Wars are measured by who achieves their objectives, not who absorbs more punishment. By that metric, the 2026 US-Israeli campaign against Iran ended in a way that no amount of presidential spin can fully disguise. Trump characterized the MoU as Iran’s “unconditional surrender.” Iran called it “a record of US failure.” Foreign Policy and The Atlantic described the outcome as a defeat for the United States and Israel, while The Independent went further, calling Iran’s proven ability to close the Strait of Hormuz a “weapon of mass economic destruction of unique power.” These are not fringe assessments. They reflect something structurally true about how the war was fought and how it ended.
The military facts are not in dispute. The US conducted over 13,000 airstrikes, assassinated Supreme Leader Ali Khamenei, targeted missile infrastructure, and deployed a naval blockade. Iran absorbed enormous damage. And yet, Trump concluded the conflict without a strategic victory — on terms that seem to favor Iran — with early reporting suggesting Tehran will enjoy a sanctions waiver on oil sales, will be able to enrich uranium, and will not be required to dismantle its network of proxies. A country does not win a war by absorbing less damage. It wins by denying the enemy its objectives. Iran did exactly that.
What the MoU Actually Reveals
The Islamabad MoU covers the end of hostilities on all fronts including Lebanon, a toll-free strait reopening for 60 days, Iranian mine-clearing within 30 days, the lifting of the US naval blockade proportionally, Iranian sanctions waivers and frozen asset release, US troop withdrawal from Iranian territory, and a 60-day nuclear negotiation window. Read as a list of Washington’s original war aims, none of these terms resemble what a victor imposes on the defeated.
Consider what the United States came in demanding: Iran’s full nuclear capitulation, the dismantlement of its regional proxy network, and regime change as the implicit end-state. The framework deal does not include the Iranian ballistic missile program or its network of non-state allies in the Middle East. Tehran insisted from the start that it would not negotiate under fire — that aggression had to stop before diplomacy could begin. As the dust settled, Iran knew how far the United States was willing to go. It also knew it could bring the Strait of Hormuz and the global economy to its knees with a barrage of missiles and drones. That is not the knowledge of a defeated state. That is leverage, proven in real time.
Paul Musgrave, an associate professor of government at Georgetown University in Qatar, said the deal indicated that “the Iranians had greater strategic patience, greater strategic leverage and the ability to shape a deal that was always going to be more favorable to them relative to the Americans.” His assessment cuts through the political noise. The party with patience wins asymmetric conflicts. Iran was patient. Washington was not.
The Hormuz Card and the Dollar’s Quiet Crisis
Iran did not need to destroy American military power to win. It needed only to demonstrate that the cost of escalation was unbearable — economically, politically, and logistically. Until the US-Israeli war against Iran, the Strait of Hormuz was open and about 25 percent of the world’s seaborne oil trade and 20 percent of the world’s LNG passed through it. Commercial traffic through the strait dropped more than 90 percent after the outbreak of conflict. The disruption rippled immediately into fuel shortages across Asia, airline ticket surcharges in the US and Europe, and a spike in global food prices tied to fertilizer trade that routes through the same chokepoint.
The 2026 Iran war illustrates a dangerous cycle: to protect the petrodollar, the United States must exert military force; yet every military exertion creates more incentive for the world to move away from the dollar. This is not a theoretical concern. A parallel framework for maritime commerce has emerged at this vital chokepoint — Iran began allowing tankers from selected “friendly” countries to pass through the strait, provided that oil payments and fees are settled either in Chinese yuan or in stablecoins. It may be more symbolic than a real blow to the petrodollar regime, but the system does appear vulnerable — and oil-exporting countries in the Middle East could go shopping for a new arrangement if the US proves to be an unreliable geopolitical partner.
The petrodollar system — the arrangement under which oil is priced and traded in US dollars, sustaining global demand for American currency and enabling Washington to run large deficits — has rested for fifty years on the assumption that the United States could guarantee the security of Gulf energy flows. The events of the last four years, and especially the Strait of Hormuz crisis, have transitioned the de-dollarization narrative from a theoretical risk to a structural realignment, with the outbreak of the Iran war in February 2026 serving as the definitive catalyst.
The Axis Survived, and So Did Palestine
The strategic objective Washington and Tel Aviv shared was dismantlement — not degradation — of Iran’s regional influence. That goal was not achieved. Hamas survived Gaza. Hezbollah absorbed significant blows but endured. Iran’s war strategy widened the arena of conflict, extending the war beyond mere military might and into the political and economic realms, with the aim of withstanding bombardment until the conflict became too costly for the United States and Israel to sustain. That strategy worked.
Iranian chief negotiator Mohammad Bagher Ghalibaf stated Iran would unilaterally begin imposing permanent tolls on ships passing the Strait of Hormuz 60 days following the withdrawal of the US Navy. If implemented, that represents a historic shift in the maritime order of the Persian Gulf — one that directly contradicts the century-old principle of [suspicious link removed] that American power has enforced since World War II.
Perhaps the deepest irony of the entire campaign is that the regional project designed to sideline Palestine — Netanyahu’s New Middle East vision, the Abraham Accords framework, the IMEC corridor — has been set back significantly by the war it launched. Before October 7, 2023, normalization was supposed to replace liberation. Palestine could be managed, marginalized, and eventually bypassed. The events since have made that calculation obsolete. Palestine is back at the center of global politics, and every major diplomatic conversation in the region now runs through it.
The Gulf states did not advocate for this war, but they are now forced to confront the fallout from the conflict — and will likely have to do so without significant help from the United States. That is not the regional order Washington set out to build. It is a direct consequence of the one it chose to fight for. The United States and Israel sought to change Iran. Iran sought only to survive the attempt. One of those objectives was realistic. The other was not.
Original analysis inspired by Sami Al-Arian from Middle East Eye. Additional research and verification conducted through multiple sources.
