The United States did not stop the war because it lost, but because the cost-benefit equation became increasingly unfavorable.
Initially, Washington’s objectives were relatively ambitious: degrade Iran’s military capabilities, force concessions on its nuclear program, secure freedom of navigation through the Strait of Hormuz, and weaken Iran’s regional influence. However, after months of conflict, it became clear that achieving regime change or a decisive victory would require a much larger and longer military commitment. Meanwhile, Iran demonstrated it could continue launching missiles, disrupt regional shipping, and impose economic pain through energy markets despite suffering heavy damage itself. In strategic terms, the U.S. reached the point of diminishing returns: every additional month of war would cost disproportionately more while delivering increasingly limited gains.
The biggest factor was arguably economics. The Trump administration has already requested roughly US$87.6 billion in additional war-related funding, with tens of billions allocated to munitions, operations, and classified military programs. At the same time, U.S. stockpiles of missiles and interceptors have been depleted, and military planners must also consider commitments in Europe and the Indo-Pacific. From a Pentagon perspective, a prolonged Middle East war risks weakening America’s readiness elsewhere.
Another critical factor was oil. Iran’s ability to threaten the Strait of Hormuz meant the conflict carried the risk of triggering a global energy shock and potentially pushing major economies toward recession. The concerns over oil prices and global economic damage were a major reason Washington softened its negotiating position compared with its earlier demands.
The U.S. also proposed US$300 billion fund structured primarily as a private-sector investment vehicle that would only become operational if a final peace agreement is reached. Sources involved in the negotiations stated that the fund contains no direct U.S. government money and is intended to encourage reconstruction and investment rather than function as war reparations.
Politically, however, the distinction matters little. Critics argue that whether the money comes from private investors, Gulf states, or international partners, the outcome still gives Iran economic relief after the war. Supporters counter that the purpose is not to reward Iran, but to create economic incentives strong enough to keep Tehran committed to the peace process and prevent another regional conflict.
From a strategic perspective, the deal resembles a classic great-power compromise. The U.S. appears to have concluded that a weakened but stable Iran is preferable to a collapsing Iran that could drag the region into years of instability. Washington may also believe that economic integration and investment create more leverage over Tehran than endless military escalation. The risk, however, is that Iran emerges from the agreement economically stronger while retaining much of its regional influence, which is why critics in Israel and parts of the Gulf view the deal as a strategic concession rather than a victory.
Compiled by: Connie
Disclaimer: The information, market updates and materials provided by the Company and/or on this website are intended solely for general informational and educational purposes only. Nothing contained herein constitutes and/or should be construed as financial investment or trading advice, or a solicitation, recommendation or endorsement to buy, sell or hold any security, commodity, currency or financial instrument or a guarantee of future performance or outcomes. All users are strongly encouraged to conduct their own independent research and due diligence before making any investment decisions. Users are solely responsible for evaluating the accuracy, completeness and relevance of any information provided before making financial decisions. The Company shall not be held liable for any losses, damages or outcomes resulting from reliance on the information shared herein. By accessing and using this website, you acknowledge and agree that you must conduct your own independent research and due diligence., you assume full responsibility for your investment and trading decisions, the Company shall not be held liable for any losses, damages, or consequences arising from reliance on the information shared. If you require personalised financial advice, please consult a licensed financial advisor or other qualified professional.
