The Phoenix Trick and the US-Iran War: The War Powers Act, the “ended” war, and the new escalation

62 days of war and a perfidious constitutional loophole: How Trump 'ended' the conflict with Iran via letter

In the spring of 2026, a new geopolitical crisis rocked the world: The US, under the leadership of President Donald Trump, launched a massive military strike against Iran with "Operation Epic Fury." But what was planned as a swift, devastating attack on the Iranian arms industry quickly escalated into a global economic and constitutional stress test. While the strategically vital Strait of Hormuz became an unpredictable bottleneck for world trade and drove oil prices to alarming heights, Trump employed an unprecedented legal sleight of hand: To circumvent the 60-day period stipulated by the US War Powers Resolution and sideline Congress on the issue of war and peace, he simply declared the fighting over by letter—only to reignite it shortly thereafter. The following analysis sheds light on this disturbing erosion of democratic checks and balances and reveals the devastating domino effects on global energy markets, the existential crisis facing German merchant shipping, and the unexpected winners of this conflict.

Related to this:

• No peace, just empty promises – The Iran conflict as a geopolitical chess game against China

Legal time architecture as a weapon of war: How Trump is turning the War Powers Resolution into an Achilles' heel

The foundation: A law designed to tame presidents

The War Powers Resolution of 1973 is one of the rare examples in American constitutional law where Congress actually attempted to limit presidential power after a military catastrophe. Created as a legislative reaction to the debacle of the Vietnam War, in which several presidents sent hundreds of thousands of troops into battle without ever obtaining a formal declaration of war from Congress, the law codifies a simple rule of thumb: Whoever, as commander-in-chief, is waging war has sixty days before Congress has the final say. A one-time extension of thirty days is possible, provided the president confirms in writing that the time is needed to initiate an orderly withdrawal of troops. After that, the president is legally obligated to either cease hostilities or obtain formal congressional authorization.

The law was intended to prevent wars that no one has declared. In the political practice of the past decades, however, it has primarily demonstrated one thing: that a determined president who wants to ignore Congress can do so with little constitutional effort. Bill Clinton waged the 1999 Kosovo War for months beyond the sixty-day limit without ever receiving authorization; Congress even explicitly rejected a resolution to authorize it. Barack Obama let the deadline pass in the 2011 Libyan War, arguing that the limited US involvement did not constitute combat as defined by the law. In a clear vote in October 2011, the House of Representatives denied him retroactive authorization. Thus, what was intended as a safeguard has, over the decades, proven to be a porous set of rules that derives its political value primarily from its symbolic power, not its enforceability.

Related to this:

• When a ceasefire becomes a farce: The war continues – The Iran war and its global shockwave | May 26 and 28, 2026

Phase 1: 62 days of war, declared over

On February 28, 2026, at 1:15 a.m. local time, the US Central Command (CENTCOM), acting on behalf of President Donald Trump, launched Operation Epic Fury, a coordinated US-Israeli offensive against Iran. The stated objective was the destruction of Iran's ballistic missile capabilities, naval forces, and defense industry base. According to official Pentagon figures, over 5,000 targets were attacked and 50 Iranian ships were damaged or sunk in the first ten days. Trump officially informed Congress on March 2, which set the constitutionally mandated War Powers Resolution clock to May 1, 2026.

In 38 days, according to the White House, employing triumphant military rhetoric, the US military had achieved its objectives: More than 85 percent of Iran's arms manufacturing base was destroyed, over 13,000 targets were hit, 150 warships of 16 classes were sunk, every Iranian submarine was sealed on the seabed, and 97 percent of the country's naval mine stockpile was destroyed. These figures should naturally be interpreted with the usual caution regarding self-reported information from warring parties, but they nevertheless convey the scale of the operation. On April 7 and 8, 2026, the US and Iran, mediated by Pakistan, agreed to a two-week ceasefire, coupled with the temporary opening of the Strait of Hormuz. Trump unilaterally extended the ceasefire indefinitely on April 21.

As May 1st, the sixtieth day of the war, approached, domestic political pressure increased considerably. Republican Senator John Curtis had declared that he would not support continued military action beyond the sixty-day limit without congressional approval. Defense Secretary Pete Hegseth argued before a Senate committee that the existing ceasefire meant the deadline was paused or suspended. A 30-day extension was therefore unnecessary. This was a legally creative argument, but hardly constitutionally sound, since the War Powers Resolution does not provide for a pause.

Trump ultimately chose the boldest option: On May 1, 2026, he declared in a letter to Congress that the hostilities, which had begun on February 28, were over. A senior government official clarified to the German Press Agency: "In accordance with the War Powers Resolution, the hostilities that began on Saturday, February 28, have ended." No exchange of fire between US forces and Iran had been recorded since April 7. This was not a military assessment, but a constitutional maneuver of considerable audacity: The naval blockade of Iranian ports continued, the military presence in the Gulf remained, but on paper the war was over, and thus the sixty-day clock was reset.

The peace agreement: 14 points, many gaps

In mid-June 2026, Trump and Iranian President Massoud Peseshkian separately signed a framework agreement, which both sides officially presented as a historic breakthrough. The signing ceremony took place with pomp at the Palace of Versailles on June 17, and Pakistani Prime Minister Shehbaz Sharif, one of the main mediators alongside Qatar, announced the result on Platform X. The agreement comprises 14 points and stipulates: an immediate and permanent end to all military operations on all fronts, including Lebanon; the complete lifting of the US naval blockade of Iranian ports within 30 days of signing; the opening of the Strait of Hormuz for toll-free transit; and the release of frozen Iranian assets. In its most far-reaching economic commitment, the US pledged to establish, together with partner countries, a reconstruction and development fund for Iran of at least $300 billion.

Crucially, what the agreement doesn't address is this: Iran's nuclear program, its missile program, and its support for pro-Iranian militias like Hezbollah were deliberately excluded from the framework and relegated to a second phase of negotiations. The agreement set a maximum deadline of 60 days for concluding this second phase, extendable only by mutual consent. Iran had already signaled beforehand that the lifting of sanctions and the release of frozen assets were preconditions for any substantive negotiations. Thus, the negotiations began with a structural asymmetry: the US had won militarily, but had built up little leverage for the second phase in terms of negotiation tactics.

The opening round of talks in Switzerland, scheduled for June 18 at the luxury resort Bürgenstock, began with a telling blunder: US Vice President JD Vance canceled his trip at the last minute, forcing the Swiss government to officially postpone the start of negotiations. When the delegations finally convened, the mediators from Pakistan and Qatar issued an optimistic statement about encouraging progress and a positive and constructive atmosphere, without offering any concrete substance. While they did establish a direct line between the two sides to de-escalate potential incidents in the Strait of Hormuz, the real sticking points remained unaddressed.

The collapse: Four weeks until the next escalation

Nearly four weeks after the ceremonial signing in Versailles, Iranian Revolutionary Guards attacked several tankers again in the Strait of Hormuz on the night of July 7-8, 2026. The most serious attack targeted the Al-Rekayyat, a Qatari LNG carrier, whose engine room caught fire after being shelled and which threatened to explode before the crew could be evacuated. Simultaneously, a Saudi Arabian crude oil tanker was damaged, and another LNG tanker, sailing under the Liberian flag, was ordered by Iranian security forces to change course and head towards the Iranian coast. Qatar, which acted as a mediator and whose LNG tanker was thus directly hit for the first time, blamed Iran for the attack, calling it an unacceptable act of aggression against the safety of international shipping.

The US responded that same night with more than 80 airstrikes on Iranian targets. US Central Command (CENTCOM) reported destroying air defense systems, coastal missiles, and more than 60 Revolutionary Guard patrol boats in or near the Strait of Hormuz. Iran subsequently closed the Strait of Hormuz again indefinitely and attacked US bases in Bahrain and Kuwait with missiles and drones; the Revolutionary Guard claimed to have attacked 85 key American military installations. In the following days, the US further expanded its airstrikes, destroying dozens of targets in regions such as Qeshm Island, the port city of Bandar Abbas, and the Khuzestan province bordering Iraq, according to CENTCOM. At the same time, the US reinstated oil sanctions against Iran, effectively suspending the framework agreement reached in June.

The constitutional question is being revisited: When does the clock tick?

This brings the fundamental constitutional question back to the table, and this time it is even more delicate than before. With the resumption of active hostilities on July 7th/8th, 2026, the War Powers Clock will, according to all previous precedents, begin to run again, with the date of this escalation as the starting point. If the US attacks of July 7th and 8th are considered the start of a new war, the constitutional sixty-day period expires around the beginning of September 2026. This is an extraordinarily short timeframe for a conflict whose diplomatic framework has just collapsed.

Theoretically, Trump faces the same four options as before: He can seek congressional authorization, initiate the withdrawal of US troops, choose to re-legally construct the end of the war, or he can simply ignore the law, as Clinton and Obama did in other conflicts. The likelihood of genuine congressional authorization is low: On the one hand, the Senate has shown itself to be divided; on the other hand, Trump values ​​the institutional autonomy of the Executive Office too much to voluntarily curtail it. However, another phoenix tactic—that is, declaring the war over again while maintaining a military presence—would further erode the credibility of this approach and offer Congress a more difficult target for attack.

The president's peculiar rhetoric these days fits into this logic: Trump personally ordered the attacks and publicly threatened even worse, yet at a press conference said he didn't believe the conflict would reignite. This isn't a contradiction, but a method. As long as he doesn't declare a formal state of war and frames each escalation as a targeted act of retaliation, he is attempting to keep the sixty-day deadline institutionally suspended. The framework agreement from June, for its part, contains its own sixty-day negotiation period; this and the war powers deadline now overlap in a way that is intended to allow Washington legal and diplomatic flexibility, but leaves all other actors—from shipping companies and energy markets to neighboring states—in a state of maximum uncertainty.

The bottleneck of the global economy: Hormuz and its global price signals

The Strait of Hormuz is no ordinary shipping route. Under normal conditions, roughly 20 percent of the world's crude oil and 30 percent of global liquefied natural gas flow through this approximately 40-kilometer-wide strait between Iran in the north and Oman in the south every day. No other narrow passage in the world's oceans concentrates so much energy infrastructure in such a small area. By comparison, the disruption of Russian oil exports due to the Ukraine sanctions in 2022 removed seven million barrels per day from the market; under normal conditions, around 20 million barrels flow through Hormuz daily. The current potential for a shock is therefore three times higher than in 2022.

Since the start of Operation Epic Fury, this geography has unleashed its full economic pressure. On the very day of the first US attacks, the price of oil jumped by as much as 14 percent, the strongest daily increase since the turmoil of 2020. North Sea Brent crude approached the $95 mark in the first weeks of the war, and within a week the price of oil rose by 34 percent, significantly more than after the Russian invasion of Ukraine, whose strongest weekly increase was 25 percent. IEA chief Fatih Birol spoke of what was possibly the most severe energy crisis in decades: "To date, we have lost eleven million barrels per day, which is more than two major oil shocks combined."

Bank of America warned in a widely noted analysis that a continued blockade of the Strait of Hormuz could catapult oil prices above $150 per barrel, a level that, according to historical analysis, marks the tipping point for global recessions. The price reporting agency Argus Media raised its Brent crude price forecast for the third quarter of 2026 from $95 to an average of $120 per barrel and anticipates that even with a phased reopening of the strait starting in September, Iranian crude oil exports will not reach pre-war levels from January 2026 until March 2027. At the same time, Argus estimates that around one billion barrels of oil have not been delivered since the blockade began; two-thirds of this has been compensated for by industrial stockpiles. Strategic reserves are assuming an increasing share of this buffer role: The US has already released 58 million barrels from its Strategic Petroleum Reserve onto the market.

A remarkably cynical profiteer profile is emerging in the background: Russia is handling its raw material exports via alternative routes and profiting from the increased global market prices. According to calculations by the German-Russian Chamber of Commerce, Russia is generating additional monthly revenue of more than ten billion euros from the export of oil, gas, and fertilizers due to the price increase. At a price of 100 dollars per barrel, this would translate to approximately 50 billion dollars in additional revenue per year from oil and gas.

Hub for Security and Defense - Image: Xpert.Digital

The Security and Defence Hub offers expert advice and up-to-date information to effectively support companies and organizations in strengthening their role in European security and defence policy. Working closely with the SME Connect Defence Working Group, it particularly promotes small and medium-sized enterprises (SMEs) that wish to further develop their innovative capacity and competitiveness in the defence sector. As a central point of contact, the Hub thus creates a crucial bridge between SMEs and European defence strategy.

Related to this:

• The SME Connect Defence Working Group – Strengthening SMEs in European Defence

German shipping companies between war bonuses and political vacuum

For German merchant shipping, the conflict is not an abstract geopolitical issue, but an existential business problem. Since February 28, 2026, the sea lanes in the Persian Gulf have been virtually impassable for most German shipping companies. At the time of the German Shipowners' Association's annual report in March 2026, 51 ships belonging to German companies, with approximately 1,000 seafarers on board, were stranded in the Persian Gulf without a safe way to leave the region via the Strait of Hormuz. By the conclusion of the framework agreement in mid-June, according to the VDR, this number had dropped to 46 ships, whose crews were in a situation that maritime safety officer Irina Haesler described as tense. Depending on their cargo, affected shipping companies are losing tens of millions of euros per week.

It is not only the physical exclusion zone that is forcing companies into inactivity, but also the exploding insurance landscape. According to the German Insurance Association (GDV), coverage for ships in the Gulf region is still generally available, but at prices that completely upend the economic logic of many transit decisions. War risk insurance has increased in price by an average of five to six times since the outbreak of war, explained insurance broker Raik Becker of Marsh Risk. For an insured voyage through a high-risk area like the Gulf, shipping companies have to pay approximately three to seven percent of the ship's value; for large merchant vessels, this translates to six- to seven-figure sums for a single transit.

In this situation, the German Shipowners' Association (VDR) exerted pressure on several levels: Firstly, from the outset, it called for military escort protection for merchant ships, similar to the EU naval operation Aspides in the Red Sea. VDR Managing Director Martin Kröger emphasized that shipping companies could not protect their vessels alone, pointing to the need to secure the only access and exit routes from the sea area. The German government's reaction was sobering: In March 2026, Chancellor Friedrich Merz explicitly ruled out German participation, arguing that Germany was not part of this war and did not want to become part of it. The VDR expressed its disappointment, noting that while the G7 had agreed to prepare coordinated protective measures for merchant ships, Germany was the only G7 member to opt out.

Secondly, the German Shipowners' Association (VDR) tirelessly demanded robust safety guarantees. After a brief reopening and the immediate reclosure of the strait at the end of April, the association made it clear: Reliable and safe passage could not be guaranteed under these conditions. Shipping companies and crews needed stable and internationally coordinated framework conditions. Without robust safety guarantees, there could be no sustainable normalization of shipping traffic. Even after the signing of the framework agreement in June, VDR President Kröger reacted with cautious optimism, but without euphoria: An immediate return to regular operations could not be expected, as mines first had to be cleared and the numerous stranded ships could not all leave the region at the same time. Hapag-Lloyd estimated that at least three months would pass before normalization could occur.

Related to this:

• Continued: War as a weapon of US policy – ​​Why the Iran conflict is not a misfortune, but a tool

The asymmetric guerrilla forces of the Revolutionary Guard

To understand the strategic logic of Iranian actions, one must distinguish the institutional autonomy of the Islamic Revolutionary Guard Corps (IRGC) from the Iranian state leadership. The Revolutionary Guard is not a regular armed force, but a state within a state with its own economy, ideology, and power interests. Its maritime unit, the IRGC Navy, specializes in asymmetric naval warfare: swarm tactics using speedboats, mines, anti-ship missiles, and drones. These very capabilities were massively decimated by the US air strikes of the first phase of the war; more than 60 boats were destroyed again on the nights of July 7 and 8 alone.

The fact that the Revolutionary Guard continues to operate despite these losses illustrates the structural challenge: Asymmetric naval warfare does not require sophisticated carrier strike groups, but rather cheap, numerous, and decentralized platforms. Fast patrol boats can be replaced more quickly than aircraft carriers. The attack on the Al-Rekayyat was not only militarily but also politically calculated: The LNG tanker sailed under the Qatari flag, and Qatar is the key mediator between Washington and Tehran. Attacking the mediator sends a clear message to all parties, implying that parts of the Iranian leadership, especially the Revolutionary Guard, have no interest in the success of the negotiations.

Strategic geography: Whoever controls the strait controls the market

Iran's geostrategic leverage in this conflict has remained structurally stable despite its military defeat in the first phase of the war. Iran not only controls the northern shore of the Strait of Hormuz, but also holds three strategically located islands in the strait—Abu Musa and the Tunbs—which have been internationally disputed since their occupation in 1971. From these positions, the Revolutionary Guard can threaten the entire passage with relatively simple means. Even after the massive destruction of its military infrastructure by the US, Iran possesses sufficient residual capabilities to disrupt, if not block, shipping.

This creates a twofold dependency for Europe, which the conflict has painfully exposed. Directly, through rising energy prices: German oil import costs could rise to more than €60 billion if the price level remains high at $100 per barrel, warned the German-Russian Chamber of Commerce. Indirectly, through supply chain disruptions that extend far beyond the energy sector. Around 200 internationally operating crude oil and product tankers were effectively stranded in the Gulf after the start of Operation Epic Fury, as passage through the strait was considered extremely dangerous. Logistics companies such as Hapag-Lloyd, CMA CGM, and Kühne+Nagel rerouted ships around the Cape of Good Hope, which extended transport times by weeks and drove up freight rates.

Unpredictability as a system: Consequences for insurance and route planning

This last point deserves special attention, as it describes an economic pathology that extends beyond the current conflict. Markets, especially insurance markets, function efficiently only when risks are calculable. What the Trump administration is creating with its war-power tactics is precisely the opposite: systematically generated unpredictability.

When it is unclear whether the sixty-day War Powers Clock is running, stopped, or restarting, insurers cannot develop stable premium models. They react rationally by either denying coverage or raising premiums to a level that makes transit decisions economically prohibitive for shipping companies. When it is unclear whether a framework agreement is still in effect or already functionally suspended, no shipowner can responsibly make a transit decision through the Strait of Hormuz. When it is unclear whether the next wave of attacks by the Revolutionary Guard constitutes a new entry into the war or a one-off act of retaliation, no demand side—no power plant, no chemical plant, no refinery operator—can plan reliably.

The VDR (German Shipowners' Association) has succinctly summarized this diagnosis: Shipping companies and crews need not only physical safety guarantees, but also political reliability. This very political reliability is the scarcest commodity in a conflict waged by a government that uses legal ambiguity as a tool for control.

Geopolitical winners in the shadow of the fire

While Europe, the Arab Gulf states, and Asian importers suffer the effects of the Hormuz crisis, a number of actors are profiting from the instability. Russia is the most striking example: As its own raw material exports are under pressure due to Western sanctions, the supply disruption caused by Hormuz results in a global price increase, boosting its export revenues without Moscow having to lift a finger. In Moscow, there are already hopes for an oil price of $200 per barrel, which, according to calculations by the Foreign Chamber of Commerce, would lead to total revenues of $350 billion – roughly $247 billion above the budget.

Saudi Arabia also benefits in the short term from higher oil prices, but faces the structural dilemma that a sustained price shock would accelerate the energy transition in consumer countries, thereby undermining its own long-term demand growth. The US, which as a net oil exporter temporarily profits from high prices, is simultaneously experiencing a domestic consumer backlash against expensive gasoline prices, which Trump has stated will be detrimental to the congressional elections in November 2026.

China occupies a particularly exposed position: As the world's largest importer of crude oil and heavily dependent on Iranian oil, the People's Republic is especially vulnerable. An oil price of $150 would mean not only a price crisis for Asia, but also an availability crisis, explained BofA analyst Michael Widmer: While Western countries have strategic reserves and diversified sources of supply, Asia is trapped.

Related to this:

• The Iran war, the global economic earthquake, and why China, Japan, South Korea, and Singapore are losing more than the rest of the world

The September Clock and the open constitutional question

If the escalation of July 7th and 8th, 2026, is considered a new start to the war, then the next War Powers deadline expires at the beginning of September. In a war that is structurally proving to be a long-term crisis, this is a short timeframe. Trump will once again face the same choice he faced on May 1st, 2026: to circumvent Congress, to reinterpret the law legally, or simply to ignore it.

The erosion of the War Powers Act is no accident; it is deliberate. Presidents of all stripes have systematically undermined the practical enforceability of the law since 1973 because it stands in the way of their strategic freedom of action. The institutional logic of the presidential office almost inevitably produces actors who prioritize short-term decision-making over long-term legislative control. What is new about the 2026 US-Iran war is not the precedent set by circumvention, but the audacity of the scheme: Declaring an ongoing war, with a continuing blockade and combat troops still stationed, over by letter to Congress in order to reset a constitutional deadline, and potentially repeating this tactic a few weeks later, is a qualitatively different form of institutional erosion than Obama's rather technical dispute over the definition of combat.

The far-reaching consequences of this development extend beyond Iran. If a president can end and restart wars by decree, the War Powers Resolution loses its last vestige of effectiveness. Congress remains a mere spectator in the most crucial decision-making process of a democracy: the decision over war and peace. For shipping, energy markets, and all those who depend on political reliability in the Strait of Hormuz, this has very concrete implications: the outlook for this shipping route remains as unpredictable as the legal construct that governs it.

Markus Becker

I would be happy to serve as your personal advisor.

Head of Business Development

Chairman SME Connect Defense Working Group

LinkedIn

Konrad Wolfenstein

I would be happy to serve as your personal advisor.

You can contact me at wolfenstein∂xpert.digital or

Just call me on +49 7348 4088 965 .

LinkedIn