Exchanges of fire between Iran and the US demonstrate the serious instability of the situation in the Middle East. Though the US strikes late on Thursday were just “a love tap”, according to the US president, Donald Trump, the reality is that neither side can continue the high-stakes standoff in the strait of Hormuz indefinitely.

The US and its ally Israel demonstrated a comprehensive military superiority over Iran – taking minimal casualties in the 38-day war – but Washington has both failed to translate that into strategic dominance and allowed Iran to take control of the strait, driving up the oil price.

The most significant development this week was the collapse of Trump’s Project Freedom on Tuesday after just 50 hours. The unilateral US proposal had sought to create a safe zone for merchant shipping on the southern, Omani side of the strait using more than 100 fighter jets and several naval destroyers. Two merchant vessels took advantage.

It ended amid objections from the Saudis, who were not consulted before the launch. Riyadh refused to allow US access to its airspace and bases, concerned Project Freedom could end up restarting the full-scale war. It was also not discussed with major shipping companies and it was unclear whether it would be effective.

Richard Meade, the editor of Lloyd’s List, a specialist shipping industry title, said this week: “No major industry organisations that we are aware of have been approached by the US to set up any sort of briefing session.

“Security teams in the region remain unclear what’s happening and no ship owner I have spoken to in the past 24 hours has any confidence that this changes anything.”

Iran retains the ability to threaten and inflict damage on tankers passing through the strait of Hormuz and effectively halt all other shipping. More than 1,550 vessels remain trapped in the Gulf, while on Wednesday and Thursday no merchant ships transited the strait, according to S&P Global Market Intelligence.

Burcu Ozcelik, a Middle East expert with the Royal United Services Institute thinkthank, said: “Iran has proven to be a formidable adversary, in that it has demonstrated resilience that many who should have known better didn’t predict.

“Trump wanted a quick win, and was not prepared to commit the substantial military force that would have been required to dislodge the regime properly.”

Though its decision-making appears fragmented and the health of the supreme leader, Mojtaba Khamenei, still publicly uncertain, most assessments are that the Tehran regime has, for now, been entrenched by the bombing campaign launched by the US and Israel. CIA assessments leaked this week suggest it retains 70% of its missiles, 75% of its launchers; it may also retain half its Shahed attack drones.

Iran appears confident in pushing back against US demands for a total end to its nuclear weapons programme, which includes calls for a dismantling of its nuclear sites, a 20-year moratorium on enrichment and a handover of its near weapons-grade uranium. It can see that Trump appears unwilling to restart a full bombing campaign, perhaps in the light of depleted high-end US missile stocks, down by anywhere between a quarter and a half during the $25bn (£18bn) Epic Fury campaign.

Diplomats who have dealt with Iranian negotiators complain that Tehran loves to act as if it has endless time. It does not. The parallel US blockade to the east of the strait, where two US carrier strike groups are now operating, also prevents Iran from exporting its crude. US Central Command has turned back 52 vessels since 13 April – and there are reports from within Iran of rising inflation, unemployment and unpaid wages.

On Wednesday Iran’s top negotiator, Mohammad Bagher Ghalibaf, sought to shore up Iranian resistance, arguing that the US was seeking “to destroy the country’s cohesion” through “a naval blockade, economic pressure and media manipulation”. A US intelligence assessment, leaked to the Washington Post this week, suggested Iran could endure three to four months, then face more severe economic hardship.

Iran has no close allies at this moment of isolation. China is believed to be supplying drone parts, similar to its help to Russia, and there have been reports that it may try to covertly send Tehran handheld air defence systems, but this is basic defensive weaponry. A presentation from Russian GRU military intelligence for Iran, seen by the Economist, suggests Moscow could send 5,000 fibre-optic drones – weapons only likely to be useful against US ground troops, should they seize an island in the Gulf.

In any event, it is not obvious how any military escalation helps Iran. The country’s – and the regime’s – ability to endure the US blockade is impossible to predict, but simply hanging on could be an economic disaster for its people. “It is the insurgent’s dilemma,” says Ozcelik. “At first to survive is to win, but there’s always a point when that is no longer enough. When Iran gets to that point, we don’t know.”

Trump, however, is fickle and impatient. The US president has the political problem of needing to resolve an economic crisis he essentially created – while showing progress on the nuclear issue. Higher inflation is already affecting large parts of the world economy, and the impact of oil shortages is particularly acute in Asia. It is an unstable outcome, and still, two sets of militaries face each other, locked and loaded.