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Ask AI · How do oil price fluctuations affect the decision-making balance in the U.S.-Iran conflict?

Local time on March 24, U.S. President Donald Trump said at the White House that the U.S. had “won” in its action against Iran, and that Iran had been “completely defeated.” U.S. Secretary of Defense Pete Hegseth also said the same day that this operation is different from the wars in Iraq and Afghanistan. The goal of this round is clear: to “eliminate the risk of nuclear capabilities,” rather than long-term involvement or reconstruction.

The day before, Trump said the U.S. and Iran were holding “very in-depth negotiations,” reached multiple understandings, and would “delay by 5 days” the strikes on Iran’s power plants. However, Iran’s parliamentary speaker Mohammad Bagher Qalibaf posted on social media in response, saying that reports about the negotiations were “false information,” and that the purpose was to manipulate financial and oil markets so as to help the U.S. and Israel get out of their current “predicament.”

Within just a few days, Trump’s stance has taken a sudden turn—moving from a “final ultimatum” to strike Iran’s power plants to repeatedly referencing ceasefire proposals. On one hand, a ceasefire plan containing 15 points was reportedly delivered to Tehran via Pakistan channels. On the other hand, about 2,000 soldiers from the U.S. Army’s 82nd Airborne Division are deploying to the Middle East, and the Marines are assembling in the Persian Gulf. Options for an amphibious landing and island-seizure operation against Iranian islands near the Strait of Hormuz have not been ruled out of the plan.

In addition, at the very moment when all sides publicly announced that Pakistan is prepared to act as a coordinating country to host negotiations between the U.S. and Iran, a poll released by Reuters this week delivered a hot and potentially damaging report card to the White House: Trump’s approval rating has fallen to 36%, the lowest level since his return to the White House; his economic approval rating is only 29%, not only lower than at any point during his first term, but also lower than all records during the Biden administration. The direct driver of this decline is the oil price that has remained elevated since the outbreak of the U.S.-Iran conflict.

Under these circumstances, the White House’s high-profile announcement that negotiations are making progress, and the Pentagon’s simultaneous troop buildup in the Middle East, have not removed the island-seizure operation plan from the table. Are the negotiations truly genuine diplomatic efforts, a delaying tactic to buy time for all parties? Or is it a strategic disguise to lull Iran and create a window for the next round of military strikes?

On March 18, Iran’s capital Tehran held a funeral for the service members who were killed when an Iranian warship was sunk by U.S. forces, as well as for Iranian security officials and military commanders who were killed in attacks launched by Israel. Photo/ Xinhua

A more dangerous new phase

In the early hours of March 17, precision-guided bombs by the U.S.-Iran allied forces ended the life of Ali Larijani, Secretary of Iran’s Supreme National Security Council. Iran’s official authorities immediately announced a “three-day national mourning,” and the Islamic Revolutionary Guard Corps entered “the highest level of wartime alert.”

Larijani, who was widely viewed as the person effectively controlling the Islamic Revolutionary Guard Corps, was killed in an attack. His death is neither the endpoint of this conflict nor the starting point of Iran’s collapse. Instead, it is a signal marking that the war has entered a more complex and more dangerous new phase.

Larijani’s position within Iran’s military system far exceeds that of a typical “commander.” He is a veteran of the Iran-Iraq War, the main designer of the Revolutionary Guard Corps’ “mosaic defense” system, and a core hub connecting overseas proxy networks such as the missile units, drone units, Hezbollah, and the Houthis. In the language used by Western intelligence circles, he is the brain of Iran’s “tri-domain operations”—the core coordinator overseeing three lines of operation: land-based missiles, aerial drones, and overseas proxy armed forces. Larijani’s death means that the most strategically coordinating link in Iran’s command system has been severed.

However, after decades of strategic evolution, Iran has prepared a set of “immunity mechanisms” to respond to sudden targeting and killing of top-level figures. To understand this mechanism, one must go back to the period of the Iran-Iraq War. That eight-year attrition war left Iran with profound strategic lessons, leading the Revolutionary Guard Corps to conclude that it needed a distributed system with “no central node” to address the shortcomings of the central command system. Under this system, operational instructions for Iran’s missile brigades and drone battalions would be pre-positioned in advance, so that theater commanders, under specific conditions, would not need to wait for directives from Tehran to launch on their own. In recent years, Lebanon’s Hezbollah and Yemen’s Houthi forces have also gained greater autonomy in choosing the timing of attacks on Israel’s northern regions and the Red Sea shipping lanes.

After Larijani was reportedly killed, there were delays in missile launches in multiple places in Iran, and the scheduling of drone formations was briefly interrupted. But this 12-hour “vacuum period” is far from the “collapse effect” expected by the U.S. and Israel. One of the deepest structural paradoxes of this war becomes clear at this moment. While the U.S. and Israel’s “decapitation” actions may eliminate specific targets, they may also be accelerating Iran’s evolution into the form that is hardest for them to deal with—building a flatter, more dispersed, and harder-to-kill military network.

“Asymmetric warfare”

This war, now entering the new phase, shows two parallel asymmetric logics. The first layer is the asymmetry between the military power of the U.S. and Israel versus Iran’s military power. The second layer is the asymmetry in the attrition-war phase: Iran’s low-cost harassment versus the high-cost defense by the U.S. and its allies.

At the first asymmetric layer, the advantage of the U.S.-Israel coalition in traditional military terms is overwhelming. According to U.S. assessments, since March, Israel’s F-35I aircraft formations have used bunker-busting munitions to strike Iran’s underground “missile cities,” destroying five underground missile facilities. U.S. EA-18G electronic warfare aircraft have suppressed Iran’s radar systems, causing the real hit rate of Iran’s ballistic missiles to drop sharply from about 60% to around 35%. In the intelligence domain, the U.S. and Israel share a “red list” of targets. Within weeks, they carried out targeted killings of multiple Iranian nuclear scientists, destroyed three centrifuge plant sites, and—through real-time monitoring via satellites and drones—preemptively destroyed a large number of mobile missile launch vehicles.

However, this precision strike system has a fundamental geographic blind spot. At present, the U.S. and Israel’s main strike forces are concentrated in Iran’s western regions, including known military facilities along the line from around Tehran to Khuzestan Province and the Zagros Mountains. In contrast, Iran’s mountainous areas in the east and the southeast—especially in Kerman Province and the Khorasan region—are believed to still retain multiple dispersed underground “missile cities” that have not yet been destroyed. These facilities are deeply buried inside mountains, with some depths exceeding 80 meters. The existing GBU-57 “Massive Ordnance Penetrator” is the strongest bunker-busting munition in the U.S. military, but for reinforced facilities deeper than 60 meters, the penetration effect remains uncertain.

This means that up to now, what the U.S.-Israel coalition has knocked out in the west is only part of Iran’s missile stockpiles and infrastructure. Strategic reserves in the eastern depth remain largely intact. Some assessments show that Iran’s existing ballistic missile stockpile is between 1,500 and 2,500 missiles, including the “Conqueror-313” and “Meteor-3” series with ranges covering all of Israel.

The second asymmetric layer is Iran’s “punching above its weight” during the attrition-war phase. The unit cost of each Shahed-136 drone is about 20,000 dollars, and its monthly production capacity is on the scale of several thousand drones. By comparison, the cost for the U.S. and Israel to intercept a single missile—taking the upgraded “Arrow-3” system version of “Iron Dome” as an example—costs about 8 million dollars per interception. In mid-March, Iran used more than a dozen drones to conduct a feint attack on Qatar Ras Laffan LNG facilities, inducing the U.S. and Israel’s air defense systems to expend large numbers of interceptor missiles. Then a suicide drone broke through the defenses, and the losses to port facilities exceeded several hundred million dollars.

The deeper effect of this style of operations lies in the psychological dimension. Energy infrastructure in Gulf Cooperation Council member states—especially Qatar and the United Arab Emirates—continues to be harassed, causing these countries’ confidence in the U.S. and Israel’s “protection commitments” to visibly waver. Saudi Arabia has also repeatedly publicly condemned Iran’s “extortion-like” attacks. This is the true objective of Iran’s “punching above its weight” strategy: not to defeat the U.S. and Israel on the battlefield, but to gradually loosen the political support of the Gulf Arab states for the war through sustained, low-cost, asymmetric attrition.

“60-day time limit”

The time boundary of this war is not determined entirely by battlefield logic. There is also a legal constraint within the United States: the War Powers Resolution. It states that the U.S. president may independently direct hostile actions without formally declaring war or receiving special authorization from Congress, but must submit a report to Congress within 48 hours after initiating the action. Thereafter, if Congress does not pass a resolution to declare war, authorize, or extend within 60 days, the president must begin withdrawing troops, with an additional 30-day buffer period for withdrawal. In other words, for unilateral offensive operations without authorization from Congress, the legal cap in the text is 60 days.

However, since the War Powers Resolution came into being, successive administrations have almost never fully complied with it. From Reagan’s Grenada operation, to Clinton’s airstrikes on Kosovo, to Obama’s military intervention in Libya, presidents in different administrations have, in different ways, evaded or challenged this legal constraint. The common rationale cited is that the Constitution gives the president the status of “commander in chief of the armed forces,” and Congress cannot unilaterally limit this constitutional power through legislation. Outcomes of multiple court lawsuits have also generally concluded by invoking the principle that “political questions are not within judicial jurisdiction,” without substantive rulings.

According to a report by U.S. media on March 2, Trump has submitted to Congress a notice regarding the War Powers Resolution for the military actions launched against Iran on February 28, and acknowledged that “at this time, it is not possible to determine the full scope and duration of the military actions that may be needed.” Once the war drags on beyond 60 days, the Trump administration may take two specific operational paths.

The first is to package the military action as “defensive strikes,” “actions to protect American citizens and allies,” or a “limited mission,” thereby avoiding the trigger conditions for “hostile actions” in the legal text and causing the 60-day time limit to lose its binding force. This is the most commonly used method of packaging war according to war-law by U.S. governments in recent decades.

The second is “report extension.” Before the 60-day period expires, the administration submits a new “situation report” to Congress and simultaneously requests additional military appropriations. If Congress wants to force a withdrawal, both chambers must pass a resolution; the president can exercise a veto. In turn, this would require Congress to reach a two-thirds majority to override the veto. In today’s highly adversarial Congress, this threshold is extremely difficult to achieve.

Formally seeking authorization from Congress is the path with the highest political cost but the most solid legal authority. If, within the 60-day window, Iran causes significant casualties among U.S. forces, or launches some kind of landmark attack with a “Pearl Harbor effect,” the domestic political atmosphere in the U.S. could shift sharply. At that point, Trump seeking a congressional resolution similar to the 2001 Authorization for Use of Military Force (AUMF) would be politically feasible.

This is one of the most delicate game-structure elements of this war. If Iran can cause enough casualties among U.S. forces within 60 days, it might—ironically—provide domestic political momentum for the Trump administration to continue the war. But if Iran chooses to maintain “low-intensity attrition,” the Trump administration might stop the war on its own after 60 days due to legal pressure. How Iran’s decision-makers should calibrate the “casualty scale” is the toughest question they face.

On March 3, above Tel Aviv, Israel, Israel’s air defense system intercepted a ballistic missile launched by Iran.

When to call for a ceasefire?

Based on the variables above, the evolution path of this war is most likely to fall among three possibilities.

The first, with a relatively higher probability, is that the core goals are completed within the 60-day window, and both sides end through negotiations or a ceasefire. This is the initial intention of the U.S. and Israel. The strike focus is to destroy Iran’s nuclear facilities system and ballistic missile infrastructure, while keeping room for negotiations with Iran through a “diplomatic backdoor.” After suffering severe damage, Iran would face the strategic choice of whether to continue attrition or negotiate to cut losses.

There are mainly three favorable conditions driving this path. First, Iran’s economy is already fragile, and the capacity of the domestic population to endure a continued wartime state is limited. Second, key external forces such as Gulf Arab states and Europe have strong intentions to facilitate a ceasefire. Third, Iran’s top leader has demonstrated the ability for pragmatic strategic retrenchment in the past, such as accepting UN Security Council Resolution 598 in 1988 and ending the Iran-Iraq War.

However, the core obstacle this path faces is that the public statements of both sides differ significantly. Iran’s leadership has clearly stated that there is “no dialogue” with the United States, described Trump’s statements as “psychological warfare,” and emphasized that defense will continue until “necessary deterrence” is achieved. Whether the Trump administration’s publicly stated willingness to negotiate can be translated into concrete progress remains unknown.

The second possibility is that the war enters a 2- to 3-month multi-domain escalation period. If the U.S. and Israel fail to achieve core goals in the first stage, and manage—through legal means—to successfully bypass or extend the 60-day limitation, the war will enter a substantive escalation stage. At that time, Iran’s most likely choice would be to activate its “strategic depth,” meaning its proxy armed network.

If Hezbollah in Lebanon intensifies rocket attacks on northern Israel, Israel would be forced to open a second front. If Yemen’s Houthis announce a comprehensive blockade of the Strait of Hormuz and the Bab el-Mandeb Strait, global crude oil prices would surge sharply, affecting global supply chains far beyond the Middle East. For the heavily indebted U.S. fiscal situation, this is an economic shell aimed at a political nerve. More importantly, this path would extend the “victims” of the war beyond Israel and Gulf Arab states to Europe, Asia, and even the entire emerging market world—regions whose economies are highly sensitive to energy prices.

The least likely scenario is a low-intensity stalemate lasting more than three months. Under the premise that the first two paths fail, this is the worst outcome that all sides do not want and that could occur. If the war turns into a prolonged stalemate, the U.S. and Israel maintain a limited level of air strike intensity, while Iran sustains “harmless” low-intensity harassment. Neither side has political will to take decisive military risks, and neither has enough diplomatic momentum to achieve a truly meaningful ceasefire. Under these circumstances, domestic politics in the U.S. would continue to be torn apart by war-related exhaustion; Israel would face the accumulation of long-term public war-weariness; and Iran would maintain a war that it cannot win and cannot end on the brink of economic collapse.

Satellite image of Halk Island This issue’s map/Visual China

The “island-seizure” suspense

In the U.S. military’s strategic assessments, Halk Island’s position is far more critical than what outsiders typically understand. This small island located in the northwest of the Persian Gulf has an area of only 49 square kilometers, yet it is regarded as Iran’s irreplaceable economic heart. It carries about 90% of the nation’s crude oil export loading and shipping tasks and is referred to as Iran’s “oil export valve.” Once operations on Halk Island are interrupted or taken under control, Iran’s sources of foreign exchange would be nearly cut off, and its ability to sustain the war in the short term would face a situation akin to pulling the rug out from under it. That is precisely why Halk Island is the highest-priority target and the most clearly intended objective in the U.S. military’s operation.

Geshm Island has also entered the U.S. military’s strategic vision. With an area of 1,491 square kilometers and located at the southern mouth of the Strait of Hormuz, it is the largest island in the Persian Gulf and Iran’s core military foothold in the strait area. The range of the island’s shore-based anti-ship missile systems covers the central areas of the shipping lanes. Seizing or suppressing Geshm Island to some degree has clear military logic. But the forces and political cost needed to land on both fronts at the same time will become an important factor in the decision-makers’ trade-offs.

However, the difficulty and payoff of island seizure are at the same magnitude. Iran has built a complete “coastal anti-ship missiles + anti-tank teams” beachhead defense system on Halk Island. A clearance operation would require at least two Marine battalions, about 4,000 soldiers. More crucially, there is the weather window—fog is frequent in the Hormuz region from April to May, and the suitable climate window for amphibious landings is only about 15 days. If the operation misses this window, it will be delayed until the next cycle. Some analyses believe the probability of seizing the island is higher in late March and early April.

A full set of multi-dimensional supporting actions is required for the island-seizure operation. In the maritime blockade layer, the USS Truman aircraft carrier battle group of the Fifth Fleet will blockade the Gulf of Oman, cutting off any potential maritime reinforcements Iran could carry out from Chabahar Port. Littoral combat ships will conduct dense patrols along the Hormuz channel, monitoring every small fishing boat that could potentially be modified into suicide boats using AN/SPY-6 radar systems. In the air suppression layer, MQ-9 “Reaper” drones will conduct 24-hour continuous patrols over Halk Island, focusing on striking Iran’s mobile air defense systems. F-22 stealth fighters will be responsible for destroying Iran’s “Noor” series radar sites, clearing air-defense threats for the landing forces.

Allied coordination is also indispensable in the island-seizure operation. Saudi Arabia has indicated that it is willing to open the Taif Air Base as a transit platform for KC-135 tanker aircraft, which would substantially extend the effective operational range of the F-35s. Jebel Ali Port in the United Arab Emirates will take on the role of a logistics and resupply node for U.S. military ammunition and supplies. Israel’s role in this operation is remote air escort rather than ground participation. Israel’s F-35I aircraft formation will be responsible for bombing deep interior targets in Iran, dispersing the “enemy’s” attention during the landing operation.

However, if the U.S. military can control Halk Island and break Iran’s “Hormuz blockade ace card,” it means embedding a permanent military presence at Iran’s doorstep. This “nail” could then become a target for sustained harassment by Iran’s drones, missiles, and special forces. The risk of this shift—from “battlefield achievements” to “strategic liabilities”—is not without precedent. Israel’s 18-year deployment in Lebanon can serve as a reference.

As the war continues for more than three weeks, the core dilemma facing the U.S. and Israel is that technological advantages cannot automatically translate into strategic victory. Killing a commander is met by Iran using power to decentralize in response. Blocking a sea route is met by Iran opening a gap elsewhere through proxy armed forces. The war design of the U.S. and Israel resembles surgery—hoping for precision, speed, and limited scope—while Iran’s war design, from the beginning, has tried every way to stretch it into a prolonged war of attrition and tug-of-war.

The biggest uncertainty of this war may not actually be on the battlefield, but rather in how the U.S. and Israel will deal with domestic political agendas when the 60-day time limit arrives. That moment could be the true key node that determines the direction of this round of fighting and influences how the situation in the Middle East evolves.

Author: Zhu Zhaoyi

Editor: Xu Fangqing