Iran can continue to wreak havoc on the global economy, says CFR's Michael Froman

Summary

• Military objectives against Iran have been largely achieved: degrading its military, missile capabilities, navy, and ability to defend nuclear programs.
• Iran has waged war on the global economy by closing the Strait of Hormuz, threatening global shipping and oil supply.
• Reopening the Strait requires negotiation or military action, but U.S. and Iranian demands have almost no overlap.
• Military action would involve significant U.S. assets on the ground, with high downside risk and uncertainty; no decision has been made.
• Iran employs asymmetric warfare (drones, missiles) to wreak havoc on the global economy with relatively low-cost methods.
• Iran is counting on the economic pain from the Strait closure affecting the U.S. and global markets more than Iran itself.
• Iran is exporting oil at higher prices due to the conflict, and sanctions on seaborne oil have been lifted.
• The U.S. President has all military options available, including actions against Kharg Island or uranium storage sites.
• A potential ground offensive is being prepared, but it remains unclear if it will be pursued.
• Key risk: prolonged closure of the Strait of Hormuz could lead to sustained high oil prices and broader global economic disruption.