What Now?
Plan D.
What follows was written by Richard Haass, former president of the Council on Foreign Relations, long-time diplomat and co-host of America’s fastest-growing podcast, ‘Alternate Shots’.
It arose out of a discussion we had on our most recent episode, which will be in your in-box shortly. Richard’s Substack newsletter, Home & Away, has been (and continues to be) an excellent source of realistic analysis of the Iran war, among other things. This one assesses two questions: (1) How we got to where we are?, and (2) what might be the best path forward?
A Strategy for Iran: Back to the Drawing Board (July 13, 2026)
By Richard Haass.
Welcome to this special edition of Home & Away, one stimulated by a recent piece in The New York Times by David Sanger, “Bombing and a Tentative Accord Didn’t Work. Does Trump Have a Plan C for Iran?”
I would argue that as the United States has already tried three strategies in its war with Iran and come up short each and every time, the question is whether Trump has a Plan D. But who’s counting? The pertinent question is, what now?
To recap, President Trump began the war in late February in an attempt to trigger regime change in Iran. Military, clerical, and political leadership were all targeted, in some cases successfully. But the regime established in the 1979 revolution that ousted the American-backed Shah was more institutionalized and proved more resilient than many in the U.S. and Israeli governments understood. Any potential public uprising was ruthlessly repressed. Making matters worse, the leadership that emerged in the wake of the attacks was, if anything, more hard-line than what it replaced. You could say regime change was achieved, just not as intended.
Then, a new strategy emerged, one of intense bombardment meant to force Iran to capitulate and unconditionally accept U.S. and Israeli terms for war termination. That too failed, as Iran proved able both to absorb punishment and to mete it out by attacking its Arab neighbors and closing the Strait of Hormuz, a vital artery through which one-fifth of the world’s oil and gas passes on its way to customers worldwide.
The Trump administration retaliated with a counter-blockade, largely denying Iran use of the Strait. Fighting flared and eased, and the war evolved into something of a game of chicken, hinging on which side could better endure continuing military exchanges and the closure of the Strait.
That turned out to be Iran. All of which set the stage for a third strategy, as the Trump administration, facing growing dissatisfaction at home over higher gasoline prices, opted for diplomacy. Despite Israeli objections, it agreed to a Memorandum of Understanding (MOU) with Iran intended to extend and shore up a shaky ceasefire and reopen the Strait of Hormuz.
The thinking behind this third strategy was that the promise of increasing economic benefits and easing sanctions would persuade Iran’s new leadership to implement the MOU in full, embark on a more moderate path, and agree to more U.S. preferences.
It didn’t work out that way. The Trump administration, reflecting the business and real estate experience of the president and his two main negotiators, continues here and in other disputes to exaggerate the lure of economic incentives and underestimate the power of nationalism, pride, and anger. Administration officials were surprised, but certainly should not have been, by Iran’s demand that ships transiting the Strait use a channel off its coast rather than one off Oman’s; when some balked, Iran attacked the ships even though doing so put promised economic benefits at risk. Trump, describing Iran’s leadership as “scum” just weeks after praising them, ordered the U.S. military to attack additional military and industrial targets in Iran and declared the ceasefire over. Iran retaliated against U.S. bases in the region and again closed the Strait.
Diplomatic exchanges through third parties have resumed or inevitably will, and there are reports that Iran has communicated that the attack on shipping was unauthorized, carried out by a faction that opposed any normalization of ties with the United States. That may or may not be the case; what is certain is that the United States has to decide its next steps.
What would be folly would be to assume that a return to a ceasefire and the MOU could resolve things satisfactorily. It is not just that Iran may have difficulty disciplining its forces. It is also that the poorly negotiated and terribly worded MOU does not provide a satisfactory basis for proceeding. It grants Iran considerable influence over everyone’s use of the Strait of Hormuz as well as the ability (after 60 days) to collect tolls. It also eases economic sanctions up front and fails to resolve anything pertaining to Iran’s nuclear activities other than calling for negotiations. The MOU has nothing to say about Iran’s conventional military forces or its support for armed proxies.
But America’s dilemma also reflects the reality that its options are poor. Convoying ships in the Strait promises to be costly, dangerous, and inefficient. Seizing and holding Kharg Island would be difficult, incur casualties, and still not guarantee the Strait would be open to shipping. Attacking military and industrial targets in Iran has been shown to be ineffective; more of the same will not change things. Iran has demonstrated its ability to take a punch and to deliver two: it can shut down the Strait and it can attack its neighbors, putting their energy and water infrastructure at risk, a threat that, if carried out in full, would transform what has been a limited crisis into a global economic calamity. Which means U.S. attacks on Iran will necessarily remain limited in order to keep Iran’s retaliation limited…which, in turn, means U.S. military action will be more performative than decisive.
So, what to do?
The United States needs a new, long-term, comprehensive strategy, one designed to reduce Iran’s three principal sources of leverage: its control over the Strait of Hormuz, its ability to threaten its neighbors, and its pathway to developing a nuclear weapon, which, if it were to come to fruition, would give Iran enormous leverage throughout the region and beyond, grant it impunity to empower its proxies to conduct attacks against Israel and others, and quite possibly trigger a regional nuclear arms race. As turbulent as the Middle East has been and continues to be, such a future has the potential to make the past look like a picnic.
The good news is that Iran can be countered. First, the United States, working with both its regional partners and other allies, must accelerate efforts to reduce the strategic salience of the Strait of Hormuz. Such an undertaking should consist of multiple elements: increased production of oil and gas in the United States and other regions (especially the Western Hemisphere), adoption of measures to reduce demand for oil and gas, increased government support for alternative energy sources of every sort, construction of additional pipelines that bypass the Strait of Hormuz, and a commitment to expand and fill national strategic petroleum reserves as well as stockpiles of other vital materials that transit the Strait. Such efforts would reduce the price impact of closures of the Strait of Hormuz as well as what Iran could expect to gain from tolls and sales of its oil and gas.
Second, the United States, working with Ukraine, Israel, and others, should put into place enhanced defenses of local energy and water infrastructure against attacks by drones, missiles, cyber, or terrorism. Absent such effective defensive measures, we are unable to credibly threaten, much less carry out, attacks on Iran’s infrastructure – essential if we are to influence Iranian behavior.
Third, Iran cannot be allowed to develop a nuclear weapon. Ideally, this would be accomplished through diplomacy that would place limits on permitted Iranian activities and establish a mechanism (involving international inspectors) for verifying that Tehran is respecting these ceilings. Failing that, or should any dangerous activity be observed, Iran should understand the United States, Israel, and others would be prepared to use military force against suspected sites much as was done in June of last year.
Fourth, economic sanctions should be reimposed to impede Iran’s ability to sell oil on the open market. Such a policy limits the flow of revenues to Iran’s regime (revenues that have been and could be used for any and every purpose). Any easing of sanctions should be linked to real progress in any future nuclear negotiations. A complementary option would be to reimpose the counter-blockade on Iran (denying it revenue from energy sales and tolls) if the terms under which it is prepared to allow others to use the Strait prove to be intolerable.
Fifth and finally, the MOU should be scrapped altogether. It gives Iran formal cover for its efforts to control the Strait, provides it with much-needed resources, and does nothing to limit its nuclear activities, conventional arms production, or support for proxies. Someday a new accord might be worth signing, but that day will only arrive if Iran finds itself with diminished leverage over the Strait and with a much-reduced ability to threaten and hurt its neighbors.
It is important to keep in mind that economic shortcomings still constitute the principal weakness of the Iranian regime. There is no reason to give up on the notion that economic pressure can lead to policy moderation or conceivably even regime change down the road. Economic relief for Iran should thus be heavily and specifically conditioned.
The operative adjectives of the strategy outlined here are long-term and comprehensive. The only safe and effective way to pressure Iran is by steadily reducing the importance of the Strait and Iran’s ability to damage its neighbors. Until then, we will likely have to live with the reality that Iran has a large say over the use of the Strait. For a time, a majority of ships may need to use the channel that runs closest to Iran and pay a fee for the privilege if the objective is to keep the Strait open. This is far from an ideal outcome, but it is unrealistic to expect anything better to result from a misguided war of choice premised on a host of assumptions that were wrong.