The US and Iran are locked in an escalating cycle of mutual attacks, with both sides facing immense pressure. A protracted war would be difficult for neither side. Although both countries have expressed a willingness to resolve the issue diplomatically, the memorandum of understanding signed in June has been declared invalid by both sides. In public statements, neither country has shown any intention to compromise. But can either side truly sustain this months-long war? The following analysis examines the constraints faced by both countries from economic and geopolitical perspectives.
For Tehran: Economic Pressure, Military Damage
Iran's economy is under immense pressure—stemming from both the US-Israel war and decades of US sanctions. While its military strength remains considerable, its infrastructure has been severely damaged.
1. Economic Sanctions:
Iran is one of the most heavily sanctioned countries globally. US sanctions have suppressed oil exports, blocked financial channels, and frozen assets, causing its per capita GDP to drop from $8,000 to $5,000, and oil exports to fall from 2.2 million barrels per day to 1.5 million barrels per day. After the signing of the memorandum of understanding in June, the US lifted the blockade, granted a 60-day sanctions waiver, and promised to unfreeze assets, causing the rial to appreciate by 15% that day. However, the US reinstated sanctions this week, severely damaging an already weakened economy.
2. Defense Capabilities: According to CSIS analysis, Iran's military strength was severely weakened by US and Israeli strikes in the first phase of the war. As of April 1, its missile stockpile was depleted by 30%, its drone stockpile by 60%, and a large amount of naval infrastructure and weapons production bases were destroyed. The US claims to have severely damaged Iran's nuclear facilities in a 12-day war scheduled for 2025. A new round of strikes, beginning last week, continues to exert pressure, including Thursday's attack on Grand Tunbu.
3. Regional Diplomacy: Iran's strikes against its Gulf neighbors in March and April had already strained bilateral relations, and the current mutual attacks have further exacerbated the rift. The US maintains military assets at at least 19 locations in the Middle East. Iran claims its targets are US military facilities, but the first phase of attacks hit sovereign territory and caused civilian casualties. The conflict is pushing Gulf states to strengthen data sharing and early warning coordination.
For the US: Oil Prices, Midterm Elections, and Weapons Shortage
The US is also under immense pressure and has failed to force Tehran to yield.
1. Oil Prices Surge: Following the latest round of attacks, crude oil prices jumped 12%, reigniting concerns about the Strait of Hormuz's passage. Before the war, about one-fifth of the world's oil passed through this waterway; Iran's blockade has already disrupted global energy prices. The average price of gasoline in the United States rose from $2.98 per gallon before the war to a peak of $4.63 in May.
2. Midterm Elections: Rising oil prices and the cost of living have made the war extremely unpopular. A YouGov poll this week showed that 57% of Americans believe that going to war was a mistake. With the November midterm elections approaching, Republicans face the risk of losing their majority in Congress, while some polls show Democrats with a slight lead.
3. Weapon Shortages: According to CSIS, while U.S. weapons stocks are not yet at critical levels, they are declining. Four of the seven main types of munitions have been depleted by more than half in the first phase, and even with increased production under the Defense Production Act, replenishment will take months to years. In addition, the U.S. has lost 14 soldiers and has 414 wounded.
Will this lead to a halt in the conflict? Australian National University Professor Alam Saleh stated that while economic pressures and regional diplomacy are indeed factors to consider, the Iranian leadership views this as a life-or-death struggle and is unlikely to yield. He pointed out that Iran, having endured 47 years of sanctions, has developed economic resilience and is determined not to show weakness to the United States. If its security is not guaranteed, Iran will not compromise, but will resist. Regarding weapons production, US media reports indicate that Iran quickly restarted drone production after the April ceasefire, and some analysts estimate that Iran may fully replenish its drone arsenal within months.
As for the United States, analysts say concerns about its weapons stockpiles are more directed at potential future conflicts with other countries. International Crisis Group expert Fineuken pointed out that key weapons such as Patriot interceptors and Tomahawk missiles are being depleted at an alarming rate, and these are precisely what is needed to deal with other major military contingencies.
Ultimately, a protracted war would be costly for both sides. However, Saleh believes that the United States would suffer greater reputational damage. Other countries are watching how the United States deals with Iran, and the inability to resolve a conflict between middle powers with overwhelming force itself exposes the limitations of the US military.
