The Real Reason Iran Hasn’t Struck a Deal
On Monday, Iran made Donald Trump an offer: It would open the Strait of Hormuz in exchange for lifting the U.S. blockade while nuclear negotiations continued. On Wednesday, Trump rejected this offer, promising to keep the blockade in place until Iran agrees to America’s terms on the nuclear issue. The blockade “is genius,” he said, and “now they have to cry uncle. That’s all they have to do. Just say, ‘We give up.’”
The Trump administration’s explanation for this standoff is that there is an “absolute fracture” in the Iranian regime between the military and the negotiators. Secretary of State Marco Rubio told Fox News that “unfortunately, the hard-liners with an apocalyptic vision of the future have the ultimate power in that country,” especially because the new supreme leader, Mojtaba Khamenei, is “untested” and “has not been seen.”
The administration now appears to be gaming out a new course of action: strikes targeting not Iran’s military capacity but the faction inside the regime that it believes is blocking a deal. The president recently reposted a video of the Washington Post columnist Marc Thiessen calling for an aerial campaign to do exactly this. According to Axios, the military has prepared options for a “short and powerful” wave of strikes, which General Dan Caine, the chairman of the Joint Chiefs of Staff, briefed to the president yesterday.
The timing of such a move is complicated because of Trump’s state visit to China scheduled for mid-May, which has been postponed once before. Strikes could happen within the next few days, so as to precede the trip, or they could come immediately after it.
But the assumption underlying this approach is almost certainly wrong. The Islamic Revolutionary Guard Corps has proved far more resilient than either Washington or Jerusalem anticipated. An institution that has survived multiple rounds of air strikes, international isolation, and the death of much of its senior leadership does not capitulate because a few more names are removed from the org chart. And hard-liners are spread throughout the regime, not just in the IRGC.
Iran and the United States have failed to come to an agreement not because hard-liners are blocking pragmatists inside Iran, but because both sides seem to sincerely believe that they have won the war.
According to Trump, the United States has destroyed Iran’s navy and air force, many of its missiles, and much of its military and industrial capacity. But the Iranian regime sees mainly that it has withstood a war that has aimed to topple it, has demonstrated its ability to attack the Persian Gulf and Israel, and has succeeded in controlling the Strait of Hormuz.
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During talks in Islamabad, the U.S. negotiating team, led by J. D. Vance, found that Iran was entirely unresponsive to American demands regarding its nuclear program. Instead of going back to war, Trump opted for a blockade, which Vance reportedly believed would cause Iran to give in after a few days.
But Iran has resisted U.S. demands to completely cease enriching uranium, and to curb its missile program, for years. It has gone to war with the United States and Israel twice rather than concede those points. The Iranian regime is not likely to give away at the negotiating table what it believes America was unable to gain through war.
The Trump administration seemed to expect that the blockade would collapse the Iranian oil industry in a matter of weeks. On April 27, Treasury Secretary Scott Bessent posted on social media: “While the surviving IRGC Leaders are trapped like drowning rats in a sewage pipe, Iran’s creaking oil industry is starting to shut in production thanks to the U.S. BLOCKADE. Pumping will soon collapse.” But the Iranians have endured decades of sanctions: They have experience in adjusting their oil industry to cope with reduced demand. They also benefited from a financial windfall at the start of the conflict, when the U.S. lifted sanctions on their oil exports.
Tehran likely calculates that it can outlast the United States in absorbing economic hardship, especially because Trump will face domestic political pressure in the run-up to the midterm elections in the fall. Nor is Iran likely to wait for an economic crisis. If the United States appears to be hunkered down for the long haul, Iran’s leadership may set its sights on blocking off other choke points—for instance, getting the Houthis to close the Bab el-Mandeb Strait, which connects the Red Sea to the Gulf of Aden and is essential to traffic through the Suez Canal.
Earlier in the war, the U.S. president seriously considered escalatory moves, such as attacking Iranian infrastructure and sending ground troops to reopen the Strait of Hormuz. Now Trump seems reluctant to take these steps, perhaps recognizing that they could lead to retaliatory strikes on infrastructure in the Gulf States and a bloodier and more protracted conflict. He may see a limited wave of strikes as less risky, but Iran will retaliate against these too.
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Should Trump restart the war and actually succeed in limiting the fighting to a couple of days, the likelihood is that he will end up back where he is now—with Iran rejecting his demands. And if the Strait of Hormuz remains closed for most of May, the costs will accumulate globally. The World Bank estimates that the current supply shock on oil may already be the largest ever. It’s about to get much worse.
Energy and refined-petroleum products from the Gulf have continued to reach the market over the past couple of months, via ships and tankers that transited the strait before the war began. Now that traffic has stopped. Stockpiles have been drawn down. Refined products such as fertilizer and petrochemicals will soon be in short supply. This will affect the rest of the world much more than it will the United States, so the Trump administration may be tempted to shrug it off. The United States may even try to introduce limits on the export of oil, but the pressure on gas prices and inflation will undoubtedly take a toll.
If Trump doesn’t foresee continuing the blockade into the fall, he will confront a choice. He could try to strike a deal with Iran that offers sanctions relief and is stronger than the 2015 nuclear deal—with a longer timeline and more restrictions on enrichment—but that would not fully abolish Iran’s nuclear program and would not address its missiles. The strait would be fully reopened, but Iran would retain the capacity to close it in the event of more Israeli strikes.
Alternatively, he could accept an arrangement like the one the Iranians offered this week, in which the strait reopens but nothing else is settled. The U.S. would give up its embargo without securing a deal to curb Iran’s nuclear program or limit its missiles, and the Iranians would reopen the strait without getting sanctions relief.
Some of America’s allies in the Middle East, particularly Israel and the United Arab Emirates, may prefer the second option over the first if they can’t persuade the United States to resume the war against Iran and stick with it for as long as it takes. These countries care a great deal about Iranian missiles and regional power. They know that the country’s nuclear program has already been significantly set back, and they may not wish to see a deal that lifts sanctions without limiting Iran’s missile program or preventing it from reconstituting its proxy network. They may also worry that a nuclear deal would prevent the U.S. from restarting the war so long as the strait remains open and Iran does not breach its nuclear commitments.
The Israelis may calculate that without a nuclear agreement, they can retain the option of striking Iran again in the coming years, and that the Iranian regime, without sanctions relief, is likelier to face an economic crisis that could lead to its collapse.
The United States went to war to deal the Islamic Republic a devastating blow from which it would never recover. The war has damaged Iran’s military capacity, but it also has handed Tehran more leverage over global energy markets and the Gulf States than it has ever possessed. A wave of limited strikes won’t reverse this outcome, and it would not help Trump avoid the difficult choice he still faces between bad options.