Not the Iran We Thought It Was: Shifting Power in the Persian Gulf

By Azu Ishiekwene

On paper, Iran has always looked formidable. A giant in the Persian Gulf, it is at least 75 times the size of Israel, with a population nearly tenfold. Historically and geographically, this has always felt like a modern David and Goliath match-up—with ancient prestige firmly on Iran’s side.

Under Cyrus the Great (circa 545–525 BC), the Persian Empire stretched as far as Egypt. For centuries, Iran’s military and cultural influence across the Middle East was unrivalled. Even in the 20th century, Iran stood its ground during the brutal eight-year war against Saddam Hussein’s Iraq.

And yet, since June 12, when Israel struck Iran’s nuclear facility, killing 14 atomic scientists and 16 top military officers, Iran’s response has been far less than what the world expected. A leaked U.S. intelligence report even suggests that, but for Donald Trump’s intervention, Iran’s Supreme Leader, Ayatollah Ali Khamenei, may have been a casualty in that strike.

In retaliation, Iran launched a barrage of missiles at Tel Aviv and Haifa, causing civilian casualties and briefly denting Israel’s famed Iron Dome. But the broader picture was clear: Iran—the warrior state, the defiant Islamic Republic—was rattled. Not only did Israel strike deep, but Prime Minister Benjamin Netanyahu claimed that Israel had “full control of Iranian skies.” Tehran offered no rebuttal.

What Went Wrong?

How did a country with such history and muscle become so vulnerable?

Iran’s apparent decline is not a recent event. It is the product of decades of economic strangulation, diplomatic isolation, and internal decay. Three persistent global suspicions have underpinned its isolation:

That Iran’s Shia Islamist ideology fuels radical extremist groups.
That it funds sworn enemies of Israel—namely Hamas in Gaza and Hezbollah in Lebanon.
That its nuclear enrichment programme is a cover for acquiring weapons of mass destruction.

These suspicions culminated in severe sanctions, particularly after 2015, from the U.S., U.K., France and others, dramatically curtailing Iran’s oil revenues and weakening its economy. Still, Iran found workarounds—tightening ties with China and Russia, diversifying its oil export routes, and maintaining a regional military presence.

Yet even as sanctions bit harder, Iran refused to fully comply with nuclear inspections, raising global alarm. Netanyahu had long pushed for a strike against Tehran, but post-Iraq war fatigue in Washington meant little appetite existed for another Middle East misadventure—especially among Democratic presidents like Obama and Biden.

Two Events Changed Everything

First came the October 7 Hamas attack on Israel, in which 1,200 Israelis were killed and 250 abducted. Though not directly linked to Iran, the attack was enough to transform Israeli domestic politics, embolden Netanyahu, and harden Israeli military doctrine. Hamas and Hezbollah became public enemy number one—and, by association, so did Tehran.

Then came Donald Trump’s re-election. Known for transactional diplomacy and his warm ties with Netanyahu, Trump’s return shifted the dynamics drastically. His administration had no patience for Tehran’s nuclear ambiguity. With the U.S. reasserting itself and Tehran showing signs of economic and political fatigue, Iran suddenly found itself cornered.

Strategic Collapse

So, what has changed in the region? How has Iran been so systematically weakened?

1. Collapse of the “Axis of Resistance”:
Iran’s regional allies—Hamas, Hezbollah, and Syria’s Bashar al-Assad—have been isolated or degraded. Israel’s attacks last September killed 13 Hezbollah members and injured Iran’s ambassador to Lebanon, sending shockwaves through Tehran’s power corridors. Even the once-defiant Houthis have been scattered. Iran stands more alone than ever.

2. Decapitation of Iran’s Military Elite:
Israel has directly targeted and eliminated key figures in Iran’s military establishment. Among the most notable losses is General Mohammad Hossein Bagheri, Chief of the General Staff, a man only one step away from the Supreme Leader himself. Iran’s once-vaunted air defense system now looks porous, its missile response increasingly symbolic.

3. Economic Breakdown and Abandoned Allies:
With Russia bogged down in Ukraine, Iran’s fallback ally is distracted. Sanctions have blocked access to modern weaponry, stalled military upgrades, and pushed the country deeper into economic despair. The regime is financially squeezed and diplomatically exposed.

A Humbling Turn

In an ironic twist, Tehran is now turning to Qatar and Egypt—two countries it has historically distrusted—for mediation. Israel’s brutal campaign in Gaza may yet constrain Netanyahu politically and morally, but the fact remains: Iran is in no position to dictate terms.

The question now is no longer whether Iran is a threat, but whether it has the capacity to survive as a regional power under the weight of military setbacks and diplomatic isolation.

After centuries of dominance—from Cyrus to Khomeini—is the sun finally setting on this ancient “Gunpowder Empire”? Or does the turban of the mullahs still conceal one final spell?

Vanguard

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