Is the Middle East conflict really coming to an end?

Everyone hopes the Middle East war will end as soon as possible.

The Trump administration’s remarks about withdrawing troops within “three weeks,” the confirmed dates for his visit to China in May, the 10 oil tankers being cleared through the Strait of Hormuz, the removal of the Iranian foreign minister and the speaker from the strike list, rumors of secret contacts between the U.S. and Iran…

These signals all point to a huge possibility that the Middle East war could end in the short term.

The best time for a war to end was yesterday, and the next best time is now. For the Trump administration, there is nothing to be gained by letting the fighting drag on. What’s in front of him is not a choice between “good and bad,” but between “worse and worst.” Only by going as fast and decisive as possible can he prevent the fighting from spilling over—hurting the midterm elections in November this year, and even further affecting the 2028 presidential election.

The Strait of Hormuz and the energy power struggle

If the war truly moves into its final stretch, what kind of state will the Strait of Hormuz move toward? Will it be kept under long-term blockade?

Judging from real-world conditions, this possibility is actually not high. Even if the Iranian regime doesn’t change hands, after going through a round of military strikes, its overall strength would be clearly weakened, making it difficult to rely on a single strait for a long-term standoff against the world.

More importantly, this is not only a European problem. The first to feel the pressure could, in fact, be one of Iran’s most important buyers: China.

Europe can still reroute energy from other regions, but China’s dependence on the Strait of Hormuz is higher. Once the shipping lane is obstructed for the long term, the pressure on China would become more direct. Therefore, one of the core variables in this matter is actually the attitude of the Chinese side—especially how the U.S. and China communicate and coordinate—because this very likely becomes a key factor affecting how the situation unfolds afterward.

Meanwhile, the U.S. has clearly stronger capacity to withstand pressure on this issue. Over the past few years, the degree of domestic energy production in the U.S. has increased significantly, and it no longer depends on Middle East crude oil to the same extent as in the past. From the supply side, even if the Strait of Hormuz develops a problem, the direct impact on the U.S. homeland would be relatively limited. What would truly be affected is mainly European and Asian countries.

Of course, there is also a darker—but still realistic—scenario: Iran might not have the ability to completely block the strait, but it could shift to “charging for passage,” effectively extorting past oil tankers. This approach would also create continuing disruption.

The U.S. has already made clear that it should not accept this kind of behavior, but “whether to accept” and “whether it can stop it” are two different things.

In this situation, the responses among different countries are likely to diverge. For example, if Iran allows passage “for China to get a pass” to maintain its survival, then the trade routes and flows could be reshaped. Some intermediary links—transshipment, resale, and arbitrage—could all emerge, but this might also lead Chinese businessmen to smuggle the oil they bought at low prices into Europe for enormous profits, making the problem even more complicated.

A chaotic Iranian regime

The New York Times recently ran a series of reports about Iran, including several reporters who have long studied authoritarian systems. They put forward a key judgment: Iran internally is currently highly divided, the power structure is unclear, and even, to a certain extent, there is a situation where “no one truly pulls the trigger.”

According to the report, during Iran’s large-scale protests in 2019, the Iranian regime had actually once been close to the brink of collapse; its internal condition was very fragile, though the outside world didn’t know. But on the surface, at that time Khamenei still “held down” the situation through a series of measures, making the regime appear to have stabilized again and successfully getting through that crisis.

The problem is that Khamenei was killed in a joint U.S.-Israeli strike two months ago. Whether his son Mujtaba can truly take over this rotten mess amid shellfire and chaos is a question that no one can give a definite answer to.

Against this background, Trump’s strategy is fairly obvious. He isn’t simply negotiating with a stable government; he is trying to identify, and even filter, a faction inside Iran that is more “pro-U.S.” or more cooperative.

Once the negotiations are reached, the U.S. may support this faction to move into power through external force.

The most reputable “force that can be supported” right now is Reza Pahlavi.

The exiled prince—after forty years

In 1978, the 17-year-old Pahlavi went to the U.S. to receive pilot training. In 1979, one year later, the Islamic Revolution broke out; the “Pahlavi dynasty” and the “Iranian Empire” ended, and the monarchy was abolished. After that, there was a change of regime, the country’s name became the “Islamic Republic of Iran.” He never made it back again, settling in the U.S.

Over the following four decades, he maneuvered between Western think tanks and media outlets as an exiled crown prince, never leaving Iran’s political horizon.

Without legitimacy of name, words are not in order; without words in order, nothing can be accomplished. When an old regime collapses and rival power centers rise, having bloodline ties to the previous ruling dynasty is a major political asset.

And now, Pahlavi has arrived at the most representative “spotlight moment” of his exile career. At the end of February this year, when Khamenei was killed in a joint U.S.-Israeli operation, Pahlavi carried out intensive political mobilization in March.

He has repeatedly said that his goal is not necessarily to restore the monarchy, but to give the Iranian people freedom to choose their form of government. If the people choose a republic, he says he will accept it. He frequently appears in Western media and think tank events, calling on Western countries to put pressure on the Iranian government and to support human rights movements inside Iran (such as the “Women, Life, Freedom” protests in recent years).

The most core events are his speech at CPAC (the Conservative Political Action Conference in the U.S.) held on March 28, 2026 in Texas, and the rally support he launched in Washington in the same month.

At CPAC, Pahlavi’s speech is highly compelling. Its core message includes: deeply linking Iran’s future to America’s values. He tells the audience that a free Iran will no longer be a nuclear threat, will no longer support terrorism, and will no longer block the Strait of Hormuz. In addition, Iran would establish strategic partnerships with the U.S. and Israel, which would bring potential benefits exceeding $1 trillion to the U.S. economy.

At the end of his speech, he even imitates one of Trump’s slogans, throwing out the line that makes the whole room erupt: “President Trump is making America great again, and I plan to make Iran great again. MIGA.”

He also deliberately addresses the biggest doubts from the outside world. He says Iran is not Iraq; he won’t repeat the tragedy of those years’ “de-Baathification,” and he won’t let a power vacuum evolve into anarchy. He promises to preserve the existing bureaucratic institutions and some military facilities, only removing the top-level theocratic oppression.

The Western media’s characterization has also quietly shifted this month. Fox News and the Jerusalem Post’s introductions of him are no longer “former crown prince,” but “leader of Iran’s opposition.”

Iranian Americans at a rally in Copley Square, calling for the collapse of the Islamic Republic of Iran

“Crossing cities, generations, and social classes, Pahlavi has become the only widely recognized opposition figure with genuine legitimacy; his name is shouted across the country.” A Jerusalem Post article notes: “For many Iranians, he isn’t just one of many political options. He represents a clear break with the Islamic Republic, and a bond that carries continuity for Iran beyond it.”

Pahlavi is not just a symbolic figure; over the past two years, he has done a great deal of substantial preparation.

In April 2025, he officially launched the “Iran Prosperity Project,” a political transition operations manual written over several years by more than 100 experts, spanning 170 pages. Its core logic is to shift the focus from “how to overthrow” to “what to do on Day 1 through Day 180 after the overthrow”—lifting sanctions, reclaiming $120 billion to $150 billion in overseas frozen assets, rebuilding energy supply, integrating the military, and holding a national referendum.

His focus is to prevent post-regime-collapse Iran from falling into an Iraq- or Libya-style anarchy.

In October 2025, he released a supporting digital mobilization platform, “We Take Back Iran.” According to his team, as of early 2026, tens of thousands of Iran’s active-duty security forces, police, and government workers have registered through the platform, saying they are willing to defect in the event of a regime change.

In Pahlavi’s “We Take Back Iran” plan, the most core political bet is a call for Iran’s regular armed forces (Artesh) to defect. This armed force, with roughly 350,000 troops, exists in parallel with the Islamic Revolutionary Guard Corps (IRGC) within the system, but it has long been marginalized.

Long-standing contradictions inside the Iranian military

The long-standing conflict between the two armies in Iran is also another entry point for an Iranian regime change.

Within Iran’s highly militarized theocratic state, the confrontation between the regular armed forces (Artesh) and the IRGC is not something that appeared overnight. It is a structural poison that has been buried since the beginning of state-building in 1979. These two armed forces are completely different in bloodline and in soul.

Artesh is Iran’s long-established regular army. Its professional traditions, military regulations, and even family memories of many senior generals can all be traced back to the more secular, more nationalist-minded Pahlavi dynasty era. For them, what they defend is “the land of Darius and Cyrus.”

The IRGC, however, is a “private army” built by Khamenei and his predecessors to consolidate their rule. Therefore, the IRGC doesn’t just control Iran’s most elite missile units and its richest overseas secret accounts—it has also monopolized the country’s construction, telecommunications, and energy industries through its massive business empire.

In the Iranian capital, Tehran, a mid-level IRGC officer might own a mansion in the north of the city, while an Artesh colonel might still be worrying about basic medical insurance for the whole family. The conflict between the two has already been exacerbated to a tipping point in the war in 2026.

According to battlefield reports from mid-March 2026, when responding to external airstrikes, Artesh took on a large share of front-line air defense and territorial defense tasks, but it had extremely scarce supplies. There are reports that the IRGC—which controls the key arteries of logistics—refused to provide medical transport for injured Artesh soldiers, and even intercepted ammunition. This has sparked immense anger within Artesh.

There are already signs that the U.S. military is maintaining informal communication with senior Iranian Artesh officials via Qatar.

All of these analyses ultimately point to the same thing: in today’s Iran of warlords vying for power, the U.S. is also identifying, waiting for, and helping the most suitable “local regime” to regain power in Iran.

Real pressure from the U.S. midterm elections

The echoes of war ultimately transmit to the most real place of all: gas stations.

As the midterm elections approach, the negative feedback effect of the Iran war on U.S. domestic politics is becoming apparent.

One key variable is that support for the Iran war inside the U.S. is already low to begin with. This is also one aspect many analysts have been criticizing about Trump: the war’s public relations basically failed, and you could even say that an effective narrative was never built from the start. For ordinary Americans, they may not care about the complex logic of geopolitics, but they very much care about their cost of living—like gas prices.

So the information is layered. For people who pay attention to news or who already strongly support Trump, they may feel that the war is “important” in the big picture and relates to global developments, energy, and geopolitics. But for most ordinary Americans, their feelings are very specific: spending $100 more each week at the gas pump is more direct than any grand narrative.

Now, in many places, gas prices have already risen to $3.8, and in some places even above $4 per gallon. In that situation, Trump emphasizes that “this is short-term pain,” and logically that may make sense, but psychologically with voters it is hard to sustain. Because for most people, short-term pain is precisely the clearest and hardest to ignore kind of pain.

As for whether it will translate into votes, any judgment is still too early. But it is certain that inflation is eroding trust in the government, and the “kitchen-economy” factor is becoming decisive again.

From the perspective of the congressional landscape, the direct impact of the war itself is limited. Affected by economic factors such as higher gasoline prices, if votes were cast now, the Republicans might lose the House of Representatives. But there are still 7 months until the midterm election, the war has not ended, and the situation remains unclear.

In addition, anti-war sentiment inside the U.S. has not formed an overwhelming consensus. Those opposed have not built strong mobilization, and those who are not opposed are not particularly firm either. This “middle stance” is actually difficult to turn into dramatic swings at the ballot box.

Meaningful analysis—at least—can only be made after June and July, by breaking down about 20 to 25 key swing seats one by one, in order to form a relatively reliable judgment.

Although the Republicans face the risk of losing the House, the Senate landscape is much more stable.

If Democrats want to truly change the situation, they would need to secure at least 4 additional seats on top of holding their current ones to have a real advantage; winning 3 seats would not matter much, because in a 50:50 split, the vice president’s tiebreaking vote would break the stalemate.

So based on the current seat-by-state structure, it is very difficult for Democrats to win the Senate. In places like Texas and Alaska, Democrats basically have no realistic chance. By contrast, swing states like New Hampshire—where there is some variability—could offer more opportunity; in addition, North Carolina could also become a focus of Democrats’ competition.

Overall, the Democrats’ theoretical “ceiling” is to win four seats, but realistically, it is more likely to be an increase of one to two seats—and the race has not yet even entered the most intense stage. Many states are still holding primaries within the party. For example, in Texas, the Democratic candidate being put forward lacks thorough vetting, and past statements are being unearthed and scrutinized; these factors will all weaken their competitiveness.

In the mid-to-late stage of the 2028 election, the script will be one of a “divided Congress”: Republicans control the Senate to secure key appointments and diplomatic powers, while Democrats— even if they retake the House—would face a “policy vacuum period” caused by legislative gridlock.

During this period, because fiscal subsidies would be hard to pass, large-scale domestic stimulus packages would die in the womb. Although this kind of political stalemate would reduce government efficiency, from a macro perspective it could instead make U.S. policy even more coherent in core areas—such as energy extraction and border security—through a one-way reinforcement via executive orders.

Repricing in financial markets

In the current chaos surrounding Iran, the valuation models for global macro assets are undergoing a profound reconstruction.

The core variable behind this repricing is that the U.S. is using its energy advantage to carry out a targeted extraction and redistribution of global wealth. The performance of the crude oil market shows an extreme kind of asymmetry: in the short term, fears of supply disruptions support oil prices as they fluctuate at historical highs, but smart money has already started pricing in “post-conflict supply abundance.”

With the U.S. homeland’s production capacity reaching its maximum release and Venezuela’s development rights being reactivated, an energy supply order dominated by the West is taking shape. This means the market bargaining power of Middle East crude oil is facing permanent dilution.

In the currency markets, the dollar’s dominance has not only failed to be weakened amid the turmoil—it has been reinforced in reverse. By contrast, the euro is trapped in a long-term depreciation channel driven by energy shortages and political fragmentation. The blame-shifting by France and Spain in military action not only exposes Europe’s weakness in defense, but also deals a severe blow to market confidence in the euro. Because Europe lacks an energy moat as deep as the U.S.’s, this lack of economic sovereignty is turning into a currency-exchange-rate disaster. Under the potential impact of proposed fiscal plans such as the “Save America Act,” global capital may accelerate its return to the U.S., seeking a safe haven amid geopolitical storms.

And in this script, gold’s rise comes from three overlapping drivers:

First is the geopolitical risk premium. Before Pahlavi truly establishes firm footing, there will inevitably be a vacuum period. No one knows what Iran will ultimately become. Until the situation fully settles, the IRGC has not yet been thoroughly dismantled; remnants still exist, and regional proxies remain active. Gold will stay at a high level until the situation becomes clear. This driver will continue until the geopolitical picture becomes truly clear.

Second is structural pressure on U.S. dollar credit. Even if a Pahlavi regime is ultimately established and oil-dollar expansion increases, before that happens the U.S. has already endured an extremely expensive war, a rebound in inflation, and renewed questions about the sustainability of U.S. fiscal policy. In this process, gold plays the role of “fiat currency credit hedging,” not merely a safe-haven tool for geopolitical risk.

Third is a structural trend of global central banks accumulating gold. This trend has formed since 2022. The Middle East war will only accelerate it, not reverse it.

As for Bitcoin, its impact needs to be looked at in two dimensions.

The first dimension is liquidity.

Falling oil prices, easing inflation, and the opening up of room for the Fed to cut rates—this is a macro environment of renewed liquidity loosening. Historically, whenever the Fed turns toward easing, Bitcoin has been one of the biggest beneficiaries, because its sensitivity to liquidity far exceeds any traditional asset. In this dimension, Bitcoin is clearly a beneficiary.

In the past few years, Bitcoin’s correlation with the Nasdaq has already become quite high. Whenever global risk premiums spike—whether the pandemic shock in March 2020, the rate-hike cycle in 2022, or any major geopolitical event—Bitcoin has not displayed the “safe-haven asset” attributes it should theoretically have. Instead, it has fallen along with risk assets, and the declines are often larger.

The reason is straightforward: Bitcoin’s marginal holders are still primarily institutional investors and retail traders with relatively high risk appetite. When liquidity tightens, they prioritize selling the most volatile asset in their portfolio to obtain cash. And Bitcoin, precisely, is the most volatile asset among their holdings.

So in the first phase of war breaking out, oil prices surging, and global risk sentiment collapsing, Bitcoin will likely fall together with the Nasdaq, and it could fall harder. This is not a logical contradiction; it’s determined by market structure.

Bitcoin’s key variable is not the war itself, but the Fed’s reaction path. If a surge in oil prices forces the Fed to tighten liquidity again, Bitcoin will likely fall with risk assets in the short term, with a potentially quite large decline. But if the Fed is compelled to compromise between inflation and recession—choosing to maintain easing or even restart QE—Bitcoin will be one of the most direct beneficiaries.