One month into the US-Israeli war, Iran is increasingly pursuing a strategy of economic attrition, targeting energy infrastructure and maritime routes with mass-produced, low-cost drones .
This calculated operational shift is designed to impose continuously rising financial costs on its adversaries, systematically draining their defence budgets and threatening global markets without crossing the threshold that would trigger a full-scale conventional war.
Defence analysts and regional security experts describe this approach as a combination of horizontal expansion and vertical escalation. The horizontal dimension has broadened the geographic scope of the conflict far beyond traditional flashpoints, stretching the threat matrix across nine separate Middle Eastern countries .
Simultaneously, this vertical escalation has seen a sharp increase in the intensity and sensitivity of the targets chosen. Rather than focusing solely on traditional military installations, Tehran has directed its asymmetric capabilities toward critical civilian arteries and the economic lifeblood of the region.
Iran began its ascent up the vertical escalation ladder by deliberately expanding its crosshairs beyond established United States and Israeli military sites. The target list now encompasses Gulf civilian transportation infrastructure, vital data centres, and energy processing facilities.
The most severe manifestation of this strategy is the effective closure of the strategic Strait of Hormuz .
Tehran’s efforts to mine this critical maritime bottleneck, through which approximately 20% of the entire global oil trade passes, highlight a high-stakes, go-for-broke gamble. It is a manoeuvre that inherently risks strangling Iran's own economic lifeline, yet it simultaneously threatens to suffocate the world’s oil supply, leveraging global economic panic as a primary weapon of deterrence.
Mike Mulroy, former US Deputy Assistant Secretary of Defence for the Middle East, told The New Arab that the execution of these strikes reveals a clear underlying doctrine.
“Iran’s war approach reflects a strategy of economic attrition, using low-cost tools to pressure adversaries without triggering larger conflict,” Mulroy said. Weaponising energy infrastructure To execute this strategy, Iran has deliberately targeted the most critical facilities of the global energy supply chain. By launching strikes against energy hubs such as the Ras Tanura oil facilities in Saudi Arabia and the Ras Laffan liquefied natural gas complex in Qatar, Tehran is actively exerting widespread, structural economic pressure.
This approach essentially turns global energy markets into a political weapon. By extending the tangible impact of the conflict far beyond the physical battlefield, Tehran is prioritising international stagflation fears over direct military confrontation to ensure regime survival.
The toll of this campaign is mounting rapidly. At least 40 critical energy assets across nine Middle Eastern countries have been severely or very severely damaged since the current iteration of the war began on 28 February.
This has raised alarms about long-term, systemic supply disruptions. Fatih Birol, head of the International Energy Agency, outlined the severity of the situation to the National Press Club in Canberra last week, noting that the global energy architecture is currently under unprecedented strain.
This phase of the war has already slashed Gulf liquefied natural gas output by approximately 20 per cent. Qatar’s Ras Laffan facility, recognised as the world’s largest liquefaction hub, has been forced offline since taking direct hits on 2 March.
Furthermore, since 1 March, the sustained disruptions and mining operations in the Strait of Hormuz have cut LNG supplies from both Qatar and the United Arab Emirates (UAE) by more than 300 million cubic metres per day.
This reduction equates to a weekly loss of over two billion cubic metres of gas supply, sending shockwaves through international commodities markets.
The ripple effects of these strikes are immediately visible in the financial sector. Maritime insurance premiums for Gulf oil and gas tankers operating in contested waters have surged by up to 400 per cent, adding massive logistical costs to every barrel exported from the region. The macroeconomic forecasts are increasingly grim as well. Goldman Sachs predicts that if the war maintains its current trajectory until the end of April, the gross domestic product of both Qatar and Kuwait will plummet by 14 per cent.
Similarly, Capital Economics forecasts a severe 10 to 15 per cent regional GDP contraction if the Gulf's energy infrastructure suffers long-term, structural damage that cannot be quickly repaired. Calling the deterrence bluff Through sustained economic pressure, Tehran is exposing the limits of US and Israeli deterrence. The assumption that Western military superiority dictates regional behaviour is being aggressively tested.
When President Donald Trump issued a strict 48-hour ultimatum, threatening to demolish Iran’s domestic power plants unless the Strait of Hormuz was fully reopened, Tehran did not signal a retreat or attempt to de-escalate.
Instead, Iranian officials countered the ultimatum by threatening to “irreversibly destroy” critical Middle Eastern civilian infrastructure. Most notably, they singled out the region's vast network of water and desalination systems .
Because the Gulf states rely almost entirely on these highly exposed coastal desalination plants for their daily drinking water, destroying them would constitute an existential catastrophe.
By holding global energy markets and regional survival assets hostage, Iran is calculating that policymakers in Washington and Tel Aviv will not risk triggering an international economic collapse, nor will they take actions that could literally render the Gulf peninsula unlivable for their regional allies.
The scale of this standoff is historic. Birol described the potential economic fallout of the current crisis as equivalent to “the two major oil crises of the 1970s and the 2022 gas crisis put together”. The high cost of interception This strategic geopolitical bluff is reinforced daily by a stark and unsustainable financial asymmetry on the battlefield. By deploying swarms of $20,000 loitering munitions , Tehran is forcing Gulf states and their Western military allies to spend millions of dollars on high-end interceptors.
The sheer volume of these attacks highlights a clear operational shift. According to data compiled from Gulf defence ministries by The New Arab, interceptors have downed over 4,000 projectiles since the campaign began, with drones accounting for 62 percent of the incoming fire. However, the strikes are not distributed evenly across the region. Between 28 February and 16 March, the United Arab Emirates faced the heaviest and most complex barrages, intercepting 1,627 drones alongside 304 ballistic and 15 cruise missiles, as detailed in the UAE Ministry of Defence daily statements.
In contrast, Saudi Arabia and Kuwait are facing assaults consisting almost entirely of unmanned aerial vehicles. On a single day, Saudi forces shot down 64 drones aimed primarily at the Eastern Province, according to Defence Ministry spokesperson Maj. Gen. Turki Al-Maliki. Meanwhile, Qatar is experiencing a noticeably different pattern.
Drone usage there is far more limited, with missile activity playing a comparatively larger role, suggesting Iran is employing a targeted, precision approach rather than attempting to overwhelm Qatari airspace with sheer volume.
This reliance on mass-produced drones is yielding tactical success. Luca Nevola, a senior analyst for Yemen and the Gulf at the Armed Conflict Location and Event Data Project (ACLED), noted in an interview with The New Arab that drones now account for roughly 80 percent of successful strikes on the Gulf. “The share of successful missile attacks has been steadily decreasing from a peak of 50% on 2 March to an average of 12% during the last 7 days," he said, noting that drone attacks have risen in parallel. The trend underscores a clear and growing operational reliance on drones in carrying out effective strikes.
The US Treasury has identified Iran’s Shahed series drones, including models such as the Shahed‑136 and Shahed‑131, as loitering munitions, essentially kamikaze drones engineered to strike targets with precision.
Joe Yarak, an economic analyst and Head of Global Markets at Cedra Markets, warns that low-cost drones like Shaheds can force defenders to spend $15-$35 per dollar spent by attackers, highlighting a significant cost disparity that favours low-cost, mass-produced drones.
“Missile defence will likely evolve into air defence ecosystems rather than missile batteries," he told The New Arab . Gulf states have heavily invested in the Patriot PAC‑3 Missile Segment Enhancement (MSE) system as the cornerstone of their air and missile defence strategy, designed as a high-velocity, hit-to-kill interceptor. According to official US Department of Defence 2026 budget documents, the cost of a single PAC‑3 MSE interceptor ranges between $3.85 million and $5.2 million per unit. The high cost underscores the financial strain that sustained Iranian drone and missile attacks impose, as Tehran’s low-cost drones, often under $50,000 each, force Gulf states to expend multimillion-dollar interceptors repeatedly.
The resulting financial asymmetry is staggering. Iranian officials claim to have a reserve of 80,000 Shahed drones. While Patriot PAC‑3 missiles cost between $3 million and $5 million per interceptor. Defending against all 80,000 Iranian drones using Patriot missiles alone would therefore cost roughly $240 billion to $400 billion. Given that the US produces approximately 650 PAC‑3 MSE missiles per year, it would take nearly 123 years to manufacture enough interceptors to match this stockpile.
Military planners are actively trying to close this gap. Former US Assistant Secretary of State Mark Kimmitt told The New Arab that Washington is fully aware of this unsustainable imbalance.
He noted that “the US defence sector is accelerating the development of its own low-cost drones and better countermeasures, so militaries are no longer forced to expend million-dollar missiles on budget targets".
Kimmitt explained that the US defence industrial base is working to address this gap through multiple approaches, including developing similarly low-cost drones and advancing counter-drone technologies.
In December, the United States deployed a force of one-way attack drones to the Middle East as part of efforts to counter Iran’s expanding drone threat. The system used is the Low-Cost Uncrewed Combat Attack System (LUCAS), a relatively inexpensive unmanned platform designed to respond to the growing role of low-cost drones on the battlefield. Analysts say the military lesson for the US is simple: drone defence must begin with a low-cost, widespread drone-against-drone layer rather than a force structure based on million-dollar missiles. Menna Abdel Razek is an investigative data journalist and fact-checker specialising in OSINT and data-driven reporting Follow her on Instagram: mennaabdelrazk This piece is published in collaboration with Egab Edited by Charlie Hoyle