Iran’s calculations as US escalation looms: Trust, midterms, Hormuz

China announced Tuesday it will send an envoy to regional countries to help prevent further escalation in the conflict, which has disrupted global energy markets. On Monday, senior officials from Saudi Arabia, Pakistan and Turkiye met with Iranian counterparts, promising continued discussions on regional peace and security.

Tehran remains firm on its demands, particularly regarding its leverage over the Strait of Hormuz, through which one-fifth of global oil and LNG were shipped before the war. Iran insists on sanctions relief, an end to the US naval blockade on its Gulf ports, and guarantees against renewed attacks in exchange for normalizing Hormuz traffic.

Deep distrust of Washington

Iran's position stems from a belief that previous diplomatic efforts failed to protect against renewed US and Israeli attacks. The US and Israel launched the first strikes of the war on February 28, during ongoing peace talks in Oman. Last June, Israel launched a 12-day war on Iran, which the US joined.

A June memorandum of understanding brokered by Pakistan and Qatar to reopen Hormuz and end the US blockade quickly unraveled as both sides resumed attacks, leading to sustained US attacks on Iran in July and Iranian retaliatory strikes on US military assets and energy infrastructure in neighboring Gulf countries and Jordan.

Sina Toossi, a senior fellow at the Center for International Policy, noted that the failure of that arrangement had hardened Tehran's position: "Iran believes previous negotiations and ceasefire arrangements failed to protect it from renewed military attacks, and it is therefore seeking more tangible and durable guarantees."

US President Donald Trump has remained ambiguous about his next steps, telling reporters: "My question is, do I make a deal with them or do I finish them off?" He had previously stated attacks on Iran would not occur until after the US midterms on November 3.

Elections influence strategy

The upcoming US midterms, where all 435 House seats and 35 Senate seats are contested, will determine which party controls Congress for Trump's final two years. The war, already unpopular with Americans, has become a contentious domestic issue, with just 34% approving of Trump's handling of the conflict according to a Reuters/Ipsos survey.

The conflict has driven up energy prices, with diesel nearly doubling, causing significant burdens for farmers and small businesses and adding to inflation concerns dominating the election campaign. Some reports suggest Tehran may be prolonging negotiations to deny Trump a political victory before the elections.

Israel's election on Tuesday adds another dimension. A defeat for Prime Minister Benjamin Netanyahu could complicate renewed joint attacks with the US, as he was reportedly the main force behind Trump greenlighting the war. However, opposition leader Gadi Eisenkot, also a former military chief, has expressed similar concerns about Iran's nuclear program.

Hormuz as bargaining chip

Iran's control over shipping through the Strait of Hormuz remains its strongest bargaining chip. The waterway carried about one-fifth of global energy supplies before the war began on February 28. October has seen the highest number of attacks on commercial shipping around Hormuz, with Brent crude surging above $117 a barrel—compared to $72 pre-war.

Chris Beauchamp, chief market analyst at IG Group, believes Iran is deliberately exploiting economic pressure: They know they are in an attritional race with the US to see who breaks first. For now, however, they are happy to keep attacking shipping to push prices higher.

Mohsen Rezaei, secretary of Iran's Supreme National Security Council, stated the country's armed forces are prepared to respond to any new attacks, including by invading neighbors and hitting US military bases. He emphasized Iran would only reopen Hormuz and begin peace talks once Washington took concrete steps to rebuild trust.