The US has loosened Iran’s grip on the Strait of Hormuz, but the costly war is far from over

The United States has loosened Iran's control over the Strait of Hormuz, resulting in a significant decrease in Iran's oil exports and contributing to its economic decline. The U.S. blockade has almost entirely halted Iran's oil shipments, while exports from nations bordering the Gulf have surged.

However, the war between the U.S. and Israel launched in February remains unresolved, with no clear end in sight. An agreement signed in June has collapsed, and there has been no diplomatic progress since then. Low-level fighting continues, and the U.S. lacks a clear exit strategy.

The economic pressure on Iran has not resulted in a widespread uprising, and the Iranian leadership may choose military escalation over surrender. Iran's allies in Yemen have intensified attacks against Saudi Arabia, driving up oil prices to record highs. This has the potential to fuel inflation and exacerbate economic challenges.

As a result, the U.S. President Donald Trump acknowledged that gas prices are expected to remain high throughout the mid-term congressional elections. Mona Yacoubian, a Middle East expert at the Center for Strategic and International Studies, stated that Iran shows no signs of backing down and is willing to escalate wherever possible. Consequently, the war is projected to be protracted without a clear winner.

Iran's oil exports have plummeted from 1.85 million barrels per day at the beginning of the war to approximately 255,000 barrels in August. Conversely, exports of non-Iranian oil have increased from 300,000 barrels per day during the peak of the conflict to 8.4 million barrels in September, and exports through alternative routes have reached 10.8 million barrels.

The U.S. Energy Secretary, Chris Wright, reported that the country is likely exporting two-thirds or more of its pre-conflict oil flows. Non-Iranian exports reached around 14 million barrels per day before the war, according to Homayoun Falakshahi, an oil expert at Kpler. However, the increased flow relies on a significant U.S. presence in the Strait of Hormuz, which has strained the military's resources.

The unpopular war has already cost U.S. taxpayers over $37.5 billion and resulted in 18 service member deaths, and it is anticipated to negatively impact Republicans during the November elections. While the tightened blockade and new U.S. sanctions have severely affected Iran's economy, driving up prices and causing longer gas station queues, they have not prompted the country's hard-line leaders to make concessions related to the Strait of Hormuz, its disputed nuclear program, or its support for armed groups in the region.

The U.S. has yet to develop a clear theory of victory, as more ships have been able to pass through, and Iran is suffering economically. However, this has not translated into political outcomes. Iran has continued to attack vessels in the strait, receiving limited U.S. strikes on its coastal areas, and then retaliating with missile attacks on Arab nations hosting U.S. forces.

The Iran-backed Houthis, involved in a long-standing conflict with Saudi Arabia that has intensified recently, have launched attacks on Saudi oil facilities. They are also targeting Saudi shipping, which threatens oil exports and a critical trade route through the Bab el-Mandeb strait leading to the Red Sea and the Suez Canal. The Houthis have damaged Saudi Arabia's Jizan refinery, a significant supplier of diesel.