Despite the United States and Iran exchanging fire and new missile attacks targeting the United Arab Emirates this week, the Trump administration maintains that the ceasefire initiated in early April remains in effect. According to Joint Chiefs Chair General Dan Caine, Iran’s assaults on commercial and US Navy vessels are still "all below the threshold of restarting major combat operations at this point." Concurrently, Iran’s stranglehold on shipping through the Strait of Hormuz persists, with experts warning of only weeks left before a catastrophic global energy crunch. The US blockade on Iranian ports is already wreaking havoc on the war-battered country’s economy. Is there a way out?
The US launched a naval operation, "Project Freedom," over the weekend to escort stranded ships out of the strait, but President Donald Trump paused it on Tuesday, citing progress in diplomatic negotiations. On Wednesday, Axios’s Barak Ravid reported that the US and Iran were close to a deal to end the standoff. Oil prices began to plummet but then stalled when Trump poured cold water on the reporting, calling it a "big assumption" that "Iran agrees to give what has been agreed to." In short, no one knows how this stalemate will end, but several plausible scenarios are emerging.
1) A Nuclear Deal
Ravid’s reporting, heavily based on sources within the Trump administration, suggests the two sides are close to a "one-page memorandum" that would include lifting both sides’ restrictions on shipping through Hormuz, Iran agreeing to pause its nuclear enrichment activity, and the US releasing billions of dollars in frozen Iranian funds. The duration of the enrichment pause is still under negotiation, likely between the five years proposed by Iran and the 20 proposed by the US. This outcome would be ironic: The "green, green cash" flown to Iran in 2015 has been a favorite talking point for Trump about the Barack Obama-negotiated deal he withdrew from in 2018. However, it may be the best option available for the administration, especially if Iran agrees to remove its existing stockpile of highly enriched uranium.
2) A Nonnuclear Deal
Wednesday’s reports might be spin. This is not the first time in recent weeks that the two sides have been reportedly close to a deal. The main division is that the US wants concessions on Iran’s nuclear program, while Iran seeks a deal to reopen the strait in exchange for the US lifting its blockade, with the nuclear issue postponed. Ordinary Iranians are struggling to buy basic necessities, and Iran may be running out of storage for oil it cannot export. However, Iran’s new leaders may believe they can endure more pain than Trump and hold out for a deal on their terms, sidestepping nuclear concessions. According to a recent Reuters report, US intelligence officials believe Operation Epic Fury did not significantly alter Iran’s timeline for building a nuclear weapon. While missile resources have been degraded, they can be rebuilt. If this war was primarily about Iran’s nuclear program, this outcome would be an unambiguous US defeat.
3) The US Reopens the Strait by Force
Under the currently paused Project Freedom, which the Pentagon maintains is separate from Epic Fury, US naval vessels successfully escorted two ships out of the Strait of Hormuz on Monday; over 1,000 vessels remain stranded in the Persian Gulf. Even if resumed and expanded, Project Freedom is only intended to help stranded ships exit, not to allow new ones in. Resuming full shipping requires international companies and insurers to believe the trip is worth the liability. During the 1980s "Tanker War," the US Navy escorted ships through the Persian Gulf, but that was before the age of drones, which allow Iran to threaten more ships at lower cost. Trump has been reluctant to consider deploying ground troops to capture Kharg Island due to high casualty risks, but public pressure is growing. The administration has tried to cajole allies into a coalition to reopen the strait, with limited success so far, but pressure may increase as economic devastation mounts.
4) Return to Full-Scale War
Given Trump’s insistence to the public and Congress that the war has ended, restarting it seems unlikely. However, he has said he will "go back to bombing the hell out of them" if there is no deal. This could involve targeting Iran’s power grid and bridges, which Trump threatened but did not carry out in April. US ally Israel would likely be happy to resume the air campaign. On Tuesday, Trump urged Iranian leaders to wave "the white flag of surrender" because "we don’t want to go in and kill people." But it remains unclear whether a regime willing to kill thousands of its own people to stay in power will make concessions to prevent US or Israeli attacks.
5) It Doesn’t End
The current status quo seems unsustainable, but rather than ending dramatically in a deal or war, this crisis could ease over time. The US could ease its embargo, as it recently did in Cuba. Iran could establish a system to charge tolls on ships transiting the Strait of Hormuz, creating a new economic reality for the Middle East and the world. Other countries on strategic maritime chokepoints may consider similar steps, threatening the freedom of navigation that enabled globalization. Even if Iran lifts restrictions, it now has the implicit ability to close the strait again when threatened, arguably a more useful deterrent than its nuclear program. Rather than asking how this crisis will end, it may be time to ask how to adjust to the new world it has created.
