But can either side actually afford to keep the months-long war going?<\/p>\n
Here\u2019s what we know about how economic and political pressures could limit both countries from escalating the conflict into another full-scale war:<\/p>\n
![\"A](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/07\/ap_6a57c9e85f5c4-1784138216.jpg\")
A fruit seller arranges fruits at his stall at Tajrish Square in northern Tehran, Iran, Monday, July 13, 2026 [Vahid Salemi\/AP]For Tehran, battered economy and battered defences<\/p>\n
Iran\u2019s economy has been severly stressed, not just from the US-Israel war, but also as a result of decades of US sanctions on the country<\/a>. Although still powerful, its military infrastructure has also suffered much damage.<\/p>\n Economic sanctions<\/p>\n Iran is one of the most heavily sanctioned countries in the world. US sanctions have squeezed oil exports, hindered access to global finance and frozen assets. Iran\u2019s GDP per capita plummeted from $8,000 in 2012 to $5,000 in 2024, as a result. Oil exports dropped from 2.2 million barrels per day (bpd) in 2012 to 1.5 million bpd in 2025.<\/p>\n When both sides signed the MoU in June, the US called off its naval blockade, issued a 60-day sanctions waiver and promised to unfreeze Iran\u2019s assets. The Iranian rial, which had plunged in value, rose by 15 percent on the day of the agreement. However, the US re-imposed sanctions on Iran this week, dealing a blow to the weakened economy.<\/p>\n Defence capabilities<\/p>\n Iran\u2019s military, while continuing to aggressively strike back at US military installations in neighbouring Gulf countries, was severely degraded by US-Israeli strikes in the first phase of the war, according to analysis by the Center for Strategic and International Studies (CSIS).<\/p>\n By April 1, Iran had depleted 30 percent of its pre-war missile stockpile and 60 percent of its drone arsenal, CSIS notes. A significant portion of naval infrastructure has been targeted, including ports and naval vessels, while weapons production sites have been hit. The US claimed it significantly degraded Iran\u2019s nuclear sites during the 12-day war in 2025.<\/p>\n Renewed US strikes since last week have kept up the pressure, pummelling military sites, including the strategic island of Greater Tunb on Thursday.<\/p>\n Regional diplomacy<\/p>\n Tehran\u2019s relations with its Gulf neighbours, already strained when Iran struck them in March and April, are being further damaged by the current attacks and retaliatory strikes.<\/p>\n The US has military assets in at least 19 locations across the Middle East, including in Bahrain, Jordan, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates. Iran has consistently claimed it is attacking US military assets, but Iranian strikes during the first phase of the war hit sovereign territory and caused civilian casualties.<\/p>\n Spurred by the conflict, Gulf countries are now tightening military cooperation by sharing data and coordinating warning systems.<\/p>\n The US, too, has faced immense pressure in the war and has failed to force Tehran to capitulate, despite Trump\u2019s boasts.<\/p>\n Surging oil prices<\/p>\n Crude prices surged by 12 percent following the latest wave of US attacks on Iran as concerns about transiting the Strait of Hormuz grew once more. Before the war, about a fifth of the world\u2019s oil supply passed through the waterway, but Iran\u2019s blockade on the strait has disrupted energy prices worldwide. Volatile prices are reflected at petrol stations across the US, where petrol went from $2.98 per gallon ($0.78 per litre) before the war to a peak of $4.63 ($1.22 per litre) in May.<\/p>\n Midterm elections<\/p>\n Increased pump prices, and the resulting increase in living expenses, in general, have contributed to making the US\u2019s war on Iran highly unpopular among Americans. A majority, 57 percent, believed it was the wrong decision by the Trump administration, according to a YouGov poll this week. The war looms uncomfortably over Republicans as midterm elections approach in November, when the party risks losing its congressional majority. Some polls already show Democrats securing a small lead.<\/p>\n Weapons shortage<\/p>\n![\"epa12978802](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/07\/epa_6a21ee1c7fc1-1780608540.jpg\")
Protesters during a rally against the Iran conflict outside the US Capitol, Washington, DC, US, May 20, 2026 [Will Oliver\/EPA]For the US, oil prices, midterms and a looming weapons shortage<\/p>\n