US weakens Iran in Hormuz, but costly war shows no sign of ending
The United States has in recent weeks managed to weaken Iran's hold over the Strait of Hormuz while also almost stopping Iran's own oil exports, deepening the pressure on the Iranian economy. But the war launched by the US and Israel in February, which was meant to last only a few weeks, remains far from over, with low-level fighting continuing and no clear diplomatic progress.
The prolonged conflict is proving costly for both sides. Oil prices have risen again as Iran's Houthi allies in Yemen step up attacks on Saudi Arabia, adding to concerns over supplies. Brent crude went above USD 100 a barrel this week, while diesel prices hit a record, raising the risk of inflation. US President Donald Trump has acknowledged that fuel prices are likely to remain high through the midterm congressional elections.
An agreement reached in June quickly fell apart, and there has been no sign of movement since then. The mounting economic pressure on Iran has not triggered an uprising, and analysts say Tehran may choose to escalate militarily rather than give in if it feels cornered. Mona Yacoubian, a Middle East expert at the Centre for Strategic and International Studies in Washington, said, "Unfortunately, the US is not winning in the war with Iran despite its limited success in loosening Iran's grip over the strait and the devastating impact on Iran's economy." She added, "Iran shows no sign of backing down, and instead has demonstrated a willingness to not only fight back, but escalate wherever it can. The war is likely to be protracted with no clear victor."
Iran had effectively closed the Strait of Hormuz in the opening days of the war, using the global economic shock as leverage, while continuing to export its own oil mainly to China. In recent weeks, however, the situation has reversed. According to figures compiled by Homayoun Falakshahi, an oil expert at Kpler, a global trade monitor, a US blockade has nearly stopped Iran's exports while the American military has helped increase exports by Gulf countries.
Falakshahi found that Iran's oil exports fell from 1.85 million barrels a day last spring to around 255,000 in August. Exports of non-Iranian oil rose from 300,000 barrels a day at the height of the war to 8.4 million in September, and exports through alternative routes took that figure to 10.8 million. US Energy Secretary Chris Wright pointed to similar numbers on Sunday, saying, "we're probably two-thirds or more of preconflict flows." According to Falakshahi, non-Iranian exports were around 14 million barrels a day before the war. But maintaining these flows has required a major US deployment in the strait, stretching military resources. The war has already cost US taxpayers more than USD 37.5 billion and left 18 US service members dead, and it is expected to weigh on Republicans in the November election.
The tighter blockade and new US sanctions are already hurting Iran's economy, pushing up prices and leading to even longer queues outside petrol stations. Even so, there is no sign that Iran's increasingly hard-line leaders are ready to make concessions on the Strait of Hormuz, its disputed nuclear programme or its backing for armed groups in the region. Ali Vaez of the International Crisis Group said, "Washington's main problem is that it still lacks a theory of victory: More ships are getting through, and Iran is hurting, yet none of that has produced a political outcome."
Iran has continued to attack ships in the strait, drawing limited US strikes on coastal areas and then responding with missile attacks on Arab countries hosting US forces. Trump recently dismissed the conflict as "small potatoes". But with the US supply of sophisticated interceptors coming under strain, Iran may be tempted to intensify its attacks or act through regional proxies.
That risk has been underlined by the Houthis' latest actions. The Iran-backed group carried out a wave of attacks on Saudi oil facilities this week and has also targeted Saudi shipping, threatening both oil exports and the key route through the Bab el-Mandeb chokepoint to the Red Sea and the Suez Canal. Falakshahi said the Houthis had damaged Saudi Arabia's Jizan refinery, a major supplier of diesel and jet fuel to Europe. Kpler's figures showed that Saudi oil moving through the Bab el-Mandeb towards Asia dropped from about 3.4 million barrels a day in June to just 128,000 in August, before recovering slightly to about 700,000 barrels a day in September.
Danny Citrinowicz, a senior researcher at Israel's Institute for National Security Studies and a former Israeli intelligence officer focused on Iran, wrote on X, "Tehran has repeatedly signaled that it will respond to growing US pressure by moving up the escalation ladder, not by backing down." He added, "Iran will not simply accept an indefinite maritime blockade, nor will it allow Washington to impose mounting economic costs without imposing costs of its own." For now, the US has improved the flow of non-Iranian oil through the region and tightened pressure on Tehran, but the fighting continues, the costs are rising and there is still no clear end in sight.
