(AP) – In recent weeks, the United States has succeeded in loosening Iran’s grip over the Strait of Hormuz while virtually shutting down Iran’s own oil exports, accelerating its economic free fall.

But the war launched by the U.S. and Israel in February — intended to last a few weeks — is still far from over, and the stalemate is costly for both sides. An agreement reached in June quickly crumbled, with no sign of diplomatic progress since then. Low-level fighting persists, and the U.S. does not seem to have an exit strategy.

The mounting economic pressure on Iran has yet to stoke an uprising, and if its leaders are backed into a corner, they may opt for military escalation rather than capitulation. Their Houthi allies in Yemen have meanwhile stepped up attacks on Saudi Arabia, helping to push oil prices back up.

The price of a barrel of Brent crude, the international benchmark, surged above $100 this week, and diesel — heavily used in transport and farming — hit a record, potentially stoking inflation. U.S. President Donald Trump has acknowledged that gas prices are likely to stay high through the midterm congressional elections.

“Unfortunately, the U.S. is not winning in the war with Iran despite its limited success in loosening Iran’s grip over the strait and the devastating impact on Iran’s economy,” said Mona Yacoubian, a Middle East expert at the Center for Strategic and International Studies in Washington.

“Iran shows no sign of backing down, and instead has demonstrated a willingness to not only fight back, but escalate wherever it can. The war is likely to be protracted with no clear victor.”

Iran loses leverage as oil moves through the Strait of Hormuz
Iran effectively closed the Strait of Hormuz — through which a fifth of the world’s traded oil and gas transits in peacetime — in the opening days of the war, using the worldwide economic shock as leverage. Meanwhile, it continued to export its own oil, mainly to China.

But in recent weeks, the balance has reversed. A U.S. blockade has virtually halted Iran’s exports, while the American military has facilitated greater exports by Gulf countries, according to figures compiled by Homayoun Falakshahi, an oil expert at Kpler, a global trade monitor.

He found that Iran’s oil exports had dropped from 1.85 million barrels a day last spring to around 255,000 in August. Exports of non-Iranian oil rose from 300,000 barrels a day at the height of the war to 8.4 million in September, and exports through alternative routes took that number to 10.8 million.

U.S. Energy Secretary Chris Wright boasted of similar figures on Sunday, saying “we’re probably two-thirds or more of preconflict flows.” Non-Iranian exports were at around 14 million barrels a day before the war, according to Falakshahi.

But the increased flow depends on a major U.S. deployment in the strait that has strained the military’s resources. The unpopular war has already cost U.S. taxpayers more than $37.5 billion and left 18 U.S. service members dead, and is expected to weigh on Republicans in November’s election.

Tehran could escalate in other ways
The tightened blockade and new U.S. sanctions are already taking a heavy toll on Iran’s economy, driving up prices and causing even longer lines outside gas stations.

But so far, it’s shown no sign of pushing the country’s increasingly hard-line leaders to make concessions on the Strait of Hormuz, Iran’s disputed nuclear program or its support for armed groups in the region.

“Washington’s main problem is that it still lacks a theory of victory: More ships are getting through, and Iran is hurting, yet none of that has produced a political outcome,” said Ali Vaez, an Iran expert at the International Crisis Group think tank.

Iran has continued to attack ships in the strait, drawing limited U.S. strikes on its coastal areas and then responding with missile attacks on Arab countries hosting U.S. forces. Trump recently dismissed the conflict as “small potatoes.”

But with the U.S. supply of sophisticated interceptors showing strain, Iran could be tempted to escalate its attacks — or respond through regional proxies.

The Iran-backed Houthis launched a wave of attacks on Saudi oil facilities this week as part of a conflict that goes back more than a decade but has heated up in recent weeks. The Houthis are also attacking Saudi shipping, threatening its oil exports and a crucial trade route through the Bab el-Mandeb chokepoint leading to the Red Sea and the Suez Canal.

The Houthis have damaged Saudi Arabia’s Jizan refinery, a large supplier of diesel and jet fuel to Europe, Falakshahi said. The volume of Saudi oil passing through the Bab el-Mandeb bound for Asia has plunged from around 3.4 million barrels a day in June to just 128,000 in August, according to Kpler’s figures, though it has recovered slightly to some 700,000 barrels per day in September.

“Tehran has repeatedly signaled that it will respond to growing U.S. pressure by moving up the escalation ladder, not by backing down,” Danny Citrinowicz, a senior researcher at Israel’s Institute for National Security Studies and a former Israeli intelligence officer focused on Iran, wrote on X.

“Iran will not simply accept an indefinite maritime blockade, nor will it allow Washington to impose mounting economic costs without imposing costs of its own,” he wrote.