US seeks to reap dividends from managed instability

Just weeks after declaring the interim peace arrangement with Iran dead and resuming heavy strikes, United States President Donald Trump now says there is a good chance of a new agreement. That makes Israeli Prime Minister Benjamin Netanyahu's White House visit this week hardly coincidental.

Meanwhile, a Ukrainian strike on an Iranian merchant vessel in the Caspian Sea has unexpectedly opened a new front.

This is the Great Game of the 21st century. It is fought less for territory than for markets, which reward uncertainty far more readily than they reward lasting peace, creating incentives to oscillate between confrontation and conciliation.

The Middle East illustrates this logic. The US and Israel have paused major strikes on Iran without abandoning the threat of force. Officially, diplomacy has been given room to work. Yet the Strait of Hormuz remains only partially open, while Houthi attacks in the Red Sea continue to threaten regional energy infrastructure. The objective is neither war nor peace but controlled instability, with oil prices serving as the principal transmission mechanism.

The political arithmetic is straightforward. Military pressure pushes Tehran toward negotiations, while the prospect of a diplomatic breakthrough pulls crude prices lower, easing inflation and reducing gasoline prices for US consumers. Markets respond not to peace itself but to expectations of peace. For any US administration facing the midterm elections, those expectations can prove almost as valuable as an actual agreement.

Netanyahu's visit adds another layer of complexity. Reports of tensions between him and the US leader, alongside Washington's willingness to pursue policies that unsettle Israel, suggest that the White House views an open-ended regional conflict as increasingly costly.

Following Ukraine's strike on the Iranian vessel, Tehran has accused Kyiv of acting on Israel's behalf in an effort to widen the conflict. The Caspian Sea — another major production base of oil and natural gas — has become an arena where the conflicts in Ukraine and the Middle East intersect.

Markets reacted exactly as US politicians might have expected. Earlier diplomatic engagement between Washington and Tehran helped pull Brent Crude off wartime highs, delivering a sharp decline in energy inflation. Trump's renewed talk of negotiations pushed oil futures lower, laying the ground for a new round of reaping, despite little immediate change in the underlying security situation.

This reflects a broader pattern of hegemonic leverage. Washington can tighten sanctions to increase pressure, ease them to calm energy markets, then restore restrictions if negotiations falter — all while preserving the US dollar's central role in the global energy trade. Carefully timed communications from the US Federal Reserve have repeatedly amplified market expectations, reinforcing financial stability at politically opportune moments. Whether diplomacy succeeds or fails, the cycle ultimately strengthens the US' financial hegemony.

The substance of negotiations remains far less convincing. Proposals requiring Iran to dismantle significant elements of its nuclear program while committing the US to a substantial regional military withdrawal are politically ambitious and strategically difficult to implement. Few observers expect a comprehensive settlement in the near term. The mooted negotiations therefore serve as much to shape market expectations as to resolve the underlying disputes.

The contradictions therefore remain intact. Lower energy prices offer only temporary relief from broader inflationary pressures, while regional tensions continue to simmer beneath successive rounds of diplomacy. The oscillation between confrontation and engagement has become less a pathway to peace than a mechanism for the US managing domestic political risks and fleecing world markets.

That may be the defining feature of contemporary geopolitics engineered by the US. Stability is no longer the immediate objective. Managed instability can generate strategic, financial and political dividends that durable peace cannot. The Caspian Sea incident is a reminder that, in today's world, the choreography of crisis often matters as much as its resolution — and that the true currency of US geopolitical competition is increasingly volatility itself.