The CIA has assessed that the US-Iran conflict has entered an "infinite stalemate," with military strikes failing to force Tehran to the negotiating table, according to a report submitted to the Trump administration.
Back
CIA assessment warns of infinite US-Iran stalemate after 5 months of war
The CIA assessed the US-Iran conflict has entered an "infinite stalemate," with American and Israeli strikes failing to force Tehran to soften its negotiating stance, according to a July 20 report submitted to the Trump administration.
"The report paints a picture of a conflict stuck between peace and war — a state where neither side can achieve a decisive outcome," a current US official familiar with the assessment said. The report was authored primarily by the Central Intelligence Agency and briefed to senior White House officials.
Despite US and Israeli strikes that have killed multiple senior Iranian commanders and destroyed significant military assets, the assessment found that Iran retains strong resistance and survival capabilities. The conflict has now entered its fifth month since the February 28 escalation over the Strait of Hormuz, a chokepoint that handles about 21% of global oil trade, according to the US Energy Information Administration.
The assessment suggests that the geopolitical risk premium embedded in crude prices is unlikely to dissipate soon. Brent crude has remained elevated as traders price in supply disruption risks, while safe-haven assets including gold have drawn sustained bids. The standoff also threatens to draw in Gulf states more directly, with Iran having expanded strikes to civilian infrastructure in Kuwait and Saudi Arabia.
A Conflict Without Off-Ramps
The "infinite stalemate" reflects a conflict that has defied diplomatic resolution despite repeated mediation efforts. Pakistan and Qatar have been scrambling to develop an off-ramp, but the unraveling of a 14-point Memorandum of Understanding signed last month has undermined faith in any negotiated settlement. Iran suspended its MOU commitments on July 18, with Supreme Leader Mojtaba Khamenei declaring President Trump's signature "worthless and invalid."
The last time the US and Iran reached a similar impasse — during the 2019-2020 tanker war in the Persian Gulf — the standoff lasted 18 months before de-escalation took hold. During that period, Brent crude traded at an average $18 premium above pre-crisis levels, according to International Energy Agency data.
Escalation Risks Remain Elevated
The assessment comes as both sides show readiness to intensify the conflict. President Trump has threatened to strike Iran's deeply buried nuclear facility at Pickaxe Mountain, saying the site is ripe for "a nice big fat shot right in the front door." The US has also deployed additional fighter jets to the region, potentially presaging a broader attack.
Iran, meanwhile, has reportedly asked its Houthi partners in Yemen to prepare to close the Bab al-Mandab strait — the region's other critical chokepoint — and has broadened strikes to include targets in Jordan and Saudi Arabia. The conflict has already claimed American lives, with Iranian strikes killing at least two US soldiers in recent weeks.
Despite the escalation, both sides have left the door open to diplomacy. US Secretary of State Marco Rubio has welcomed an "open door" to talks, and Iran's foreign ministry spokesman has similarly highlighted a positive role for diplomacy. But the CIA assessment suggests any meaningful negotiation remains distant, leaving markets to price in a prolonged period of elevated geopolitical risk.
This article is for informational purposes only and does not constitute investment advice.
[1] US Intelligence: US and Iran Will Be Stuck in a Long-Term Standoff[2] More US strikes are unlikely to break standoff: Intelligence[3] U.S. strikes unlikely to move Iran, intelligence reports say[4] Is the Iran War Entering a Dangerous New Phase?[5] Trump’s Threat To Strike Iran’s Pickaxe Mountain Bunker’s “Front Door” Underscor...
