The United States and Iran are caught in an intensifying cycle of military escalation with little indication either side can secure a decisive advantage, analysts say. The conflict expanded this week as Iranian-allied militants in Yemen launched attacks on ships passing through a strategic Red Sea chokepoint, driving oil prices above $100 per barrel on Thursday.

In response to the increased maritime aggression, the U.S. has intensified its bombing campaign inside Iran, marking the most sustained aerial offensive since President Donald Trump and Israel began strikes targeting Iran earlier this year in late February. Trump and senior U.S. officials have threatened further military action, including strikes against Iran’s suspected nuclear facilities at Pickaxe Mountain and critical infrastructure such as power plants, as retaliation for attacks on vessels transiting the Strait of Hormuz.

Secretary of State Marco Rubio underscored the escalating approach in remarks at a summit in Manila, referencing Iranian Foreign Minister Abbas Araghchi’s characterization of Tehran’s strategy as “an eye for an eye.” Rubio warned that the U.S. would respond in kind, stating, “The president’s policy is a head for an eye.” He also indicated that decisions on further escalation would be made in the coming days.

Military experts emphasize the dangerous stalemate facing both governments, as each seeks leverage but neither holds the capacity to compel decisive change via force alone. Alan Eyre, a former senior U.S. diplomat involved in past negotiations with Iran, noted the absence of a clear U.S. strategic objective in the current campaign. Hamidreza Azizi, a specialist on Iran at the German Institute for International and Security Affairs, added that even extreme measures—such as the use of a tactical nuclear weapon against underground facilities—would likely only carry symbolic weight without fundamentally altering the conflict’s dynamics.

The involvement of the Houthi militia in Yemen, an Iranian ally, has broadened the confrontation’s scope. The group announced a maritime blockade of Saudi Arabia and reported attacks on Saudi oil tankers in the Bab al-Mandeb strait, a vital passage connecting the Red Sea and the Indian Ocean. International maritime authorities confirmed at least one tanker was struck on Wednesday.

The Houthis, who control much of Yemen including the capital Sana’a, receive weapons and training from Iran’s Islamic Revolutionary Guard Corps but operate with more autonomy compared to other Iranian proxies such as militants in Iraq or Lebanon's Hezbollah. Their recent actions signal Tehran’s intent to intensify economic pressure on the U.S. and its partners by threatening key regional shipping routes.

Former U.S. Navy official Bryan Clark characterized the Houthis’ participation as conferring an escalation advantage to Iran but cautioned the U.S. still retains significant military options, including strikes on civilian targets, to press its campaign. U.S. forces previously faced challenges combating the Houthis during the 2025 Operation Rough Rider bombing campaign, which included the loss of multiple drones and a missile attack on the aircraft carrier USS Harry S. Truman.

The surge in oil prices reflects the broader market impact of expanded hostilities. Analysts suggest the Houthis’ engagement may serve as a “counter-jawboning” tactic against President Trump’s efforts to calm energy markets through diplomatic signaling. Erik Meyersson, chief emerging markets strategist at SEB bank, explained that occasional militant strikes could undermine attempts to reassure markets without requiring sustained attacks.

As the conflict persists, the risk of prolonged fighting grows, with both Washington and Tehran appearing locked in a cycle of retaliation with no clear exit strategy.