By Dr. Pshtiwan Faraj

This Is No Longer Simply a War With Iran

The U.S.-Iran conflict has entered a phase in which the battlefield can no longer be separated from diplomacy, sanctions, energy markets, maritime security or the internal politics of the Islamic Republic. What began as a military confrontation has evolved into a contest over who will define the political and economic order of the Middle East after the war. The missiles and drones remain important, but the decisive struggle is increasingly taking place around leverage: oil, shipping, financial access, nuclear capabilities and the ability to impose costs without triggering uncontrollable escalation.

Kurdish Policy Analysis has followed this transformation from its earliest stages. The evolution from Trump's initial coercive diplomacy to military escalation, from the closure of the Strait of Hormuz to ceasefire negotiations, and from the June memorandum of understanding to the renewed economic and military confrontation reveals a consistent pattern. Washington has repeatedly sought decisive leverage over Tehran, while Iran has attempted to convert its geographic position, regional networks and capacity for endurance into bargaining power.

The central lesson is therefore uncomfortable for both sides. Neither Washington's military superiority nor Tehran's asymmetric leverage has been sufficient to produce a political settlement. The war has instead created a prolonged contest of endurance. And that contest is now reshaping the region.

From Ultimatums to War

The diplomatic phase of the confrontation was never simply diplomacy. From the beginning, Washington attempted to combine negotiation with coercion. Tehran interpreted American demands through the history of previous negotiations, particularly the experience of the 2015 nuclear agreement and its subsequent collapse.

That explains why the early American strategy encountered resistance even before the conflict fully escalated. The question was never simply whether Iran would negotiate. The question was what Iran believed would happen after it negotiated.

KPA's early analysis of the administration's five-day peace initiative captured this contradiction, arguing that what appeared to be a diplomatic opening could simultaneously function as a coercive deadline. Washington's early peace proposal and the five-day diplomatic ultimatum

That pattern became increasingly visible during the following weeks. Tehran resisted Washington's demands while attempting to preserve diplomatic channels through intermediaries. Pakistan, Qatar, Oman and other regional actors consequently became increasingly important because direct communication between Washington and Tehran remained politically toxic.

The problem was that every diplomatic initiative was accompanied by military pressure. That made compromise harder rather than easier. When Trump warned that the clock was running out, Tehran heard not simply a negotiating position but the possibility that any concession could become the starting point for another American demand. When Iran threatened to close or restrict Hormuz, Washington interpreted the move as evidence that coercion would be necessary to restore freedom of navigation. The result was a classic escalation trap. Each side interpreted the other's attempt to increase leverage as evidence that the other side understood only pressure.

The Strait of Hormuz Became the Real Battlefield No issue better illustrates the evolution of the war than the Strait of Hormuz. The strait was initially treated as one component of the confrontation. It gradually became its center of gravity.

Iran's geographic advantage is extraordinary. The country sits astride one of the world's most important maritime chokepoints, meaning that Tehran does not need to defeat the United States militarily to impose enormous economic costs. It only needs to create sufficient uncertainty around commercial navigation to raise insurance premiums, slow shipping, disrupt energy flows and force Washington to dedicate military resources to maritime security.

Your early reporting on Iranian efforts to control maritime traffic demonstrated how Tehran was attempting to transform temporary wartime restrictions into a more durable source of geopolitical leverage. the analysis of Iran's attempt to institutionalize influence over Hormuz

That strategy created an extraordinary asymmetry. The United States possessed superior naval power. Iran possessed geography. Washington could destroy ships, missile systems and coastal infrastructure. But geography could not be destroyed.

This explains why the American demand for an unrestricted reopening of Hormuz became so central to Trump's negotiating position. In late May, Washington was already linking any broader settlement to unrestricted shipping, mine clearance and Iranian commitments concerning its nuclear program. Trump's late-May negotiating position on Hormuz and the nuclear issue

The importance of the waterway only increased after the war disrupted normal commercial traffic. KPA subsequently examined how Iranian authorization for selected Chinese vessels demonstrated that Tehran could use access to Hormuz selectively rather than treating the strait simply as an open-or-closed binary. Iran's selective reopening of Hormuz to Chinese shipping

That distinction is strategically important. Iran does not necessarily need to close Hormuz completely. It can make access conditional. It can create uncertainty. It can discriminate between categories of shipping. It can impose administrative requirements. It can threaten disruption without actually shutting the waterway.

The result is a form of maritime coercion that exists below the threshold of total blockade. That is why the later debate over the future of Hormuz became much more consequential than the original question of whether the strait was technically open.

KPA's subsequent analysis argued that Iran could attempt to institutionalize control over the waterway rather than simply weaponize it temporarily. the deeper analysis of Hormuz as a permanent Iranian bargaining instrument

By August, the question had evolved again: could alternative oil corridors and sufficient shipping through Hormuz eventually weaken Tehran's economic leverage? the analysis of alternative oil corridors and the Hormuz endgame That is the larger strategic contest. Washington wants to make Hormuz survivable without Iran. Tehran wants to make Hormuz indispensable to any settlement with Iran.

Trump Discovered the Limits of Maximum Pressure

The Trump administration entered the confrontation with a familiar theory of coercion: apply overwhelming pressure, demonstrate escalation dominance and force the adversary to make concessions. But Iran is an unusually difficult target for this strategy.

The Islamic Republic has spent decades adapting to sanctions, isolation, military pressure and asymmetric warfare. Its economy is inefficient and vulnerable, but its political system has developed mechanisms for surviving precisely the conditions Washington has attempted to create.

Your May analysis of Trump's strategy captured this dilemma, arguing that the administration's attempt to compel Tehran through threats, blockades and economic pressure was colliding with Iran's capacity for strategic endurance. the analysis of Trump's coercive strategy and Iran's resilience

This does not mean that sanctions are ineffective. It means that economic pain and political capitulation are not the same thing. That distinction has become increasingly important. The United States can reduce Iranian oil revenues. It can restrict access to the international financial system. It can sanction shipping companies and banks. It can target intermediaries in Turkey, the Gulf and elsewhere.

But every additional layer of economic pressure creates a second question: what political outcome is Washington actually trying to purchase?

That question became unavoidable after Washington launched what KPA described as a new financial front against Iran. Washington's expanding campaign against Iran's global financial lifelines

The latest sanctions against a Turkish financial institution demonstrate how far this strategy is now expanding. On September 4, Washington sanctioned Golden Global Yatirim Bankasi and two subsidiaries, accusing them of facilitating transactions linked to Iran's Islamic Revolutionary Guard Corps and helping move Iranian oil revenues through international financial channels.

The strategic message is larger than the bank itself. Washington is attempting to convince every intermediary that helping Iran survive the sanctions regime will eventually carry a price. That is a fundamentally different strategy from simply sanctioning Iran. It is an attempt to sanction Iran's economic ecosystem. 

The Sanctions Trap

The problem is that economic warfare can become self-reinforcing. Sanctions reduce Iranian revenue. Iran searches for alternative financial channels. Washington identifies those channels. New sanctions follow. Iran seeks new intermediaries. Washington expands the target list. The process can continue indefinitely.

KPA's analysis of Iran's worsening economic situation warned against assuming that economic collapse automatically produces regime change. the analysis of Iran's economic pressure and the limits of sanctions as a regime-change strategy

This is one of the most important distinctions in understanding the conflict. An economy can be severely damaged without the political system collapsing. Indeed, authoritarian systems can sometimes become more coercive as economic pressure increases. The leadership can blame external enemies, centralize resources, restrict dissent and prioritize security institutions.

Iran therefore faces a genuine economic crisis. But economic crisis is not synonymous with political defeat. For Washington, the danger is strategic drift. If sanctions are intended to produce negotiations, they must eventually be connected to a diplomatic pathway. If there is no credible pathway, sanctions risk becoming an objective rather than an instrument. That is how economic warfare becomes permanent.

The First Major Diplomatic Opening

Despite the violence, diplomacy never disappeared. It repeatedly returned because neither side could solve the fundamental strategic problem militarily. By late May, reports indicated that U.S. and Iranian negotiators had reached the outline of a 60-day framework involving the ceasefire, the blockade, Hormuz, sanctions relief and negotiations over Iran's nuclear program. the May turning point in the Trump-Iran negotiations

This was significant because it demonstrated that the battlefield itself was generating diplomatic incentives. Washington needed the war to produce a political result. Tehran needed sanctions relief and economic breathing space. Both needed Hormuz reopened. Both wanted to prevent another uncontrolled regional escalation. Yet the fundamental problem remained sequencing.

Who moves first? Does Iran reopen Hormuz before sanctions are lifted? Does Washington lift the blockade before Iran makes nuclear commitments? Does Iran surrender leverage before receiving guarantees? Does the United States trust Tehran to comply after sanctions relief? Does Tehran trust Washington not to reverse the agreement later? These are not technical questions. They are the central strategic problem.

The June MOU: Diplomacy at the Edge of War

The June memorandum of understanding represented the most ambitious diplomatic opening of the conflict.

KPA documented the agreement as containing commitments on the cessation of hostilities, Hormuz, sanctions, Iranian oil exports, frozen assets, reconstruction and the nuclear question. the June memorandum and its ceasefire framework The agreement was important because it attempted to link several previously separate problems into one package.

Iran would gain economic relief. The United States would gain restrictions on Iran's nuclear ambitions and improved maritime access. Regional actors would gain a reduction in military risk. Hormuz would become part of the diplomatic settlement rather than merely an object of military confrontation. But the agreement also exposed a deeper problem.

The governments could reach an understanding more easily than their domestic political systems could accept it. Inside Iran, criticism emerged almost immediately. Hardliners questioned whether Tehran was conceding too much. Pragmatists argued that economic stabilization required compromise. Security institutions worried about strategic vulnerability.

Political factions debated whether Washington could be trusted. KPA examined this internal struggle in detail, showing that the greatest obstacle to the deal might not be the American negotiating position at all, but the political battle inside Iran over who has the authority to define the country's strategic future. the analysis of Iran's internal struggle over the Trump agreement That insight remains essential. The United States negotiates with the Iranian state. But the Iranian state itself contains competing centers of power. Any agreement must therefore survive not one negotiation, but several.

The Nuclear Issue Never Disappeared

The nuclear question remains the hardest problem in the entire dispute. Hormuz can theoretically be reopened. Sanctions can theoretically be lifted. Frozen assets can theoretically be released. But nuclear capabilities create a much more permanent strategic dilemma. Washington wants to prevent Iran from acquiring a nuclear weapon.

Tehran wants to preserve technological capacity, strategic deterrence and national sovereignty. This is why the Trump framework was ultimately forced back toward the nuclear question even when the immediate crisis centered on shipping and energy.

KPA's comparison between the Trump framework and the Obama-era nuclear agreement highlighted this fundamental difference: the new negotiations emerged from a radically different strategic environment, shaped by the collapse of trust surrounding the previous agreement and the military confrontation that followed. the comparison between Trump's framework and the Obama-era nuclear deal The central challenge is therefore not simply enrichment. It is credibility.

Iran remembers that an American administration signed an agreement and another American administration later abandoned it. Washington remembers that Iranian nuclear capabilities expanded after the collapse of the agreement. Neither side believes the other's promises are sufficient. That is why enforcement mechanisms, sequencing and external guarantees matter so much.

The Ceasefire Was Never Really Peace

The June understanding temporarily changed the character of the conflict. It did not resolve it. That distinction has proven decisive. A ceasefire can stop shooting. It cannot automatically settle the strategic issues that caused the shooting. The unresolved questions remained: Iran's nuclear program. Hormuz. Sanctions. Iran's regional military networks.

American military presence. Regional security guarantees. The future of Iranian oil exports. The credibility of American commitments. The credibility of Iranian commitments. And the political survival of the leaders making the agreement. As negotiations stalled, the logic of the battlefield returned.

By August, Iranian officials were again threatening a more offensive military posture if diplomacy failed, while Washington signaled that it did not intend to extend the existing arrangements indefinitely.

The war had therefore entered a dangerous intermediate stage. It was neither full-scale war nor genuine peace. It was a suspended conflict. And suspended conflicts can be more dangerous than open wars because every side believes it still has time to improve its negotiating position.

Iran's War Strategy Has Become Economic as Much as Military

The evolution of Iranian strategy is particularly important. Tehran has increasingly treated the war as a contest in which military action, maritime disruption, regional networks and diplomacy reinforce one another. The objective is not necessarily to defeat the United States. It is to make victory sufficiently expensive that Washington eventually accepts a negotiated settlement.

This explains the importance of Iranian pressure beyond the immediate battlefield. KPA's analysis of Iranian attacks on Gulf energy infrastructure examined how Tehran could use regional partners to widen the costs of the conflict without relying exclusively on direct Iranian attacks. the analysis of Iran's expanding proxy strategy and pressure on Gulf energy infrastructure

It also explains why Iraq has become increasingly important. Iran does not need Iraq to become an Iranian military base. It needs Iraq to remain economically, politically and strategically difficult for Washington to separate from Tehran. The dispute over Iranian gas payments, for example, demonstrated how sanctions policy collides with Iraq's dependence on Iranian energy. the analysis of Iraq's sanctions-compliant mechanism for paying Iran's gas debt

This is one of the least understood dimensions of the conflict. Washington can sanction Iran. But it cannot easily eliminate Iran's geographical relationships. Iran borders Iraq.

It has deep commercial links with the Gulf. It maintains economic networks through Turkey and other regional states. It sells oil through complex international channels. It possesses relationships with Russia and China. Economic isolation therefore becomes a contest over the architecture of globalization itself. China and Russia Are Part of the Equation

The conflict has also demonstrated that the United States is not negotiating with Iran in a vacuum. China matters because of energy. Russia matters because of strategic partnership. Regional states matter because they provide trade routes, financial channels and diplomatic mediation. That makes the conflict larger than a bilateral dispute.

Iran's ability to maintain relationships with China and Russia reduces the effectiveness of unilateral American pressure. At the same time, China does not necessarily want an unlimited war. Beijing benefits from Iranian oil and regional stability.

A prolonged Hormuz crisis threatens both. This creates a complicated strategic triangle. Washington wants leverage over Tehran. Tehran wants leverage over Washington. China wants the conflict contained without sacrificing access to Iranian energy.

Gulf states want security without becoming permanent battlefields. Iraq wants to avoid choosing sides while remaining economically dependent on Iran. The result is not a traditional alliance system. It is a network of competing dependencies.

The Kurdish Question Has Become Part of the War

For the Kurdistan Region, the conflict has never been distant. The war has repeatedly crossed the Iranian-Iraqi frontier through missile attacks, drone strikes, pressure on Iranian Kurdish opposition groups and political demands directed at Erbil and Sulaimaniyah.

KPA documented how Iraqi Kurdistan became an unintended frontline of the confrontation. the analysis of why Iraqi Kurdistan has paid the price of the U.S.-Iran confrontation The strategic dilemma became even more complicated as speculation grew over whether Iranian Kurdish forces could become a ground component of the American-Israeli campaign.

KPA examined the possibility of American airpower being combined with Kurdish forces on the ground in northwestern Iran. the analysis of speculation over a Kurdish ground front inside Iran But the Kurdish armed groups themselves remained cautious.

Their hesitation reflected a deeper lesson: Kurdish actors have repeatedly discovered that great powers may regard them as strategically useful without being willing to guarantee the political consequences of their involvement. The resulting mistrust shaped the failure to create a sustained Kurdish military front inside Iran.

KPA's analysis of Washington's inability to generate such a front highlighted how American policy signals and regional Kurdish calculations interacted to close what initially appeared to be an important strategic opening. the analysis of why a Kurdish front inside Iran failed to materialize

That story matters beyond Kurdistan.

It demonstrates that the war cannot be understood solely through the capabilities of the United States and Iran. Regional actors have agency. They make their own calculations. And increasingly, they are refusing to become instruments of someone else's war.

The Postwar Middle East Is Already Emerging

The most important question is therefore not who wins the war. It is what the region looks like afterward. The conflict has already weakened several assumptions that shaped Middle Eastern politics for decades. One assumption was that the United States could guarantee regional security primarily through military superiority.

Another was that Iran could use asymmetric power indefinitely without facing a serious economic response. A third was that the Gulf states would remain passive recipients of American security guarantees. A fourth was that Iraq could indefinitely balance between Washington and Tehran without confronting the consequences. All four assumptions are now under pressure. The Gulf states are diversifying their diplomatic relationships.

Iraq is confronting the costs of dependence on Iranian energy and armed groups. Iran is attempting to build alternative economic and security networks. Washington is expanding sanctions far beyond Iran itself. And Hormuz has become a central question in the future architecture of global energy security.

KPA's recent analysis of the Gulf states' divergent approaches to the conflict illustrates this fragmentation. the analysis of divisions among Gulf states over the future of the U.S.-Iran confrontation

There is no longer one Gulf position. There is no longer one Iranian strategy. There is no longer one American strategy. The region is fragmenting into overlapping strategic calculations.

The New Economic Front

The latest phase of the war demonstrates that Washington increasingly sees economic isolation as the mechanism through which military pressure can be converted into political leverage. The campaign is moving through banks, oil revenues, intermediaries, shipping networks and third-country institutions. The September sanctions against a Turkish bank are particularly revealing because Turkey is a NATO member and a major regional economic actor.

The message is clear: Washington is prepared to pressure not only Iran but the financial infrastructure that allows Iran to circumvent American restrictions. Yet this also creates risks. The more aggressively Washington extends sanctions into third countries, the greater the possibility of friction with partners and allies. Sanctions can create compliance. They can also create resentment. They can encourage alternative financial systems.

And they can accelerate the very de-dollarization and economic fragmentation that Washington seeks to prevent. This is the paradox of maximum pressure. The United States may become better at restricting Iran while simultaneously encouraging Iran and its partners to construct a world less dependent on the American financial system.

September 2026: The War Is Not Over

The latest escalation demonstrates that the conflict remains unresolved. On September 1, the United States again struck Iranian military infrastructure, including systems associated with Iranian efforts to monitor and threaten shipping around Hormuz. the latest analysis of Hormuz as the operational center of gravity of the war

On September 4–5, the economic and military dimensions converged again. Washington imposed new sanctions on a Turkish bank and its subsidiaries over alleged Iranian financial activity. At the same time, U.S. forces struck Iranian oil tankers after Iranian missiles targeted American naval vessels.

This is the clearest indication yet that the conflict has entered a new phase. The war is no longer simply about destroying Iranian military infrastructure. It is about controlling the economic systems that sustain Iran's ability to fight. Iran, meanwhile, continues to possess the capacity to impose costs through missiles, maritime disruption and regional escalation.

The result is a dangerous equilibrium. Washington can hurt Iran. Iran can hurt the regional system. Neither has demonstrated an ability to impose an acceptable political settlement on the other.

What Comes Next

Three scenarios now appear plausible.

The first is renewed diplomacy. This would require both Washington and Tehran to conclude that continued escalation produces diminishing returns. A new negotiating framework could emerge around Hormuz, nuclear restrictions, sanctions relief and regional security guarantees.

The second is prolonged managed conflict. Under this scenario, neither side returns to full-scale war but neither reaches a durable settlement. Military strikes, sanctions, maritime incidents and diplomatic negotiations alternate indefinitely.

The third is escalation toward a larger regional confrontation. That would occur if either side concludes that the current equilibrium is becoming strategically unacceptable.

The danger is that neither side necessarily controls all of the actors capable of triggering escalation. Militias can act. Ships can be attacked. Missiles can be misidentified. Political factions can undermine negotiations. A single incident can destroy months of diplomacy. That is why the central strategic challenge is not merely negotiating an agreement. It is constructing an agreement capable of surviving the actors who oppose it.

The Real Endgame

The United States cannot simply bomb Iran into accepting a new regional order. Iran cannot simply close Hormuz indefinitely and expect the international system to tolerate it. The Gulf states cannot permanently absorb the economic consequences of maritime instability. Iraq cannot indefinitely balance between Washington and Tehran while avoiding the consequences of both relationships.

And the Kurdistan Region cannot remain outside the strategic consequences of a conflict unfolding directly across its borders. The war has therefore created a new regional reality. The decisive contest is no longer simply over Iran's nuclear program.

It is over who controls the mechanisms through which the Middle East connects to the global economy. Hormuz is one mechanism. Oil is another. Sanctions are another. Banks are another. Energy corridors are another.

And diplomacy is the mechanism through which these forms of power might eventually be converted into a political settlement. That is why the Strait of Hormuz has become so important. It is not merely a waterway. It is the physical expression of the strategic problem. Iran possesses geography. America possesses military power. The Gulf possesses capital. China possesses economic demand. Russia possesses strategic depth. Iraq possesses geography and dependency. The Kurdistan Region sits between several of these systems. None of them can completely dominate the others. That is the central lesson of the war.

Conclusion: The War Has Already Changed the Region

The most consequential outcome of the U.S.-Iran war may ultimately be neither an Iranian victory nor an American victory. It may be the disappearance of the old regional order. The conflict has exposed the limits of military supremacy, the limitations of sanctions, the strategic value of geography and the fragility of diplomatic agreements built without durable trust.

It has also demonstrated that the Middle East is becoming less hierarchical. Regional states are increasingly willing to hedge. Iran is seeking alternative economic networks. The Gulf states are pursuing greater strategic autonomy. Iraq is struggling to escape the structural consequences of its dependence on competing powers.

And Kurdish actors are confronting once again the difference between being strategically important and being strategically protected. The question facing Washington and Tehran is therefore larger than whether they can stop the next exchange of missiles.

It is whether they can build a settlement that both sides believe is safer than another war. So far, they have not. The battlefield has repeatedly interrupted diplomacy. Diplomacy has repeatedly failed to resolve the battlefield. And Hormuz sits at the center of both.

The war will end only when the costs of continuing become greater than the leverage each side believes it can still gain—and that moment has not yet arrived.

Dr. Pshtiwan Faraj

Dr. Pshtiwan Faraj is a geopolitical analyst and founder of Kurdish Policy Analysis, focusing on Kurdistan, Iraq, Iran, U.S. foreign policy, regional security, energy geopolitics and the intersection of conflict and diplomacy. He holds a PhD in English Literature from Brunel University London and has extensive experience in international relations, higher education, research and geopolitical analysis.

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