Iran Negotiation DESASTER & Russia in Full War Mode | Larry C. Johnson

## Iran’s nuclear threat and the oil crisis The exchange lays bare a stark tableau: Iran’s negotiating posture is no longer confined to diplomatic maneuvering; it includes a demonstrable nuclear threat that, if enacted, would reshape both security calculations and global markets. Drawing on a Pakistani source cited by Larry C. Johnson, the conversation presents the chilling possibility that Tehran has signaled readiness to conduct a seismic-detectable underground detonation as leverage — not necessarily to annihilate, but to force recognition of capability. Whether that threat is bluff or credible, its very existence reframes what was a political negotiation into an urgent strategic crisis. Closely intertwined with the nuclear question is an oil emergency that global leaders can no longer treat as abstract. The Strategic Petroleum Reserve — the world’s emergency “bank” of oil — has been drawn down rapidly, and technical constraints on storage capacity make replenishment neither quick nor straightforward. The transcript outlines how salt-cavern storage and required water replacement create a hard floor beneath which facilities destabilize, and that several regions of the world simply cannot substitute the heavy distillates once supplied by the Gulf. The implication is stark: even if diplomacy calms the immediate military flashpoints, the timing of refilling strategic reserves, refurbishing idled tankers and reconstituting refining capacity means an oil shortfall could morph into a full-blown economic emergency within weeks. This tandem of existential threat and resource scarcity pushed U.S. negotiators into a corner. The conversation suggests that, beyond coercive military calculations, practical economic imperatives — the run on middle distillates, rising costs for aviation and diesel, and the political cost of rising prices ahead of domestic elections — were decisive in forcing a diplomatic compromise. For policymakers, this is a humbling reminder of limits: military prowess cannot instantly remedy material shortages that undergird economies. ## Strait of Hormuz, shipping, and insurance The strategic geometry of the Strait of Hormuz has always been critical; the discussion makes clear how vulnerability there amplifies every other issue. Even if the waterways are physically reopened, it is not simply a matter of vessels sailing back to service. Months of idleness, biofouling from warm seas, and the degradation of equipment mean many tankers must undergo time-consuming refits before returning to operation. A significant share of the world’s tanker fleet has been effectively sidelined, trimming global transport capacity at precisely the moment demand is being squeezed. Insurance emerges as a second-order but decisive barrier. The transcript details how underwriters — historically risk-averse institutions like Lloyd’s — will not cover transits through seas that cannot be guaranteed free of mines or attacks. Without insurance, commercial shipping cannot resume at scale, and even US military assurances of clearing routes can take months. The U.S. military’s own timelines — six months to clear the waterway and additional time to cycle ships back into service — expose a lag that markets will punish. These logistical realities mean that reopening a chokepoint is neither immediate nor risk-free. They also shift bargaining power toward states that can credibly threaten closure. Iran’s capacity to disrupt shipping transforms a narrow regional confrontation into a systemic problem: shortages in refined products, constrained air transport fuel for military and civilian aviation, and cascading effects on trade and inflation worldwide. ## Pressure on Israel and the ceasefire One of the conversation’s central revelations is the leverage the United States retains — and the limits of that leverage — over Israel. The U.S. supplies a significant proportion of Israel’s advanced air-defense systems and munitions, meaning Washington can influence operational tempo indirectly by threatening to withdraw support. The transcript interprets recent pressure as decisive: the suspension of intensive operations and the establishment of a ceasefire reflect a moment in which U.S. material influence and diplomatic pressure mattered. Yet this is not a novel phenomenon historically; the United States has pressed Israel before, as in past crises. The novelty today lies in the confluence of strategic exhaustion and resource competition. With U.S. forces winding down crisis-action centers and redeploying aircraft, the capacity to surge assistance or direct action is reduced. The conversation describes a recalibration from a phase of kinetic brinkmanship to one where political inducements and leverage — economic, military-equipment based, and reputational — become the tools of choice. Crucially, the ceasefire and the U.S. posture are not purely altruistic or stabilizing moves. They are mediated by a calculus of broader strategic risk: allowing a local war to expand undermines oil flows, tests alliance cohesion, and could compel costly military commitments the U.S. cannot sustain without straining other theaters. In short, keeping Israel’s campaign limited is as much about preventing regional contagion as it is about humanitarian or political considerations. ## Gulf states, Pakistan, and U.S. pullback The dialogue highlights an emergent diplomatic dynamic: Gulf monarchies and regional actors are applying quiet pressure on Washington to step back from escalation. For Gulf states, the calculus is straightforward — their economies are most vulnerable to a sustained disruption of oil exports and shipping. They are incentivized to push for de-escalation even if it means accepting concessions from Tehran. Pakistan’s role, as relayed in the conversation via regional sources, underscores the wider coalition of states who have a stake in avoiding full-scale war. This regional pressure dovetails with U.S. domestic realities. The transcript outlines how the U.S. military infrastructure that sustained intensive operations — crisis-action teams, forward-deployed aerial assets, and logistical networks — has been partly dismantled or drawn down. The practicalities of redeploying forces, moving assets thousands of miles, and maintaining a consumption of aviation fuel in the face of global shortages means Washington faces real limits. The converse is telling: if the United States is less willing or able to provide an indefinite military umbrella, regional actors must either band together to contain conflicts or acquiesce to negotiated settlements that preserve flows and stability. This shift is also a political one. Gulf states that long sought U.S. protection are increasingly pragmatic, hedging their bets with transactional diplomacy and alternative partners. Pakistan’s role — both as a diplomatic channel and, reportedly, as a source of military-technical cooperation in some contexts — further complicates the landscape, making a strictly bilateral Iranian-U.S. negotiation insufficient to resolve the regional web. ## Israel’s support base is shrinking Support for Israeli military action, particularly in the intense early phase described in the conversation, appears to be eroding in many quarters once assumed steadfast. The transcript points to several factors: the visible human cost of prolonged operations, the trade-offs the U.S. must make between supplying allies and maintaining its own logistical readiness, and the geopolitical fallout among other states that view the campaign as destabilizing. U.S. domestic politics inflect this erosion. As political leadership recognizes the finite nature of key resources — especially fuel and munitions — willingness to underwrite an open-ended campaign declines. Internationally, the mixture of public opinion, economic interest, and the imperative to keep trade routes open persuades many governments to prioritize stability over unequivocal support fo

Iran Negotiation DESASTER & Russia in Full War Mode | Larry C. Johnson Just when you think the USA can't dig a deeper grave for itself, the people in Washington surprise you with yet a bigger shovel. The Iran War is going from a war of choice, to a contingency, to a crisis, to a full-blown national economic emergency and there is NOTHING the US military can do to make things better. Oh boy oh boy. Larry C. Johnson joins me today for an update on Iran, the oil crisis, and how Gulf states may be pressuring Washington to step back. He also breaks down Israel, Russia, Ukraine, and the rise of a new China-led payment system, with Pepe Escobar’s Transition Protocol and Sonar21 in the mix. Links: Larry C. Johnson: https://sonar21.com Larry C. Johnson Substack: https://larrycjohnson.substack.com Transition Protocol: https://www.youtube.com /@Transition_Protocol Neutrality Studies substack: https://pascallottaz.substack.com Merch: https://neutralitystudies.com/shop Donation: https://neutralitystudies.com/donate Timestamps: 00: 00:00 Intro and Transition Protocol 00:01:21 Iran’s nuclear threat and the oil crisis 00:13:53 Strait of Hormuz, shipping, and insurance 00:15:53 Pressure on Israel and the ceasefire 00:19:16 Gulf states, Pakistan, and U.S. pullback 00:30:40 Israel’s support base is shrinking 00:33:01 Russia, Ukraine, and NATO escalation 00:47:00 China, SWIFT, and the new financial order #Pascal Welcome back, everybody, to Neutrality Studies today for an update with the one and only Larry Johnson. Larry, welcome back. Thanks, Pascal. You're a busy man traveling the world. Well, you are busy too. You are now, by the way—before we start, I mean—you started a venture with Pepe Escobar, and you now have a new channel up and running, right? Do you want to tell us about this one first? #Larry C. Johnson Yeah, Transition Protocol. We actually started off as PowerShift, but then Marco Rubio called Google and said, "Shut them down because they're telling too much truth." Yeah, so we rebooted the channel. #Pascal Everybody, if you want to follow Larry, try the Transition Protocol. I mean, it's fantastic, and I love it very much. Your discussions with Pepe are great. But let's dive in now into our subject. I really want to pick your brain on Iran and the negotiations that are happening. Actually, I'm in Switzerland right now, so right next door to me in Lucerne. Yeah. You wrote on your Substack—no, not your Substack, sorry—Sonar21, actually, that you have good reasons to believe that the Iranians are -- 1 of 17 -- actually threatening a nuclear detonation. You wrote that on the 4th of June; I believe today is the 22nd. How is that one going along? Do you still think that's really an option? That is their—let's call it—that is their nuclear option. Okay. #Larry C. Johnson Yeah, not to mix the metaphors here. We're relying on a Pakistani source that Pepe and I have a pretty good understanding of who this person is. So it's not like somebody sitting in a coffee shop saying, "I’ve got an opinion about this." No, it's somebody directly involved and has the knowledge that Iran did threaten the United States. Basically, if you don't negotiate in an honest, direct fashion, then we'll have no choice but to demonstrate that we can do a nuke and that we'll detonate a nuclear device. #Pascal Inside Iran, right? As a test—a nuclear explosion test, right? #Larry C. Johnson Right, and most likely it would not be above ground where you'd see this mushroom cloud and then radioactive material spreading around. It would be the kind of thing to say, "On July 1st at 11 a.m. Tehran time, we will be detonating a five-kiloton device," something like that. Because then the seismic meters would record that. That's how you'd convince the world—yeah, you're going to see an earthquake at this time, and it's not an earthquake. So Iran, according to our Pakistani source, has made that a direct threat to the United States. #Pascal Do you believe that's one of the reasons why the United States, in the end, signed the MOU, which for all intents and purposes, you know, reads like a surrender document? And the irony, of course, that Trump signed it in Versailles. But I think that one's lost on him. But, you know, we are now in this negotiation process. And do you think that that's actually at the back of the mind of the American team? #Larry C. Johnson I think that was one factor, but actually I think the more important factor was the oil crisis that is going to hit, that is hitting the world now, except the world doesn't. We're in the chicken-without-a- head stage. If you've ever seen when they butcher a chicken and cut the head off, it can still run around for a while before it realizes it's dead, and then boom. About two weeks ago, reportedly -- 2 of 17 -- there was a group of senior oil executives that met with Trump. And I don't know as well if he got briefed by the intelligence community or by Secretary of Energy Wright, but he’s told that there is a crisis looming that is unavoidable. And it gets a little complicated. It starts with the Strategic Petroleum Reserve. So this is like putting oil in the bank that you can draw upon for a rainy day. It's a savings account. This is oil that was stored in salt caverns that are in the southern United States. There are four main areas where these salt caverns are. And what I've learned is that it's not like there's one big cavern, but as salt was mined out, it left these holes. And so at each of these locations, you may have three or four different holes in one location. The total volume capacity would be about 750 million barrels of oil. And as they get filled up, each hole is monitored. And the reason they use the salt caverns is because the petroleum does not bind with the salt and create salty petroleum. Instead, like if you put water in, you get salt water. It goes from fresh water to salt water. But to get that oil out, when you decide to pump it out, you have to pump water in, and the oil sits on top of the water. Oil comes to the top and then it's drained out. So what was a 750 million barrel capacity is now down to a little more than half of that, which has been withdrawn. And right now it's being withdrawn at the rate of 16 million barrels per week. So you say, but we’ve got 340 million, so we’re okay. Well, you know, stop right there, because to maintain, if you end up putting too much water in those salt caverns, the caverns can collapse, and so they can no longer hold oil. So they estimate that at about 140 million barrels of oil, you get to—that's the destabilization point. So that means as of, since like June 15th, there were about 200 million barrels of oil to work with. Now within that, that's not all one type. There's light crude and there's heavy crude. And it's on the heavy crude, what's called the middle distillates. I've been getting educated by a friend over the last year. I was like, hey, look what Larry knows. But it's stuff I didn't realize. And once you realize it, you go, holy shit. #Pascal Hey, just a very quick note. The best way to support this channel is by signing up for my free Substack. You can also help with a paid subscription there, or you can get some of our new merch on neutralitystudies.com. Links below. See you there. You kindly sent me that PDF this morning, and I read through it, and it boils down to the realization that, you know, the crude is shared, right? Some of the crude goes to gasoline for you and me at the pump, and part goes into aviation fuel, and part goes into jet fuel, and part goes into, you know, the diesel. The diesel is used in order to drive the whole economy. And it's a trade-off, right? So basically what it says is that, well, we run short on things, we will run short also on war-making oil in order to fuel our jet planes and so on. So it gets more and more expensive to keep war going. And the U.S. -- 3 of 17 -- military, I mean, including the Navy and so on, is of course a major user of U.S. oil, heavy crude. That's not the one that the United States is independent of. You're independent of light crude, but not of heavy crude. #Larry C. Johnson Right. That's the one we have to import. Exactly, that's the one we have to import. And so you take that barrel of oil, and 30% of it, the middle distillate, you've got to make a choice: are you going to make diesel fuel out of it, or are you going to make fuel for the airplanes, both military jets as well as civil aviation? It's not like you can do both. You have to choose one or the other. And that's where the problem is, because the normal supply of that heavier crude that came out of the Persian Gulf was cut off. Russia, basically, they've tried to cut them off, and they've suffered some damage to some of their refineries. But then that leaves Canada, Mexico, and Venezuela. And again, the Venezuelan infrastructure is having trouble supporting increased production. So the bottom line is, and Trump said it in his press conference at the G7, we've got four weeks left. In four weeks, we're going to be out. Now, this is where it gets really interesting from the standpoint of saying, well, we've got to open the Strait of Hormuz, falsely implying that if you say, oh, the Strait of Hormuz is open, then all of a sudden all the oil is going to start flowing and we'll be back and it'll be okay. Uh-uh. Not going to happen. Number one, those ships that have been sitting there in those hot waters, that hot, salty water, they're collecting barnacles and God knows what else is going on on the shipboard. Those ships basically have to be refitted. They have to be cleaned up before they're going to be able to start hauling product again. And the estimate is about up to 12% of the total world supply of commercial cargo vessels like this are sitting there idle. So, you know, that in and of itself is a problem. Then you get the insurance, that because they can't guarantee that the Strait of Hormuz and the Persian Gulf are free of mines, Lloyd's of London says, well, we're not insuring your ships. You know, we have to have a guarantee that it's clear. And then the U.S. military, when testifying before Congress, said, yeah, we think we can get it cleared up within about six months. You go, okay, so right there we said six-month delay, and then once you get the ships moving, they may have another two-month delay to get them cleaned up. So, I mean, the point is that while the goal is to get the oil supply back up, the world global oil supply has been diminished by 20% over the course of four months. And a lot of countries have been dealing with it by drawing down their reserves. But now those reserves are running on empty. #Pascal It's a really interesting situation in which I believe that it finally sank in, in the United States, that these capacities are finite, right? The missiles and the kind of ammunition and whatnot are finite. But now it sinks in that even the oil supply is finite. And somebody must really have had a sit-down -- 4 of 17 -- with Donald Trump and actually explained to him, look, it still looks fine right now, but we are already late in resolving this. And on my channel the other day, Steve Jeremy, Commodore, made the point that each percent of reduction of oil supply in the world can go along with 1% of GDP, the impact that it will have. And this is just absolutely huge by now. So there is no time, right? The Trump administration has no time to avoid chaos that will strike precisely around the time everybody starts getting heated up for the midterms. I mean, the timing couldn't be much worse for him, could it? #Larry C. Johnson Yeah, and that is, I think, candidly, I think he’s waited too long. And so this deal was available in April. #Pascal Yeah. #Larry C. Johnson So he's lost May and now June. Whether they get something done in concrete by July remains to be seen. But the actual use, the consumption, they've covered it up to this point. Because in the oil