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Suzanne Maloney on Whether Perpetual Conflict is New Normal for the Gulf
Brief
The episode centers on the fragile aftermath of the ceasefire tied to the US–Iran memorandum of understanding and the renewed instability in the Strait of Hormuz. Suzanne Maloney (Brookings) tells host Jason Bordoff that the strait had been open for about 26 days and traffic had only returned to roughly 20% of pre-war volumes before kinetic incidents and competing interpretations of the MOU undermined the arrangement. Bordoff outlines the rapid policy shifts — Tehran again declaring the strait closed and President Trump publicly proposing to reopen it by force, reinstate a blockade, and even charge commercial ships a 20% toll — and Maloney pushes back: a military reopening is impractical, the toll proposal would violate freedom-of-navigation norms, and the near-term pathway back to stable transit runs through diplomacy, not force.
The conversation traces the wider strategic consequences. Maloney argues this is likely a new “no peace, no war” normal: intermittent disruption, periodic strikes (the UAE, Qatar, Kuwait, Oman and potentially Saudi oil infrastructure could be targeted), and the possibility of the Houthis becoming more active. She stresses Iran’s political economy — millions of lost jobs and deep economic strain — but also Iranian leadership’s hardened resilience and distrust of American guarantees after the 2018 JCPOA withdrawal and withheld frozen assets in 2023. On nuclear issues, Maloney notes that the most consequential setback to Iran’s program came from the June 2025 Israel–US strikes; nonetheless, she says the US and Israel retain options (surveillance and strikes) if Iran attempts rapid reconstitution. The Gulf states, she adds, will hedge: maintaining the US security relationship while diversifying procurement and accelerating non-oil development. Bordoff and Maloney agree the energy takeaway is bullish/risks-upside: recent releases and alternative pipelines have softened the immediate shock, but the Strait’s long-term unpredictability means markets must price in episodic supply risk and policymakers must treat diplomacy and energy security as tightly linked.
Why it matters
Suzanne Maloney: The Strait of Hormuz was open for roughly 26 days after the memorandum of understanding (MOU); traffic recovered to about 20% of pre-war levels before recent re-escalation.
Key details
- Jason Bordoff (quoting developments): Tehran announced the Strait of Hormuz was closed again and President Trump responded by saying the waterway would remain open “with or without Iran,” proposing a controversial plan to charge commercial ships a 20% toll and to reinstate a US blockade.
- Suzanne Maloney: Reopening the strait by force is unrealistic — it would require prolonged deployments, possible US ground troops on Iranian coastline, and would be costly and risky; the 20% toll proposal undermines longstanding freedom-of-navigation principles.
- Suzanne Maloney: Even if diplomacy resumes, the region has entered a durable ‘no peace/no war’ equilibrium — intermittent flare-ups, instability, and volatility are likely to persist and should be priced into markets and policy calculations.
- Suzanne Maloney: Iran’s economy was already deeply damaged (she cited at least ~1 million lost jobs) and Iranian leaders distrust US commitments because prior reversals (notably the 2018 US withdrawal from the JCPOA and withheld frozen assets in 2023) showed sanctions relief can be revoked.
- Suzanne Maloney: The June 2025 military strikes by US/Israel materially set back Iran’s nuclear programme; with current air superiority the US/Israel could target reconstitution efforts, but long-term prevention remains primarily a diplomatic and intelligence task.