Iranian President Masoud Pezeshkian called for an end to the war with the United States, stating that Tehran should negotiate from a "position of strength and dignity" while the world recognizes Iran's victory [1][4][5]. The appeal came as the United States maintained a naval blockade of the Strait of Hormuz and President Donald Trump announced what he described as "the most crushing economic operation ever taken against any country" [4][8][21].
Pezeshkian defended the June memorandum of understanding against hardline critics who accused him of capitulation, stating the agreement contains "no clause indicating capitulation" and that all commitments fall on the American side [5][12]. The memorandum also places some obligations on Iran, including allowing commercial transit through the Strait of Hormuz [4]. Supreme Leader Mojtaba Khamenei approved the deal despite holding "different views" [5][17]. Pezeshkian told hardline lawmakers to "recognize our victory" and said the US is "hated worldwide" for attacking schools, hospitals, and infrastructure [6][13][23].
The diplomatic overture ran alongside explicit military threats. Armed Forces Chief of Staff Ali Abdollahi stated that Iran's forces, prepared across "land, sea, air, air defense and cyberspace," would respond to new threats with "crushing, punishing and devastating responses" [4][7][11]. Navy Commander Shahram Irani asserted Iran's "complete control" over waters east of the Strait of Hormuz and warned of a "major, historic and unforgettable lesson" for adversaries at sea [26].
Washington framed the economic campaign as a substitute for military action. Treasury Secretary Scott Bessent described a "one-two punch" of naval blockade and sanctions designed to "collapse this regime," calling it "the greatest coordinated economic isolation in the history of the world" [4][11][27]. Bessent said the campaign means the US is less likely to return to large-scale military operations [8][22]. Trump stated that Iran faces 350% inflation and lacks naval and air power, asserting the US has "total control" of the Strait of Hormuz, which he views as "American territory" [10][17][24]. He said Iran "wants a deal" but is "not ready for the right deal" [1][24].
Trump also acknowledged that negotiations are complicated by the killing of Iranian leaders, saying it is unclear who is running the country [20]. A reported divergence exists within the administration: Trump prioritizes preventing Iran from acquiring a nuclear weapon, while Vice President JD Vance prioritizes lowering fuel prices by restoring freedom of navigation through the Strait [20]. Vance described the shift to economic pressure as a "delicate dance" [8].
Iranian officials rejected the US framing. Foreign Minister Abbas Araghchi dismissed the "Economic D-Day" as "a diversion from America's own crisis: unprecedented debt and surging interest costs," and said previous sanctions campaigns all failed [5][8][11][26]. Foreign Ministry spokesperson Esmaeil Baghaei called the sanctions a "declaration of war" on all nations [24]. Araghchi described the campaign as "economic terrorism" threatening global sovereignty [14][22].
Parliamentary Speaker Mohammad Qalibaf offered a more pragmatic assessment, stating that Washington appears to have concluded it cannot prevail militarily but acknowledging that Iran "won't survive if people are hungry" without financial turnover, economic growth, and national production [4][11][18]. Qalibaf called for concrete plans to manage sanctions alongside diplomacy [4].
China and Russia opposed the sanctions campaign. Chinese Foreign Ministry spokesman Lin Jian stated that "sanctions and pressure will not help resolve the issue" and called for diplomatic solutions [1][5][15]. Russia's Mikhail Ulyanov said Washington "chose the wrong path" and that "only honest diplomacy can yield positive results" [2]. Chinese academics argued that Iran has developed alternative overland trade routes through Iraq, Pakistan, Central Asia, and Russia, and that China's independent refineries — which buy over 80% of Iran's shipped oil — have little reliance on the US financial system [3][14][26]. Georgetown University professor Paul Musgrave noted that Trump is attempting to unilaterally impose sanctions that normally require multilateral coordination [14].
Iran's economy shows signs of severe strain. Euronews Persian reported that rice prices rose 60% and meat prices 150%, with unemployment soaring [29]. BBC Persian cited economists warning of hyperinflation and potential famine under a prolonged blockade [28]. Kpler oil analyst Homayoun Falakshahi stated there is no escape from the naval blockade and alternative routes cannot meet Iran's needs [28]. Tehran residents described the difficulty of daily survival, with one resident saying she earned less than $11 in profit from over a dozen online sales [38]. The Iranian government estimated damage from US and Israeli attacks at approximately $270 billion [28].
Gulf Arab states are shifting toward economic pressure against Iran while expressing frustration with US strategy. The UAE suspended all trade and financial transactions with Iran, a move that Brandeis University professor Nader Habibi attributed to US encouragement [30][14]. Analysts noted that Saudi Arabia bears disproportionate costs and that the June memorandum failed to address Gulf security concerns including Iran's missile program [31]. Kuwait University historian Badr al-Saif criticized US policy as lacking clear vision [31].
Global energy-importing nations are working to shield themselves from Hormuz-linked disruption. South Korea reported a 21% increase in oil import costs despite reduced volumes [33]. Thailand's Petroleum Institute warned that the problem has shifted from transport delays to actual supply shortages [40]. Kenya's energy minister met with oil importers to form an emergency plan, and Ethiopia's prime minister urged citizens to use fuel sparingly [39]. India faces risks to its energy security, the welfare of its 10-million-strong diaspora in the Gulf, and the Chabahar port project [34]. NATO's top European commander convened allied defense chiefs to discuss supporting freedom of navigation through the strait [18].
Pakistan opened a trade corridor for Iran, which analysts framed as a confidence-building measure vetted with the US rather than a sanctions violation, since Pakistan is providing transit rather than directly trading with Iran [35]. Russia's non-intervention drew criticism from analysts who said Moscow benefits from high oil prices while failing to support an ally, undermining its self-styled role as protector of the Global South [36].
A legal scholar argued that the US naval blockade is likely unlawful under international law, because the original US use of force against Iran likely violated the UN Charter, making the resulting blockade unlawful under jus ad bellum [37]. Hawkish US analysts warned that Iran could deliberately manufacture a military crisis — such as a ballistic missile attack on Israel or targeting US energy infrastructure — to raise oil prices and inflict political damage on Trump ahead of elections [9]. Former US counterterrorism official Joe Kent urged the administration to seize the current pressure-induced opening to lock in a peace deal before an incident restarts the military spiral [17]. Ukrainian President Volodymyr Zelensky, in a separate conflict, told UN Secretary-General Antonio Guterres that the UN would help find ways to end the Russia-Ukraine war despite Moscow rejecting talks [16].
Oil prices briefly retreated after Pezeshkian's comments before recovering, with Brent crude trading around $94 per barrel [6]. The 60-day memorandum of understanding window failed to reopen the Strait of Hormuz, with traffic remaining at a fraction of normal levels [41]. An upcoming meeting between Trump and Chinese President Xi Jinping is expected to address Iran [15].