Trump shifts Iran pressure towards economic squeeze

US President Donald Trump has signalled that Washington is holding back from another major military escalation against Iran while allowing sanctions, a naval blockade and severe economic pressure to increase the strain on Tehran.

Trump said the United States was “low-keying it” and described contacts with Tehran as only partial negotiations. His remarks indicated that the White House currently sees Iran’s worsening economic position as a potentially stronger source of leverage than another round of strikes. Iran, meanwhile, insists that formal negotiations cannot resume until Washington changes its conduct and honours commitments Tehran says were breached.

The shift comes as negotiations over the Strait of Hormuz remain stalled despite progress on a separate arrangement between Iran and Oman governing shipping routes through the strategic waterway. Foreign Minister Abbas Araghchi said work on the maritime arrangement had reached its final stages, but stressed that completing it would not automatically mean the strait would reopen.

Iran has made reopening conditional on a broad package of US concessions. Its demands include compensation for damage caused during the war, an end to sanctions and the naval blockade, the release of frozen Iranian assets and guarantees against further military threats. Tehran has also demanded an end to attacks against Iran and armed groups aligned with it across the region.

The conditions have hardened perceptions in Washington that Iran believes control of the strait gives it considerable bargaining power. Former US defence secretary Mark Esper said Tehran appeared increasingly confident and argued that its demands should be rejected. He pointed particularly to calls for withdrawal of US forces from the region, compensation for war damage and the lifting of sanctions and the blockade.

Esper said Iran’s position suggested its leadership believed it held the upper hand. He also linked Tehran’s tougher posture to continued activity by allied armed groups, saying Iran was demonstrating confidence both at the negotiating table and through regional pressure.

Hormuz remains central to the dispute because of its importance to global energy supplies. Before Iran blocked the waterway following US and Israeli attacks, about one-fifth of global oil and liquefied natural gas shipments passed through it. The interruption has made reopening the strait a priority for Gulf governments, major energy importers and shipping companies.

The proposed Iran-Oman arrangement would establish temporary maritime routes, with vessels entering through waters closer to Iran and leaving closer to Oman. Ships would not pay tolls during the interim period. Gulf Cooperation Council members have backed the framework, which could ultimately be announced with the involvement of the United States and the International Maritime Organization. Its terms remain subject to change.

Washington has indicated that it is prepared to remove its blockade of Iranian ports once arrangements for unobstructed commercial shipping are implemented. Tehran argues that the blockade itself breached a June interim agreement and says messages transmitted through intermediaries should not be regarded as formal negotiations.

Trump’s emphasis on Iran’s economic difficulties adds another element to the pressure campaign. He specifically cited high inflation and a shortage of financial resources as reasons for Washington to avoid rushing into another offensive. The administration appears to calculate that prolonged economic distress could eventually narrow Tehran’s ability to resist US demands.

Military options nevertheless remain part of the confrontation. Esper said US stocks of some critical munitions were under pressure after months of conflict, adding another constraint to decisions over further strikes. A US official has described inventories of ballistic missile interceptors as extremely low, while efforts to expand production could take years to produce substantial additional supplies.

The security situation around the strait also remains unstable. The United Arab Emirates said an ADNOC-linked vessel was struck while travelling through the waterway, with no casualties reported. Iranian forces have previously said ships must coordinate their passage with Tehran, while proposals under discussion could restrict vessels connected to countries Iran considers hostile.