Iran is play­ing a long game

Two weeks into the war, Iran’s strategy is com­ing into focus. It ini­tially set out to absorb Amer­ican and Israeli strikes while retali­at­ing against Israeli cit­ies and US bases with drones and mis­siles in an attempt to deplete their stock­piles of inter­cept­ors. The long-term plan was to pre­serve lar­ger and more lethal mis­siles for the second phase of the war.

But Iran has also deployed a par­al­lel — and poten­tially more effect­ive — strategy: waging war on the global eco­nomy. Ira­nian mis­siles and drones attacked oil and gas facil­it­ies in Qatar, Saudi Ara­bia and the UAE along with oil tankers in the Gulf, and restric­ted pas­sage through the Strait of Hor­muz, in effect clos­ing it and lead­ing to spikes in oil prices.

In his State of the Union address on Feb­ru­ary 24, days before the war star­ted, US Pres­id­ent Don­ald Trump barely men­tioned Iran. But he dwelled extens­ively on gas prices, infla­tion and the state of the eco­nomy. Ira­ni­ans under­stand that bombs and mis­siles may go unnoticed by many Amer­ic­ans, but gas prices and infla­tion will not.

They have been proved right. As the con­flict spread to the Gulf, energy prices surged, rat­tling global mar­kets. Although Iran had warned of exactly such a scen­ario, the US was caught off­guard. Its unpre­pared­ness only accen­tu­ated fear of an impend­ing crisis.

But Iran is not going after energy sup­plies alone. Its drones and mis­siles have deeply impacted other vital indus­tries in the Gulf, from tech com­pan­ies to air­lines. It has attacked Amazon’s data centres, Dubai’s air­port and port facil­it­ies in a num­ber of Gulf coun­tries. Dis­rup­tion to ship­ping through the Strait of Hor­muz also impacts con­tainer traffic car­ry­ing com­mod­it­ies and indus­trial products such as pet­ro­chem­ic­als and the fer­til­iser neces­sary for agri­cul­ture.

In war, geo­graphy mat­ters as much as tech­no­logy. Iran com­mands the entire north­ern shore of the Gulf, loom­ing large over energy fields on its south­ern shore and all that passes through its waters. Its Houthi allies are perched at the entrance to the Red Sea and along the pas­sage to the Suez Canal; Iran is thus per­fectly posi­tioned to squeeze the global eco­nomy from both sides of the Ara­bian Pen­in­sula.

Those in com­mand of Iran today are vet­er­ans of asym­met­ric wars in Iraq and Syria. They are now apply­ing the same strategy to fight­ing the US on the bat­tle­field of the global eco­nomy. Drones, short-range mis­siles and mines set­ting tankers and ports on fire can have the same effect IEDs had in Iraq, only with greater impact — dis­rupt­ing global sup­ply chains and send­ing oil prices higher.

Iran’s mis­sile attacks against a deplet­ing stock of Israeli inter­cept­ors helped push the US and Israel towards a cease­fire the last time the two attacked in June 2025. Waging war on the global eco­nomy could, however, pro­duce a dif­fer­ent out­come this time.

Iran could sus­tain its coun­ter­of­fens­ive more eas­ily and for far longer. Fur­ther­more, a cease­fire alone will not lift the shadow of risk that Iran has imposed over the Gulf. That is why Ira­nian lead­ers are say­ing they will not accept a cease­fire until Wash­ing­ton fully grasps the global eco­nomic cost of waging this war. Busi­nesses, investors and tour­ists may not return to the Gulf states if they assume that war could resume again.

Unless the US is pre­pared to invade Iran to remove the Islamic repub­lic’s lead­ers and then stay there to ensure sta­bil­ity and secur­ity, con­fid­ence in the Gulf will only return if the US and Iran arrive at a dur­able cease­fire. The pres­sure is build­ing on Wash­ing­ton to seek one. It is not just Gulf states that want an end to the fight­ing, but also coun­tries across Asia, Africa and even Europe, all of which fear ser­i­ous eco­nomic crises unless the fight­ing stops soon.

In recent days, the US and Israel have increased the pace and intens­ity of their bomb­ing cam­paign on the assump­tion that they can force Iran to col­lapse or sur­render. The Ira­nian regime is in turn pre­pared to wage asym­met­ric war­fare on the global eco­nomy for long enough to per­suade Wash­ing­ton to view a polit­ical set­tle­ment as the only option.

Iran says it will only accept a cease­fire with inter­na­tional guar­an­tees for its sov­er­eignty, which would prob­ably mean a dir­ect role for Rus­sia and China. It may also demand com­pens­a­tion for war dam­ages and a veri­fi­able cease­fire in Lebanon. The US would then have to agree to some form of the nuc­lear deal it left on the table in Geneva in Feb­ru­ary and com­mit to lift­ing sanc­tions.

Iran’s lead­ers entered this war with the goal of ensur­ing it will be the last one. Either it breaks them or rad­ic­ally changes the coun­try’s cir­cum­stances. They are bet­ting on sur­viv­ing long enough and squeez­ing the global economy hard enough to real­ise that goal.

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