There seem to be many clear paths that lead to confrontation and none that leads to peace and negotiations.

After a short lull, tensions between the United States and Iran have escalated again after Iranian forces shot down a US surveillance drone on June 20. Although US President Donald Trump called off an attack in retaliation, the possibility of a confrontation remains high.

Both sides are engaged in making risky moves, testing each other’s resolve without knowing the limits, which raises the chances of a miscalculation. Given that both cannot afford to be seen as making concessions or giving in, in the event of a serious enough incident initiated by either side, retaliation is certain.

While Washington and Tehran seemingly do not want war, their brinkmanship is leading them in the very direction they are trying to avoid.

The US strategy

Since it pulled out from the nuclear agreement in May 2018, the Trump administration has been tightening the noose around Iran‘s neck, hoping to force it back to the negotiating table. In November 2018, it reimposed sanctions on Iran’s oil sector. In April this year, it designated Iran’s elite Revolutionary Guard Corps (IRGC) as a “foreign terrorist organisation” and announced it was cancelling waivers for buyers of Iranian oil, vowing to bring its energy export to zero.

Then several rounds of sanctions followed in May and June, targeting the key steel, aluminium, copper and iron sectors and petrochemical industry worth billions of dollars, and most recently, some Islamic Republic officials, including its supreme leader Ayatollah Ali Khamenei.

The Trump administration is clearly pushing for Iran to be isolated like Iraq in the 1990s when Saddam Hussein’s regime was only able to buy food and medicine in exchange for oil. The Iranian economy has been hit badly by these measures, with inflation skyrocketing and the currency plunging into a record low against the US dollar.

To back economic and diplomatic efforts to pressure Iran, the Trump administration has also increased its military presence in the Middle East. It has sent reinforcements to navy forces stationed in the region and deployed a MIM-104 Patriot missile battery in the Gulf. Over the past two months, the Pentagon has also boosted its ground forces in the region with 2,500 additional troops “for defensive purposes”.

This show of force, while indeed a worrying sign, may be motivated by domestic considerations of the current administration. Some in Washington believe that the failure to back economic sanctions with military force in dealing with North Korea was the reason why the Trump administration failed to reach a denuclearisation deal. With presidential elections just a year and a half away, Trump cannot afford another foreign policy fiasco.

Iran’s calculations

Iran, for its part, is also trying to put pressure on the US – both diplomatically and militarily. The US sanctions have taken their toll on the Iranian economy and the regime is suffering, as popular disaffection is growing. The Islamic Republic knows it cannot survive for long without oil revenues.

As a result, it might be seeking a confrontation with the US which is limited enough in scope as not to cause an all-out war, but also significant enough to boost its image among the general public at home and put pressure on Washington to reconsider its position.

Thus, attacks on US positions and US allies in the region by Iranian proxies have increased in recent months, especially in Iraq and Yemen. Although evidence is inconclusive, Iran could also be behind the attacks on vessels in the Gulf.

Targeting oil tankers would affect oil prices and hopes that this would force Trump to backtrack, fearing an economic downturn ahead of his bid for re-election. At the same time – as has already become clear over the past month – such attacks are easy to carry out and difficult to prove. They also carry much less risk of an escalation than a blockade of the Strait of Hormuz, which Iran has also threatened to do.

Negotiation or confrontation

The problem with the current situation is that while confrontation and war seem increasingly possible, there are clear paths that lead to de-escalation and negotiations. This is because the concessions the Trump administration has vowed to achieve from Iran are unattainable.

Washington wants to renegotiate the nuclear deal, removing “problematic” parts and including the Iranian ballistic missile programme and its regional activities. But the Islamic Republic views concessions on these issues as a potential threat to its survival.

Under the Joint Comprehensive Plan of Action (JCPOA), the restrictions on Iran buying arms on the international market and goods and technology that can be used to build a nuclear weapon expire respectively in 2020 and 2030. The Trump administration wants these provisions replaced with new ones that would prevent Iran from developing a nuclear weapon indefinitely. Yet, Iran is unlikely to accept giving up its nuclear programme for life , as it has become a matter of national pride.

At the same time, Washington demands that Tehran surrender its ballistic missiles programme, which currently allows it to hit targets across the Middle East and perhaps as far as Southeast Europe. The problem is that the Iranian regime views its missile capabilities as its main deterrence tool, given its weak conventional forces.

If attacked, Iran can attack vital installations in Saudi Arabia and other GCC countries, such as oil refineries, hydroelectric power plants and water desalination systems. Having seen what happened to Iraqi President Saddam Hussein after agreeing to US demands to disarm, the Iranian leadership would never make the same mistake.

Furthermore, Iran would not agree to give up its regional ambitions. After the end of the Iran-Iraq war in 1988, Tehran adopted a new military doctrine which aims to move the war into enemy territories and never fight on Iranian soil again. It views its military involvement and proxy operations in Iraq, Syria, Yemen, and Lebanon as a way to keep confrontation away from its borders.

In this sense, its regional expansion is both a defensive as well as an offensive strategy. In the eventuality of war, Iran would use Syria, Lebanon and Gaza, as a launching pad against Israel. It is already using Yemen against Saudi Arabia.

From an economic point of view, Iraq and Syria are also an important source of income for Iran. Iraq offers an unrestricted market for Iranian products, while Syria has given up a number of its strategic resources and infrastructure to Iranian (and Russian) firms and businesses.

In July 2011, Iran signed an agreement with Syria and Iraq to build a natural gas pipeline to transport Iranian gas from South Pars/North Dome Gas field towards Europe. This way it would avoid the Strait of Hormuz and establish itself as a major energy supplier to Europe.

Withdrawal from Syria and a diminished role in Iraq would cost the Iranian regime dearly and are, therefore, non-negotiable at this point.

Geopolitical competition

It is increasingly clear that Washington’s “maximum pressure strategy” will not force Iran to surrender. Both sides also cannot afford a war either, and the status quo is unsustainable, particularly for Iran.

Worse still, the crisis comes at a time when US global hegemony is coming under increasing pressure. Iran’s geopolitical location between Asia’s rising powers (India, China and Russia), its regional weight and massive energy resources make it of utmost importance for the US as well as its contenders.

Winning Iran back by installing a friendlier regime in Tehran is therefore essential for the endurance of US supremacy. But, for exactly this reason, other powers in the international system, Russia and China, in particular, will make sure that the US fails in this.

At this point, it seems Iran and the US are facing the worst crisis since the fall of the pro-US shah regime in 1979, with no clear diplomatic way out. In the short term, the two countries are likely to slowly slide into a limited military confrontation that could end the current deadlock and eventually pave the way for new negotiations.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.