US-Iran war: After the end of the five-day deadline to open the Strait of Hormuz, US President Donald Trump has extended it by 10 days to 6 April 2026. While extending the deadline, the US President said, ‘Talks are going very well.’ While announcing the war against Iran, the US administration had declared five goals, which includes destrcution of the Iranian missile capability and defence industrial base by eliminating Tehran’s navy and air force.
Now, one month into the US-Iran war, the Trump administration has said its objectives are clear and unchanging, but the list of priorities has expanded and shifted as the war has taken a toll on the global economy, tested alliances, and raised unanswered questions about the planning for the conflict, its justification, and its aftermath.
By most accounts, the strikes by the US and Israel have significantly degraded Iran’s military capabilities and killed scores of senior leaders. But those tactical successes don’t necessarily translate to achieving all the president’s strategic aims.
US-Iran war: Challenges in achieving a ceasefire
According to experts, the ongoing conflict between the US and Iran underscores a fundamental reality of geopolitics: ceasefires cannot be unilaterally dictated, especially when the adversary holds strategic leverage. Despite initial expectations of a swift resolution following US military strikes, the conflict has evolved into a prolonged and complex standoff, where Iran currently appears to hold key bargaining power. They said that by extending the deadline for the next ten days, Donald Trump may want to achieve these five goals: Ensuring the safety of the petrodollar system, containing the elevated US Treasury yields, containing the inflation fear and hawkish US Fed, addressing the renewed fear of economic slowdown, and stopping the US-Iran war from turning into a Gulf War.
Ensuring the safety of the petrodollar system
Seema Srivastava, Senior Research Analyst at SMC Global Securities, said the petrodollar system, established in the 1970s, has been a cornerstone of US economic dominance. It requires countries to buy oil in dollars, creating demand for the currency and allowing the US to print more money. However, countries like China and Russia are exploring alternative currencies for oil transactions, reducing US influence. This shift weakens the petrodollar regime.
“By announcing a unilateral moratorium on military attacks and extending the deadline to open the Strait of Hormuz, the Trump administration is trying to cool down the crude oil prices because it will reduce the bargaining power of Iran,” said Anuj Gupta, a SEBI-registered market expert.
Containing the elevated US Treasury yields
Rising US Treasury yields are another headache that the Trump administration is trying to address by extending the deadline by 10 days.
“Higher yields increase the government’s borrowing costs, reducing its ability to finance military operations or offer concessions. As rising crude oil prices have already made the US-Iran war a costly affair for the entire world, including the US, the extended deadline would help the US government keep debt under control by keeping a check on Treasury yields, Seema Srivastava said, adding, ”This will allow the US administration to finance its military equipment by lesser debt repayment.”
Check on the rising inflation
Avinash Gorakshkar, a SEBI-registered fundamental equity analyst, believes rising crude oil prices strengthen the US dollar and fuel inflation, a situation that makes the central bank of any country turn hawkish. Further escalation of the Israel-US-Iran war would have pushed Brent crude oil prices to $150 per barrel, as they had already reached $120.
“The Trump administration is trying to bring down the Brent crude oil prices below $80 per barrel, and their goal looked possible when the Brent crude oil slipped below $100 within five days of the earlier deadline for opening the Strait of Hormuz,” Avinash Gorakshkar said.
Check on the economic slowdown fear
The war has disrupted global oil supplies, causing economic uncertainty. This makes it harder for Trump to predict outcomes and negotiate effectively. The situation is volatile, with many variables at play, including the potential for further escalation or unexpected breakthroughs. This uncertainty reduces Trump’s ability to dictate terms, as he can’t accurately assess the risks and benefits.
“By extending the deadline for the next 10 days, the Trump administration is trying to address the looming fear of economic slowdown as rising crude oil prices and disruption in the oil supply and production are expected to hit the industrial output. So, the market is expecting the upcoming few quarterly earnings seasons to be weak,” said Avinash Gorakshkar.
Gorakshkar said that an economy can’t afford another long-term, tepid earnings season, as it is yet to come out of the Russia-Ukraine war’s impact. So, extending the deadline would leverage Washington’s position against Tehran during the ceasefire discussions.
Stopping the war to become a Gulf War
The way Iran was targeting Saudi Arabia, UAE, Qatar, and some other Middle East countries, a retaliation from any of these countries, which are a part of the Abraham Accord, signed in 2020, might turn this Israel-US-Iran war into a Gulf War. So, the Trump administration is trying to keep this war within and around the Iranian border and establish a military restraint in this high-tension geopolitical crisis.
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