Trump shifts to economic pressure as Iran war drags on

New Delhi: The US president, Donald Trump, is increasingly turning to economic pressure to push Iran towards an agreement as months of military action and stop-start negotiations have failed to end the conflict. Washington is maintaining pressure on Tehran while keeping open the possibility of further military action.

Trump has said Iran’s economy is in serious trouble and that the US can continue applying financial pressure until Tehran agrees to its demands. He has also left open the option of stronger military action, saying the US could either allow Iran’s economy to deteriorate further or hit the country much harder.

The US campaign has put particular pressure on Iran’s oil trade. A US naval blockade has halted crude exports from Kharg Island, Iran’s main oil export hub, while American forces have redirected 55 commercial vessels, according to the report. Maritime intelligence company Windward said all three terminals at Kharg were empty, with no departures recorded between July 31 and August 9. Seventeen tankers remained stationary in the waiting area.

The disruption comes on top of years of sanctions that have already weakened Iran’s economy. The country’s economic difficulties have deepened during the war, with inflation, unemployment and falling oil revenues adding to the pressure on Tehran.

Iranian economist Masoud Nili described the economy as being at a historic crossroads. Since 2018, Iran’s exchange rate has increased nearly 50-fold, while food prices have risen more than 34-fold, according to figures cited by him. The report also said about 16 million people have fallen below the poverty line.

Iran’s labour market has also come under strain. The unemployment rate stands at about 9.4%, while six in 10 people are outside the labour force, including students, homemakers and retirees. Since 2019, Iran’s working-age population has grown by about five million, but net employment has increased by only 400,000.

Young people have faced a particularly difficult employment situation, with people in their 20s accounting for the largest share of inactive and unemployed workers. Women have also seen worsening employment prospects, with about 700,000 jobs disappearing even as the working-age female population increased.

Iran’s industrial sector has suffered as well. The country lost about 630,000 industrial jobs between spring 2025 and spring 2026, wiping out employment gains accumulated over the previous eight years.

Despite the economic pressure, there is no clear indication that Iran is ready to concede to Washington’s demands. Trump has described Iranian negotiators as difficult and continued to threaten stronger action. At the same time, Pakistan has said the US and Iran are close to reaching “some sort” of deal, while Qatar has said talks on managing the Strait of Hormuz have reached an advanced stage.

The strait remains central to the negotiations because its disruption has affected global energy supplies. Iran has sought compensation and sanctions relief as part of discussions over reopening the waterway, while the US wants unrestricted shipping through the strait.

Trump has also rejected concerns over US ammunition levels, saying the country is producing munitions rapidly. Reuters previously reported that the US Army had used much of its stockpile of highly accurate long-range missiles during the conflict. Trump blamed the former president, Joe Biden, for the reduced stockpile and said weapons production was now increasing.

For now, Washington appears to be pursuing a middle path, combining economic and military pressure while leaving room for negotiations. The outcome will depend on whether Iran’s worsening economic conditions push Tehran towards a compromise or whether prolonged pressure leads to another round of military escalation.