The U.S. Is Back to Squeezing Iran’s Economy

President Trump may have reached the limits of what he can achieve by bombing targets in Iran—now he’s trying to use economic pressure to bring Tehran back to the negotiating table. After a six-week pummeling by U.S. and Israeli forces failed to force Iran to capitulate, and a marathon weekend negotiating session ended without a deal, the United States announced that it would be imposing a naval blockade on Iran. The latest strategy illustrates just how far the war has shifted from Trump’s original—albeit confusing—objectives. The principal American interest today is to walk into the next round of talks with a clear advantage, by making Iran’s economic life as difficult as possible.

That is, to reach a peace deal during the already declared cease-fire, the U.S. believes that it needs to wage a new kind of war, this time by targeting Iran’s economy—which depends heavily on energy exports through the Strait of Hormuz.

The blockade is “the least bad option” after the collapse of the talks in Islamabad last weekend, one former military official told us. Trump has repeatedly claimed victory in the war, but the regime remains in charge in Tehran and has used its control of the strait to impose steep economic costs on the world. Imposing a blockade will also draw the U.S. military deeper into the conflict, potentially putting Navy ships face-to-face with Iranian forces or proxies.

The war’s outcome may now be decided by whether the U.S. or Iran blinks first from the economic pain and returns to the negotiating table with concessions. U.S. intelligence suggests that Iran may be more economically fragile than it is letting on, and that the loss of oil revenue from the blockade might force its hand, U.S. officials told us. But regardless of who wins, there are already a couple of clear losers. One is the rest of the world, which will suffer prolonged economic pain while Washington and Tehran engage and stare each other down at sea. The second is Trump’s own reputation as a leader who has spent years calling the geopolitical shots by making maximalist threats.

Trump has had little luck in recent weeks turning his headline-grabbing rhetoric into substantive victories on the world stage. Trump and J. D. Vance made extensive and highly visible efforts to prod the Hungarian electorate into backing another term for Prime Minister Viktor Orbán, but couldn’t prevent the resounding defeat of Trump’s ally at the polls yesterday. European allies, in the face of Trump’s hectoring, have declined to enter the war in Iran. And Israeli Prime Minister Benjamin Netanyahu has so far not stopped his country’s war with Lebanon, a key Iranian demand, though he agreed to Trump’s request to rein in assaults and engage in direct talks with Lebanon this week in Washington, D.C.

[Read: There’s a message for MAGA in Viktor Orbán’s defeat ]

Even Trump’s recent trolling of Pope Leo XIV—which included posting a depiction of a Christlike Trump and an accusation that the head of the Roman Catholic Church was “WEAK on Crime”—was met with a papal riposte that encapsulates how more and more global leaders appear to be feeling: “I have no fear of the Trump administration.”

The blockade took effect today, but neither the White House nor the Pentagon provided much detail on how it will work. America’s allies and even officials within the military were scrambling to understand the scope of Trump’s order and how it would affect shipping through the strait and, by extension, the global economy.

The U.S. carried out what it called a naval “quarantine” against Cuba during the 1962 missile crisis. And the Trump administration conducted a limited blockade of Venezuela, targeting oil tankers, in the weeks leading up to the January capture of President Nicolás Maduro. But Washington rarely employs the tactic, because it is considered an act of war under international law; it’s complex to implement, demanding troops and materiel; and it’s inherently risky, current and former military officials told us. Speaking on the condition of anonymity to share sensitive operations details, they described for us what would be involved.

[Read: Venezuela seems to be going … well?]

A formal blockade of the Strait of Hormuz that prevents Iranian ships and any other nations’ ships leaving Iranian ports from transiting to the Gulf of Oman and the Arabian Sea would begin with air power, the officials told us. At least two aircraft-carrier groups or land-based air forces would be tasked with providing cover for seaborne forces monitoring the waterway. P-8 Poseidon patrol aircraft would watch the water and attack targets at sea. E-2 Hawkeye radar planes would fly above the fleet to detect threats and other aircraft. The U.S. would also swarm the strait with drones.

Controlling access points would take roughly a dozen destroyers and littoral combat ships. These ships, along with autonomous systems that don’t require human navigation, could also be used to conduct de-mining operations. Regional partners, including the United Arab Emirates, might also contribute to the effort.

Once a suspected Iranian ship attempted to break the blockade, Marines or Navy SEALs would need to board the ship, arriving by helicopter or on small boats. One Marine Expeditionary Unit, which could provide three boarding parties at any given time, is already nearby. But after U.S. troops seize an Iranian vessel, where would it go and who would guard it? This scenario assumes that those aboard such a ship would peacefully comply with U.S. orders. What if Iran put armed Islamic Revolutionary Guard Corps members on its ships who resist the American operation? For riskier boarding operations, the military typically employs highly skilled Special Operations forces, but even then things can go awry. In 2024, two SEALs died during one such mission off Somalia.

How else might Iran respond to the blockade? The regime, as it did during the 39-day U.S.-led campaign, could hit back with asymmetrical tactics—laying mines or launching drones and missiles. Those attacks might target both U.S. naval forces and Persian Gulf partners, on land and at sea. A single mine would not destroy a tanker but could sink a U.S. destroyer. The Iranians could also ask the Houthis in Yemen to harass commercial-shipping vessels in the Red Sea, which the group has done before, choking off an alternate route.

In theory, the blockade will prevent Iran from exporting additional oil from its ports—a sharp reversal from the Trump administration’s effort earlier in the war to lower the global price of oil by easing restrictions on the Iranian supply already at sea. Trump’s social-media post announcing the blockade indicates that the United States would interdict any vessel in international waters that had paid Iran to transit the strait. “No one who pays an illegal toll will have safe passage on the high seas,” he said on Truth Social. In the Venezuela blockade, the U.S. Navy pursued ships as far as the Indian Ocean. But Central Command, which oversees military operations in the Middle East, has suggested that it is pursuing a more narrow mission focused on blockading Iranian ports. The U.S. military is also beginning a mission to clear the area of Iranian mines—but how many are hiding in the strait remains unknown, making the endeavor all the more perilous.

A blockade offers the U.S. a flexible, coercive means of imposing economic damage while minimizing direct civilian casualties. Air strikes on a bridge or a power plant, unlike a blockade, create damage that is not easily reversed. Retired Vice Admiral Kevin Donegan, who commanded U.S. naval forces in the Middle East from 2015 to 2017, said that the Navy has long interdicted vessels suspected of carrying drugs or other illicit cargo from Iran, including weapons bound for allies in Yemen. U.S. sailors, he said, can manage the risk associated with unwilling crews and with anti-ship fire from shore. “If your idea is to keep up the pressure on Iran during negotiations, a blockade does that without having to resort to restarting air strikes,” he told us.

But even if the blockade is successful, a return to normalcy for shipping traffic and prewar energy prices remains a long way off. Trump, in an interview yesterday with the Fox News host Maria Bartiromo, said the price of oil might come down by November’s midterm elections—or “it could be, or the same or maybe a little bit higher, but it should be around the same.”

[Read: Iran out-trolled the troller in chief ]

Since the beginning of the conflict, commerce has slowed to a trickle in the strait, through which one-fifth of the world’s traded oil normally transits. Trump’s cease-fire nearly a week ago raised hopes that trade would soon resume. Now “that optimism has evaporated,” Chris Newton, an analyst at the International Crisis Group, told us. “If you take what Iran and the United States have said publicly, what you have is a double blockade, and no one wants to sail through that.”

The U.S. and Iran may yet return to their negotiations before the cease-fire expires next week. The 21 hours of meetings in Islamabad didn’t yield a breakthrough, but officials tell us that they did create some momentum. U.S. officials described the second stretch—nearly 10 hours—as the point when the friction between the two sides abated and they began to listen to each other. The result was a framework that would allow for future talks, though one official acknowledged that the cease-fire could still end with either a deal or a resumption of conflict.

The talks produced progress on the U.S. demand that Tehran abandon its nuclear-weapons ambitions, the official told us without providing specifics. But friction over the strait persists. After all of the ordnance that the U.S. and Israel have dropped in their effort to bring Iran to heel, the verdict of global markets might ultimately prove dispositive.

In the meantime, despite Trump’s threats and bluster, the U.S. may have to rely on other nations to find peace. Pakistan, Egypt, and Turkey continue to try to get the talks back on track. The foreign minister of China, a major importer of Iranian oil, today urged other nations to “unequivocally oppose any actions that undermine the cease-fire or escalate the confrontation.” (Trump is scheduled to travel to Beijing next month for high-level talks, which have already been postponed once because of the war.) And the United Kingdom and France this week will host talks that are intended to form a peaceful multinational mission to restore freedom of navigation through the Strait of Hormuz.