Why a US-Iran deal remains likely despite the rhetoric

During the 60-day period following the interim memorandum of understanding, we might notice rhetoric going up and down, and there might be occasional, isolated strikes, but it is less likely to go back into a full-fledged war for several reasons.

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On the Iranian side, the country simply cannot afford to let the conflict reignite on a major scale. Iran’s economy was already under severe strain from years of sanctions, mismanagement, and prior conflicts before the 2026 escalation. The recent war has pushed it into freefall. The International Monetary Fund projected a contraction of around 6.1 percent for 2026, with inflation soaring well above 40-60 percent in recent periods. Food inflation has been particularly devastating, with bread and cereals up over 140 percent, oils and fats surging 219 percent, and other staples seeing triple-digit increases in some cases. Ordinary Iranians have faced skyrocketing prices for essentials, contributing to widespread protests and social unrest that have challenged the regime’s stability.

Iran’s economic and military pressures

Government revenue relies heavily on oil exports, which were crippled by the US naval blockade and closure of the Strait of Hormuz. With oil sales restricted or sold at deep discounts, Tehran lost billions in crucial foreign currency earnings. Petrochemicals and related industries, which alongside oil form a massive chunk of exports, suffered extensive damage.

Reimposing a full blockade or returning to maximum sanctions would be catastrophic, choking off the limited relief already granted in the interim deal – such as eased sanctions on oil exports and access to frozen assets.

Without normalized trade through the Strait and sanctions relief, reconstruction efforts would stall, exacerbating poverty affecting a huge portion of the population and risking further domestic upheaval.

Militarily, Iran has also taken significant hits that make prolonged high-intensity conflict unsustainable. US and Israeli strikes damaged or destroyed dozens of naval vessels, key bases, missile infrastructure, and air defenses. Reports indicate over 100 naval assets affected, with major facilities like those in Bandar Abbas and elsewhere severely impaired. Iran’s ability to project power in the Gulf and disrupt shipping has been degraded, limiting its retaliatory options without inviting even more devastating responses. Rebuilding these capabilities while under economic duress would take years and resources Tehran lacks.
US domestic and political constraints

Turning to the US side, several pragmatic factors also weigh heavily against resuming full-scale war. First, there is limited public support for another prolonged military engagement in the Middle East. Polls throughout the conflict showed broad disapproval of the strikes, with majorities viewing them as not worth the costs. Americans, weary from previous decades of involvement in the region, are skeptical of open-ended commitments that could drag on without clear victories.

Second, the timing with the 2026 midterm elections adds political risk, particularly for Republicans. The war has contributed to a dip in approval ratings and boosted Democratic prospects in generic ballots. A full return to hostilities could alienate independents and even some in the base, especially if it leads to higher casualties, prolonged deployments, or visible failures. Midterms often serve as a referendum on the sitting administration, and escalating conflict rarely plays well when voters prioritize domestic issues.

Economic realities and incentives for peace

Third, the economic fallout at home, particularly on oil and gas prices, creates strong pressure for de-escalation. Disruptions in the Strait of Hormuz previously drove Brent crude above $120 per barrel, rippling through global markets and hitting US gas pumps. Higher energy costs fuel inflation, squeeze household budgets, and erode public support – precisely the kind of pain that voters punish at the ballot box. With the interim deal reopening shipping lanes and easing some pressures, both sides see the benefits of stability over renewed volatility.

Pragmatically, there are far more incentives for both sides to pursue a deal than to risk full war. Iran gains breathing room for its economy and regime stability through sanctions relief, oil revenue, and reconstruction support. The US achieves progress on curbing Iran’s nuclear program (via monitoring, stockpile management, and limits), secures regional shipping, reduces immediate threats, and avoids the domestic political and economic costs of escalation. Technical talks in places like Doha continue, focusing on nuclear issues, sanctions sequencing, and oversight mechanisms, building on the Islamabad Memorandum framework. 

The path forward: Diplomacy prevails

Rhetoric will likely remain heated, with hardliners on both sides posturing and isolated incidents possible as tests of resolve. But once the immediate passions cool and leaders weigh the steep costs – economic collapse for Iran, political backlash and price spikes for the US – the path back to negotiation becomes the rational choice. History shows that even bitter adversaries often find pragmatic off-ramps when mutual destruction looms.

In conclusion, despite the rhetoric and possibly heated exchanges that may flare up during this period, a deal is more likely to prevail. War offers no sustainable benefit to either side: Iran faces economic ruin and military exhaustion, while the US contends with public fatigue, electoral risks, and energy-driven inflation. Pragmatism and self-interest point toward compromise, making a comprehensive agreement addressing nuclear concerns and sanctions the probable outcome as cooler heads assess the alternatives.

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