President Trump is betting new sanctions, a naval blockade and ramped-up economic pressure against Iran\u2019s trading partners can accomplish what thousands of bombs and missiles could not: force Tehran to accept a deal to end the war on U.S. terms. <\/p>\n
But like other U.S. efforts to force Iran into capitulation, there\u2019s one main problem: Iran\u2019s Islamic Revolutionary Guard Corps, which has claimed control of the vital Strait of Hormuz and sent volleys of attack drones across the Persian Gulf, may be impervious to such pressure \u2014 and has plenty of ways to retaliate.<\/p>\n
A key part of the U.S. effort will come Monday, when Treasury Secretary Scott Bessent has promised to unveil details of a plan designed to shift the conflict from tit-for-tat strikes across the Middle East to full-blown economic isolation \u2014 a campaign that could touch nations ranging from China and India to Turkey and the United Arab Emirates.<\/p>\n
Yet significant new economic pressure is likely to prompt Iran to retaliate with military strikes across the gulf \u2014 including against energy infrastructure \u2014 in an attempt to push up oil prices and raise the cost of the U.S. effort, forcing Trump to shift his approach once again.<\/p>\n
\u201cIf this is actually effective, at some point, Iran will lash out again \u2014 they just will have no alternative,\u201d said Nate Swanson, a senior fellow at the Atlantic Council who worked on Iran issues at the State Department and White House National Security Council until last year. \u201cTrump may see this as a different phase of the war, but I don\u2019t think Iran does.\u201d<\/p>\n
Since the U.S. and Israel first attacked Iran on Feb. 28, Iran has repeatedly shown the ability to endure airstrikes on thousands of targets, layers of sanctions and a U.S. Navy blockade \u2014 yet still retain the ability to hit back. <\/p>\n
Tehran has used Shahed attack drones and ballistic missiles to hit U.S. bases and civilian sites across the gulf, including water and power infrastructure. That has kept the Strait of Hormuz largely shut, raised global energy prices and forced wealthy gulf nations to lobby the U.S. into finding a diplomatic offramp to the unpopular conflict. <\/p>\n
Iran\u2019s grip on the strait also gives it immense leverage in any potential talks with the United States.<\/p>\n
Bessent suggested last week that the shift to an economic campaign \u201cmeans that likely there will not be a large-scale kinetic restart.\u201d But analysts aren\u2019t so sure that Iran will refrain from a return to open hostilities, even if the U.S. does.<\/p>\n
\u201cIf this new economic pressure campaign works \u2014 and that\u2019s a big if \u2014 it\u2019s more likely that we would see military action coming out of Iran than that we would see capitulation, at least as a first step,\u201d said Chris Kennedy, the economic statecraft lead at Bloomberg Economics. \u201cJust because the U.S. has decided to pause its full-blown military operation doesn\u2019t mean Iran will follow suit.\u201d<\/p>\n
It\u2019s not clear exactly how the U.S. could meaningfully ramp up economic pressure on Iran, other than going after China \u2014 the main buyer of Iranian oil \u2014 and risking blowback. Going after smaller entities in countries such as Iraq, Turkey or the United Arab Emriates would be unlikely to break Tehran\u2019s will. <\/p>\n
Still, the U.S. economic pressure campaign is having an effect. It now risks triggering one of Iran\u2019s worst ever economic crises, despite the country weathering years of broad isolation.<\/p>\n
Even before the war, a slump in the Iranian rial triggered nationwide protests, with the government killing thousands of demonstrators. Since the war began, the nation\u2019s citizens have seen their purchasing power evaporate under inflation that\u2019s now above 80% and with a currency that\u2019s lost almost 30% of its value this year alone. <\/p>\n
Last week, Iran\u2019s central bank governor said the nation\u2019s oil exports had \u201cvirtually stopped\u201d under the U.S. blockade, ending the government\u2019s main source of revenue. The International Monetary Fund said in April it expected Iran\u2019s economy to shrink 6.1% this year, the worst contraction in decades.<\/p>\n
On Friday, Iranian President Masoud Pezeshkian urged an end to the war with the U.S. But his responsibilities are mostly limited to domestic economic policy, while hard-line Iranian officials, including some in the nation\u2019s powerful military leadership, have argued that Iran is winning and should continue the fight.<\/p>\n
It\u2019s possible the new measures Bessent will announce Monday and the ongoing naval blockade will eventually spur Iran to return to the interim diplomatic deal it reached with Washington in June, said David Schenker, a U.S. diplomat for the Middle East during Trump\u2019s first term. <\/p>\n
But it could take six months for any measures to have a significant impact, testing the patience of the Trump administration, he said, noting the Iranian government has shown it can endure major economic pain while largely ignoring the suffering of the nation\u2019s people.<\/p>\n
\u201cIt could drag on for some time,\u201d said Schenker, now a fellow at the Washington Institute for Near East Policy. \u201cThe Iranian regime still sees itself as having leverage and being in a good position.\u201d<\/p>\n
Martin writes for Bloomberg. Bloomberg writers Magdalena Del Valle and Golnar Motevalli contributed to this report. <\/p>\n","protected":false},"excerpt":{"rendered":"President Trump is betting new sanctions, a naval blockade and ramped-up economic pressure against Iran\u2019s trading partners can…\n","protected":false},"author":2,"featured_media":261432,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[26],"tags":[71913,71911,394,359,34,8810,14086,5121,71912,39,69,2968,392,71910,16565,36],"class_list":["post-261431","post","type-post","status-publish","format-standard","has-post-thumbnail","category-persian-gulf","tag-bloomberg-economics","tag-economic-isolation-plan","tag-government","tag-gulf","tag-iran","tag-last-week","tag-last-year","tag-nation","tag-other-u-s-effort","tag-persian-gulf","tag-tehran","tag-thousand","tag-trump","tag-u-s-term","tag-vital-strait","tag-war"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/117145723345970051","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/261431","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=261431"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/261431\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/261432"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=261431"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=261431"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=261431"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}