The war with Iran has reached its endgame: a costly stalemate. Six months after US and Israeli forces attacked the country, killing its supreme leader and maiming his son and heir apparent, the Iranian regime is under economic blockade but still clinging to power and believes that time is on its side.
US President Donald Trump has threatened to impose crippling new sanctions on Iran, but he faces a fundamental problem: Tehran has made it clear that he will not take the decisive step to break the deadlock by strictly enforcing secondary sanctions on countries that support Iran's economy, primarily China and India.
The latest measures announced by Washington on Monday mark a new phase in the conflict that began on February 28, shifting the battleground from missiles and airstrikes to Iran's oil revenues, its banks and its trade partners.
US Treasury Secretary Scott Besant said his country would cut off financial flows that support Iran's economy at a time when Washington's naval blockade has limited Iran's crude oil exports and thus its access to hard currency.
"The (Trump) administration is desperately trying to find a way out of this situation," said Aaron David Miller, a former US diplomat and now a fellow at the Carnegie Endowment for International Peace. Besant mentioned D-Day when she introduced the sanctions, but Miller disagreed with the comparison: "To me, this is not D-Day, it's Desperation Day. I don't think the administration has come any closer to finding a way out."
BLOCKADE and SANCTIONS
Michael Knights, who heads research at Horizon Engage, a New York-based strategic analysis firm, says the blockade could have more serious consequences than the sanctions themselves, because the immediate challenge for Iran is no longer how to withstand economic pressure, but how to end it. Tehran has been adapting to sanctions for decades and has withstood "maximum pressure" campaigns without changing its behavior, he argues.
Increasing economic pressure, Knights suggested, could increase Iran's incentive to raise the cost of confrontation for its adversaries by pressuring Gulf states, especially Saudi Arabia, to push Washington toward a diplomatic solution. He suggests that Iran may increasingly adopt the approach of its Houthi allies in the Red Sea: intermittent attacks, intermittent negotiations and a sustained campaign of intimidation, but without engaging in full-scale war, potentially targeting ships, ports, energy infrastructure and other critical assets, to make the conflict too costly for the Gulf states to take for granted.
Washington rejects this assessment and argues that the balance of power is in its favor. "Iran's economy is in free fall and the regime's military has been destroyed," said US State Department spokesman Tommy Pigott in response to this article. "President Trump holds all the cards and we are cutting off all other financial flows to the regime," he added.
IRANIAN OFFICIALS REJECT US STRATEGY
Alan Airey, a former US diplomat who worked on the Iran dossier, questions whether Washington has the international support and bureaucratic machinery needed to enforce sanctions. Unlike the multilateral campaign that preceded the 2015 deal between Tehran and world powers that curbed Iran's nuclear program in exchange for lifting sanctions, the latest measures are based on public threats rather than sustained diplomacy with allies and trading partners, he argued.
Iranian officials reject the US strategy as following a playbook that has already failed. A senior official in Tehran told Reuters that China would not stop cooperating with Iran just to serve American interests.
Some political analysts say there is a deeper flaw in this strategy: From North Korea to Russia to Iran itself, sanctions have rarely forced governments to give up goals they consider vital to their survival.
The official, who spoke to Reuters, said Tehran believes Washington's broader goal is to stoke domestic discontent in the hope that economic hardship could eventually lead to political unrest. The Iranian leadership also believes the "maximum pressure" campaign is failed during Trump's first term, and the same thing will happen now.
"If the pressure increases, Iran's approach will change," he said, adding that the Gulf Arab states have understood that further pressure on Tehran could expose themselves to greater risk.
THE THREAT TO IRANIAN LEADERSHIP FROM UNREST
From the perspective of the Iranian leadership, the biggest threat may not be the economic problems themselves, but the risk that worsening living conditions will lead to new mass unrest, according to regime insiders and an Iranian government official.
In July, annual inflation reached 66%, and consumer prices were 87.9% higher year-on-year, according to data from the Iranian Statistical Center. Food prices, in particular, have risen 128% year-on-year.
President Masoud Pezeshkian acknowledged the severity of the difficulties last week when he said: "Our problems have increased several times, and our incomes have decreased."
Economic discontent has repeatedly led to nationwide protests in Iran in recent years. Demonstrations in January against economic hardship were crushed by the Islamic Revolutionary Guard Corps and the Basij militia, killing thousands.
The appointment this month of Hossein Taeb, a key figure in previous crackdowns, as head of the Basij is one of the clearest signs yet that Iran’s leadership is wary of fresh unrest, said a former regime official under the reformists.
The Basij, a paramilitary force linked to the Guards, have repeatedly been deployed by Iran’s ruling clerics to quell protests. This suggests a paradox at the heart of Washington’s strategy: sanctions could deepen Iran’s economic woes without forcing its leaders to change course. Historically, Iran’s leadership has responded to domestic unrest with repression and to external pressure with threats of retaliation abroad.
A DANGEROUS BACK STREET
For the Gulf states, the equation is particularly complicated. They prefer economic and diplomatic pressure to another episode of war, but they fear an outcome that would allow Iran to declare victory while preserving its ability to disrupt traffic through the Strait of Hormuz, a vital route for global oil supplies that Tehran has effectively blocked, sending oil prices soaring.
Abdulaziz Segher, head of the Saudi-based Gulf Studies Center, said regional leaders were not convinced that sanctions alone could make Iran change its behavior quickly, given the resilience of its leadership and its ability to maintain control at home. It is unlikely that we will witness significant political changes or the collapse of the theocratic regime in Tehran in the near future, he predicts.
The result will be a dangerous impasse if the negotiations with mediators fail to achieve a breakthrough. Washington wants Iran to stop using the Strait of Hormuz as a tool of influence, but without giving it a role in managing this key waterway. Tehran, in turn, wants the US blockade of Iranian ports to be lifted without it looking like a capitulation on its part. As for the Gulf states, they are striving for the conflict to be contained and for Iran not to emerge as the winner.
Translation from English: Nikolay Stanoev, BTA