Iran Bets Trump Prefers Negotiation as 5-Month War Grinds On

Iran's leadership has concluded that President Trump's military threats are negotiating leverage rather than a prelude to full-scale war, betting it can outlast Washington through regional proxies and sustained pressure on global shipping lanes. The assessment, reported by Reuters citing Gulf officials and analysts, comes as the 5-month-old conflict has pushed U.S. inflation back above 4 percent and slowed economic growth to 1.5 percent in the second quarter.

"The Iranians believe that by widening the war and increasing the pressure, he will eventually give in," a Gulf source told Reuters. "Trump thinks he can hit the Iranians hard and bring them to the negotiating table, but they won't bend."

Trump's pattern supports Tehran's read. The president has repeatedly threatened massive strikes — including "obliterating" Iran's power plants and seizing its oil infrastructure — only to pull back at the last minute. In April, a two-week ceasefire was announced less than two hours before a Trump deadline for Tehran to capitulate. In May, he held off on a major strike citing "serious negotiations." In June, he threatened to seize Iran's energy base on Kharg Island, then called off the strikes after claiming peace talks had progressed.

The latest episode followed the same script. On Friday, Trump declared he was "losing faith" in negotiations and warned the U.S. military "will be hitting them very hard." By Saturday night, after a phone call with Saudi Crown Prince Mohammed bin Salman, he called off the strikes, crediting Gulf allies for persuading him to show restraint. On Monday, he was back to fuming that "Iranian Leadership is unbelievably duplicitous" after Tehran said it was not currently holding negotiations.

The Endurance Gambit

Iran's strategy extends beyond the negotiating table. Tehran has demonstrated its ability to disrupt traffic through the Strait of Hormuz, which carried about a fifth of global oil consumption before the war, and has signaled that no maritime chokepoint is off limits — including the Red Sea and Saudi energy infrastructure. The goal is to raise the cost of protecting global commerce while testing Washington's tolerance for disruption.

"Iran, from the beginning, has tried to out-escalate the United States by stretching out its escalation options so that it always has something new to bring every week — a new geography, a new type of weapon, a new type of target," said Michael Knights of the Washington Institute. "Their big advantage is that they can hurt the regional states and the global economy."

The endurance contest has produced measurable consequences. The emerging Saudi-led maritime coalition is focused on escorting commercial vessels and safeguarding sea lanes rather than confronting Iran directly — a defensive posture that Tehran views as a measure of success. Each new threat, whether in Hormuz, Bab al-Mandeb, or elsewhere, increases the resources required to keep global trade flowing.

Michael Singh of the Washington Institute said Tehran believes it still holds the initiative, partly because the Trump administration appears uncertain how far it is willing to go militarily. "The Iranians are trying to press their advantage," he said. "They're interested in establishing sovereignty over the strait and exercising selective control over the waterway."

At the center of the dispute is the future governance of Hormuz. Oman has presented Iran with a Gulf-backed proposal for managing the waterway, including voluntary user fees, according to regional sources. Tehran, however, is seeking administrative authority over the strait and the ability to levy service charges on vessels. Washington has rejected any fees, insisting Hormuz remain an international waterway free from Iranian control.

Political Stakes at Home

The political stakes are equally high in Washington. About two-thirds of U.S. adults say the war has not been worthwhile, according to AP-NORC polling, including 37 percent of Republicans. With midterm elections three months away, Republican lawmakers are urging caution. Louisiana Sen. John Kennedy said on NBC's "Meet the Press" that further escalation could lead to "a lot of inflation for the American people," recommending the administration maintain the status quo.

Trump has insisted the midterms aren't shaping his approach, but the polling suggests otherwise. If Iran's assessment is correct — that Trump will ultimately choose diplomacy over escalation — the question becomes what concessions Washington is willing to offer to reopen the Strait of Hormuz and end a war that has already disrupted global energy markets and sent prices soaring.

"If there are going to be negotiations, they will define the terms," said Ray Takeyh of the Council on Foreign Relations. "Both sides are matching escalation with escalation."

This article is for informational purposes only and does not constitute investment advice.