For years, Iran confronted a balance of power in the Middle East that tilted against it. The region was dominated by a hostile American superpower, a nuclear-armed and militarily superior Israel, and significant local actors—Egypt, Saudi Arabia, the United Arab Emirates—that were strategically and economically aligned with the United States.Today finds Iran in entirely new circumstances. It has gone head-to-head with the superpower and Israel, withstood a pounding from their most advanced weapons, and more than survived. As a result, Iran has, with American help, completely reconfigured the power structure of the Middle East and the Persian Gulf. The dominant power in the region going forward will be Iran, not the U.S. or Israel. Neighboring countries are already making their adjustments to this new reality. More distant powers will too. For years, the world has been dealing with an Iran constrained. It will now discover what Iran unleashed looks like.Iran doesn’t need a deal with the United States. The common assumption that a weak and impoverished Iran would eventually have to make some accommodation to American power, open the Strait of Hormuz, and set about tending to its badly damaged economy has proved mistaken. The Islamic Republic has rarely appeared weaker or more vulnerable than it has over the past two years. Last February, President Trump renewed his “maximum pressure” campaign of international sanctions, which severely damaged Iran’s already-weak economy and cut billions of dollars in state revenues. Israel and the United States then launched the 12-day war that June to destroy Iranian nuclear facilities. The war significantly damaged Iran’s program and revealed just how vulnerable the country was to Israeli and American strikes. Then, in February, the United States and Israel launched the most recent war with the killing of the regime’s supreme leader and the great majority of its senior officials, followed by more than five weeks of unremitting attacks on Iranian military capabilities.[Tom Nichols: Donald Trump effectively just told Iran to get a nuclear weapon]Yet through all of this, the regime has survived and made no concessions. On the contrary, Iran exposed America’s Achilles’ heel: the vulnerability of Iran’s neighbors. A major turning point came in mid-March, when Israel attacked Iran’s South Pars gas field, and Iran retaliated against Qatar’s Ras Laffan complex, the world’s largest liquefied-natural-gas facility. The attack showed that although Iran obviously could not defeat the United States in an air war, Iranian missiles and drones could inflict enough damage on the oil-and-gas infrastructure of the Gulf to plunge the world into a prolonged economic crisis. The Gulf States understood this immediately, and so did Trump. He halted attacks on Iranian energy targets, ordered a reluctant Israel to do the same, and soon brought the larger campaign to a stop without extracting a single Iranian concession. Ever since, and despite many threats, Trump has not once ordered another strike against Iranian energy infrastructure.This alone was enough to alter the balance of leverage between Iran and the United States. From April through last month, Trump repeatedly threatened to launch another massive attack against Iran. Each time, Iran threatened retaliation, Gulf States warned of the consequences, and Trump backed off. By his third or fourth bluff, Tehran had reason to conclude that the United States was no longer prepared to follow Iran up the ladder of escalation. Trump made this clear when he noted in mid-June that continuing the war would lead to “economic catastrophe,” possibly even a “depression,” and that he did not want to become President Herbert Hoover. Ever since, Trump has been trying, with notable desperation, to end the conflict.The memorandum of understanding that the U.S. and Iran adopted in June reflected this reality. Although phrased to save face for the United States as much as possible, the MOU was a clear Iranian victory. It declared that the Islamic Republic of Iran, and no other nation, would “make arrangements” for the “safe passage of commercial vessels” through the Strait of Hormuz. In dialogue with Oman, without intermediaries or other participants, Iran would determine the strait’s administration “in line with the applicable international law and the sovereign rights of coastal states.”The MOU did not call for a return to the prewar status quo. Neither did it provide the United States any say over future administration of the strait. Rather, it designated Iran as the only actor other than the weak Oman, and it even allowed Iran to charge nations for safe passage after 60 days. The MOU thus codified the defeat that the United States had suffered back in March, when Trump apparently realized that he either could not or would not risk further attacks on energy facilities in the region.In retrospect, Iran’s leaders do not seem to have believed that they needed the MOU. Supreme Leader Mojtaba Khamenei reportedly had to be persuaded by President Masoud Pezeshkian to sign it. Tehran’s relative indifference was understandable: The American concessions reflected such desperation to end the war that the Iranians could well have expected that the U.S. would eventually retreat, with or without a deal.Iranian leaders certainly did not hesitate to blow up the cease-fire almost immediately when the U.S. Navy began shepherding tankers through the Omani side of the strait. Trump may or may not have understood the full extent of the concessions his negotiators had made regarding control of the strait, but from the Iranian point of view, the Omani route was an attempt to recapture what the U.S. had given away. For a while, the United States and Iran engaged in tit-for-tat strikes, culminating in intense American attacks in mid-July. When these had no effect, Trump warned on July 15 that the United States was “going to knock out all their power plants” and “all their bridges” unless Iran negotiated. Yet again, no attack followed.Then the world, and the Iranians, learned one of the main reasons: Revelations that American stocks of crucial munitions were dangerously low, and that no less than the chairman of the Joint Chiefs of Staff himself was looking for an “off-ramp,” sent a clear signal about the future course of American strategy. A major assault on Iran would threaten American interests elsewhere by weakening the United States in the possible event of a Chinese move on Taiwan or a Russian onslaught against a NATO member.Missile shortages would also increase the hazards involved in a massive attack on Iranian infrastructure. The U.S. would be forced to send more manned aircraft within range of Iranian air defenses, and it would have relatively few interceptors on hand to protect the Gulf States and its own regional bases. The risk of American casualties would be high, as would the danger to the region’s energy infrastructure. And nothing would guarantee that such an assault would be any more effective than the five-plus weeks of bombings were earlier this year.American actions have made plain that Washington fears escalation more than Iran does—not just for now, but for the future. This places limits on what the United States can do even at low levels of conflict. Because any military action against Iran risks stepping onto an escalation ladder that the U.S. does not want to ascend, even tit-for-tat strikes seem no longer to be part of American strategy. The president has reportedly told his advisers that he does not want to order more strikes. The Iranians have struck at several UAE ships this month and even fired ballistic missiles at the country, but the United States has not responded since July—a fact undoubtedly noted by the UAE and Iran’s other neighbors.[Vivian Salama: From ‘indispensable’ ally to target of annihilation]Given the evident American reluctance to fight another major campaign, Iran has reason to wonder what it can get from a deal that it will not get anyway without one. Senior Iranian officials are now calling for the withdrawal of American forces, the lifting of the American naval blockade and all sanctions, the freeing of Iran’s frozen assets, and the payment of war reparations. The conventional wisdom is that Iran’s leaders know that these demands are nonstarters for Washington and that they are therefore either rubbing Trump’s nose in defeat, angling for a better deal, or overplaying their hand. Many observers still assume that control of the strait is a bargaining chip to squeeze more concessions out of the United States or get Trump back to the MOU. But we are well past all that. A victor does not have to go back to the bargaining table except to set the terms of surrender.Iran has now laid out those terms. They may appear maximalist and excessive, but Tehran must hardly believe that it has reason to ask for less. Iran has made clear for months that control of the strait is not negotiable. The notion, constantly floated by the Trump administration and the media, that the Iranians can’t make up their minds and that they keep shifting their positions is nonsense. As far back as April, Mojtaba declared that Iran would implement “new legal frameworks and management” of the strait and that “foreigners who come from thousands of kilometers away” had no place in the Gulf, “except at the bottom of its waters.” On a day commemorating Iran’s defeat of Portugal in the strait in 1622, he declared that “by the will and power of God, the bright future of the Persian Gulf region will be a future without America.”The idea that, having survived both military strikes and sanctions, Iran will now succumb to sanctions alone is deluded. Mojtaba has overhauled Iran’s national-security leadership and installed veterans of the Islamic Revolutionary Guard Corps in top positions. Former IRGC Commander Mohsen Rezaei now heads the Supreme National Security Council, and other hard-line security officials have been elevated. The regime emerging from the war is being reorganized by men who believe that Iran survived an American-Israeli attempt to destroy it and that defiance, not compromise, produced victory.But this is not just triumphalism. For Iran, control of the strait is neither a luxury nor a bargaining chip. Given the likelihood that, at some future point, Israel or the United States will attack again, deal or no deal, the strait provides Iran’s strongest and surest deterrent. It is also the key to unlocking many of the shackles that a U.S.-dominated world order placed on Iran over the course of decades, and to undoing a regional and global economic system designed to exclude and impoverish it. Some so-called moderates within the Iranian establishment may well regard the strait as a bargaining chip, but they are not winning the argument, for reasons that are not hard to understand. An IRGC spokesperson stated the regime’s perspective plainly: “For us, the Strait of Hormuz is not merely an economic waterway, but rather a key component of our geopolitical and strategic power.”Iran has been establishing the mechanisms of control for months and instructing shipowners and nations as to how the system will operate. It created the Persian Gulf Strait Authority and demanded that shipping companies register with it, obtain permits, follow Iran-designated routes, and pay for Iran-provided insurance and security.Neither is Iran claiming merely the right to collect money. It is also claiming the right to decide who may pass. It has proposed excluding vessels associated with governments it deems hostile, such as the U.S. and Israel, and it has demanded compensation from nations that participated in attacks against it. Iran is establishing the principle that passage through the strait will henceforth be a privilege that Tehran can grant, condition, delay, or deny. Other nations have already begun acquiescing to the new arrangement. India, Pakistan, Iraq, Turkey, China, and others have sought to come to terms.Iran’s control of the Strait of Hormuz is a more useful instrument of power than a nuclear weapon would be. A nuclear weapon might deter an attack, but control of the strait gives Iran leverage every day, over dozens of countries. With it, Iran can reward friends, punish enemies, extract revenue, force the loosening of sanctions, and make governments think twice before opposing Iranian policies. It can do all of this without firing a shot, and while preserving the ability to threaten violence when necessary.The sanctions strategy that for decades served to isolate Iran rested on international cooperation. Nations that depend on access to the strait—Japan and South Korea, for example—will have to choose between access to a reliable energy supply and participation in American-backed sanctions. Will they choose solidarity with Washington—this Washington—over their economic interests? In the new order that Iran is creating, a global sanctions regime is likely to be unsustainable.Iran will probably sustain its control over energy flows for at least a couple of years. The most optimistic projections suggest that establishing alternative pipelines and export routes that circumvent the Strait of Hormuz will take this long. But one wonders whether these will even come to fruition. New pipelines, ports, and energy facilities will be just as vulnerable to Iranian missiles and drones as the old ones were. Will Iran simply stand by while neighboring states construct the means to escape its control? The small states that must build and protect such routes are going to be wary of incurring Iran’s wrath, and American protection has proved inadequate. Iran is already trying to draw Iraq away from developing alternative oil-export corridors, in part by offering safe passage for Iraqi tankers on Iranian terms.The regional adjustment has begun. Gulf rulers who once counted on an American security guarantee must now make their peace with the power that proved capable of defeating their protector. Saudi Arabia’s rejection of the U.S.- and Israel-backed Abraham Accords in favor of a strategic compact with Pakistan and Turkey hints at the shape of the future. The Abraham Accords represented the consolidation of Israeli power and influence in the region and the further containment of Iran. The Mecca pact is something else entirely. Neither Pakistan nor Turkey regards Iran as a major threat; Pakistan, like Iran, has close relations with China; Israel regards Turkey as a regional threat second only to Iran. Instead of an American-Israeli order, this will be an alignment less implacably hostile to Iran, less friendly to Israel, and more independent of the United States. The signatories also have nuclear weapons in common: Pakistan has them, and the Turks and Saudis want them.[Arash Azizi: Tehran has to make a choice]Meanwhile, Iran will be free to resume its own nuclear-weapons program without fear of another major attack. This fact in itself will transform the regional balance. Last year, Israel and the United States bombed Iran’s nuclear facilities for 12 days without facing serious Iranian retaliation. Now Iran has been emboldened to use its control of the strait, and threats against neighboring states and their energy infrastructure, to deter any such strikes for the foreseeable future. American missile and interceptor stocks will take a long time to replenish, and may well be needed in other parts of the world in years to come; Iran will all the while be rearming with Russian and Chinese help, potentially leaving the U.S. in a worse position a year from now than it is in today.The effects will extend far beyond the Middle East. American allies in Asia and Europe can see that a relatively brief war against a second-rank power has consumed much of America’s supply of the weapons needed for missile defense. They can see that the United States began a war it could not finish, exposed its partners to retaliation, and then stopped when the costs became too great. Beijing’s conclusions about Taiwan, and Moscow’s conclusions about Europe, may be impossible to know. But America’s allies will inevitably be asking whether Washington has the weapons, stamina, and political will to sustain another major conflict. In fact, they already are.That the Iranian regime could fall is, of course, possible. It is corrupt, repressive, economically incompetent, and widely hated by its people. But it had all of these weaknesses before the war. What it did not have was control of the world’s most important energy choke point, the prospect of growing revenues and influence, the demonstrated ability to deter the United States, and the prestige of an impossible victory.A regime that survived what much of the world believed would destroy it, and then forced the world’s dominant power to retreat, will likely emerge strengthened, at least for a time. Such success tends to breed confidence, and perhaps overconfidence. But it is not likely to make Iran’s leaders less ambitious or less committed to the faith that saw them through this miraculous triumph. Recently, senior Iranian officials began talking publicly about adopting a “fully offensive” posture, and reports have emerged of Iranian plans to expand its targets to include European countries hosting American bases. To see stories in The New York Times asking, “Who will blink first?” is amusing, given that the Iranians until now have never once blinked, while the Trump administration has done nothing but blink. Iran may even start fighting again to force the U.S. to lift the naval blockade. Given the American administration’s proven fear of escalation, the hope is not unreasonable. The world has spent decades worrying about what Iran might do if it acquired a nuclear weapon. It should now worry about something even more consequential: an Iran that has defeated the United States, no longer fears American attack, and controls access to the Persian Gulf. Nuclear weapons alone could never have given Iran this kind of power. The failed U.S. and Israeli war with Iran has.