The 60-Day Peace Window Has Closed — Is Trump's Iran Strategy About to Shift?
August 17 marked the official end of the 60-day negotiating period meant to resolve the conflict between the United States and Iran. With that window now closed, Washington appears to have abandoned diplomacy in favor of full enforcement — and the ripple effects are being felt across global energy markets.
Washington Moves to a Hardline Posture
The U.S. has formally suspended peace talks and pivoted to what officials are calling a total enforcement approach. President Trump has gone so far as to claim the Strait of Hormuz — the corridor that has historically carried roughly 30% of the world's seaborne oil and about a fifth of its LNG — as American territory, saying a formal designation is coming soon. He has also asserted that no vessel moves through the strait without U.S. approval.
Alongside this, Washington has relaunched its harshest economic pressure campaign yet, an initiative dubbed "Economic D-Day." Under it, any nation that lets Iran use its banks, businesses, or airports risks being hit with secondary sanctions. U.S. Energy Secretary Chris Wright has said the naval blockade in the Gulf of Oman has cut Iranian crude exports to almost nothing, with American forces intercepting, redirecting, or boarding numerous vessels trying to slip past it.
Iran's Response
Tehran has declared the diplomatic process dead, framing the new U.S. sanctions and blockade as an assault on global sovereignty. Iran's National Security Council has warned neighboring states that helping the U.S. effort will be treated as a hostile act, and military officials say the country's posture has shifted from defensive to offensive.
Iran's parliament speaker has laid out conditions for reopening Hormuz to shipping: lifting the U.S. blockade, ending sanctions, paying war reparations, unfreezing Iranian assets held abroad, withdrawing U.S. forces from the Gulf region, and permanently halting military action against Iran and its regional allies. Tehran is also pursuing a separate arrangement with Oman to assert its own long-term control over transit through the strait, reportedly seeking a transit fee of 5–7% on the value of cargo passing through.
The Original Objectives Resurface
Trump's stated goals at the outset of the conflict were fourfold: stop Iran from ever building a nuclear weapon, destroy its missile capabilities, force regime change, and cut off funding to its regional proxies. In a recent social media post, he reiterated much of this agenda, framing the pressure campaign as necessary to isolate and defeat what he called the Iranian threat, and vowing Iran will never obtain a nuclear weapon.
Part of Trump's frustration with U.S. allies reportedly traces back to 2018, when he withdrew the U.S. from the Iran nuclear deal and several European powers tried to keep trading with Tehran anyway — including through a special payment channel that drew a formal warning from the U.S. Treasury. He has also pointed to Europe's reluctance to confront Russia after the 2014 annexation of Crimea, driven by dependence on Russian energy, as a mistake that emboldened Moscow's full-scale invasion in 2022.
Is a Nuclear Strike on the Table?
Speculation has circulated about whether the U.S. might use a nuclear weapon to break the stalemate, particularly against Iran's deeply buried enriched-uranium stockpile. But sources close to Trump's team describe this as, at most, a passing option considered during broader wargaming exercises — not an active plan. Given the risks of any nuclear use amid ongoing tension with Russia over Ukraine and China's posture toward Taiwan, insiders say the administration sees far better alternatives.
The More Likely Path: Pressure, Not Escalation
According to sources close to the U.S. Treasury, the preferred approach is to keep a military presence around both the Strait of Hormuz and the Bab el-Mandeb Strait — the other major chokepoint, threatened by Iran-backed Houthi forces — to keep energy shipments moving, while ramping up economic sanctions on Tehran. This combination reportedly worked before it was eased for the sake of peace talks, and officials believe it can work again, especially if China faces added pressure.
China has continued to support Iran throughout the conflict, importing large volumes of Iranian oil and supplying weapons-related technology. But the expanded "Economic D-Day" sanctions campaign may force Beijing to reconsider. Treasury Secretary Bessent has said the U.S. will impose the toughest sanctions in its history on Iran and has called on China to cooperate, noting that roughly half of China's energy needs are met by Gulf supplies — giving Beijing a strong incentive to help reopen the strait and ease pressure on global energy prices.
Adapted from reporting by Simon Watkins, Oilprice.com.