Ground war begins, or ends in deterrence.
Article by: Garrett
Article compiled and sourced by Peggy, BlockBeats
Editor's Note: In the dramatic unfolding of the past few weeks, markets initially tried to understand it all within a familiar framework—airstrikes, blockades, oil price shocks—seemingly just another typical Middle East crisis. But as time progressed, a more unavoidable question gradually emerged: if the "hidden deal" that had lasted for decades has broken down, then along what path will the world rebuild a new equilibrium?
This article uses "bargain" as a thread to trace the logic behind the formation, cracks, and collapse of the Middle Eastern order. It points out that the key to the current situation lies not in the victory or defeat of a single military operation, but in the simultaneous failure of a pair of fundamental rules: "the United States will not touch the foundations of the Iranian regime" and "Iran will not touch the Strait of Hormuz." When these mutually constraining boundaries are broken, the evolution of the conflict is no longer bound by the old logic.
Looking ahead, this article offers the following predictions: In the short term, the situation may oscillate between "ground warfare" and "de-escalation of tensions"; however, in the medium to long term, more certain changes are already emerging: selective passage is reshaping alliances, energy transport routes are being restructured, and the ties between the dollar and security are loosening. These changes will not be reversed by a single ceasefire or the end of negotiations, but will gradually solidify into a new structure.
The following is the original text:
March 24, 2026. A warship with a displacement of 45,000 tons is sailing at full speed from Japan toward the Persian Gulf.
The USS Tripoli, also known as the "Lightning Carrier" by the US military, houses 14 F-35B stealth fighter jets on its flight deck—currently the only fifth-generation fighter jet with vertical landing capabilities. In 2022, the US Navy completed a crucial test on the ship: simultaneously carrying 20 F-35Bs, marking the first complete validation of the "Lightning Carrier" operational concept. As the Seventh Fleet commander stated, "The 14 fifth-generation fighters on the deck alone constitute a highly deterrent sensing and strike system." In different mission configurations, it can serve as a light stealth carrier or be equipped with Osprey tiltrotor aircraft and Super Stallion helicopters, deploying 2,200 Marines at a time for amphibious landing operations. Expected arrival date: March 27.
Meanwhile, another amphibious assault group has departed from San Diego—centered on the USS Boxer, carrying approximately 2,500 Marines, with a voyage of about three weeks. At Fort Bragg, North Carolina, the 82nd Airborne Division's Rapid Reaction Brigade is also on standby. This force of approximately 3,000 personnel is the fastest-deployable ground force in the U.S. military, capable of being deployed to any region of the world within 18 hours.
The Pentagon already has a contingency plan: a coordinated amphibious assault at sea and an airborne takeover. The core target is Kharag Island, Iran's largest oil export hub. Located only 25 kilometers from the Iranian mainland, the island is used for transshipment of approximately 90% of the country's oil exports. In addition, Qeshm and Kish Islands, which control the entrance to the Strait of Hormuz, are also listed as potential targets. However, retired Navy Vice Admiral John Miller warned that even if these islands are captured, long-term control will be difficult—Iran could still maintain continuous interference with shipping from its mainland. Once the operation begins, it will be the largest amphibious operation by the United States since the Vietnam War. With all forces assembled, the US military deployment in the Middle East will reach 50,000 personnel.
Just a month ago, all of this was unimaginable.
Four weeks ago, the US and Israel launched airstrikes against Iran; three weeks ago, Iran blocked the Strait of Hormuz—a global energy choke point that carries 21 million barrels of crude oil daily; two weeks ago, international oil prices broke through $110; and a week ago, senior US military officials signaled to allies that they "may have no choice" but to launch a ground offensive.
From a timeline perspective, this appears to be a path of rapid escalation. However, if we extend our perspective to fifty years, we find that every step we take today has a clear historical starting point. Those seemingly "out-of-control" decisions, in the context of their time, almost all stemmed from rational calculations.
To understand how all this happened, we need to turn back the clock half a century.
That "deal"
In the 1970s, monarchies in the Middle East collapsed one after another.
In 1952, Nasser overthrew Egyptian King Farouk; in 1958, the Faisal dynasty in Iraq collapsed in a military coup; in 1969, Gaddafi overthrew Libyan King Idris; and in 1979, Khomeini overthrew the Pahlavi dynasty in Iran. Each revolution carried the same banner: Pan-Arabism—"Arabs unite against the West and Israel." And each revolution ended in the same way: a strongman came to power, the US embassy was burned down, and oil was nationalized.
The remaining monarchies—Saudi Arabia, Kuwait, the UAE, Bahrain, and Qatar—are watching their neighbors fall one by one and are deeply mired in existential anxiety.
Thus, an unwritten "transaction" naturally formed: the United States provided security guarantees; the Gulf monarchies sold oil in US dollars and reinvested the petrodollars back into US Treasury bonds.
There was no contract, no signing ceremony, and no time limit. A common misconception is that "the US and Saudi Arabia signed the Petrodollar Agreement in 1974." In fact, the declassified memos of Nixon and King Fahd's meeting at the White House are only four pages long, discussing Middle Eastern politics without mentioning oil pricing or dollar settlements. This was not an agreement, but a "transaction"—a natural pattern of behavior that arises when the interests of both parties are highly aligned.
Remember this word. Because what will collapse in 2026 is another "transaction" that has lasted for forty years. And the reason why transactions are fragile is precisely because they lack a mechanism for enforcement—once one party recalculates the gains and losses, the equilibrium will irreversibly collapse.
To understand why the Gulf states still cannot openly embrace Israel—though their royal families may privately wish to—one must see a structural reality: the Arab world is, in a sense, a mirror image of Europe. Europe is a collection of "small nations forming large states," while the Arab world is a collection of "large nations fragmented into multiple countries." From Morocco to Iraq, people speak the same language and practice the same religion, yet are divided into dozens of countries by colonial-era borders. The narrative of "uniting against Israel" naturally has a broad popular base.
The strongmen who once championed this banner—Nasser, Saddam, Gaddafi—were ultimately eliminated. But the countries they left behind didn't improve; instead, they fragmented: Iraq became a battleground for Shiite militias, Libya descended into warlordism, and Yemen fell into the hands of the Houthis. More importantly, the public harbors a sense of nostalgia for these strongmen—they symbolized the narrative of "the Arabs rising up." This presents the dilemma for the Gulf monarchies: they host US military bases but cannot allow these bases to be used to attack Iran. Opening the bases would mean "fighting their Muslim brothers for the US and Israel," and the domestic political costs could far outweigh the risk of missile strikes.
Within this framework, Iran has developed an extremely sophisticated nuclear strategy. Khamenei's principle is simple: always remain below the threshold—always possessing the capability to cross it, but never actually crossing it. In game theory, this is known as "ambiguous deterrence": achieving nuclear deterrence without incurring the comprehensive sanctions and isolation seen with North Korea. Enriching uranium to 60%—weapon-grade is 90%—but you can never be certain how far you are from 90%. This equilibrium could have continued indefinitely.
In the Strait of Hormuz, another, even older "deal" has been operating stably for forty years: the United States will not overthrow the Iranian regime, and Iran will not touch the Strait of Hormuz.
It withstood extreme tests. During the "tanker war" of the Iran-Iraq War from 1984 to 1988, Iraq and Iran bombed each other's tankers, and the US Navy even directly engaged in combat with Iran ("Operation Mantis"), yet Iran still did not block the Strait of Hormuz. In the "12-Day War" in 2025, the US and Israel jointly attacked Iran's nuclear facilities—almost touching its survival bottom line—yet Iran still did not block the Strait of Hormuz.
Why? Not because Iran is "weak," but because both sides' rational calculations point to the same conclusion: 90% of Iran's oil exports depend on this strait, and a complete blockade would be tantamount to economic suicide. The United States also understands that once the strait is truly closed, there are virtually no military means to restore navigation in a short time. Both sides have a strong incentive to maintain the status quo—never to cross the other's red line.
This equilibrium seems to last forever.
crack
The rift began with an agreement that was originally intended to repair the relationship.
In 2015, the Iran nuclear deal (JCPOA), spearheaded by the Obama administration, included a "sunset clause": key restrictions would gradually expire after 10 to 15 years, at which point Iran could legally resume high-level uranium enrichment. This was essentially a promise—"Just ten more years, and you'll regain legitimacy." Israel and Saudi Arabia were extremely unhappy about this: it was tantamount to telling Iran that time was on its side.
In 2018, Trump announced the US withdrawal from the JCPOA. On its own, the logic behind this decision wasn't entirely flawed—the "sunset clause" was indeed a ticking time bomb. However, the problem was that there were no alternatives. A new equilibrium emerged: continued US sanctions and Iran's slow progress. US intelligence assessments concluded that Iran had not substantially advanced its nuclear weapons program. This was an ugly, but fundamentally stable situation.
Trump's real strategic focus is actually in another direction: the Abraham Accords.
This design is quite ingenious: the US needs to shift its strategic focus to China, and Middle East security must be "outsourced"; to achieve this, a common enemy (Iran) is needed to bind the Gulf states to Israel. Israel provides security capabilities, the Gulf states provide economic resources, and the US acts as a coordinator and platform. Logically, it's almost flawless.
However, it is hampered by one premise: public opinion in the Gulf region must be able to accept Israel.
The only way to fundamentally resolve this issue is for Israel to withdraw from the 1967 "Green Line." This is also the bottom line repeatedly hinted at by Saudi Crown Prince Mohammed bin Salman (MBS). Once Israel withdraws, not only will public opinion resistance in the Gulf region decrease significantly, but even Iran will lose its core fulcrum for mobilization. The banner you've been holding high is "Israel occupies our land," but if the land is returned, what will you use to mobilize? In this situation, Iran's occasional rocket launches will only strengthen the Gulf states' security dependence on Israel. The United States only needs to uphold one bottom line: Iran cannot possess nuclear weapons. Because once nuclear proliferation begins (if Iran acquires nuclear weapons, Saudi Arabia will inevitably follow; after Saudi Arabia, Turkey will also find it difficult to remain uninvolved), the situation will completely spiral out of control.
But Netanyahu will not back down. The Israeli far right views settlements as a "biblical promise," making a return to the Green Line politically virtually impossible. This is precisely why Saudi Arabia has consistently refused to join the Abraham Accords.
Then, 2025 arrived.
The US and Israel launched the "12-Day War," directly attacking Iran's nuclear facilities. From Iran's perspective, this crossed a fundamental red line. Bombing its nuclear capabilities was tantamount to stripping it of its last "safety net"—the implicit promise, upheld for forty years, that "the US will not overthrow the Iranian regime"—which now no longer exists. You broke the rules first.
What collapsed with it was the entire trading logic. In the past, Iran didn't block the Strait of Hormuz because "you don't touch my foundation, I won't touch your lifeline." Now that its foundation has been shaken, what can "not blocking the Strait" get it in return? Nothing.
The preconditions for the deal have disappeared. But anger alone is not enough. Iran also needs capability and opportunity. And between 2025 and 2026, all three conditions will be met simultaneously.
First, a qualitative leap in military capabilities. In the past, "blockading the Straits = suicide" because Iran could not selectively blockade. But today, Iran possesses low-cost drone swarms, precision anti-ship missiles, and sufficient information capabilities to "block your ships but not mine"—allowing Chinese and Russian ships to pass while intercepting ships of US allies. Selective blockade transforms what was originally a "suicidal act" into a "sustainable strategic tool."
Second, moral legitimacy. "You bombed our nuclear facilities first"—this point is sufficiently persuasive in international public opinion.
Third, the tacit approval of China and Russia. Beijing and Moscow do not need to publicly support Iran; they only need to maintain "denial"—we are not involved, but we do not condemn it either. This provides Iran with diplomatic space.
On the day the nuclear facility is bombed in 2025, these three conditions will be aligned. From a game theory perspective, the blockade of Hormuz in 2026 is not an "impulsive move," but a card that should have been played—only previously lacking the timing, capability, and legitimacy.
The crux of the problem is this: the US has broken the first half of the deal (not overthrowing the regime → bombing nuclear facilities), yet expects Iran to continue to abide by the second half (not blocking the Strait of Hormuz). From a game theory perspective, this is clearly untenable—you unilaterally break the agreement, yet demand that the other party continue to fulfill it.
The equilibrium thus irreversibly collapsed.
collapse
Let's return to March 2026. The scene depicted at the beginning—the "Lightning Carrier," the airborne division, and 50,000 troops—is now easy to understand. The surrounding air raids did not open the Strait of Hormuz. Because what you are facing is not a physical obstacle that can be "cleared" with bombs, but a political equilibrium that has been disrupted by your own actions.
Bombs can't solve politics. But the changes that occurred in the fourth week went far beyond military buildup. The entire power structure of the Middle East is being reshaped.
Iran: Shifting from Defense to Offense
On March 22, Abdollahi, commander of the Central Command of the Iranian Armed Forces, publicly announced that Iran's military posture had shifted from defense to offense, and that it had introduced more advanced weapons systems and tactics. The following day, the Iranian military claimed to have achieved "effective control" over the Strait of Hormuz, adding a significant statement: "Under the current level of control, there is no need to lay mines in the Persian Gulf."
The subtext is clear: we don't need a minefield; we already have de facto control of this waterway.
On the same day, in response to Trump's "48-hour ultimatum" (either open the Strait of Hormuz or bomb power facilities), the Iranian military issued a counter-statement: the Strait of Hormuz will be completely closed until the damaged facilities are restored; US and Israeli energy, information technology, and desalination facilities in the Middle East will become legitimate targets; and Israel's power and communication systems will also suffer large-scale attacks.
This is Iran's clearest signal of escalation to date: if the United States attacks the power system, Iran will not only block the Strait of Hormuz, but will also extend the war to the energy infrastructure of the entire Gulf.
At the same time, Iran also used a more covert and deadly tool.
Iranian Foreign Minister Araghchi publicly stated that Iran is willing to allow Japanese vessels to pass through the Strait of Hormuz. South Korea subsequently indicated that it was also conducting similar negotiations. The logic is very clear: countries involved in the attacks on Iran face blockades; neutral countries are open to negotiations; and countries whose alliances are fractured are forced to choose sides.
Iran is reshaping the structure of international alliances by using the "right of passage." This is no longer a simple military blockade, but rather a transformation of "who can pass" into a form of diplomatic currency.
Trump: Ultimatum → Concessions → Further Ultimatum
Looking back at the past week, a pattern gradually became clear: Thursday – “close to achieving the goal,” downgrading considered; Friday – a sudden reversal, a 48-hour ultimatum issued; Saturday – Iran responded strongly and launched the 75th round of “Real Commitment-4” operations; Sunday – the ultimatum expired, and the United States suddenly announced “constructive dialogue with Iran” and postponed the strikes by five days.
Iran directly denied the claim, with Speaker of Parliament Ghalibaf calling it "disinformation manipulating the financial and oil markets." Israel, however, revealed that the US and Iran might hold talks in Islamabad, Pakistan, with US Vice President Vance possibly serving as a special envoy.
Creating tension, setting deadlines, and then offering a "stepping stone"—but market trust in this approach is rapidly declining. On March 24, influenced by news of the "dialogue," oil prices plummeted by more than 10%, falling below $100, but the rebound did not change any structural facts: the Strait of Hormuz remains closed, the US military is still increasing its troop presence, and Israel has made it clear that the strikes will continue for "weeks."
Saudi Arabia: The "balancing act" forced offline
One of the most crucial variables this week is the shift in Saudi Arabia's stance.
On March 24, Saudi Arabia opened King Fahd Air Base to the US military—Riyadh had previously stated explicitly that the base would not be used to attack Iran. Simultaneously, the UAE closed Iranian hospitals and clubs in the country, severing their social networks; missiles used to strike Iran were confirmed to have originated from Bahrain; and Saudi Arabia privately indicated to the US that it was prepared to retaliate directly if Iran attacked its power and water infrastructure. A senior UAE advisor even publicly stated that Iran's bombing "pushed them to the side of Israel and the United States."
Remember the "tightrope" mentioned in Part 1? The Gulf states' balancing act—hosting US troops, but preventing them from being used against Iran due to the high domestic political costs. Iran's missiles, however, severed this tightrope. When power plants and freshwater facilities were hit, "neutrality" was no longer an option.
But at the same time, Saudi Arabia also showed another side: extremely strong strategic resilience.
It launched the 1,200-kilometer-long East-West Pipeline, connecting the Abqaiq oil field in the east directly to the port of Yanbu on the Red Sea. Built in the 1980s in response to the Iran-Iraq War, this pipeline has become a lifeline for global energy. Yanbu's exports jumped from less than 800,000 barrels per day before the war to 3.66 million barrels per day, peaking at over 4 million barrels per day; at least 25 very large crude carriers (VLCCs) are en route to load cargo; and pipeline capacity has expanded to approximately 7 million barrels per day. Saudi Aramco CEO Nasser stated bluntly, "This is the biggest crisis in the history of the region's oil and gas industry."
However, the Yanbu route also faces risks: Iran has attacked the local Samref refinery (a joint venture between Saudi Aramco and ExxonMobil), briefly disrupting shipments; tankers bound for Asia still need to pass through the Bab el-Mandeb Strait, and the Houthi rebels have only "paused" the attack, not stopped it; Saudi domestic production capacity has also been damaged, with the Rastanura refinery temporarily shut down, reducing total capacity by about 2.5 million barrels per day.
Two pillars
Put all of this together and you'll see a structural change that's more significant than any single news story: the two pillars supporting the petrodollar system are being weakened simultaneously.
The first issue is the monetary narrative. Iran proposed "RMB in exchange for passage rights." In the short term, the scale is limited—over 90% of global oil trade is still settled in US dollars, China's capital account is not yet fully open, and Iran is excluded from SWIFT. But the damage is not significant, though the insult is extremely strong—it drags "de-dollarization" from think tank discussions directly into the battlefield. China doesn't even need to intervene: Iran creates the narrative on the front lines, while China maintains a gray area in the rear. The truly crucial element is the "seed effect": once Japanese and South Korean shipowners are forced to open RMB accounts for passage, this infrastructure will not easily disappear.
The second pillar is the security monopoly. Since 1974, another pillar of the petrodollar has been the "security exchange"—the US protects the Gulf shipping lanes, and Gulf states settle oil transactions in dollars. Now, this premise has been shaken: the US cannot guarantee the safety of navigation in the Strait of Hormuz. Japan and South Korea have begun negotiating directly with Iran—bypassing the US as a "security intermediary" and facing the "payer" directly. Once this model solidifies, Iran will become the de facto controller of the Strait, and the US's role as "protector" will be hollowed out—if you collect protection fees but cannot provide protection, why should I continue to pay?
The petrodollar is being weakened on both the dollar settlement system and the US security monopoly.
This is why the United States "must act": it's not simply a military issue, but rather that every day of delay makes the erosion of the two pillars more difficult to reverse. But as mentioned earlier: air strikes won't break through (no results from all sides), occupation won't break through either (controlling the islands cannot solve the triple blockade of security, distributed strikes, and mines), and inaction is even more impossible (both pillars will collapse simultaneously).
This is the real strategic dead end.
International Energy Agency (IEA) Executive Director Fatih Birol described the current shock as "a superposition of the two oil crises of the 1970s and the 2022 Russia-Ukraine gas crisis." After drawing on a record 400 million barrels of strategic reserves, he stated bluntly: the only real solution is the reopening of the Strait of Hormuz.
But at present, there is no feasible path in sight.
What will happen next?
March 27: The "Lightning Carrier"—the USS Tripoli—entered the U.S. Central Command's area of responsibility. March 28: The five-day "pause period" set by Trump expired.
Next, there are two paths.
Path 1: Ground war begins.
If negotiations fail to make substantial progress within five days, the established operational plan may be activated. The "Lightning Carrier" provides stealth air strikes, the 82nd Airborne Division conducts parachute landings, and amphibious forces simultaneously land—a typical "three-dimensional island-seizing" operation combining sea-based advance and air-based control. US airstrikes have destroyed the runway on Hargh Island, which Marine Corps engineering units can quickly repair, followed by continuous troop and equipment delivery via C-130 transport aircraft; the entire operational chain is now operational. Meanwhile, the entry threshold for Saudi Arabia and the UAE has significantly decreased, while Iran has initiated its "punitive countermeasures." The war will escalate from an "air-based war of attrition" to a "multinational ground war," lasting from weeks to months, and the global energy crisis will shift from a "supply shock" to a "structural disruption."
Path Two: End with deterrence, rather than war.
A US aircraft carrier carrying 14 F-35Bs transited the Strait of Hormuz, and Iran chose not to fire. While this scenario is unlikely, it cannot be ruled out. The logic aligns with Iran's current strategy of selective blockade: the optimal strategy is not a complete blockade (which would sever its economic lifeline and trigger a unified global reaction), but rather "controllable deterrence + selective passage." If the US carrier passes without Iranian interception, a "gray withdrawal" could be achieved: no formal ceasefire, just a de facto de-escalation. The US could publicly declare that "security in the Strait has been restored," while Iran could internally emphasize "strategic restraint," while retaining the capability to blockade again in the future. However, in the current climate, Iran has publicly announced a shift from defense to offense, and allowing passage without firing would be politically unacceptable domestically—unless some tacit understanding has been reached behind the scenes. The Islamabad negotiations disclosed by Israel likely point in this direction.
Regardless of which path it ultimately takes, several things will remain unchanged: the selective passage mechanism is reshaping the alliance structure; expectations of ground war are prolonging the conflict cycle; high oil prices are "locking in" the Federal Reserve, making it difficult to offset the recession through interest rate cuts; the "de-dollarization" trend of central banks around the world will not be reversed by a single event; and Saudi Arabia's launch of the East-West pipeline has already substantially restructured the global oil logistics system.
The duration of this war will far exceed market expectations three weeks ago.
Key observation indicators
Whether the Islamabad negotiations have concluded (whether Vance will travel to Pakistan)
If it goes ahead, it will be the highest-level direct contact between the US and Iran since the severance of diplomatic ties in 1979, meaning that a "behind-the-scenes agreement" may have already entered the framework stage.
Secret diplomatic moves by Saudi Arabia, Oman, and Türkiye
Oman has historically acted as an intermediary between the US and Iran (the secret JCPOA negotiations began in Muscat). A significant increase in its activity suggests that both sides are creating "preparatory space" for formal negotiations.
Has Iran expanded the scope of "selective passage"?
Following Japan and South Korea, if India or EU countries receive passage arrangements, it means that Iran is systematically "dismantling" people from the US alliance, and the political objectives of the blockade are beginning to surpass its military significance.
Tripoli's actual course after March 27
If the ship sails towards Harg Island, the probability of ground operations increases significantly; if it sails towards the Strait of Hormuz, it is closer to a "deterrence demonstration" route.
Whether non-Chinese and non-Russian merchant ships have begun attempting to pass through (this can be tracked via AIS data).
The first non-Chinese/Russian merchant ship to successfully pass through will become the starting point for repricing in the insurance market, and also means that the blockade is in fact beginning to loosen.
