What to Watch as the Iran Blockade Intensifies

[00:00:00]So 24 hours ago, a US blockade of Iranian ports went into effect. This is President Trump's attempt to strangle the Iranian economy and force concessions at the negotiating table. Of course, it brings with it a very real risk of escalation. So to better understand exactly what's playing out, we're joined today by Kelly Magsman.

[00:00:19]Kelly is a former chief of staff to the Secretary of Defense and worked on the JCPOA as the Iran director at the National Security Council. We talk about how the blockade is likely to play out, how the straight of Hormuz might be Iran's preferred new means of deterrence, and more. And with that, let's get to the conversation. All right, Kelly, thank you so much for taking the time to talk with us today.

[00:00:39]There's a lot happening. We were joking just before we hit record that fortunately nothing drastically uh altered in the uh the Iran war in the last few hours. So, we have the opportunity to talk about I think starting with the blockade. Uh at a high level, what are we looking at here? What what what do you think the plan is for this new blockade over the straight of Hormuz?

[00:01:01]>> Yeah. Well, you know, the United States Navy has a a history of doing these kinds of operations um going back many many decades, but this is pretty complicated stuff. Um pretty high intensity. When I say high intensity, I mean from an asset perspective, many ships and vessels will have to be involved. Also high risk potentially depending on how the Iranians choose to react to it. But I sort of see this as actually being two mission sets. Part of it is a blockade, a traditional blockade where the US Navy, you know, essentially sits outside of the straight and does not allow any vessels from Iranian ports um going to or from Iranian ports uh to pass through. That's a you know, they have the ability to do that. They have intelligence, etc. and monitoring capabilities to to sort of hail and query is what we call it hail and query and then potentially boarding operations. uh for non-compliant vessels. So there's that dimension of this. Then the second mission set is really creating a a safe passageway for friendly vessels who are coming from other regional ports and that's like potentially an escorting mission um which can be significantly high high asset or you know add some sort of combination of mine clearing uh operations as well to ensure that where they're traveling is safe from a mine perspective. you saw the two destroyers last weekend go through. That was a good sign. Um, but if they do that mission, I think that's going to have to be um a pretty much a sort of to use a basketball analogy, a a a zone defense uh versus a man-on-man um just from a a vessel perspective, unless you know the Europeans and others start to contribute. So, it's two missions really um at the outset that are complicated um and and very high risk.

[00:02:50]>> A question about the the the nature of a blockade because we can do this like we have the ability to interdict these ships. We have the ability to to board them and and search them. Where does the where does this fit in legally though?

[00:03:04]Like yeah, if we say an Iranian vessel is sanctioned, for instance, like off the coast of Venezuela, we were seizing some of those. That feels pretty clean, but there's got to be ships in the Gulf that don't meet that criteria or Yeah.

[00:03:19]Does this It feels like it could get messy, I guess, is the question.

[00:03:22]>> Uh, it definitely can. I would not want to be a a sententcom lawyer at the moment.

[00:03:28]>> Uh, just even use the terminology blockade comes with a ton of international legal implications. Those blockades are supposed to be impartial.

[00:03:36]Um, so the sort of idea of sorting um, you know, vessels could potentially be problematic. But yes, like what do you do for example with a a vessel that is South Korean um, that is carrying material that's not, you know, necessarily sanctioned um, but is willing to pay a fee to the Iranians?

[00:03:55]What do you do with that vessel? Do you have legal grounds essentially to to seize that vessel? It gets pretty complicated. And then there's the question of where do you send those vessels? Do you send them back to the ports? Do you seize them and move them to new ports in the region and then potentially enter into a whole legal question around the contents of the of the tanker, for example, or the vessel, the shipping containers. It's it's not easy. You saw some of it recently with Venezuela, but those were really onesie twoosies. We're talking about, you know, on average 130 vessels go through the straight every day. That was pre-war. So this is a pretty significant sorting operation and the legal dimension of this is going to be important going forward.

[00:04:41]>> Have you seen anything from our Gulf allies about their involvement or willingness to help in this? It seems like that could be a big assistance if they were to get involved, but it seems a little silent right. Yeah, I think everybody right I mean my read on this is it's been 24 hours since the blockade was put in place and people are kind of hanging back um you know shipping you know operators the Gulf states the Europeans are a little hanging back you know everybody's sort of waiting to see how this is actually going to work um I think that you know potentially the Gulf a coalition could emerge around the dimension of the of the sort of safe passage operations the escorting missions and you In the past, you know, the Bahrainis, for example, have contributed in the Red Sea, for example.

[00:05:27]So, you could see a a framework of cooperation around that emerge, but that takes time. Um, I'm sure SNCOM is having and Navan are having conversations with their their regional allies to put in place the procedures, the ROE, the legal frameworks for for that uh contribution to take place. But all of this, I think, is going to take time to shake out.

[00:05:49]But the the the more time it feels like the blockade is kind of a waiting to see who blinks first because a ship could go through at any point. And to use your example, part of part of the example, let's say it was a South Korean vessel and it says we're not going to stop for this blockade. Like I I I have a hard time believing that firing warning shots at a South Korean vessel is is like good and that's going to help anything here at all. So we're probably not going to do that. But then does the deterrent's gone then? So it just feels like >> every moment since this went into place, we're on the verge of a major test.

[00:06:24]>> So the longer these countries wait to see like how it's going to go, it might kind of be determined by the time they make a decision.

[00:06:31]>> Yeah. I mean, it's it's very interesting. I mean, the blockade was is clearly meant to increase our leverage on the Iranians in the context of negotiations. Um, now whether or not the Iranians will, you know, how they will react to this in the context of those negotiations, we will see. Hopefully, it sounds like there may be more discussions coming this weekend. Um, but to your point, both sides are really on a clock right now. Um, you have, you know, the the straight over is on a clock. So, you know, the United States is, you know, relatively um buffered from some of the immediate implications of we could talk about gas prices, but you know, this is really about the global economy and the impact there. So, the US is on that clock and then the Iranians are on their own clock. I mean, if if this blockade is successful, you're talking a potential of around $400 million a day of losses to the Iranian economy. And that's no that's not chump change, right? That's, you know, potentially $13 billion a month. So, they're on a clock, too, in terms of how much they can withstand.

[00:07:35]Now, there have been reports that the Iranians have moved a lot of their oil out over the past several weeks out of the out of the Persian Gulf and and into the sort of Indian Ocean, etc. So, there may be like a bit of a economic buffer for them in terms of what they were able to move, but they're still going to be on a clock, too. So, it's really a test of wills um and time and and time is frankly not on either uh either party's side at this stage.

[00:08:03]Well, so that seems like the idea here is that we're going to choke the Iranian economy. And I understand that at face value, but we also are four years into Russia's invasion of Ukraine where we layered historic sanctions on them and and their economy was supposed to fall apart or it it's they found a way through. And I'm sure it's not a good comparison the Iranian economy to the Russian economy, but is this that much different to where it could just be a matter of weeks or months and they could capitulate or are we worried about the the Russia situation where it turns out they're actually pretty resilient to this?

[00:08:38]>> I mean, I think we have historically as as a as a US government underestimated Iranian resilience. I mean, they've been under significant international and US and European sanctions for like five decades. um and are pretty resil pretty pretty resilient. So, you know, I think um I think you raised a really good point. I mean, that they could essentially try to wait this out and see if the economic pain and the political pain for the president is higher than what they're going to have to endure.

[00:09:05]And listen, they just had the the crap kicked out of them for the last several weeks and and they were they survived.

[00:09:12]So, I think that their tolerance um for for escalation and risk at this stage is is actually pretty high. So, you know, I'm hopeful um that these discussions that are underway will yield something, but both sides are currently pretty pretty far apart.

[00:09:32]>> Speaking of that, and I I I don't know how much in your wheelhouse this is, so kick it down the road if if if not, but we have very little information about the new leadership, the new regime in Iran, if they're more willing to make a deal. There's been some speculation that they might be even more hardline than than Hamina and his crew. Any idea what we're working with on that end?

[00:09:54]>> Well, it's interesting. I you know, I um negotiated with the Iranians um many many years ago um under better circumstances, let's put it that way, more ideal circumstances than than currently. I mean, I think the regime right now is in a in its own transition phase, its own consolidation phase, which, you know, potentially opens up avenues of pragmatism. I mean, the Iranians can be very pragmatic. Um, even though they're very ideological, um, in the context of negotiations, they could be quite creative. So, you know, Khalibah, uh, the speaker who is the nominally in charge essentially of Iran right now is is a known kind of hardline but pragmatic guy. Um, I know those things holding those two things in your head at one time is challenging, but it it is actually kind of how how they operate. Um, the Supreme Leader is an unknown, you know, variable for us right now and it sounds like he's severely wounded. So I imagine like just internal coordination um is quite challenging right now uh in terms of aligning positions and and certainly you know I think any peace any deal that is reached will be fragile uh there the deep there is deep distrust um obviously and even more so now in the Iranian system. So, uh, you know, even in a prospect of a a say the talks this weekend if they happen go well, we're looking at a multi-week, potentially multimonth, um, set of engagements. You know, I could be proven wrong. Obviously, I don't see a grand bargaining emerging right away and the and the details of what is agreed are actually quite important, especially when it comes to the nuclear program. Um, but I think the Iranian regime right now is is probably having their own internal challenges just kind of keeping their own alignment on these issues.

[00:11:44]>> The Israeli strategy for so long has been referred to as mowing the grass in in places like southern Lebanon and and Gaza. I I've seen that thrown around more and more as a way that the United States might be dealing with or maybe Israel dealing with Iran long term. Do you think that's a possible outcome here? we don't reach a diplomatic solution and we just for the next few years maybe it's the occasional strike to set back their nuclear program or something of sorts.

[00:12:12]>> Yeah. I mean there is like kind of a sort of status quo stasis um scenario where nothing is really a breach but we just kind of kind of keep a significant amount of economic pressure on them and military pressure. That is the Iranian's worst fear um is that we are going to continue to try to attack them over time that this is going to happen again which is why they want and are demanding as part of their their request to have security guarantees of some sort. Um who those are who those are made by I don't know if it's the Chinese or or who who it's going to be but they want some sort of framework that ensures that this is not going to happen continuously to them. um which is going to be another challenging part of the of the uh negotiations for the United States. I don't see us agreeing to anything quite like that.

[00:12:59]>> It feels like the closure of the straight like the Iranian the regime hit the gold mine there. Uh they closed it down very quickly and immediately it it looks like that is kind of what pushed the United States to want to sit down and talk and it seems like that's been more and more a focus, right? It was not the original war aim was not to open the straight of Hormuz and all of a sudden it's kind of made its way to the top of the list.

[00:13:23]Is that at all comparable to the Iranian desire for a nuclear weapon in terms of deterrence? Like have they discovered that maybe the straight of Hormuz is that deterrence just in different form?

[00:13:34]>> Yeah, it's a really it's a really good point. Uh Preston, I was thinking about this this morning. I mean before before the war um the there was always the risk right that the Iranians could close the straight of war moves but it was kind of a theoretical risk and I think a lot of analysts uh myself included sort of thought well they probably wouldn't do that because then they're just going to hurt themselves. I think that was a very um misplaced view obviously and they figured it out on their own um through the course of this conflict. So yeah, I think it's interesting that they have now this is now a kind of like the normal the way they they sort of thought about their deterrence was their ballistic missile program, their proxies and of course the potential for a nuclear uh a nuclear program. Those were the kind of like the three legs of their stool. Well, they've added the fourth leg which is now the straight. So, it'll be interesting to see if they can toggle between those elements of deterrence and make make compromises essentially around the nuclear program uh within it with sort of the straight as their their major card to play.

[00:14:32]>> Do you think that's attainable? Like is I hear the nuclear program referred to so often as it's kind of the core of the Iranian regime. They'd be giving up everything if they gave up their right to enrich.

[00:14:43]Do you think the strait could be important enough to actually dial that back somehow? I I think that the Iranians are always going to try to adhere to some sort of right to enrich.

[00:14:54]Um and we had this we had you know during the JCPOA negotiations this was always the you know but once you get past that if the United States which it sounds like the president if it's if the reports are true that we offered a kind of a a two decade moratorum to the Iranians that is a that's a sort of a de facto way of accepting their right to enrich even though they're not enriching. So, if the two parties can kind of get to that uh un loose understanding of like you're not enriching, but yes, you still have the right to enrich as an NPT, you know, like if they can get there, then potentially there's space for for a deal. Um, and you know, now that now that the Iranians to going back to the other point, have the straight kind of as part of their cards to play, um, you know, certainly is potentially strengthens their hand.

[00:15:42]>> It was frustrating, wasn't it? I mean I to your point everybody kind of saw that as an o a possibility but the fact that it happened and they did it well like I >> yeah it doesn't take much >> they did it pretty effectively you know ah yeah >> it doesn't take much and that >> and quite honestly this whole thing I mean you know I think it will hinge on I think the blockade success will hinge on the success of the negotiations in some ways because you know the Iranians have yet to react militarily to this um but if they start I mean it takes a couple of drones, a couple of, you know, USVs, you know, to hit a tanker or whatnot of a friendly vessel. Hopefully, they wouldn't directly target US Navy uh ships, although I wouldn't take that off the table for them. Like that that can that can paralyze us from a blockade perspective because, you know, people are still not going to want to run the gauntlet. Um, and this could be quite, you know, if this extends for weeks and weeks and weeks of uncertainty and fragility and risk, um, that's going to have a major a major impact on the global economy.

[00:16:48]>> The I like to bring Israel into the conversation here because we're fighting this side by side with them and the opening days and phases of this conflict seems very well choreographed between what they were doing and what we were doing. As this has progressed, it does seem like we might have different objectives at time overlapping, but maybe not entirely overlapping. There was uh I think the the the MSAD chief just today said even after the ceasefire, we're still going to be pushing for regime change. And it's like, ah, I don't know if that helps the the ceasefire talks.

[00:17:19]What What are you seeing there? Are is is are the differences something that we can work our way through? Is it possible that we end up exiting the conflict and Israel continues vice versa? Yeah, I think there is a potential uh for that to happen and you know it has been the Israeli view for a very long time that the nature of the Iranian regime is is basically a non-starter for them. I mean just the the the whole the the sort of threats against Israel sort of mac I mean it's the Israeli government top to bottom has felt that the regime is the problem and that's been the case for many many years and you know obviously their theory of the case this time was if you apply applied enough you know military pressure the United States and Israel together you know we could potentially produce a change in regime that the people would rise up that that clearly didn't happen um and It may it may happen down the road. I mean, I certainly think that the Iranian regime probably is on is on its own clock um in terms of its its support within Iran.

[00:18:22]But um I think that's how they view the regime whereas we are our priority has always been the nuclear program for obvious reasons to us for our own security um and not allowing you know a power like Iran to have those kinds of weapons. So there is a disconnect in strategic objectives. Um you know even if we are aligned operationally and we have very good uh operational channels with the Israelis at the strategic level I can certainly see disconnects and I would not be surprised if the Israelis pursued especially on the covert action side you know additional efforts to to try to shift the regime.

[00:18:57]To that end, wanted to get your thoughts on kind of the domestic messaging or US and Israeli messaging to the domestic Iranian population. It seems like maybe we started there, especially during the protests and the massacres there. There was a lot of um from the president directly, help is on the way, right?

[00:19:14]Speaking to the Iranian people and at the outset of hostilities, it did seem like both Netanyahu and Trump put out statements directly at the people. You know, your time is coming. Just wait. Uh there will be a new Iran. that seems to have fallen off. I don't know the last time we've heard a lot of uh uh of anything really directed at the Iranian people. What do you make of that?

[00:19:37]>> It's quite tragic. Um actually, I think, you know, um when the United States, you know, makes comments like that, um you know, it lifts people's spirits and it's quite dangerous if you're not willing to follow through. Um I think the Iranian people are probably in the worst possible position right now at the end of this war. Um not you know not just the the the carnage that has happened in the context of the war but the position in which they are finding themselves with a a more hardline um and uh uh angry regime that is definitely going to go after people after this for sure internally. So I expect there could be a further crackdown internally. So they kind of got the the raw end of the deal here. Um quite honestly, you know, even as we've we've definitely, you know, uh degraded their military capability, certainly have have, you know, induced economic pain on the Iranian, uh state, but it's the Iranian people that are the ones that are going to lose, I think, the most in this scenario.

[00:20:42]Do you think that messaging at the beginning and kind of going from talking to the Iranians to just messaging at the regime, do you think that maybe shows that there was a plan to help a popular uprising or maybe maybe there that was the hope and it didn't happen? It >> I think there was hints of a plan as the president has said before.

[00:21:00]>> Outline of a plan.

[00:21:00]>> An outline of a plan. I I mean, I think there really was a a a a buyin at the beginning um between Netanyahu and Trump that they thought that this would materially impact regime change. Um and clearly when that didn't happen, the president kind of kind of walked away from from it. Um but I I think that there certainly probably were some discussions at the beginning. You saw those reports about arming the Kurds and that turned out to be a terrible idea.

[00:21:27]Um but you know um certainly I imagine there there were conversations happening. I just don't know that they were they were mature enough or the plans were mature enough to really materialize any outcome. Clearly not. Um >> well now it looks like the the kind of the status quo if you will is going to be this regime kind of staying in power with some sort of negotiated settlement ideally here with the United States and Israel in the next little bit. What are you watching here in the next how about until the end of this ceasefire? I think it's April 22nd, so we got about 8 days left. What are you watching for to see which direction this is headed?

[00:22:02]>> Obviously, the negotiations are the are the core to watch uh at this stage. I think that it's going to be, you know, seeing what happens if there's able if they're able to get to some broad framework around the nuclear issue. I think that is a a sign that this could be, you know, coming off the escalation ladder. I I am also watching how the the blockade itself works and how the Iranians react to it and whether we're able to successfully prevent traffic uh going to and from Iranian ports. I'm still also watching US force flow into the region. Um this is the thing the thing I used to focus on in my my prior role. You know, we still we have another carrier strike group now, the USS HW Bush on its way. Looks like it's going around the Horn of Africa. uh which is interesting rather than going to the med which is news. So, you know, seeing how that plays out. There's another amphibious ready group, you know, the boxer is on its way with another MW. So, we're still we're still sending force flow into the theater and and clearly that's to give the president uh and his team options um if he chooses to escalate. Um, but I I am I'm I'm hope I'm hopeful that the negotiations get some traction, but I still think we're potentially on the escalation ladder because the president, if things don't go well, doesn't have a lot of options short of significant escalation, I think, to to really um manage this this issue.

[00:23:31]>> All right, it's going to be a big eight days. Kelly, thank you so much for taking the time to walk through all this today.

[00:23:36]>> It's great to be here. Thanks, Preston.

[00:23:40]>> All right, so thank you again to Kelly for taking the time to uh chat with us today. This is a dynamic situation to say the least. That might be understating things just a little bit.

[00:23:49]It's changing hour by hour, let alone day by day. So incredibly valuable to be able to get the insights of someone that you know worked on the staff of the uh Secretary of Defense and then worked on the JCPOA at the National Security Council. So Kelly, thank you again.

[00:24:03]That's all we got for now. Thanks for watching and I'll see youall next time.