President Donald Trump indicated on Sunday that he is moving away from threatening military force in favor of applying economic pressure on Iran to end the war.
“We are low-keying it,” he told Axios on a brief phone call. “We are only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact they have no money.”
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Trump credited the U.S. naval blockade in the Strait of Hormuz for exacerbating Iran’s economic crisis. He said the Islamic regime “is in very bad shape” economically and has no money left to pay its troops.
Meanwhile, the president said he believes the public is feeling less financial strain from the war now that crude oil is down to over $75 per barrel. Oil prices reached their peak in March and April at $118 per barrel.
While critics are dismayed by the president’s handling of the conflict, Trump is confident of his strategy to end the war.
“It will work out. It always works out. It’s like a chess game,” Trump said of his administration’s back-and-forth dealings with Iran.
A week ago, Trump was ready to have the U.S. military bomb Tehran in an effort to force Iranian officials to the negotiating table. He instead settled for diplomacy, claiming a peace deal was near. Negotiations remain paused for the time being.
This weekend, Iran released a new list of demands that would allow shipping to pass through the Strait of Hormuz. The demands require the United States to threaten Iran no more; end hostilities with Iran, Lebanon, Palestine, Yemen, and Iraq; terminate its naval blockade and remove all military forces around Iran; pay damages for the war and lift sanctions on the regime; and unfreeze Iranian assets.
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The demands were issued as Iran negotiates with Oman to fully reopen the Strait of Hormuz to international traffic. An agreement, however, depends on how the U.S. responds to those broader concessions.
In its talks with Oman, Iran is proposing a 7% shipping toll in the strait that could result in Tehran generating about $136 billion annually. The U.S. strongly opposes that idea.
