US President Donald Trump on Sunday told Axios that the US is currently choosing economic pressure over renewed military conflict. He said that the US is currently “low-keying” it. Washington is prioritising economic and diplomatic pressure, claiming that Iran is in “very bad shape” with its poor economy and soaring inflation. On the other hand, oil is down to slightly over $75 a barrel, and US consumers are at relative ease from the pain of the war. He said that they are semi-negotiating with Iran and likened the back and forth with Iran to a “chess game”.
"We are only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact they have no money," Trump told Axios. He claimed that Iran has no money to pay its troops and the US naval blockade has exacerbated the Iranian regime's economic crisis. Trump seemed optimistic despite the recent failure to force Iran to open the Strait of Hormuz or to get a favourable deal: "It will work out. It always works out. It's like a chess game." Vice President JD Vance described the strategy as using a combination of diplomatic, economic and military measures to protect US interests.
The approach represents a shift from last week. Axios reports that Trump had been close to ordering a return to major combat operations against Iran, but advisers persuaded him to pursue a less confrontational course for now. The US, Iran and Oman are working toward an agreement aimed at managing traffic at the Strait of Hormuz, in which Iran will have partial control.
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Iran presents fresh conditions for reopening of Hormuz
“While an agreement may be reached, the reopening of the Strait of Hormuz remains contingent on a series of conditions that have been communicated through intermediaries,” said Iranian Foreign Minister Seyed Abbas Araghchi. He said that there are no direct negotiations going on with the US and it is likely to continue unless the US ceases its violence.
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US claims that there is growing division within the Iranian leadership. According to Axios, US officials believe that President Masoud Pezeshkian and other pragmatist, pro-negotiation officials have been pushing diplomacy, and worried about an economic collapse. While Hardline elements around Supreme Leader Mojtaba Khamenei and the security establishment appear more resistant to concessions. Iranian state media reported that Iranian President Masoud Pezeshkian has held a meeting with Supreme Leader Mojtaba Khamenei to discuss the country's military and economic affairs.
The official Iranian position, however, remains united.
On Saturday, the head of Iran's Supreme National Security Council, Mohammad Bagher Zolghadr, laid out fresh demands for the opening of the Strait of Hormuz. “Never threaten nor insult Iran in any language, permanently end the war against Iran and Iran's allies in Lebanon, Gaza, Yemen, and Iraq, and lift the naval blockade and withdraw military forces from the surroundings of Iran." He added a demand for full compensation for war damages, lifting of all sanctions and releasing all Iranian frozen funds. Earlier, these demands were a prerequisite for a nuclear deal, but now these are conditions for opening the Strait of Hormuz

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