Winning the War, Losing the Peace

The United States and Israel were winning the 2026 campaign against Iran. Then Washington gave up the advantage. The June 17 memorandum it signed traded decisive leverage for a framework weaker than the 2015 nuclear deal and financed the adversary it was defeating. This analysis shows the siege was working and a disarmament settlement was within reach; addresses the “oil clock” case for a fast exit; and documents how Israel, a key partner in the campaign, was sidelined in the aftermath. Drawing on Clausewitz, joint doctrine, and Boyd’s observe-orient-decide-act loop, it argues that halting a campaign which held the initiative forfeited the operational tempo that U.S. doctrine treats as decisive. None of it is yet irreversible: the memorandum is not a treaty, and the leverage that was breaking Iran can still be reclaimed. The outcome was a choice, not a necessity.

The Memorandum of Understanding unveiled on June 17 is sold as peace through strength. It is the reverse, terms conceded from a position of dominance. Two days later, France said it would not approve the UN sanctions relief the memorandum promises Tehran unless its terms are met. When allies decline to endorse terms extracted from a breaking adversary, the terms are the problem.

A campaign this dominant should have ended the threat. Instead, it produced an agreement weaker than the 2015 nuclear deal on every measure that matters, one that finances the adversary it was defeating. This was not a prudent exit from an unwinnable war but a failure to convert battlefield dominance into political terms.

By April 2026, Iran was losing decisively. Six weeks of joint American and Israeli operations, more than 10,200 sorties and 13,500 strikes, had destroyed its air defenses, shattered its military, and decapitated its leadership, including the supreme leader, killed on February 28. CENTCOM’s commander, Admiral Brad Cooper, reported Iran’s missile fire down by roughly 90 percent and judged more than 85 percent of its missile, drone, and naval industrial base destroyed. In 38 days, he later testified, the campaign had rolled back 40 years of Iranian military investment. Outside analysts cautioned the arsenal was degraded, not erased. Iran was not toothless: it downed two American jets, destroyed a U.S. radar-and-control aircraft, knocked out missile-defense radars, and battered GCC energy infrastructure. But it was reeling, and the campaign winning the war was financial. The naval blockade imposed on April 13 went after the one thing the regime could not replace, its money. This was compellence in Schelling’s sense: coercion to bend a regime’s will rather than smash its army.

The numbers were grim and worsening. Oil is the regime’s financial lifeline, the pressure point the Washington Institute singled out as most exposed, and the blockade cut Iran’s crude exports from about 1.85 million barrels a day toward 567,000. The IMF projected a 6.1 percent contraction with inflation near 69 percent; the rial collapsed past 1.3 million to the dollar; Tehran was reported worried about making payroll. This struck the regime’s center of gravity, the Revolutionary Guard, at its critical vulnerability, the oil revenue that funds it. Some 90 percent of Iran’s crude exports leave through Kharg Island, a trade the Guard dominates and runs largely to China. Under the U.S. naval blockade Kharg’s storage was filling, forcing Iran to cut production.

What remained could be finished by pressure, not invasion. The bombing had not completed the job, some 440 kilograms of enriched uranium survived, buried deep, and intelligence judged the setback temporary, but no depth of rock shelters a revenue stream. Yet the pressure on the wallet was never fully applied. Kharg’s loading jetties were left standing, the shadow fleet kept reaching China, and the buyers financing it went largely untouched by secondary sanction notwithstanding Treasury efforts.

Retired General Jack Keane argued for finishing the campaign rather than settling. When Trump halted the bombing on April 7, the target list was far from exhausted. Whether pressure would have forced terms or prolonged the fight is a fair question. But Iran was closer to collapse, its economy in freefall. The campaign stopped short by choice. Joint doctrine, JP 3-0, is built on seizing the initiative and controlling tempo, and Boyd’s loop of observe, orient, decide, and act, the OODA loop, captures why: move faster than your adversary can reorient and his decisions come apart. A pause at peak momentum does the reverse, ceding the initiative and giving a reeling regime time to recover a battlefield it was losing.

Critics will say the war’s real aim was regime change, and that it was a fantasy. They are right that it was, you cannot topple a government from 30,000 feet, no uprising came, and Trump backed away. The real objective was disarmament.

Disarmament meant a Libya-style bargain, the 2003 model, not the 2011 one: Iran giving up its bomb, its long-range missiles, and its proxies, and guaranteeing passage through Hormuz, in exchange for survival and a return to the world economy. Iran needed that bargain, its revenue sharply cut, its leadership decapitated, its military wrecked. A regime in that condition does not set the price.

The regime folds when survival is at stake. In 1988, his army broken, Khomeini swallowed the ceasefire with Iraq he called a poisoned chalice rather than lose the revolution, and that regime was stronger than 2026’s.

The 14 points deliver none of the four disarmament objectives that mattered. No enriched uranium is removed; the memorandum downblends it in place, the stockpile staying in Iran. There is no cap on enrichment, no limit on missiles, no dismantling of the proxies. On every dimension the terms are weaker than the 2015 deal it spent a decade denouncing, which capped enrichment at 3.67 percent, shipped the stockpile abroad, and removed two-thirds of the centrifuges. The memorandum does none of it and gives up the one thing that deal kept, a credible threat to restore the pressure.

The memorandum also funds the adversary. The deal commits Washington to immediate oil waivers, the release of Iran’s frozen assets in full, the termination of every sanction, and a reconstruction program of at least $300 billion. Not a dollar is American aid, but money is fungible and dollars that rebuild Iran free other funds for the IRGC, its missiles, and its proxies. The United States did not merely stop fighting, it released funds to a regime it was still defeating, not one it had defeated.

And it promises what Washington cannot deliver. The memorandum pledges to end UN sanctions, but those are not America’s to lift. Britain, France, and Germany triggered the UN snapback mechanism in 2025, and the full pre-2015 regime is back, so relief now needs a fresh Security Council resolution, which France has signaled it will not approve. Washington conceded what was its own for a centerpiece it cannot deliver. The pledge is either incoherent or unenforceable.

Two deals, one regression:

Provision

2015 JCPOA

2026 Memorandum

Enrichment cap

Capped at 3.67 percent

None; deferred to the final deal

Enriched stockpile

Shipped out of the country

About 440 kg to be downblended in place, kept in Iran

Centrifuges

About two-thirds removed

No limit

Ballistic missiles

Limited under UN Resolution 2231

Not addressed

Regional proxies

Not addressed

Not addressed; Israel halted in Lebanon

IAEA verification

Continuous intrusive monitoring

No intrusive regime specified; deferred to final deal

Sanctions

Phased, compliance-based relief

All to be terminated, including UN measures

Cash to Iran

Access to its own frozen assets

Frozen assets in full, plus $300 billion to rebuild

UN legal basis

Endorsed by Resolution 2231

Needs a new resolution; snapback already triggered

Sources: the Islamabad Memorandum of Understanding (official text); Arms Control Association, JCPOA at a Glance.

The case for the early exit rested on an “oil clock”: the claim that the shock was draining world supply so fast that Washington had no choice but to settle quickly. The premise is real, and the math deserves an honest answer. The shock was historic: Brent rose past 126 dollars, the International Energy Agency mounted its largest stock release ever, and the closed strait shut in some 14 million barrels a day of Gulf output. New production did not refill that hole. American output ran at record highs, Saudi and Emirati crude rerouted overland around the strait, and demand fell several million barrels, but those offsets covered barely a third of the loss. The world bridged the rest by draining inventories at a record pace toward their lowest in two decades, a finite buffer one Exxon executive warned could hit 160 a barrel once it ran low. The shortage was real, and prices held near 105 dollars. But it was a strait problem, not an Iran problem.

Iran’s own exports, the blockade’s target, ran about 1.85 million barrels a day before the war and a fraction of that after, a rounding error against the volume the closed strait took off the water. Reopening the chokepoint would refill the buffer, lifting Iran’s sanctions would not. And reopening it was never hostage to Iran’s price. The mined strait could be ground clear under the campaign’s air dominance, a labor the Pentagon told Congress could run six months, or opened faster by a narrow accord a cornered Iran was in no position to refuse. Neither path was the memorandum.

For the United States, a net exporter, the spike was a tailwind rather than a tax, driving American petroleum net exports to a record and a windfall that offset much of the cost at the pump, while Iran, its crude blockaded, had no buffer to draw. The campaign had brought it to that edge at a cost of 13 American lives, with the graver risk running the other way, the uranium left in the ground and adversaries shown that American resolve is bounded by a deadline. The world’s clock ran on oil, and it had reserves, Iran’s ran on money and that was draining fast. The emergency was an argument for opening the strait, never for terminating every sanction, releasing the funds in full, and financing the reconstruction. The strait was the emergency. The concession was a choice.

Israel bore a huge cost in confronting Iran with the U.S. and received the least consideration in the settlement. For the first time since 1956, the Israel Defense Forces fought inside a coalition and carried much of the weight, including an opening sortie of some 200 aircraft that won air superiority without a loss, the dominant role in striking Tehran. Within three weeks its prime minister could say Iran could no longer enrich uranium or build missiles.

Israel was excluded from the settlement and publicly rebuked. On June 18, Vice President Vance answered Israeli critics not on the merits but by reminding them that two-thirds of their defensive weapons were American-built, and warning them not to attack their only powerful ally, blunting criticism of a deal Israel was never shown, one that leaves Iran’s program intact and Hezbollah rearming on its border.

Israel is not the only loser. The strategic winner is China, which gains a rehabilitated oil supplier and proof American resolve can be worn down. Beijing was already acting on it.  Even as the campaign fixed American attention on reopening Hormuz, it tightened its grip on its own chokepoint, stringing a barrier across the disputed Scarborough Shoal in a gray zone move calibrated to stay below the threshold of a U.S. response. The deeper loser is American deterrence. Adversaries learned America can win a war and be talked out of the peace. Even the president’s own party objected; Senator Roger Wicker, chair of Armed Services, called the reconstruction fund alone enough to make Iran’s 2015 payoff look like a pittance.

Some characterize this as Israel’s war, sold by Netanyahu to Trump. Netanyahu advocated, as allies do, but the order and the ownership were Trump’s. He commanded the strikes and claimed the victory. The deeper charge, that Israel overreached and failed, mistakes the war for the peace. The campaign was succeeding, and diplomacy failed. The missile problem went unsolved because the memorandum deferred it. Hezbollah survives because the deal forbade Israel from finishing it. The ally pressing to complete a victory is not the one who lost it.

As Marine Corps doctrine holds, war is at bottom a clash of opposing wills, and victory belongs to the side whose will outlasts the others. In the spring of 2026, the U.S. held every material advantage against a breaking adversary, Iran’s military broken, its leadership decapitated, its treasury emptying, its economy the only one without reserves to outlast a shock the rest of the world could ride out. What was lacking was resolve, not capability.  Rather than absorb the energy shock or clear the strait by force, Washington secured its exit through concessions.

The American and Israeli military and intelligence services were winning their fight. The memorandum was how Washington lost the peace. The failure came in three acts: a strait left unsecured before the first strike, a campaign halted before it was finished, and the settlement conceded at the table. The first was an error of planning, the last, a failure of resolve. Holding the stronger position, Washington chose not to press its advantage to a decisive settlement.

But the position is not yet lost. The June 17 document is a memorandum, not a ratified treaty, and its centerpiece is already faltering. France will not lift the UN sanctions Washington promised Tehran. The enriched uranium is supposed to be downblended in place, not removed, and still sits on Iranian soil. The blockade, the pressure on Kharg, the frozen accounts, and the threat of snapback all remain available to a government willing to use them. The leverage that was breaking Iran did not vanish when the memorandum was signed. It was set aside. And it can be reclaimed. A settlement that disarms Iran on the campaign’s terms is still within reach, if Washington recovers the will to demand it before the funds flow and the centrifuges spin.

CAPT Lance B. Gordon (U.S. Navy, ret.) is a retired U.S. Navy intelligence officer, graduate of the U.S. Army War College and New York University School of Law, and former Partner/Principal at Ernst & Young LLP. His analyses of the 2026 Iran campaign, “Iran in the Box” and “Oil Revenues as the IRGC’s Center of Gravity,” appear in Small Wars Journal.