Elusive US-Iran Peace: Trapped Between a Mirage and an Abyss

 Complexities of asymmetrical warfare, economic exhaustion, and strategic compulsion have pushed Washington and Tehran towards an uneasy, cold and turbulent peace. There is a strong possibility that it may only be a strategic pause, albeit a longer one, rather than an endurable peace, before resumption of next round of confrontations. Hence, stakeholders have to fix multiple points if the current process aspires not only security of lives and stability of the region but also protection of global energy supply chains, global growth and overall stability of markets world over.   

Elusive Peace

US-Iran peace process in recent weeks has appeared trapped between a mirage and an abyss. Diplomatic mediators have shuttled between capitals carrying proposals and counterproposals amidst recurrent missile and drone attacks as well as persistent combats in the sky and waters. Mutual distrust among the warring parties- US, Israel and Iran- has more often outweighed the gestures of peace, reconciliation and accommodation. Ceasefire has been under relentless fire, pushing the peace-talks like a pendulum swinging between possibility and uncertainty. If dynamics of asymmetrical war has exposed futility of escalation, the persistent distrust has ensured near impossibility of a reconciliation.

Nevertheless, economic exhaustion and larger global and strategic pressures have pushed both USA and Iran to pursue a peace that has so far been too uneasy, cold and rocky. It still appears more as a strategic pause, hopefully a longer one, before resumption of confrontation.

As on June 12, 2026, Washington and Tehran appear closer to at least an interim agreement than at any point of time since the present conflict erupted. President Trump, who had threatened hours earlier on June 11 to decimate remaining military infrastructure of Iran and even take over its entire oil reserves, including primary oil export hub -Kharg island- that handles 90% of its crude, abruptly altered his tone. He declared at White House that the United States was close to securing "a great settlement" and suggested that a memorandum of understanding could be signed "over the next few days," possibly in Europe. He apparently cancelled planned strikes hinting that negotiations had entered a decisive phase of conclusion. Markets rallied all over the world taking it as a cue for positive sentiment.

On the other hand, Iranians initially neither acknowledged nor rejected the possibility of an agreement. They emphasized that the final decision was yet to be made. They also insisted that “substantial differences remained unresolved” and that any arrangement “must reflect Iranian sovereignty and national dignity” rather than surrender to military coercion. Subsequently, Iranian Foreign Minister Abbas Araghchi posted on X that a Memorandum of Understanding has never been closer, pending its finalization. Nevertheless, somewhat conflicting statements have continued from both sides even after this.  

Poverty of Trust

A certain threshold level of mutual trust has always defined success of any diplomatic process. This has been squarely missing between US and Iran. Slightest miscommunication may still trigger derailment of the peace process.  In the prevailing equations, sustainability of even a formal deal, and its ability to lead to an endurable solution, remains doubtful.

President Trump’s frequent recourse to high-risk deception, bluff, bullying and overall unpredictability and unreliability may be very effective in corporate deal making in New York or Las Vegas. But in global diplomacy, such an approach needs to be tampered to a different level lest it permanently erodes the trustworthiness and credibility of the most powerful state on the planet. 

It is not only about the way he has dealt with Iran alone. Astounding success of American covert operation to capture Nicolas Maduro or killing of Iranian supreme leader or elimination of Iranian military top brass have permanently altered the trust quotient in geopolitics. Iranians have been repeatedly quoted by media that the US was not negotiating in good faith. They complain that more often the United States used the negotiations only as a smoke screen to prepare for deceitful attacks.

Such allegations gain credence in light of Omani foreign Minister’s disclosure on Feb 27, just a day before US launched its attacks on Iran, that details of US-Iran agreement had been worked out.  It was clear that American CENTCOM was preparing for the attacks, irrespective of the progress or otherwise in the Omani brokered talks. 

During early days of the war, both United States and Israel had declared regime change in Iran as their war objective. They have climbed down from the initial goal more out of compulsion rather than choice. For Iranian regime, its survival remains sacred and non-negotiable. Hence, it shall remain wary of trusting entities who have been seeking to overthrow its very existence.  This is especially after large-scale killing of senior functionaries of the regime.

 This explains fragility of a ceasefire that has witnessed sustained violations. Iran and Israel have regularly targeted one another's strategic infrastructure through periodic missile exchanges. Israel intermittently intensified operations against Hezbollah positions in Lebanon, maintaining that ceasefire with Tehran did not extend to other theatres.

    Iran, for its part, had continued launching missile and drone attacks on U.S. bases across the Gulf, including Bahrain, Kuwait, Jordan and even UAE, threatening serious spillover of war in the entire region. American commanders stationed in the Gulf have repeatedly acknowledged the fragile nature of ceasefire where absence of full -scale war did not mean peace.

Complex Dynamics of Asymmetrical Warfare

The later phase of the U.S.–Iran confrontation also exposed severe limitations of lethal military capacities in extracting an outright victory in complex geopolitical theatres.  Iran is in no position to defeat the United States militarily. Yet by denying an outright victory to combined forces of US and Israel, it has inflicted severe psychological and financial damage on both United States and Israel as well as the entire world, especially Asia.

American superiority in air firepower, surveillance capacity, precision strike, stealth technology, logistics, and overall force projection remains far too overwhelming for Iran. Iran is also in no position to match Israel's technological and intelligence prowess. Yet these have failed to exact a capitulation from Iran.  

Iran has suffered staggering losses. Its entire military top brass has been wiped out along with its supreme spiritual leader Ali Khamenei. Estimated civilian casualties are in excess of tens of thousands whereas thousands of losses of IRGC fighters have been reported in precision US-Israeli strikes. Iranian Air Force has been severely crippled with at least 62 confirmed losses (unconfirmed figure places it at 83) of out of a total inventory of little over 300. Many of the surviving aircraft have been damaged or grounded, beyond repair reducing Iranian strength to half of the pre-war levels. Similarly, Iranian Navy has also suffered massive damages. Out of a total of nearly 100 conventional vessels and submarines, the figure of confirmed losses as on June 10 stood at 28 (12 destroyed, 14 sunk and 2 captured) besides another 14 being rendered inoperable. It has lost of most of its Frigates and Corvettes even though of loss of submarines is estimated to be minimal.

Multiple IRGC bases in Tehran, Isfahan, Bandar Abbas, and Bushehr have been damaged. Several underground missile cities have been destroyed but still a large number of these remain intact. Several key ports like Bandar Abbas and Bushehr as well as well as multiple Refineries and petrochemical plants have been damaged. This has further crippled an already sanction hit economy, comprehensively eroding its economic and military capacities. Estimated economic losses for Iran are placed at hundreds of billions of dollars. 

Yet Iran's cheap, expendable drones, capable of being deployed in large numbers, cost only tens of thousands of dollars compared to the sophisticated American and Israeli interceptor missiles, each costing anywhere between one to five millions.

    United States has also lost 42 aircraft whose estimated cost has been assessed at 29 billion dollars. Media inputs also suggest that it is spending almost 1 billion dollars daily on the war at peak of confrontations and the Pentagon insiders have been quoted stating the total war cost figures stood at 50 billion dollars by June first week. There is limited infrastructure damage on account of missile hits at US bases in the region as most of these have been contained. Nevertheless, all US allies in the region have suffered some military hits, loss of lives and severe economic hits. The loss of global goodwill for the United States and especially President Trump may be formidable.

    Such economic asymmetry has fundamentally altered the strategic and military calculus of war. Iran has also compounded the challenges for US and its allies by attacking US bases in the region as part of a classic strategy of asymmetric warfare. The same has compelled the USA to expend its energy and resources on defending multiple fronts. 

    It is endurance of Iran’s missile and drone arsenal that denied US and Israel  a clear victory. Iran also exploited geography of Persian Gulf by disrupting Strait of Hormuz, which accounts for roughly one fifth of global oil and liquefied natural gas flow. This has hit markets and economies in many Asian states very hard. 

 

Boomerang Impact

Ideological and institutional resilience of a deeply entrenched theocratic regime in Iran, even in face of serious human and material losses, has emboldened it to approach the negotiations from a position of strength.

American Israeli aggression has given it a fresh lease of life when its domestic popularity and acceptability had been dwindling. US-Israeli attacks have been unmindful of civilian casualties and mass sufferings. The regime has used these to invoke to rally popular support by invoking sentiments of patriotism. The declared war objective of regime changes by US and Israel has boomeranged.  

Regime change is a delicate component of a complex science of covert warfare. It requires a unique cocktail of deception, deniability and subversion by smart harnessing of efficacious support structures in a state. Reckless or excessive use of force, and that too from an external force, is certain to change popular sentiment.  Such strategy may have been successful in medieval era when institutional apparatus of a modern state was in a rudimentary stage, offering bigger space for powerful parallel power centers. Such a move may still succeed in de-institutionalized states or states with very fragile institutions.

Iranian theocratic regime, despite its financial and technological constraints, was not found wanting on ideological support among well trained and ideologically committed troops or efficacy of structural components of the state. Iranian state remains in a strong position to deny space for subversion and armed struggle as well as crush any attempt to takeover state power through street agitation. US-Israeli aggression has proved to be a Godsend opportunity for the regime to bolster its legitimacy as savior of the people and the nation. It has also used the opportunity to fracture and crush possible power centres that could challenge it. 

Larger Geopolitical Context

Further, a degree of covert and indirect Chinese and Russian support to Iranian regime must have played a critical role in sustaining the moral and capacity of the latter to deny victory to US-Israeli forces.

China has been clear about its strategic objective drive out US and NATO not only from Taiwan and Far East but from whole of Asia. Venezuela may have been far more dispensable compared to Iran, whose fall again does not pose any existential threat to China. Yet it is likely to back Iran far more than Venezuela because any investment in Iran to counter US influence is likely to get bigger geopolitical and security dividends, at a much lesser cost, due a variety of factors that are too obvious. 

Israeli Prime Minister Netanyahu has appeared determined to keep the pot boiling in whole of West Asia and more so in Iran. This appears critical for preserving his personal political fortunes and evasion of his possible conviction. His influence on US strategy has also dented integrity of American geopolitical calculations. Several former senior Israeli statesmen have accused Netanyahu of being driven more by his own private agenda than that of collective interests of people of Israel.  Reckless killings of unarmed civilians and large-scale destruction of public infrastructure must never be objective of war by a responsible state. These erodes credibility and acceptability of every such aggressor.

Further, the quality of mediator or broker is also important in third party-facilitated talks. Being an Indian with a better understanding of psyche of Pakistani political and military establishment, one can far better appreciate the confusion between US and Iran and their relentlessly ping- pong position on critical issues. A dishonest and unreliable mediator, who has been established as the biggest sponsor of conflict both at home and abroad, more often breeds discord and spreads confusion. This is what has defined the essence of Pakistan brokered US-Iran peace process so far.

Financial Losses for the World

US-Iran conflict has hit the entire world and especially Asian states like India and Japan to some extent. Crude prices had shot up from $70-72 per barrel prior to the war to up to $120 before somewhere stabilizing around $85-90 after the ceasefire process kicked off. Similarly, shipping costs have also gone up and insurance premium have steeply risen leaving a much stronger cascading impact on prices and businesses. Markets all over the world, especially in Asian states, have witnessed serious erosion of wealth.   

Financial experts have repeatedly scaled down growth forecasts as direct consequence of war. While it is difficult to quantify exact economic losses, most assessments indicate global GDP losses in excess of one trillion dollar. Simultaneously, there may be additional inflation costs anywhere in the range of 0.5 to 0.8percent. Citing Middle East conflict and energy-market disruptions, the IMF has also scaled down its 2026 global growth outlook from pre-war levels of 3.4% to 3.1%. Director Research of IMF wrote on it blog on April 14: " A longer shutdown of the Strait of Hormuz and further damage to drilling and refining facilities would disrupt the global economy more deeply and for longer. In an adverse scenario, assuming a sharper increase in energy prices this year coupled with rising inflation expectations and some tightening of financial conditions, growth falls to 2.5 percent this year and inflation rises to 5.4 percent."

He further added: " Countries will feel the impact differently. As in past commodity-price surges, importers are highly exposed. Low-income and developing economies—especially those with vulnerabilities and limited buffers—are likely to be hit hardest. Gulf energy exporters will face economic fallout from damaged infrastructure, production disruptions, export constraints, and weaker tourism and business activity. Remittances will fall in countries that supply migrant workers to the region." 

The consequences have been particularly severe for India as it is heavily dependent upon external energy sources amidst its own developmental constraints and pressures to sustain a very large population.

Why Sustainable Peace Appears Difficult

    There exist several serious obstacles to an endurable peace.

    United States, Iran and Israel have multiple irreconcilable expectations from the negotiations. The United States may like an effective curb on Iran's nuclear activities, aggressive intent and even capacity to optimize its strength under the current regime. It may demand greater transparency and scrutiny of Iran's nuclear programmes amidst renunciation of ambition for nuclear weapons. 

    On the other hand, many Iranian regime insiders have been quoted at credible platforms expressing regret over not pursuing their nuclear weapon program at an accelerated pace and that too more clandestinely. They have all the reason to believe that a nuclear weapon alone could offer a credible deterrence against external aggression. 

    Iran also remains ambitious of dominating the entire region and seeks undermine a number of American allies varying from Israel to Saudi Arabia. The latter, on the other hand, remain highly suspicious of the clandestine network of Iranian proxies in the region, whom it has propped up as "Axis of Resistance". Besides Hezbollah and Houthis there are at least six to eight Iran controlled groups with varying degrees of  potential to carry out irregular/proxy warfare and even disrupt maritime traffic in the region. Israel has pounded Hamas and Hezbollah and Houthis have also been under attack. Yet Iran is unlikely to give up on them unless there is total transformation of strategic calculus in the region.  

    Iran, as evident from actions and words of its top functionaries, expects serious and substantive relief from sanctions, respect for its sovereignty, assurances for its security and freedom to maintain strategic deterrence against any external attack, especially from Israel. 

    The overall space for convergence of mutual objectives of US and Iran appears fairly narrow. Iranian regime has all the more reasons to distrust President Trump and his intents as well as Israeli Prime Minister Netanyahu. Netanyahu and Israeli establishment too may be equally wary of possible revenge or even proxy or otherwise guerrilla attacks from Iran. 

    Their mediator Pakistan itself suffers from low credibility. It has track record of double dealing and peddling private mercenary agenda of its incumbents at the first available opportunity. This was clearly responsible for large-scale American casualties in Afghanistan and eventual collapse of US backed regime in Kabul. Pakistan Army had allied with the US and had continued to support Taliban.

    Domestic political factors both within the United States and internal power equations in Tehran or larger geopolitical equations within the region also pose formidable challenges to sustainable peace. Any major concession to Tehran, even if the same may be critical for larger peace and security in the region, can potentially invite accusations of weakness in a highly polarized domestic political space of US. Even though President Trump remains politically strong at the moment and he cares very little for sensitivities, he may be wary of making concessions beyond a certain threshold level. 

Simultaneously, IRGC and theocratic elements, who constitute the support base of Iranian regime, are hardliners by default. In the context of huge sacrifices in terms of human lives, including almost entire top leadership, loss of public infrastructure and overall hardship for their people, they appear to be looking for victory in the negotiations. They have tasted success by pressuring the entire world, and most of Asia, by ensuring closure of strait of Hormuz. A softer approach by the current leadership of regime, even in genuine quest of a sustainable peace, may appear as surrender under pressure. Hence, the task is cut out quite tough for the Iranian leaders.

Regional stakeholders, especially Israel under Netanyahu, appears the biggest potential spoiler of peace. Israel has all the reason to be suspicious of Iranian capabilities and intent, which have perennially posed an existential threat to Israel. Hence, Israel has been insisting upon effective curbs on nuclear, missile and even drone capacities of Iran. But in practical terms, Israel will continue to distrust the very existence of the current Iranian regime, given its outlook, as well as any substantial economic and technological progress under its aegis.

        Simultaneously, Arab partners of United States are also apprehensive of Iran and its entrenched ideological position as well as its overall ambitions. They may oppose any concession to Iran that may alter strategic balance in the region or kick off fresh realignments.

China and Russia factors cannot be discounted from the larger geopolitical equations in the region. Though both of them have outwardly maintained a near total distance from the conflict but their covert backing to Iranian regime has been assessed by many credible experts. China, given its avowed strategic objectives, is likely to nourish and back Iranian regime to a level where it can withstand American pressure and assaults and yet drain military, economic and political energy of the latter. Simultaneously, it has been in a far better position to endure economic losses on account of closure of Hormuz. Rather, it had already taken measures to mitigate such losses by diversifying its sources of energy supplies. Unless severely provoked, China is likely to avoid a direct confrontation with the United States and yet would do its best drive out the latter from the region or at least undermine its influence.  

Russia has its own axe to grind over NATO and American support to Ukraine. Its discreet and limited support to Iran appears obvious. This is again a factor that will embolden Iran even in future to take a more assertive position in future.

    Finally, in the prevailing atmosphere of distrust and suspicion, there is bigger space for operational errors and accidents. Potential miscalculation, rogue actors, proxy elements and unauthorized military enthusiasm possess the potential to quickly jeopardize the hard-earned ceasefire and peace process. 

Hence, what the world can legitimately expect is an uneasy, cold and turbulent peace hoping that it sustains longer and until such time when overall equations alter to turn more conducive for sustainable peace. An endurable peace at this juncture appears extremely difficult in the immediate future unless there is a serious transformation in the entire regional and global geopolitical calculus. 

India

India finds itself largely in the role of a bystander hit fairly hard by the developments in the region. World's most populous state cannot afford to be shut out of such global and regional geopolitical dynamics that impacts lives of its people or quality and pace of its progress. We have the largest diaspora in West Asia who are contributing to economic enterprise, innovation and overall development of that region. We have a big stake in peace, security and stability in that region and protection of every human life in the entire theatre. 

 First and foremost, India must go beyond polemics to diversify its energy sources at one and build genuine, credible and innovative alternatives to fossil fuel. Simultaneously, it must find stronger employment opportunities for our burgeoning population both at home and abroad. This calls for capacity to ensure security and stability of not only our own state but virtually every territory where Indians live and that too at minimal and sustainable costs. No piecemeal bureaucratic, diplomatic, political or legal adjustment can bring in such a capacity.

Hence, the developments in the region must trigger serious introspection within echelons of Indian state and India's strategic community and all key stakeholders of the nation.  

What I am advocating is not an external intrusion in a peace process where the present equations do not offer us any serious space. It is also not about ability to deliver speeches alone. It should be about ability to make a big difference. Stronger economic, technological, military and covert capacities are always integral component of diplomatic voice. Even if we tactically focus on an issue, we cannot afford to lose sight of larger requirement of building strategic capacities through institutional re-configurations. Our credibility and capacity even in the realm of geopolitics shall depend upon overall integrity of our approach and actions as state and the degree of consistency in the same. 

                    ************************************