Trump's Iran war may be 'militarily' over, but economic siege still haunts

Did Donald Trump's Iran campaign just come to an end, finally? The US President's latest news byte is causing quite a flutter around the world even as war-wearty economies and businesses keep their fingers crossed.

Trump said on November 10 that the war is "effectively" over militarily. A day after a keenly-watched meeting with Qatar's Prime Minister, he said that another major US bombing campaign against Iran was unlikely for now.

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Trump's remark has caused attention to spike around the world. However, even as public interest in the matter hits a high note, many are of the opinion that it may be too early to count on an announcement by someone whose frequent change of stance is only too well known.

So, where do matters really stand as of now? The ground situation and the recent diplomatic back-and-forth may be instructive in this respect.

From real war to proxy one

Trump's remark notwithstanding, the American naval blockade or Iran remains firmly in place. Iranian oil exports are still under as much pressure as any time in the recent past. And a new US task force -- Iron Gate -- is being deployed with a mandate to restrict Iran's overland trade.

What all this means is, while Trump & Co may be stepping back from large-scale military operations, it is showing few real signs of ending the siege.

Here is a more significant question that needs asking: Is Trump replacing the actual war with a proxy one? Which means, is economic warfare set to take the place of the armed conflict? And if it does, what will it mean for the vital Hormuz corridor and the global oil/gas markets?

As for the real war itself, Trump called Iran "militarily defeated". To drive his point home, he cited the destruction of its military leadership and capabilities. He, however, did not announce a withdrawal of US forces or a complete end to military operations.

Trump said US forces would remain ready to strike if circumstances changed. More importantly, he made clear that the naval blockade would remain in place.

The message seems to be that the war will remain on hold without the US letting go of its leverage over Iran, AP and Reuters reported following Trump's remarks.

All eyes on an evolving equation

The new, evolving phase might turn out to be critical to what turn matters now take.

The blockade targets maritime trade entering and leaving Iranian ports, rather than merely stopping Iranian tankers from setting sail. Although humanitarian supplies are exempt, this arrangement practically puts a tight leash on both exports and imports.

The main likely objective of this move is to deprive Iran of its oil revenues, its most important source of foreign exchange, at the same time also cutting its access to arms/ammunition supplies.

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According to recent US Centcom estimates cited by AP, thus far, Iran has been stopped from exporting more than $25 billion worth of crude. It means the Iran war is not a simple, straighforward military campaign anymore, but an economic war with high costs for the besieged side, both Reuters and AP reported.

The oil flow from Iran, however, hasn't completely stopped. China, its biggest customer, imported an estimated 534,000 barrels per day of Iranian crude in August, according to Kpler data cited by a Reuters report.

While that was a sharp fall from an average of 1.4 million barrels per day in 2025, it showed Iran can still make the system work, at least in part.

However, a key point to note here is that much of this trade involved barrels "already loaded or held in floating storage, outside Hormuz", Reuters reported. So, while Iran was able to monetise that cargo, continuing these exports must have become seriously difficult once Hormuz came under fire.

A new iron curtain

Its not just the sea around Iran that is under American siege.

Iron Gate, announced on November 7, has been tasked with coordinating with other US agencies to restrict the movement of advanced weapons, dual-use technologies, sanctioned materials and illicit revenue across Iran's land borders and the Caspian Sea.

This is basically a new task force that has the mandate to raise the heat on Iran by raiding alternative supply routes. This sends a big new signal: that the US it willing to go all the way in its attempt to strangulate Iran financially, Reuters reported.

The Strait of Hormuz remains the biggest uncertainty. In normal times, roughly a fifth of global oil shipments passes through this strategic waterway. Iran's ability to disrupt shipping gives it major leverage even as the US restricts access to its ports.

If the siege gets prologed, it will keep freight, insurance and oil prices volatile, with major consequences for big energy importers like India. While oil prices eased after Trump's latest remark, global energy markets could still be a long way from real, business-boosting normalcy -- durable settlement and uninterrupted shipping, which in turn will restore sentiments.

Another retreat, America-style?

Trump's track-record of abrupt reversals means no one really knows what will come next. In April, he threatened to destroy Iranian civilian infra if Tehran failed to reopen Hormuz, only to accept a two-week ceasefire shortly before his deadline. He has since alternated between threats of conciliatory signals.

Trump's latest enough-of-war talk, even as the US blockade of Iran stays firmly put, is consistent with Trump's diplomatic playbook. According to him, this is strategic flexibility, even though it keeps everyone -- allies, enemies, markets -- guessing.

Meanwhile, history buffs are looking at it from another angle.

Could this be the beginning of another American military retreat? In Afghanistan, after 20 years of war, US and NATO forces abruptly withdrew in August 2021, only for the Taliban to return to power. In Iraq, American combat troops invaded in 2003 and withdrew in December 2011, after grinding the country to dust. (US Troops, however, returned there in 2014 when Islamic State overran large parts of the country.)

Iraq and Afghanistan showed the limits of military superiority in invading a foreign country. According to analysts cited by an assortment of reports, Iran may become a different version of the same story.

Trump is seemingly unwilling to get the US military entangled in another long foreign war. But an economic siege is not a better exit plan either, they said.

The world had thought Trump's army would steamroll Iran in a matter of weeks, if not days. But Iran withstood the militarily far superior advarsary's attacks for months on end. If Iran finds a way to withstand the economic warfare too, Trump then will have gotten the US entangled in another long, expensive face-off -- maybe less bloody, but not less costly.