Deadline passes with no deal
The 60-day window for the United States and Iran to reach a final agreement expired Monday with no deal announced, as President Donald Trump hardened his rhetoric toward Tehran and his administration prepared what Treasury Secretary Scott Bessent has described as an unprecedented new phase of economic pressure. In a phone interview Monday with Fox News, Trump said, "They should put up the white flag of surrender." He added that he was in no rush to reach a deal and confirmed a direct backchannel with officials from Iran's Islamic Revolutionary Guard Corps.
The June memorandum of understanding had committed both sides to negotiate a final deal within 60 days, extendable by mutual consent. Reuters reported that the interim agreement quickly unraveled over a dispute involving control of the Strait of Hormuz, and Trump declared the pact "over" on July 7 before Tehran later suspended it.
Escalating rhetoric and sanctions threats
The deadline now places a central question at the heart of Trump's Iran strategy: whether the US can turn military and maritime pressure into political concessions by squeezing Tehran financially. Trump told Fox that Iran "would love to make a deal, but they're not ready to make the right deal," and promised to wage "Economic Warfare and Isolation on an unprecedented scale." Treasury Secretary Scott Bessent, speaking on Aug. 13, said, "Watch this space for more announcements coming next week because we are going to apply measures like have never been seen in the history of economic isolation of a country."
Iran responded sharply. Foreign ministry spokesperson Esmaeil Baghaei called the imminent sanctions an "assertion of extraterritorial sovereignty over every independent member state of the United Nations," adding that "such secondary sanctions find no foundation in international law." Tehran described Trump's threat as "economic terrorism."
Iranian concessions and domestic pressure
Iranian President Masoud Pezeshkian called for an end to the conflict, saying, "It is better that we bring the war to an end now as we are in a position of power and dignity." He acknowledged last week that Iran was selling less oil and collecting less tax revenue, while the IMF projected the country's economy would contract by 5.4%. Official data cited by Reuters show consumer prices in July were 87.9% higher than a year earlier, with food prices up 128%.
Iran also granted permission for Iraqi oil tankers to pass through the Strait of Hormuz, after Iraqi parliament speaker Haibat al-Halbousi requested special permission from his Iranian counterpart. According to Iran's IRNA news agency, the move aims to protect Iraq's oil exports and economic interests, though specifics on the number of tankers or duration were not released.
The threat of domestic unrest hangs over Tehran's economic decisions. In November 2019, a sharp increase in government-set gasoline prices triggered nationwide demonstrations, with authorities reporting roughly 200,000 participants and thousands of arrests. Iran has a gasoline deficit and has been reluctant to raise retail fuel prices due to the potential political consequences. Exiled opposition figure Reza Pahlavi criticized proposals for fuel price increases, calling them an "unforgivable mistake" and asserting that the Islamic Republic is "corrupt, incompetent, and anti-Iranian."
Military posture and regional tensions
Iranian army spokesman Brigadier General Mohammad Akraminia said Iran's military doctrine had shifted from defensive to offensive, and that it would respond to aggression "on a broader scale." Israel's national security minister Itamar Ben-Gvir built a gallows site for executing Palestinians sentenced to death, despite international criticism.
US energy secretary Chris Wright said 15 million barrels of oil transited Hormuz on Tuesday, with the seven-day average exceeding 8 million barrels per day. However, data firm Kpler reported only seven commodity vessels passed through the strait on Thursday.
Trump declared the Strait of Hormuz an "American territory" and reiterated that Iran must never have a nuclear weapon.
Economic impact and relief prospects
The US Treasury spokesperson said on background that "Economic Fury" has left the regime desperate for cash, though the exact phrase was not independently confirmed in official statements. Average Iranian oil loadings have fallen from 1.8 million barrels per day before the war to less than 500,000 per day over the previous month. Iran is facing fuel shortages, being reluctant to raise domestic prices due to political risks.
Pezeshkian has also acknowledged US attacks on schools, hospitals, and infrastructure, while asserting that "the whole world acknowledges Iran's victory." The US strategy appears to hinge on maximizing economic pressure. Attorney general William Barr said, "The ceiling on sanctions is near," and enforcement is key. An interim agreement previously collapsed over Hormuz, and a senior Iranian official has threatened military escalation within weeks if Washington does not fully implement its commitments.
Perspectives
The Trump administration frames its policy as a legitimate pressure campaign, emphasizing that Iran must capitulate and meet demands for a new deal. Officials point to economic hardship and oil reductions as evidence of sanctions success, and argue that force is warranted to coordinate pressure.
Iran, by contrast, views the sanctions as coercive economic warfare that violates international law and uses terms like "economic terrorism." Pezeshkian presents Iran as acting from a position of "power and dignity," seeking a dignified exit from the conflict. Iranian military officials promise broader responses to aggression, while competing perspectives stand in key interests without negotiating.
International observers analyze the regional and global implications, especially the pressure on the Strait of Hormuz for the global energy supply, and the risk of violent conflict if the military stalemate persists.