Trump adopts wait-and-see approach as Iran demands compensation to reopen Strait of Hormuz

The Strait of Hormuz remains closed, and there is no clear path to opening it. On Sunday, President Trump told Axios that the United States was "low-keying it" with Iran—a phrase that captures the current stalemate perfectly. Rather than pursue aggressive new military action, Trump said he was content to watch Iran struggle under the weight of its own economic collapse: massive inflation, depleted currency reserves, a government running out of money. "We're only semi-negotiating with them," he said. "It will work out. It's like a chess game."

But Iran is playing the same waiting game. Tehran has made clear that the Strait will remain sealed until the United States meets six specific demands. Mohammad Baqer Zolqadr, head of Iran's supreme national security council, laid them out: the US must end the war and all aggression against Iran and its allies in Lebanon, Palestine, Yemen, and Iraq—permanently. Washington must pay compensation for the widespread attacks it has launched on Iranian territory since late February. The naval blockade in the Gulf must be lifted. Sanctions must be removed. Frozen Iranian assets must be returned. Only then will Iran sign a deal with Oman to reopen the waterway.

Iranian foreign minister Abbas Araqchi said on Sunday that an agreement with Oman on new shipping lanes was in its "final stages," but he reiterated that none of it matters without American concessions. Araqchi also noted that Iran would not resume negotiations with the US until Washington stops violating the memorandum of understanding that ended the war in June—a ceasefire that has already broken down. The US reimposed a shipping blockade on Iranian ports in July, a move Tehran said violated the truce.

Meanwhile, the conflict is metastasizing across the region. On Sunday, the Houthi rebels in Yemen—Iranian allies—attacked Saudi Aramco's Jazan refinery in the Red Sea, claiming it was retaliation for what they describe as a Saudi siege on Yemen. Saudi Arabia denied the allegation but responded by signing a new defense pact with Turkey and Pakistan, framing it as a response to growing regional instability. The Houthis have also declared a naval blockade against Saudi Arabia in the Red Sea. A UAE oil tanker was hit by an Iranian missile in the Strait on Saturday; the UAE condemned the attack as piracy and a violation of UN resolutions on freedom of navigation.

Back in Washington, the Pentagon is in crisis mode. Deputy Defense Secretary Steve Feinberg sent a memo to defense contractors demanding they submit plans within three weeks to "dramatically" accelerate weapons production. The Iran war has burned through American missile supplies at an alarming rate. "Years-long development cycles are not acceptable," Feinberg wrote. "We must dramatically accelerate our program schedules and expand our production capacity now." Trump reportedly chewed out Defense Secretary Pete Hegseth over the munitions shortage.

In Gaza, a separate negotiation is collapsing. Trump announced last month that he had brokered a breakthrough: a 15-point plan that both Israel and Hamas had agreed to, involving Israeli withdrawal, Hamas disarmament, and an international stabilization force. But Prime Minister Benjamin Netanyahu rejected it almost immediately. "Israel does not accept the 15-point document," he said in a cabinet meeting on Sunday. The military will not withdraw, he insisted, until Hamas is completely disarmed—all weaponry, heavy and light. Netanyahu is caught between pressure from Trump, his key military backer, and far-right ministers in his coalition who oppose any concessions. He faces re-election on October 27 and is struggling in the polls. A Hamas official, Basem Naim, said the group remained committed to a roadmap agreed in Cairo ten days earlier and called on mediators and the US to pressure Netanyahu to stop obstructing the process.

The human cost of all this is mounting in Yemen. More than half the population was already facing hunger before the Strait was closed. Months of disruption to shipping through the waterway have driven up food and fuel prices across the region. The conflict with Iran has triggered renewed escalation in Yemen, compounding what the UN calls one of the world's worst humanitarian crises. Millions more are now vulnerable to hunger as aid operations struggle to function. Connecticut Senator Chris Murphy, a Trump critic, said on NBC's Meet the Press that he would support even a "terrible-bad deal" to end the war at this point, given the damage the blockade continues to inflict on global food and energy supplies.