What’s behind Trump’s shift to economic pressure on Iran? Will it work? 

More than 23 weeks into the war on Iran, United States President Donald Trump has signalled he would rather rely on squeezing Tehran’s economy than returning to a military offensive, as he had warned he might last week.

Shipping through the Strait of Hormuz, the critical waterway now central to negotiations aimed at ending the war, remains disrupted by Iranian forces as a US naval blockade tightens its grip on Iranian ports.

While Iran and Oman have said they are close to reaching an agreement on the management of the Strait of Hormuz, Trump said the US is “only semi-negotiating” with Iran. Tehran has denied direct talks at all with Washington.

So after months of expansive fighting, why is Trump turning to economic pressure over military force in this conflict?

“We are low-keying it,” Trump told the news website Axios in an interview on Sunday regarding the US approach to the war on Iran. This signals a complete change from his comments last week when he gave “duplicitous” Iran “one last chance” to make a deal or suffer catastrophic strikes.

Now, Trump said, he wants to hit Iran economically instead.

He said Iran is in “very bad shape” financially, citing high inflation and difficulty paying its own soldiers, and credited a US naval blockade in place since April with increasing that pressure.

“We are just watching Iran with its huge inflation and the fact they have no money,” he said.

Trump also claimed that falling prices of oil, which was trading at about $78 a barrel on Monday, have eased the economic impact on US consumers of the war and the closure of the Strait of Hormuz, which had sent oil prices above $100 a barrel for a time.

“It will work out. It always works out. It’s like a chess game,” he said.

Speaking about the war on Iran on Saturday, Vice President JD Vance told Fox News: “We’re in the middle of the game, and we’re applying a whole host of tools – diplomatic, economic, military tools – to ensure that we get the best outcome for the American people.”

The US has maintained a naval blockade against Iranian ports since mid-April. The aim is to reduce Iran’s oil exports – estimated at about 1.5 million barrels per day – and thereby significantly decrease its oil revenues.

On Saturday, the US military’s Central Command (CENTCOM) reported redirecting 53 commercial vessels, boarding two and disabling two others.

Trump described this as an unyielding “wall of steel”. Iranian authorities have attested to near-zero crude exports due to the blockade. The oil export constraints are adding to Iran’s existing economic woes, linked to domestic structural issues and mismanagement, topped off by years of harsh sanctions.

Iran’s infrastructure has also suffered significant damage during the war launched by the US and Israel in late February. Tehran has asked the US to compensate it for these losses as one of the conditions for reopening the Strait of Hormuz.

Is the US short on munitions?

Several US media reports have indicated that Washington is running low on munition stockpiles due to the fighting in the Middle East and Ukraine.

At the end of last month, Axios reported that the chairman of the US Joint Chiefs of Staff, General Dan Caine, had cautioned Defense Secretary Pete Hegseth and Trump that a shortage of air defence interceptors could hamper the US ability to protect its forces and allies in the Middle East.

The Pentagon has asked the US defence industry to rapidly escalate the production and delivery of weapons, including munitions in extremely short supply due to the war with Iran, The Washington Post reported, citing a Department of Defense memo.

However, a Pentagon official on Saturday told Al Jazeera that the US has enough munitions to sustain its military operations.

“We have sufficient munitions for the task at hand,” Jarred Conley, the principal deputy director at the Defense Department’s Defense Innovation Unit, told Al Jazeera in an exclusive interview. “The department has everything it needs today to execute a war.”

Is Trump under pressure at home over this war?

Trump began his second term in the White House at the beginning of last year promising to avoid “stupid wars”.

Currently, his war on Iran is unpopular in the US, where the president and his fellow Republicans are seeking to defend their narrow congressional majorities in November’s midterm elections.

Only about 35 percent of Americans approve of the war, a recent Reuters/Ipsos poll suggested. Asked which political party has a better approach to handling war and “terrorism”, registered voters picked Democrats over Republicans – 37 percent to 36 percent.

This is the first time Democrats ⁠have led since Reuters/Ipsos polling began posing the question in December 2024 when Republicans led 39 percent to Democrats’ 28 percent.

Will economic pressure work against Iran?

Mehran Kamrava, professor at Georgetown University in Qatar, said negotiations between Iran and the US are progressing very slowly and cast doubt on whether Washington’s economic pressure campaign would succeed.

He noted that Iran has been able to exert considerable pressure on Gulf countries where US military assets and infrastructure are located by attacking them with missiles and drones.

“What we have seen is that the Iranians are trying to put economic pressure on the regional neighbours, particularly on countries like Qatar, UAE, Saudi Arabia and Kuwait, so that they would in turn put pressure on the US to negotiate with Iran,” he said.

“Meanwhile, the US is putting economic pressure on Iran. … So neither side is willing to take that first step and extend an arm and say, ‘Let’s sit down and negotiate,’” he said.

Kamrava said he was sceptical that US economic pressure would prove effective, particularly as Iran’s leaders are not under the same internal political pressure as the Trump administration.

“Tehran is under tremendous economic pressure, but we need to bear in mind that Iran’s political system is ultimately a very repressive one. It’s not that people making decisions directly care about the plight of the middle classes,” he said.

“They want to stay in power,” he said, adding, “So I’m not sure if this tactic is going to work at this point.”

Not really. The US and Israel time and again have shifted the goalposts considerably since launching the war on February 28, the day they killed Iranian Supreme Leader Ali Khamenei.

At the outset, the US said the war was about restricting Iran from developing a nuclear weapon, which Tehran said it was never intending to do, and forcing a change in Iran’s government, which Trump has quietly dropped since. The US also made other demands, including restricting Iran’s ballistic missiles programme and ending its support for Iran-aligned armed groups around the region, such as Hezbollah in Lebanon, the Houthis in Yemen and others in Iraq and Syria.

As the war has continued, the cost to Gulf countries and the global energy crisis unleashed by the closure of the Strait of Hormuz have put pressure on Washington to reach a peace deal with Iran.

Iran put forward several conditions of its own for ending the war, including lifting the US sanctions and naval blockade and unfreezing Iranian assets. But a memorandum of understanding (MoU) that Iran and the US signed on June 17 to reopen the Strait of Hormuz and begin a 60-day negotiation period unravelled within days, mainly over disagreements about the management of the strait.

While the MoU did mention the eventual lifting of US sanctions on Iran and a reconstruction fund for Iran, it did not specifically cover US demands about Iran’s ballistic missile programme or regional armed proxy groups. It also appeared to show the US had given up any hope of forcing regime change in Iran.