There is a version of the U.S.–Iran war in which Washington, having decapitated parts of the Iranian leadership, presses a clear strategic advantage into a settlement that secures energy markets, restores deterrence, and leaves the Middle East more stable than before. According to Fiona Hill and Anne Applebaum — two of the most closely watched national-security thinkers in the English-speaking world — that is not the version unfolding. The version unfolding is one in which the president shows his cards to the adversary every morning, the adversary has every reason to wait, and the one tangible asset the conflict has produced is an Iranian chokehold over the Strait of Hormuz that Hill describes as “something like a nuclear weapon that they can use against the United States and against the Gulf states.”
Hill, a former senior director for Europe and Russia on the National Security Council who testified during Trump’s first impeachment, and Applebaum, a Pulitzer Prize-winning historian of authoritarianism and staff writer at The Atlantic, delivered their assessment in early August 2026 on The Prof G Pod with host Scott Galloway. The conversation is not a military briefing. It is a political-psychological autopsy of a war being fought without anyone in Washington having defined what winning looks like — or even asking the most basic question of any conflict: what do the people on the other side actually want?
The applause-to-policy ratio
Applebaum’s core claim is that Trump does not think strategically or historically, and that the deficit explains every zigzag in his wartime conduct. The internal monologue she reconstructs is not about Iran. It is about Trump:
“He’s not thinking about solving the problem on behalf of others,” she said. “He’s thinking entirely about himself.”
She elaborates: when the president looks at Iran, he does not ask how to solve the problem for Americans, for the people of the Middle East, or for the Iranian population. He asks how he emerges as the winner, how he ensures nobody says he is merely adopting the Obama-era JCPOA framework, and how he generates applause. Galloway condensed the point into seven words: “He’s trying to create applause. He’s not trying to solve the problem.”
That orientation produces what Applebaum calls “strange zigzags” — the repeated, contradictory claims that a deal with Iran is imminent, followed by retreats into maximalist demands for “absolute surrender” or regime change. The reference materials confirm the pattern: by early August 2026, markets had witnessed at least 39 separate “announcements of understandings” related to Iran, each calibrated, intentionally or not, to move oil prices and equities. Treasury Secretary Scott Bessent told CNBC on August 4 that a deal ensuring “freedom of movement” through the Strait of Hormuz could arrive “today or tomorrow.” By August 6, no deal had materialized, and Iranian parliamentary speaker Mohammad Bagher Ghalibaf was mocking the cycle as “theater diplomacy on loop.”
Hill’s verdict on the president’s negotiating posture is sharper than Applebaum’s, and it goes to the structure of the talks themselves. Trump does not merely lack leverage. He actively destroys it.
“Trump also thinks that he’s the seller, not just the buyer,” Hill said. “He’s always telling the Iranians what he would do and in real time laying out everything that he’s thinking.”
Galloway translated this into the language of a transaction. The IRGC, he said, is a car dealership, and Trump is a buyer who has informed the sales staff that he needs a car to get home — then sat down at the poker table with his cards face-up and a weak hand. “I can find no reason why the IRGC would negotiate at all,” he said. “We don’t even have a hand, much less a weak hand.”
Why Tehran is waiting
Hill provided the structural explanation for why Iran’s leadership sees no upside in engaging. “There is no incentive whatsoever for them to make a deal on any kind of basis right now because they have no certainty, no assurances of what the outcome is going to be.”
The participants identified four things Iran wants, and four reasons Trump cannot grant them without betraying his own political frame.
What Iran wantsWhy Trump withholds itResultRelease of frozen assetsAny resemblance to the Obama-era JCPOA triggers a backlash from the right and a presidential backtrackMoments of apparent willingness collapse back into demands for surrenderLifting of sanctionsConceding on sanctions would look like weakness, not the world-historic victory Trump requiresThe pre-war sanctions architecture remains largely intactCompensation for war damageApplebaum calls compensation “pretty unlikely” within Trump’s political frameNot a live negotiating itemGenuflection or deferenceTehran will not offer it to a leader who just bombed the countryPerpetual deadlock
The last row is the psychological trap. As Applebaum put it: Trump “needs some show of genuflection or some demonstration that he’s the greatest leader in the world. And of course that’s not what they’re going to give him.”
Hill noted that the president does not appear to be listening to advice, and flagged a “major rift with Netanyahu” that will make any resolution of the Lebanon front “extraordinarily complicated.” Applebaum added the timeline that makes the rift so consequential: Israel’s war against Hezbollah in Lebanon is “probably a generational undertaking,” and both Israel and Iran understand Lebanon as part of the same conflict — while, by implication, Trump’s team does not.
The weapon Washington handed to Tehran
The war’s single most consequential strategic outcome, Hill argued, has already occurred, and it is the exact inverse of what the operation was designed to achieve.
“We’ve in essence given them something like a nuclear weapon that they can use against the United States and against the Gulf states — control of the Strait of Hormuz,” she said.
Before the war, roughly 20 percent of the world’s crude oil and liquefied natural gas passed through the 104-mile waterway daily. By July 2026, Gulf countries’ crude and condensate exports remained about 40 percent below pre-war levels. The reference materials show that the toll dispute — Iran’s demand to charge service fees for passage — had become the central sticking point in negotiations, with the U.S. insisting on a restoration of the pre-war status of international waters. Rystad Energy chief economist Claudio Galimberti summarized the impasse: “Iran wants to impose a service fee, while the US wants the pre-war situation restored.”
The consequences of this new reality cascade through every dimension of the conflict. Iran can now strangle oil flows with a degree of deniability, squeezing U.S. and Gulf economies while retaining the option to escalate further. Hill’s prediction is that the end of the war will give the Iranian regime “more legitimacy rather than less” — a rally-round-the-flag effect generated by the American attack, channeled through a power structure that is no longer dominated by religious leaders but by “the army and the military.”
The regime, in other words, is fighting for its survival, and may emerge from the war with a new strategic asset and greater internal cohesion. That is the meaning of “more legitimacy rather than less.”
Inside Iran: euphoria, then fear
What actual Iranians are experiencing is almost entirely opaque to outsiders — and that opacity is itself a strategic fact. Applebaum noted that the internet had been cut and only partially restored, there was no polling or public opinion data, and no national conversation was visible from outside the country. But through Iranian opposition contacts in touch with people on the ground, she and Hill reported an extraordinary emotional arc.
At the moment the leadership was struck, the mood was one of genuine euphoria. Hill relayed a message from a friend on that day: “I know what you think about this, but I just want you to know: this is only the day Khomeini was killed. This is the best day of my life.”
That enthusiasm has since curdled into disappointment with how the war is being prosecuted, and fear that its conclusion will empower the regime rather than dismantle it. There may be rally-round-the-regime effects generated by the American attack, but what has not appeared — as of early August 2026 — is anything like the street protests of January 2026. The regime is still in charge, its internal divisions may be real but are invisible from outside, and there is no room for a conversation about what kind of government Iranians would prefer.
The structural misunderstanding
Hill’s most consequential critique is that the administration has built its Iran strategy on a misunderstanding of how the country actually works. Trump has cast himself as acting on behalf of the Iranian people, even urging them into the streets to support his campaign to decapitate the regime — but the regime was never the hierarchical monolith this assumes.
The theocracy, Hill explained, sits on top of the IRGC, the regular military, and other groups that have “penetrated the entire economy.” The Iranian people are separate from all of it. The groups at the top are fighting for their own survival, not for the people beneath them, and that distinction is invisible in Washington’s framing.
The operational consequence of this misunderstanding was an early embrace of Reza Pahlavi, the son of the late Shah. Hill called it “a classic US top-down approach that also wasn’t going to get any traction.” An exiled crown prince backed by Washington was never going to mobilize a society that does not operate on that axis. Hill noted that no Iran experts appeared to have been consulted.
Applebaum drew the sharpest contrast by reaching backward to the Iraq war. Whatever one thinks of that invasion, she argued, it came with a constant conversation about the Iraqi people: attempts to reach them, to give them agency, to prepare Iraqis to run their own country, and an explicit rejection of long-term occupation. With Iran, nothing comparable exists.
“There seems to be almost no conversation about the Iranians and what they want and how we could help them live better,” she said.
The absence is strategic, not cosmetic. Without a theory of what post-war Iran looks like — who governs, how the economy functions, how the Strait of Hormuz is managed — the war’s stated purpose of “decapitation” becomes its own end. And if the decapitation produces a more legitimate, more entrenched regime holding a chokepoint over 20 percent of global oil flows, the purpose has inverted.
The diagram below maps the relationships and leverage flows the speakers describe.
The question nobody is asking
Hill’s closing warning is the inverse of the war’s stated rationale. “Even if Trump manages to make some kind of accommodation with all of these different groups that are at the top, you’re going to leave Iran in a very perilous and parlous state — a weak, dysfunctional country in a critical region.”
That is not a call for regime change. It is a call to recognize that the framework the administration is operating within — deal with whoever is on top, negotiate with himself, proceed without experts, ignore the population, treat the Strait of Hormuz as a side issue — cannot produce a stable outcome, regardless of whether a memorandum of understanding is signed. The regime may emerge with more legitimacy and a new economic weapon. The country will be left dysfunctional. The region will remain volatile. And “America’s failure to see the conflict from Iran’s perspective looking into the future,” Hill predicted, “will complicate any means of resolving this war.”
For investors, the implications are not abstract. Oil markets have been caught in what Bob McNally of Rapidan Energy Group calls a “spiky muddle-through dynamic,” rallying on every White House hint of a deal and selling off on every Iranian counter-proposal. Helima Croft of RBC Capital Markets has warned of a “tremendous optimism bias” in which investors treat a potential deal as “a time machine” resetting the Middle East to its pre-war status quo. That bias, she argues, is unwarranted. If Hill and Applebaum are correct, it is worse than unwarranted: it is betting against a negotiating dynamic in which one side shows its hand daily, the other has no incentive to fold, and the single biggest asset on the table — the Strait of Hormuz — is already in Tehran’s pocket.