The war in the Gulf is now in its ninth month. It began on February 28, the Strait of Hormuz has been effectively closed since March, and a US counter-blockade has squeezed Iranian oil exports.
This week, as President Trump hinted at fresh strikes and a US envoy said one could come this weekend, Iran threatened the undersea cables that carry the Gulf’s data. Brent crude briefly crossed $117, a five-month high, before a single new shot had been fired. The market is no longer pricing the war. It is pricing the next phase of it.
The usual question is whether Washington or Tehran will blink. A better one is whose interests this stalemate serves, and who is paying for it.
A war of claims
Begin with what is contested. Iran’s Revolutionary Guard says four tankers were hit and three struck mines near Hormuz. Maritime monitors have confirmed only two attacks this week. President Trump calls the Iranian claims invented to push up oil prices before the midterms, and says more oil is flowing through Hormuz than before the conflict. Iranian state media says the movement of “non-compliant” vessels has halted, and independent transit data reportedly does not support Mr Trump’s picture.
Both sides are managing the market as much as the battlefield. Each claim, true or not, moves the price, and each side has an election calendar. Readers should treat every belligerent’s statement with caution. The price rise, however, is real, and it is paid by importers far from the battlefield.
What Washington wants
The stated aims at the outset were to destroy Iran’s nuclear program, missiles, navy, and proxies. Eight months later, the campaign has a second layer that concerns flow rather than facilities. The Treasury Secretary describes the blockade as Operation Economic Outcast and says it has decimated Iran’s oil lifeline. The president has repeatedly suggested that America could take Iran’s oil and has said Hormuz is “totally ours.”
That fits a broader logic. Washington reads Iran partly through its rivalry with China, which depends on Gulf energy and sees Iran as a node in its overland connectivity plans. Controlling the movement of energy, short of an outright cut-off, gives leverage: access to oil, shipping, and insurance can be made conditional in a crisis. Venezuela, where the United States took control of oil exports after Nicolás Maduro was deposed, is the precedent the president himself has pointed to.
But this strategy collides with American politics. The president favors cheap oil, gasoline prices have become a political liability, and midterm elections are days away. That explains the mixed signals: threats of new strikes, talk of a deal, and the accusation that Iran invents tanker attacks to push up prices before the vote. Washington needs pressure on Tehran but cannot afford the prices that pressure produces. That tension, more than any strategy, is behind the oscillation between escalation and negotiation.
Iran’s asset
Any account of Washington’s aims must reckon with how Tehran sees them. For Iran, Hormuz is more than a shipping lane. It is the one strategic asset that sanctions and air campaigns have not removed: a piece of geography that lets a state under blockade impose costs on the world economy.
Iranian officials argue that the strait lies within the internal waters of Iran and Oman, and say the two countries have agreed designated lanes. Early in the war, Tehran sought international recognition of its sovereignty over the waterway, and its talks with Oman on managing traffic have reportedly considered a toll, though Foreign Minister Abbas Araghchi notes that no fees were charged before the war.
Washington and most maritime states regard Hormuz as an international strait with a right of transit passage, so the claim is contested.
From Tehran’s vantage point, talk of taking Iran’s oil and declaring Hormuz “totally ours” looks like an attempt to strip it of its leverage and turn its geography and resources into American assets. Iran’s response is to treat passage as something it grants selectively. Special routes have been opened for Iraqi vessels, and India and other “friendly nations” were allowed through, while ships using a US-endorsed route that Tehran rejects have faced attack.
Its stated terms have been consistent. The strait would reopen on the sixth day of an agreement, and talks would begin on the seventh, if Washington lifts its blockade and oil sanctions and ends hostilities on all regional fronts. Washington wants the nuclear file addressed first, and Vice President Vance has said Iran must make a meaningful cut in enrichment. Distrust runs deep: Mr. Araghchi says all three earlier rounds of talks ended in wars against Iran.
But the asset cuts both ways. The closure has cost Iran its own exports under the blockade, and by hitting its neighbors it has united much of the region against it. A record 135 countries backed a UN resolution condemning Iran’s retaliatory strikes on Gulf states. The more Iran uses its asset, the more it isolates itself, and the more Washington tries to take it away, the more Tehran treats it as non-negotiable.
The chokepoint paradox
Control of a chokepoint is a weapon that wounds allies first. About a fifth of the world’s oil passes through Hormuz, so disrupting it penalizes importers in Asia and Europe, many of them American partners, before it hurts rivals. Tehran understands this. An IRGC spokesman has pointed out that seven major internet cables run beneath the strait and spoken of “new targets” and “new weapons,” and Reuters reports that Tehran is weighing attacks on Gulf internet infrastructure.
That would move the war from energy to information, a lever that bypasses oil entirely. Banks, exchanges, ports, hospitals, and airlines across the Gulf depend on those links, and cuts can take effect within hours while repairs at sea can take far longer. Both capitals are competing to raise the other’s costs, and neither bears the heaviest ones.
The Gulf Governments did not choose this war, yet they host the bases, the oil facilities, and the cables. Reports of Houthi drones intercepted over Riyadh, Medina, and the Shaybah oilfield, and of Aramco emptying its Dhahran headquarters, show how exposed they are, whichever side strikes first.
An exit that keeps receding
The signals are contradictory. A US envoy says a strike could come this weekend and also describes Mr. Trump as open to a deal. Prime Minister Netanyahu is calling for the regime to be overthrown. The US ambassador to the UN has said the war could last another year. Force has not produced an exit in nine months, and each new threat narrows the room for one.
India’s dilemma
India imports roughly 85 to 90 percent of its crude oil and draws most of it from the Gulf. For New Delhi, $117 oil is not an abstraction.
The rupee has been near record lows, around 96 to the dollar earlier this month. Foreign exchange reserves fell by about $38 billion in the three weeks to late September as the Reserve Bank of India defended the currency. On October 7, the central bank raised its policy rate by 25 basis points to 5.50 percent and moved to a stance of calibrated tightening, saying rate cuts are off the table for now. Inflation reached 4.82 percent in August, and forecasters expect the current account deficit to widen to roughly 1.5 to 1.7 percent of GDP in FY27, with growth slowing.
The exposure goes beyond macroeconomics. Nearly ten million Indians live and work in the Gulf, and they send home roughly 40 percent of India’s remittances. A wider war, or even prolonged disruption of Gulf economies, would reach households from Kerala to Uttar Pradesh. India’s outsourcing and finance sectors ride on the same global network of cables whose security is now in question.
Strategically, India is more exposed than any other major power. It has partnerships with Iran, through Chabahar and the North-South corridor, and with the Gulf monarchies, Israel, Russia, and the United States. Early in the war, Iran allowed India and other “friendly nations” to keep using Hormuz for commercial shipping. That courtesy is valuable but fragile, and it depends on India staying out of the fight. Taking sides would cost it Iranian goodwill or American favor. Staying silent costs it influence over the outcome. This is strategic autonomy under real strain.
What India can do
India’s best tools are quiet ones.
Use its credibility. Moscow has publicly credited Prime Minister Modi for pressing for an end to the Ukraine war. India holds the same standing with Gulf capitals, Tehran, and Washington, and few other Governments can talk to all four. It should use that standing to push for a verifiable pause.
Diversify and cushion. More crude from the Americas, West Africa, and Russia, larger strategic reserves, and routes that bypass the strait, such as pipelines to Yanbu and Fujairah, which have limited capacity, all reduce the shock.
Treat connectivity as national security. Diversifying data routes and landing points should be a priority, since a cable cut would hit finance and outsourcing within hours.
Build corridors that do not depend on one sea lane. The India-Arab economic partnership, including the proposed corridors to Europe, is only as strong as the security of the routes it uses.
Why Washington should care about India’s strain
There is an American interest here too. The United States wants India as a partner and counterweight in Asia. A prolonged oil shock, a weaker rupee, and rising interest rates erode the economy Washington is counting on, and pressing India to choose sides will push it toward the hedging it already practices. America’s interest in a durable exit is therefore not only about its own gasoline prices. It is also about the strength of the partners it needs for the longer competition with China.
The way out
Escalation has been announced in public, rung by rung: strikes, then cables, then energy sites. Each rung is a choice, not an inevitability. The diplomatic offers that both sides say are on the table should be taken now, not after the first strike.
A realistic way out would combine a time-limited pause, verified assurances on shipping, and an explicit understanding that undersea cables and civilian infrastructure are off-limits to all sides. Both sides have, in fact, sketched such a path. Tehran says Washington has accepted the terms of Iran’s seven-day plan but wants additional clauses. The gap is narrower than the rhetoric suggests, and the main sticking point is sequence: Washington wants the nuclear file addressed first, while Tehran wants the strait and the blockade settled first. Bridging that does not require either Government to concede its position. It requires only that they recognize who is paying the bill.
The most powerful players in this war are not the ones facing the highest costs. The importers, the Gulf states, and the migrant workers are. A settlement that ignores them will not last.
Dr Waiel Awwad, is a veteran journalist specialising in West Asian affairs; Views presented are personal.