Only three months ago, Israel and Iran engaged in a conflict that destabilized the Middle East. Missiles and drones were exchanged by both sides, but with significant assistance from the U.S., Israel took command of Iranian airspace, repeatedly targeted nuclear and military sites throughout Iran, and eliminated approximately 30 security commanders and other personnel. Iran’s retaliatory actions achieved little that might deter Israel in the future.
A return to full-scale war is improbable. Although Iran possesses the knowledge and capacity to restore its enrichment capabilities, the recent conflict ensured it is now several years away from being able to produce a nuclear weapon. Israel has also effectively normalized direct strikes within Iran’s borders and demonstrated its capacity to inflict substantial damage on the regime. Israel can execute limited “mow the grass” operations if Iran makes swift progress in rebuilding its nuclear program, and it can target more missile bases and air-defense systems to keep Iran’s defenses degraded.
For its part, Iran cannot afford another war. It will respond if Israel strikes again, but any retaliation will be carefully calibrated to avoid a dangerous escalation that it is less prepared to withstand. Iran finds itself in a more precarious position than it was before Oct. 7, having seen significant erosion of its allied network—from key proxies and partners to Bashar Assad in Syria—a network Tehran had long relied upon to deter Israel and project its regional power.
Presently, the Iranian regime remains stable. The nation’s water and energy shortages have provoked a few isolated demonstrations, but a firm government crackdown has prevented any resurgence of the widespread unrest that convulsed the country in 2022. Any return to high-intensity warfare could jeopardize the regime’s hold on power.
Nonetheless, even if Iran manages to avoid another war, economic pressure, and consequently pressure on the regime, is poised to escalate. Iran faces the imminent re-imposition of UN sanctions. At the close of August, the three European governments—Britain, France, and Germany—who signed the 2015 agreement designed to prevent the development of a nuclear weapons program, triggered the return of U.N. sanctions on Iran in response to its decision to cease cooperation with international inspectors.
Barring an unlikely diplomatic breakthrough, these sanctions are scheduled to be reinstated on Oct. 18, immediately after the snapback deadline expires. Washington has already imposed its own sanctions and prohibited the use of U.S. dollars in commercial transactions. The E.U. has also taken measures in response to the violent suppression of past protests and Iran’s military backing for Russia’s war in Ukraine. However, U.N. sanctions would be far more comprehensive and are likely to cause a considerable drop in Iran’s oil revenues, placing additional strain on its economy.
Iran had previously indicated to the Trump Administration that it was open to discussions, but the current White House appears determined to further squeeze Tehran before any new negotiations can commence. The official U.S. stance is that Iran must first make significant concessions on uranium enrichment, and such a capitulation is deemed improbable. In the interim, Washington can utilize the threat of U.N. snapback sanctions to push Iran’s leadership deeper into a corner.
Tehran is not without its sympathizers and client states. Although the U.S. has imposed sanctions on those involved in transporting Iranian oil, China continues to discreetly acquire it. Its major energy companies and banks largely remain shielded from the Iranian oil trade, which limits their exposure to penalties. Yet, the broader outlook for Iran’s oil revenue is darkening as other potential buyers hold back. Floating storage—tankers containing Iranian oil without a current destination—surged from 5 million barrels to 30 million during the first half of 2025. At a minimum, this implies Iran will need to offer greater discounts and accept lower revenues to attract more purchasers.
The Islamic Republic has navigated many challenges since the 1979 revolution and may well endure several more. In the aftermath of the recent Iran-Israel conflict, Tehran has worked diligently to present its survival as a victory. However, the nation’s difficulties are only projected to intensify.