President Donald Trump declared the United States Navy holds complete control of the Strait of Hormuz, simultaneously demanding Iran pay reparations for alleged damages over the past half century. Trump also insisted on compensation from Iran, instructing his representatives to include this demand in all future negotiations. He further called for payments to families of Iranian protesters killed over the last 50 years, according to a Truth Social post.
These remarks came Monday afternoon in the Oval Office and again Monday evening as reporters questioned the administration's next steps. "If there's damages to be paid, I think Iran should pay those damages," Trump stated, reiterating his claim of U.S. control over the major oil-shipping route.
Imperial Demands and Economic Warfare
The U.S. and Iran remained close to "some sort of arrangement" over the Strait of Hormuz, Pakistan's defense minister, Khawaja Asif, reported. Asif noted that "things are shaping up again in favor of a peace arrangement or a deal," citing signals from the last two to three days. A Qatari Foreign Ministry spokesperson confirmed talks between Iran and Oman regarding a shipping channel through the strait were at a "critical juncture."
Despite these diplomatic overtures, U.S. forces early Tuesday morning fired on a Panama-flagged vessel attempting to bypass the blockade, The Wall Street Journal reported. The U.K. Maritime Trade Operations Centre confirmed an incident involving a tanker and military forces in the Gulf of Oman, near the Strait of Hormuz, advising vessels to maintain awareness.
Iran's Supreme National Security Council secretary, Mohammad Bagher Zolghadr, stated Saturday that the strait would not reopen until Washington lifted its naval blockade and sanctions. Iran also demanded the withdrawal of American forces from the region, payment of war reparations, and the release of frozen Iranian assets. The council called for an end to U.S. attacks on Iran's regional allies.
U.S. Treasury Secretary Scott Bessent described U.S. sanctions as "suffocating" Iran, a claim Iran's Foreign Ministry spokesman, Esmail Baghaei, countered by calling Washington's reliance on sanctions a "compulsive addiction." Baghaei noted that the U.S. escalates sanctions when diplomacy fails and they don't work.
NPR reported that Trump's administration is betting on another financial squeeze to end the war, despite 50 years of economic pressure failing to halt Iran's nuclear ambitions. Since April 16, the administration has engaged in "Operation Economic Fury" against Iran, with Treasury Secretary Bessent calling it the "financial equivalent" of a bombing campaign. Countries buying oil from Iran or banking with it face potential sanctions, extending the reach of U.S. economic power.
The Cost of Capital's War
Trump asserted Iran is "broke, totally broke," claiming, "They're not paying their soldiers. They have inflation of 300%." While NPR confirmed high inflation in Iran, Trump's estimates exceeded those cited by administration officials. The International Monetary Fund estimated Iran's overall economy would shrink by 5.4%, and the Iranian government recently reported an annual inflation rate of 88.6%. The U.S. Treasury Department noted average loadings of Iranian oil decreased from 1.8 million barrels per day before the war to less than 500,000 barrels per day over the past month.
The war largely closed the Strait of Hormuz, which previously handled roughly 20% of global oil supplies. This closure has become a source of leverage for Iran in negotiations. Crude oil prices climbed Monday, as investors interpreted Trump's comments as a sign of limited global supplies of gasoline, jet fuel, and natural gas.
Defense Secretary Pete Hegseth, in a joint appearance with Bessent, underscored the state's dual power. "It's not just what the military can do — we've got the most powerful economy in the world as well," he said. Hegseth added that a "motivated treasury secretary who can pull a lot of levers" can exert significant pressure on adversaries, revealing the coordinated use of military and financial might.
Richard Nephew, a senior research scholar at Columbia University, who directed Iran sanctions strategy in the Obama administration, noted sanctions' limited value. He stated they cannot bite as quickly as the impact of the largely shuttered strait. Nephew criticized Trump for not articulating clear strategic goals, weakening his own hand through inadequate force and vacillation on negotiations.
Juan Zarate, a deputy national security adviser in the George W. Bush administration, highlighted the economic and financial leverage provided by sanctions and the ongoing U.S. naval blockade. Zarate acknowledged that sanctions threatening third-party countries take time to impact. He questioned how far the U.S. would go to constrict Iran's oil trade and whether it had the patience to test if economic pain would change the regime's behavior.
Trump has long derided past presidents' use of sanctions, which date back 46 years to November 1979, to limit Iran's economic ability to fund its military and nuclear development. In a speech last week in Las Vegas, he defended the bombing, missiles, and drone attacks that began on Feb. 28, arguing that previous sanctions had failed over 50 years.
A senior U.S. official, speaking anonymously, confirmed the U.S. military has set back Iran's ability to produce, sell, and ship oil and other energy resources. The official views the naval blockade and sanctions as effective, with additional options to intensify pressure in the coming weeks and months.
Resistance to Imperial Control
Iran's Foreign Ministry spokesman, Esmail Baghaei, characterized Washington's reliance on sanctions as a "compulsive addiction," noting its pattern of escalating pressure when diplomacy fails. Iran's demands for the lifting of the naval blockade and sanctions, withdrawal of U.S. forces, and payment of war reparations stand as a direct challenge to the imperial project.
Trump's administration, through its "Operation Economic Fury," aims to push Iran's economy to a breaking point, forcing its leadership to concede to demands to end its nuclear program and fully reopen the Strait of Hormuz to oil and natural gas tankers. This strategy, framed as a "financial equivalent" of a bombing campaign, illustrates the state's willingness to use economic warfare to secure capital's interests in global energy markets.