Daniel Davis and Glenn Diesen discuss the reopening of the Strait of Hormuz and prospects for ending the US-Iran conflict
Glenn Diesen interviews Lieutenant Colonel Daniel Davis on the fragile ceasefire conditions surrounding Iran's announcement that the Strait of Hormuz is reopened.
Summary
Glenn Diesen interviews Lieutenant Colonel Daniel Davis, a four-times combat veteran and host of the Daniel Davis Deep Dive YouTube channel, about Iran's announcement that the Strait of Hormuz has reopened. Davis argues that the announcement is far more conditional and fragile than it appears, with Iran and the US stating incompatible terms for what "open" actually means. He outlines three possible paths forward for Trump — a negotiated settlement, an escalated bombing campaign, or a prolonged economic blockade — and argues all three are bad options, with negotiation being the least damaging. Davis and Diesen also discuss the compounding economic damage already locked in from the conflict, including disruptions to oil supply, fertilizer availability, and food security, with Davis agreeing with analysts who believe a global recession may already be unavoidable even if the conflict ends immediately.
Key Takeaways
FULL TRANSCRIPT
Iran's announcement and the incompatible conditions for the Strait's reopening
Glenn Diesen: Welcome back. We are joined again by Lieutenant Colonel Daniel Davis, a four-times combat veteran and host of the Daniel Davis Deep Dive YouTube show. Thank you for coming back on. We see a lot of developments. Iran declared that the Strait of Hormuz is open. Trump has apparently posted that it's open and will never be closed again, although Trump will keep the blockade on Iran. So what exactly is happening? Is this peace, or may that be a bit premature?
Daniel Davis: It's way premature. There are a ton of things that have to happen right now. Number one, Foreign Minister Abbas Araghchi this morning, when he announced that the Strait of Hormuz was back open again in conformity with the conditions that were set when they did the original ceasefire — that was contingent upon the fact that there was now a ceasefire in Lebanon. So they said, "Okay, now that you did that, we're going to do this." And then he specified this is for the period of the ceasefire, which expires, I think, at midnight US time on Tuesday — Wednesday morning local time. So that only gives us a few days for it to be open.
Nobody — none of these tankers, none of these companies, none of these countries — are going to just start flying tankers through the Gulf right now. There could be some that are already full that have been floating around there that would love to get out, so you may get some movement. But there's not going to be a flood of people coming out because none of the conditions have been met.
Then you had President Trump, immediately in response to an Axios report that came out saying there's a deal on the table where the US would pay $20 billion for the reprocessed material — it wouldn't be characterized like that, it would be framed as an unfreezing of Iranian assets in exchange for them delivering all of the 400-and-something kilograms of reprocessed 60% enriched material. Trump immediately put out another Truth Social post and said, "Nope, no truth to that whatsoever. I'm going to get all of that reprocessed material. I will not give a dollar for it. We will not release any of the funds." Which seems to just take the oxygen right out of what should have been an opportunity.
The president had put a lot of pressure — and he specifically pointed out that he put pressure on Israel to have this ceasefire, saying something like "I told them to do it" in all caps, and that they're just going to have to be quiet. He was definitely emphatic that he told Israel to have this ceasefire, but then went to lengths to say that's not connected with the opening of the Strait of Hormuz. I don't know if he just wants to have credit for it himself — like, "No, no, I did this on my own, it wasn't because of that." Araghchi said it was definitely because of that.
In fact, the Iranian foreign ministry spokesman Ibrahim Balkhi said this is contingent upon the implementation of certain terms and conditions — the ceasefire in Lebanon — and that if the naval blockade continues, it will be considered a violation of the ceasefire. So he's saying the US can't keep its blockade open or it's going to be a violation. But President Trump said the blockade would continue. So Trump is saying the Strait of Hormuz is open for all the traffic we want out, but it's going to continue to be closed for Iranian traffic.
We'll wait and see how that works out. But the Iranian side said this is contingent upon three things: one, that the ships be commercial and that passage of a military ship is prohibited; two, that the ships and their cargo not be linked to any belligerent state — which is a pretty big limitation; three, that the ships pass through the route designated by Iran, because apparently there are mines in there and they want to make sure ships don't hit them. And then it said the ships must be coordinated with the Iranian forces responsible for this passage, as US Central Command confirmed before the war that the Iranian Revolutionary Guard Corps controlled the Strait of Hormuz.
So we'll see how this actually plays out, because you have both sides saying very different things. The oil market is thrilled — it dropped almost 12% immediately upon these two announcements — but the devil's in the details, and these are pretty big devils.
Glenn Diesen: I agree. It's always sold with great optimism, and I think Trump is also good at talking down oil prices. But yeah, as I said, it might be a bit premature. At the same time, we see that the Lebanon ceasefire is unlikely to hold, and there's also indication that the US might be preparing for renewed hostilities. There's also now talk of a possible ground invasion. Do you think this is put on hold now that negotiations are seemingly moving forward, or do you think this is just a little pause before we move on?
Military preparations continuing alongside diplomacy
Daniel Davis: Everything is moving concurrently. There's movement in the diplomatic realm, movement in the political realm, and movement in the military realm. Everything is going forward as though none of the other things are going to succeed, and all parties will execute whichever option seems to give their side the best chance.
There is no question — and we've seen open-source reporting on this — that the Iranian side has been doing all kinds of excavation. A lot of the tunnel systems we've hit, a lot of these mountainsides, a lot of these underground missile cities — they're doing reprocessing work. They're also moving assets around, probably from one tunnel to another to cross-level. They're getting ready for more. They're probably manufacturing more drones and more missiles as fast as they can.
The US side is definitely doing the same thing. We've seen lots of air traffic. Additional forces have been sent to the region. Additional ships. We're definitely continuing to build up, and every indication — including the Secretary of Defense yesterday saying "we are locked and loaded and ready to go when this ceasefire comes to an end" — points in that direction. President Trump yesterday, in front of the White House, was specifically asked: when the ceasefire period comes to an end, are you going to resume hostilities? And without hesitation he said yes, definitely. Now, he's probably saying that to add negotiating pressure, but that's what he said. That's what the Secretary of Defense said, and that's what the US military is doing.
They have been radically and dramatically sending additional interceptor missiles, offensive missiles — whether that's JASMs, Tomahawks, SM-2s, SM-3s — all kinds of ranges of weapon systems have been restocked so that if the order is given, they can re-engage and continue the war from where it was.
Everything is happening concurrently. The diplomats are hard at work, and obviously a lot is going on behind the scenes. President Trump mentioned a number of Middle Eastern powers this morning on Truth Social, thanking them, which indicates that multilateral diplomacy is going on and everybody is trying to find a way out. The question is which path is going to succeed, and we have such a narrow window — we're talking four days before this comes to an end, unless the sides agree to extend it. I think there's probably a 75% probability of an extension, because both sides have some advantage in doing that — both for more military preparation and for more space for negotiations.
But again, when you see that the conditions being set by Trump and by the Iranian side on what it means for the Strait to be open are incompatible — is one side going to give? Because otherwise the Strait isn't really open. The proof will be in the pudding. We'll see on the ship trackers how many vessels actually go out. So far, nothing has moved. We've had a bunch of dueling social media posts. We'll see what actually happens on the ground.
This contrast — Trump's Truth Social post being explicit that the Iranians have opened up but the US will not end its blockade — could just be a show of strength, or appealing to his own audience, because he really has to sell a version of victory where the US is in the driver's seat. But if Iran sees this as a complete breach, that doesn't fit within any wider agreement.
Glenn Diesen: How do you expect the Iranians to respond? Why did they suddenly become so seemingly lenient in terms of being prepared to meet these demands?
Iran's conditions and the limits of its flexibility
Daniel Davis: We'll see how lenient they actually are. That statement by their foreign ministry spokesman didn't sound very lenient — it sounded very limiting and very exacting. "Either it's a two-way street or it's a no-way street." That's why I say it's incompatible with what Trump said, because he said it's a one-way street, his way — you're going to open up everything and I'm going to keep everything closed. That's the opposite of what the Iranians are saying.
Maybe this is just dueling social media posts that don't translate to anything happening on the ground. That's a big problem here, because Trump has all but declared an end. Trump also said Iran promised they would never close the Strait of Hormuz again, and that they are definitely going to give the US all of their nuclear material — "nuclear dust," as he calls it. No word on any of that from the Iranian side.
One has to wonder what President Trump's confidence is based on. Is he letting the cat out of the bag — letting people know what's actually secretly going on behind the scenes, and later we'll find out that's true? Or is this just stuff he hopes is true and he's trying to will into existence by saying it enough? Unfortunately, we have experience of both of those kinds of things happening. So we don't know what that's going to mean either.
Bottom line: there's a lot of verbal action, a lot of written words, but so far no physical action. In fact, speaking of the US blockade, I was looking this morning at one of those ship trackers that tracks all the traffic coming in and out of the Gulf. They did a super fast-motion replay that looked at all the traffic in the last three days of the US blockade, and they said there are still a number of US-sanctioned ships that have gone out of the Gulf. We claim that 13 or 14 ships had been turned back, but the graphic on the ground shows that quite a number physically moved through the Gulf and out past the blockade line. So has it actually been blockaded or not? I don't know.
Glenn Diesen: It's hard to tell. It's such a war of narratives that reality becomes difficult to see. But it does seem very unlikely that the Iranians would give up their nuclear material for nothing in return, because that would only leave them weaker with a worse hand to play later on. I'll go so far as to say there's zero chance they just hand that over unless there's something substantial in return.
I think the days are over when Iran just says, "All right, we'll do what we're told, we'll capitulate and submit in order to end the fighting." What happened with Operation Midnight Hammer, the Israeli attack in 2025, and now this one, has led them to conclude that it's pointless to ever trust the US to do something willingly, or that by being self-restrained they'll restrain us. I think they now see that self-restraint will only encourage us to do more later on after we restock ammunition. So I don't think they're going to let that go. It's a major point — unless they get something pretty significant in return, something that has even a version of a security guarantee and some kind of reparation.
Even when they're talking about opening up the Strait, apparently that does not mean they're not going to be charging a toll for what they allow through. They're going to try to make some revenue as well. There are signs and billboards all over buildings in Tehran — billboards showing a hand holding the Strait of Hormuz — and I think that's emerging as a symbol of their resistance and defiance, saying "we have the leverage here." The idea that they're just going to let that hand open and stand back and let it go back to any version of what it was before is inconceivable to me. Along with their missile force, control of the Strait has been the real demonstration that they have genuine leverage and can't just be coerced anymore. They would be foolish to withdraw that, and they have not shown themselves to be foolish so far.
The three options facing Trump — and why all are bad
Daniel Davis: Well, that is the problem, because as I see it, there are a few options that President Trump has and all of them are bad. Once we embarked on this war, any sane analysis in the concept phase would have shown there's no military solution here — no path to compel compliance, whether it's the assassination of the leader, a big shock-and-awe bombing campaign. The country is simply too big. As you've said numerous times, even on my show, it's about as large as a good portion of Western Europe, and the terrain is just terrible for an offensive force. So it was foolish from the beginning to think you could do it, but we did anyway. Now we are where we are. Whether we should or shouldn't have been is no longer a question. The absolute question is: what now?
Since you're already engaged and you've already committed to a course of action and you don't have a ground component to even threaten anything on the ground, what can we do? As I see it, there are three main possibilities.
One is that Trump achieves a negotiated settlement on terms that are minimally acceptable to the Iranian side. Their ten-point plan is the basis they're willing to talk from. They're not going to get all ten — I don't think they have any dreams about that. That's their biggest wish list. But there are a few things on there that I think are probably non-negotiable: control of the Strait, or at least a toll-booth kind of situation; some kind of security guarantees; reparations of some sort, whether that's unfreezing of their assets or charging that toll; and keeping their missiles and keeping their proxies. Those are going to be their non-negotiables. Trump is going to have to create some version of that — he can doctor it up any way he wants for the domestic audience. But there aren't many people in his camp, or in Israel, who would be quiet about that. I can imagine Israel doing whatever it took to sabotage that path if he moved down it.
The second option is that he doubles down. When this period comes to an end — whether it's next Wednesday or after an extension — at some point it's going to come to an end, and he says, "I'm going to give you a firestorm like you have never seen before. I'm going to blow up everything — energy systems, infrastructure — we're going to rain down holy hell on you unless you comply with some version of our fifteen-point plan." Iran has been unequivocal about what they would do in that case. Every time since before this war started that they said "if you attack, we're going to do this," they have done exactly what they claimed. There's no reason to think this would be any different — they would respond in kind against the GCC countries, Israel, and our assets in the region. It would be lights out for the oil industry for an extended period of time, regardless of whether the Strait is open or closed.
The third option is that he plays the long game — keeps the blockade, keeps the sanctions, launches what he called "Operation Economic Fury," and sees who can suffer the longest. He may calculate that the US can outlast Iran. That's a bad play.
As I see it, those are the three broad outlines, and there's no good one. There is no good victory narrative that can come out no matter what words come out of President Trump's mouth. If he chooses option B or C, we're going to be in a world of hurt, and so is the world economically. Option A is the best of the ugly options — it gets things off the table and allows him to turn and focus back on the midterms. Like everything else, he'll eat a lot of crow and take a lot of domestic heat, but there are so many other issues in the US, and they'll turn to something else. He's good at changing the narrative anyway. That's what he should do. We'll see what he does do.
Glenn Diesen: It does seem a bit strange — given that you have a ceasefire in Lebanon as part of these negotiations — that it essentially gives a veto right to the Israelis, because they can break it at any time and then negotiations fall apart. But let's stay optimistic for a second and hope that Trump picks a wise path and puts an end to this war. How much damage has already been done? The global energy situation is quite poor, and we see this having massive impacts around the world. The fertilizer situation is also something that's beginning to really worry me. How deep are we into these troubles?
Economic damage already locked in — recession and food security risks
Daniel Davis: I had a former British commodore who is now an expert in the energy field since his retirement in the UK — Commodore Steve Jermy — and he argued, along with a number of economists who have been making the same case, that we have already baked in a recession. In his view, if this ends next Wednesday and we have a diplomatic miracle, we've already baked in a recession because of the way the economic, energy, and fertilizer situations compound on each other.
Even if the Strait did completely open up today, it's going to take months — a couple of months at minimum — to get all of these tankers restarted and coming back. Five of the six GCC countries had already suspended or greatly reduced their physical oil production because they ran out of storage space. That's got to be undone, and that's a lot harder of a problem than it may appear. It's going to take time for the flow to restart even once insurance companies say they're willing to take the risk again and the carriers themselves are willing to take the financial risk. There are a lot of things that have to happen even once it's open before the flow gets anywhere close to what it was on the 27th of February. We're talking many months into the future.
That means all these problems that are already there are going to compound. The fertilizer situation may be one of the biggest ones, along with helium, because of the economic and food security impacts. People are planting right now — in the United States, in Asia, in the Philippines, in Australia — but they're doing it with less fertilizer than they need and at a higher cost. Diesel costs are also elevated. All of that raises the cost to produce food. When it comes time for harvesting in the fall, you're not going to get as much. That means scarcity coming in, and that's going to last until the next planting season. These are problems that are going to have manifestations many months from now, into next year at minimum.
All of that together creates the potential for a global recession. And if this doesn't get solved, we could be facing the possibility of a depression.
Glenn Diesen: In retrospect, there will be no way of looking back at this war, once it's over, and considering any of it to have been a success. But it's nonetheless worth being slightly optimistic about the efforts at least.
Daniel Davis: Believe me, I want to be optimistic as well, because any diplomatic space that gives us a chance to get this over — so that we don't have the worst of those consequences later on — is to be enthusiastically supported, and I definitely do support it. But being realistic, we're still going to be in trouble. There's no good way out of this and no way to escape it without some problems. The question is how big those problems will be.
Glenn Diesen: Well put. Thank you so much for taking the time. I know you have to run, so thanks again.
Daniel Davis: Thanks so much. I always appreciate you, Glenn. Thank you.