Iran's Hormuz leverage wanes as US economic squeeze bites

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Key points

• After years of surviving sanctions, Tehran is now confronting one of the harshest squeezes in the Islamic Republic's history, according to Iranian insiders and regional sources.
• "The balance of power has tilted against Iran a bit, " remarked Iranian analyst Arash Azizi.
• Three senior Iranian sources acknowledged that Washington's campaign is becoming increasingly tough to withstand.
• Negotiator, remarked Washington may be interpreting Iran's economic distress as evidence of strategic success when the reality is more complicated.
• The Economic Times daily newspaper is available online now.

Nifty23, 897.7024.25. Gold (MCX) (Rs/10g.)152, 815.00-2960.0. The Economic Times daily newspaper is available online now. Iran's Hormuz leverage wanes as US economic squeeze bites. Iran's Hormuz leverage wanes as US economic squeeze bites. ReutersLast Updated: Sep 06, 2026, 06: 32: 00 PM IST.

Washington's economic offensive targets Iran after recent conflict and threats. New sanctions and naval blockades are severely impacting Iran's oil exports and currency access. Iranian insiders acknowledge the increasing difficulty of withstanding these unprecedented economic pressures. Authorities hope these strains will lead to political consequences and regime change within Iran. Nevertheless, Iran's resilience and a wartime mentality may prolong the impasse.

Six months after a conflict that rattled markets and pushed the Gulf to the brink of a wider war, the tide may be turning against Iran as Washington unleashes an unprecedented economic offensive to achieve what military force could not. After years of surviving sanctions, Tehran is now confronting one of the harshest squeezes in the Islamic Republic's history, according to Iranian insiders and regional sources. A U.S. Naval blockade and tougher sanctions are curbing oil exports, restricting access to foreign currency and exposing growing strains in the economy. The campaign has led U.S. And regional authorities to wager that mounting economic pressure can force Tehran to allow free passage through the Strait of Hormuz. It carries concerning a fifth of global oil and LNG supplies.

Iran to tackle economic problems, states further attacks will be 'more painful' Their bet rests on a simple calculation: Iran is suffering more economic damage than it is inflicting. While ‌attempts to disrupt shipping through Hormuz ⁠have not ⁠triggered the global economic shock Tehran hoped would force Washington to compromise, efforts to choke off oil exports have cut state revenues. Energy markets have adjusted and alternative supplies have continued to flow. Live Events.

"The balance of power has tilted against Iran a bit, " remarked Iranian analyst Arash Azizi. Iran is losing some of the leverage it had over the Strait of Hormuz since it has been unable to close it fully, he stated, adding that the U.S. Naval blockade was "really hitting Iran." Azizi noted Tehran had anticipated disruption in the strait to trigger a major shock to the global economy and drive Washington back to the negotiating table. "It hasn't happened, really, " he remarked. Other countries had adapted, exposing limits to Iran's ability to inflict economic pain on the region and beyond. Whether the pressure will force concessions remains unclear, the regional sources remarked. Tehran has failed to impose the costs it hoped would break Washington's resolve but has shown little sign of abandoning demands for sanctions relief, access to frozen assets and recognition of its security role in Hormuz. Still, a new formula for resolving the standoff is ⁠now under ‌discussion between mediators and Iran, the sources remarked. CAN TEHRAN OUTLAST THE SQUEEZE?

Three senior Iranian sources acknowledged that Washington's campaign is becoming increasingly tough to withstand. The latest measures have sharply restricted Tehran's ability to access foreign currency, import goods and tap global financing networks that have supported keep the economy afloat. Iranian leaders fear a worsening economy, marked by surging rates, ⁠weaker trade and pressure on household incomes, could reignite nationwide unrest that has repeatedly challenged the Islamic Republic.: Iran claims strike on US ship in Strait of Hormuz as fighting escalates Shortages of key imports, including fuel and wheat, are becoming an increasing concern, office-holders noted. U.S. Treasury Secretary Scott Bessent described the strategy as a "one-two punch" combining the blockade with "the toughest sanctions in history." "It is going to work in Iran and we are going to collapse this regime, " he informed CNBC. For some U.S., Israeli and regional authorities, such strains strengthen hopes that economic pressure could eventually carry political consequences inside Iran by triggering unrest, widening rifts within the leadership and weakening its grip on power. Others remain sceptical that economic and military coercion will produce a political rupture, pointing to decades of failed efforts to destabilise the Islamic Republic and Tehran's willingness to suppress dissent. They argue Iran's rulers may again prove more resilient than their adversaries expect. THE RESILIENCE TEST.

Dennis Ross, a former U.S. Negotiator, remarked Washington may be interpreting Iran's economic distress as evidence of strategic success when the reality is more complicated. Tehran remains determined to demonstrate it can control Hormuz, but appears to be calibrating its employ of ‌force while keeping further escalation in reserve. The Revolutionary Guards may believe Iran can absorb the economic pain and outlast the pressure rather than compromise, Ross remarked. "The Iranians have consistently surprised us in terms of their resiliency, " he continued, saying he doubted economic and military pressure alone would force a retreat. Hardliners, he remarked, may believe they can endure and ultimately secure what they want. Resilience may depend as much on public tolerance as ⁠Tehran's ability to absorb economic hardship, remarked Burcu Ozcelik, a senior research fellow at the Royal United Services Institute. "Of course, the economic squeeze raises the risk of public unrest, but for now, a wartime mentality appears to have a significant hold over the population, " remarked Ozcelik. "Foreign military intervention, civilian casualties and the perception of a wider civilization confrontation with a U.S.-led order are sustaining a degree of 'Iran-first' patriotic support, tolerance or simply patience with the regime." The result is a more stubborn impasse than Washington may have anticipated. As leverage rather than a reason to concede, economic pressure is deepening the pain, but Tehran's powerful Revolutionary Guards may see endurance, backed by the threat of escalation. The key question is not whether Iran is hurting, but whether it is hurting enough to compromise before either side slips toward another confrontation, the regional sources remarked. Ross remarked the clearest path to a agreement may lie in the dispute over shipping fees through the Strait of Hormuz. Iran could abandon any demand for a toll while retaining the right to charge for legitimate navigational, security or environmental services, he remarked. Such an arrangement could offer both sides a claim to victory, allowing Tehran to step back without appearing to capitulate. "If you could announce that the Strait were reopened, " Ross remarked, "I think Trump would do a deal." Add Now!

Iran sanctionsUS economic pressureStrait of HormuzIran military responseoil exportsU.S. Treasury Secretary Scott BessentIran economyTehran Revolutionary GuardsU.S. Treasury DepartmentMiddle East tensions.

In short, iran' s Hormuz leverage wanes as US economic squeeze bites is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.