Trump Pivots to Sanctions as Iran War Strategy Shifts
The Trump administration is returning to sanctions as its primary strategy toward Iran, marking a significant shift after months of military bombardment and stalled diplomatic efforts failed to end the conflict. The pivot, confirmed by President Donald Trump over the weekend, signals a renewed bet that economic pressure can achieve what bombs and negotiations could not.
According to AP News, the administration is hoping that months of bombing have pushed Iran’s economy to a breaking point that will force its leadership to cave to demands to end its nuclear program and fully reopen the Strait of Hormuz to oil and natural gas tankers.
A Strategic Reversal
The shift represents something of a flip-flop for Trump, who has long derided past presidents for relying on sanctions to limit Iran’s economic ability to fund its military and nuclear development. In a speech last week in Las Vegas, he defended the bombing campaign that began on Feb. 28 by arguing that sanctions from previous administrations dating back to November 1979 had failed.
“It’s been 47 years, but really, it’s been 50 years because they’ve been saying 47 for three years, it’s been 50 years,” Trump said. “And no other president has done what you should have done a long time ago, because Iran cannot have a nuclear weapon, can’t have it.”
Yet on Sunday, Trump told Axios that the United States is “low keying it” with Iran and only “semi-negotiating,” according to Breitbart. “We are just watching Iran with its huge inflation and the fact they have no money,” he said.
The president also announced Monday that he is now demanding compensation from Iran for decades of U.S. military deaths, a direct response to Tehran’s own demand for war reparations. As AP News reported, Trump said he has “instructed my representatives to put this firmly into any, and all, future negotiations.”
Operation Economic Fury
The administration has been engaged in what it calls “Operation Economic Fury” against Iran since April 16, according to AP News. Treasury Secretary Scott Bessent has described the campaign as the “financial equivalent” of a bombing campaign, threatening secondary sanctions against countries and financial institutions that do business with Iran.
“We have told companies, we have told countries that if you are buying Iranian oil, that if Iranian money is sitting in your banks, we are now willing to apply secondary sanctions, which is a very stern measure,” Bessent said at an April White House briefing.
The economic pressure comes alongside a U.S. naval blockade of Iranian ports that has been in place since mid-April. The Treasury Department reports that 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.
Iran’s economy has suffered gravely, with the International Monetary Fund estimating the overall economy will shrink by 5.4% this year and the Iranian government reporting an annual inflation rate of 88.6%. As Fortune reported, Iranian officials have privately expressed growing concern that the blockade could bring the economy close to collapse.
Skepticism from Experts
Despite the administration’s confidence, sanctions experts question whether economic pressure alone will change Tehran’s behavior. Richard Nephew, a senior research scholar at Columbia University who helped direct Iran sanctions strategy in the Obama administration, told AP News that the value of sanctions is limited because Trump has not articulated clear strategic goals for the war.
“Economic pressure is a possible element in his strategy, but he’s yet to explain the purpose,” Nephew said. “Trump has systematically weakened his own hand through his inadequate use of force, inarticulate elucidation of an objective, and vacillation on negotiations.”
Juan Zarate, a deputy national security adviser in the George W. Bush administration, noted that sanctions and the naval blockade give the U.S. significant leverage. But he cautioned that these tools take time.
“The ultimate question will be how far the United States is willing to go to constrict Iran’s 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’s behavior,” Zarate said.
Iran’s Response
Iran does not appear publicly intimidated by the prospect of more financial sanctions. Esmail Baghaei, spokesman for Iran’s Foreign Ministry, dismissed the pivot on social media.
“Whenever Washington proves itself incapable of pursuing diplomacy, it retreats into sanctions; and whenever those sanctions fail to produce results, it simply increases the dose,” Baghaei said. “The 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.”
Tehran has laid out sweeping conditions for reopening the Strait of Hormuz, including lifting the naval blockade, ending sanctions, withdrawing U.S. forces, paying war reparations, and unfreezing Iranian assets. As Al Jazeera explained, the appointment of former Revolutionary Guard commander Mohsen Rezaei to head Iran’s Supreme National Security Council on Aug. 9 signals that the hardline wing may be gaining ground in Tehran’s internal power struggle.
Mehran Kamrava, a professor at Georgetown University in Qatar, told Al Jazeera that neither side appears willing to take the first step toward meaningful negotiation.
“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,” Kamrava 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.’”
Political Pressures at Home
The pivot comes as Trump faces significant political headwinds at home. The war is unpopular in the United States, with only about 35% of Americans approving of it, according to a recent Reuters/Ipsos poll cited by Al Jazeera. The conflict and higher gasoline prices are political liabilities ahead of November’s midterm elections.
Crude oil prices climbed on Monday as investors interpreted Trump’s comments as a sign that fewer ships would be traversing the Strait of Hormuz, continuing to limit global supplies. The waterway carried roughly 20% of global oil supplies before the conflict, and attempts to reopen it have been short-lived as it has become a source of leverage for the Iranians.
Defense Secretary Pete Hegseth defended the economic strategy, telling reporters Monday: “It’s not just what the military can do — we’ve got the most powerful economy in the world as well. And when you’ve 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.”
What’s Next
The administration’s bet is that economic strangulation will eventually force Iran to accept U.S. terms. But as NPR noted, sanctions are often a longer-term strategy rather than an immediate tool of warfare that can halt a conflict.
A senior U.S. official, speaking on condition of anonymity, said the administration views the naval blockade and sanctions as effective and sees Trump as having additional options that can be applied more forcefully in the weeks and months ahead. The official noted that about 8 million barrels of oil are quietly exiting the Persian Gulf each night through a southern lane in the Strait of Hormuz with U.S. military assistance, according to Fortune.
Whether the economic pressure campaign will succeed where bombs and diplomacy failed remains an open question. With both sides entrenched and the Strait of Hormuz still largely closed, the conflict appears set to continue — albeit through economic rather than kinetic means.
As Trump put it in his Axios interview: “It will work out. It always works out. It’s like a chess game.”