US-Iran Tensions Escalate: How the Conflict Landscape Has Shifted Since February

Seven oil tankers have reportedly caught fire or sustained damage in and around the Strait of Hormuz, according to Iran. The Islamic Revolutionary Guard Corps (IRGC) has issued a warning that renewed US attacks could provoke a broader response, as the international community braces for potential hostilities. While analysts deem a US attack before the November 3 midterm elections improbable, escalating rhetoric from both sides has fueled fears of renewed conflict, with control over the Strait of Hormuz and Iran's nuclear facilities at the core of the dispute. Notably, the critical Gulf waterway, which previously handled one-fifth of global oil and liquefied natural gas supplies before the war, was not a focal point prior to the initial US and Israeli strikes on Iran on February 28. At that time, discussions regarding Iran's nuclear program were also ongoing. As the US grapples with diminished defensive weapon stocks and a worsening global energy crisis, the current situation differs significantly from February, before these developments. Here's an overview of the changes:

Evolving War Geography

Should attacks resume, the US and Iran would likely engage on multiple fronts, a stark contrast to the situation in February. Iran's regional allies, including Hamas and Hezbollah, were also targets of the initial US-Israeli strikes, aimed at weakening their influence. Former President Trump had pledged to prevent Tehran-backed groups from attacking US forces and destabilizing the region. Although the offensive did not lead to a change in Iran's government, Hamas has been significantly weakened by ongoing Israeli attacks in Gaza, which have resulted in over 1,400 Palestinian casualties since a US-backed ceasefire was announced last October. Hezbollah's retaliatory strikes on northern Israel following the killing of former Iranian Supreme Leader Ali Khamenei in the initial US-Israeli air attacks drew Lebanon into the conflict in early March. Israel responded with a bombing campaign targeting sites in southern Lebanon and Beirut suburbs considered Hezbollah strongholds, at one point occupying approximately one-fifth of the country and displacing over a million people. Significant land on Lebanon's southern border remains under Israeli occupation.

Waterways and Energy Facilities as Battlegrounds

The most significant geographical shift has been the emergence of the Gulf's waterways and energy infrastructure as primary targets. Iranian attacks on US military assets and civilian infrastructure have exposed Gulf nations to the repercussions of a conflict they sought to avoid. Urban Coningham, a research fellow at the Royal United Services Institute, noted that US-Iran negotiations previously focused on Iran's regional allies and nuclear program, but the Strait of Hormuz and attacks on the Gulf have now become central issues. While the Gulf has experienced attacks previously, Coningham highlighted the increased scale and 'velocity' of recent Iranian strikes, particularly on oil and gas infrastructure, as a notable change. The Strait of Hormuz, situated between Iran and Oman, which was freely accessible to international shipping before the war, now provides Tehran with a means to inflict costs beyond its borders. Iran continues to threaten and attack shipping in the strait, while the US maintains a blockade of Iranian ports. This has severely disrupted traffic and significantly reduced oil and gas supplies. In March, CNN reported that the Pentagon and US National Security Council had underestimated Iran's resolve to restrict passage through the strait and the ensuing consequences. Defense Secretary Pete Hegseth disputed this report, asserting that the military had prepared for such possibilities.

Renewed Fighting in Yemen

The resumption of hostilities between Saudi-backed Yemeni government forces and the Iran-backed Houthis has introduced an additional front to the regional crisis. The conflict in Yemen has extended into Saudi Arabia, with Houthi missile and drone attacks targeting Saudi airports and oil infrastructure. This front has also brought the Bab al-Mandeb strait, connecting the Red Sea to the Gulf of Aden, into sharper focus as a critical trade chokepoint. Houthi threats against Saudi-linked shipping in this area could exacerbate transportation disruptions already occurring in Hormuz, hinder efforts to reroute Gulf exports, and increase pressure on the US.

Shifting Political Stakes

Both countries' leaders face distinct political pressures. Iran's leadership remains concerned with internal unrest and regime survival but is not subject to the same electoral pressures as Trump's Republican Party, which faces midterm elections in less than two weeks. Prior to the February strikes, Iran's government contended with significant public discontent following a harsh crackdown on nationwide protests against inflation and currency devaluation in January. The subsequent US-Israeli attacks resulted in the deaths of Khamenei, who had been Supreme Leader since 1989, and security chief Ali Larijani, but did not overthrow the Islamic Republic. Khamenei's son, Mojtaba, succeeded him, and his rise, along with the influence of the IRGC, has bolstered the position of hardliners within the government. Coningham cautioned against interpreting the absence of public demonstrations during wartime as support for the government, stating that while the conflict fostered a sense of national unity against foreign aggression, it did not necessarily strengthen Iran. Meanwhile, Trump faces considerable political pressure ahead of any potential renewed strikes. His approval rating has declined from 40% in a Reuters/Ipsos poll shortly before the war began to 31% in a recent survey, marking the lowest point in either of his presidential terms, attributed to public frustration over high gasoline prices and widespread opposition to the war on Iran.

Altered Economic Balance

Iran's economy was already under strain from sanctions and frozen assets before the war. The conflict has intensified these pressures, with the US employing a combination of military force, further sanctions, and a naval blockade. In April, Iran's government estimated direct and indirect damages from US-Israeli attacks at $270 billion. These pressures escalated in late August with Washington's launch of Operation Economic Outcast, aimed at isolating Iran from international trade through penalties on businesses dealing with the country. Official figures indicate a 10.1% year-on-year contraction in Iran's gross domestic product between March 21 and June 20. Energy exports have been significantly curtailed by the US blockade, and the national currency, the rial, has depreciated sharply. The US has also incurred substantial costs, with the Congressional Budget Office estimating the conflict's cost to the Department of Defense at $38 billion as of August 1. Continued operations were projected to cost $2 billion to $3 billion per month, depending on the intensity of fighting. Consequently, US government debt surpassed a record $40 trillion in August, two years earlier than anticipated.

Shifting Military Balance

While the US has demonstrated its capability to strike deep within Iran, this destructive power has not led to the collapse of Iran's political system, nor has it eliminated Tehran's capacity to retaliate against US assets and energy infrastructure in neighboring countries. Coningham described the challenge for Washington as translating military superiority into strategic gains. He also characterized recent troop redeployments as potential military posturing, though they signify a shift from previous efforts to reduce the US military presence in the region. US media reports suggest a significant shortage of weapons in the US arsenal in the Middle East, with expensive defensive missiles depleted by a barrage of low-cost Iranian drones. Fox News reported that the USS Theodore Roosevelt aircraft carrier and the 13th Marine Expeditionary Unit, comprising approximately 10,000 personnel, were expected to arrive in the Middle East by late November, expanding Trump's military options. For Iran, the conflict aligns with a long-standing narrative of resistance against perceived US and Israeli colonialism and imperialism. Since February 28, the IRGC has showcased its proficiency in 'asymmetric warfare,' countering superior US military might with inexpensive, mass-produced drones. Furthermore, its use of 'decentralized structures' has enabled continued operations despite communication disruptions and the loss of senior decision-makers. US strikes have severely damaged Iran's navy, increasing its reliance on smaller vessels, such as speedboats used in recent Strait of Hormuz attacks. In this context, geography favors Iran, allowing it to target ships in the Strait of Hormuz from coastal positions and deploy naval mines using rockets. These tactics represent challenges that the US may not have fully anticipated when initiating strikes against Iran.

Impact on Global Trade

A looming global energy crisis was not a concern in February but is now a significant threat. Disruptions to Gulf energy supplies due to the war and fears of further escalation have driven oil prices sharply upward. Brent crude, the global benchmark, closed at $72.48 a barrel on February 27, the day before the war began, reaching a four-year high of $126.41 on April 30, and trading at $114.47 by early Friday. The crisis extends beyond crude oil, with Middle East fuel production damage and sanctions on Russian supplies tightening diesel markets, and the global supply of liquefied natural gas also heavily impacted. The International Energy Agency warned in October that supply constraints could persist until 2027. Diesel price increases in the US pose a significant challenge for Trump, as farmers and businesses, key voter demographics, rely on it for production and transportation. While alternative ports, pipelines, and ship-to-ship transfers have enabled Gulf producers to resume exports, this comes with higher logistical costs and continued exposure to attacks. Re-establishing secure shipping through vital Middle Eastern waterways has thus become a primary objective in the conflict.