Despite being the weaker military party, Iran's ability to inflict persistent pain on regional shipping and U.S. allies gives it leverage. To secure a ceasefire, the U.S. may have to offer incentives like sanctions relief, allowing Iran to turn military weakness into diplomatic strength.

The push for conflict with Iran wasn't just about nuclear threats but a calculated move. By controlling the Strait of Hormuz, the US could cut off China's primary oil source, forcing them into economic concessions and shoring up the US dollar.

US actions that disrupt Iran's official oil exports also drive up global prices. This creates a bonanza for smugglers, especially IRGC-linked groups, who can buy subsidized domestic oil and sell it illicitly at a huge premium, thus undermining the entire economic pressure campaign.

In a counter-intuitive twist, Iran is the primary beneficiary of the oil disruption it helped create. While rivals like Saudi Arabia have had to shut in production because they cannot export, Iran continues to export its oil, weakening its financial incentive to de-escalate the conflict.

The specific targeting choices in the initial Iran strikes—leadership, navy warships, and military infrastructure—suggest the primary goal is economic control, specifically securing the Strait of Hormuz. Had the true objective been nuclear deterrence, the focus would have been on destroying nuclear facilities, which was not the case.

Even if President Trump pivots and declares victory, the economic forecast's weak point is the assumption that Iran will immediately stand down. Iran may leverage the situation to extract guarantees, keeping oil prices high and undermining a market recovery.

The public threats of a military strike against Iran may be a high-stakes negotiating tactic, consistent with Trump's style of creating chaos before seeking a deal. The goal is likely not war, which would be politically damaging, but to force Iran into economic concessions or a new agreement on US terms.

Contrary to decades of public statements prioritizing low gas prices, President Trump is prolonging the Iran conflict despite oil soaring over $100. The political cost of being perceived as weak and handing Iran a narrative victory outweighs the economic pain for him in this context.

Even if the US withdraws from the conflict, Iran has demonstrated its willingness to attack Gulf oil infrastructure. This establishes a new, persistent risk, fundamentally changing the security calculus and embedding a long-term price premium into the market that presidential rhetoric alone cannot erase.