Bi-Weekly Geopolitical Report – From the Shah to the Strait: The US Gamble to Stabilize the Gulf (March 23, 2026)
by Thomas Wash & Bill O’Grady | PDF
It has been nearly 50 years since the 1979 Islamic Revolution toppled the Shah of Iran, replacing the Persian monarchy with a theocracy that sent shockwaves through the West. This upheaval triggered the decade’s second major oil crisis and effectively dismantled Washington’s “Twin Pillars” policy. By losing Iran as a strategic counterweight alongside Saudi Arabia, the United States saw its primary mechanism for regional proxy influence collapse — a blow compounded by the wave of oil field nationalizations across the Middle East from the preceding years.
Today, a new regional conflict has emerged as a definitive inflection point — one that could reverse decades of geopolitical momentum. Through Operation Epic Fury, the US and Israel have launched a decisive campaign to dismantle the current regime’s military and leadership infrastructure, signaling a bold attempt to usher in a new era for Middle East oil politics. While fraught with risk, this escalation presents a singular opportunity to reassert Western leverage and fundamentally reshape the regional balance of power.
In this report, we examine the geopolitical significance of Iran and what the current conflict could mean for US global influence. We also summarize the potential market ramifications, including the impact on bond markets, the US dollar, and equities.