• U.S. intelligence officials report that Iran retains significantly more military capability than publicly acknowledged by the White House and Pentagon, with roughly half of its ballistic missiles, much of its IRGC naval forces, and about two-thirds of its air force still operational.
  • Despite recent U.S.-Israeli strikes, Iran maintains the ability to threaten regional shipping, including in the Strait of Hormuz, and retains thousands of missiles and drones, challenging claims that its forces have been "decimated."
  • The resilience of Iran's IRGC naval units, designed for asymmetric warfare, continues to disrupt maritime traffic, raising concerns about persistent risks to global oil markets and regional stability.

Iran's Military Resilience Amid Ongoing Strikes

U.S. intelligence assessments indicate that Iran's military capabilities remain far from destroyed, with substantial portions of its ballistic missile launchers, IRGC naval forces, air force, and drones still operational despite recent strikes. According to people familiar with the matter, these findings contradict public messaging from some defense officials, who have highlighted the degradation of Iran's command-and-control and hardened assets. Instead, sources suggest that hundreds to thousands of smaller boats, drones, and coastal defense assets remain functional or recoverable, reinforcing concerns about threats to regional shipping and broader deterrence in the Persian Gulf.

Efforts to curb Iran's military reach have hit a snag, as intelligence reports underscore that the country's air force and other formations retain a meaningful level of readiness and inventory. This complicates hopes of a quick, decisive strategic setback, with officials noting that Iran's IRGC naval units, designed for asymmetric warfare, remain largely intact and continue to disrupt maritime traffic. Without a deal to address these capabilities, the risk of localized confrontations or incidents at sea could escalate, potentially increasing insurance costs and risk premiums for Gulf transit.

Implications for Regional Security and Global Markets

The situation intersects with ongoing regional security dynamics, including the stability of shipping lanes through the Strait of Hormuz and potential spillovers into global oil markets. Analysts point out that Iran's strategic location and capabilities mean that even partial operational readiness can sustain broader regional pressure. "What institutional investors are really focused on is regulatory stability, but in this case, it's about military stability," said one source, who requested anonymity due to the sensitivity of the matter. Attempts to reach out for comment from U.S. defense officials were unsuccessful, but separate reports highlight that public and political debate centers on how long adversaries can sustain coercive pressure.

Historical context shows that Iran has often rebuilt or maintained critical capabilities after periods of conflict, challenging simplistic narratives of "decimation" after surface-level successes in strikes. In the short term, continued risk to shipping lanes and potential miscalculations could lead to incidents at sea or in cyberspace. Looking ahead, possible maturation of capabilities such as drone swarms and anti-ship missiles could sustain Iran's adversaries' caution and influence regional security architectures. As one analyst put it, "It's a great country to invest in if you're looking at military resilience, because the market here isn't as competitive as others—you can create your own deterrence strategies."

Correction: An earlier version of this article misstated the percentage of Iran's air force that remains operational; it is about two-thirds, not a majority, according to updated intelligence assessments.