Trump Pivots Back to Sanctions as Iran War Strategies Falter

President Donald Trump is pivoting back to economic sanctions as a strategy to end his war with Iran, even though he has long argued that decades of sanctions failed to stop Tehran's nuclear ambitions before he launched military strikes.

The administration is hoping months of bombing have pushed Iran's economy toward collapse, forcing its leadership to abandon its nuclear program and fully reopen the Strait of Hormuz to oil and gas tankers. Trump said Monday that since Iran is seeking compensation as part of any peace talks, he now intends to demand the same for the United States.

"Yeah, they can make trouble, but they're broke," Trump told reporters. "They have no money. You know, Iran is broke, totally broke. And, they're not paying their soldiers. They have inflation of 300%." Iran's government has reported an annual inflation rate of 88.6%, lower than Trump's figure.

Crude oil prices rose Monday as investors read Trump's comments as a sign that fewer ships would cross the Strait of Hormuz, a waterway that carries roughly 20% of global oil supplies and has largely been shut during the conflict.

Iran's Foreign Ministry spokesman, Esmail Baghaei, dismissed the sanctions threat on social media: "Whenever Washington proves itself incapable of pursuing diplomacy, it retreats into sanctions; and whenever those sanctions fail to produce results, it simply increases the dose."

The administration has run what it calls Operation Economic Fury against Iran since April 16. Treasury Secretary Scott Bessent has called it the "financial equivalent" of a bombing campaign. But Richard Nephew, a Columbia University scholar who worked on Iran sanctions under President Obama, said sanctions take longer to bite than the closed strait and that Trump has not clearly defined his war's objectives.

Juan Zarate, a former deputy national security adviser under President George W. Bush, said sanctions and a naval blockade of Iranian ports give the U.S. leverage, but cautioned that changing Tehran's behavior through economic pain "will take time."

The IMF estimates Iran's economy has shrunk 5.4% during the war, and the U.S. Treasury says Iranian oil exports have fallen from 1.8 million barrels a day before the war to under 500,000 barrels a day in the past month.