US-Iran Standoff: Conflict Over Strait of Hormuz Risks Global Disruption
By Samia Nakhoul and Parisa Hafezi
Escalating Tensions and Economic Fallout in the Strait of Hormuz
LONDON, May 18 (Reuters) - Three months after the United States and Israel staged an attack on Iran, a U.S. blockade and Tehran's grip on the Strait of Hormuz have created a deadlock, with neither side bending, economic pain deepening and the risk of renewed war rising.
A growing concern among policymakers is not whether a deal is near, but how long tensions can persist before a miscalculation by Washington or Tehran triggers renewed conflict.
Calls for a fresh strike are growing louder in the U.S. and Israel, with some officials arguing that increased pressure could weaken Tehran's leverage and force Iran back to the negotiating table.
Failed Strategies and Stubborn Red Lines
"There is one major problem with this theory: We have already tested it, repeatedly, and Iran did not capitulate," said Danny Citrinowicz, a senior researcher on Iran at Israel's Institute for National Security Studies and former head of the Iran branch in Israeli Defense Intelligence.
"We're in a war of attrition with the prospect of a new U.S.-Israeli attack growing by the day," said one regional official.
Iranian officials told Reuters concessions on their missile programme, nuclear capabilities or control of the Strait are not policy tools but ideological pillars of the Islamic Republic’s survival -- giving them up is not compromise, it is surrender.
That explains, Citrinowicz said, why even prolonged military confrontation has failed to shift Tehran from its red lines, and why further escalation is unlikely to succeed.
Rounds of indirect talks mediated by Pakistan have produced no breakthrough. The gaps remain vast.
Negotiation Stalemate: Time as Leverage
BOTH SIDES SEE TIME AS LEVERAGE, IMPEDING COMPROMISE
The United States wants Iran to halt uranium enrichment for 20 years and ship out its stockpiles to the U.S.
Iran wants an end to strikes, security guarantees, war reparations and recognition of its sovereignty over Hormuz -- terms Washington has rejected.
Iran's foreign ministry did not reply to a request for comment. The U.S. State Department did not immediately respond to a request for comment on the issues raised in this article.
President Donald Trump has warned Tehran that the “clock is ticking,” saying they “better get moving, FAST, or there won’t be anything left of them." He threatened that if Tehran fails to reach a deal with Washington, it will face “a very bad time.”
Ali Vaez of the International Crisis Group said neither side has shown willingness to make "the painful concessions" needed for a deal. "Both believe time is on their side and they have the upper hand, and that perception is precisely what is making a deal impossible."
Economic Impact of the Standoff
The result is a war of endurance centred on one of the world's most critical waterways. Before the war, the Strait carried roughly 25% of global oil trade and 20% of liquefied natural gas. Now, with the strait near-closed, the economic fallout is growing, disrupting supplies.
Former State Department Iran official Alan Eyre, who took part in past U.S.-Iran talks, said an agreement may be out of reach. "These two sides will never reach a deal. Trump doesn't want to just win, he wants to humiliate Iran and be seen as having crushed Iran."
Tehran sees its stockpile of enriched uranium and control of Hormuz as core strategic assets essential to survival. "Iran is therefore determined to use these assets to guarantee its interests,” a senior Iranian official said, adding capitulation is not an option.
"We fight, we die, but we don't accept humiliation. Surrender is fundamentally incompatible with Iran's identity."
Behind Defiance: Iran's Economic Pressures
BEHIND DEFIANCE, RISING PRESSURE ON IRAN'S ECONOMY
A second Iranian official argued Tehran has already won -- not by defeating Washington militarily, but by refusing to submit. Weeks of U.S. and Israeli strikes failed to break Iran’s will, reinforcing its view that its nuclear stockpile and control of Hormuz remain the core of its deterrence.
Surrendering them would dismantle that balance. "Trump wants to declare victory but Iran won't give it to him. Can the world economy withstand the pressure? That's the question Trump owes the world an answer to," he added.
More strikes would not change Iran's calculus, only accelerate escalation, he said, adding that Iran will not abandon enrichment or bow to ultimatums without compromise from Washington.
Internal Struggles and Search for Solutions
Yet behind the defiant posture, Iranian sources close to the establishment describe a more conflicted reality: Tehran does not want a prolonged “no war, no peace” scenario as inflation rises, unemployment worsens and strikes on key industries bleed an already battered economy.
Instead, they said, Iran is seeking a preliminary deal to end the war -- reopening Hormuz under Iranian oversight in exchange for lifting the U.S. blockade, before tackling harder issues such as sanctions relief and nuclear restrictions. The U.S. says ending the war must be deferred to later talks.
Nuclear and Economic Bargaining Chips
On the nuclear issue, Iranian sources say Tehran could dilute its stockpile of 440 kg of highly enriched uranium or send part of it abroad, preferably to Russia, arguing it could reclaim it if Washington violates any agreement. Washington has refused.
Iran is also pushing for a shorter halt to enrichment than Washington’s 20-year demand and full access to $30 billion in frozen assets, but Washington has only agreed to free a quarter of those assets under a timetable, the sources added.
No Military Solution: Diplomacy as the Only Path Forward
NO MILITARY FIX LEAVES TALKS AS ONLY OPTION, SAYS ANALYST
Tehran is seeking a new governance mechanism over Hormuz, rejecting a return to the pre-war status quo, while the U.S. insists on unconditional reopening -- no tolls, no veto -- a gap that may prove harder to bridge than the nuclear issue itself.
Aaron David Miller, a former U.S. official and Middle East negotiat
