The U.S. and Israel thought they'd won.

Six weeks of bombing. Khamenei dead. Nuclear sites cratered. Air defenses shredded. By every normal measure, Iran should have quit.

Instead, Iran is still firing.

This is a country that can't win a war the normal way, so it changed the rules. If you hold oil stocks or gold miners, you need to understand what's happening.

What Actually Happened

Operation Epic Fury (U.S.) and Operation Roaring Lion (Israel) kicked off on February 28, 2026. The strikes were devastating. They killed the Ayatollah. They targeted dozens of generals. Every peace negotiator who sat at a table was blown up. Nuclear sites Fordow and Natanz were cratered. Iran's air defenses collapsed.

By any sane measure, Iran lost then and there.

White House Press Secretary Karoline Leavitt was even nice enough to tell them! She said The Donald would “unleash hell if they fail to understand that they have been defeated and will continue to be."

I wouldn’t accuse her of lying. In fact, I think she’s telling the truth. The problem isn’t that the Iranians don’t get it… It’s that the Iranians are playing a completely different game.

The Strait of Hormuz is still under threat. Shipping lanes are still dangerous. New commanders keep showing up even after repeated strikes. Why, you ask?

The Answer Is Simpler Than You Think

Iranian leaders believe dying in war is Allah's will. For those madmen, martyrdom is the goal. This is the operating system of the Islamic Republic.

More importantly, Iran uses what analysts call a "mosaic" defense. When senior leaders get killed, lower-level commanders act on their own. There's no single head to cut off. The body keeps fighting.

Like the Hydra of Greek myth, cutting off its heads is a futile endeavor. The heads keep growing back somehow.

Horizontal Escalation

Iran can't match the U.S. fighter-for-fighter or ship-for-ship. Trying would be suicide. So Iran went horizontal instead.

The war spread across the entire Persian Gulf. Iranian missiles and drones hit Kuwait, Saudi Arabia, Qatar, Bahrain, the UAE, and Oman—alongside Israel. This war isn't Iran vs. Israel anymore. It's Iran vs. the whole Gulf.

Then came the real shock.

Diego Garcia Changed Everything

Allegedly, Iran fired ballistic missiles at the U.S. Navy base on Diego Garcia, roughly 2,400 miles away in the South Indian Ocean. The missiles missed. But the range was what caught everyone’s attention.

Evidently, Iran proved it could hit targets far outside the Middle East.

European governments suddenly got very quiet. Before Diego Garcia, most of them thought this was someone else's problem. Now they understand it isn't.

The Missile Math

The U.S. estimates it destroyed about one-third of Iran's missiles. Another third may be damaged or buried underground. That leaves somewhere between 1,000 and 1,500 missiles at the ready.

Here's what matters: Iran has enough missiles to keep the Strait of Hormuz dangerous for months. It doesn't need to win. It just needs to make shipping too expensive to bother with. After a few months, the world’s economy crumbles. Now that’s leverage.

It’s a completely different objective… and it's working.

Oil Prices and the Real Risk

Brent crude spiked to around $126 a barrel when the Strait of Hormuz effectively closed. Every major oil route through the Gulf is now a war zone.

The Strait handles roughly 21% of global oil consumption. That's 21 million barrels a day. When Iran threatens to close it, markets panic—for good reason.

Will prices hit $200? Maybe. But not yet.

Will there be shortages? Yes, but the U.S. Strategic Petroleum Reserve exists for exactly this. Canada, Brazil, and Norway can ramp up output. It'll hurt. It won't be the end of the world.

The real risk is a long, grinding energy shock. Think 1973, not 2008. Prices stay high for months. That’s all you need. Everyone pays more for everything.

That's painful enough for a consumer up to his eyeballs in debt.

What It Means for Your Money

The bullish cases are obvious. Gold miners love geopolitical chaos plus inflation fears. There may still be some downside in the miners before we head up (especially in the silver miners), but we will head up.

Oil services companies benefit from high, sustained prices. Defense contractors benefit from a war that shows no signs of ending. Brazilian commodity plays like PBR could catch a tailwind, too.

The bearish cases are just as clear. Airlines are getting crushed by jet fuel costs. Consumer discretionary spending falls when energy costs eat up more of the household budget. European manufacturers, especially energy-intensive ones, are getting hammered.

Uranium should be a winner if you think Europe and Asia will re-adopt nuclear power to obviate the need for oil through the Strait of Hormuz.

Pick your scenario. Hedge accordingly.

Wrap Up

As my friend and colleague Jim Rickards wrote, “Iran is far from finished, and the global economic meltdown has just begun.”

The decoys work. The decentralized command works. The willingness to absorb massive losses works. The U.S. destroyed a third of the missiles. But Iran only needs enough to make shipping too dangerous and too expensive, not enough to defeat a superpower in open battle.

The Strait of Hormuz will stay dangerous. Oil prices will stay elevated. The global economy will churn through higher prices and tighter supply.

This is the new normal.

Iran is betting that the U.S. and Israel tire before Iran runs out of missiles. It's betting that the economic pain hits the American voter before it breaks the Iranian system. It's betting on time.

For now, time is on Iran's side.

The Strait stays hot. Prices stay high. And anyone who bet on a clean six-week resolution just learned an expensive lesson.