Red Sea shipping slumps after Houthi attacks as Hormuz traffic stays low

Analysts increasingly see a broader effort to erode Tehran's military, economic and political capacity until negotiations become the less costly option.

President Donald Trump has oscillated between threatening "massive attacks" and calling for renewed negotiations with Tehran. According to Axios, he decided against another round of strikes on Friday despite military plans being ready to execute.

Whether the lull marks the beginning of diplomacy or merely an operational pause remains unclear. What appears more significant is how the campaign itself has evolved.

Military analyst and retired US Army officer John Spencer believes Washington's objectives now extend well beyond degrading Iran's immediate military capabilities.

Rather than seeking immediate regime change, he argues, the campaign is designed to convince Tehran's leadership that continuing the conflict will steadily erode its ability to govern, project military power and preserve the strategic leverage it has spent decades building, ultimately forcing Iran to negotiate from a position of growing weakness.

"The United States could do a lot more," Spencer told Eye for Iran. "This is about changing the regime's behavior."

The evolution is visible in the targets themselves. Early strikes focused overwhelmingly on Iran's ability to threaten shipping through the Strait of Hormuz, hitting coastal radar installations, anti-ship missile batteries, drone facilities and command-and-control centres.

More recently, however, the campaign has shifted inland toward bridges, railways, communications infrastructure and military logistics networks, particularly around Bandar Abbas.

Iran's largest commercial port and a key naval hub overlooking the Strait of Hormuz, Bandar Abbas has become increasingly isolated as transportation links and logistics infrastructure come under repeated attack.

For Spencer, that shift reflects an effort not simply to destroy weapons but to restrict Iran's ability to move forces, sustain military operations and eventually rebuild damaged capabilities.

"It could be beyond the battle of Hormuz," Spencer said. "It could be setting the conditions for future operations."

He argues the United States still retains considerable military, economic and cyber capabilities that have yet to be fully employed should Washington decide to intensify pressure further.

Regional balance shifts

Former Kuwaiti Information Minister Saad bin Tefla Al Ajmi believes the campaign has also altered Iran's wider strategic position.

He argues Tehran's regional network has suffered setbacks on multiple fronts. Hezbollah has been severely weakened, Syria no longer provides the strategic corridor it once did following Bashar al-Assad's fall, and repeated attacks have degraded Iran's nuclear infrastructure.

"Iran is now between two choices," Al Ajmi said. "The chalice of poison or suicide."

He also questioned whether Iran's increasingly fragmented decision-making structure could complicate any future negotiations.

"There is a fragmentation in the leadership in Iran now," he said. "Sometimes we have a problem of who to communicate with."

Military pressure has also coincided with a tightening domestic crackdown, with human rights groups reporting an increase in executions of protesters and political prisoners during the conflict.

Whether the two-night pause marks the beginning of diplomacy or simply the interval before another wave of strikes remains uncertain.

What the past fortnight has already revealed, however, is that Washington's objectives now appear to extend far beyond the Strait of Hormuz, towards reshaping the military and political calculations of Iran's leadership itself.

The report said Iran's nuclear infrastructure had already been heavily damaged by Israeli strikes and the US "Midnight Hammer" operation against its main enrichment sites, but that several facilities could still be considered targets.

"It appears that the bulk of the sites that were needed to make nuclear weapons have been hit," David Albright, president of the Institute for Science and International Security and a former UN weapons inspector, told the newspaper.

"But Israel may know of new sites through intelligence, and there may be reason to strike old sites that are being rebuilt," he said.

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  Why Iran’s Pickaxe Mountain has become Trump’s next target

Pickaxe Mountain seen as top target

The Journal said Pickaxe Mountain, known in Iran as Mount Kolang, remains the most likely target because Israeli intelligence believes Iran moved thousands of uranium-enrichment centrifuges into tunnels there after last year's 12-day war.

According to the report, the underground complex lies hundreds of feet beneath granite, making it difficult to destroy even with US bunker-busting bombs. Experts cited by the newspaper said Washington could instead strike tunnel entrances or other access points.

"Washington's clearest nonproliferation wins against Iran in the war were stopping all uranium enrichment at declared facilities and entombing enriched uranium stockpiles," Behnam Ben Taleblu of the Foundation for Defense of Democracies told the Journal.

"The more time elapses, however, the more crucial Pickaxe mountain appears to Iran's reconstitution effort," he said.

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  Trump threat to hit Pickaxe renews calls in Iran for nuclear bomb, NPT exit

Other facilities could also be struck

The Journal said other potential targets include the Taleghan 2 facility at the Parchin military complex, which satellite imagery suggests Iran has been rebuilding, although experts differ over how much of the site survived previous Israeli strikes.

It also identified support facilities at Fordow, where above-ground buildings housing centrifuges and isotope-production equipment remain, as well as parts of the Isfahan Nuclear Technology Center, where satellite imagery has shown continued vehicle activity despite previous US missile strikes.

The report added that remaining buildings at Iran's Natanz uranium enrichment plant could also be targeted if Washington expands its air campaign.

President Volodymyr Zelenskyy said Saturday that he would order Ukrainian intelligence to provide partner countries with information showing that Russia had helped Iran prepare strikes against US military facilities and regional states.

“I will instruct our intelligence to share with our partners the information we have regarding Russia’s new assistance to the Iranian regime,” Zelenskyy said in a post on X.

Zelenskyy said Ukraine had recorded active Russian satellite surveillance of Persian Gulf states and US military facilities there since the beginning of July.

He alleged that the resulting images were transferred to Iran and that Russian satellite activity closely corresponded with Iranian attacks—both before strikes, to assist preparations, and afterward, to assess the damage.

“On July 19 and 20 alone, four air bases fell within the area of interest of Russian satellites—two in Bahrain, one in Jordan, and one in Kuwait,” he said.

Zelenskyy did not publish evidence supporting the allegation. But his pledge to share Ukraine’s intelligence with its partners represents a potentially significant role for Kyiv in the US-led war against Iran, particularly given Ukraine’s experience tracking Russian surveillance systems and countering Iranian-designed drones.

CBS News reported that Zelenskyy planned to share evidence with the United States showing that Russia was assisting Iran in targeting US bases in the Middle East.

His allegation also directly challenges President Donald Trump’s recent assertion that he believed assurances from Russian President Vladimir Putin that Moscow was not assisting Tehran.

Rare Ukrainian attack on Iran vessel

Earlier Saturday, Zelenskyy said Ukrainian forces had achieved “very strong results” with long-range attacks in the Caspian Sea.

He said the targets included a Russian warship and vessels used to transport military cargo involving Iran, but did not identify the ships, describe the weapons used or disclose the extent of the damage.

Iran later confirmed that an Iranian commercial vessel had been hit in the Caspian Sea.

The Iranian Foreign Ministry said the attack caused an explosion that killed one sailor and injured another. It condemned the strike as an act of aggression, said Iran would defend its national interests and accused Kyiv of attempting to expand the Russia-Ukraine war.

Tehran also summoned Ukraine’s chargé d’affaires to protest what it described as a “hostile and criminal” attack, according to the Reuters report.

It was not immediately clear whether the Iranian vessel was one of the ships Zelenskyy said had been transporting military cargo.

Taken together, the Caspian strikes and the intelligence offer suggest Ukraine is treating the Russia-Iran partnership as a single military network operating across two wars.

Iranian-designed Shahed drones have played a major role in Russia’s attacks on Ukrainian cities and infrastructure. Kyiv is now alleging that assistance also flows in the opposite direction, with Moscow using its satellite capabilities to support Iranian attacks on US and regional military facilities.

Reuters reported on July 22 that Iranian drone attacks on CIA facilities in the Persian Gulf have prompted US intelligence analysts to investigate whether Russia assisted by providing targeting information or ​advanced drone technology.

The report, citing informed sources, said US intelligence officials have ‌not yet reached firm conclusions about the possible Russian involvement in the attacks on CIA facilities. But they cited the strikes' effectiveness and apparent precision, as well as Russia's broader technical support for Iran, as possible evidence.

Ukraine has previously offered its drone-interception expertise to Middle Eastern countries facing Iranian attacks, drawing on years of experience defending against Shahed-type drones used by Russia.

Kyiv has also increasingly targeted the Caspian Sea as a military logistics corridor, despite its distance from the principal battlefields in Ukraine.

In August 2025, Ukraine said it struck the Russian-flagged cargo vessel Port Olya-4 at the port of Olya in Russia’s Astrakhan region. Kyiv alleged that it was carrying Iranian ammunition and components for Shahed-type drones.

Four months later, Ukrainian special forces said they attacked the Kompozitor Rakhmaninov and Askar-Sarydzha off Russia’s Kalmykia region. Ukraine said the sanctioned vessels had transported weapons and military equipment between Iran and Russia.

Iran has denied supplying weapons for use in Ukraine, while acknowledging that it provided Russia with a limited number of drones before Moscow’s 2022 invasion.

Saturday’s developments, however, point to a broader confrontation. Ukraine is not only seeking to disrupt Iranian assistance to Russia but is offering to help Washington and its regional partners expose—and potentially counter—Russian support for Tehran’s war effort.

Nima Rezaei, known online as Nima Takido, has more than 935,000 YouTube subscribers and 1.5 million Instagram followers.

Iranian media reported that 5,000 free tickets had been issued for scheduled sessions at Iran Mall. Organizers were reportedly caught off guard when tens of thousands more arrived without reservations.

Teenagers traveled from several provinces and waited for hours for a chance to see him. Videos showed crowds filling the venue, turning what was intended to be a controlled fan event into a mass gathering.

The event was eventually cut short after the crowd overwhelmed the venue. Takido injured his leg in the crush and was taken for treatment.

Some Iranian reports also said his phone and wallet went missing and that security forces were called to help control the gathering.

The scenes highlighted the emergence of a parallel celebrity culture among Iran’s younger generation—one with its own stars, humor, language and communities, largely separate from television, cinema and other traditional routes to fame.

Many older Iranians had never heard Takido’s name. Yet to his young followers, he is a familiar figure whose videos and online presence have created a sense of connection built over years.

That divide is not unique to Iran. Online creators have become major cultural figures for teenagers around the world, often attracting crowds once associated mainly with film stars, musicians or athletes.

In September 2025, thousands crowded into New Jersey’s American Dream mall for an appearance by teenage YouTuber Salish Matter. The turnout overwhelmed organizers and prompted complaints about unsafe conditions and poor planning.

Takido’s event showed that the same global fan culture has taken root among young Iranians, even as they remain relatively isolated from international entertainment markets.

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Unlike traditional celebrities, online creators speak directly to their audiences, share parts of their daily lives and build communities through repeated, informal interactions. For young followers, that can make them feel more familiar and accessible than figures promoted through official media.

Takido belongs to a wider Persian-language creator ecosystem that includes Farshad Silent, Aria Rahmati, Pouria Putak, Nivad, KamTalam, Mia Plays and the Kouman team.

Some live outside Iran, while others produce content that rarely appears in state-controlled media. Their influence nevertheless crosses borders and reaches large audiences inside the country.

YouTube remains blocked in Iran, and users commonly rely on circumvention tools to access it. But the restriction was secondary to what the gathering revealed: a generation forming its cultural tastes and identities in spaces largely beyond the reach of traditional institutions.

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In Iran, everyone is watching the same number this summer. The US dollar is trading at around 1.9 million rials in Tehran’s open market, and the government has turned stopping it from reaching 2 million into a priority.

The state is spending scarce reserves to defend that line. The market is bracing for it to be crossed.

To understand why one exchange rate commands this much attention, it helps to know what the number means in Iranian life. The rial is a currency people try not to hold.

Salaries are paid in it, but many Iranians with savings convert them into dollars, crypto, gold, property or even food items with a longer shelf life as quickly as they can.

The dollar rate is the thermometer of everything else: rents, medicine, car prices and the cost of a grocery run.

When the rate crosses a round number, shopkeepers reprice, landlords renegotiate and expectations reset a step higher. Round numbers are not milestones on a financial chart; they are political events.

Here is the arc of that thermometer. Fifteen years ago, a dollar cost about 10,000 rials on the open market. In April 2025, it crossed 1 million.

This summer, it stands at the threshold of 2 million.

Spread over the first 15 years, the dollar doubled against the rial roughly once every two and a quarter years. The latest near-doubling took 15 months.

Put another way: it took 15 years to destroy 99 percent of the rial’s value against the dollar, and then 15 months to erase nearly half of what was left.

If inflation and depreciation continue at roughly their recent pace, the 3-million line could be five to eight months away. The latest halving of the currency’s value has arrived far faster than the average over the previous 15 years.

Why the central bank cannot hold the line

The engine behind this is not mysterious. Iran’s official statistics agency reports that consumer prices in June were 88.6 percent higher than a year earlier; the inflation families feel at the grocery store runs higher still.

The dollar has nearly doubled alongside the prices around it.

The inflation itself is rooted in fiscal arithmetic. The war and blockade have severely constrained Iran’s oil exports and maritime trade, while tax revenue is sinking with the economy.

The government is financing a substantial portion of its widening deficit through the banking system and central-bank liquidity creation—effectively expanding the money supply to meet its bills.

Monthly inflation has recently been running as high as 7 to 9 percent. For American readers, one comparison does the work of a statistics table: Iran is now living through something close to its own version of the 2022 US inflation shock almost every month.

The central bank’s playbook for moments like this is familiar to every Iranian. When it cannot stop the dollar’s rise, it tries to postpone losing the round number for as long as possible.

It does so through market interventions and public messaging that intensify in the final stretch.

In the winter of 2024-25, it fought exactly this battle at the 900,000-rial level and managed to push the crossing of 1 million until after the Iranian New Year in March.

But that defense was financed by oil revenue.

This one is being waged mid-war, under blockade and with exports sharply constrained. It is drawing on the remnant of reserves the country will need to import medicine and food.

A central bank without reliable oil income can buy weeks, not a new trend. Every week it buys may increase the pressure behind the next jump.

What happens next depends on the course of the war, the scale of central-bank intervention and whether oil exports resume.

If inflation and depreciation continue at their recent pace, the 2-million line could fall as soon as August.

A wider war would likely freeze the market first and then send it sharply higher when trading resumes. A durable ceasefire could slow or even temporarily reverse the move.

In every version, the greatest burden falls on Iranian families paid in rials and unable to convert their income or savings into anything safer.

They are watching each round number arrive sooner than the one before.