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From Proxy War to Clash of Titans

Months ago, in an article titled "From Proxy War to the Threat of Global Supply Chains," we pointed out that the tensions in the Persian Gulf were more than a military conflict—they were targeting the heart of global energy and raw material supply. That analysis served as a prelude to what we are witnessing today: a full-scale confrontation where the 60-day ceasefire was not an end, but a new battlefield.

We argued that the Strait of Hormuz had become the frontline of an economic war. Today, following extensive US strikes on Iranian facilities, the renewed closure of the Strait, Saudi Arabia's historic oil price cuts, and the return of price shocks to the polymer market, it is time to take a deeper look at the reasons behind this confrontation. Why did the ceasefire collapse? Why was the US compelled to return to conflict? And why does Iran continue to resist despite unprecedented pressure?

The First Claw: Five Reasons That Forced the US to Resume Hostilities

1. Economic Failure of the Ceasefire; US Shale Industry on the Brink of Collapse

Although the 60-day ceasefire reopened the Strait of Hormuz, Saudi Arabia launched an all-out price war with an unprecedented $11 per barrel cut to Asian markets. Arab Light crude was offered at a $1.50 discount to the Oman/Dubai benchmark—a sharp reversal from the $9.50 premium just the month before. The result? US shale producers, who need prices around $65 per barrel for profitable drilling, found themselves on the verge of bankruptcy. Continuing the ceasefire would have meant accepting this economic defeat.

2. Petrochemical Plant Closures; Pressure on Related Industries

Simultaneously, the US petrochemical industry came under pressure. Major companies like INEOS Styrolution announced the permanent closure of their 400,000-ton polystyrene plant in Illinois. These closures were a clear sign of outdated, non-integrated production lines struggling under intense competition. Domestic pressure to return to conditions that could save these industries was a major driver for resuming conflict.

3. Rising Global Inflation; Political Pressure on the Trump Administration

Despite the ceasefire, global energy and commodity prices remained high, fueling inflation and public dissatisfaction inside the US. The prolonged uncertainty imposed heavy political costs on the Trump administration, pushing it toward a more decisive stance.

4. Maintaining Hegemony; Inability to Accept Iran's Regional Role

For the US, the ceasefire meant acknowledging Iran's role in regional equations, particularly regarding Lebanon and the Strait of Hormuz. Tehran interpreted this understanding as recognition of its geopolitical role, while Washington sought to strip Iran of these leverage points. This interpretive gap was a root cause of the fundamental rift.

5. Domestic Political Pressure; The Need to Project Power

The Trump administration needed a decisive victory to solidify its domestic position and demonstrate strength to regional allies. Prolonged ceasefire and negotiations deprived it of this opportunity. Returning to conflict was a way to project power and respond to internal pressures.

The Second Claw: Five Reasons That Drove Iran to Resist

1. Economic Siege; Heavy Reliance on Oil Revenues

Crippling sanctions and the maritime blockade of Iranian ports had plunged the economy into crisis. Closing the Strait of Hormuz was Iran's only leverage to break this siege and increase oil revenues.

2. Resistance as a Survival Strategy

From Tehran's perspective, this was an existential war—"a war for survival" in which Iran was ready to fight with all available means until the last moment. Surrendering to pressure would have meant losing decades of resistance achievements.

3. Consolidatingthe Hormuz Leverage

Iran believed it had gained concessions during the war and negotiations that needed to be consolidated. The Strait of Hormuz was more than just a "bargaining chip" for Iran; it was a strategic asset that could not be surrendered. Any retreat would mean losing its primary leverage.

4. Demonstrating Military Capability; A Message to Neighbors and the US

Missile and drone strikes on commercial ships and military targets sent a clear message to the US and regional neighbors: Iran, despite heavy blows, still maintains its deterrent capability. This show of force provided a solid foundation for future negotiations.

5. Gaining Domestic and Regional Support

Confronting the US strengthened Iran's domestic social base and signaled to regional allies (such as Hezbollah and the Houthis) that Tehran would not bow to pressure. This support was a valuable asset for Iran in future calculations.

China: The Silent Winner

Meanwhile, China has emerged as the biggest winner, buying cheap oil and petrochemical feedstocks. Beijing is exploiting US instability and contradictory behavior to solidify its image as a "stable, responsible, and dialogue-oriented" actor. The Gulf crisis has provided China with an opportunity to:

· Consolidate its role as a leader in clean energy: Dependence of Asian countries on fossil fuels transiting the Strait has boosted demand for renewables, batteries, and EVs—areas where China dominates the global supply chain.

· Benefit from US military and diplomatic wear: Washington's significant military redeployment to the Middle East has reduced its capacity to focus on Asia. Moreover, Trump's unilateral actions have driven traditional US allies closer to China.

· Purchase cheap oil and petrochemical feedstocks: With global oil prices falling and Saudi discounts deepening, China has been able to fill its strategic reserves at unprecedented prices.

The Final Question: Which Claw Will Prevail?

The answer is more complex than declaring a single winner. Both sides have achieved some of their objectives:

· The US has demonstrated its military and economic superiority, but the costs of this war—both economic and international—have been enormous.

· Iran has managed to maintain its leverage over the Strait and showcase its resilience, but the heavy economic and military toll has weakened its position.

· China, however, has gained the most with the least cost: cheap oil, diplomatic influence, and a leading position in the global energy transition.

Future Outlook: This confrontation appears to have reached a strategic stalemate. Neither the US can force Iran to its knees, nor can Iran expel the US from the region. Meanwhile, the polymer market remains in a wait-and-see mode, dependent on the fate of the Strait of Hormuz and future negotiations. The only certainty is that China is the silent winner of this battlefield.

Gol Plastic | Specialized Reference for the Polymer Industry

Sources:

Iranian News:

· Donya-e-Eqtesad

· KalaKhabar

· ILNA

International News:

· Bloomberg

· Reuters

· Platts