Iran Overplays Its Hand

By Noah Rothman

Wednesday, July 08, 2026

 

It’s hard to begrudge anyone the temptation to confront the president and his allies with their failures of judgment and resolve, which conspired to give us the disastrous memorandum of understanding with Iran in the first place. They deserve it.

 

Last month, the remnants of the Iranian regime were “strong people, smart people,” in Trump’s estimation. “The coolest thing” about the MOU was that it showed how even the Islamic Revolutionary Guard Corps understands that “the way that we’ve done business with the US for 47 years is a mistake,” JD Vance insisted. Today, the rump Islamic Republic is, according to Trump, a bunch of “scum” — “sick people,” “vicious, violent people,” “lying guys” who are observably “cuckoo.”

 

As this about-face suggests, observers of the ongoing conflict in the Strait of Hormuz (the MOU that supposedly ended it notwithstanding) should not invest heavily in the administration’s rhetoric.

 

What’s more, the administration has earned all the ridicule it has endured: the deal it executed, designed to reopen the Strait of Hormuz, was structured in a way that ensured the strait would remain closed. That chokepoint was open and free before the war, Trump’s critics rightly note. The president is negotiating an end to conditions that he inadvertently created.

 

There is, however, a flipside to that equation, according to Johns Hopkins University Professor Vali Nasr: “Iran thinks [the] U.S. wants to use [the] MoU to take away its control of [the] Strait of Hormuz,” he wrote, “and if so, it should be ready to go to war over it.”

 

Let’s say Nasr is correct and the IRGC-led regime now believes that altering the geopolitical status quo to secure its own acknowledged and permanent sovereignty over the strait is a doctrinal element of Iranian grand strategy. If that is the case, Tehran is overplaying its hand in pursuit of that goal while sacrificing more achievable objectives in the process.

 

The regime was not operating from a position of strength when it fired projectiles at multiple commercial vessels, the Wall Street Journal’s reporters observed. Iran’s “hard-line leaders” are “feeling their grip weaken as more ships slip through” the strait via a transit route along the Omani coast patrolled by U.S. Navy ships. The IRGC has “watched with rising alarm as traffic that was deterred from crossing during the war now ply the U.S.-backed route near Oman,” the dispatch read.

 

Despite Iran’s efforts to harass commercial shipping interests, which have been ongoing since high-tempo combat operations ceased in early April, energy markets are no longer negotiating on Iran’s behalf. Oil supplies “have recovered,” the Journal notes, and future prices had been approaching “near prewar levels.” Moreover, oil producers are investing heavily in “alternative routes and overseas storage with new urgency to get around the chokepoint.”

 

Trump has made the welcome decision to withdraw the waivers that allowed Iran to sell its oil and petroleum derivatives on the open market for U.S. dollars. Suddenly, Iran’s “ghost fleet” of tankers is once again illicit. China will still purchase Iranian oil, but at a black-market discount. Meanwhile, responsible economic actors will not risk engaging in visible commercial relations with Iran if they understand that the rug might be pulled out from under them at any moment. Thus, even if Trump changes his mind, Iran’s provocations have probably cut off what was once a promisingly lucrative revenue stream.

 

It would be hard to argue with a straight face that Iran’s position is particularly advantageous. Once an inviolable taboo, U.S. military strikes on Iranian targets inside the Islamic Republic have become so regularized that they barely even make headlines. The reliable flow of capital toward the path of least resistance ensures that the strait will gradually lose its value as a chokepoint the more that Iran throttles access to it. Tehran’s sanctions-evasion networks in the Gulf region are in tatters, and its continued ballistic missile attacks on its neighbors are unlikely to compel their cooperation.

 

The president’s premature peace overtures have contributed unnecessarily to the difficulties he will face in his ongoing efforts to force Iran into compliance with his dictates. But he is not without tools at his disposal. He can restore the blockade, recommit to Operation Economic Fury (targeting, in particular, Chinese financial interests with commercial ties to Iran), and continue to demonstrate, in escalating stages, that his threats to return to full-scale war are not bluster.

 

Trump knows this. But pulling the trigger on these options would commit him to a long campaign. Seeing it through to even a modestly successful conclusion would require a level of patience the president has not yet demonstrated.

 

For now, Trump is angry. “If we make a deal with Iran, I’m not sure that will stick because I’ve found them to be very dishonorable people,” Trump told reporters in Turkey on Wednesday. He forecast more retaliatory strikes on Iranian targets akin to Tuesday’s sorties, which U.S. officials described as “punishment, not proportional.” He’s even talking once again about executing a fraught and complex operation to take control of the Iranian energy export hub Kharg Island.

 

At the same time, Trump has not closed off the diplomatic avenue. Vance, Steve Witkoff, and Jared Kushner can keep plugging away. And if recent history is any guide, Trump is liable to be persuaded by his crack negotiators that something resembling a peace deal is within their grasp. If he is so persuaded, he will commit the cardinal sin of interrupting an enemy while it’s making a mistake.