The Peace Premium: Why Weakening Iran Pays Off

“I’m Danny G. Wheeler and I’m alive.”

For five hours, a U.S. Navy chaplain whispered those words beneath the rubble of a Marine barracks in Beirut in 1983 — leveled by a Hezbollah suicide bomber trained and armed by Iran. The explosion killed 241 Americans — the Marine Corps’ deadliest day since Iwo Jima — and marked the start of Tehran’s strategy: destabilize the Middle East and raise the global cost of stability.

Four decades later, the tactic is unchanged — battlefields now stretch from barracks to balance sheets. No one invests in chaos. In June, Red Sea sailings slumped over 20% after Yemen’s Houthis resumed drone strikes. War-risk insurance for ships bound to Israel jumped fivefold. Nearly 30% of global trade passes through the Red Sea — so every drone, mine, or missile fired by Iran’s proxies isn’t just a regional skirmish; it’s a tariff on global commerce. The world’s largest tanker owner suspended new charters through the Strait of Hormuz. Foreign direct investment into Israel dropped 29% in 2023 — the first decline in seven years. Israeli tech deal flow, once a magnet for venture capital, has fallen $4 billion below its pre-October 7th pace. Abu Dhabi’s Mubadala paused a $1 billion fund aimed at Tel Aviv start-ups. These aren’t local tremors — they warn global investors that U.S.-aligned trade lanes carry unnecessary risk.

Every sidelined dollar is a lost dollar for America. When Israeli start-ups delay funding rounds, demand for U.S. chips and cloud services shrinks — undermining the CHIPS Act buildout. Stalled Gulf LNG terminals mean fewer U.S. rigs, turbines, and exports. Gulf sovereign funds — holding hundreds of billions in Treasuries and earmarked capital — keep that cash in money-market purgatory when instability spikes. Until Iran’s missile batteries, drone factories, and proxy militias are dismantled, America’s closest commercial allies will hedge every bet — blocking the peace premium needed for U.S. exports, Treasury auctions, and job creation. As investor and author Ruchir Sharma often notes, capital is a coward—it flees uncertainty. And today, thanks to Iran’s sabotage network, uncertainty is the Middle East’s most expensive export. Until that changes, the region’s upside will remain locked behind an iron curtain of risk.

This matters more than ever. The Middle East is on the brink of a golden era. Sovereign-wealth giants from Abu Dhabi, Riyadh, and Doha are steering trillions toward logistics zones, AI infrastructure, and renewable corridors instead of oil wells. During President Trump’s May 2025 visit, regional leaders pledged over $4 trillion in U.S.-anchored investment, with the UAE alone committing $1.4 trillion — including $440 billion for American energy and tech. The message was clear: in the post-oil era, Gulf capital chose the West. Since the Abraham Accords in 2020, Israel — UAE trade surged from zero to $3 billion — and likely over $5 billion this year — while Israeli defense exports to new Arab partners hit $12.5 billion in 2024. They chose the West for a reason: we offer dependable, liquid currency and debt markets unshackled by state coercion; the most advanced and transparent capital infrastructure on Earth; and the world’s strongest military alliance to protect it all. And when the Gulf leads, the region follows: Syria’s new president Ahmed al Sharaa floated building a Trump Tower in Damascus after visiting Paris. Former adversaries like Azerbaijan, Morocco, and Sudan are normalizing ties and launching trade with Israel — across the Muslim world, peace and integration are becoming the region’s most valuable asset. Historian Yuval Noah Harari recently cautioned, “every peace needs justice and every justice needs peace”—a reminder that while historic integration across the Gulf fuels hope, it must be protected and not taken for granted. But the peace dividend won’t materialize unless Iran’s disruption toolkit is dismantled.

President Donald Trump participates in a coffee ceremony with Saudi Crown Prince Mohammed Bin Salman Al Saud at the Royal Court Palace in Riyadh, Saudi Arabia, Tuesday, May 13, 2025. (Official White House Photo by Daniel Torok)

A precise U.S. strike could neutralize Iran’s regional sabotage capabilities — without ground troops, regime change, or occupation. Most of the work is already done. Israel’s June strikes degraded Iran’s nuclear and missile infrastructure by over 60%. And the U.S. could finish the job. This isn’t a neocon revival. It’s not colonialism. It’s not Iraq or Afghanistan 2.0. And only Washington has the firepower to end this. Israel’s raids exposed Iran’s weak points, but without U.S. follow-through, the network could rebound. A decisive strike ends proxy impunity and restores the security guarantee that underpins trillions in trade and dollar stability. A $5 drop in oil prices — achievable if Iranian threat premiums vanish — would save U.S. consumers over $180 billion annually and Gulf funds say even modest calm could unlock another  $250 billion for American projects — ports, energy, manufacturing, and more.

There’s also the matter of dollar supremacy. Iran’s yuan- and gold-denominated oil trades — facilitated by “dark fleet” tankers and China’s teapot refineries — rest on geopolitical leverage, not true market demand. But that foundation is fragile. A U.S.–Israeli strike removing Iran’s missile batteries, proxies, and chokepoint control would shatter the threat environment propping up these trades. U.S. sanctions are already closing loopholes — Treasury recently sanctioned Chinese refiners and tanker networks, shrinking Iran’s ability to sell oil outside the petrodollar system. With fewer buyers and covert channels, sanctions enforcement gets sharper, and customers return to the dollar for reliability. The result: steadier oil prices, stronger Treasury demand, and renewed global confidence in the dollar’s reserve status.

Russian President Vladimir Putin meets with Iran’s Supreme Leader Ayatollah Ali Khamenei in Tehran, July 2022. A quiet but enduring alliance aimed at challenging Western dominance in the Middle East. Photo: Khamenei.ir (Creative Commons BY 4.0)

Foreign policy expert Fareed Zakaria has long warned that the real threat to global order isn’t rising powers but power vacuums—and in the Middle East today, Iran fills that vacuum. His argument underscores why strategic deterrence—rather than retreat—may be our best defense of the international system. It would weaken the spine of the axis shadowing the West. China and Russia have propped up Tehran as a wedge against the West — via defense deals, port access, and cyber partnerships. Yet when Israel hit Iran’s nuclear sites, Moscow stood down. A crippled Iran cuts that axis at the knees, isolates Chinese capital from Gulf integration, and clears the way for an India–Middle East–Europe trade corridor that bypasses the Suez and anchors Eurasian commerce in U.S.-friendly territory. A sidelined Iran opens the door to a golden era. Syria, losing Iranian support, signals interest in a rules-based order. Lebanon’s militant grip weakens. Saudi Arabia and the UAE can pressure Israel to resolve the Palestinian issue by offering normalization in exchange for progress. The Palestinian cause — freed from Iranian exploitation — may finally shift from jihad to nation-building, backed by Gulf capital. Together, Israel, the Gulf, and India could form a Middle East NATO-lite — not just a military bulwark, but an economic bloc.

Iran has made itself the saboteur-in-chief of global trade. Only U.S. involvement can cancel that cost. The 1983 Beirut bombing was Tehran’s opening shot against the idea that this region could ever be stable, open, and integrated with the West. Striking Iran’s war machine now sends the opposite message: sabotage no longer pays. A new golden era — powered by Gulf capital, Israeli innovation, and Indian logistics — can emerge from what was once the world’s fault line. For Israel, the stakes aren’t just strategic—they’re existential. Our economy thrives when peace does. Innovation, trade, and integration with the region are the dividends of deterrence. Without that, we return to the bunker. For the first time in decades, the tectonic plates of the Middle East are shifting in a direction aligned with prosperity, not extremism. But it won’t happen by default. Peace demands resolve.

Forty-one years after Beirut, Tehran still bets on chaos. It’s time to call that bet.