President Donald Trump has downplayed his war on Iran as "small potatoes," but the conflict keeps growing as both sides escalate beyond their stalemate in the Strait of Hormuz.

For months, Iran's military has failed to completely close off the narrow waterway, as U.S. forces escort ever more oil tankers through it, eroding Tehran's geopolitical leverage. The U.S. military, in turn, has failed to fully reopen the strait: Iranian attacks on commercial vessels have prevented a return to prewar traffic flows, keeping oil prices elevated. The stakes of that standoff extend well beyond the Gulf — the Strait of Hormuz is one of the world's most important energy chokepoints, through which roughly a fifth of globally traded oil normally passes, which is why disruption there reverberates through energy markets worldwide.

At the same time, the U.S. naval blockade has been strangling Iran's economy, and Tehran was widely expected to try to change the equation with a fresh cycle of attacks. It did.

Iran launched missiles at U.S. bases around the Persian Gulf earlier this week, and on Saturday it fired missiles at a U.S. Navy aircraft carrier and a destroyer. In response, the U.S. military struck three Iranian oil tankers that were deemed to be operating in the "shadow network" that funnels money to the regime's Islamic Revolutionary Guard Corps. Such shadow fleets — vessels operating outside conventional shipping and insurance channels, often with obscured ownership — have long been a key tool for sanctionsed states seeking to keep oil revenues flowing.

"Let the message to the IRGC be clear: If you shoot at two of our ships, we will impose an even higher economic cost — taking out three of yours," U.S. Central Command chief Adm. Brad Cooper said in a statement. "We will not hesitate to defend American forces, and if necessary, destroy Iran's limited and exposed oil fleet."

For Hamidreza Azizi, senior Iran analyst at the International Crisis Group, the fighting appears to represent a new phase of escalation. Until now, he noted in a post on X, Iran's military had focused on tankers and commercial shipping around the Strait of Hormuz, while its direct attacks on U.S. forces had been limited to bases around the Gulf.

"Attempting to strike U.S. warships enforcing the blockade therefore crosses a different threshold," Azizi added. "The attempt failed, but there is no reason to assume the next one will. A successful strike — especially one causing significant U.S. casualties — could rapidly transform the conflict."

Iran's attack on the U.S. warships also follows a report in the Financial Times this week stating that Russia is secretly helping Iran develop supersonic cruise missiles. A ramjet propulsion system, which would allow a missile to travel at several times the speed of sound, would likely power anti-ship and land-attack cruise missiles. Such a weapon would force U.S. Navy ships and aircraft to operate much farther from Iran, breaking the chokehold on its economy. The reported cooperation would deepen a defense partnership between Moscow and Tehran that has expanded in recent years, including Iranian drones supplied to Russia for its war in Ukraine.

For now, the naval blockade has proved a potent economic weapon. Iranian officials have admitted that conditions are dire and suggested time is running out. The Treasury Department has also vowed to inflict an "economic D-Day" on Iran, with wider sanctions aimed at countries that facilitate its illicit oil trade and other financial transactions.

But Azizi warned that adding economic pressure will not necessarily make Iran more cautious, especially if Tehran sees the pressure as unsustainable. That means the U.S. attacks on Iranian oil tankers will likely spark even more escalation.

"The greater the squeeze on Iran, the greater the incentive to act," he wrote. "And the more Tehran comes to see that pressure as existential, the more likely it is to conclude that it has less to lose — and that increasingly risky actions are worth attempting."

This story was originally featured in Fortune.