President Donald Trump is betting that economic strangulation, not military force, will bring Iran to its knees. After deciding against launching a renewed all-out war, Trump told Axios on Sunday that he is "low keying it" and only "semi-negotiating" with Tehran. His strategy rests on a simple premise: a collapsing Iranian economy, battered by a U.S. naval blockade, will give Washington the leverage that bombs and missiles could not achieve.

"We are just watching Iran with its huge inflation and the fact they have no money," Trump said. He claimed Tehran cannot pay its troops and described the economy as being in "very bad shape." The blockade, he argued, has deepened the crisis. Meanwhile, American consumers face less strain as oil prices have fallen, partly because Trump has stepped back from major combat operations to give diplomacy a chance.

But the path to a deal is clogged with obstacles. Iran and Oman have held talks about managing traffic through the Strait of Hormuz, but no agreement will automatically reopen the waterway. Tehran insists on a series of aggressive demands before any normalization. On Saturday, Iran's Supreme National Security Council called on the U.S. to lift the naval blockade, end sanctions, pull out its military from the region, pay war reparations, unfreeze Iranian assets, cease attacks on Iran's proxies, and stop threatening the country.

Despite the bravado from top officials, anxiety over the economy is palpable. High inflation and a currency crash triggered nationwide protests in January, which were met with a brutal crackdown. Sources told the Wall Street Journal that regime moderates fear the reimposed U.S. naval blockade is pushing Iran's economy toward collapse. Iran's deputy foreign minister acknowledged that the economy desperately needs sanctions relief, which only a deal with the U.S. can provide. Earlier reports revealed that Iran's president and central bank chief had warned Supreme Leader Ayatollah Mojtaba Khamenei that the initial blockade was crippling the economy.

Trump expressed optimism that a deal will eventually come. "It will work out. It always works out. It's like a chess game," he told Axios. Yet his patience is tested by a dilemma: his military options have narrowed. After 40 days of bombardment and another two weeks of attacks last month, the U.S. failed to fully reopen the Strait of Hormuz. Stockpiles of munitions, including interceptors needed to counter Iranian drones and missiles, are running low. The Pentagon's top officer is reportedly searching for an off-ramp.

Surprisingly, the absence of war may serve Trump's purposes. A U.S. official told Axios that combat allowed the Iranian regime to sidestep addressing its economic crisis and its inability to fix it. But oil inventories are dwindling to critically low levels, and a looming supply crunch that spikes energy prices could test Trump's patience.

In a twist, the U.S. military has been quietly facilitating the flow of oil out of the Gulf. A U.S. official told Axios that about 8 million barrels exit each night through a southern lane in the Strait of Hormuz with American help, and that the effort will continue as long as there is no deal. A representative for U.S. Central Command did not respond to a request for comment. Before the ceasefire collapsed, the U.S. military guided tankers along an alternate route hugging the Omani coast and provided some protection. Enough ships made it out to ease global oil markets, but that prompted Iran to attack vessels bypassing its corridor, reigniting hostilities and leading to the current standoff.

Maritime traffic data shows minimal movement in the strait lately, but that may overlook ships going "dark"—sneaking out with their transponders turned off. Any added leeway the U.S. obtains in oil markets allows the blockade to deepen rifts among Iranian officials. On one side are pragmatists like President Masoud Pezeshkian, worried about the economy and eager for a deal unlocking concessions. On the other are hardliners led by the Islamic Revolutionary Guard Corps, who reject negotiations with the U.S. The tensions often spill into public view, even in state-run media. Deputy Foreign Minister Kazem Gharibabadi, a top negotiator, told IRIB: "When I read some of the opposition to negotiations, I honestly wonder what world these people are living in."

As the chess game continues, both sides await the next move. Whether the blockade proves more effective than military strikes remains uncertain, but for now, Trump is betting on economic pressure to force Iran's hand.