WASHINGTON (AP) 鈥� President likes to say that he started his after 50 years of economic pressure had failed to stop its 鈥� but he鈥檚 now betting that can bring an end to that war.
The Trump administration is hoping that months of bombing have pushed Iran鈥檚 economy to a breaking point that will to cave to demands to end its nuclear program and fully reopen the to oil and natural gas tankers.
The president on Monday said that since as part of any peace talks, he now intends to demand the same for the U.S. side. It’s part of a larger pivot this weekend by Trump to argue that Iran is now on the cusp of financially collapsing, even though it has already endured decades of financial sanctions, which are often a longer-term strategy rather than an immediate tool of warfare that can halt a conflict.
The shift comes as have dwindled and as stop-start talks seem again to have stalled. But Trump insists the pressure can lead to a breakthrough.
鈥淵eah, they can make trouble, but they鈥檙e broke,鈥� Trump told reporters. 鈥淭hey have no money. You know, Iran is broke, totally broke. And, they鈥檙e not paying their soldiers. They have inflation of 300%.鈥�
Inflation is running high in Iran, although Trump’s estimates were higher than what administration officials have been citing to reporters. But the prospect of a longer war also carries inflation risks for other nations, including the U.S. 鈥� where .
Crude as investors interpreted Trump鈥檚 comments as a sign that fewer ships would be traversing the , continuing to limit global supplies of gasoline, jet fuel, natural gas and other forms of energy. The Iran war largely closed the waterway involved in shipping roughly 20% of global oil supplies before the conflict 鈥� and attempts to reopen the strait have been short-lived as it has become a source of leverage for the Iranians in negotiations.
Iran does not appear to be publicly intimidated by the prospect of more financial sanctions.
鈥淲henever Washington proves itself incapable of pursuing diplomacy, it retreats into sanctions; and whenever those sanctions fail to produce results, it simply increases the dose,鈥� said Esmaeil Baqaei, spokesman for Iran鈥檚 Foreign Ministry, on social media. 鈥淭he real risk is that American politicians, clinging to this bad habit, will instead strangle their own remaining chances of a less humiliating exit from a crisis of their own making.鈥�
The White House has called this 鈥極peration Economic Fury鈥�
The president didn鈥檛 say what additional financial pressure would be applied, but the administration has since April 16 been engaged in what it calls 鈥� 鈥� against Iran. Treasury Secretary Scott Bessent called this component the 鈥渇inancial equivalent鈥� of a bombing campaign as the countries that buy oil from Iran or bank with it could be sanctioned.
But one problem with this pivot is that the sanctions are unable to bite as quickly as the impact of the largely shuttered strait, said Richard Nephew, a senior research scholar at Columbia University who helped direct Iran sanctions strategy in the Obama administration.
Nephew stressed that the value of sanctions as a tool is limited because Trump has not articulated clear strategic goals for the war, at times stressing that it can’t have a nuclear weapon, then emphasizing the strait and then talking about ballistic missiles. Instead, Trump has engaged in a massive series of aerial assaults and a level of destruction that has not produced the quick end that he initially promised.
鈥淓conomic pressure is a possible element in his strategy, but he鈥檚 yet to explain the purpose,鈥� Nephew said. 鈥淭rump has systematically weakened his own hand through his inadequate use of force, inarticulate elucidation of an objective, and vacillation on negotiations.鈥�
Still, the sanctions and the ongoing U.S. naval blockade of Iranian ports give the U.S. economic and financial leverage, said Juan Zarate, a deputy national security adviser in the George W. Bush administration. Zarate said the U.S. sanctions threatening third-party countries doing business with Iran also have an impact. But these things take time, he noted.
鈥淭he ultimate question will be how far the United States is willing to go to constrict Iran鈥檚 oil trade and threaten third countries with severe sanctions — and whether it has the patience to test whether the economic pain will change the regime鈥檚 behavior,鈥� Zarate said.
Past presidents used sanctions. Trump has said they didn’t go far enough
Trump’s latest pivot to economic issues with Iran is . Trump has long derided past presidents who used sanctions to limit Iran鈥檚 economic ability to pay for its military and nuclear development. In a speech last week in Las Vegas, he defended the bombing, missiles and drone attacks that began on Feb. 28 by indicating that the sanctions from previous administrations that date back to November 1979 had failed to succeed.
鈥淚t鈥檚 been 47 years, but really, it鈥檚 been 50 years because they鈥檝e been saying 47 for three years, it鈥檚 been 50 years,鈥� Trump said. 鈥淎nd no other president has done what you should have done a long time ago, because Iran cannot have a nuclear weapon, can鈥檛 have it.鈥�
The Iranian economy has suffered gravely because of the war, with the International Monetary Fund estimating the overall economy shrinks by 5.4% and the Iranian government recently reporting an annual inflation rate of 88.6%. The U.S. Treasury Department said average loadings of Iranian oil have decreased from 1.8 million barrels per day before the war to less than 500,000 barrels per day over the past month.
The U.S. economy 鈥� the world鈥檚 largest 鈥� has continued to grow, but inflation is elevated and borrowing costs have risen in ways that have hurt Trump鈥檚 popularity and led to disapproval of the Iran war.
A senior U.S. official, insisting on anonymity to discuss strategy, said the U.S. military has set back Iran鈥檚 ability to produce, sell and ship oil and other energy resources. The administration sees the naval blockade of the strait and sanctions as effective and views Trump as having additional options that can be cranked harder in the weeks and months ahead.
Trump is essentially arguing that U.S. voters are better able to tolerate any economic inconveniences than Iranians, who have been in a state of economic hardship for years.
鈥淚t鈥檚 not just what the military can do 鈥� we鈥檝e got the most powerful economy in the world as well,” Defense Secretary Pete Hegseth said Monday in a joint appearance with Bessent. “And when you鈥檝e got a motivated treasury secretary who can pull a lot of levers because he knows how to do it, you can put a lot of pressure on adversaries.鈥�
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AP White House reporter Aamer Madhani contributed to this report.
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