A month after Washington and Tehran apparently declared the end of the war, it has returned, and this time, it's dragging the entire Gulf economy down with it. American aircraft and warships on Thursday struck targets throughout Iran, for a sixth night, across the country, including coastal radar stations and military logistics facilities, according to Iranian official accounts, and a bridge and a hospital compound in Ahvaz, an official in Tehran described as an "atrocity. Iran retaliated within hours, launching missiles at a US base in Jordan, drones against American forces in Kuwait, and fire air raid sirens in as far as Bahrain. Explosions were reported in Qatar too. None of the above is supposed to have happened. The memorandum of understanding signed in mid-June in Pakistan was supposed to put the conflict, which flared into a major showdown in late February following the devastating joint US-Israeli attack on Iran's nuclear and military facilities, to bed. Rather, that truce has become a respite, not a peace, and the war that has been renewed for the last week has brought back a good deal of the restiveness from which it was a truce.

The rhetoric doesn't do the numbers justice. Oil prices rose about 12 percent this past week, with Brent now nearing $85 a barrel and West Texas Intermediate near $80 as confirmed shipments of crude through the Strait of Hormuz fell 62 percent to around 4.1 million barrels a day, down from its days as the world's fifth-busiest oil-transit route. That is not a number they can go through without emotion. It can be seen in refining margins, in the insurance premiums paid by shipping companies and in the rising unease of energy ministries in Tokyo to Berlin. The world should be concerned if the strait doesn't reopen properly within the next few weeks, says Fatih Birol, head of the International Energy Agency (IEA), this week to a Council on Foreign Relations audience, and “oil security is a very real issue.” His remarks came on the same day CENTCOM stated that it has had six consecutive nights of strikes and hours after Iran's military restated that traffic through the strait would never again look like it did before the war broke out.

Washington's own accounting of the cost is starting to catch up with the rhetoric. The House Republicans this week rolled through a $95 billion measure that was largely designed to continue funding operations against Iran, and the massive majority of that spending about $60 billion was for munitions and battlefield logistics, not for reconstruction or diplomacy. That comes on top of a previous Pentagon proposal north of $200 billion floated back in March, when the war had been underway just three weeks, that would have passed the defense budget of more than $840 billion for the fiscal year. Congressional Democrats have cited a host of prices including fuel and groceries that ordinary Americans are footing a war they didn't vote for in the first place, while polling shows that only about a quarter of the public supports the campaign. The divide between public appetite and military commitment is one of the more-striking subplots of this War, not only in the United States, but among the Gulf states that have found themselves taking Iranian retaliation in a fight that they did not initiate.

President Trump's own rhetoric has grown more extreme and strident.President Trump's own rhetoric has become firmer not softer. In a recent Fox News interview, he said the up-coming days would see strikes on Iran's power plants and bridges if Tehran does not come back to the table, calling it an ultimatum, not an escalation. There is some evidence that the door to diplomacy hasn't shut completely: Qatar has floated a new proposal to both capitals to try to resume talks, which Iranian officials reportedly now see as more favorable to their position than earlier drafts, and attacks on Qatari territory seem to have died down since it was put forward. Pakistan, which facilitated the initial memorandum, continues to urge the two sides to resume technical level negotiations. However, Iran's chief negotiator has publicly threatened that any deal would only be valid if its terms are actually observed, a nod to a US naval blockade of Iran ports that Tehran considers as an unwarranted violation of the June deal.

The difference with the first few weeks of the war is that targets are changing. American strikes have been focused on military assets until now. It is about to change, according to Israeli intelligence estimates that have been leaked to Channel 12, as civilian energy and transport infrastructure will be added to the list of targets in the coming week. If that comes to pass, it would be the highest level of escalation that few analysts predicted even a month ago and help to make sense of why energy analysts are no longer considering this a temporary price spike, but a structural repricing of Gulf risk. The Houthis have also threatened to close shipping routes through the Red Sea if the U.S. launches an attack on Iran's power grid, but Iran has indicated it might respond by pressuring the Houthis to close the Red Sea route as well, which would exacerbate the economic impact beyond the Gulf region.

The diplomatic avenues that are available on the table are far from promising and none of them will prove to withstand another night like last night. The 60-day window of the ceasefire is running out on mid-August, with everyone from trading floors to foreign ministries assuming this is no more a post-February war aftershock. It's the second one, and it's quieter in its proclamation, but not less real in its effects.