Iran Digs In for Prolonged War, Seeks Hormuz Control
Iran has launched surprise strikes on commercial ships in the Strait of Hormuz and U.S. forces in Jordan in recent weeks, signaling a shift to managed confrontation rather than seeking an immediate ceasefire. Tehran interprets U.S. sanctions, talks, pauses, and strikes as tools aimed at regime change and expects the conflict to last through the end of President Trump’s term. Draft terms with Oman for Hormuz management would give Iran control over inbound traffic, joint exit oversight, and fees for services, while barring U.S. vessels; this falls far short of U.S. expectations for unrestricted transit.
Background includes heavy U.S. and Israeli strikes since February that damaged Iranian energy, industry, and infrastructure, causing severe inflation, labor contraction, and economic pain. A June memorandum of understanding paused bombing and lifted some blockade elements but delivered limited economic relief—Iran exported oil but did not receive expected frozen assets—fueling distrust. Iranian decision-making has grown more confident and less patient after failed talks and the initial decapitation strike.
Key tensions center on whether Iran can calibrate limited attacks to raise U.S. political and military costs without triggering full-scale escalation or alienating neighbors. U.S. public support has declined and Trump’s approval is low, yet Tehran may underestimate American tolerance or lose control of responses. Domestic Iranian discontent over destruction and repression remains a risk, while Washington has invested heavily in making escalation costly but little in making restraint rewarding.
Sources: Responsible Statecraft, Naked Capitalism, OilPrice.
US Long-Range Precision Missiles Nearly Depleted
Reuters reported that the United States has used virtually all its long-range precision strike missiles, including ATACMS and PrSM, in the Iran war. Stockpiles of Patriot and THAAD interceptors are also critically low, with estimates of fewer than 827 Patriots and 278 THAAD interceptors remaining. Administration officials including Trump, Defense Secretary Hegseth, and others have denied shortages even as evidence mounts.
Depletion began with large transfers to Ukraine since 2022 that outpaced replacement rates, then accelerated with the Iran campaign. The Pentagon has sought emergency funding, awarded contracts for older PAC-2 missiles, and approached civilian firms like automakers to boost production. Munitions take years and high costs to manufacture, leaving limited capacity for sustained Middle East operations or other theaters.
Uncertainties include the exact remaining inventories, which sources decline to specify, and whether replenishment packages will arrive in time. The crisis raises questions about readiness for Pacific contingencies and the sustainability of current strategy, as air campaigns have damaged infrastructure without forcing Iranian capitulation. Officials have privately noted White House unawareness of shortfalls.
Sources: Responsible Statecraft.
Hormuz Attacks Cripple Shipping and Strain Oil Flows
Abu Dhabi National Oil Company reported 15 of its vessels hit by missiles or drones since the war began, including three this week, killing one crew member and injuring 20. Shipping traffic through Hormuz has dropped sharply—to as low as 33 vessels midweek versus higher prior levels—with many operators reluctant to enter and freight costs surging. Houthi attacks have also struck Saudi tankers and forces, killing dozens and reactivating the Yemen front.
The strait previously carried about one-fifth of global oil consumption. UAE has shifted some loadings outside Hormuz via Fujairah while ADNOC expands its fleet with $1.3 billion in new tankers to maintain exports. Oil traders have remained relatively bearish, pricing in potential diplomatic breakthroughs that have not materialized, even as disruptions deepen and Indian and Chinese refiners seek alternative grades.
Contradictions include markets betting on deals while Iran demands sanctions relief and compensation as preconditions, and U.S. messaging of imminent openings that Iranian and shipping sources contradict. Risks persist of further escalation raising global supply costs without resolving the underlying conflict, as Iran expands fronts to raise American political and economic burdens ahead of midterms.
Sources: OilPrice, Naked Capitalism, Responsible Statecraft.