US, Iran and the missing endgame

The closure of the Strait and the squeezing of commercial flows through the waterway has been Iran’s most potent economic weapon against a superior military power.

3 min readSep 30, 2026 06:12 AM IST First published on: Sep 30, 2026 at 06:12 AM IST

In contrast to the early weeks of the war in West Asia, when the US was pressing for a deal and Iran was playing hardball, Tehran has in recent days emerged as the actor that is more eager for talks. After threatening to “annihilate” Iran in his speech at last week’s UN General Assembly session, US President Donald Trump rejected an Iranian proposal for a seven-day roadmap to end hostilities. With the US midterms approaching, Trump is not allowing Tehran, which is itself basing much of its calculations on November, to use the elections as leverage against him. Another source of leverage for Iran also appears to be declining: The Strait of Hormuz.

The closure of the Strait and the squeezing of commercial flows through the waterway has been Iran’s most potent economic weapon against a superior military power. Tracking data, however, reveals that crude exports from West Asia rebounded in September. Shipments through the Strait and alternative routes have been carrying just under 80 per cent of their prewar flows as of last week, the highest since February. Saudi Arabia has repaired the East-West pipeline — a lifeline that allows its crude to bypass Hormuz — which was damaged by a drone strike, and has reportedly resumed Red Sea oil exports. Iran, on the other hand, has been unable to export crude through Hormuz due to the US counterblockade, and the Iranian oil that lies outside the blockade for sale is bound to run out sooner or later. The weakening of Iran’s chokehold and the battering of its economy due to a wave of new US sanctions, dubbed Operation Economic Outcast, explain Tehran’s sudden willingness to cut a deal.

If Iran is anxious to talk, the US appears willing to wait for sanctions to inflict enough economic pain to force Tehran into concessions. But even as high inflation and shortages of goods, gasoline and electricity continue to make life difficult for ordinary Iranians, there is little sign that the financial pain is translating into a decisive pressure on the leadership. If the deadlock is to be broken, then, both sides will have to give up some of the leverage they currently hold. Otherwise, they risk remaining locked in a prolonged stalemate.