Trump shifts from bombing to sanctions in bid to force Iran concessions

Washington,UPDATED: Aug 11, 2026 09:42 IST

President Donald Trump has shifted his approach in the conflict with Iran, arguing that economic pressure can now achieve what months of bombing have not. The Trump administration says Iran's economy has been pushed close to breaking point and that more financial pressure could force Tehran to end its nuclear programme and fully reopen the Strait of Hormuz to oil and natural gas tankers.

The shift comes as talks have again appeared to stall and US stockpiles of key weapons have fallen. On Monday, Trump said that if Iran is seeking compensation in any peace talks, the United States would demand compensation as well, while insisting that financial pressure could still produce a breakthrough.

"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%." Inflation is high in Iran, though Trump's estimate was higher than figures administration officials have been citing to reporters.

The prospect of a longer conflict has also raised inflation concerns beyond Iran, including in the United States, where the war and higher petrol prices are unpopular. Crude oil prices rose on Monday after investors read Trump's remarks as a sign that fewer ships would pass through the Strait of Hormuz, keeping global supplies of petrol, jet fuel, natural gas and other energy products under pressure. Before the war, the waterway handled about 20 per cent of global oil supplies. The conflict largely shut it, and attempts to reopen it have been brief, with Iran using the strait as leverage in negotiations.

Iran has not publicly suggested it is intimidated by the threat of more sanctions. Esmaeil Baqaei, spokesman for Iran's Foreign Ministry, said 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 real risk is that American politicians, clinging to this bad habit, will instead strangle their own remaining chances of a less humiliating exit from a crisis of their own making."

The White House has described the latest effort as "Operation Economic Fury". Trump did not spell out what extra pressure would be applied, but the administration has been pursuing the campaign since April 16. Treasury Secretary Scott Bessent has called it the "financial equivalent" of a bombing campaign, with sanctions possible against countries that buy Iranian oil or do business with its banks.

Richard Nephew, a senior research scholar at Columbia University who helped shape Iran sanctions strategy in the Obama administration, said sanctions cannot have as rapid an effect as the near-shutdown of the strait. He also said sanctions have limited value because, in his view, Trump has not clearly defined the war's objective, at different times focusing on Iran's nuclear programme, the strait and ballistic missiles. "Economic pressure is a possible element in his strategy, but he's yet to explain the purpose," Nephew said. "Trump has systematically weakened his own hand through his inadequate use of force, inarticulate elucidation of an objective, and vacillation on negotiations."

Juan Zarate, a deputy national security adviser in the George W. Bush administration, said sanctions and the continuing US naval blockade of Iranian ports still give Washington economic leverage, including pressure on third countries that do business with Iran, though such steps take time. "The ultimate question will be how far the United States is willing to go to constrict Iran's oil trade and threaten third countries with severe sanctions -- and whether it has the patience to test whether the economic pain will change the regime's behavior," Zarate said.

Trump's turn to economic pressure marks a change in emphasis, as he has often criticised earlier presidents for relying on sanctions against Iran. In a speech last week in Las Vegas, while defending the bombing, missile and drone attacks that began on February 28, he said earlier sanctions dating back to November 1979 had failed. "It's been 47 years, but really, it's been 50 years because they've been saying 47 for three years, it's been 50 years," Trump said. "And no other president has done what you should have done a long time ago, because Iran cannot have a nuclear weapon, can't have it."

The war has hit Iran's economy hard. The Monetary Fund estimates the economy will shrink by 5.4 per cent, while the Iranian government has reported annual inflation at 88.6 per cent. The US Treasury Department said average Iranian oil loadings had fallen from 1.8 million barrels a day before the war to less than 500,000 barrels a day over the past month. A senior US official, speaking on condition of anonymity to discuss strategy, said the US military had reduced Iran's ability to produce, sell and ship oil and other energy resources. The administration sees the blockade of the strait and sanctions as effective and believes Trump has further options that can be intensified in the coming weeks and months.

The US economy has continued to grow, though inflation remains high and borrowing costs have risen, hurting Trump's popularity and contributing to disapproval of the Iran war. Trump is effectively arguing that US voters can bear the economic strain more easily than Iranians, who have faced hardship for years. "It's not just what the military can do - we've got the most powerful economy in the world as well," Defence Secretary Pete Hegseth said on Monday at a joint appearance with Bessent. "And when you've got a motivated treasury secretary who can pull a lot of levers because he knows how to do it, you can put a lot of pressure on adversaries." In sum, the administration is now betting that economic force, alongside military and naval pressure, can push Iran towards concessions after months of war and stalled diplomacy.

With PTI Inputs

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