United States (US) President Donald Trump said Sunday he would let economic pressure squeeze Iran rather than order new strikes, as talks on reopening the Strait of Hormuz remained deadlocked.
The strait carries roughly a fifth of the world’s oil and gas shipments, and its closure since the war began in February has kept global energy markets on edge. Traders have trimmed bets on a September US interest rate cut to about 44 percent, down from 67 percent a week earlier, partly on fears that a collapsed Hormuz deal could push fuel prices higher.
“We are low-keying it,” Trump told Axios, describing a strategy built on economic strangulation rather than fresh military action. He said Iran was running short of money to pay its own troops and argued the naval blockade had deepened an inflation crisis already battering the Iranian economy.
Iranian Foreign Minister Abbas Araghchi rejected the idea that any negotiations were under way, telling reporters that only messages passed through intermediaries connected the two governments. He said talks could not resume until Washington ended what he called violations of the memorandum of understanding (MoU) signed by both countries in June, and compensated Iran for the breaches.
Iran’s Supreme National Security Council sharpened those terms over the weekend, demanding the United States permanently end the war, lift its naval blockade and withdraw military forces from the region before the strait can reopen, according to a statement carried by state media and attributed to council secretary Mohammad Bagher Zolghadr, a senior Revolutionary Guard commander.
Even as the wider standoff hardens, Iran and Oman appear closer to a narrower fix. Araghchi said the two countries were in the final stages of agreeing a temporary transit route for vessels through the waterway, pending a permanent replacement for the pre-war Traffic Separation Scheme. Officials cautioned that a shipping-lane agreement with Muscat would not by itself reopen the strait, which both Iran and Oman control through their exclusive economic zones under UN maritime rules.
The dispute is bleeding into other shipping lanes. Iran-aligned Houthi rebels claimed an attack on Saudi Aramco’s Jazan refinery and struck the Yemeni port city of Mocha twice within 24 hours, raising the risk that the confrontation spreads to Red Sea trade routes as well.
Trump first ordered “major combat operations” against Iran on 28 February, in joint strikes with Israel targeting military, government and infrastructure sites. Delegations from both countries opened talks in June aimed at a war-ending deal, but the fighting has continued alongside the diplomacy, with the strait emerging as the central flashpoint.
Trump predicted the standoff would eventually break in Washington’s favour, comparing the process to a chess match that always resolves itself.
