Trump pivots to sanctions as Iran conflict drags on

U.S. President Donald Trump has again turned to economic sanctions as a tool to pressure Iran, even though he has previously argued that decades of sanctions failed to curb Tehran's nuclear ambitions. With other strategies to end the ongoing conflict stalling, the administration now hopes that fresh financial pressure will force Iran to capitulate.

The President has said he began military action after 50 years of economic pressure failed to halt Iran's nuclear programme. Yet he now seems to believe another round of sanctions can end the conflict. Speaking to reporters on Monday, Mr. Trump said Iran is "broke, totally broke" and claimed it faces 300% inflation—a figure higher than what his own officials have cited. He also announced that Washington would seek compensation from Iran as part of any peace talks, mirroring Tehran's demands. His remarks contributed to a rise in global crude oil prices on Monday, as investors anticipated continued disruptions to shipping through the Strait of Hormuz.

The shift comes as U.S. stockpiles of key weapons have dwindled and as stop-start negotiations seem to have stalled again. Since April 16, the White House has pursued so-called "Operation Economic Fury" against Iran, a strategy Treasury Secretary Scott Bessent has called the "financial equivalent" of a bombing campaign. Under this policy, nations that purchase Iranian oil or maintain financial ties with Iran risk U.S. sanctions themselves.

But analysts question whether sanctions can deliver the rapid effect the President seeks. Sanctions are generally a long-term instrument, and Iran has already endured decades of economic isolation. The immediate damage to Iran's economy from the near-total closure of the Strait of Hormuz may already be severe, making the additional impact of sanctions uncertain.

Iran's Foreign Ministry spokesman, Esmaeil Baqaei, dismissed Washington's latest move. "Whenever Washington proves itself incapable of pursuing diplomacy, it retreats into sanctions," he wrote on social media. He warned that American politicians, by clinging to this habit, might "strangle their own remaining chances of a less humiliating exit from a crisis of their own making."

Richard Nephew, a senior research scholar at Columbia University and a former coordinator for Iran sanctions at the U.S. State Department, said the administration has not defined clear strategic objectives for the conflict. The President has at times stressed preventing Iran from acquiring a nuclear weapon, at other times emphasized reopening the strait, and has also raised the issue of ballistic missiles.

"Economic pressure is a possible element in his strategy, but he's yet to explain how it all fits together," Mr. Nephew said.

The economic consequences of the conflict extend beyond Iran. The war has driven up U.S. gasoline prices, making it increasingly unpopular at home. A prolonged conflict also risks fueling inflation in other economies. The Strait of Hormuz, which normally carries about 20% of the world's oil supply, has been largely closed since the fighting began, affecting shipments of crude oil, natural gas, and other energy products.

Attempts to reopen the waterway have been temporary, as Tehran uses its control over the strait as leverage in negotiations. The White House has not detailed what new sanctions might be imposed, but the threat alone has already had an effect on markets.

As the conflict drags on, the Trump administration's renewed focus on sanctions reflects the difficulty of finding a clear path to an end. Whether additional economic pressure can achieve what months of military action have not remains an open question.