The two-week ceasefire agreed on Wednesday between the United States, Israel and Iran has brought a tenuous halt to a six-week conflict that destabilised the Middle East and rattled the global economy. Yet despite the Trump administration’s claim of a “historic and overwhelming victory”, a closer look suggests a far more complicated outcome. Many analysts see this not as a resolution, but as a fragile pause, one that may ultimately tilt in Tehran’s favour.
At a tactical level, the United States and Israel have inflicted extensive damage. More than 15,000 strikes hit factories, research facilities and military installations, crippling Iran’s navy and weakening its air defences. Yet the battlefield dominance displayed by the US and Israel failed to translate into political success. In Tehran, the IRGC-clergy leadership remains firmly in control, showing the world its immense capability to absorb sustained military pressure. Several analysts drew parallels with Washington failed campaigns in the past such as Vietnam, Afghanistan and Iraq, where tactical ‘shock and awe’ did not lead to lasting strategic gains.
Iran’s most powerful leverage throughout the conflict has been its control over the Strait of Hormuz. Nearly 20 per cent of global oil passes through this narrow chokepoint. By disrupting traffic, Tehran triggered a sharp energy shock. Petrol prices in the United States have gone up significantly, fuelling domestic political pressure ahead of key elections. The effects rippled worldwide. The Philippines declared an energy emergency, Europe faced soaring electricity costs and global aviation fuel prices surged. The developing world is facing critical shortages of LNG, LPG and fertilisers.
Paradoxically, the crisis also boosted Iran’s revenues. Selling oil at elevated prices to China and India, Tehran managed to sustain, and even increase, its income despite the war.
Iran is now seeking to formalise its leverage in ceasefire negotiations. Its proposed ten-point plan reportedly includes a system to levy steep transit fees, potentially up to two million dollars per vessel, for ships crossing the strait. If realised, this could generate as much as 80 billion dollars annually, a sum that would far exceed Israel’s defence budget and enable rapid military rebuilding.
President Donald Trump has described the proposal as a “workable basis” for talks. However, critics in Washington, including Senator Lindsey Graham, argue that such a move would reward coercion and undermine long-standing American commitments to freedom of navigation.
Talks set to take place in Islamabad face serious obstacles. A key dispute is whether the ceasefire should extend to Lebanon. Iran insists it must include a halt to Israeli strikes on Hezbollah. The United States and Israel reject this, treating it as a separate conflict. Israeli operations in Lebanon have continued, with hundreds reported killed in recent days, prompting Tehran to warn it could withdraw from negotiations.
The central issue that triggered the war—Iran’s nuclear programme—remains unresolved. Washington entered the conflict aiming to eliminate Iran’s stockpile of highly enriched uranium. Defence Secretary Pete Hegseth has reiterated that objective, and contingency plans reportedly include the possible deployment of Special Forces if diplomacy fails.
Iran, however, shows little sign of compromise. It is expected to demand recognition of its right to enrich uranium, the lifting of sanctions and reparations as part of any agreement.
The wider regional picture remains deeply unstable. The conflict exposed the vulnerability of Gulf states to missile and drone attacks, drew in proxy forces and heightened insecurity across neighbouring countries. In Israel, Prime Minister Benjamin Netanyahu faces growing criticism for failing to secure what opponents describe as “total victory”.
Washington now faces difficult choices. It can accept unfavourable terms to secure a lasting ceasefire, or risk sliding back into a prolonged and costly conflict. Ending a war without achieving core objectives can feel indistinguishable from defeat.
For Iran, the outcome may be simpler. In this conflict, not losing is close enough to winning.