Steve Hanke: BREAKING: U.S. Evacuates Military Bases Across West Asia Ahead of Possible Conflict

Discussion Summary

Possible U.S. Escalation Against Iran

The host cited a Wall Street Journal report that President Trump was considering new military options, including strikes on Iranian nuclear sites and infrastructure, and that U.S. personnel had been evacuated from bases in West Asia. Steve Hanke said he could not tell whether an attack would happen, but argued that escalation could provoke a devastating Iranian response and cause severe damage across the region.

Oil Flows and Market Signals

The host contrasted U.S. Treasury Secretary Scott Bessent’s claim that Persian Gulf oil exports had rebounded above pre-conflict levels with reports of large volumes moving through the Strait of Hormuz. Hanke questioned those claims, pointing to Brent crude near $117 a barrel—roughly 60% above its prewar price, he said, and up about 7% after the Wall Street Journal report—as well as an unusually high number of tanker strikes that week. In his view, the prices and attacks did not fit the narrative of abundant, uninterrupted oil flows.

Economic and Geopolitical Costs

Hanke predicted that renewed fighting would be more damaging than earlier economic scenarios suggested, with potentially serious consequences for Europe. He described Europe as vulnerable because of its low energy inventories, reliance on imports, sanctions on Russia, and weak economic conditions.

He also argued that a prolonged conflict would be costly for the United States and could become a “forever war.”

U.S. Politics and Israel

The discussion considered how the war might affect the U.S. midterm elections and the next Congress. Hanke said the conflict was unpopular and could become an issue for Trump, while noting that high-tech sectors appeared to be doing better than much of the rest of the U.S. economy.

Hanke argued that Israel’s strategic preferences strongly influence the risk of escalation and said the Israeli political mainstream broadly supports continuing the conflict.

Environmental Damage and European Politics

The host showed footage described as depicting oil-contaminated water on UAE beaches. Hanke called the damage distressing and criticized what he saw as the relative silence of environmental groups about the war’s environmental consequences.

He also described European governments as politically weak and economically strained, and discussed unrest and dissatisfaction with political elites.

Israel’s Security Doctrine and Argentina

The host summarized an Israeli policy document that, as described in the interview, advocates preparing for prolonged conflict and reducing dependence on the United States. Hanke characterized this as a move toward a wartime economy, while arguing that Israel would still need U.S. support.

The conversation also touched on Israel’s changed stance on Argentina’s Falklands claim. Hanke linked Argentine President Javier Milei’s political positioning to domestic economic difficulties, including persistent inflation.

Pakistan and Iran’s Neighbors

The host raised reports of pressure on Pakistan to restrict economic ties with Iran, including border closures that could affect Pakistan’s LPG supply. Hanke described Pakistan as effectively governed by its military, economically fragile, and politically unstable.

He said former prime minister Imran Khan’s imprisonment reflected U.S. pressure, and cited tensions with Afghanistan, problems in Kashmir, unemployment, and weak rule of law. Hanke warned that Pakistan could face major unrest.

Presenters and Contributors

• Host: Nima Alkhorshid
• Guest: Professor Steve Hanke