Trump may have to choose between an endless quagmire and ceding the Strait of Hormuz to Iran

Nearly five months into the war in Iran, the conflict has entered a “second round” as bombs fly throughout the Middle East after a temporary truce collapsed. Iran is again threatening passage through the now-infamous Strait of Hormuz, while the U.S. has reinstated a naval blockade on Iranian oil exports.

As the world’s emergency petroleum supplies dangerously dwindle and prices again rise, the Trump administration appears to have lost the upper hand and faces a stark choice: escalate the conflict in a prolonged morass resembling Ukraine, or capitulate and let Iran control the world’s leading energy artery—with the ability to charge service fees for passage and recoup costs, a toll in all but name— energy and geopolitical analysts told Fortune.

The decision could shape energy and fuel prices heading into the fall, including the midterm elections, and set a precedent for how far the U.S. will go to defend global shipping lanes.

“I don’t think there’s any military option for reopening the Strait of Hormuz,” said Gregory Brew, senior analyst for Iran and energy with the Eurasia Group. “The Iranians have considerable leverage here. I don’t see them backing down and, honestly, time is probably on their side.”

Despite being militarily battered and with much of its leadership killed early in the war, the Iranian regime remains steadfast and determined to hold onto its prize—the narrow waterway that controls nearly 20% of the world’s energy flows, Brew said. Whatever the result, the Persian Gulf is unlikely to return to a free flow of energy and trade, he added.

“The options are to escalate or cut a deal. And I think the [Trump] administration is likely to do the first, see it fail, and end up with the second,” Brew said.

When the 60-day, interim peace deal was reached in mid-June, traffic through the strait began to resume—but not to normal levels—and energy prices plunged as oil markets even began to predict a temporary glut. The global oil benchmark fell from a high of $124 per barrel in early May down to $68 at the start of July, lower than expected. Already though, it surged back above $88 per barrel as of July 17. Global stockpiles are dwindled—the U.S. Strategic Petroleum Reserve is at a 43-year low—U.S. midterm elections are approaching, and China, which sharply cut its imports and leaned on its hefty reserves to help balance the global market, hasn’t yet started buying more oil.

“All of the signs point........

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