War, Once Again
Even the formal signing of an agreement by the presidents of the United States and Iran failed to secure a lasting ceasefire. Although the 14-point memorandum was signed by Donald Trump and Masoud Pezeshkian on June 18, sustained nighttime attacks across southern Iran resumed on July 10. Iran has once again declared the Strait of Hormuz closed, while the United States has reimposed a naval blockade on Iran.
Although many observers expected tensions to eventually return to the region, few anticipated that the ceasefire would collapse within the very 60-day implementation period established by the agreement. At first glance, the memorandum appeared to reflect the interests of both sides. Tehran stood to benefit from the easing of the blockade and the revival of its foreign trade, providing much-needed relief for its struggling economy. Washington, meanwhile, expected that reopening the Strait of Hormuz would help stabilize global energy markets and signal to American voters that gasoline prices could fall.
Why, then, did the conflict reignite so quickly? Is another ceasefire still possible? And what shape is this confrontation likely to take in the long run?
A Ceasefire Under Strain
From Tehran's perspective, Washington began violating the agreement almost immediately.
Under the first article, hostilities were supposed to cease across all fronts, including Lebanon, while the country's territorial integrity would be respected. Iran viewed Israel's continued military presence in southern Lebanon as a direct breach of the ceasefire. Although U.S. pressure eventually halted Israeli strikes on Beirut, Tehran had expected a far broader implementation of the agreement than what ultimately occurred.
Another source of frustration concerned Article 11, which promised Iran access to its frozen financial assets. Several weeks after the agreement, however, that provision had yet to be implemented.
Despite these grievances, Tehran had strong incentives to preserve the ceasefire. The lifting of the naval blockade allowed Iranian oil exports to recover sharply. Official figures indicate that Iran exported more than 80 million barrels of oil during the first three weeks after restrictions were eased—an extraordinary improvement compared with previous months and a significant boost to the country's economy.
Financial markets reflected the same optimism. After climbing above 1.9 million rials per U.S. dollar before the agreement, the exchange rate strengthened to around 1.6 million. Following the renewed hostilities, however, the rial once again weakened to roughly 1.92 million per dollar.
The Tehran Stock Exchange also experienced a remarkable recovery during the ceasefire. Its main index climbed from approximately 3.7 million points to 5.3 million before retreating below 4.9 million after the latest escalation.
For these reasons, despite its objections over alleged violations of the agreement, Tehran continued to observe the ceasefire. But this was only part of the story.
Funeral Processions and the Politics of Revenge
Four months after the assassination of Iran's late Supreme Leader, authorities finally held the state funeral.
According to international media reports, the week-long ceremonies attracted enormous crowds. The funeral began in Tehran before moving to the holy city of Qom. The procession then crossed into Najaf, Iraq's leading Shiite religious center, before concluding in Mashhad, Iran's northeastern pilgrimage city, the ancestral hometown of Ayatollah Khamenei and the burial place of the Eighth Imam of Shiite Islam.
The Islamic Republic intended the ceremonies to demonstrate that it still enjoyed broad public legitimacy. Yet one message became increasingly dominant throughout the processions: revenge.
While the government had signed the memorandum to project a commitment to lasting peace, the funeral crowds sent a different signal. Chants questioned the wisdom of negotiating with Washington, while some protesters even denounced Iran's own negotiators. The prevailing message was unmistakable: many demanded retaliation.
President Trump responded forcefully, warning that any attempt on his life would trigger overwhelming military action against Iran.
Supporters of retaliation argue that unless Iran avenges the assassination of its former leader, the country's current leadership will remain permanently vulnerable to similar attacks. That concern, they argue, explains why Ayatollah Mojtaba Khamenei has yet to make regular public appearances.
Yet this was only one element driving the renewed confrontation.
Article 5 of the agreement required Iran to facilitate the reopening of the Strait of Hormuz. Tehran interpreted this as meaning that all maritime traffic through the strait should proceed with Iranian coordination. Washington, however, sought to reopen the southern shipping channel without granting Iran an effective role.
On July 8, Iran attacked three commercial vessels and oil tankers in what it described as an effort to preserve its authority over the waterway. The incident occurred in the middle of the funeral ceremonies and rapidly reignited military exchanges.
Some analysts have argued that the attacks reflected a disconnect between political leaders in Tehran and operational military commanders, suggesting that the strikes may not have been authorized at the highest level. However, little concrete evidence has emerged to support that claim.
A Cyclical Conflict
The war, which had been suspended by the April 8 ceasefire, has now resumed.
Increasingly, the confrontation between Tehran and Washington appears to be entering a recurring cycle of warfare followed by temporary ceasefires—a pattern that could persist for months or more.
In the current phase of the conflict, U.S. air operations have focused primarily on southern Iran. Beyond military targets, bridges and critical infrastructure have also been struck.
Iran has responded by targeting American military facilities in Bahrain, Kuwait, Jordan, Qatar, and Saudi Arabia.
Some Iranian analysts argue that Washington's bombing campaign appears designed to isolate southern Iran from the rest of the country, fueling renewed speculation that the United States could eventually deploy ground forces to islands in the Persian Gulf or even parts of southern Iran. Whether or not such scenarios materialize, these discussions suggest that Washington may be preparing for a prolonged confrontation rather than a short military campaign.
From the perspective of decision-makers in Tehran, another pattern has also emerged. Whenever ceasefires reduce energy prices, they believe President Trump acquires greater political room to resume military operations. Before the latest escalation, oil prices had fallen below $80 per barrel. Within days of the renewed fighting, prices had risen by more than 10 percent.
The broader trajectory therefore points toward a long-term conflict punctuated by periodic pauses. Temporary ceasefires remain possible because both sides retain incentives to de-escalate. For Iran, a prolonged blockade risks creating severe humanitarian and economic hardship. For the wider world, Iran's continuing ability to disrupt shipping through the Strait of Hormuz threatens higher global energy prices, giving Washington incentives to accept temporary truces.
Yet despite these recurring pauses, no durable middle ground appears to exist on the nuclear issue or on the broader disputes dividing the two countries. Until such a compromise emerges, lasting peace is likely to remain elusive.
Pouya Jabal Ameli Economist and former editor-in-chief of Donya-e-Eqtesad Daily