Iran war: Tehran’s retaliation doubles as deterrence strategy, say analysts
Observers are divided over whether a genuine diplomatic opening exists, or if Washington is simply buying time.
Members of a Red Crescent rescue team work at a building that was damaged by a strike, amid the US-Israeli war on Iran, in Tehran on Mar 21, 2026. (Photo: Reuters/Alaa Al-Marjani)
United States President Donald Trump’s claim that he held “productive” talks with Iran has raised more questions than answers, as Tehran swiftly pushed back on Monday (Mar 23), denying any negotiations took place.
Trump said he had postponed a threat to bomb Iran’s power grid following the purported talks, but Tehran dismissed his remarks as “fake news” aimed at manipulating financial and oil markets.
Analysts are divided over whether a real diplomatic opening exists, or if Washington is simply buying time. While they say some level of communication is likely underway, though far from straightforward.
Ryan Bohl, a senior Middle East and North Africa analyst at geopolitical consultancy RANE, said Trump’s move appears to be part of a dual-track strategy.
“I don't think that there's much of a diplomatic opening at the moment. Trump’s hoping to signal to Iran that he's serious about a de-escalation,” Bohl said, noting that the White House is beginning to recognise how intractable the conflict has become.
“At the same time, he's still signalling a willingness to escalate militarily,” he added, pointing to the deployment of additional US Marines and warships to the region.
Jennifer Parker, an adjunct professor at the University of Western Australia’s Defence and Security Institute, offered a more optimistic assessment.
“It’s clear some degree of communication is occurring,” she said, citing mediation efforts involving Egypt, Saudi Arabia, Turkiye and Pakistan.
The Wall Street Journal reported on Monday that back-channel diplomacy between Iran and America’s Arab allies was partly behind Trump’s decision to put threatened strikes on Iran’s energy infrastructure on hold.
While Tehran continues to deny direct engagement with Washington, Parker said that does not necessarily reflect the full picture.
“The regime is still in charge but clearly their communications are fractured, and there is likely an internal battle for who has influence. It is likely that the US statement about these talks is more likely true than the comments from Iran at this stage,” she told CNA’s Asia Now programme.
IRAN’S “INSURANCE POLICY”
Even as diplomatic signals emerge, tensions on the ground remain high.
Tehran has threatened to strike energy and water infrastructure across the Gulf if the US follows through on targeting Iran’s power grid, raising fears of a humanitarian crisis in a region heavily dependent on desalinated water.
Bohl said such a scenario would have far-reaching consequences.
“Trump realises that a humanitarian crisis in the Gulf Arab countries could deepen the energy crisis, potentially causing it to last much longer than he's willing,” he said.
At the same time, Iran’s strategy is not just about retaliation but also deterrence, particularly after its nuclear and military sites were attacked by the US and Israel less than a year ago, he added.
“Iran is dedicated to inflicting as much economic pain as possible, because the only way to deter the next war is if the US, particularly Trump, believes it's simply too expensive to start one,” he said.
That calculation is already playing out in global markets, with the Strait of Hormuz – a key artery for about 20 per cent of the world’s energy supply – effectively closed, sending ripples through the global economy.
LIMITS OF AN AERIAL WAR
While Washington has outlined ambitious military objectives – including dismantling Iran’s missile capabilities, naval forces and nuclear programme – analysts warn that these goals may be difficult to achieve without ground support.
“There's only so much that air power can do, (since) there is no revolution breaking out in Iran,” said Bohl.
Washington had hoped to spark an internal uprising against Iran’s theocratic government, similar to nationwide protests last December, but that has not materialised.
“The key issue with Iran's nuclear capability is who has control of its highly enriched uranium. Either ground forces (are sent in) to seize that, which the US would be highly reluctant to do, or Iran has to agree to give that up,” said Parker.
In the absence of such a breakthrough, Iran retains significant leverage, she noted, adding that its geographic position gives it a strategic advantage.
“Iran's geography allows it to dominate the Strait of Hormuz and surrounding waters, using fairly low-cost capabilities like uncrewed vessels and (drones) to attack and deter shipping,” she said.
RISKS OF A PROLONGED CONFLICT
Despite signs that neither the US nor Israel wants a prolonged war, analysts warn that an early exit without clear outcomes could set the stage for renewed conflict.
Israel, already managing tensions with Hezbollah along its border with Lebanon, is likely to favour short-term de-escalation. Trump, facing weak domestic support ahead of midterm elections, may also be inclined to wind down the conflict.
But longer-term strategic concerns about Iran remain unchanged.
Parker cautioned that if Washington backs down under economic pressure without achieving its stated objectives, history could repeat itself.
Recent developments have added to those concerns. Iran’s attempted strike on the joint US-UK military base in Diego Garcia, some 4,000km away, has raised alarms over the range of its missile systems, fuelling fears that parts of Europe could also be within reach.
“There is a danger that the US pulls out too quickly without having achieved their objectives, and what we see in 12 months is another conflict … and again a constriction of the Strait of Hormuz,” said Parker.
Analysts believe the risks of escalation remain significant. Any further destruction of oil and gas infrastructure in the Gulf could send prices skyrocketing, with long-term consequences for the global economy.
Also worth reading
