Pentagon Chief and Top US General Say Ceasefire with Iran Remains in Effect
US Defense Secretary Pete Hegseth and General Dan Caine confirmed at a briefing on Tuesday that the ceasefire with Iran "has not ended," despite ongoing attacks in the Strait of Hormuz and strikes on the UAE, calling them below the threshold of "major combat operations."
The statement by Pentagon chief Pete Hegseth and General Dan Caine that the ceasefire with Iran "has not ended," despite direct strikes on UAE territory, is not mere hypocrisy or an intelligence failure. It is a deliberate political and military decision that redefines the very concept of "war" in the Middle East. The Trump team is trying to keep the conflict below the threshold that triggers certain legal and financial mechanisms, even if it undermines traditional alliances and rules of engagement.
[The Core]: What Is Really Happening
The essence of Hegseth's statement lies in a willful refusal to acknowledge reality in order to maintain control over the global insurance and financial system. It is no secret that the key driver of US policy right now is the need to keep the price of Brent crude from storming the $130 per barrel mark and prevent a collapse of the sovereign bond market in the Gulf states.
Officially, the Pentagon states: "The strikes do not reach the threshold of major combat operations." This is a legal formula chosen deliberately. If Hegseth had uttered the phrase "state of war" or "ceasefire violated," it would automatically give Lloyd's syndicates the right to void all current insurance coverage under force majeure for voyages to the region. A single word from an official could sink maritime trade faster than an Iranian anti-ship missile. So the US administration resorted to doublespeak: bombings of ports and oil storage facilities are now called "sporadic incidents that do not violate the overall de-escalation regime." General Caine, a former pilot with real combat experience, understands the absurdity of the situation but plays along to prevent economic panic.
Timeline and Context
The context here is a desperate attempt by the US to maintain control over the strategic initiative, which it is rapidly losing. As early as April 2026, the administration insisted that the truce brokered by Pakistan and Oman was supposedly cooling the region. In reality, the IRGC saw the pause as an opportunity to regroup and redirect its strikes from naval targets to the coastal infrastructure of the UAE.
Pete Hegseth, known as the most hawkish member of the cabinet, is now playing the role of a "dove" because no real military victory is in sight in the region. The US Navy cannot simultaneously cover Israeli ports from the Houthis, patrol the Red Sea, and escort tankers in the Strait of Hormuz without moving to total mobilization. The May 6 statement is an admission of weakness wrapped in the rhetoric of strength. CENTCOM commander General Michael Kurilla presented a report to the president directly stating that a full-scale opening of the strait would require Operation Desert Storm 2.0 against the entire Iranian coast, and such resources are not available without detriment to the Pacific theater.
Who Wins and Who Loses
The main loser here is the United Arab Emirates, and above all, UAE President Mohamed bin Zayed. Abu Dhabi has spent hundreds of millions of USD over the years lobbying in Washington for solid security guarantees. Now they see that the US, to preserve global economic stability, is willing to write off strikes on Fujairah as "isolated incidents." This kills the very purpose of American security guarantees. If Al Dhafra Air Base or Jebel Ali Port cannot be defended without the risk of being drawn into a full-scale war, then why does the UAE need this alliance at all?
Loser number two is the Gulf sovereign debt market. Dollar-denominated sukuk and eurobonds of Abu Dhabi maturing in 2029-2030 lost about 2.5 percentage points in price on the morning of May 6, as bondholders began pricing in a risk premium that the UAE has turned from a "safe haven" into a direct strike zone.
Winning, oddly enough, is the US military-industrial sector. The Hegseth-Caine statement effectively gives the green light for a new multi-billion dollar deal to sell THAAD and Patriot systems to Saudi Arabia and, again, to the UAE. Since there is no diplomatic protection, the Gulf states will have to buy hardware in hopes of self-defense. Raytheon and Lockheed Martin shares were already up in pre-market trading on May 6. It's a classic trap: we absolve ourselves of responsibility for direct intervention, but offer you weapons that, as experience shows, do not guarantee interception of a swarm of $50,000 drones.
What the Media Are Not Saying
The media are broadcasting the Pentagon's narrative: "The ceasefire regime remains in effect." But they are not revealing the main secret circulating in the corridors of the Pentagon and on oil trading floors in Singapore and Geneva. The US and Iran have reached a secret, unspoken protocol on "mutual non-aggression against major targets." This is a shadowy gentleman's agreement brokered by the Sultan of Oman.
The essence of the protocol, which will never be published, is this: Washington does not strike Iran's nuclear infrastructure or oil facilities on Kharg Island, and Tehran in return promises not to sink US warships or hit Gulf capitals with missiles, limiting itself to strikes on second-tier infrastructure (Fujairah, pipelines). That is why Hegseth clings to the term "truce": it is being observed in the sense that there is no "total" war, which neither side wants. But for the UAE, this "limited war" is an existential threat to its economic miracle.
Forecast: Next 30 Days and 90 Days
30-day horizon (by June 5, 2026).
Markets will continue to live in cognitive dissonance. Politicians will repeat the mantra of a truce, while insurance companies will unofficially demand up to 10% of cargo value for entry into the Persian Gulf. Iran will continue its tactic of "below-threshold strikes," testing the Pentagon's red lines. If a drone accidentally hits a US facility, the Hegseth team will try to cover it up to avoid destroying the construct. Investors will begin mass capital flight from the UAE to Singapore and Zurich, creating, according to JPMorgan estimates, a liquidity outflow of $15-18 billion per month.
90-day horizon (by August 2026).
This charade will collapse when the Lloyd's insurance market finally stops believing political declarations and introduces its own criteria for "war zone," ignoring Pentagon assurances. From that point, the region's food and goods supply will be threatened without direct US Navy involvement in logistics. Trump will be forced either to begin evacuating US bases from Kuwait and the UAE, or to order a limited "retaliatory" military operation against drone factories in Iran, which would instantly tear down the hypocritical ceasefire facade and send Brent crude above $140. In any case, the credibility of the word of the US military leadership in the region will be completely exhausted. We are witnessing the slow death of Pax Americana in the Middle East, accompanied by statements that nothing is happening.
— Editorial Team
