Iran's Strategy of Attrition Threatens Global Energy Markets

The renewed conflict between the United States and Iran is centered around control of the Strait of Hormuz, through which a fifth of the world's oil passes. For two weeks, American missiles have struck Iranian targets, with Iran retaliating against U.S. allies Kuwait, Bahrain, and Jordan.

At least 53 Iranians have been killed and 592 injured since July 6, while four U.S. soldiers have died and 142 were wounded. The conflict has already cost the U.S. over $37.5 billion, with American airstrikes targeting Iranian missile bases that allow Iran to reach U.S. bases across the region.

Iranian strategists are aiming for something more ambitious: raising the cost of hosting American forces until the U.S. thins out its regional military presence. Tehran hopes a combination of control over Hormuz and the coercive power of its drones and missiles would make Gulf states reluctant to host U.S. forces.

The biggest challenge Iran faces is Israel's secretive nuclear powers, as well as the asymmetry of pain thresholds between the two nations. American credibility is on the line, but Iranian territory is being hit hard, with year-on-year inflation in Iran reaching an astonishing 88.6% by late June.