The Trump administration is employing a combined strategy of economic pressure and military action in its ongoing efforts to influence Iran's government, which has resisted backing down from its current course. This dual approach aims to isolate Iran economically while maintaining the threat of escalated military engagement.
Last week, the administration launched "Operation Economic Outcast," a campaign intended to sever Iran's remaining global trade ties. Concurrently, the U.S. has resumed military strikes, leading to Iranian retaliation and renewed anxieties about a broader regional conflict. However, the existing sanctions and intermittent bombing campaign over the past six months have not altered the Iranian leadership's stance. This has led to frustration within the administration, particularly as rising energy prices, global economic instability, and declining poll numbers related to the conflict loom ahead of the November midterm elections.
President Donald Trump expressed optimism Wednesday that the conflict would not persist much longer. He dismissed suggestions that the conflict's unpopularity or high gasoline prices, influenced by Iran's control over the Strait of Hormuz, would negatively impact Republican candidates in the upcoming elections. "It doesn’t matter. And I’m not affected by the election," Trump told reporters. "I’m not running. But my party is running, and I’m going to help my party. But I think my party respects the fact that we’re not allowing Iran to have a nuclear weapon."
A regional diplomat, speaking anonymously, indicated that domestic priorities are a significant factor for both nations' reluctance to de-escalate. For Trump and the Republican party, the midterm elections are a key concern, while Iran faces its own internal crises. This stalemate, the diplomat suggested, means neither side is willing to concede first.
According to the diplomat, any potential negotiations, whether between Iran and Oman or even Iran and the U.S., will hinge on addressing Israel's role, which was the initial catalyst for the conflict. The diplomat also expressed skepticism regarding the effectiveness of the new U.S. sanctions plan, noting that the threats require further clarification beyond what has been publicly provided.
The "Operation Economic Outcast" initiative, announced with considerable fanfare, has so far had limited impact. The U.S. has targeted one branch of an Egyptian bank in the United Arab Emirates. For sanctions to be truly effective, experts agree they must target Iran's primary trading partners, including China, India, and Russia. However, the administration appears hesitant to impose sanctions on China, especially in light of an upcoming meeting with President Xi Jinping.
The U.S. maintains that it controls the Strait of Hormuz, a critical route through which one-fifth of the world's oil transited before the conflict began. Reopening the strait fully is a primary objective for the U.S. administration. Currently, ship traffic remains significantly below pre-war levels due to the risks associated with Iranian vetting procedures near its coastline. Data from Lloyd’s List Intelligence shows approximately 102 transits last week and 126 the week before, a notable decrease from the pre-war average of over 130 per day.
White House spokesperson Anna Kelly stated on Thursday, "As President Trump said, the strait is open and all mines have been cleared. The naval blockade remains in full force and effect, and Operation Economic Outcast is underway to sever every remaining economic lifeline sustaining the regime."
Administration officials have highlighted the economic toll on Iran, pointing to rampant inflation and a substantial devaluation of its currency, describing Iran's financial system as "one big house of cards."
Secretary of State Marco Rubio commented that Iran's primary consequence will be economic, adding, "but we reserve the right ... to take military action when necessary — not just to protect ourselves but to prevent them from being able to threaten others as well." He told Fox News, "They’re going to continue to feel the squeeze."
Treasury Secretary Scott Bessent compared Iran to a "a snake that has been decapitated but whose body is still writhing," asserting, "We are burying the head of the Iranian snake... The snake doesn’t know it’s dead yet, but it will stop wiggling when the sun goes down. And so the Iranian regime — they are in demise, and they will figure it out."
Internal divisions within Iran's leadership, between moderates favoring negotiation and hardliners advocating for a more confrontational stance, complicate the situation for the U.S. While President Masoud Pezeshkian has voiced support for a negotiated solution, hardliners appear to hold greater influence, and Tehran continues to respond to U.S. military strikes with actions against U.S. interests and allies in the region.
Analysts describe the current U.S. strategy as a "hybrid approach — the combination of military force, blockade and economic pressure — that is the only option that seems to be available to the United States at this moment." This situation is characterized as a "battle of endurance between the two sides."
Two primary reasons are cited for the deteriorating situation: neither party is satisfied with the current outcome, meaning it does not serve U.S. or Iranian interests well. Additionally, leaders on both sides are concerned about domestic perceptions. The Trump administration fears being perceived as having failed to successfully conclude the military campaign, which could impact the midterm elections. Conversely, Iranian leaders, particularly within the Revolutionary Guard, are wary of appearing to submit to U.S. sanctions without a strong response, which could have negative domestic repercussions.