FP - Analysis Trump’s Epic Fury Can’t Resolve His Iran Quagmire - The clock is ticking for global oil markets, and Iran has the time. - By Keith Johnson, a staff writer at Foreign Policy covering geoeconomics and energy.

 FP  -  Analysis

Trump’s Epic Fury Can’t Resolve His Iran Quagmire

The clock is ticking for global oil markets, and Iran has the time.

By Keith Johnson, a staff writer at Foreign Policy covering geoeconomics and energy.

U.S. Defense Secretary Pete Hegseth testifies during a Senate Appropriations Committee hearing on Capitol Hill in Washington on July 21. Anna Moneymaker/Getty Images

July 22, 2026, 1:25 PM

Whatever the real goal of the ramped-up U.S. offensive on Iran, with 11 straight days of airstrikes on Iranian infrastructure, ports, and military installations after a brief cease-fire, it does nothing to address the ticking clock that threatens to scuttle the Trump administration’s entire approach: rapidly rising oil prices and rapidly falling global oil stockpiles.

Iran War

Analysis and news.

The Pentagon says that the renewed U.S. air offensive, if not necessarily prelude to a ground invasion, is “designed to continue degrading Iran’s ability to threaten commercial shipping in the Strait of Hormuz.” Iranian military capacity was already destroyed four months ago, according to the Pentagon, but Iran has shown a surprising ability to continue firing missiles and drones at ships passing through Hormuz, at the critical infrastructure of U.S.-allied countries in the region, and at U.S. military bases in the region. 

“What are we trying to do? Escalate the pain on Iran to change its red lines. Tactically, we are trying to degrade their ability to interdict the Gulf, and to isolate the strait of Bab el-Mandeb, and also showing a little leg on escalation, such as the attacks on [an Iranian missile complex in] Tabriz,” said Alan Eyre, a former U.S. State Department official who worked on Iran issues for decades.

“A lot of this is just the reptile brain response of [U.S. President] Donald Trump,” he said. “He is like a pianist with one key, and that key is military strength,” said Eyre, who is now at the Middle East Institute.

The renewed U.S. offensive is not working. Traffic through Hormuz is back to bare minimums, with single-digit transits now again the norm (and few of them tankers). Iran has targeted three different ships running the gauntlet in the last day or so. Oil analysts now expect the strait will remain choked, likely for the remainder of the year at least, if not longer. 

The result is higher oil prices. Benchmark Brent crude has gone back to the mid-$90s-a-barrel range, after a brief lark near $70 a barrel just weeks ago when it seemed that the United States and Iran had actually reached an understanding. U.S. gasoline prices are back above $4 a gallon just months ahead of midterm elections. Prices that really matter, such as the cost of diesel fuel, are even worse, creating headaches for industry and agriculture across multiple continents. 

That sounds like the situation this spring, when oil prices soared, and conflict in the Persian Gulf raised the specter of widespread economic disruption. The difference this time is that the shock absorbers are gone, or nearly so. The U.S. Strategic Petroleum Reserve (SPR) is getting so dangerously low that there are only a little over a month’s worth of stocks left to compensate for missing barrels from the Middle East. The situation is so bad that the U.S. Department of Energy decided last week to redefine where the bottom of the barrel is for the SPR, storage-wise, far below levels that oil-industry professionals think is wise. 

“It’s a two-clocks issue. That is, will Iran capitulate due to mounting economic pressure before Trump does?” Eyre asked. Both sides got a reset during the recent cease-fire, with the world briefly enjoying lower oil prices and Iran briefly enjoying sanctions relief and a $6 billion export boom for its previously banned cargoes. That breather allowed it to empty its storage tanks, make money, and start fresh for another battle of economic attrition.

“The two-clocks issue works in favor of Iran. We are running out of stocks,” Eyre said.

Things could get worse if Iran’s Houthi proxies in Yemen make good on their threats to attack shipping, especially Saudi shipping, in the Red Sea (the other regional maritime choke point), which has been a safety valve for a good portion of the previously trapped volumes of crude oil from the Persian Gulf. 

In the meantime, Iran has not let up on its assault on shipping through what it considers unauthorized lanes in the Strait of Hormuz, which further discourages shipping lines from returning to anything like business as usual. Lloyd’s of London estimates that total traffic is down 90 percent year-on-year despite U.S. assurances that it controls passage through Hormuz. 

Read More

A protester holds a portrait of former Iranian Supreme Leader Ayatollah Ali Khamenei in one hand while raising their other arm.

A protester holds a portrait of former Iranian Supreme Leader Ayatollah Ali Khamenei in one hand while raising their other arm.

The Houthis Have Joined the Chat

Iran’s break-the-glass plan to strangle another key waterway may now be active. This article has an audio recording

Analysis | Keith Johnson

A man crosses Enghelab Square in Tehran on July 15.

A man crosses Enghelab Square in Tehran on July 15.

The Iran Expert Trump Fired

Nate Swanson on the U.S. president’s unique top-down style—and his fondness for lobbying. This article has an audio recording

 Insider | Ravi Agrawal

Boats are anchored off Oman’s northern Musandam Peninsula near the Strait of Hormuz on June 27.

Boats are anchored off Oman’s northern Musandam Peninsula near the Strait of Hormuz on June 27.

The MOU Is Paying Off Early for Iran

Washington and Tehran are grappling over a “memorandum of misunderstanding.” This article has an audio recording

Keith Johnson

Iran’s military reprisals aren’t limited to the strait, either. Iranian strikes over the past week severely damaged a desalination plant in Kuwait, a U.S. ally that is 90 percent reliant on such plants for its drinking water. 

And despite months of “degrading” of Iran’s offensive capability, U.S. military bases in the region remain in the crosshairs, with the most recent lethal attack coming on a Jordanian base that hosts U.S. forces. 

The few levers the United States seems to have at its disposal—more airstrikes, more sanctions, or more tariffs—are unlikely to address the underlying problem, which is that Iran has new red lines and new leverage it never had before this war began. Trump’s dismissal this week of even the nascent shoots of a renewed try for a negotiated solution speaks to the impasse.

“This administration doesn’t do diplomacy. They do pain and threats and tariffs. It’s not going to work with Iran,” Eyre said. 

This post is part of FP’s ongoing coverage. Read more here.

Keith Johnson is a staff writer at Foreign Policy covering geoeconomics and energy. Bluesky: @kfj-fp.bsky.social X: @KFJ_FP

Read More On Iran | Kuwait | Oil | Saudi Arabia | War | Yemen