Today, Iranian armed forces targeted US and Israeli military and industrial infrastructure, as well as an American amphibious helicopter carrier transporting more than 5,000 troops. According to the Iranian Tasnim News Agency, the public service of the Islamic Revolutionary Guard Corps (IRGC) announced that the Corps' naval and aerospace forces executed combined operations against American and Israeli military installations. The operation, dedicated to Majid Khademi, included strikes against command centers, operational and logistical infrastructure, as well as industrial military targets.
First strikes with cruise missiles
In the first phase of the operations, IRGC naval troops targeted the Israeli container ship SDN7 with cruise missiles, causing an extensive fire following its destruction. Simultaneously, precision missiles struck strategic targets in Haifa and industrial facilities in Beer Sheva, as well as Israeli military bases in Petah Tikva. The American amphibious LHA7, carrying more than 5,000 Marines, sustained a series of explosive and missile attacks from the IRGC, forcing it to retreat toward the southern Indian Ocean.
Drone strikes as well
In another part of the operation, drone production centers in the United Arab Emirates and Israel, as well as aircraft at the Ali Al-Salem base, are being struck with precision by drones and missiles. The IRGC emphasizes that the attacks will continue and that naval activity in the Persian Gulf and the Strait of Hormuz is being closely monitored. Every move by adversaries will be met with determination by Iranian troops. Tehran pledges to keep the Iranian public informed of every development regarding operations against "terrorist" forces, as it characterizes the US and Israel.
The IDF has suffered a strategic defeat
With the war in the broader Middle East region entering its sixth week, the US and Israel have become trapped in a dangerous game of military escalation with Iran. The confusion prevailing in the American government regarding the next move is revealed by Trump himself, who on one hand launches unprecedented threats to destroy Iran's energy infrastructure, and on the other extends his own ultimatums, stating that serious negotiations are underway and a deal with Tehran is possible. Trump is trapped, and his impasse at the Strait of Hormuz is characteristic. His failure to achieve the reopening of the Strait is plunging the US economy into disaster, while his policy has been a true gift to Iran, which can now count on revenues of $500 billion. In the face of these moves that reveal an unprecedented fiasco, Iran maintains a very specific line, stating that it will not back down or agree to a temporary ceasefire, as it wants assurances that the war will end permanently and that it will not be attacked again by the US and Israel. At the same time, an Israeli general confesses and explains why the Israeli military has suffered a strategic defeat on the Iranian front. Amidst this chaotic scene, the world watches, the clock is ticking, and every moment could change the facts in one of the most dangerous conflicts of the 21st century.
Israeli general admits strategic defeat
Israeli General Isaac Brik argues that the Israeli military has been downgraded from a strategically oriented army to a "crisis manager." In his analysis, Brik explains the reasons for the IDF's strategic defeat in the recent war, tracing its roots to a gradual process spanning nearly three decades. As he says, the path began after the Yom Kippur War but was significantly reinforced over the last thirty years, leading to the current situation. Brik contends that the IDF has been downgraded from a "strategically oriented army" to a "crisis manager." In his view, this army no longer possesses a comprehensive strategic concept and operates only reactively. Instead of planning and guiding the war on a regional or global level, it simply responds to crisis points—like a firefighter going from incident to incident without an integrated plan.
Weakening and the shift to air power
The analysis points out that about two-thirds of the IDF's traditional capability has been weakened, and the primary focus has shifted toward developing a technologically oriented air force. Brik notes that this shift, while providing advantages, weakens the military's strategic foundations and turns it from an integrated body into a one-dimensional tool. One of the most significant consequences of this trend is the severe reduction in the resilience of Israel's "home front." Brik distinguishes between different fronts:
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Classical fronts (e.g., North against Hezbollah or South against Gaza)
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A new front, the "rear front," namely internal society. According to Brik, in previous conflicts—even in recent crises—the level of domestic involvement was limited:
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In the events of October 7, internal conflicts were mainly limited to the first two days and the areas around Gaza.
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In the tension with Hezbollah, conflicts were mainly limited to the northern border (~10 km).
Differences in the current war
In the current situation, for the first time, the "rear guard" is involved continuously and on a large scale. Brik emphasizes that "for 37 consecutive days, the home front has been involved. This includes strikes, operational disruptions, and insecurity at the city level, a fact that significantly reduces social resilience and the ability to continue the war."
Iran expects $500 billion in revenue from the Strait of Hormuz
Iran, relying on its strategic position at the Strait of Hormuz, can acquire a steady source of revenue, according to a report by Reuters. As stated, US military action against Iran unexpectedly created a geopolitical opportunity for Tehran. Iran can, by leveraging its position in the Strait of Hormuz, obtain a stable source of income. Approximately 150 oil tankers pass through the Strait daily. If Iran charges an average of $2 million per ship—a figure cited by Lloyd’s List—annual revenues could reach $100 to $120 billion. The report highlights that Iran will likely not limit itself to a flat fee but will implement a dynamic system, similar to that of the Bosporus and Dardanelles straits, where fees are determined by volume, weight, or type of cargo, dynamically increasing revenue.
There are no alternative routes
As pointed out, the possibility of alternative routes is limited. Specifically, it is emphasized that the capacity of pipelines to bypass the Strait is restricted and that of the approximately 20 million barrels of oil exported daily from the region, about 10 million barrels still depend on the Strait of Hormuz. Furthermore, it is stressed that in the short term (4 to 5 years), there is no effective alternative route. The Reuters analysis concludes that if Iran can stabilize this revenue model over a few years, the total amount could reach $500 billion. It is even noted that Trump’s policies created this possibility for Iran.
Arabs stand to lose $200 billion annually if Hormuz remains closed
At the same time, it is estimated that if the Strait of Hormuz remains closed, Arab countries will lose approximately $200 billion annually in oil revenues. According to an analysis, if the Strait remains closed, Arab countries will lose about $200 billion a year from their oil income. Additionally, Qatar will suffer losses of approximately $50 billion from natural gas exports. In total, about $250 billion in annual revenue may be affected—revenue that, due to the region's geopolitical position, is essentially under Iran's influence. Based on this reality, it is argued that Iran could use this position as economic leverage and demand part of these revenue flows in the form of transit fees or duties.
Rejection scenario by Arab countries
One of the possible scenarios is that Arab countries, relying on their sovereign wealth funds, could refuse to pay fees to Iran. However, according to the Reuters analysis, the economic resilience of these countries in a long-term crisis is limited, while Iran has more experience in managing prolonged pressure. As a result, continuing the blockade could gradually exhaust their financial resources. It is noted that the US could threaten that any payment of fees to Iran would be considered a sanctions bypass, imposing sanctions on the involved parties. However, this approach creates a strategic dilemma: Washington's core goal is to reduce energy prices, while such pressures may lead to an increase in oil prices. This creates a sort of impasse in decision-making for American policy.
Impasse and Trump's confusion
Trump has been sending constantly contradictory and clashing messages for 37 days. His statements regarding oil and the Strait of Hormuz are indicative. "The United States imports almost no oil through the Strait of Hormuz and will not in the future. We don't need it. We have never needed it and we don't need it." This is what President Donald Trump stated last Wednesday during a prime time speech from the White House. "Open the fucking Strait, you crazy bastards, otherwise you will live through Hell – JUST WATCH!" This was Trump’s message on Sunday in a post on Truth Social. What changed? On one hand, the price of oil…
Oil, Hormuz, and the American economy
American oil skyrocketed over 11% last Thursday, the day after his speech, reaching over $111 per barrel—the highest price in four years and one of the largest daily increases in history. West Texas Intermediate was trading around $100 per barrel shortly before Trump’s speech and under $70 per barrel before the war began. Trump is right that the United States relies very little on Middle Eastern oil passing through the Strait of Hormuz—the narrow passage through which 20% of the world’s oil usually passes. America takes only about half a million barrels of the 20 million barrels of crude that pass daily through the Strait—a very small amount that it could replace with oil from other regions. But Trump’s latest threat, full of profanities, underscores the tragic truth: the health of the US economy depends on the Strait of Hormuz much more than the president has admitted.
Supply and demand
The United States has done a remarkable job over the last fifteen years reshaping its energy industry, thanks to hydraulic fracking and horizontal drilling, particularly in the Permian Basin of Texas. America now produces about 22 million barrels of oil per day, twice the production of Saudi Arabia and slightly more than it consumes daily. America is energy independent. The United States still imports over 6 million barrels of crude a day—about one-third of what it consumes. It also exports about 4 million barrels of oil daily. This happens because not all oil is the same: America produces light, sweet crude, which is ideal for gasoline but poor for heating fuel, asphalt, and diesel, among other heavy distillates. Thus, the US needs to import oil from countries that produce heavy, sour crude—including Venezuela and the Middle East. Furthermore, the oil market is global. When supply decreases in one region, it affects all regions. During such shortages, oil importers compete for whatever barrels are available, driving up the price for whoever needs them most, as pointed out by Dan Pickering, founder and chief investment officer of Pickering Energy Partners. Thus, the US was and will likely continue to be well-supplied with oil during the war with Iran. The problem is not that. The concern is that America is not immune to global oil prices.
The energy economy
High energy prices are an obvious consequence of America’s war and Iran's effective closure of the Strait of Hormuz. Crude prices remained high on Monday after Trump’s threat to strike Iran's factories and bridges. Gasoline prices in the US rose to $4.11 per gallon on average. These high oil and gasoline prices are already affecting the US economy. Many middle- and low-income Americans who were already weary of high prices are struggling with gasoline expenses, and some small businesses that cannot further increase prices face difficult staffing decisions. The biggest problem will arise if high prices destroy the demand for gasoline and oil. Prices may decrease as a result, but if oil and gasoline are too expensive for Americans to fill their cars or travel by plane, this could create serious economic problems.
Wall Street estimates
Shrinking a $30 trillion economy is not easy. Despite the fact that eight of the last nine recessions were preceded by oil price shocks, the war has lasted only five weeks and might need to continue for months to cause recession-level damage. Wall Street analysts estimate that every $10 increase per barrel reduces GDP by between 0.1 and 0.4 percentage points. The current increase of $40 per barrel could reduce about one percentage point of GDP—significant, but not enough for severe damage. But the situation could become much worse if prices rise sharply.
Increases everywhere
And oil is not the only factor: All products delivered by truck will become more expensive due to rising diesel prices. Several other imports through the Strait, such as aluminum, helium, and fertilizer, will increase prices for building materials, microchips, and food. Annual consumer inflation for March is expected to reach approximately 3.5%, completely erasing the average wage increase of the previous year for American workers. "The US economy can withstand the shock for some time with oil over $100 per barrel," said Joe Brusuelas, chief economist at RSM US. "But if it reaches $150 or $200 per barrel, it's a different matter."
The hard truth about the Strait
This may be a significant factor in Trump’s concern regarding the Strait of Hormuz. Trump has spoken contradictorily about the Strait since the beginning of the war. His administration has promised to navally escort tankers passing through the Strait and to guarantee insurance for ships that lost their coverage from marine insurers. He has also stated that tankers must show courage and sail into the Strait, and the countries most dependent on Middle Eastern oil should help reopen the strait on their own. "Go get your own oil!" Trump posted on Truth Social last Tuesday. Trump’s changing rhetoric daily has raised or lowered oil prices, but overall oil has increased as it becomes clear that Iran holds the cards in the Strait—and an American withdrawal from the war might not reopen the vital lane for tanker passage.
No exit strategy
There is intense concern that Trump has no exit strategy from the war with Iran, and there is strong worry that his threats of escalation could further hit the crude supply. Iran, meanwhile, has stated that it will charge tolls for safe passage through the Strait—a fee that many Gulf countries will likely refuse to pay. Even a partially open Strait would leave the world with a deficit of 4.4 to 8 million barrels per day, according to Citi's global energy strategist, Anthony Yuen. Trump set a deadline of 03:00 a.m. Wednesday 8/4 (Greek time) for Iran to reopen the Strait. It is not clear what Iran's response will be, or if and how the United States could convince Iran to open it.
What will happen?
The US-Israel campaign against Iran completed five weeks last Saturday, without any clear plan for the conflict's conclusion. At the beginning of the war, the White House spoke of an operation lasting 4 to 6 weeks. Mediators told the Wall Street Journal last Friday that negotiations have reached an "impasse." Considering that Trump's latest ultimatum expires in less than 48 hours, it is obvious that the worst is yet to come. Two optimistic scenarios seem unlikely to materialize. Despite repeated Israeli claims that there are "visible cracks" in the Iranian regime, it is not going to fall. US intelligence estimates say the regime will likely remain in place, with the Islamic Revolutionary Guard Corps in even greater control. Nor are the Iranians going to run out of missiles or drones. Israel and the US have destroyed hundreds of Iranian missiles and launchers, but Israel believes the country has over 1,000 more, according to an IAF intelligence officer, and will be able to continue firing as long as the war lasts. Iran is also proving capable of quickly retrieving launchers from underground sites hit by the US and Israel and reusing them, as reported by the New York Times.
Toward escalation
The war seems to be heading toward escalation, possibly in its final phase. If Trump does not continue to extend his deadlines, he will have to keep his promise to end "America's nice stay in Iran" with attacks on power plants, energy infrastructure, and Kharg Island. He made an extremely clear and specific threat on Sunday, saying that Tuesday "will be the Day of Power Stations and the Day of Bridges, all together in Iran. There will be nothing like it!!!" Israel is ready to launch its own attacks on Iranian energy facilities but is waiting for the green light from the US.
Victory narrative
Trump—and likely Netanyahu in this case—could unilaterally end the war after neutralizing significant Iranian energy infrastructure, creating a victory narrative by presenting the damage caused to Iran’s military and industrial capabilities. However, there are several major problems with this approach. First, there is no guarantee that Iran will agree to stop the war just because the US and Israel do. It may see the opportunity to strengthen the narrative that it defeated its enemies by continuing to target Israel and the Arab countries, undermining Trump's claimed victories. Most importantly, it is hard to imagine Trump allowing the war to end while leaving control of the Strait of Hormuz in Iran's hands. While in the past the US was the guarantor of safe passage through this strategic point, Iran would become the regulator for who passes—and would certainly use it to its advantage, charging fees and pressuring other countries by threatening to block them.
Deciding on a ground intervention
Trump has thousands of ground forces ready for an operation to take control of the strait from Iran. They can seize islands in the passage, control parts of the Iranian coast from which navigation is threatened, or land on Kharg Island to hold the critical export site as a bargaining chip. The use of ground forces could escalate the war even further, as Iran would likely target much of its power at amphibious forces. If he causes significant casualties, Trump could choose to punish Iran even more.
What will happen to the 440 kg of uranium
There is also the issue of Iran's 440 kilograms of highly enriched uranium. It is believed to be buried under the rubble of the Isfahan and Natanz nuclear facilities, which were bombed by the US and Israel last year. If it remains inside Iran, the regime could use it in the future to create a nuclear weapon. Trump claims there is no problem. In his speech last week, he said, "we have it under intense satellite surveillance and control. If we see [the Iranians] make a move, even for that, we will hit them again very hard with missiles." However, Trump will not be president forever, and he may not have the inclination to start another conflict with Iran in the time remaining.
Thousands of US soldiers
There are US plans to use ground forces to take the uranium. However, such an operation would be dangerous and require significant resources. American forces would have to transport hundreds or even thousands of soldiers behind enemy lines, along with heavy equipment, while operating under fire from Iran, as former defense officials told the Washington Post. They would have to spend weeks breaking through rubble to collect the uranium, while planes would need a specially constructed runway to transport it. And Iran would try to harm the forces involved in the operation. At least for the next few weeks, the war against Iran seems headed for further escalation. This will harm Iran more than Israel and the US, but it shows no easy way out of the war.
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