Conflicts Forum Occasional Sitrep: The Third Phase of the Iran War

by Alastair Crooke, published on Conflicts Forum, July 24, 2026

The Third Phase of the War — Iran believes it has succeeded in achieving its strategic goals in this round of the war /

AnsarAllah’s Blockade on Saudi Arabia — ‘Blockade for blockade’ /

A more vengeful President Trump; diplomatic resolution nigh impossible

The Third Phase of the War — Iran believes it has succeeded in achieving its strategic goals in this round of the war

• The 14th consecutive night of American strikes on Iran witnessed another wave of widespread attacks across multiple provinces. Iran has warned that for every item of Iranian infrastructure struck by the US, a multiple of similar strikes on infrastructure — including that in Israel — will be mounted in consequence.
• A statement issued by the Commander of the IRGC Aerospace Force said: “Iranian missiles are locked onto the region’s oil and electricity infrastructure”.
• Parliament speaker Qalibaf concurred: “The equation of this war is clear: either all or none! In a region where we do not sell oil, no one will sell oil. If our security is not ensured, no infrastructure will be safe”.
• At the beginning of the week, Iran’s Noor news agency cautioned: “In light of the new US strategy against Iran, Iran is preparing for a protracted conflict that will encompass the entire region. Arab governments will be the first casualties of this ‘war of attrition’”.
• Huge explosions have been reported across Bahrain and Kuwait as Iran launches wave after wave of ballistic missiles inflicting significant damage to US military infrastructure. Kuwait houses two leading US bases in the region — Camp Al-Adairi which is located 104 kilometers from the Iran border and serves as a key center for logistical support for US military operations. Ali Al Salem Air Base serves as the primary air transport, logistics hub and gateway for the deployment of US military forces in the region. Reports suggest heavy explosions are ongoing at the the US Fifth Fleet headquarters in Bahrain. Additionally, Iranian missiles reportedly struck the King Faisal and Muwaffaq Al Salti bases in Jordan, where American forces are stationed (resulting in significant casualties).
• CENTCOM’s ‘Eye’ Digital Intelligence in Bahrain reportedly has shut down. Iranian news agency Tasnim reports that Iran targeted and damaged Amazon’s central data infrastructure in Bahrain — one of the main information exchange hubs supporting the American military.

Behind the headlines: Iran believes that it has so far succeeded in achieving the goals of what it considers the third round in the first phase of the war. US aircraft have been pushed back from the front lines and the remaining US ground-based radar early warning and satellite communication systems have been critically damaged and/or destroyed.

Why it matters: By sweeping US assets out of the immediate vicinity of Iran, this reduces the US’ ability to gather intelligence and degrades US capabilities to re-fuel strike aircraft — and as well provides tempting targets for Iran (reportedly there are 100 US refuelling tankers sitting in the open at Ben Gurion airport).

Bigger picture 1: Iran has warned Kuwait and Bahrain that should they continue to allow US missile launches from their territory, Iranian retaliatory attacks will intensify. Iranian strikes have already caused extensive damage to Kuwait’s oil infrastructure and to electricity and water desalination infrastructure which, with the complete cessation of oil exports, is leading to what one Iranian commentator termed ‘the inability of the Sheikhdom to continue to function’. Were Iran to bomb the strategically important King Fahd bridge that connects Bahrain to Saudi Arabia, this would cut off Bahrain and US forces from reinforcement and re-supply.

Bigger Picture 2: Trump’s Ceasefire Proposal delivered by the Iraqi PM was rejected by Iran. A rebuffed Trump subsequently announced that the US is about to carry out a massive attack on Iran “way bigger than Operation Epic Fury and bigger than any attack ever carried out before”. He said, “we are all set for it”; “I’m close to making a decision,” he told Axios.

What they’re saying: Israeli Channel 15 reports that the US military has begun deploying bombers to carry out attacks on Iran, with the first attack using B1 bombers being flown on Tuesday this week. The US reportedly has notified Israel of plans to intensify attacks on Iran.

AnsarAllah’s Blockade on Saudi Arabia — ‘Blockade for blockade’

• Yemen’s AnsarAllah (the Houthis) announced on 20 July an immediate naval blockade on Saudi Arabia in retaliation for the decade-long Saudi blockade on their air and sea ports. AnsarAllah have made clear that they will only target Saudi exports passing through the Red Sea, and not those of other countries. Two Saudi tankers were hit by drone and missile attack (one set on fire), with other vessels retreating after being warned off by AnsarAllah’s military forces.

Big Picture: The blockade comes after more than a decade of Saudi Arabia’s siege imposed on AnsarAllah. The blockade (“siege for siege”) comes after Saudi Arabia attacked Sana’a International Airport to prevent a civilian Iranian aircraft from landing. The plane was intended to take a Houthi delegation to the funeral ceremonies for the assassinated Supreme Leader. The plane subsequently landed at Hodeida airport.

What was the trigger? Saudi Arabia broke the ceasefire with AnsarAllah by bombing Sana’a airport. A further element seemingly was the southern Yemeni government showing signs of preparing to attack the Houthis.

Why it matters 1: With the Bab al Mandeb Strait closed, some 20-22% of Saudi exports via Red Sea are taken off-line (albeit some may pass via the Suez Canal); but taken together with the Hormuz closure, some 40% of world supply of oil is removed – and this at a moment when Saudi has returned as a purchaser in the oil market. US authorities are trying to mitigate the Red Sea blockade news with another manipulation, saying that the operational floor of the US strategic reserve is 70 mbpd instead of 150 — i.e. that they can drain far deeper. However, this claim is disputed by experts who insist that cavern structures will not accommodate any further draw-down.

Why it matters 2: War risk insurance premiums for ships transiting the southern Red Sea have more than doubled for some operators after Ansarallah’s military forces attacked two tankers.

Why it matters 3: This impacts US directly — gasoline stands between $4.25-$4.40 per gallon and diesel is above $5 (above $5 has been considered the redline after which political pushback is expected). Prices however, are poised to go significantly higher as markets are obliged to recognize the dislocation reality that the conflict has inflicted on energy infrastructure.

Bigger Picture 1: The global price of Brent crude — the heavily manipulated price benchmark — crossed $100 a barrel this week for the first time since May, after Yemen imposed the blockade on Saudi air and sea ports.

Bigger Picture 2: Saudi Arabia already faces significant financial pressure due to the on-going war: In June it was reported that Saudi’s NEOM project is facing $16 billion bill to cancel contracts — Saudi authorities expect to spend more money canceling projects at NEOM than building them over the next five years. The projected cancellation costs to halt construction are equal to more than a third of the government’s projected 2026 budget deficit. In addition, noted Saudi commentators report that MbS is having to “slash the budget and trim expenses to mitigate the war’s repercussions, but this time the cuts are targeting the most sensitive areas: the Ministry of Defense, where he has decided to merge the Air Force and Air Defense into a unified command system. It is expected that this reduction will save $2 billion annually. For the record, the cost-cutting measures will affect all ministries and agencies—except for the General Entertainment Authority, which no one will touch!”.

Bigger Picture 3: The initial purported Saudi Nuclear Deal that was announced permitted enrichment and also postulated (unusually) zero surveillance. Trump seemingly wanted nothing in return; but one day later, he poured cold water on his own proposal by demanding that Saudi Arabia recognise Israel and join the Abraham Accords.

A more vengeful President Trump; diplomatic resolution nigh impossible …

• Yesterday markets juddered as the scale of the war, and the consequent fracture of energy supply lines forced themselves on trader complacency and Algorithms that have been trained in such a way that facilitates manipulation by US authorities.
• The war is spreading across the region — Lebanon, Yemen, Saudi, Syria, Iraq, Gaza, West Bank and Turkey.
• These elements are all interlinked — yet all also have their separate agendas. This fact alone makes any diplomatic resolution nigh impossible — there are too many elements to correlate. Escalation is baked-in by Trump’s insistence that Iran can be bludgeoned into capitulation through carpet bombing.
• This insistence seems to be based on Trump’s instinct alone, and by his admiration of ruthless war — á la Israel.
• In an interview with Mario Nawfal, based on their recent book Regime Change, authors Maggie Haberman and Jonathan Swan opine that Trump’s second term is ‘impelled by a historical irony which Trump himself has come to understand — that the indictments, the convictions, the assassination attempts, and four years of exile made him not weaker; but far more powerful, more vengeful, and more willing to gamble than any President in modern history.’

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Alastair Crooke is widely recognized as a respected diplomat, geopolitical analyst, and former intelligence officer who played an important role in shaping dialogue about the Middle East. He was brought up mostly in Rhodesia (now Zimbabwe). He was educated at Aiglon College in Switzerland and at the University of St. Andrews (1968–1972) in Scotland, from which he obtained an MA in moral philosophy and political economy.  Throughout his long career, he has worked behind the scenes in intelligence, diplomacy, and political mediation. His work helped bridge conversations between Western governments and political groups in the Middle East during some of the region’s most tense periods.