THE CONFLICT ravaging the Middle East may best be understood as two parallel wars. One is the campaign of American and Israeli air strikes against the Iranian regime; the other is Iran’s war on the global economy. Both are largely one-sided. Iran cannot repel the warplanes prowling its skies and America has no easy way to reopen the Strait of Hormuz, the narrow waterway vital to the flow of oil, gas and other commodities, or to stop Iranian attacks on energy-production facilities.
For Iran, that asymmetry is the point: the energy war is meant to induce America to halt its air war and deter it from some day launching another one. Yet it may do the opposite. Donald Trump seems unlikely to end the fighting while the strait is blocked. Crucially, his allies in the Gulf agree: having borne the brunt of Iran’s retaliation, most now want to see the regime incapacitated. America, Israel and the Gulf states started the war with different aims—yet as the fighting enters its fourth week, Iran is pushing them into alignment.
The Pentagon says it has carried out more than 7,000 strikes across Iran thus far. Israel has conducted thousands of its own, including a series of raids targeting senior Iranian officials. On March 17th it assassinated Ali Larijani, a wily politician who was among the most powerful men in Iran, and the head of the Basij, the regime’s paramilitary enforcers. The next day it announced it had killed the intelligence minister.
Beyond such headline-grabbing attacks, America and Israel have also battered Iran’s armed forces, from the depots that house missiles and drones to the factories that produce them. More than 100 ships have been sunk. The death toll is mounting, with more than 3,000 Iranians killed, including at least 1,300 civilians, according to HRANA, a human-rights group.
For some American officials, winning the air war is enough: they have tried to nudge Mr Trump to declare victory. But the president seems increasingly focused on the other war. The prices of oil and natural gas, already high, leapt yet more as strikes on energy facilities intensified, and the cost of everything from fertiliser to helium, a vital input in semiconductor manufacturing, has soared too.
The Strait of Hormuz is not literally closed: Iran’s surface fleet was never that formidable to begin with, and much of it is now at the bottom of the sea. Instead the regime has imposed a de facto blockade through a mix of threats and sporadic missile and drone attacks on commercial vessels. Shipping firms, understandably, have little tolerance for that sort of risk.
America will struggle to reassure them. The Pentagon has mulled naval escorts but is not ready to provide them. Mr Trump spent several days this week alternately begging and badgering allies in Europe and Asia to join a maritime coalition. Then, on March 17th, he said this was no longer needed: “In fact,” he wrote, “WE DO NOT NEED THE HELP OF ANYONE!”
In truth, it would be hard for any navy to secure the strait. Its geography is forbidding. It is just 54km (34 miles) wide at its narrowest point and flanked by mountains on both sides. Even beyond this chokepoint, the seas either side are within easy range of Iranian drones and missiles. Escort ships would have mere seconds to react to an attack. Sending troops to secure the coastline is a non-starter, given the size of the force required; Iran could also just continue shooting from inland.
Instead Mr Trump may shift his attention elsewhere. For decades he has been fixated on Kharg island, a rocky speck where 90% of Iran’s oil exports are loaded onto tankers. He told an interviewer in 1988 that, were he president, he would “do a number” on it. On March 13th he got his chance: America bombed dozens of military targets there, hitting storage depots for missiles and naval mines.
The oil terminal was left untouched, for what Mr Trump calls “reasons of decency”. That may be because he aims to seize it. A marine expeditionary unit, which trains for this sort of mission, is being redeployed from Japan to the Middle East. America could no doubt capture the island. The idea would be to use it as leverage: if Gulf states cannot export their oil, neither can Iran. If the regime proves stubborn, however, American marines would have to withstand a potential barrage of missiles and drones. Oil prices would no doubt jump further, both from the loss of supply (Iran ships around 1m b/d to China) and the prospect of a longer war.
Meanwhile, Iran is pursuing its own sort of escalation. A share of Gulf oil is still flowing through two pipelines that bypass the Strait of Hormuz. One of them, in Saudi Arabia, can transport up to 7m b/d, two-thirds of the kingdom’s total output, to ports on the Red Sea. The other, in the United Arab Emirates (UAE), can move about half of that country’s 3.4m b/d to the port of Fujairah. Dozens of tankers are already sailing towards Saudi Arabia’s west coast to pick up crude.
On recent nights Iran has launched dozens of drones at Saudi oil fields, up from just a handful at the start of the war. In the UAE it has attacked Fujairah (the source of the plume of smoke in the image above), a big gas field and the Ruwais refinery, which can process nearly 1m b/d. After Israel bombed Iran’s portion of the world’s biggest gas field on March 18th, Iran targeted the processing plant on the Qatari side of the same field. All of this suggests a change in tactics, in which Iran tries to hit the sources of energy supply, not just the vessels bringing it out of the Gulf.
With so many tankers bound for the Red Sea, Iran might also encourage the Houthis, its militia ally in Yemen, to resume their own campaign against shipping. The group largely halted traffic through the Red Sea in 2024 by firing missiles at ships, which it described as a show of support for Palestinians in Gaza. Even a single such attack now would probably be enough to send markets into a panic. Yemen-watchers are split on whether the group would agree, though; some think it would prefer to stay out of the war to avoid antagonising the Saudis.
The loss of oil-and-gas exports is not the only economic blow to the Gulf. This should be one of the busiest times of the year in the region, with a final spurt of business-and-tourism activity between the end of Ramadan on March 19th and the start of scorching summer heat. Instead, conferences are being postponed until autumn and hotel workers are being furloughed for want of guests. Thousands of expats have left, while many planes to the Gulf arrive almost empty.
The magnitude of Iran’s attacks on Gulf states has decreased, from around 1,000 missiles and drones on the first day of the war to about a tenth of that today. Even occasional attacks are disruptive, though. Emirates, the state-owned airline of Dubai, has been gradually resuming flights. On March 15th it had hoped to operate around 60% of its pre-war schedule. Then debris from an intercepted Iranian drone hit a fuel depot at Dubai’s main airport.
Quiet diplomatic contacts with Iran have been infuriating: the regime sometimes denies that it is attacking civilian targets at all. “They’re gaslighting us,” says a diplomat briefed on a recent call. Iranian officials are also airing maximalist demands, such as the closure of all American military bases in the region. They also suggest they expect plentiful investment from the Gulf states to repair the damage from the war, a request Gulf officials liken to a mob boss running a protection racket.
The Gulf states have not joined the fight themselves, although on March 17th Anwar Gargash, the diplomatic adviser to the UAE’s president, said his country might be willing to take part in a naval coalition to secure the strait. In any event, their capabilities would be limited. More important is what they have not done: urge America to stop. The message to Mr Trump from most Gulf leaders has been that the war cannot end with an emboldened Iranian regime able to hold their economies hostage.
Many Israeli officials want to fight on as well, seeing this as a rare opportunity to wound their main state adversary. Mr Trump’s aims are still unclear: does he want to topple the regime, make a deal with it or merely hobble it? Officials in the Gulf struggle to parse his ever-changing pronouncements. Yet by making this a war over energy, Iran may have made such questions moot. It is pushing all of its foes toward the same conclusion: that the war cannot end until the regime is crippled. ■