peak, is likely to close the week with its largest weekly gain since July, as crack spreads remain staggeringly high and stocks of refined products such as diesel are staggering low.

That is a structurally inflationary backdrop because refined products go into or into moving everything. It can only stop being structural if we know both wars are going to end; or that new refineries are going to be magically built years ahead of schedule; or that demand for everything is going to decline due to high prices, which is stagflationary. Neither of the first two are true, and the latter will have huge political consequences. From a geopolitical perspective, you can make peace on your opponent’s terms --but neither Ukraine with its drones nor Israel with its nukes will sign-- to bring oil down; or you can arm up to bring them and it down. Central banks are secondary to that dynamic except where they act on ‘second round effects’ or help on the peace or ‘arm up’ fronts.

Markets can cheer another Fed speech from Waller that suggests that maybe rates don’t have to go up this month. It doesn’t change the above – politicians will or little will.

Markets can watch as JPY swings on heavy intervention again ahead of the BOJ almost certainly raising rates this month. It doesn’t change the above – politicians will or little will. On which note, the BOJ looks like it’s being leaned on by Bessent to hike, who also wants to ensure JPY rises to stabilise US markets. Also watch the reported 155 level in JPY, beyond which we could see accumulated shorts unwound, pushing the currency even further. Indeed, when things unwind it’s a “slowly at first then all at once” non-linear process – and not just in markets, even if they then have to try and price for them.

The Australian financial press just ran an op-ed calling for negative immigration, not lower net immigration, which would have been as unthinkable a few years ago as a collapsing housing market against which the RBA is likely to have to hike again. The same is happening in the US to some degree and various parties on the right in Europe are also talking about the same. Were it to occur, many political norms and economic assumptions built over the past few decades stop working.

As VW sheds 50,000 jobs and closes plants, the Netherlands Scientific Council for Government Policy (WRR) argued the neo-mercantilist global backdrop leaves Europe vulnerable. It narrows EU options to: “international co-ordination”, i.e., a Plaza Accord for China; “strategic symmetry” to mirror China, requiring “the ECB to depart from its current policy of a freely floating exchange rate”; or “stronger trade defence measures”, i.e., tariffs, and maybe taxing capital inflows.

It notes:

“Clearly there is no easy pathway…This reflects the fundamental tension at the heart of this debate: the desire to maintain the international multilateral trade framework that has brought a great deal to Europe and to the world… At the same time, the issue of growing trade imbalances cannot be resolved within that framework, because it lacks the appropriate instruments.”

It concludes four things, three of which are:

Industrial policy is important, but by itself not enough to tackle strategic dependencies. Formulate a strategy that addresses both trade imbalances and innovation.

Doing nothing also comes at a high price. Therefore, to address trade imbalances, all options need to be on the table, even if they are painful.

Europe is lagging behind when it comes to applying and scaling up technological innovations. Commit to a coherent European innovation system.

OpenAI claims it has overtaken Anthropic with its latest AI model, which is says could be considered to be “Artificial General Intelligence” or AGI. Is this marketing hype, or have we just had a true Manhattan Project moment that transforms everything? Who knows. But would you like to guess where equities, rates, FX, and commodities should sit if the US just developed a true AGI that can now improve itself at a non-linear rate? Now do it assuming we have two major, conflating, wars going on.

In the US, Democrats refused to support a constitutional amendment to keep the Supreme Court capped at nine justices, as the Democratic Socialist Alliance refused to back populist Democrat AOC as a 2028 presidential candidate because she is ‘too mainstream.’ The DOJ also asked the Supreme Court to rule on the White House’s new executive order on mail-in voting, which could have a major impact on both the midterms and all subsequent US elections.

The fourth WRR conclusion I held back to the end was this: “The world as we knew it no longer exists. Dare to think outside existing frameworks.”

Tyler Durden Fri, 09/04/2026 - 09:40

The White House is now apparently using Russian tactics to convince the American public that the war in Iran is not, in fact, a war. When asked by reporters at the White House on Thursday whether the most intense sustained air campaign by American forces since the invasion of Iraq would be over by the midterms, Vice President JD Vance replied: “I wouldn’t call it a war.

” Vladimir Putin said much the same thing when he invaded Ukraine. Russia was not fighting a war either, the Kremlin insisted; it was merely conducting a “special military operation.” If that comparison strikes you as shocking, consider the contours of the two conflicts.

A vastly more powerful military launched a punishing offensive against a smaller, less well-equipped adversary, inflicted enormous damage without achieving a decisive resolution, and then found itself drawn into a longer, grinding conflict with no clear way out.

The motivations behind the wars may be different, and they’re playing out in different theaters, but the pattern is eerily similar. Now, so too is the attempt by those in power to control how the public understands, and even what it is allowed to call, the obvious war unfolding in front of them.

If This Isn’t a War, What Is? Let us take a moment to assess what exactly has happened since February 28, when the U.S. launched Operation Epic Fury. The opening U.S.-Israeli attack killed Iran’s supreme leader, Ali Khamenei, along with the commander of the Revolutionary Guard, the defense minister and various other senior officials.

According to the U.S. military’s own accounting, the first 38 days of major combat operations involved more than 10,200 sorties and 13,500 strikes. U.S. Central Command (CENTCOM) says those attacks damaged or destroyed more than 85 percent of Iran’s ballistic missile, drone and naval defense industrial base, while knocking out 82 percent of its air-defense missile systems.

The U.S. sent carrier strike groups and warships into the region, later imposing a military blockade on Iranian ports. Meanwhile, American and allied air defenses intercepted more than 6,000 Iranian attack drones and 1,500 ballistic missiles fired at U.

S. forces, Israel and American partners across the Middle East. More than 50,000 U.S. service members remain deployed across the region. The fighting has killed 18 U.S. service members and at least 8,000 people across Iran, Lebanon, Israel and the Gulf states.

More than 750 U.S. service members have been wounded. Last month, during a lull in the fighting, the U.S. Treasury unveiled a sanctions package likened to an “economic D-day” that is designed to make Iran an “economic outcast” and cut the adversary off from all available forms of economic support.

In the announcement, Treasury Secretary Scott Bessent openly declared that Iran had been “at war against America” for 47 years. This week, the shooting resumed; the U.S. hit targets in and around the Strait of Hormuz, and Iran blasted missiles at targets in Kuwait, Bahrain, Jordan and Iraq.

All this from an administration that almost exactly a year ago launched a rapid rebrand of the Defense Department into the “Department of War”. No boots on the ground, though, so it’s not a war, right? Tell It Kind of Like It Is Even the very best snake-oil salesman would have a hard time convincing people that the war in Iran isn’t a war.

So why is JD Vance even trying? Well, if there’s one thing politicians understand better than anyone, it’s the importance of language and rhetoric. Words have immense power; a well-written speech can unite millions of people, and a catchy slogan like Make America Great Again can come to represent an entire political philosophy.

But war is a pesky word. For one, it implies there will eventually be a winner and a loser. It also brings with it certain expectations—and some very difficult questions. What is the objective? How many people will die? When will it end? And, perhaps most dangerously of all: was it worth it?

Those are not questions the White House wants Americans to be asking. Trump built a substantial part of his political identity around ending, rather than beginning, America’s “endless wars.” When Washington and Tehran signed a memorandum of understanding in June, the White House presented it as proof that Trump’s America First approach could deliver peace without another prolonged Middle Eastern conflict.

Then the hostilities started again. Earlier this week, Trump shared a Truth Social graphic declaring that “Hormuz Oil Volumes are BACK!”, saying 18 million barrels a day were once again leaving the Strait, compared with 20 million before the war. No independent commodity tracking company or energy analyst appeared to verify Trump’s claims.

But most Americans won’t be checking tanker-tracking dashboards. What they’ll care about is the cold, hard fact that diesel hit a new record price this morning, soaring to an average of $5.85 a gallon for the first time ever. Gasoline is $4.15 a gallon on average, compared with $3.

20 at this time last year, according to AAA. The numbers on the sign at the gas station and the price on the grocery receipt aren’t affected by Trump’s tall tales, but they’ll surely affect how Americans vote at the midterms. When viewed in this light, Vance’s attempt to discourage reporters from “call[ing] it a war” begins to make sense.

A war is something that we want to end. It tends to result in a winner and a loser. And its worth is up for debate at all times. A different kind of engagement that doesn’t quite meet the threshold of war—say, a special military operation—is not exposed to the same kind of scrutiny.

Vance effectively made that case himself. “When you ask, ‘When will this end?’ You’re asking me a question like, ‘When will the Iranians stop shooting at ships?’” he said. By that logic, there is no American war—only recurring Iranian provocations that require American military responses.

That’s exactly the logic applied by Putin to Ukraine and supposed expansion of NATO. Putting the Toothpaste Back in the Tube U.S. lawmakers have repeatedly invoked the War Powers Resolution to challenge Trump’s authority to keep fighting Iran without specific congressional authorization.

The law generally gives a president 60 days after U.S. forces enter “hostilities” to secure congressional approval or bring those hostilities to an end. That makes the pauses in fighting hugely important. When the original 60-day deadline arrived in May, Trump told Congress that the temporary ceasefire reached in April meant the hostilities that began on February 28 had ended.

Defense Secretary Pete Hegseth argued that the War Powers clock could “pause, or stop” when the shooting did. That position is disputed by legal experts, but its political utility is obvious. If every new outbreak of fighting can be treated as a separate skirmish, rather than part of one continuous war, the administration can argue that a fresh 60-day clock starts each time.

Vance’s insistence that there is no continuing “war” fits neatly for an administration that has already tried to divide six months of conflict into separate periods of hostilities, interrupted by ceasefires and pauses. This brings us back to Moscow.

The Kremlin’s own linguistic trick was also about making one sprawling war sound smaller, more limited and more manageable than it really was. From the very beginning of the invasion, Putin described the war as a special military operation. Only after two years of grinding warfare did Kremlin spokesman Dmitry Peskov openly declare Russia to be in a “state of war”—and even then, he said the transformation had occurred because the “collective West” had joined the fight against Russia.

Vance is playing a similar game, but in reverse. Only now—with soaring fuel prices, mounting casualties, concerns over the military’s munitions stockpiles, and midterm elections on the horizon—is the conflict no longer a war. You can’t put the genie back in the bottle, though, and the American people aren’t stupid.

Vance and the White House may discover in November that voters are perfectly capable of recognizing a war, even when the vice president doesn’t want to call it one.

For nearly half a century, the Islamic Republic of Iran taught Washington to fear confrontation more than Tehran feared attacking American interests. The regime sponsored terrorism, armed proxies, threatened international shipping and targeted U.S. forces while exploiting American fears of "escalation.

" President Donald Trump has begun to reverse that equation. The latest strikes matter not simply because Iranian radar, air defenses and maritime assets have been destroyed, but because Washington is imposing a principle Tehran understands: aggression will expose and diminish its military power.

For a theocracy that built regional influence by convincing adversaries that retaliation was more dangerous than accommodation, this fundamentally changes the balance of fear. The latest confrontation in the Persian Gulf illustrates that change. U.S.

Central Command said its Sept. 1 operation struck Islamic Revolutionary Guard Corps (IRGC) air defenses, radar systems, maritime assets, mine-laying capabilities and communications sites after attempted Iranian attacks on commercial shipping and U.S.

service members. Tehran responded with missiles and drones aimed toward Jordan, Kuwait and Bahrain. TRUMP RETALIATES AFTER IRAN ATTACK AS EXPERT WARNS REGIME IS GROWING MORE DANGEROUS The attacks demonstrate that Iran remains dangerous, but not strategically strong.

Possessing missiles capable of inflicting damage is not the same as possessing the power to dictate a conflict’s outcome. Each attempt to rebuild its machinery of aggression creates new vulnerabilities for American intelligence and military power to exploit.

This is one of the most consequential achievements of current U.S. policy. For years, Tehran followed a favorable cycle: build military capabilities, use them directly or through proxies, absorb a limited response, wait for calls for "de-escalation" and rebuild.

Washington mistook restraint for deterrence. But deterrence exists only when aggression reliably leaves an adversary worse off, and the Trump administration is restoring that principle. When the IRGC rebuilds radar, surveillance or other capabilities threatening American forces and international commerce, Washington need not accept their restoration.

Tehran’s reconstructed assets can instead become new liabilities. IRAN PROVES THAT IT MIGHT CHANGE ITS MILITARY LEADERS, BUT IT’S NOT CHANGING STRATEGY Nowhere is this transformation more important than in the Strait of Hormuz. The Islamic Republic has long treated the Persian Gulf as a geopolitical hostage.

Tehran never needed to defeat the U.S. Navy; it needed only to make this vital waterway dangerous enough to frighten shipping companies, insurers, energy markets and governments. Missiles, drones, mines and fast boats became instruments of economic coercion.

America is now challenging that blackmail by protecting shipping while degrading Iran’s maritime surveillance and offensive capabilities. The same geography that gives Tehran leverage also exposes the infrastructure on which its ability to threaten international commerce depends.

IRAN WARNS SHIPS OF 'FORCEFUL RESPONSE' AS US-BACKED HORMUZ ROUTE CHALLENGES TEHRAN'S GRIP The economic dimension makes this pressure even more consequential. Iran depends heavily on energy revenue to sustain its security institutions, patronage networks and military ambitions.

Restricting oil exports therefore constrains the financial ecosystem sustaining the regime’s coercive power. The reported American "tanker for tanker" policy sharpens that message. If Tehran endangers commercial vessels and turns the Persian Gulf into a battlefield, it cannot assume its own maritime assets will remain insulated from the consequences.

For decades, the Islamic Republic perfected asymmetric warfare by forcing others to bear costs it could avoid. Washington is finally making asymmetry work against Tehran. IRAN LOSES KEY ECONOMIC LIFELINE IN MIDDLE EAST THAT TRUMP'S SANCTIONS COULDN'T REACH AS DEADLOCK PERSISTS This deserves to be recognized as a long-overdue shift from managing Iranian aggression to degrading the machinery that makes it possible.

The Islamic Republic is not a conventional government, occasionally pursuing objectionable policies. The IRGC, its terrorist proxies, intelligence networks, missile forces and ideological militias are central instruments of a system that has used terrorism and coercion as statecraft since 1979.

American policy failed when it imagined that concessions, negotiations or temporary agreements could transform that system. Current policy rests on a more realistic premise: a regime built around coercion must confront costs it cannot simply transfer to its victims.

IRAN IS NOT A NORMAL NATION YOU CAN MAKE DEALS WITH; IT’S A NATIONAL SECURITY THREAT The danger now is stopping halfway. Military superiority can destroy capabilities, but it cannot define victory. America may demolish Iranian radars, cripple maritime forces and obstruct oil exports while leaving one strategic question unanswered: What happens if the Islamic Republic survives and rebuilds?

Tehran understands that Western attention shifts, administrations change and diplomacy returns. The same geography that gives Tehran leverage also exposes the infrastructure on which its ability to threaten international commerce depends. Given time, a weakened regime can reconstruct weapons and networks, presenting a future president with the familiar choice between confrontation and another supposedly historic negotiation.

Tactical success without a political endgame could ultimately recreate the problem America is now paying heavily to solve. TRUMP HAS 3 CHOICES TO DEFINE VICTORY IF HE WANTS TO BEAT IRAN. NONE OF THEM ARE EASY The endgame should not be an American invasion, occupation or nation-building project.

Iran does not need America to invent a nation for it. It is an ancient country with a powerful national identity, an educated population and a political history extending far beyond the clerical regime established in 1979. Nor should Washington empower separatist forces whose ambitions could turn regime collapse into state collapse.

A fragmented Iran of more than 90 million people would be a catastrophe for Iranians and a strategic nightmare for America. Washington should seek to end the Islamic Republic’s capacity for terrorism and regional coercion while preserving Iran’s territorial integrity and continuity.

IRAN’S REGIME WON’T NEGOTIATE IN GOOD FAITH. TRUMP MUST BREAK ITS GRIP A successful American endgame should envision a united Iran where clerical repression is dismantled, a security vacuum is prevented and Iranians can establish a secular, democratic political order.

America should not select Iran’s future government, but preserving the Iranian state while the Islamic Republic disappears is profoundly in the U.S. national interest. That requires looking beyond the next missile exchange. Military, economic and intelligence pressure must reinforce a coherent political strategy, ensuring that the regime cannot simply survive the current confrontation and rebuild the architecture of terrorism, proxy warfare and coercion that made it dangerous in the first place.

I'VE STUDIED MILITARY STRATEGY. TRUMP NOW FACES IRAN'S OLDEST BATTLEFIELD TRICK The Islamic Republic remains capable of violence because the apparatus that has kept it alive has not disappeared. Its missiles and drones remain dangerous, its security organizations brutal and its rulers determined to use whatever instruments survive to project strength.

But the strategic picture has changed. Iran’s conventional military infrastructure has been badly damaged, its ability to dominate the Persian Gulf is being challenged, and the resources sustaining its power are under extraordinary pressure. Tehran’s retaliation should not intimidate Washington into abandoning a successful strategy.

A wounded authoritarian regime often grows more violent precisely as its options narrow. The danger now is stopping halfway. Military superiority can destroy capabilities, but it cannot define victory. CLICK HERE FOR MORE FOX NEWS OPINION For decades, American policymakers asked how much Iranian aggression Washington could absorb without triggering a wider confrontation.

Trump has posed a better question: how much aggression can Tehran afford when every escalation puts more of its military and economic power at risk? That reversal may prove more consequential than any individual strike. CLICK HERE TO DOWNLOAD THE FOX NEWS APP America is demonstrating that the world’s most aggressive state sponsor of Islamist terrorism cannot claim a permanent veto over regional security simply by threatening chaos whenever confronted.

Washington should preserve the pressure, protect Iran’s territorial integrity, reject another premature diplomatic escape hatch and translate military superiority into a durable political outcome. Trump is breaking Iran’s war machine. This is no time to stop halfway.