President Donald Trump said the United States is "low-keying it" with Iran and is "only semi-negotiating" as Washington maintains maritime pressure in the Strait of Hormuz while economic sanctions squeeze Tehran's already strained finances. In a phone interview with Axios on Sunday, Trump said talks on a deal to end the Iran war have slowed. "We are just watching Iran with its huge inflation and the fact they have no money," he said.
The comments marked a sharp shift from 1 week ago, when Trump warned Iran it had one final chance to agree to a peace deal or face "decapitation." He said then that he had decided not to order what would have been "the biggest attack since World War II" at the request of Saudi Arabia, the United Arab Emirates and Qatar. He also said on June 4 that he didn't want to be "Jimmy Carter," referring to the 1980 hostage crisis and Operation Eagle Claw.
Economic Pressure Mounts
Trump told Axios Iran "is in very bad shape" because of the U.S. naval blockade on Iranian ports, which he said has crippled the country economically. The U.S. military has redirected 55 commercial vessels as of Sunday, up from 35 as of Aug. 2, according to U.S. Central Command. American forces have also disabled two ships and boarded two to ensure compliance, the command said.
Iran has demanded that the United States meet certain conditions before the Strait of Hormuz reopens. Those conditions include compensation, an end to sanctions, the lifting of the U.S. naval blockade, the withdrawal of American troops from the region and the release of frozen Iranian assets. A senior Iranian official told MS NOW on Monday that Tehran's position is that Washington must meet all of the conditions Iran says are in the memorandum of understanding the two countries signed in June. Iranian Foreign Minister Abbas Araghchi said the negotiations with Oman had progressed well and reached their final stage, but he said the deal wouldn't reopen the waterway.
Oman said its talks with Tehran were moving in "a positive and constructive atmosphere" and called for a halt to repeated attacks on vessels transiting the strait. Iranian state media published a draft plan last week that would restrict traffic through Hormuz, bar U.S. and Israeli ships from the strait and require compensation from hostile countries before allowing transit. The plan is under review by Iran's parliament, according to the state outlet Fars. Tehran would impose penalties on violators equal to 20% of the value of cargo aboard a ship, according to the initial draft.
Market and Energy Impacts
The closure of the strait has kept oil prices elevated and pushed U.S. gasoline prices higher. The average price nationally for a gallon of regular gas was slightly more than $4 on Aug. 10, according to AAA, compared with $2.98 when Trump started the war with airstrikes in late February. The Strait of Hormuz carried about a quarter of the world's seaborne oil trade and a fifth of global liquefied natural gas before the war began in February.
Shipping traffic through the strait has dwindled to just eight confirmed crossings last Friday, down 33% from the day before, according to shipping tracker Kpler. Oil prices rose Monday, with Brent crude futures up 1.1% to $84.45 a barrel and West Texas Intermediate futures up 1% to $78.98. ING Bank's Warren Patterson said in a note last Friday that "There doesn't seem to be much of a compromise, which ultimately makes it more difficult to reach a sustainable deal," and warned that "Things could go from bad to worse once again." ING kept its forecast for Brent crude to average $80 a barrel this quarter.
Iranian Leadership Shifts
Iran also appointed Mohsen Rezaei, a military adviser to its new supreme leader, to head the Supreme National Security Council on Sunday. Rezaei commanded Iran's paramilitary Revolutionary Guard from 1981 to 1997 and last week threatened American forces with "serious risks and casualties" if the U.S. didn't lift its blockade of Iranian ports. He replaces Mohammad Bagher Zolghadr, who took the security council role in March after his predecessor was killed by an Israeli strike. Zolghadr will become a political adviser to Khamenei.
President Masoud Pezeshkian said in an interview Monday with Iranian state television that he held a nearly seven-hour meeting with Ayatollah Mojtaba Khamenei, discussing "people's livelihoods, the state of the market, employment, people's housing," as well as "problems that are now being created as a result of the (U.S.) sanctions." Pezeshkian said Khamenei stressed unity. "All of the enemy's plans are aimed at creating division," Pezeshkian said. "What we have to do is prevent divisions from emerging." He said it was only the second time he'd met with the new supreme leader since Khamenei was appointed in March following a U.S.-Israeli strike that killed his father. Khamenei, believed to have been wounded in the same attack, hasn't appeared in public since then.
Regional Spillover
Elsewhere in the region, Israel's military said Monday it had declared the Christian-majority town of Taybeh in the occupied West Bank a closed military zone to keep out Israeli settlers and other non-residents. The order doesn't apply to Palestinian residents or journalists unless soldiers determine their presence poses a threat. The army said its troops would detain suspects and disperse gatherings to keep the peace. The designation came after months of the army and police struggling to maintain order throughout the territory, where at least 87 Palestinians have been killed by Israeli settlers or soldiers in 2026, according to the Ramallah-based Palestinian Health Ministry.
Yemen's Iran-backed Houthi rebels attacked a Red Sea port town controlled by government forces on Sunday, killing seven and injuring 30 people, Yemen's Defense Ministry said. The ministry said four military personnel and three civilians were killed in the attack on Mokha. The strike was the latest in one of the largest waves of Houthi attacks on Yemeni military positions and areas held by the Saudi-backed government since a 2022 truce. Yemen's Houthi rebels also claimed responsibility for an attack on an oil refinery in Saudi Arabia and equipment in Yemen's Red Sea port city of al-Makha. The attacks have renewed focus on the Red Sea and Bab el-Mandeb Strait as shipping through Hormuz has been restricted.
Domestic Political Headwinds
Trump's Iran posture comes as domestic political pressure builds at home. CNN said the president is facing two liabilities that could damage his Republican Party in the midterms and his second-term legacy, including the impact of the war on energy prices and a bad jobs report showing the economy lost 23,000 jobs in July. Trump told Punchbowl News, "They're not angry at me, but they are angry at Republicans." Kevin Hassett, director of the National Economic Council, told CNN's Jake Tapper that "the overall economy" is "really, really booming," and said the job losses reflected the end of temporary work from the World Cup finals and teachers taking July off.
CNN also said Trump's approval rating hit 34% in a recent CNN poll conducted by SSRS, matching the career low he saw at the end of his first term, while 73% of U.S. adults said he hasn't paid attention to the country's most important problems and 65% said his policies have worsened economic conditions. The weekend also brought a personnel win for Trump. The Senate narrowly confirmed his former personal lawyer Todd Blanche as U.S. attorney general this weekend, and Blanche was sworn in on Monday, according to The Hill. Trump's administration also saw the failure of his top-priority voting restrictions bill to pass, while Israeli Prime Minister Benjamin Netanyahu rejected another plan to disarm Hamas in Gaza, according to CNN's analysis.
Why This Matters:
The administration's shift to a waiting strategy reflects confidence that economic pressure alone can force Iranian concessions without risking American lives or depleting military resources further. The blockade has demonstrably restricted Iran's economic lifeline while the naval presence maintains U.S. credibility in the region. Yet the approach carries real costs at home: gasoline prices have jumped more than $1 per gallon since February, and shipping disruptions continue to ripple through global energy markets. The appointment of Rezaei, a hardliner who commanded the Revolutionary Guard for 16 years, signals Tehran isn't backing down despite its economic distress. For American consumers and businesses, the question isn't whether maximum pressure works in theory—it's whether the strategy can produce results before midterm voters render their judgment on $4 gas and a weakening jobs picture. The narrow confirmation of Blanche as attorney general shows Trump retains enough Senate support to staff his administration, but failed legislative priorities and polling numbers suggest his political capital is finite.