'Nothing is over': Iran-Israel conflict enters a new phase

On Monday, Iran said it would suspend operations against Israel but warned attacks would resume if Israel continued striking Lebanon.

Israel rejected the condition, with Prime Minister Benjamin Netanyahu accusing Tehran and Hezbollah of trying to create a new equation in which attacks on Israel would no longer carry consequences.

The development has fueled debate over whether the latest ceasefire represents the end of the fighting—or merely the end of its first phase.

A ceasefire tied to Lebanon

For UAE-based analyst Amjad Taha, the answer is straightforward.

"It's a pause rather than a ceasefire or an end of war," he told Iran International.

Taha argues that Tehran's decision to link its ceasefire to Lebanon reveals that the Islamic Republic continues to view regional conflicts through the lens of its proxy network.

"The fact that the Islamic regime right now says it's fighting and its condition in Lebanon ceasefire with its own, it tells us that Iran's, the Islamic Regime still sees Lebanon and other countries as its own proxy and its own extension," he said.

In his view, the current calm risks postponing rather than resolving the underlying conflict.

"If the ceasefire happens right now, we are just postponing another 7th of October-style event, but this time across the Middle East, not just the state of Israel."

Elizabeth Tsurkov, a fellow at the New Lines Institute, sees Iran's Lebanon condition as part of a broader effort to shape the post-war landscape.

"It appears clear that the Iranian regime believes that it won the 40-day war and is therefore trying to establish new rules of the game to project its power and deter Israeli action in Lebanon as well," she said.

Tsurkov also rejected suggestions that apparent tensions between Washington and Jerusalem amount to a coordinated strategy.

"I don't think that this is a matter of bad cop, good cop," she said. "Trump genuinely wants a deal."

Her assessment points to a broader reality emerging from the latest crisis: Lebanon is no longer a separate arena. It has become intertwined with negotiations over Iran, regional deterrence and the future of the ceasefire itself.

A new equation?

The debate over Iran's intentions has exposed sharply different interpretations of the latest escalation. While some see Tehran acting from a position of weakness, others argue it has successfully shaped events since the ceasefire.

Avi Melamed, a former Israeli intelligence official, believes Iran has managed to place itself at the center of multiple interconnected disputes.

"The Iranian regime, as of now, has been quite clearly able to dictate the pace," he said.

Melamed argued that Tehran is attempting to connect "the story of the Hormuz Strait, Iran, the nuclear program and the situation in Lebanon," creating additional pressure points for both Washington and Jerusalem.

As the dispute over Lebanon intensified, Iranian Foreign Minister Abbas Araghchi shared an image on X showing the Iranian and Lebanese flags intertwined, reflecting Tehran's position that the two fronts are inseparable.

Still, Melamed cautioned against drawing firm conclusions.

"I think we are at a phase where you could say that, at the same time, the Iranian regime could mark some significant achievements as far as the Iranian regime is concerned," he said, describing the current situation as an "ongoing ping pong game."

Others reject the notion that Iran is acting from a position of confidence.

John Craig, a former US ambassador and senior fellow at the Transatlantic Leadership Network, sees the latest missile attack as an attempt to undermine diplomacy rather than demonstrate strength.

"Iran is desperate to slow/stop any negotiations," Craig said.

He remains skeptical that the current pause will hold.

"Nothing is over," he said. "The IRGC does not want any agreement. Ever."

For military analyst Andrew Fox, the future of the ceasefire may depend less on Tehran and Jerusalem than on developments in Lebanon.

"I think it very much depends on what happens in Lebanon," Fox said.

While describing Israel's latest response as limited compared with the broader war phase, Fox said the underlying conflict remains unresolved.

"It clearly wasn't a full-scale return to combat operations. It was nothing like the scale or intensity of what we saw during the war phase. But it did send a message."

And despite the current lull, he does not believe hostilities have truly ended.

"I don't think it is an end to hostilities," Fox said. "I don't think it is an end to attempts to overthrow the Iranian regime, but I think it will draw a line under this phase."

That may be the clearest point of agreement among analysts. Whether they view Iran as emboldened, opportunistic or desperate, few believe the latest ceasefire has settled the larger struggle.

Trump continues to pursue negotiations with Tehran. Netanyahu has vowed Israel will respond forcefully to future attacks. And Iran has made clear that its restraint is conditional on events beyond its borders.

The missiles may have stopped flying between Iran and Israel. But by tying its ceasefire to Lebanon, Tehran has ensured that the next test of the truce may come not in Tehran or Tel Aviv, but on Israel's northern border.

The US Treasury designated Nobitex alongside Wallex, Bitpin and Ramzinex and sanctioned senior figures connected to Nobitex, including chairman, co-founder and former chief executive Amir Hossein Rad.

According to the Treasury, Nobitex processed more than half of all Iranian digital asset inflows in 2025. Washington also accused it of facilitating transactions linked to the Islamic Revolutionary Guard Corps (IRGC), sanctions evasion, ransomware activity and the Central Bank of Iran's access to hundreds of millions of dollars in stablecoins.

The sanctions therefore struck at part of the infrastructure that has allowed Iranian individuals, companies and state-linked actors to access international digital asset markets despite years of financial restrictions.

Crypto vs sanctions

Iran's interest in cryptocurrency is not difficult to explain. Sanctions have sharply limited access to international banking networks, dollar transactions, trade finance and oil revenues. Digital assets do not eliminate these constraints but can provide alternative channels for moving value across borders.

Cryptocurrencies and stablecoins can help facilitate transactions, preserve value and maintain access to foreign markets. Stablecoins are particularly attractive because they reduce exposure to price volatility while still operating outside traditional correspondent banking networks.

Crypto mining has also become part of Iran's sanctions-evasion toolkit. By using subsidized electricity to mine Bitcoin, Iran can effectively convert domestic energy resources into a globally transferable digital asset.

The strategy comes with costs. Mining places additional strain on Iran's electricity grid and has been linked to power shortages and public frustration. Yet for a sanctioned economy, the logic remains compelling: when access to conventional finance is restricted, any mechanism capable of transforming local resources into internationally usable value becomes strategically important.

Hormuz and crypto

Cryptocurrency has also emerged in discussions surrounding the Strait of Hormuz, one of the world's most important energy chokepoints.

Chainalysis reported recently that Iran intended to demand cryptocurrency payments from oil tankers seeking safe passage through the strait during periods of heightened tension. Whether such plans were fully implemented is less important than what they reveal about the potential role of digital assets in future geopolitical confrontations.

For Tehran, cryptocurrency offers several advantages in such scenarios. Payments can move rapidly across borders, avoid some traditional banking restrictions and reduce exposure to frozen accounts or conventional financial controls.

The prospect of crypto-based payments linked to maritime security demonstrates how digital assets could potentially be used not only to move money quietly but also to generate revenue during periods of geopolitical crisis.

The US Treasury has warned of sanctions risks associated with Iranian demands for transit-related payments through the Strait of Hormuz, including payments made through digital assets, fiat currency, offsets, swaps or other arrangements.

Blockchain evasion limits

Despite its advantages, cryptocurrency is not a magic shield against sanctions.

Blockchain transactions often leave traces that can be analyzed by firms such as Chainalysis and Elliptic or by government financial-intelligence agencies.

Once the United States designates a platform such as Nobitex, international exchanges, liquidity providers and counterparties face increased risks if they continue interacting with Iranian-linked wallets. This pushes activity toward smaller, less liquid and often riskier channels.

The sanctions also highlight another vulnerability. Treasury officials noted that Nobitex suffered a major hack in June 2025, underscoring the risks associated with relying on digital financial infrastructure.

Another area of interest is the role of the IRGC, which under Iran's previous budget law was tasked with exporting roughly 700,000 barrels of crude oil per day—about half of the country's exports at the time. The organization is also one of Iran's largest infrastructure contractors.

While available data do not reveal where imported services originated or who ultimately benefited from them, the overlap illustrates the growing importance of non-traditional financial channels within Iran's sanctioned economy.

Iran is likely to adapt. Activity may shift toward peer-to-peer trading, decentralized platforms, foreign intermediaries, stablecoin networks or new domestic exchanges. Yet each alternative carries costs, whether through reduced liquidity, greater compliance risks or increased exposure to future sanctions.

For Washington, the challenge is sustained enforcement. Sanctioning Nobitex will matter most if it is accompanied by international cooperation, improved blockchain intelligence, pressure on foreign exchanges and clear guidance for shipping firms, insurers and commodity traders.

The United States does not need to stop every Iranian crypto transaction to have an effect. It only needs to make the system more expensive, more traceable, riskier and less attractive for counterparties.

The Nobitex case illustrates how financial warfare has moved from banks to blockchains. Digital assets have given Tehran greater flexibility under sanctions, but they have also created new vulnerabilities.

The more Iran relies on crypto infrastructure, the more that infrastructure becomes part of the sanctions battlefield.

Iran's imports of services surged to a record $25.5 billion in 2025 while merchandise imports fell sharply, according to newly released data from the Central Bank of Iran, highlighting a significant shift in the country's trade structure.

Services imports accounted for roughly one-quarter of Iran's total imports during the year, an unusually high share for an economy traditionally dominated by trade in physical goods.

At the same time, Iran's exports of services declined, pushing the country's services trade deficit to a record $17 billion. The deficit was 52% higher than in 2024 and roughly three times larger than in 2020.

Separate central bank data on foreign trade in goods point to an equally dramatic contraction in merchandise trade.

Read the full article here.

Services imports accounted for roughly one-quarter of Iran's total imports during the year, an unusually high share for an economy traditionally dominated by trade in physical goods.

At the same time, Iran's exports of services declined, pushing the country's services trade deficit to a record $17 billion. The deficit was 52% higher than in 2024 and roughly three times larger than in 2020.

Separate central bank data on foreign trade in goods point to an equally dramatic contraction in merchandise trade.

Iran imported approximately $49 billion worth of goods during the fiscal year ending March 21, a decline of 32% compared with the previous year. Non-oil exports also weakened considerably, falling 22% year-on-year to about $45 billion.

The figures suggest Iran's trade structure is undergoing a significant transformation, with services playing an increasingly prominent role while merchandise trade contracts.

The reasons behind the rapid rise in services imports remain unclear.

Iran's services imports primarily include transportation and logistics services, insurance related to foreign trade, financial transaction services, engineering and construction projects, technology purchases and other professional services.

One possible explanation emerged in a Wall Street Journal report published last October, which suggested that part of Iran's oil exports to China were being exchanged for services rather than cash payments or traditional oil-for-goods arrangements.

China is effectively the sole buyer of Iranian crude oil. According to estimates by the Organization of the Petroleum Exporting Countries (OPEC), Iran's crude oil exports were worth approximately $44 billion last year before accounting for sanctions-related discounts and the costs of circumventing US restrictions.

While the central bank data do not reveal the source of the imported services, the figures are consistent with the possibility that a growing share of Iran's oil revenues is being settled through services rather than conventional financial transfers or merchandise imports.

Another factor attracting attention is the role of the Islamic Revolutionary Guard Corps (IRGC) in both oil exports and major infrastructure projects.

Under Iran's previous budget law, the IRGC was tasked with exporting 700,000 barrels of crude oil per day, roughly half of the country's actual crude exports. The organization is also one of Iran's largest contractors in infrastructure and construction.

However, the central bank data provide no direct evidence regarding the destination of oil revenues or the beneficiaries of imported services.

The outlook for the current fiscal year is even more uncertain amid the conflict involving the United States and Israel.

Trade flows with the United Arab Emirates, Iran's largest supplier of goods, have reportedly been disrupted over the past three months.

Meanwhile, Chinese customs data show Iran and China recorded only about $400 million in bilateral non-oil trade during March and April combined, roughly one-fifth of the level recorded during the same period a year earlier.

Whether the shift toward services reflects changes in sanctions-evasion mechanisms, evolving arrangements with China, or broader economic weakness remains an open question. What is clear from the latest data is that Iran's trade profile is changing in ways not seen in recent years.

By suspending talks with Washington over Israel's campaign in Lebanon, Tehran has raised the stakes of postwar diplomacy and posed a critical question: is it successfully increasing its leverage, or overplaying its hand?

President Donald Trump announced Monday that Israel and Hezbollah had agreed to halt attacks following a flurry of calls with Israeli Prime Minister Benjamin Netanyahu and intermediaries linked to the Iranian-backed group.

Hours earlier, however, Iran suspended talks with Washington, citing Israel's military operations in Lebanon and threatening to open new fronts in the conflict.

The diplomatic turmoil comes as Israel carries out its deepest military operations in Lebanon in more than two decades.

Tehran argues the operations violate the broader ceasefire framework established after the US-Iran war, while critics counter that Iran helped create the crisis by insisting Lebanon be included in ceasefire discussions and then backing Hezbollah attacks that prompted Israel's response.

Read the full article here.