Iran’s conventional military has been largely destroyed and it can’t stop US and Israeli air attacks, but the Islamic Republic’s control of the Strait of Hormuz provides a means to escalate the conflict beyond what adversaries may be willing to bear.
Waves of Iranian missile and drone barrages around the region have decreased by as much as 90 per cent since the war’s early days, US officials have said, although they have hit American military facilities and valuable equipment.
The rest of the regime’s military is either out of commission or missing in action. As the world’s oil markets roil, however, Iran’s last big card to play may give it “escalation dominance,” where one belligerent can inflict and endure more pain than the other.
Mining the Strait of Hormuz, using anti-ship missiles against tankers or destroying the Gulf’s oil infrastructure could lead to peace negotiations — or global turmoil, with energy shortages and spiraling inflation. About 20 per cent of the world’s oil supply passes through the strait or originates in the Gulf.
“The Iranians have taken the bulk of the punishment they are going to take,” said Jeffrey Lewis of the James Martin Center for Nonproliferation Studies in Monterey, California. “There’s not much left for the US and Israel to destroy. But the regime hasn’t crumbled, and they are now targeting the global economy.”
He said Iran’s regime sees the conflict as an existential threat, unlike the US, making it willing to endure massive hardship rather than capitulate.
On Tuesday, the US Navy ship escorted a tanker through the strait, Energy Secretary Chris Wright said in a post on social media. A day earlier, French President Emmanuel Macron said he would send military ships after the conflict ended.
Oil has been on a wild ride since the onset of the war. Trump’s comments that the conflict would be over “very soon” led the price of a barrel to fall near $80 Tuesday after previously approaching $120.
Bloomberg Economics estimates that a 1 per cent drop in supply pushes prices up by about 4 per cent.
For Europe, sustained higher energy prices would take the economy to the brink of recession. For the US, they would trap the Federal Reserve between a war that pushes inflation higher and a president demanding lower interest rates.
For China, the end of discounted Iranian oil imports adds to strain from Trump’s tariffs and the collapse in the real estate market.
US forces have struck more than 3,000 targets inside Iran, according to US Central Command, including weapons storage, airbases, manufacturing facilities and other sites. The air campaign continues to hunt for missile launchers, whose destruction makes it difficult for Iran to use even the weapons it still has.
But high-impact targets are becoming more scarce. The only remaining means of US escalation may be ground forces, which Trump hasn’t ruled out but is an option carrying huge political risks.
Whatever the US and Israel decide, Iran also gets a say in what happens next, said Ankit Panda, a senior fellow at the Carnegie Endowment for International Peace.
“This will shape the political decision-making dynamics around the war in Washington, but ending the conflict won’t be entirely in the hands of Trump and Netanyahu,” he said, referring to Israeli Prime Minister Benjamin Netanyahu.
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Published on March 11, 2026
