Iran threatens full retaliation as 18 US troops killed in conflict

Iran warned it would retaliate with full force if US troops set foot on its soil, as the conflict enters its sixth month with no diplomatic off-ramp in sight.

Iran warned it would unleash its full military capability against any US ground invasion, as the 11-week-old conflict has killed 18 American service members and pushed crude above $91 a barrel. "If the United States steps on Iranian soil, Iran will fight back with full force," Iran's state television said, as the Islamic Republic seeks to deter any expansion of the US air campaign into a ground operation.

The warning came as the US military completed its 11th consecutive night of strikes on Iranian military infrastructure, targeting aircraft hangars and drone storage sites, according to US Central Command. The escalation has cost an estimated $37.5 billion so far, Defense Secretary Pete Hegseth told lawmakers Tuesday, though sources familiar with the matter said the actual figure is far higher when including military construction and damaged bases.

The Strait of Hormuz, through which about one-fifth of the world's crude oil and natural gas flowed before the war, remains effectively closed, with both sides targeting commercial shipping. Iran retains roughly 70 percent of its prewar missile and drone stockpile, according to assessments reported in June, and has demonstrated the ability to strike US bases across Jordan, Kuwait, Bahrain and Qatar.

The threat of a ground invasion represents a significant escalation in a conflict that President Donald Trump has sought to contain to air and naval operations. Trump has been reluctant to commit US ground forces into Iran, fearing large numbers of American casualties and a return of the war to the center of public debate ahead of November's midterm elections. But the administration's strategy of degrading Iran's military capability from the air has not prevented the Islamic Republic from striking back.

Iran's missile and drone capabilities have proven more resilient than US officials anticipated. The country still has access to most of its missile sites and retains the ability to launch combined barrages designed to overwhelm air defenses, according to Nicole Grajewski, an expert on Iran's missile program at Sciences Po in Paris. "Contrary to a lot of the US statements from early parts of the war, Iran still retains quite a significant amount of missile and drone capabilities," Grajewski said.

The US has likely burned through more than 1,000 of its roughly 2,300 stockpile of Patriot interceptors and between 50 percent and 80 percent of its THAAD interceptors, according to estimates from the Center for Strategic and International Studies. "We do not have enough to safely sustain operations," one US official told the Washington Post this week.

Diplomatic Efforts Falter as Conflict Widens

Mediators from Qatar, Egypt and Pakistan have presented both sides with a proposal for a 10-day halt in fighting to revive an interim memorandum of understanding agreed last month, according to Axios. But the diplomatic push comes as both governments harden their public positions. Trump said Tuesday the US had "no interest in meeting," while Iranian Foreign Ministry spokesperson Esmaeil Baghaei confirmed mediators were active but declined to provide details.

The conflict has expanded beyond the Persian Gulf. Iran-aligned Houthi rebels in Yemen have declared a naval blockade on Saudi ports in the Red Sea, threatening the Bab el-Mandeb Strait — the southern gateway to a waterway that handles a significant portion of global container traffic. Saudi Arabia has been relying on a pipeline to the Red Sea to export millions of barrels of oil after the Strait of Hormuz closure.

The last time a major power confronted Iran with sustained military force was the 1980-1988 Iran-Iraq War, which resulted in hundreds of thousands of casualties and saw both sides attack oil tankers in the Persian Gulf. The current conflict has already disrupted global energy markets more severely, with Brent crude trading above $91 a barrel and US regular gasoline averaging $4 a gallon — a politically sensitive level ahead of the midterm elections.

For investors, the key risk is that the conflict draws in additional regional actors or triggers a sustained disruption to energy supplies that pushes oil toward $100 a barrel. Iran's threat of full retaliation against any ground invasion, combined with its demonstrated ability to strike US bases throughout the region, suggests the risks to American forces — and to global markets — may only grow the longer the war continues.

This article is for informational purposes only and does not constitute investment advice.