Six months after the war was supposed to have ended, Washington and Tehran are again engaged in a shooting war; what remains unclear on every trading floor in Singapore to London is whether Iran will strike back and if so, how far.

American forces attacked Iranian forces again late on Tuesday and in a few hours Iranian rockets were soaring toward what Tehran termed US assets in Jordan, Bahrain, Kuwait and Iraq. It's a course of events the area has seen happen so often since it first broke out on Feb. 28 that the drama is now becoming familiar. The difference lies not in the dance of the strike and counter-strike, but in the state of the country that is counter-striking. September Iran is a completely different Iran than the one that began this war.

The initial market response was the typical one. An earlier American attack on Iranian rocket launchers on Larak Island in the Strait of Hormuz pushed prices back above $90 a barrel, and more than 30 percent above pre-war levels, as traders dug out of an apparent lull. West Texas Intermediate was let down by it, however, as it breached $84. The price for every new round of the two sides' negotiations passes quicker through the commodity desks than through diplomatic channels, as the strait through which some 20% of the world's oil and gas passes is the pivot on which this whole conflict pivots.

That is exactly where Iran's remaining leverage lies and that is why its options (even if they are shrinking) are far from depleted. In the last six months, Tehran has proved that the war can cost anyone who falls within its range, targeting energy terminals in the Gulf states, ammunition depots, and even water and power plants in Kuwait, Bahrain and Jordan, and anyone who is considered to be supporting the U.S. war to strangle its economy is fair game.

The next step of those attacks from shipping lanes to upstream oil and gas sites is the most logical next step, and attacks on supply-side shocks have a longer lasting political impact in Washington than a tanker fire these days has in the eyes of insurers. A direct attack on desalination plants in the dry Gulf monarchies, a major financial centre for much of the world's capital is an even heavier weapon one that makes an oil war a humanitarian and financial war as well.

Iran's asymmetric arsenal hasn't left the country either. The shutdown of a small electricity substation has been attributed to Iranian-affiliated hackers by British authorities and the same hackers have been blamed for cyberattacks on water utilities in Minnesota by the U.S. government. Beirut-based intelligence agencies in the West still claim that the Revolutionary Guards have attempted to lure locals in Europe or North America to carry out sabotage or assassination activities, but Tehran has been successful so far in protecting itself through denying it. None of this requires the missile stockpile that sanctions, and six months of bombardment, have gradually eroded hence the appeal of such a leadership to those who want to cause pain without spending precious hardware.

The challenge for Tehran is that each of these options now has to be considered against an economy in actual freefall. The International Monetary Fund projects Iran's annual GDP growth will fall by over five percent this year, the biggest drop since the late 1980s, and inflation is in the vicinity of 69 percent. The rial is now worth about one dollar, down from a peak of 3,500 to the dollar in 2015.

Pre-war, exports were running at more than two million barrels a day, but this summer have dropped near to zero under the American naval blockade and only a few hundred thousand under the blockade have been able to get back on the water, an independent assessment estimates costing Tehran more than $400 million a day and some $140 billion so far, equivalent to almost 40 per cent of its pre-war production. President Masoud Pezeshkian himself has admitted that trade has been cut by approximately 30 percent, a rather public statement from the government which had for a number of years claimed that sanctions would be survivable.

It is this paradox that's governing every Iranian decision today. The regime is still able and willing to wage war with its military and secret forces and make it a painful experience for its neighbours and ultimately global energy and shipping markets already under strain from a combination of ‘stagflation' and an armed conflict thousands of miles away from their borders, thus requiring their central banks to reassess their rate paths. It is a war based on an economy that is crumbling in real time, however, and there is increasing awareness within Tehran, perhaps spreading to the new supreme leader, Ali Khamenei, that a prolonged conflict is just as dangerous to the regime's survival as any American airstrike. When Pezeshkian says he will return to former terms of the memorandum of understanding if Washington does too, it isn't about weakness, it's about numbers.

In the rest of the world the lesson is not so much who survives the next bout of exchange of fire but rather what would happen to energy security, shipping insurance, fertiliser supply chains if it continues to roll all the way into the autumn. But Iran has more weapons in its arsenal, more ways to attack the Gulf's infrastructure and more ways to operate deniably elsewhere, and all of these options have costs, and Iranian's economy is not as robust as it was before the war to handle them. But it's the imbalance that will determine whether this six-month war turns into a seven-month war or finally begins to find its way out.