Iran’s Diminishing Leverage in the Strait of Hormuz

The six-month war has unfolded in four distinct acts. Act One began with intensive U.S. and Israeli airstrikes on February 28, lasting six weeks. Act Two started with a cease-fire on April 7, culminating in a memorandum of understanding signed on June 17 by President Donald Trump and Iranian President Masoud Pezeshkian. After Iran resumed attacks on commercial vessels in the Strait, a third act of tit-for-tat exchanges ensued. Since mid-July, the United States has re-imposed a naval blockade of Iranian ports and renewed sanctions on Iran’s oil trade, while U.S. forces have worked to keep the Strait open. A drone view from August 28, 2026 shows vessels transiting the waterway, indicating that shipping lanes remain functional despite the heightened tension.

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The International Monetary Fund projects that Iran’s economy will contract by more than 5 % this year, with inflation approaching 70 %. An official from Iran’s Labor Ministry estimates that over one million jobs vanished in the war’s first three months, and the rial has sharply depreciated, driving up prices for basic goods. These economic strains undermine Tehran’s capacity to sustain its military posture.

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• U.S. stance: Admiral Brad Cooper, commander of U.S. Central Command, states that the current U.S. objective is to enforce the blockade on Iran and ensure the safe passage of commercial traffic through the Strait.

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• Iranian stance: Foreign Minister Abbas Araghchi argues that the blockade and sanctions are “bound to fail,” echoing Tehran’s long-standing view that external pressure will not compel Iran to abandon its nuclear program, control of the Strait, or support for regional proxies.

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• Presidential outlook: President Trump has indicated willingness to accept a deal in which Iran ceases its Strait threats and curtails its enrichment activities, signaling that a negotiated settlement remains on the table.

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Bloomberg reports that oil flows through the Strait have recovered to about two-thirds of pre-war levels, keeping global energy prices relatively stable. Gulf states, while displeased with the war, do not support Iran’s “extortionist” demands, and Iran’s recent attempts to block the Strait with drones and mines have largely failed. Nonetheless, Iran’s proxy forces in Yemen continue to threaten Red Sea commerce, preserving a risk of broader regional escalation.

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Analysts note that the contest could extend through the remainder of Trump’s presidency and beyond, with the United States appearing more resolute than in earlier phases. While Iran retains missile capabilities and proxy networks, the combined economic embargo and naval pressure are eroding its leverage over the strategic waterway.

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