The first six days of the war in Iran cost the US $12.7 billion (£9.5 billion), but now the Pentagon is seeking military funding of up to $200 billion. Oil at $125 per barrel is no longer an Iranian or Russian fantasy.
The jewel in Qatar’s crown, Ras Laffan – the world’s largest liquefied natural gas facility – may not fully reopen for up to five years, at a cost of $20 billion per year.
Other fuel oil deposits in the Gulf, from Bahrain to Abu Dhabi, are exposed to Iran's low-cost drones. Then, add the human cost of 18,000 civilians injured and over 3,000 deaths in Iran alone, writes The Guardian in an analysis.
The Tehran regime, fighting for its survival, had long warned that if attacked, it would retaliate by targeting American bases in the region. However, US President Donald Trump seemed surprised when this happened.
Accustomed to decades of isolation and condemnation, Ali Khamenei, the former Supreme Leader, declared at the beginning of February: "Americans should know that if they start a war, this time it will be a regional war."
Iran has also said that a new phase of the conflict will begin if its energy installations are attacked. Ali Larijani, the assassinated head of Iranian security, explained this to the Gulf states and tried to convince them that their national interest does not lie in siding with Israel.
The Iranian regime has no qualms about escalating the war. In fact, its desire to do so is its greatest weapon. An Iranian official warned this week: "Other cards have been designed that will come into play at the right time." This likely refers to desalination facilities in the Gulf, the center of the region's fragile ecosystem.
Iran has nothing to lose
The leadership of Iran, having nothing to lose, benefits from an asymmetric advantage of fear. For Europeans like Giorgia Meloni, the Italian Prime Minister, the main concern is recession and a massive influx of refugees from a destabilized Iran. She says Europe should prepare to close its borders.
Similarly, sending military ships to reopen the Strait of Hormuz seems fraught with political dangers for European leaders. Trump could now call for "a team effort" to ensure the strait's safety, but Europe is being asked to escalate a war it was not consulted on and whose consequences it has been warned about.
At the White House, it is said that the US President is "angrier than ever." He is angry at his European allies, whom he considers hesitant and ungrateful, and at his critics in the Maga group. He is angry at Tulsi Gabbard, his National Intelligence Director, for testifying before Congress that Iran is not rebuilding its uranium enrichment facilities, and at JD Vance, whose silence speaks volumes.
Even his appeal among European populist right-wing parties is under pressure. Tino Chrupalla, co-leader of the German party Alternative für Deutschland, complained: "Trump started as a president of peace. He will become a president of war."
Furthermore, the US alliance with Israel, the cornerstone on which the war was launched, is causing issues with the Gulf states and opening the door to divergence between Israeli and American objectives. Trump has backtracked on his statement that Israel did not consult him on its attack on Iran's South Pars gas field, an attack the Gulf states had asked not to happen as it would lead to Iranian reprisals.
Diplomacy seems to have reached an impasse. Around diplomatic tables in London, there is talk of exit strategies, but few can identify one that Trump would be willing to choose.
How could the war end?
There are three options: a long and arduous conflict ending in Iran's surrender; a unilateral declaration of victory by Trump; or a comprehensive or limited, regional or bilateral agreement that ends the hostilities.
For Simon McDonald, former Permanent Secretary of the Foreign Office, an American-Israeli victory should not be ignored. He told a select committee of the House of Lords: "From what I can see in Iran, the country achieving its objectives is Israel. Netanyahu has been personally obsessed with Iran all his life. He had a bust of Churchill in his office, and that was his model.
Churchill was the only one in the 1930s who saw the threat from Nazi Germany and felt he saw the threat from Iran similarly. There are plenty of pessimistic forecasts about what is happening in Iran. Israel could achieve its objectives."
In the second option, Trump could declare victory and simply leave, arguing that he has destroyed or diminished Iran's ability to threaten the region again. There have been moments when Trump seemed ready to take this step, claiming that the destruction of Iran's navy, nuclear program, security apparatus, and missile launchers was complete.
Israel, now lobbying for ground troops, would have no choice but to accept his judgment. The whereabouts of Iran's highly enriched uranium would be unknown, the limits of American air power confirmed, and the Strait of Hormuz, which at its narrowest is only about 34 kilometers wide, would continue to be a chokepoint for oil tanker traffic. Iranian protesters might try their luck.
But that assumes Iran is willing to accept this claim. Aslı Aydıntaşbaş, a member of the Brookings Institution think tank in Washington, said of the Tehran regime: "There has been a regime change, and this change has been for the worse, towards a more hardline, nationalist Islamic Revolutionary Guard Corps operating within a decentralized command structure."
The last option is de-escalation followed by peace. This peace could be one where all parties are shown the "full ballet" in advance - an expression sometimes used by Jonathan Powell, the British National Security Advisor - or it could be achieved in stages.
Badr Albusaidi, Oman's Foreign Minister, who mediated eight rounds of talks between the US and Iran, wrote an article in The Economist presenting a rational vision in which all parties in the region ensure a substantial agreement on nuclear transparency within the context of a regional non-aggression treaty.
But the Gulf is divided on what the greatest threat is: Israel or Iran. Iran's readiness to sacrifice the economies of the Gulf helps it lose this dispute, even in Qatar and Turkey, the two countries most likely to persuade Iranian leadership to negotiate. If there is any willingness to reassess the value of American bases in the Gulf and if they have become a source of insecurity, this is not evident.
Saudi Foreign Minister Prince Faisal bin Farhan said on Thursday that Iran miscalculated if it thought the Gulf states were incapable of responding to its actions. "The little trust that existed before has been completely shattered on multiple levels," he said.