Six months after the United States and Israel struck Iran, the conflict has settled into a stalemate that neither side can break. Washington has shifted from missiles to sanctions and a naval blockade targeting Iran's oil trade, while Tehran bets it can outlast the pressure. The standoff is also costing Trump politically at home and straining U.S. military resources abroad.
Washington shifts to economic pressure
The war that began on February 28 has reached its endgame: a costly stalemate. Iran's government is under economic siege but still holds power, and it is betting that President Trump will not take the final step of aggressively enforcing secondary sanctions on the countries keeping its economy afloat, chiefly China and India.
Treasury Secretary Scott Bessent has said the United States will cut off the financial lifelines sustaining Iran's economy, while a naval blockade restricts Tehran's oil exports and access to hard currency. Yet Alan Eyre, a former U.S. diplomat, has questioned whether Washington has the international support to make the sanctions stick. According to Aaron David Miller, a former U.S. diplomat and senior fellow at Carnegie Endowment: "I don't think the administration is any closer to finding a way out of this."
Inflation and unrest inside Iran
Iran's economy is under strain from inflation and sanctions alike. Annual inflation reached 66% in July, while consumer prices were 87.9% higher than a year earlier, according to Iran's Statistical Centre. Food prices, meanwhile, rose 128% year on year.
President Masoud Pezeshkian has acknowledged the squeeze, and economic grievances have repeatedly erupted into nationwide protests in recent years. Still, Tehran's leadership has historically answered domestic unrest with repression rather than concessions, and analysts say sanctions alone rarely force governments to abandon goals they view as existential.
Costs mount for the US and the global economy
The war is also exacting a toll on Washington. Trump's approval rating has fallen from 40% to 33% since the conflict began, according to Reuters/Ipsos polling, as rising gas prices undercut his campaign promise to lower costs. Just 31% of the country approves of the conflict.
Since the war started, 18 U.S. service members have been killed and over 750 injured, and a Congressional Research Service report said 42 U.S. military aircraft had been lost. The International Monetary Fund has cut its global growth forecast twice since the war began, now expecting the world economy to grow 3.0% this year, down from a 3.3% forecast in January. Shipping through the Strait of Hormuz remains severely disrupted, with no clear path to ending the standoff.
Sources: Reuters via Investing.com, Reuters via Investing.com
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