President Donald Trump demanded Monday that Iran pay reparations to families of protesters killed over the past half century, even as his naval blockade and sanctions campaign pushes the country's economy toward collapse and threatens global oil supplies. The declaration came as Pakistan's defense minister suggested peace talks were nearing "some sort of arrangement" to reopen the Strait of Hormuz, the critical shipping route that's been largely closed since the war began.
Trump told reporters the U.S. Navy has complete control of the strait and that Iran owes compensation for what he calls decades of damage. "If there's damages to be paid, I think Iran should pay those damages," he said in the Oval Office. When pressed on further military action, he replied: "You'll find out."
The comments revealed the administration's dual-track approach of military pressure and economic warfare, even as the human costs mount on both sides and global energy markets remain in turmoil.
Economic Warfare Escalates
The Treasury Department reported that Iranian oil exports have plummeted from 1.8 million barrels per day before the war to less than 500,000 barrels daily over the past month. Treasury Secretary Scott Bessent has called the administration's "Operation Economic Fury" — launched April 16 — the "financial equivalent" of a bombing campaign, threatening sanctions against any country that buys Iranian oil or conducts banking with Tehran.
The International Monetary Fund estimated Iran's overall economy will shrink by 5.4% this year. The Iranian government recently reported an annual inflation rate of 88.6%, though Trump claimed it's running at 300%. "Iran is broke, totally broke," he said. "They're not paying their soldiers."
But the blockade's impact extends far beyond Iran's borders. Crude oil prices climbed Monday as investors realized fewer ships would traverse the strait, which handled roughly 20% of global oil supplies before the conflict. The resulting inflation has hurt Trump's popularity and fueled disapproval of the war, according to NPR.
Iran Sets Conditions
Iran's Supreme National Security Council secretary, Mohammad Bagher Zolghadr, said Saturday the strait won't reopen until Washington lifts its naval blockade and sanctions, withdraws American forces from the region, pays war reparations, and releases frozen Iranian assets. The council also demanded an end to U.S. attacks on Iran's regional allies.
Iran's Foreign Ministry spokesman, Esmail Baghaei, accused Washington of treating sanctions as a "compulsive addiction" rather than policy, saying the U.S. escalates them whenever diplomacy fails and they don't work.
U.S. forces fired early Tuesday morning on a Panama-flagged vessel that tried to bypass the blockade, CNBC reported, citing The Wall Street Journal. The U.K. Maritime Trade Operations Centre confirmed it received reports of an incident involving a tanker and military forces in the Gulf of Oman, near the strait.
Experts Question Strategy
Richard Nephew, a senior research scholar at Columbia University who helped direct Iran sanctions strategy in the Obama administration, said Trump hasn't articulated clear strategic goals for the war. At times he stresses Iran can't have a nuclear weapon, then emphasizes the strait, then talks about 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 naval blockade give the U.S. economic leverage, though they 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," he said.
Decades of Sanctions
Trump has long criticized past presidents who used sanctions to limit Iran's economic ability to pay for its military and nuclear development. In a Las Vegas speech last week, he defended the bombing, missiles and drone attacks that began Feb. 28 by saying sanctions from previous administrations 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," he 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."
A senior U.S. official, speaking anonymously, said the administration sees the naval blockade and sanctions as effective and views Trump as having additional options in the weeks and months ahead. Defense Secretary Pete Hegseth said Monday in a joint appearance with Bessent: "It's not just what the military can do — we've got the most powerful economy in the world as well. 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."
Pakistan's defense minister, Khawaja Asif, told reporters that "things are shaping up again in favor of a peace arrangement or a deal." He said: "The signals in the last two to three days are that we are close to some sort of an arrangement," without giving further details. A Qatari Foreign Ministry spokesperson told Al Jazeera that talks between Iran and Oman about opening a shipping channel through the strait were at a "critical juncture."
Why This Matters:
The Trump administration's strategy of combining military force with what it calls economic warfare raises urgent questions about who bears the cost of this approach. Iranian families already face an 88.6% inflation rate and a shrinking economy, while the largely shuttered Strait of Hormuz has driven up global energy prices that hurt American consumers and workers. Trump's demand for reparations to families of Iranian protesters killed over decades acknowledges a humanitarian toll, yet his own blockade and sanctions are inflicting severe economic pain on ordinary Iranians who have no control over their government's policies. The lack of clear strategic goals, as experts note, means this economic pressure campaign could drag on indefinitely without achieving diplomatic breakthrough or meaningful protections for vulnerable populations on either side. Global oil markets remain volatile, threatening economic stability worldwide, while the human costs of both military action and economic collapse continue to mount.