Trump Turns Back to Economic Sanctions as Other Strategies Fail to End Iran War
President Donald Trump is increasingly turning back to economic sanctions and financial pressure as his administration searches for a way to bring the war with Iran to an end, following the apparent failure of military action and stop-start diplomatic efforts to deliver a quick breakthrough.
Trump has argued for years that decades of economic sanctions against Iran failed to prevent Tehran from advancing its nuclear ambitions. Yet, as the conflict enters a difficult phase, his administration is once again betting that intensified economic pressure could push Iran’s leadership toward accepting U.S. demands.
The strategy rests on the belief that months of American military strikes, combined with restrictions on Iran’s oil trade and a naval blockade affecting the Strait of Hormuz, have pushed the Iranian economy closer to a breaking point.
The administration hopes that further financial pressure will eventually force Tehran to agree to abandon its nuclear programme and fully reopen the strategic waterway to international oil and natural-gas shipments.
Trump signalled the shift on Monday, saying that if Iran expects financial compensation as part of any peace agreement, the United States should also demand compensation. The president has also increasingly portrayed Iran as economically exhausted and incapable of sustaining a prolonged confrontation.
“They have no money. You know, Iran is broke, totally broke,” Trump told reporters.
Trump also claimed that Iran’s inflation had reached 300%, although that figure is considerably higher than estimates being cited by U.S. administration officials.
Economic pressure becomes Washington’s latest weapon
The renewed emphasis on sanctions comes at a critical moment for the United States. American stockpiles of some key weapons have reportedly declined, while repeated attempts to restart negotiations have failed to produce a lasting agreement. At the same time, the conflict has generated economic consequences beyond Iran and the United States.
Oil prices climbed Monday after Trump’s comments were interpreted by markets as a sign that restrictions on shipping through the Strait of Hormuz could continue. The waterway is one of the world’s most important energy corridors, carrying roughly one-fifth of global oil supplies before the conflict. Its disruption has raised concerns about supplies of gasoline, jet fuel, natural gas and other energy products.
Although efforts have been made to reopen the strait, those attempts have been short-lived, allowing Iran to use control over the waterway as an important bargaining tool in negotiations.
Iran, however, has shown little public indication that it is prepared to surrender under the threat of additional sanctions. Iranian Foreign Ministry spokesman Esmaeil Baqaei criticised Washington’s approach, arguing that the United States repeatedly returns to sanctions whenever diplomacy fails.
His comments underline Tehran’s longstanding position that increased economic pressure will not necessarily force the Iranian government to accept Washington’s demands.
‘Operation Economic Fury’ intensifies pressure
The Trump administration has already been pursuing an expanded economic campaign against Iran since April 16, calling the initiative “Operation Economic Fury.” Treasury Secretary Scott Bessent has described the financial campaign as the economic equivalent of the military offensive.
Under the strategy, countries and financial institutions that continue purchasing Iranian oil or conducting business with Tehran could face American sanctions. The goal is to make it increasingly difficult for Iran to generate revenue, finance its government, support military operations and maintain its oil exports.
But experts warn that sanctions operate differently from military strikes. Richard Nephew, a senior research scholar at Columbia University who previously helped direct Iran sanctions policy during the Obama administration, said economic restrictions cannot necessarily deliver the immediate impact created by military action or the closure of a major shipping route.
He also questioned the broader strategy behind the war, arguing that the Trump administration has not consistently communicated a single objective.
At different points, Trump has emphasised preventing Iran from acquiring a nuclear weapon, reopening the Strait of Hormuz and restricting Iran’s ballistic missile capabilities. That uncertainty, according to analysts, could undermine the effectiveness of economic pressure.
Sanctions could take months to deliver results
Juan Zarate, who served as a deputy national security adviser during the George W. Bush administration, said sanctions and the naval blockade nevertheless give Washington significant economic leverage. The United States can also threaten third countries that continue doing business with Iran, potentially increasing the cost of maintaining economic relations with Tehran. But Zarate stressed that sanctions require patience.
The key question, he said, is whether Washington is prepared to significantly restrict Iran’s oil trade and impose severe penalties on countries that continue doing business with Tehran, and whether the resulting economic pain will eventually change Iranian behaviour. That creates a difficult calculation for Trump.
While the president is betting that Iran’s economic vulnerability could force its leaders to negotiate, the United States is also dealing with the domestic economic consequences of the conflict.
Iran’s economy under severe pressure
Iran’s economy has already been badly damaged by years of sanctions and the latest conflict. The International Monetary Fund has estimated that Iran’s overall economy could contract by 5.4%, while Iranian authorities have reported annual inflation of 88.6%.
The U.S. Treasury Department has also reported a dramatic decline in Iranian oil shipments. Average Iranian oil loadings have reportedly fallen from approximately 1.8 million barrels per day before the war to fewer than 500,000 barrels per day during the past month. The figures demonstrate the scale of the economic pressure facing Tehran.
But the conflict is also creating economic challenges for Americans. Although the U.S. economy has continued to expand, inflation remains elevated and higher borrowing costs have added pressure on households and businesses. Rising energy prices have also created political difficulties for the Trump administration as public concern over the war grows.
Trump defends the shift despite previous criticism
Trump’s renewed reliance on sanctions represents a notable change from his previous criticism of economic pressure as a strategy against Iran.
For years, the president has argued that previous administrations failed to do enough to prevent Iran from developing its nuclear capabilities.
During a speech in Las Vegas last week, Trump defended the decision to launch military strikes, arguing that decades of sanctions dating back to 1979 had failed to achieve the desired outcome.
His current strategy, however, suggests that economic pressure may once again become a central component of Washington’s attempt to force Tehran into concessions. A senior U.S. official, speaking anonymously about the administration’s strategy, said American military operations had significantly weakened Iran’s ability to produce, sell and transport oil and other energy resources.
The administration believes that combining military pressure, sanctions and the naval blockade gives Washington several additional tools that can be intensified in the coming weeks and months.
Defense Secretary Pete Hegseth reinforced that position Monday, arguing that America’s economic strength gives the administration another powerful weapon. “It’s not just what the military can do we’ve got the most powerful economy in the world as well,” Hegseth said.
The high-stakes gamble
Trump’s latest strategy therefore represents a major economic gamble. The administration is betting that Iran’s worsening financial situation will eventually become more painful than continuing the conflict, forcing Tehran to accept U.S. demands.
But Iran has endured decades of sanctions, economic isolation and financial hardship without abandoning all of its strategic objectives.
The question now is whether the combination of military strikes, restrictions on oil exports, pressure on international banks and continued disruption around the Strait of Hormuz will finally push Tehran toward a negotiated settlement, or simply deepen an already dangerous confrontation.
For Trump, the coming weeks could determine whether his economic strategy becomes the pathway to ending the war or another chapter in an increasingly costly and uncertain conflict.
