Raising the Cost of War: Iran’s Response to the US

The Descent into War

At the same time, while the United States was intensifying pressure on Tehran to return to the negotiating table and concede the demands it sought, Iran faced severe domestic pressures. A large wave of protests erupted between December 2025 and mid-January 2026, the largest in the country since 2022. Initially sparked by deteriorating economic conditions and the collapse of the national currency, the protests soon raised broader political demands. The government responded with repression and an information blackout, including an internet shutdown. These developments provided Washington with additional tools to pressure Tehran, which found itself squeezed between external and internal pressures.

Iranian Calculations with the Outbreak of War

The second priority was to mount a rapid and multi-front military response aimed at preventing the adversary’s initial military advantage from being translated into a decisive political outcome – in other words, to prevent the first strike from producing a condition of immediate strategic resolution. Meanwhile, the third priority centred on managing the escalation in a way that would ramp up the cost of confrontation for Iran’s adversaries without sliding into a broad regional war that could provoke an international alignment against Tehran.

Available evidence suggests that Tehran sought to expand the scope of the confrontation by gradually extending it across three principal arenas that differ in cost and escalation. The first arena involves Israel and US bases; the second extends to the Arab Gulf states and their vital infrastructure; and the third concerns maritime routes and energy transport corridors in the Strait of Hormuz. This graduated approach reflects an Iranian attempt to increase the costs of the war for its adversaries and broaden its geographical and political scope without crossing the threshold into uncontrolled escalation.

The first arena demonstrates the capacity to retaliate both domestically and internationally. In this context, Iran’s response took the form of ballistic missile launches and drone strikes targeting sites inside Israel and US military bases. This can be understood as an effort to show not only that the opening strike of the war failed to paralyse Iran or force it into submission, but also that the cost of that strike would be high for its adversaries. It also aimed to demonstrate Iran’s ability to open multiple fronts simultaneously, thereby increasing the cost of confrontation for the United States and its regional allies.

Nevertheless, this does not mean that Iran possesses unlimited room for escalation. The targeting of sensitive civilian facilities – such as water desalination plants in Bahrain – raises the possibility that the conflict could enter a phase of attacks on daily infrastructure. Such a development could push regional states toward more forceful responses and increase the risk of the confrontation sliding into a broader regional war. For this reason, Iranian behaviour at this stage can be interpreted as a pressure ladder that can be raised or lowered depending on the course of the war and political interactions, rather than as a strategy of unlimited escalation or comprehensive destruction.

What Options Are Left for Iran?

There is little doubt that Iran is the party most directly concerned with ending the war. Yet there are no indications that it is prepared to surrender under US–Israeli pressure. The only viable path therefore lies in restoring a political track with the existing regime in Iran. Until Washington reaches this conclusion, the new Iranian leadership will face major challenges related to sustaining resilience and continuing the fight. As military operations against Iran and Iranian responses continue, the trajectory of the confrontation remains open to several possibilities. The difficulty of accurately verifying developments on the ground inside Iran means that assessing future directions relies primarily on analysing the military and political behaviour of the actors involved. The possible scenarios can broadly be summarized in four main scenarios.

The first scenario is the continuation of a war of mutual attrition within a high but controlled ceiling of escalation. In such a scenario, the level of attacks in the Gulf would fluctuate, while the Strait of Hormuz would remain effectively disrupted without an official declaration of closure. This option allows Iran to use the strait as a pressure tool while avoiding the costs of a full closure – particularly as mediation efforts led by Oman continue, alongside international calls to return to negotiations. Such efforts could bear fruit once the United States reaches the conclusion that the regime cannot be overthrown through aerial bombardment alone.

The second scenario involves a regional expansion of the war if attacks targeting energy, water, and port infrastructure in the Gulf evolve into a systematic pattern, or if Gulf states become directly involved in counter-operations. This is reflected in the statement issued by the Gulf Cooperation Council, which indicated the right to respond to Iranian attacks and highlighted growing concerns regarding energy security and maritime safety. At present, however, this scenario appears unlikely.

The third scenario would see the emergence of a fragile de-escalation or ceasefire without a stable political settlement. Such an outcome would be imposed less by a genuine political agreement than by the mounting economic costs of the war – such as rising oil prices and disruptions to maritime shipping. This situation could reopen the negotiating track with support from the United Nations.

The fourth scenario concerns increasing pressure on the centre of decision-making within Iran, potentially widening divisions between political and military elites over how to manage the crisis. This possibility was hinted at in statements by the Iranian president, Masoud Pezeshkian, regarding the attacks on Gulf states and the responses of military institutions. Ultimately, the trajectory of the conflict will depend on the ability of the parties to contain escalation, the scale of the economic, military, and political costs of the war for each of them, and the effectiveness of diplomatic mediation efforts aimed at bringing the conflict to an end.