A World at War and A War of Worlds
The streets of Midtown East came alive with diplomacy this week, as global leaders convened for the 81st UN General Assembly (UNGA) and New Yorkers grumbled at the additional road closures. But underpinning discussions of peace and security is the cold hard fact that much of the world is either currently at war, or feeling the ramifications of these wars, and that there’s no quick fix here. Worse, the threat of expanded conflicts in new arenas—both geographical and technological—looms large in the background, and it’s unclear how and if any international organization has the capacity to stop them.
Conflicts, Controversy, and Corruption,
Tehran is sustaining pressure on the Strait of Hormuz to keep energy prices elevated while deliberately keeping the conflict below the threshold of full-scale war. Iranian hardliners see rising US inflation and the Fed’s recent rate hike as evidence that their strategy is increasing pressure on Washington, but Iran’s growing economic isolation—including tighter Turkish trade controls and Pakistan’s border closure—could make the stalemate difficult to sustain.
Beijing is also introducing a new layer to the confrontation, with Tehran concerned that China could use its leverage over Iranian oil purchases to pressure a reopening of Hormuz in exchange for Washington walking back a proposed $14 billion arms package to Taiwan.
Meanwhile, the Houthis have privately assured both the US and Israel that their vessels will be spared in the Bab el-Mandeb—provided neither joins Saudi Arabia’s efforts to retaliate after a series of crippling Houthi strikes on key Saudi targets.
Lines of Leverage
Iran’s shifting its pressure campaign from Hormuz toward the Bab el-Mandeb this week, betting that growing Houthi control of the Red Sea chokepoint can provide Tehran with greater leverage over Washington. Shipping volumes through Hormuz have collapsed amid renewed US-Iran kinetic flare-ups, while rapid Houthi advances in Yemen now threaten to give Iran an additional lever over global maritime traffic—and potentially the ability to trade Houthi gains for recognition of its sovereignty at the Strait of Hormuz. Depending on Riyadh’s response to the recent attacks on its soil, Houthi strikes could generate significant leverage—or instead galvanize a coalition prepared to escalate militarily against the Houthis and their Iranian backers.
Strategic Power Plays
Prospects for a durable off-ramp to the US-Iran conflict remain limited, as negotiations to re-open the Strait of Hormuz remain directed by Iran’s maximalist hardline leadership. Rather than seeking a compromise which secures its interests while appeasing Washington with some concessions, Tehran appears intent to leave no room for the US to claim a diplomatic success. Iran’s demands for unilateral control of the waterway remain a central sticking point, as do fees, and even if an agreement is reached in the coming days, differing expectations over sanctions relief, shipping governance, and the treatment of foreign vessels are likely to leave any arrangement vulnerable to collapse and renewed fighting.
Converging Contests
The US-Iran conflict is now seeing the risk of escalation extending beyond direct exchanges between Washington and Tehran. While both sides appear to be calibrating their own strikes to avoid a return to full-scale conflict, peripheral actors—including the Houthis and Iran-aligned groups in Iraq—are expanding the geographic scope of the conflict. Regional governments face growing pressure to respond to attacks on their infrastructure and maritime routes. The strike against Egypt’s Damietta port highlights the vulnerability of energy infrastructure outside the conflict’s traditional theater and raises the prospect that additional states could be pulled into the confrontation.
Breaking the Balance
With military confrontation back in full force this week, Washington and Tehran are headed toward another collision course resembling the peak of hostilities last spring. The June framework has eroded and been replaced by a familiar resumption of kinetic attacks, primarily targeting the Iranian coastline of the Strait of Hormuz, as both the US and Iran attempt to use the battlefield to reconfigure the next negotiations balance.
Closure Without Clarity
The agreed upon Memorandum of Understanding coming out of the latest US-Iran negotiations is a validation of progress, but each signatory will interpret its requisite obligations in a way that advances its national interest. This will impact the speed and nature of the deal’s implementation and even threaten its ultimate viability.
Deals and Detours
The agreement Washington and Tehran signed electronically this week is being characterized as the end of the war, but that assessment is likely an overstatement. The document is a sixty-day interim memorandum which gives both sides a way to pause the fighting, but structural disagreements remain which could derail the diplomatic track.
Stuck in the Middle
The Middle East is erupting again this week, with kinetic attacks ranging from Iranian missiles launched at Israel to US strikes on petrochemical plants in Iran—but the military escalation is likely aimed to prompt a quicker diplomatic solution, not derail one. Neither side wants to continue full-scale fighting, but if Iran remains firm in its demands to control the Strait of Hormuz and refuses to negotiate on the nuclear issue, it will be difficult for Washington to back down, and we can expect lower-level violence to continue—if not expand.
Agreeing to Disagree
Washington and Tehran both want a deal, but not the same one. For the White House, the priority is reducing tensions in the Gulf, securing freedom of navigation through Hormuz, and preserving space for a longer diplomatic process on the nuclear issue. Iran, by contrast, appears to be seeking an arrangement that demonstrates the limits of American coercion while preserving the strategic assets and sources of leverage it regards as untouchable.
