Skeptical about any progress with war in Iran, says Brookings' Michael O'Hanlon

Summary

• Michael O'Hanlon is skeptical that President Trump's 15-point peace plan represents meaningful progress towards ending the Iran war.
• He believes Iran is not in a mood to negotiate, as it seeks revenge and aims to reestablish deterrence through asymmetric warfare.
• Iran has significant capabilities in the Strait of Hormuz, using covert activities and improvised tactics that could disrupt global oil shipments.
• O'Hanlon disagrees with the stock market's potential optimism about diplomatic developments, cautioning against premature recovery.
• The announcement of a Trump-Xi meeting in May implies Trump assumes the war will be over by then, but O'Hanlon doubts this timeline.
• Key uncertainty lies in Iran's response and willingness to engage in substantive negotiations.
• Market implication: Persistent geopolitical risk may affect oil prices and equity sentiment, but O'Hanlon advises caution on interpreting diplomatic signals.
• He emphasizes that Iran's goals include demonstrating global resilience, which could prolong conflict and instability.
• The China meeting adds a variable but does not guarantee war resolution, reflecting broader geopolitical complexities.
• O'Hanlon's view contrasts with some market assessments that see signs of progress, highlighting a contrarian perspective on war dynamics.