Iran Thinks It’s Winning the War

Summary

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Podcast Summary: Iran Thinks It’s Winning the War

Podcast: The Journal.
Hosts: Ryan Knutson, Jessica Mendoza
Guest: Yaroslav Trofimov, Chief Foreign Affairs Correspondent, The Wall Street Journal
Date: March 24, 2026

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Overview

This episode examines Iran’s unexpected position of strength in the ongoing war with the United States and Israel. Despite significant military losses—including the death of Iran’s supreme leader and destruction of key military infrastructure—Iran has seized a powerful lever: control over the Strait of Hormuz, a vital global oil chokepoint. The discussion explores the economic, geopolitical, and military implications, Iran’s end game, and the difficult choices now facing the US.

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Key Discussion Points & Insights

1. US and Israeli Military Successes vs. Iran’s Strategic Leverage

• The US and Israel carried out a swift campaign destroying Iranian military assets, assassinating key leaders, and crippling its nuclear program.
  • Ryan Knudson (01:03): “The campaign has killed Iran's supreme leader… destroyed many of its missile launchers, decimated its navy, and inflicted even more damage to its nuclear program.”
• Yet, Iran emerged with a potent advantage by weaponizing the Strait of Hormuz.

2. Strait of Hormuz: The New Economic Weapon

• Iran threatens to attack any ship passing through the strait without its permission, transforming the world’s most vital oil conduit into a "massive toll booth.”
• Only ships from “friendly” nations like China and India are allowed through, and Iran seeks to make this control permanent as a condition for any ceasefire.
  • Yaroslav Trofimov (02:36): “They are trying to basically transform this international waterway into a toll booth… that would really transform the balance of power in the entire Middle East and the world because Iran will be dominating global energy markets.”

3. The Iranian Regime After the Leadership Decapitation

• The Supreme Leader was killed; his son (de facto successor) is missing, possibly dead or injured.
• Power has shifted almost entirely to the Revolutionary Guard (IRGC), a military-political force long-prepared for all-out war.
  • Yaroslav Trofimov (05:49): “Power seems to have come to the Revolutionary Guard… they've been preparing for this war against what they call the Great Satan and the Little Satan since the revolution in 1979.”
• The IRGC operates as a “state within a state,” determined and fortified by decades of conflict and planning.

4. Why Iran Hadn’t Weaponized the Strait Earlier

• Historically, Iran worked through proxies to avoid direct retaliatory war on their own soil.
• The US/Israeli attack brought war directly to Iran, making restraint obsolete and forcing the regime into “survival mode.”
  • Yaroslav Trofimov (08:39): “Now that the US and Israel launched this war in Iran, they have nothing to lose. The regime is in survival mode and they're using every point of leverage that they can possibly get to survive.”

5. Global Economic Impacts

• Oil prices have nearly doubled; shortages and rationing are widespread, with disproportionate impacts on oil-importing countries.
  • Yaroslav Trofimov (09:01): “The impact has been colossal. The price of oil, at some point, almost doubled… some countries like Bangladesh and Sri Lanka… are imposing rationing.”
• The US has temporarily lifted sanctions on Iranian oil to release some supply, but results are minimal and may finance the Iranian regime.

6. Iran’s Endgame and Demands

• Iran's conditions for ending the conflict:
  1. Massive reparations from the US.
  2. Complete withdrawal of US military presence from the Middle East.
  3. Permanent Iranian control over the Strait of Hormuz—effectively, taxing all oil shipments.
• These sweeping demands show Iran’s confidence in its negotiating position.
  • Ryan Knudson (16:04): “That does not sound like a country that's negotiating from a position of weakness. They're asking for the whole shebang, basically.”

7. The Perilous Position for the US

• The US faces unattractive choices:
  • Accepting Iranian demands and undermining its own role in the region.
  • Escalating militarily, risking a protracted “forever war” with heavy casualties and no sure path to victory.
  • Yaroslav Trofimov (17:29): “The two main pathways, it's either you acquiesce largely to Iranian demands… or you go in with the ground forces and double down and then it could become a forever war.”

8. Uncertain Negotiations and the Path Forward

• Trump threatened to escalate with strikes on Iranian energy infrastructure but delayed, citing negotiations.
  • Iran dismisses the threat and claims no actual talks are happening, viewing US hesitation as a victory.
  • Yaroslav Trofimov (15:10): “The positions are still very much far apart because Iran thinks it's winning and Iran thinks that time is on its side.”
• The podcast draws an analogy to the prolonged and unsettled Russia-Ukraine talks.

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Notable Quotes & Memorable Moments

• “You control the price of oil, therefore you control the clock.”
  —Yaroslav Trofimov (01:39)

• “If the US just declares victory and cuts and runs… that would leave Iran empowered. That would leave Iran in control of the strait.”
  —Yaroslav Trofimov (10:38)

• On Iran’s demands:
  “…billions and billions of dollars to be paid by the US taxpayers… removal of all American bases from the Middle East… permanent Iranian control over the Strait of Hormuz.”
  —Yaroslav Trofimov (15:34)

• “Wars are easy to start, but very hard to end.”
  —Yaroslav Trofimov (17:29)

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Important Timestamps

• 01:03 – Recap of US/Israeli military campaign in Iran
• 02:36 – Iran turns the Strait of Hormuz into a toll booth
• 05:21 – The fractured Iranian regime post-leader assassination
• 07:37 – Iran’s selective permission for ships; future plans for the Strait
• 09:01 – Global economic impact of the Strait’s closure
• 10:38 – Regional power shifts if Iran retains strait control
• 14:04–15:10 – Trump’s ultimatum, claims of negotiations, and Iran seeing it as a win
• 15:34 – Iran’s formal demands to end the war
• 17:29 – No attractive options for the US; the difficulty of ending modern wars

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Tone and Style

The conversation is brisk, analytical, and laced with urgency. Yaroslav Trofimov delivers insights with clarity and matter-of-factness, while Ryan Knudson keeps questioning pointed and accessible. Together, they draw a picture of a conflict whose economic and geopolitical stakes are enormous, and whose endgame remains dangerously unclear.

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For Listeners

This episode provides an in-depth examination of how Iran has managed to turn perceived defeat into strategic leverage, and how global economies and US foreign policy are now caught in the crossfire. It’s an essential listen (or read) for anyone seeking to understand the high stakes and lasting consequences of the new Middle East power map.

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Transcript

[Jess]

Hey, it's Jess and Ryan. Before we kick off today's episode, we have a fun announcement to make. We are doing a live show again.

[Ryan Knudsen]

We love doing our live show in New York so much that we decided to take it on the road this time. We'll be in Los Angeles at the El Rey theater on Tuesday, April 28.

[Jess]

And just like last time, we're going to have special guests. And since we'll be in la, you can prepare for a night of money, business and power, conversations about Hollywood and. And after the show, Ryan and I will stick around to meet you.

[Ryan Knudsen]

All tickets go on sale this Wednesday, March 25th at 10am Pacific. You can find the link in our show notes.

[Jess]

And again, the show's gonna be at the El rey Theater in LA on Tuesday, April 28th. Tickets go on sale this Wednesday, March 25th. Hope to see you there.

[Ryan Trump Commentator]

We took a little excursion because we felt we had to do that to get rid of some evil. And I think you'll see it's gonna be a excursion. How good is our military?

[Ryan Knudsen]

Since the war in Iran started, President Trump has been saying that it would be over quickly thanks to a swift military campaign. And the campaign has been swift. The US And Israel have delivered a significant blow to much of Iran's military capabilities. The campaign has killed Iran's supreme leader, along with dozens of others in the country's leadership, destroyed many of its missile launchers, decimated its navy, and inflicted even more damage to its nuclear program. But despite this success, Iran seems to think that it has the upper hand by controlling.

[Yaroslav Trofimov]

You control the price of oil, therefore you control the clock.

[Ryan Knudsen]

Yaroslav Trofimov is the Journal's chief foreign affairs correspondent, and he says that Iran has taken the Strait of Hormuz, a historically open waterway where a quarter of the world's oil passes through, and turned it into a powerful economic weapon by threatening to attack any ships that dare enter.

[Yaroslav Trofimov]

So the longer this goes on, the higher the prices get, the more severe the shortages around the world and the more pressure there is on President Trump from the energy markets, but also from bond markets to accept Iranian demands. And so, I mean, the Iranian calculation is that as long as the control is straight, time works in their favor.

[Ryan Knudsen]

After talking with sources throughout the region, Yaroslav says it's now clear what Iran wants to get out of this war and what its end game to turn the Strait of Hormuz into a massive toll booth.

[Yaroslav Trofimov]

What Iran is doing is saying, look, now it's our waters. Anybody passing through here must pay us a toll and get permission from us. And so they are trying to basically transform this international waterway into a toll booth that will sustain the regime going forward. And if that is allowed to happen, that would really transform the balance of power in the entire Middle east and the world because Iran will be dominating global energy markets. So now they are, in a way, in a much stronger position than they were before the war. And if the war ends with them still controlling the Strait of Hormuz, that would be a strategic victory for the Islamic Republic of Iran.

[Ryan Knudsen]

Welcome to the Journal, our show about money, business and power. I'm Ryan knudsen. It's Tuesday, March 24th. Coming up on the show, what Iran wants from this war.

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[Ryan Knudsen]

Can you take me inside the Iranian regime? What is left of it at this point?

[Yaroslav Trofimov]

Well, I think the Iranian system was always very complicated because you had on the surface elections and the parliament and a president who is still there but who really holds very little actual power. Then you have the Revolutionary Guard, the argc, that is really the strongest force and has the strongest military muscle.

[Ryan Knudsen]

On top of this entire system is the supreme leader. The last one was killed at the start of the war.

[Yaroslav Trofimov]

And after his death, his son Moshtavahinei was named as the new supreme leader. But nobody has seen him, nobody has heard him since then. It's not clear whether he's alive and if he's alive, if he's been injured and how badly. And so, in fact, the power seems to have come to the Revolutionary Guard.

[Ryan Knudsen]

The Revolutionary Guard is described as a state within a state. It's a tough military force that was hardened by a long and bloody war with Iraq in the 1980s.

[Yaroslav Trofimov]

So the commanders, they are determined to keep fighting. You know, this is a very solid organization with many layers. They've been preparing for this war against what they call the Great Satan and the Little Satan since the revolution in 1979. They knew it was going to happen and they made plans, perhaps unlike the US and so, and now they're executing them.

[Ryan Knudsen]

One of the ways to fight against the US and Israel, what Iran calls the Great Satan and Little Satan, involves the Strait of Hormuz. It's a 100 mile stretch of waterway that connects the Persian Gulf with the rest of the world. At its narrowest point, it's just 21 miles across. About 20% of the world's natural gas passes through it, as well as about a quarter of the world's oil. There's also aluminum and fertilizer.

[Yaroslav Trofimov]

And then again, if you look at the Gulf states, a lot of the imports that sustain them, food, cement, you name it, it's all coming to their ports through the Strait of Hormuz. So it's really one of the most vital waterways in the world.

[Ryan Knudsen]

And Iran is holding the Strait hostage by threatening to unleash missiles, drones or underwater mines at any passing ship. And for the past couple of weeks, no ships have passed through the strait without Iran's explicit permission.

[Yaroslav Trofimov]

They're letting a few very small numbers from so called friendly countries like China and India. But they are talking about making this a permanent system and insisting that any ceasefire with the US will involve a new international arrangement for the Strait of Hormuz.

[Ryan Knudsen]

I'm honestly a little bit surprised that Iran hasn't tried to create a toll booth out of the Strait of Hormuz in the past. Given how much leverage it gives the country. Why haven't they?

[Yaroslav Trofimov]

Well, you know, Iran's strategy through the decades was to create this network of proxies, Hezbollah in Lebanon, like the Houthis in Yemen, who would fight its enemies and would absorb the blows while the Iranian mainland was not bombarded by anyone. And the Iranian. They could tell the Iranian people that, you know, we are maintaining the country at peace. So directly intervening in the Strait of Hormuz would have brought war onto Iranian shores, something that they tried at all costs to avoid.

[Ryan Knudsen]

I see. But now that war has arrived on its shores, regardless.

[Yaroslav Trofimov]

Well, exactly. Now that the US And Israel launched this war in Iran, they have nothing to lose. The regime is in the survival mode, and they're using every point of leverage that they can possibly get to survive.

[Ryan Knudsen]

Exercising this leverage has allowed Iran to have a huge impact on the world's economy.

[Yaroslav Trofimov]

The Imbak has been colossal. The price of oil, at some point almost doubled. There is also a disparity between oil futures and the price of physical oil because you have actual shortages in some countries like Bangladesh and Sri Lanka, that are cutting short the workweek and imposing rationing. Obviously, there is a lot less impact in the US because the US Is the world's largest producer and now exporter of oil. But again, you know, if prices rise globally, they also rise in the US and people are seeing this at the pump.

[Indeed Announcer]

Gas at this station here in Maryland

[Alexa Announcer]

Quickly approaching $4 a gallon.

[Indeed Announcer]

And that is becoming the norm across the country.

[Ryan Knudsen]

Gas jumping nationwide from an average of

[Yaroslav Trofimov]

$2.92 in Kansas to more than $5 a gallon in California. It's still a dollar higher than it

[Intuit Enterprise Suite Announcer]

was a month ago.

[Ryan Knudsen]

The impact on the global oil market has been so severe that the US Decided to lift sanctions on Iranian oil that was already at sea. While the decision will release some oil into global markets, it could also result in billions of dollars going to the regime.

[Yaroslav Trofimov]

And, you know, if you listen to the administration, they were arguing that the money will not necessarily end up in Iranian hands. But that's still a drop in the notion of. That doesn't really do much to offset the colossal shortage that is being caused by this blockade of the Strait of Hormuz.

[Ryan Knudsen]

By taking control of the strait during the conflict, Iran now has control over the strait, and they aren't going to give it up easily. Meaning the US can't just pull out of the region without making a bad situation permanent.

[Yaroslav Trofimov]

If the US Just declares victory and cuts and runs, well, you know, that would leave Iran empowered. That would leave Iran in control of the strait. There is talk in Iran now of passing new legislation that would actually formalize this control and require every passing ship to pay money, lots of money, to the Iranian state. And that would transform the geopolitical situation in the Gulf. It would turn all these Gulf countries into, in a way, dependence of Iran because they will not be able to do anything with their own oil and gas without Iranian permission. And that is a strategic victory for Iran if that happens and would be a massive defeat for the United States.

[Ryan Knudsen]

So how can the US turn things around? That's next.

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[Ryan Knudsen]

Yarrow so now that Iran has effectively taken control of the Strait and doesn't seem likely to give it up easily, what are the US Military's options for reopening it?

[Yaroslav Trofimov]

Well, none of the options are really good. It's a mountainous area. You now have drones, you now have portable missiles, so any military operation to reopen it will likely cause significant casualties.

[Ryan Knudsen]

One option would be for the US to seize the island of Kharma, which is where Iran's primary oil export terminal

[Yaroslav Trofimov]

is located, and use that as leverage in negotiations with the Iranian regime to say, okay, well, you know, if you want to export your oil, let's open up the Strait and then, you know, you can have your oil terminal back.

[Ryan Knudsen]

The challenge is that the island is located deep in the Persian Gulf, and the US Would have to pass through the Strait of Hormuz to access it. Another option is to use the US military to escort tankers.

[Yaroslav Trofimov]

Back in the 1980s, the US and other nations were escorting tanker ships through the strait out of the Persian Gulf. That's a little bit more difficult, much more difficult now because technology has changed, because now Iranians have access to drones that are really hard to detect that can fly the entire breadth of this strait and strike ships. And the Iranians are currently attacking tankers in the vicinity of the strait with drones almost every day.

[Ryan Knudsen]

On Saturday, President Trump took to Truth Social and gave Iran an ultimatum. The regime had 48 hours to reopen the Strait. If it didn't, the President said the U.S. would, quote, obliterate Iran's energy infrastructure. But before the deadline expired, Trump said the US Would hold off on those infrastructure attacks because he said the two countries were making headway on negotiations.

[Ryan Trump Commentator]

We'll see how that goes. And if it goes well, we're going to end up with settling this. Otherwise, we'll just keep bombing our little hearts out.

[Ryan Knudsen]

So, actually, I want to back up for a second to make sure I understand this correctly. So Iran has the control of the Strait of Hormuz. Trump is frustrated by that. And so he makes a threat.

[Ryan Trump Commentator]

Right.

[Ryan Knudsen]

He says that I'm going to escalate by bombing energy infrastructure if Iran doesn't reopen this. And then he said, actually there's been productive talks, so we're going to not do that yet.

[Yaroslav Trofimov]

Correct, Correct. So the Iranian response to this was, well, it was an empty threat, and we called his bluff.

[Ryan Knudsen]

Iranians also said there actually weren't any talks taking place between the US And Iran. So it's a little unclear what's happening.

[Yaroslav Trofimov]

The positions are still very much far apart because Iran thinks it's winning and Iran thinks that time is on its side. And this statement by Trump was seen in Iran as a victory because the Iranians have warned that if Trump strikes Iranian energy infrastructure, they will strike back across the Gulf and plunge Gulf countries into darkness.

[Ryan Knudsen]

Under what conditions does Iran say it will end the war?

[Yaroslav Trofimov]

The demands they are issuing right now officially, are a massive reparation. So billions and billions of dollars to be paid by the US Taxpayers to Iran to compensate for all the destruction in the last three weeks. B, the removal of all American bases from the Middle East. So America has to basically surrender the Middle east to Iranian domination. And three, permanent Iranian control over the Strait of Hormuz. Would Iran being paid by every ship that passes through it.

[Ryan Knudsen]

Wow, that does not sound like a country that's negotiating from a position of weakness. They're asking for the whole shebang, basically.

[Yaroslav Trofimov]

Correct, Correct. And that's what they're holding out for. And that's obviously something that neither the US Nor the Gulf states find palatable.

[Ryan Knudsen]

So it seems like the US And Iran are extremely far apart on coming to any sort of agreement over how to resolve this conflict.

[Yaroslav Trofimov]

Well, absolutely. Absolutely. They're very far apart. And so the very fact that they're talking doesn't necessarily mean if they're talking, as President Trump says, that doesn't necessarily mean that any agreement is possible in the foreseeable future. Let's also remember that Russia and Ukraine have had negotiations since March 2022, and we're now four years later and they're still at war.

[Ryan Knudsen]

If Iran were to control the Strait of Hormuz indefinitely, oil prices would remain high, affecting everything from the price of gas to food to plastics. And at this point, it appears reopening the strait will take months, meaning what was once envisioned as a short military excursion could turn into something much longer.

[Yaroslav Trofimov]

And the question is, is the American public opinion ready for several more months of this conflict? Is the American public opinion ready for casualties that will have to be encouraged to reopen the strait?

[Ryan Knudsen]

How do you see this ending?

[Yaroslav Trofimov]

Well, it's very hard to predict because we don't know if we're in the beginning or in the end of this war or in the middle. I think there are no easy options for President Trump in how to extricate the US from this war. I mean, the two main sort of pathways, it's either you acquiesce largely tyranny demands and undercut America's global role as a result, and allow Iran to proclaim victory, or you go in with the ground forces and double down and then it could become a forever war. So with casualties and maybe also at the end of the day, lead to US defeat months or years later. And so, unfortunately, wars are easy to start, but very hard to end.

[Ryan Knudsen]

On Tuesday, the Pentagon said it was planning to order a deployment of 3,000 soldiers to the Middle east in order to support operations in Iran. That's all for today. Tuesday, March 24. The Journal is a co production of Spotify and the Wall Street Journal. Additional reporting in this episode by Laura Seligman. Thanks for listening. See you tomorrow.

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