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WEDNESDAY, AUGUST 12, 2026 | SPECIAL REPORT & ANALYSIS
SPECIAL REPORT REVIEW | IRAN, ENERGY & THE MIDTERMS
Two Straits, One Squeeze: Iran Bets It Can Outlast Washington as Energy Chokepoints Tighten
Bret Baier’s data-driven walkthrough of the Strait of Hormuz and Bab el-Mandeb, paired with Gen. Jack Keane’s strategic read, adds up to a single story: the Iran conflict has settled into a war of wills — fought through shipping lanes, oil prices and the political calendar.
Analysis · August 12, 2026
Two segments on Wednesday’s Special Report with Bret Baier — a map-and-data walkthrough of the Iran conflict’s twin maritime chokepoints, followed by an extended interview with Fox News senior strategic analyst retired Gen. Jack Keane — told one sobering story. Nearly six months into the war, the fighting has largely moved off the battlefield and onto the world’s two most important energy waterways, and Tehran has convinced itself that time is on its side.
“War is always a fundamental test of will, and that is where I think they are… The Iranians don’t know at what point they will give in… I think their determination is to outlast us.” — Retired Gen. Jack Keane, on Special Report
THE BROADCAST IN BRIEF
Segment one (about 3½ minutes) was classic Baier big-board work: a geography lesson on the Strait of Hormuz and the Bab el-Mandeb Strait, layered with hard numbers from the Energy Information Administration (EIA) and the International Energy Agency (IEA) showing how the squeeze on both waterways is already rewriting the U.S. government’s energy outlook. Segment two (more than seven minutes) put those charts in front of Gen. Keane, who used them to explain why President Trump halted military operations on April 7, why Iran believes it holds the upper hand, and why the November midterms now sit at the center of Tehran’s war planning.
One detail that framed the whole hour: the markets barely blinked. Baier opened with the S&P 500 up 20 points and the Nasdaq up 143 — equities shrugging on the very day the government marked up its forecast for what Americans will pay for fuel. That disconnect between Wall Street’s calm and the energy agencies’ flashing warnings is itself a story to watch.
WHY TWO WATERWAYS SUDDENLY MATTER
The anchor’s core point was structural: most petroleum and natural gas leaving the Persian Gulf for the West must clear not one but two narrow passages — the Strait of Hormuz between Iran and Oman, and the Bab el-Mandeb between Yemen and the Horn of Africa, which connects the Red Sea to the Gulf of Aden and the Arabian Sea. Disruption at either ripples through global markets; pressure on both at once, as Baier put it, “raises the stakes considerably.”
Figure 1. The twin chokepoints: Persian Gulf energy bound for Europe and the U.S. must clear both the Strait of Hormuz and the Bab el-Mandeb. Source: Special Report with Bret Baier, Aug. 12, 2026.
The numbers behind Hormuz are staggering. Oil flow through the strait averaged nearly 21 million barrels per day in the first half of last year — roughly 20 percent of global petroleum liquids consumption — and about one-fifth of the world’s liquefied natural gas trade moves through the same gap. There is no pipeline network on earth that can re-route volumes of that size. When Hormuz constricts, the world market constricts with it.
The strategic takeaway Baier closed on: Iran and its proxies can pressure two critical maritime gateways simultaneously, “with consequences that can reach far from the battlefield — global shipping, the price to Americans, and what we pay at the pump.” That is the through-line connecting both segments: this is now an economic war with military punctuation, not the reverse.
HORMUZ: FROM 100 SHIPS A DAY TO A HANDFUL
The most arresting data point of the night: before the conflict, more than 100 vessels a day crossed the Strait of Hormuz. On Monday, eight made the transit. Tuesday, 14. President Trump has claimed “total control” of the strait, and the U.S. naval blockade — which the President calls a “wall of steel” — has shut down Iran’s own ports entirely. But control and commerce are two different things.
Figure 2. Daily vessel transits through the Strait of Hormuz, as cited on air. Source: Special Report with Bret Baier, Aug. 12, 2026.
The analysis Baier implied but let the numbers deliver: a waterway does not have to be closed to be crippled. War-risk insurance premiums, shipowner caution and the mere possibility of Iranian disruption are enough to reduce a 100-ship-a-day artery to a trickle — even with the U.S. Navy standing guard. Keane made the same point from the other direction: Iran does not control the strait, but neither does Washington “totally control it either.” What Iran has is influence through the ability to disrupt — and by Keane’s account, the effect of that influence “exceeded their expectations.”
THE PRICE SIGNAL: EIA AND IEA MARK UP THE RISK
The chokepoint squeeze is now official government arithmetic. The EIA raised its forecast for the average price of a gallon of gasoline over the full year by 14 cents, and lifted its 2026 Brent crude forecast from $82 to $87 a barrel. Those are annual averages — which means the agency expects the back half of the year to run well above what consumers have seen so far.
Figure 3. EIA forecast revisions cited on air: Brent crude for 2026 and the full-year average gasoline price. Source: Energy Information Administration, via Special Report.
The IEA’s supply math is more alarming still. Global crude inventories fell by 2.2 million barrels a day in July, and the agency now expects a third-quarter global supply deficit of 1.8 million barrels a day — more than double its previous estimate. Deficits of that size, sustained, normally force prices sharply higher; that markets have not yet fully priced it suggests traders are betting on a quick resolution, strategic reserve releases, or both. If those bets are wrong, the adjustment will be abrupt.
Figure 4. IEA data cited on air: July inventory draw and the third-quarter supply deficit forecast. Source: International Energy Agency, via Special Report.
Why it matters for agriculture: energy is the transmission belt that carries a Middle East shipping war straight to the farm gate. A firmer Brent path means costlier farm diesel just as harvest demand peaks, higher propane costs heading into grain-drying season, and — through natural gas — upward pressure on nitrogen fertilizer economics for fall application. Freight is exposed too: a fifth of world LNG and a fifth of world oil consumption squeezing through contested water raises shipping costs economy-wide.
BAB EL-MANDEB: THE SECOND FRONT
The Houthis have reopened the southern squeeze. Baier reported that the Iran-backed group declared a naval blockade on Saudi Arabia last month, and that a Houthi attack on a commercial vessel off Yemen killed six people Tuesday — the first reported fatalities since that blockade was declared. The Bab el-Mandeb is the gateway between the Red Sea and the Arabian Sea; pressure there forces Europe- and U.S.-bound cargoes into the long, expensive detour around Africa and stretches naval escort resources across two theaters at once.
The escalation signal matters more than the single strike. First fatalities convert a declared blockade from rhetoric into demonstrated capability — precisely the kind of pressure Keane predicts Tehran will lean on as the U.S. political calendar tightens.
KEANE’S READ: WHY THE GUNS WENT QUIET ON APRIL 7
Keane laid out the war’s arc with unusual candor. The war began Feb 28; Iran blocked the Strait of Hormuz on March 2. The April 7 ceasefire — struck at Iran’s invitation — had two objectives: reopen Hormuz, then negotiate a nuclear deal. Neither has held. A memorandum of understanding signed by both presidents was, in Keane’s words, violated “within days,” and the principal provision was reopening the strait. The President, he noted, is visibly frustrated: “You can’t talk to these guys.”
Figure 5. Six months of conflict, as recounted on air — and the political deadline shaping both sides’ calculations. Source: Special Report with Bret Baier, Aug. 12, 2026.
The candid part — and the headline inside the interview: Keane said the April 7 halt reflected a shift in the President’s priorities, with “political midterms, economic, oil and gas prices” becoming paramount over military objectives. He added a remarkable detail: Gulf-state allies — the region’s oil producers — came to the President “more than one time, I think three times, is reported” and persuaded him to stand down from military operations. A retired general confirming on air that domestic politics and allied pressure are governing U.S. war tempo is the kind of admission adversaries file away — and by Keane’s own telling, Tehran already has.
TEHRAN’S CALCULUS: OUTLAST WASHINGTON
Iran believes it holds the upper hand for two reasons, in Keane’s assessment: its demonstrated ability to disrupt both chokepoints, and the discovery that Washington’s own allies will restrain American escalation. Layer on the midterms and Keane’s “gut feel” is blunt: Iran is “likely going to get more aggressive because they don’t believe the President will do much prior to the midterms” — a president who has said himself he is “low-keying it.”
The IRGC commander, on PBS: “One way is to prolong this war until we get to the next term of the presidency and cause attrition, so that if anyone else wants to attack Iran, they will know there is a cost.” Tehran’s strategy is not victory — it is endurance.
Keane’s most important analytical point challenged the West’s scorekeeping. Four months into the naval blockade — in place since April 13 — analysts tally Iran’s currency, inflation, lost revenue and unpaid soldiers and wait for collapse. Keane’s rejoinder: the regime “doesn’t really care about the suffering of their own people.” What it cares about is surviving with enough control to rebuild. “There’s not a man on the planet” who knows Iran’s economic breaking point — including, he argued, the Iranians themselves.
The counterweight is real, and Keane stressed it. Iran has “miscalculated with him time and time again.” The U.S. has more capability in the region than it did on Feb. 28; the Israelis are at “full magazine depth”; Iran has no navy, no air force, a decimated IRGC and uncertain leadership. The leverage to “shut them down once and for all,” as Keane put it, sits at the President’s fingertips. The question the segment left open is whether it will be used before November — or whether Tehran gets the quiet autumn it is counting on.
THE MUNITIONS QUESTION
Baier pressed on stockpiles, and Keane drew a careful line. CENTCOM and Pentagon leadership believe they have what they need for a massive strike on Iran if ordered, and Keane said munitions are not driving Iran decision-making. But he acknowledged the deeper problem: for years, rebuilding the arsenal was sacrificed to budget cutbacks because it was an easy place to cut, and “those problems are coming home to roost.” The real issue, he argued, is replenishment — how fast stockpiles can be rebuilt to deal with other potential threats. Translation: the Iran mission is funded, but the margin for a second crisis is thin, and that constraint outlives this war.
WHAT TO WATCH
Daily Hormuz transit counts. Baier’s eight-versus-14 comparison makes vessel traffic the best real-time gauge of whether commerce is normalizing or the squeeze is deepening.
Houthi follow-through at Bab el-Mandeb. More attacks after Tuesday’s fatal strike would confirm the two-chokepoint strategy is accelerating into the fall.
The next EIA/IEA revisions. A second consecutive markup of the gasoline and Brent forecasts — or a wider Q3 deficit estimate — would signal the agencies see no quick resolution.
Gulf-state diplomacy. If regional allies again move to restrain U.S. military action, Tehran’s read of the escalation window will harden.
The pre-midterm provocation window. Keane expects Iran to test Washington before Nov. 3 elections. Any U.S. military response — or conspicuous non-response — will set the tone for the war’s next phase.
BOTTOM LINE
This has become a siege economy in both directions — a U.S. blockade strangling Iran’s ports against Iranian-orchestrated pressure on two global chokepoints — and sieges are won by whoever absorbs pain longer. Baier’s charts showed the pain reaching American pumps first; Keane’s analysis explained why Tehran thinks that asymmetry, plus the midterm calendar, works in its favor.
For agriculture, energy is the exposure: firmer diesel into harvest, costlier propane into drying season, and natural-gas pressure on nitrogen prices for fall application. A realized 1.8 million-barrel-a-day global deficit in Q3 lands squarely on the farm economy’s busiest quarter.
The strategic bottom line belongs to Keane: war is a test of will, no one knows Iran’s breaking point, and the U.S. holds decisive military leverage it has so far chosen — for political and economic reasons — not to use. Expect Tehran to probe that restraint between now and Nov. 3.
Sources: Fox News “Special Report with Bret Baier,” Aug. 12, 2026 (two segment transcripts); Energy Information Administration and International Energy Agency figures as cited on air; interview with Fox News senior strategic analyst retired Gen. Jack Keane. Charts by Ag Policy & Markets Daily from data cited in the broadcast.
AG POLICY & MARKETS DAILY | SPECIAL REPORT REVIEW | IRAN, ENERGY & THE MIDTERMS — WEDNESDAY, AUGUST 12, 2026
