The most serious consequences of the U.S.–Israeli war with Iran will not occur on the battlefield. They are already unfolding in the global economy and threatening to weaken the Western alliance system. What began as a decapitation strike intended to collapse the Iranian regime has triggered a cascading crisis: disruption of Gulf energy exports, rising pressure on global energy markets, an existential threat to the Gulf Cooperation Council (GCC) states, and new strategic opportunities for Russia. Increasingly, the costs of the conflict are falling not on Iran alone, but on the United States and its partners across Europe, the Middle East, and the Pacific.

No Strategic Clarity

The most striking feature of the conflict so far has been the absence of strategic clarity in Washington. Countries typically go to war to achieve defined objectives; control over disputed territory, destruction of threatening weapons, retribution against individual leaders for perceived past wrongs, but President Donald Trump has not settled on which objective justified the U.S.–Israeli attack on Iran.

At first, the president argued that Iran was on the verge of producing a nuclear weapon. That claim was followed by warnings that Iran was preparing to deploy an intercontinental ballistic missile capable of striking the United States. Later statements suggested that the goal was destroying Iran’s missile production infrastructure. These shifting objectives reflect policy improvisation rather than coherent strategy.

The Trump administration’s original assumption appears to have been that a massive air campaign and the killing of Iranian Supreme Leader Ali Khamenei would trigger rapid political collapse. It has not, and does not appear likely to. Iran has neither capitulated nor collapsed; instead, it has retaliated against Israeli and American targets and struck the GCC states, Iraq, Azerbaijan and Turkey with drones and ballistic missiles, demonstrating that Iranian military forces remain capable of functioning despite severe damage.

The United States now finds itself in a familiar position. A war launched with expectations of rapid success but no clear strategic end state is turning into quicksand around Washington’s ankles.

The Decapitation Gamble

Israeli Prime Minister Benjamin Netanyahu appears to have convinced Trump that a decapitation strike against Iran’s leadership would produce rapid strategic results. The logic was simple: eliminate the central leadership of the Islamic Republic and the regime would fracture or collapse.

That expectation did not materialize. Instead, the war has entered a far more dangerous phase. Iran continues to retaliate, attacking GCC energy infrastructure as well as American military assets and Israel itself. More seriously, the outcome that everyone feared has come to pass: oil and gas shipping from the Gulf is essentially frozen. Whatever Trump expected, he does not appear to have anticipated the consequences the war would have for the global energy system or for states far removed from the battlefield.

This makes the political origins of the decision especially important. The United States is now deeply involved in a conflict whose initial assumptions appear to have been shaped heavily by Israeli strategic preferences, not to mention Netanyahu’s desire to remain in office and out of jail.

Strategic Drift in Washington

President Trump’s response to these developments reflects a pattern of strategic drift. Following the failure of the decapitation strike to produce regime collapse, the administration shifted toward calls for regime change by the Iranian people. When that approach also failed, White House officials began encouraging Iranian Kurdish militias operating from northern Iraq to spark a separatist rebellion, teasing American air support for an Iraqi Kurdish incursion. While Trump has since distanced himself from efforts to spark a Kurdish uprising, the idea continues to circulate in Washington.

Such a development would alarm Turkey, Syria, and Iraq, all of which view Kurdish separatism as a direct threat to their territorial integrity. These countries would likely oppose any U.S. effort to promote Kurdish insurgency inside Iran. Turkey and Iraq have long treated Kurdish separatism as an existential threat, while Azerbaijan and the GCC states fear instability spreading across their borders.

An attempt to weaken Iran through a Kurdish revolt would also be poorly received inside Tehran. Although many Iranians welcomed the weakening of the regime’s leadership, and few mourned the death of Khamenei and his inner circle, most Iranians are vigorously opposed to the fragmentation of the Iranian state. Even those hostile to the current regime are unlikely to accept the dismemberment of their country. Supporting Kurdish separatism therefore looks less like strategy than desperation.

The Energy Shock

The most immediate consequence of the conflict lies in the global disruption of energy flows from the Gulf. Under normal conditions, roughly 20 million barrels per day of oil move through the Strait of Hormuz, about one-fifth of global consumption. Qatar’s LNG export infrastructure at Ras Laffan accounts for another fifth of global liquefied natural gas trade. Iranian threats halted shipping in the Strait, and a missile strike against an LNG facility in Qatar forced the country to halt its LNG production and declare force majeure on exports.

Naval escorts may eventually allow some tanker traffic to resume, but the number of warships available will be limited. Recruiting allies willing to risk billion-dollar warships in narrow waters to manage the consequences of the war will be difficult. Rising insurance costs, missile and drone threats, and difficulty recruiting crews will discourage many shipping companies. At best, naval escorts will protect only a fraction of normal tanker traffic. The effective loss to global markets could approach 15 million barrels per day of oil supply, an unprecedented shock to the modern energy system. Furthermore, Qatari LNG will not flow until hostilities stop.

Energy markets would respond quickly. Analysts already estimate that a prolonged disruption could continuing pushing oil prices above $100 per barrel, while natural gas prices in Europe and Asia would rise even faster. Countries heavily dependent on Gulf energy, particularly India, China, Japan, and South Korea, face immediate economic pressure.

The United States cannot compensate for such a disruption. Although American energy production has expanded dramatically over the past decade, export infrastructure remains constrained. U.S. LNG terminals are already operating near maximum capacity. American crude exports average roughly 4.4 million barrels per day, only a fraction of the volumes normally passing through Hormuz. Put simply, the United States cannot replace the bulk of Gulf energy exports in the short term. Of course, U.S. oil producers will reap enormous profits, but this will come as little consolation to Americans at the pump.

Pressured Allies, Relieved Adversaries

The consequences of the conflict will fall most heavily on America’s partners. The Gulf states themselves face existential threats from disrupted export revenues. Hydrocarbon exports remain the foundation of GCC government budgets, and if those flows remain interrupted, governments will turn to sovereign wealth funds to finance domestic spending.

That shift will spread the shock to financial markets. GCC sovereign wealth funds hold trillions of dollars in investments in the United States and Europe. A prolonged disruption will reduce overseas investment and could also trigger disinvestment as governments redirect capital toward domestic economic stability.

Europe faces serious risks as well. European economies have already absorbed substantial costs after the European Union (EU) imposed a ban on Russian energy, set to be completed by 2027, following the invasion of Ukraine. Another energy shock could deepen economic strain just as the EU has begun large-scale rearmament and committed billions to purchasing American munitions for Ukraine. These developments will reinforce doubts about America’s commitment to Europe.

Indeed, only one country stands to benefit substantially from the conflict and its associated rise in oil prices: Russia. Western sanctions and price caps have reduced Russian energy revenues by forcing Moscow to sell oil at discounted prices. A sustained rise in global oil prices would offset many of those losses, strengthening Russia’s fiscal position and global leverage.

Higher prices also encouraged Moscow to test the limits of Western sanctions and price caps, and the West appears to have blinked. The United States has waived sanctions on Russian ships bound for India and on the German subsidiary of Rosneft, a Russian oil giant. The crisis has therefore already weakened one of the West’s central economic tools for constraining Russia’s war effort in Ukraine.

Preventing a Wider Strategic Failure

Trump now faces a difficult dilemma. The conflict did not produce the dramatic victory he expected, yet stopping without visible results risks humiliation. This explains his shifting objectives.

The best course of action for the White House is simple: declare success and disengage from the conflict. In practice, Trump’s instincts make such a step difficult, as admitting a mistake risks appearing weak. It is far more likely that the president will continue searching for ways to transform an increasingly costly conflict into a visible success. That course of action, however, is dangerous; it mirrors the “forever wars” in Afghanistan and Iraq, with no clear definition of “victory” and therefore no conditions for withdrawal. The United States cannot undo the strategic damage already inflicted by the conflict, but it can still prevent the situation from deteriorating further.

Two steps would help stabilize the situation. First, the United States should focus on restoring stability to global energy markets; perhaps by allowing Iranian exports in exchange for reopening the Strait of Hormuz to all users. Second, it must reassert control over the conflict. U.S. policy in the Middle East must be determined by the Trump administration, not by Netanyahu. If necessary, the United States should be prepared to use its leverage over Israel, including suspending military assistance, to ensure that American policy drives the relationship, not the other way around.

If these steps are not taken, the consequences could extend far beyond the battlefield. What began as a strike intended to weaken Iran now threatens the economic stability and security of many of America’s closest partners and allies. Unless the United States restores strategic discipline, the long-term result may not be Iran’s defeat, but a broader erosion of American leadership.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.

Issue: U.S. – Gulf Policy

Country: GCC, Iran