Earlier this month, tensions turned into threats, as Washington refused to extend sanctions waivers for buyers of Iranian oil, designated Iran's elite Revolutionary Guards (IRGC) a terrorist organisation, and began military preparations to deter Iran.
These measures are pushing the Iranian economy to the brink. Oil exports, which have already dwindled from 2.5 million to less than 1.3 million barrels a day since last year, could drop even further, crippling the state budget. Ordinary Iranians, who are already suffering from the raging inflation (currently at 40 percent) and skyrocketing prices of goods, will likely bear the brunt of Washington's push to bring Iranian oil exports to zero. And this is only the beginning.
The Iranian leadership has been defiant. Supreme Leader Ayatollah Ali Khamenei has said this "hostile measure" will not be left "without a response", while President Hassan Rouhani has threatened to disrupt oil shipments from Gulf countries. Foreign Minister Mohammad Javad Zarif has cautioned that Iran could walk away from the nuclear deal and warned against a potential escalation to war.
If the past three Gulf wars of the 1980s (Iraq-Iran), 1991 (US/UN-Iraq) and 2003 (US/UK-Iraq) are anything to go by, a confrontation between the US and Iran would prove far more devastating. So why are Washington and Tehran ignoring the lessons of war, and marching eyes wide shut towards another armed conflict? And can anyone stop them?
Even before he was elected president, Donald Trump famously branded the Joint Comprehensive Plan of Action (JCPOA) negotiated by the Obama administration "the worst deal ever" and once he took office, he embarked on dismantling it.
In May last year, his administration withdrew from the JCPOA and issued 12 demands to Iran. It was one of those impossible lists, designed to provoke and humiliate.
The US wants Iran to end all its nuclear and missile programmes, withdraw its forces from Syria, stop its "destabilising" policies in Iraq, Afghanistan and the Gulf, and cease its support for armed groups like Hezbollah, Hamas, and the Houthis in exchange for negotiating a new nuclear deal.
No one would have been more surprised than the US itself if Iran had said yes to any of it. These demands basically constitute total Iranian surrender, not only to the US but also to Israel and Saudi Arabia, Trump's key regional partners and principle drivers behind the new Iran policy.
Days before the anniversary of the United States's exit from a 2015 deal that curbed Iran's nuclear programme, John Bolton, the US national security adviser, issued a stark warning.
Citing a number of "troubling and escalatory" indications, Bolton said the US was deploying warships to the Middle East to "send a clear and unmistakable message" that it would meet any Iranian attacks on US interests "with unrelenting force". Washington was "not seeking war" with Tehran, he said, but was "fully prepared to respond" to any attack from Iran or its proxies in the region.
He did not offer evidence detailing the threat from Iran, which promptly dismissed Bolton's warning as "psychological warfare".
For some, the comments also echoed the war rhetoric in the US before its invasion of Iraq in 2003. Bolton, a senior official in the administration that launched the Iraq conflict, had also called for attacks on Iran before taking up his current post.
The US' naval deployment was just the latest twist of the screw in Donald Trump's "maximum pressure" campaign against Iran. On May 8, 2018, he pulled the US out of the landmark deal that his predecessor negotiated with Iran and five other world powers, calling it "defective to its core".
The pact, formally known as the Joint Comprehensive Plan of Action (JCPOA), imposed limits on Iran's capacity to enrich uranium and capped its stockpile in exchange for global sanctions relief. But Trump said the deal did not do enough to curtail Iran's ballistic missiles programme or address its support for armed groups in Iraq, Yemen, Syria and Lebanon.
In the year since, the US told buyers of Iranian crude to stop purchases or face sanctions, tightened restrictions on Tehran's civilian nuclear programme, and designated its elite Islamic Revolutionary Guard Corps a "terrorist organisation" - the first time Washington applied the label to a part of another government.
To lift the punishing measures and begin new negotiations, the US said last year that Iran should meet a list of 12 steep demands, including ending its missile programme and support for regional armed groups.
Iran, however, has remained defiant.
On Wednesday, the anniversary of the US' withdrawal from the Iran nuclear deal, President Hassan Rouhani said Tehran would build up its stockpiles of low-enriched uranium and heavy water instead of selling surpluses abroad, as required under the nuclear accord.
"We felt the nuclear deal needs a surgery," Rouhani said. "This surgery is for saving the deal, not destroying it."
He also threatened to resume high-level uranium enrichment in 60 days if the pact's remaining signatories - the United Kingdom, Russia, France, China, Germany and the European Union - failed to protect Iran's oil and banking industries from US sanctions.
Meanwhile, National Security Advisor of the United States John Bolton made this crystal clear on the sidelines of the UN General Assembly session last September, when he said: "If you cross us, our allies, or our partners; if you harm our citizens; if you continue to lie, cheat, and deceive, yes, there will indeed be hell to pay."
The message was certainly heard loud and clear in Tehran, which has accused the so-called B-team (Bolton, Israel's Benjamin Netanyahu, Saudi Arabia's MBS- Mohammed Bin Salman and the UAE's Mohammed Bin Zayed) of pushing Trump to seek regime or war with Iran.
Perhaps it is true that the US president has been ensnared by various warmongers in a vicious campaign against Iran, but the Iranian leadership has been anything but innocent in all of this, with its own A-team (led by Ayatollah Khamenei) pursuing regional hegemony.
Instead of taking advantage of the windfall from the nuclear deal and the normalisation of relations with the West to rebuild its economy and country, Tehran has doubled down on its aggressive policies in the region.
US, Israel, and Saudi Arabia are causing instability in the Middle East. However, Iran has itself chosen to advance its narrow interests with recklessness with disastrous consequences.
Over the past few years, Iran has pursued a sectarian strategy that destabilised its neighbours and empowered the likes of Bashar al-Assad in Syria and Nouri al-Maliki in Iraq. It has also waged proxy wars against Saudi Arabia, crippling countries like Yemen and Lebanon and used paramilitary groups like the IRGC and its al-Quds Force to undermine opponents across the Arab world.
Its aggressive policies have fuelled a now widely held suspicion that it seeks to "create a new Persian and Shi'ite 'empire' on Arab land". Some members of its political elite have even bragged that Iran already rules in four Arab capitals: Baghdad, Damascus, Beirut, and Sanaa.
The Iranian strategy of exploiting instability to pursue regional hegemony has backfired. In the hope of curtailing Iran's Middle Eastern ambitions, many Arab states are now not only siding with the US but are also drawing closer to Iran's archenemy, Israel.
In addition to economic, diplomatic and strategic tools, Washington and Tehran are also employing religion to justify their policies and rally their supporters at home and abroad.
Secretary of State Mike Pompeo, an evangelical, has claimed that Trump may have been sent by God to protect Israel from Iran. He, along with Vice President Mike Pence and other evangelicals working with the Trump administration, supports Israel's religious claims over Jerusalem and the rest of Palestine, and invokes biblical texts to explain US policy towards Iran and the region.
No less alarming is Iran's use of religion and particularly the idea of protecting the oppressed and the downtrodden to pursue its hegemonic policies across the region. The Iranian leadership has also actively sought the sectarianisation of local tensions and conflicts in order to present itself as the "protector" of all Shia communities in the region. It has also employed Shia dogmas and calls to protect holy Shia shrines to recruit fighters for the various militias it supports in Iraq and Syria.
But it is not only the US and Iran who have engaged in religious fanaticism. Israel and Saudi Arabia have done so as well, and so have various non-state actors such as the Islamic State of Iraq and the Levant (ISIL-Daesh). They have all assumed their own versions of "manifest destiny", claiming they were divinely ordained to conquer and occupy and willing to use God's name in vain in order to advance their narrow political interests.
Arrogance breeds contempt; religious arrogance breeds conflict.
So, could this "clash of fanaticism" escalate into a wider confrontation?
I don't believe that either Trump or Rouhani wishes for a war. There doesn't seem to be a decision or a plan to go to war, yet - not today, not tomorrow.
But what about next year? Trump's 12 demands have left Tehran with no option for an honourable exit and set it on the path towards an economic disaster. Feeling anxious about an implosion from within, it will have to devise a plan to respond.
Meanwhile, the US will continue to strangle it economically, destabilise it politically and undermine it regionally. It will pursue various containment strategies like "offshore balancing", but if those fail, military intervention will be a viable option.
Washington's aggressive approach will likely weaken Iranian pragmatists like Rouhani, and empower hardliners. This will cause Iran to abandon diplomatic efforts to contain the crisis and seek to quit the nuclear deal and perhaps even the Nuclear Non-Proliferation Treaty altogether, rile up its Gulf neighbours, and undermine the US presence in Iraq and Afghanistan. This would inevitably evoke a sharp reaction from Washington, which may lead to war or wars by proxy throughout much of the region.
Foreseeing such developments, the Trump administration is already preparing the public for possible escalation. Like the Bush administration, it is repeating the same false claims that paved the way for the invasion of Iraq - that there are weapons of mass destruction (WMD) threat and support for terrorism.
Clearly, some in Washington have forgotten the Iraq debacle, and continue to believe in limited wars and regime change.
All of this begs the bigger question: Where are the world powers who signed the Iran deal, enshrined it in a UN Security Council resolution, and vowed to defend it? Shouldn't they stop the ongoing escalation?
Europe may still support the deal but it is clearly spooked by Washington's aggressive posturing and has not yet activated INSTEX, the alternative trade mechanism to bypass US sanctions.
Mohammad Marandi - a professor at Tehran University who was part of the nuclear deal negotiations in 2015 - said Iran's strategy was aimed at pressuring the remaining parties, especially those in Europe, to deliver on the economic benefits promised under the pact.
The US's sanctions have triggered an economic crisis in Iran; the currency lost more than 60 percent of its value against the dollar last year, while inflation is predicted to reach 40 percent this year. Iran's economy, which shrank by 3.9 percent last year, could plummet by another six percent, the International Monetary Fund said. That estimate preceded the latest round of US sanctions on Iranian oil.