Trump Backs Down From Yet Another Empty Threat to Iran

It was a whirlwind weekend for people across the Middle East. A burst of stories came out on Friday suggesting that President Donald Trump and Israeli Prime Minister Benjamin Netanyahu were thinking of resuming full-scale war with Iran, including Trump’s long-threatened attacks on power plants and bridges. U.S. embassies warned Americans against travel in the Middle East. People on both sides of the Persian Gulf told me about the preparations for war: families stocking up on supplies, authorities throttling the internet, service members called up for duty.

On Saturday night, Trump suddenly reversed course. Despite being “locked and loaded” to unleash “Military Terror,” he wrote on Truth Social, the U.S. was going to “cancel the attack” because “the perimeters [sic] of a deal has been agreed to. This would include the Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran’s nuclear threat.”

The cycle has become a running joke among commodities traders. Multiple times during the war and postwar clashes, Trump made an extreme threat at the beginning of the weekend, only to climb down before oil and stock trading resumed. “Middle East wars are now scheduled from 9pm Friday to 10.30pm Sunday (GMT). That’s it. Fighting outside designed non-market hours isn’t allowed,” Bloomberg columnist Javier Blas joked in June. During the latest period of tension, U.S. officials themselves acknowledged to CBS that the administration wanted “to conclude [its planned attack] by the time financial markets open Monday.”

On Monday morning, Trump demanded on Truth Social that oil companies “get your consumer (retail!) Oil Prices DOWN, NOW!”

The problem is more fundamental than just playing markets. Trump started the war in February expecting a quick, cheap victory. Instead, he created a situation where Iranian officials have both means and motive to make the situation as difficult as possible for the president, to discourage him from once again trying to wreck the country and kill its leaders. Because stocks of both air defense ammunition and crude oil have been emptied out, any path to an American military victory would be painful. Yet domestic U.S. politics mean that Trump would pay a political price for any concessions to Iran, both from opportunist Democrats and from earnestly hawkish Republicans.

Ironically, the grand prize in Iranian eyes would cost Americans nothing. Iran badly needs U.S. economic sanctions to be lifted in order to conduct trade in dollars and attract international investment in the country’s reconstruction. And it is exactly this prize that Trump got the most flak for offering in the last peace memorandum. While Trump offered a temporary sanctions waiver allowing Iran to sell oil in dollars—which he revoked last month—he did not unfreeze any Iranian bank accounts as promised. Secretary of State Marco Rubio hinted that any further sanctions relief would come with extra conditions not in the memorandum.

So Iran has clung onto Hormuz as a form of leverage against sanctions. After Trump’s Saturday announcement, Iranian Foreign Ministry spokesperson Esmail Baqaei did confirm that Iran was close to finalizing a deal with neighboring Oman over Hormuz, but claimed that the strait would not open immediately or return to the open prewar status quo. According to Israel’s Channel 12, the deal on the table routes all inbound traffic through Iranian waters and all outbound traffic through Omani waters, essentially giving these countries a veto on Hormuz. On Sunday night, the British Navy’s Maritime Trade Operations office reported “an explosion in close proximity” to an oil tanker passing by Oman.

The last round of fighting had been sparked by Iranian attempts to hold onto that leverage. After the U.S. Navy tried to reroute shipping away from Iranian waters last month, Iranian forces began shooting at those ships and Trump declared the peace memorandum “over,” beginning near-nightly air raids on the Iranian coast. It wasn’t enough to restart shipping—and over the past two weeks, Iran showed that it can hold trade hostage in places other than Hormuz. Houthi forces in Yemen, allied with Iran, declared a blockade of shipping in Bab al-Mandab, the strait at the southern end of the Red Sea. They also launched drones at Saudi oil plants from Iraqi soil. On the other side of the Red Sea, a drone smashed into a gas tanker at the Egyptian port of Damietta near the Suez Canal.

Meanwhile, Iranian air raids have apparently led the U.S. military to start pulling back from parts of the Middle East. The U.S. recently took its Patriot air defense missiles out of Iraqi Kurdistan, where Iran has regularly been bombing the airport, the U.S. consulate, and Kurdish rebel camps. Although officials insisted that this was a pre-scheduled withdrawal, the White House has repeatedly promised to withdraw from Iraq over the past decade without following through; this time was different. The Wall Street Journal reports that the U.S. military is thinking of drawing down from Kuwait, which is right next to Iran.

Six American troops were killed during an Iranian drone raid in Kuwait on March 1, the second day of the war. Casualty data obtained by The War Horse under the Freedom of Information Act shows that the raid also wounded two generals and a colonel. The country is close enough to Iranian borders that Iran was even able to attack a U.S. base there with 1950s fighter jets. But moving U.S. forces further away doesn’t guarantee their safety. Last month, an Iranian missile killed three Americans at Muwaffaq Salti Air Base in Jordan.

The U.S. military is down to about 800 Patriot interceptors, out of 2,300 before the war, according to a paper published last week by the Center for International and Strategic Studies last week. Government sources confirmed those numbers to CNN. Meanwhile, Ukrainian President Volodymyr Zelenskyy is asking for 300 Patriot interceptors by the winter, when Russia is expected to attack energy infrastructure.

Of course, the state of Iran’s own stockpile is still a big unknown. It is clear, however, that the U.S. military cannot provide its troops and host countries the level of protection they had been used to. Gen. Alexus Grynkewich, head of U.S. European Command, recently warned the Pentagon that he would have to choose between defending Israel and defending the homeland, in a letter leaked to the Washington Post.

Trump has two paths ahead of him. One path is diplomacy, which means making real concessions to the other side, sticking to them, and defending the deal domestically. The other path is a return to war, which means accepting increased risks, real costs, and a pace of escalation that cannot be limited to when the market is closed. Faced with this fork in the road, Trump is driving straight toward the median: He has adopted a predictable pattern of bluffing, backing down, and failing to change the situation.

Esfandyar Batmanghelidj, an American economist who recently debated a member of Iran’s negotiating team, wrote in The American Conservative that Iranian leaders are increasingly skeptical that a peace deal is even possible, given the Trump administration’s indecision and dysfunction. The negotiator “insisted that Iran would not allow the Strait of Hormuz to reopen until it saw a definitive change in U.S. strategy—not just a shift in tactics. We might hope that he is wrong in that assessment, but I too am skeptical the crisis can be resolved in any other way,” Batmanghelidj wrote.