Trump favors Iran sanctions over new strikes

US President Donald Trump is emphasizing sanctions and economic pressure on Iran while saying he is keeping the option of new strikes open, as the war and the dispute over the Strait of Hormuz continue.

“We are low-keying it,” Trump told Axios by phone Sunday. “We're only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact they have no money.”

Trump said Monday in the Oval Office that “Iran is broke” and claimed its soldiers were not being paid. In a Wednesday Truth Social post, he again claimed Iran's inflation was above 300 percent. He also said there was no urgency because the United States had “total control” of the Strait of Hormuz, a major oil trade route at the centre of the conflict.

The United States has imposed a blockade on Iranian ports, while Tehran has locked down the strategic passage. Trump had earlier said he would demand compensation from Iran in any future negotiations, including for damage from the current war and attacks he alleged were backed or carried out by Tehran.

Washington announced new measures at the end of July targeting Iran's Islamic Revolutionary Guard Corps. The Wall Street Journal reported that Trump's advisers showed him data on the effect of US sanctions and that he was considering tightening them or imposing further restrictions.

Michael O'Hanlon, a Brookings Institution expert, said Iran was in “terrible shape economically” and could not ship oil at any meaningful level, but questioned how much Iran's leaders cared.

Iranian foreign ministry spokesman Esmaeil Baqaei called the renewed sanctions push a “retreat” and said Washington turns to sanctions when diplomacy fails. He said Iran had endured US sanctions for decades.