Trump: Middle East allies asked me to hold off on new Iran strikes

The United States' pause on major strikes in the Iran conflict may not indicate an imminent end to the war, but rather a tactical break as President Donald Trump considers whether renewed air strikes could bolster his negotiating position. Gulf energy producers have adjusted to the ongoing conflict, which has made their operations more expensive and risky, potentially contributing to a floor for global oil prices.

However, the costs of living with the existing conflict have not decreased. Iranian attacks on vessels in the Strait of Hormuz have become frequent, with 35 confirmed incidents in November alone, up from the lowest point during the conflict. In response, oil and liquefied natural gas exporters have implemented complex strategies such as convoy shipping, narrow routes close to Oman's coast, and ship-to-ship transfers under US Navy protection.

While these measures have worked, they come at a significant cost, with freight and insurance expenses remaining about 10 times pre-war levels. Unless a durable agreement is reached between Washington and Tehran, there is little reason to believe these costs will dissipate. Gulf producers are adapting to the new reality, demonstrating their resilience, but it remains unclear if they are truly resolving the situation.

Iran has every incentive to continue attacking vessels crossing the Hormuz, while the US blockade is straining its economy. Teheran appears confident it can outlast Washington, especially after the Republican Party's recent losses. This leaves Trump with an uncomfortable decision: continuing the conflict or accepting a deal that may not significantly curb Iran's nuclear ambitions.

The US midterm elections signaled the political repercussions of an unpopular war, but the question remains whether Washington is willing to accept a deal that doesn't effectively curb Iran's nuclear program, or risk another round of military action that could strengthen Iran's position. The real danger is not just a spike in oil prices due to renewed conflict, but the emergence of a more durable and insidious form of conflict that keeps shipping risky, insurance expensive, and energy infrastructure vulnerable, but contained enough for the world to adapt.