Original Title: The Bargain: How Fifty Years of Peace Came to an End
Original Author: Garrett
Translator: Peggy, BlockBeats
Editor's Note: In the intense developments of the past few weeks, the market initially tried to understand everything through a familiar framework—airstrikes, blockades, oil price shocks—it seemed to be just another typical Middle Eastern crisis. However, as time progressed, a more difficult-to-avoid question gradually emerged: if the "implicit bargain" that had been maintained for decades has now broken down, what path will the world take to rebuild a new equilibrium?
This article takes "bargain" as a clue to sort out the generation, fractures, and collapse logic of the Middle Eastern order and points out that the key in the current situation lies not in the victory or defeat of a military action but in the simultaneous failure of a pair of fundamental rules: "the U.S. does not touch the core of the Iranian regime" and "Iran does not touch the Strait of Hormuz." When this mutually restraining boundary is broken, the evolution of conflict will no longer be constrained by old logic.
For the future, the article provides a prediction: in the short term, the situation may oscillate between "ground war" and "deterrence de-escalation"; but in the mid to long term, more certain changes have already begun to emerge: selective passage is reshaping alliance relationships, energy transportation routes are being forced to restructure, and the binding relationship between the U.S. dollar and security is loosening. These changes will not be reversed with a ceasefire or the end of negotiations, but will gradually solidify into a new structure.
The following is the original text:
March 24, 2026. A warship with a displacement of 45,000 tons is speeding from Japan to the Persian Gulf.
The USS Tripoli, an amphibious assault ship, is also referred to by the U.S. military as the "Lightning Carrier." Its flight deck is equipped with 14 F-35B stealth fighters—the only fifth-generation aircraft currently capable of vertical landing. In 2022, the U.S. Navy conducted a critical test on this ship: carrying 20 F-35B aircraft simultaneously to fully verify the operational concept of the "Lightning Carrier." As noted by the commander of the Seventh Fleet: "The mere presence of 14 fifth-generation aircraft on the deck is a highly deterrent sensor and strike system." Depending on the mission configuration, it can serve as a lightweight stealth carrier or switch to carry "Osprey" tiltrotor aircraft and "Super Stallion" helicopters, deploying 2,200 Marines for landing operations. Expected arrival time: March 27.
Meanwhile, another amphibious task force has set sail from San Diego—centered around the USS Boxer, carrying about 2,500 Marines, with a journey of about three weeks. At Fort Bragg in North Carolina, the 82nd Airborne Division's rapid response brigade has also been placed on standby. This approximately 3,000-person unit is the fastest deploying ground force of the U.S. military, capable of being deployed to any region in the world within 18 hours.
The Pentagon has a set of operational plans on the table: a coordinated assault from the sea and an airborne takeover. The core target is Iran's largest oil export hub—Kharg Island. This island is just 25 kilometers from Iranian territory, with approximately 90% of the country's oil exports transported through it. Additionally, controlling Qeshm Island and Kish Island at the entrance to the Strait of Hormuz is also included as potential strike targets. However, retired Navy Admiral John Miller warns: even if these islands are occupied, forming long-term control will be difficult—Iran can still rely on its mainland to disrupt shipping continuously. Once the operation is launched, it will become the most extensive amphibious operation by the U.S. since the Vietnam War. After all forces have been gathered, the U.S. military's deployment in the Middle East will rise to 50,000 personnel.
Just a month ago, all of this seemed unimaginable.
Four weeks ago, the U.S. and Israel launched airstrikes on Iran; three weeks ago, Iran blockaded the Strait of Hormuz—the global energy choke point that carries 21 million barrels of crude oil daily; two weeks ago, international oil prices broke through $110; one week ago, senior U.S. military officials signaled to allies that they "may have no choice" but to initiate a ground offensive.
From a timeline perspective, this is a rapidly escalating path. But if we extend our view back fifty years, we find that each step today has a clear historical starting point. Those seemingly "uncontrollable" decisions largely originated from rational calculations in the context of their time.
To understand how all this unfolded, we need to turn back the clock half a century.
The Bargain
In the 1970s, the monarchies of the Middle East fell one after another.
In 1952, Nasser overthrew Egyptian King Farouk; in 1958, the Iraqi Faisal dynasty was extinguished in a military coup; in 1969, Qaddafi overthrew Libyan King Idris; in 1979, Khomeini overthrew the Iranian Pahlavi dynasty. Each revolution carried the same banner: Pan-Arabism—"Arabs unite to confront the West and Israel." The outcomes of the revolutions were strikingly similar: strongmen came to power, U.S. embassies were burned, and oil was nationalized.
The surviving monarchies—Saudi Arabia, Kuwait, the UAE, Bahrain, and Qatar—watched their neighbors fall, deeply engulfed in survival anxiety.
Thus, an unwritten "bargain" naturally formed: the U.S. provides security guarantees; the Gulf monarchies sell oil priced in U.S. dollars and reinvest oil dollar revenues in U.S. Treasury bonds.
There was no contract, no signing ceremony, and no time limits. A common misconception is that "the U.S. and Saudi Arabia signed a petrodollar agreement in 1974." In fact, the declassified memorandum of Nixon's meeting with King Fahd at the White House is only four pages long, discussing Middle Eastern politics throughout but not mentioning a word about oil pricing or dollar settlement. This is not an agreement but a "bargain"—a behavior pattern that naturally forms when the interests of both parties align closely.
Remember this term. Because what collapsed in 2026 was another "bargain" that had lasted for forty years. The fragility of the bargain lies precisely in the fact that it lacks an enforcement mechanism—once one party recalculates its gains and losses, the equilibrium will irreversibly disintegrate.
To understand why the Gulf countries still cannot openly embrace Israel—despite their royal families potentially being willing in private—we must recognize a structural reality: the Arab world is, in some sense, a reflection of Europe. Europe is composed of "smaller nations forming large states," whereas the Arab world is "one large nation divided into multiple states." From Morocco to Iraq, people speak the same language and follow the same religion, yet they are divided into dozens of nations by colonial-era boundaries. The narrative of "uniting to confront Israel" inherently has a broad grassroots foundation.
The strongmen who once held high this banner—Nasser, Saddam, Qaddafi—were ultimately removed. But the countries they left behind did not become better; instead, they headed toward fragmentation: Iraq became a battleground for Shiite militias, Libya fell into warlord factions, and Yemen was seized by Houthi forces. More critically, the public has nostalgic feelings towards these strongmen—they symbolize the narrative of "Arabs standing up." This is precisely the dilemma faced by the Gulf monarchies: they host U.S. military bases but cannot allow these bases to be used to strike Iran. Opening the bases would mean "fighting on behalf of the U.S. and Israel against the Muslim Brotherhood," and the domestic political cost could far outweigh the cost of enduring missile strikes themselves.
In such a configuration, Iran developed an extremely sophisticated nuclear strategy. Khamenei's principle is simple: always stay below the threshold—always capable of crossing it but never truly crossing it. In game theory, this is called "strategic ambiguity": it achieves nuclear deterrence without incurring the comprehensive sanctions and isolation that North Korea faces. Enriching uranium to 60%—weapons-grade is 90%, but you can never be certain how close I am to 90%. This equilibrium could have continued indefinitely.
Meanwhile, in the Strait of Hormuz, another older "bargain" has also been operating stably for forty years: the U.S. does not overthrow the Iranian regime, Iran does not touch the Strait of Hormuz.
It survived extreme tests. During the Iran-Iraq War's "tanker war" from 1984 to 1988, Iraq and Iran bombed each other's tankers, and the U.S. Navy even engaged directly with Iran ("Operation Praying Mantis"), yet Iran still did not blockade the strait. In the 2025 "Twelve Day War," the U.S. and Israel jointly struck Iranian nuclear facilities—almost touching its survival bottom line, yet Iran still did not blockade the strait.
Why? Not because Iran is "weak," but because both parties' rational calculations point to the same conclusion: 90% of Iran's oil exports also depend on this strait, and a full blockade would be akin to economic suicide. The U.S. also understands that once the strait is truly closed, there are virtually no military means to restore navigation in a short timeframe. Both sides have a strong incentive to maintain the status quo—never crossing each other's survival red lines.
This equilibrium could seemingly go on forever.
Cracks
The cracks began with an agreement that was originally intended to mend relations.
In 2015, the Obama administration promoted the Iran nuclear deal (JCPOA) which included "sunset clauses": key restrictions would gradually expire in 10 to 15 years, at which point Iran could legally resume high-level uranium enrichment. This was essentially a promise—"endure for another ten years, and you will regain legitimacy." Israel and Saudi Arabia were extremely dissatisfied: it was equivalent to telling Iran that time was on their side.
In 2018, Trump announced the U.S. withdrawal from the JCPOA. Viewed in isolation, the logic of this decision is not untenable—"sunset clauses" do indeed resemble a ticking time bomb. But the problem lies in the lack of any alternative plan. The new equilibrium became: the U.S. continues sanctions, Iran slowly progresses. U.S. intelligence assessments indicated that Iran had not made substantial progress towards weaponization. This is an unsightly but basically stable state.
Trump's real strategic focus, in fact, lay in another direction: the Abraham Accords.
This framework was quite ingeniously designed: the U.S. needed to shift its strategic focus to China, and Middle Eastern security had to be "outsourced"; to achieve this, a common enemy (Iran) was needed to bind the Gulf countries together with Israel. Israel would provide security capabilities, the Gulf countries would supply economic resources, and the U.S. would act as a coordinator and platform. Logically, it was almost flawless.
However, it hinged on one premise: public opinion in the Gulf region must be able to accept Israel.
To fundamentally resolve this issue, the only path is for Israel to retreat to the 1967 "Green Line." This is what Saudi Crown Prince Mohammed bin Salman (MBS) has repeatedly hinted at as the bottom line. Once Israel withdraws, not only will the public opinion resistance in the Gulf region significantly decrease, but even Iran will lose the core support for mobilizing its narrative. The flag you have long held high is "Israel occupies our land"; if the land is returned, what can you use to mobilize? In this case, Iran occasionally launching rockets could actually reinforce the Gulf countries' security dependence on Israel. The U.S. only needs to uphold one bottom line: Iran cannot possess nuclear weapons. Because once nuclear proliferation begins (if Iran obtains nuclear weapons, Saudi Arabia will inevitably follow; Turkey, too, will not be able to be an outsider), the situation will be utterly uncontrollable.
But Netanyahu would not back down. The Israeli far-right views settlements as a "biblical promise," and retreating to the Green Line is nearly impossible to achieve politically at home. Hence, Saudi Arabia has never joined the Abraham Accords.
Then came 2025.
The U.S. and Israel launched the "Twelve Day War," directly striking Iranian nuclear facilities. From Iran's perspective, this crossed a fundamental red line. Bombing its nuclear capabilities equates to stripping away its last "insurance mechanism"—the implicit promise that "the U.S. will not overthrow the Iranian regime" has now been rendered void. You were the one who tore up the rules first.
What collapsed along with this was the entire logic of the bargain. In the past, Iran did not blockade the strait because "you do not touch my foundation, and I will not touch your lifeline." Now that the foundation has been touched, what can "not block the strait" yield anymore? Nothing.
The premise of the bargain has disappeared. But anger alone is not enough. Iran also needs capability and timing. Between 2025 and 2026, all three conditions mature simultaneously.
First, a qualitative change in military capability. In the past, "blocking the strait = suicide" because Iran could not achieve selective blockade. But today, Iran possesses low-cost drone swarms, precision anti-ship missiles, and sufficient information capabilities to achieve "blocking your ships but not mine"—allowing Chinese and Russian vessels to pass while intercepting those of U.S. allies. A selective blockade transforms the previously "suicidal behavior" into a "sustainable strategic tool."
Second, a moral legitimacy. "You bombed our nuclear facilities first"—this has enough persuasive power in international public opinion.
Third, tacit approval from China and Russia. Beijing and Moscow do not need to publicly support Iran; they just need to maintain "deniability"—we did not participate, but we also do not condemn. This provides diplomatic space for Iran.
On the day the nuclear facilities were bombed in 2025, these three conditions were aligned. From the perspective of game theory, blocking the Strait of Hormuz in 2026 was not an "impulsive act," but a card that should have been played—it simply lacked the timing, capacity, and legitimacy before.
The core of the issue is this: the U.S. tore up the first half of the bargain (not overthrowing the regime → bombing nuclear facilities) but expects Iran to continue to abide by the second half (not blocking the strait). From a game theory perspective, this is clearly untenable—you unilaterally breach the contract while demanding the other party to continue fulfilling their obligations.
The equilibrium then irreversibly disintegrates.
Collapse
Back to March 2026. The scene described at the beginning—"Lightning Carrier," airborne division, 50,000 troops—is now easy to understand. The surrounding airstrikes did not open the Strait of Hormuz. Because what you are facing is not a physical obstacle that can be "cleared" with bombs but a political equilibrium that has been broken by your own actions.
Bombs cannot solve politics. But the changes happening in the fourth week go far beyond military mobilization. The entire power structure of the Middle East is being reshaped.
Iran: Shifting from Defense to Offense
On March 22, Iranian Armed Forces Central Command Chief Abdollahi publicly announced: Iran's military stance has shifted from defense to offense, introducing more advanced weapon systems and tactics. The next day, the Iranian military claimed to have achieved "effective control" of the Strait of Hormuz, adding a significant remark: "At the current level of control, there is no need to lay mines in the Persian Gulf."
The subtext is clear: we do not need a minefield; we have virtually controlled this waterway.
On the same day, in response to Trump's "48-hour ultimatum" (either reopen the strait or face bombings of power facilities), the Iranian military issued a counterstatement: the Strait of Hormuz will be fully closed until the damaged facilities are restored; U.S. and Israeli energy, information technology, and desalination facilities in the Middle East will become legitimate targets for attacks; Israel’s power and communication systems will also suffer large-scale assaults.
This is Iran's clearest escalation signal to date: if the U.S. strikes the power systems, Iran will not only close the strait but will also extend the war to the entire Gulf's energy infrastructure.
At the same time, Iran is employing an even more covert and deadly tool.
Foreign Minister Araghchi publicly stated that Iran is willing to allow relevant Japanese vessels to pass through the Strait of Hormuz. South Korea subsequently indicated it is undergoing similar negotiations. The logic is very clear: countries that participate in strikes against Iran—blockade; neutral countries—can negotiate; countries whose alliance positions show cracks—are forced to take sides.
Iran is reshaping the international alliance structure through "passage rights." This is no longer a simple military blockade but a transformation of "who can pass" into a diplomatic currency.
Trump: Ultimatum → Concessions → Another Ultimatum
Looking back over the past week, a pattern gradually becomes clear: Thursday—"close to achieving objectives," considering de-escalation; Friday—a sudden reversal, issuing a 48-hour ultimatum; Saturday—Iran responds firmly and launches the 75th round of "Real Commitment-4"; Sunday—the ultimatum expires, and the U.S. suddenly announces "constructive dialogue with Iran" and postpones military strikes for five days.
Iran directly denied this claim, with Speaker Ghalibaf calling it "false information manipulating financial and oil markets." Israeli sources revealed that U.S.-Iran talks might take place in Islamabad, Pakistan, with U.S. Vice President Vance possibly serving as a special envoy.
Creating tension, setting deadlines, and then providing a "way out"—but trust in this routine is rapidly declining. On March 24, influenced by the "dialogue" news, oil prices briefly plunged over 10%, falling below $100, but the rebound did not change any structural facts: the Strait of Hormuz remains closed, U.S. military personnel are still increasing, and Israel has clearly stated that strikes will continue "for weeks."
Saudi Arabia: A "Balance" Forced Offline
One of the key variables this week was the change of position by Saudi Arabia.
On March 24, according to The Wall Street Journal, Saudi Arabia has opened King Fahd Air Base to U.S. forces—previously, Riyadh had clearly stated that its bases would not be used to strike Iran. At the same time, the UAE closed Iranian hospitals and clubs in the region, effectively cutting off its social networks; missiles used to strike Iran have been confirmed to have come from Bahrain; and Saudi Arabia privately informed the U.S. that it is prepared to counterattack if Iran attacks its power and water resources facilities. A senior UAE advisor even publicly stated: the Iranian bombings "have pushed them to the side of Israel and the U.S."
Do you remember the "tightrope" mentioned in the first part? The balancing act of Gulf countries—hosting U.S. troops but not allowing them to strike Iran due to high domestic political costs. And Iranian missiles have directly severed that tightrope. When power plants and freshwater facilities are hit, "staying neutral" is no longer an option.
At the same time, Saudi Arabia has also shown another side: an extremely strong strategic resilience.
It has initiated the full-length 1,200-kilometer East-West Pipeline, running directly from the Abqaiq oil fields in the east to the Red Sea port of Yanbu. This pipeline, built in the 1980s to respond to the Iran-Iraq War, has now become the lifeline of global energy. The export quantity from Yanbu has surged from less than 800,000 barrels per day before the war to 3.66 million barrels per day, peaking at over 4 million barrels; at least 25 very large crude carriers are en route to load; and the pipeline capacity has been expanded to about 7 million barrels per day. Saudi Aramco CEO Nasser stated bluntly: "This is the largest crisis in the region’s oil and gas industry in history."
However, the Yanbu route also carries risks: Iran has attacked the local Samref refinery (a joint venture of Saudi Aramco and ExxonMobil), briefly interrupting shipments; oil tankers heading to Asia still need to pass through the Bab el Mandeb Strait, while the Houthi forces have merely "paused," not ceased their attacks; domestic production capacity in Saudi Arabia has also been affected, with the Ras Tanura refinery temporarily shut down, reducing total capacity by about 2.5 million barrels per day.
Two Pillars
Putting all of this together, we can see a more significant structural change than any single piece of news: the two pillars supporting the petrodollar system are being weakened simultaneously.
The first pillar is the currency narrative. Iran has proposed "exchange yuan for passage rights." In the short term, the scale is limited—over 90% of global oil trade is still settled in U.S. dollars, China's capital account has not been fully opened, and Iran is excluded from SWIFT. But the damage is minor and extremely insulting—it brings "de-dollarization" from think tank discussions directly onto the battlefield. China doesn't even need to show up: Iran creates the narrative on the front lines, while China maintains ambiguity in the background. The truly critical element is the "seed effect": once Japanese and Korean shipowners are forced to open yuan accounts for passage, this infrastructure will not easily disappear.
The second pillar is security monopoly. Since 1974, another pillar of the petrodollar has been the "security exchange"—the U.S. protects Gulf shipping lanes, and Gulf countries settle oil in dollars. Now, this premise has been shaken: the U.S. is unable to guarantee navigation safety in the Strait of Hormuz. Japan and South Korea are beginning to negotiate directly with Iran—bypassing the U.S. as a "security intermediary" and confronting the "toll collector" directly. Once this model stabilizes, Iran will become the de facto controller of the strait, and the U.S. "protector" role will be hollowed out—if you collect protection fees but cannot provide protection, why should I continue to pay?
One side is weakening the dollar settlement system while the other is diminishing the U.S. security monopoly—the two legs of the petrodollar are being simultaneously cut.
This is also why the U.S. "must act": not merely a military issue, but with each passing day, the erosion of these two pillars becomes harder to reverse. But as previously shown: airstrikes cannot open (with the surrounding area yielding nothing), and occupation cannot solve (controlling the islands does not address insurance, distributed strike, and triple blockade) while inaction is even less possible (both pillars collapsing at the same time).
This is the true strategic deadlock.
International Energy Agency (IEA) Director Birol has described the current impact as "the overlay of the two oil crises of the 1970s and the 2022 Russia-Ukraine gas crisis." After tapping into a record 400 million barrels of strategic reserves, he bluntly stated: the only real solution is to reopen the Strait of Hormuz.
But right now, no viable path is visible.
What Will Happen Next
March 27: The "Lightning Carrier"—USS Tripoli enters the U.S. Central Command area of responsibility. March 28: The five-day "pause" set by Trump expires.
Next, there are two paths.
Path One: Ground War Initiation.
If there is no substantial progress in negotiations within five days, the pre-established operational plan may be activated. The "Lightning Carrier" provides stealth aerial strikes, the 82nd Airborne Division conducts parachuting, and amphibious forces land simultaneously—progressing at sea and securing air control, a typical "three-dimensional island seizure" operation. U.S. airstrikes have destroyed the runway on Kharg Island, and Marine engineering units can quickly carry out repairs, followed by sustained troop and equipment deployments via C-130 transport aircraft, connecting the entire operational chain. Meanwhile, the thresholds for Saudi Arabia and the UAE to join the fight have clearly lowered, while Iran initiates its "punitive countermeasures." The war will escalate from an "airstrike attrition battle" to a "multinational ground war," extending the duration from weeks to months, and the global energy crisis will shift from a "supply shock" to a "structural disruption."
Path Two: Ends with Deterrence Rather than War.
The "Lightning Carrier" carrying 14 F-35B aircraft crosses the Strait of Hormuz, and Iran chooses not to fire. The probability of this scenario is low but not impossible. Its logic aligns with Iran's current "selective blockade" strategy: the optimal strategy is not "full blockade" (which would cut off its own economic lifeline and trigger a unified global response) but "controllable deterrence + selective passage." If U.S. Navy carriers pass without interception from Iran, both sides may achieve a kind of "gray exit": no formal ceasefire, just a de facto de-escalation. The U.S. can publicly claim "navigation safety has been restored," while Iran emphasizes "strategic restraint" internally, while retaining the ability to blockade again in the future. But under the current atmosphere, Iran has publicly announced a "shift from defense to offense," and "allowing passage while not firing" is politically nearly unbearable—unless a certain tacit understanding has already been reached. The talks taking place in Islamabad disclosed by Israel may likely point in this direction.
No matter which path is finally taken, several things will not change: the selective passage mechanism is reshaping alliance structures; expectations of ground war are extending the conflict cycle; high oil prices will essentially "lock" the Federal Reserve, making it difficult to offset recession through interest rate cuts; the trend of "de-dollarization" by central banks around the world will not reverse due to a single event; and Saudi Arabia's activation of the East-West pipeline has substantially restructured the global oil logistics system.
The duration of this war will far exceed market expectations from three weeks ago.
Key Observation Indicators
Whether the Islamabad Talks Materialize (Will Vance Go to Pakistan)
If realized, this will mark the highest level of direct contact between the U.S. and Iran since the severance of diplomatic ties in 1979, indicating that "behind-the-scenes agreements" may have entered a framework stage.
Secret Diplomatic Movements from Saudi Arabia/Oman/Turkey
Oman has historically served as a mediator between the U.S. and Iran (the secret negotiations leading to the JCPOA began in Muscat). If its activities increase significantly, it indicates both sides are creating "preparatory space" for formal negotiations.
Whether Iran Expands the Scope of "Selective Passage"
After Japan and South Korea, if India or EU countries receive passage arrangements, it means Iran is systematically "removing people" from the U.S. alliance, and the political goal of the blockade begins to exceed its military significance.
The Actual Course of the Tripoli After March 27
If heading towards Kharg Island, the probability of ground operations significantly increases; if heading towards the Strait of Hormuz, it is closer to the "deterrence demonstration" route.
Whether Non-China/Russia Merchant Vessels Start Attempting Passage (Can Be Tracked via AIS Data)
The first successful passage of a non-China/Russia merchant vessel will mark the starting point for re-evaluating insurance markets, also indicating that the blockade is beginning to loosen in practice.
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