Following indirect negotiations last week on the sidelines of the United Nations General Assembly, Iran and the United States are keeping diplomatic channels open while betting that economic pressure will force the other side to compromise. Washington is counting on its maritime blockade and an attempted air blockade by sanctions to weaken Tehran’s bargaining position. This is countered in Tehran by advocates of escalation in Iran arguing that continued disruption to energy supplies - and the resulting costs for the global economy - will put greater pressure on President Donald Trump. The deadlock reflects competing expectations that waiting will produce a better deal, even as the costs of waiting rise.
Inside Iran, that calculation is fueling a debate over whether to remain open to a deal or intensify the confrontation. Calls to increase pressure before the U.S. midterm elections, confront the United Arab Emirates, and withdraw from the Nuclear Non-Proliferation Treaty are emerging alongside Foreign Minister Abbas Araghchi’s continued pursuit of mediation.
On Monday, September 28, IRNA reported that the Iranian delegation in New York had no talks with U.S. officials scheduled and was awaiting a response to positions conveyed through Qatar. Later that day, IRNA reported that Araghchi would meet Qatari mediators. This indicated that indirect diplomatic exchanges were continuing, even without a scheduled meeting between Iranian and American officials.
The gaps between Washington and Tehran include both the scope of a settlement and the sequence of concessions. In an interview that aired Sunday on NBC’s Meet the Press, Araghchi laid out Iran’s demands for an agreement to end the war. “First of all, we want to end this war — this war of aggression,” said Araghchi. “They started this war eight months ago with the hope that in two, three days, you know, they can win the war. It’s now eight months. And we want it to be ended. We want our moneys, our assets, which are illegally frozen, to be released. We want, you know, to be able to sell our oil. So we want certain things that U.S. has already committed itself in the previous, you know, deals.” He reiterated that Iran was willing to open the Strait of Hormuz within seven days, and noted that Iran had not heard a formal rejection from the Trump administration through mediators despite widespread reports to the contrary.
Speaking on CNN’s State of the Union, U.S. Ambassador to the United Nations Mike Waltz put the blame on Iran for the impasse and said Iran was “asking for everything up front.” He continued, saying Iran was “asking for relief from billions and billions of sanctions,” along with “snapback sanctions from the United Nations” and for “access to billions in frozen assets.” He suggested this would not have been in return for concrete concessions, but instead a promise to talk. He also suggested Iran violated the original Memorandum of Understanding bu firing at ships transiting the Strait of Hormuz. Iran wants tangible relief before surrendering its pressure on shipping, while Washington wants confidence that relief will secure concessions extending beyond Hormuz. Each side fears giving up its bargaining position before the other delivers.
Treasury Secretary Scott Bessent has presented the economic squeeze as a reason for Washington to wait. Speaking to Fox News, he claimed that only around 15 million barrels of Iranian oil remained in transit and that Iran could deliver its final shipments to China within roughly two weeks. That is a claim by a party to the conflict, rather than an independently established deadline for Iran’s economic exhaustion. Even a severe reduction in oil receipts would not automatically determine when, or whether, Tehran changes its negotiating position.
The domestic costs are nevertheless increasingly visible. Khabar Online reported the dollar at 240,500 tomans on Monday, while a later Eghtesad Online report put it above 244,000 tomans. Separately, Tejarat News, citing Central Bank figures, reported urban consumer prices in September were 83.8 percent higher than a year earlier. Currency depreciation raises business costs while eroding household purchasing power. The government’s capacity to prolong a confrontation is not the same as the population’s capacity to absorb its consequences.
Iran’s medicine shortages show how this pressure reaches patients. The Financial Times, citing Iranian pharmacists and health officials, reported shortages of around 60 medicines used to treat life-threatening conditions. Although medicines are generally exempt from sanctions, payment barriers, shipping restrictions, and banks’ reluctance to process transactions can obstruct access. Domestic policy has compounded the problem: the removal of subsidized foreign exchange for many medicines has increased costs. For patients, prolonged confrontation will mean interrupted treatment and essential drugs becoming unaffordable.
The pressure also extends outward. Reuters reported Brent crude at $106.60 a barrel on Monday morning in New York, up 2.2 percent, after Trump rejected Iran’s proposal. Sustained high oil prices increase costs for energy consumers and complicate efforts to contain inflation. For advocates of escalation in Tehran, those international costs are a source of bargaining power. But higher prices do not necessarily benefit Iran when restrictions prevent it from exporting freely or accessing the proceeds.
Economist Majid Shakeri has articulated the argument for waiting more explicitly. Speaking on Iran’s state television news channel, IRINN, he argued for maintaining or increasing pressure ahead of the U.S. midterm elections. In this assessment, reducing the economic costs of the confrontation would benefit Trump. Araghchi has publicly taken a different position, saying that American elections do not determine Iran’s interests and that opportunities for peace should be pursued.
The UAE has become a focal point because of its role, as described by Shakeri and other Iranian advocates of escalation, in keeping oil moving through the Strait of Hormuz. In their account, the UAE is buying oil from Gulf producers and chartering tankers, assuming or accommodating insurance-related risks that would otherwise discourage shipments. Transportation becomes more expensive, but some exports continue, although below prewar levels. Their concern is that Emirati arrangements are making the risks commercially manageable and weakening Iran’s ability to translate disruption into economic pressure.
That argument underpins calls to widen the confrontation. Shakeri and others contend that targeting individual tankers cannot preserve Iran’s leverage if the UAE continues organizing shipments and absorbing additional costs. They advocate directly targeting the UAE instead, presenting this as a way to keep the Strait of Hormuz an effective Iranian bargaining instrument.
Mostafa Najafi made a related case in a post on X. He accused the UAE of facilitating other countries’ oil shipments, obstructing an Iranian-Omani agreement on managing Hormuz, and lobbying Washington and Israel to attack Iran. He also alleged direct Emirati participation in attacks and portrayed Netanyahu’s visit to Abu Dhabi as evidence of an anti-Iranian agenda. These are Najafi’s allegations, not independently-established findings about Emirati actions or the visit’s outcome.
Najafi argued that Tehran should move its handling of the UAE beyond exclusively political and diplomatic measures. His post illustrates the push for escalation without establishing an official decision to attack. The broader danger is that, as commercial arrangements reduce the effectiveness of pressure on shipping, advocates demand action against the country sustaining those arrangements. That could widen the war and expose Iran to further retaliation.
Calls to withdraw from the Nuclear Non-Proliferation Treaty add another potential route to escalation. Didban Iran reported that 32 former officials, including former intelligence minister Heydar Moslehi and former vice presidents and ministers, urged the government, parliament, and Supreme National Security Council to begin the withdrawal process. Their argument is that membership and cooperation have failed to protect Iran’s security.
The letter represents a political demand, not an announced government decision to withdraw or develop nuclear weapons. Its signatories also stated that they continued to support peaceful nuclear energy. Nevertheless, pursuing withdrawal could make agreement on nuclear monitoring and assurances more difficult precisely when Washington is demanding greater confidence about Iran’s nuclear intentions. It could deepen the obstacle American officials already cite as a reason to withhold economic relief.
Reports on Monday emphasized that the U.S. is seeking greater assurances on Iran’s nuclear program, which is an issue that was largely deferred in the June Memorandum of Understanding. While potentially favorable, it is far from clear if U.S. demands are reasonable and if Tehran has a fully-developed position on whether and how to compromise on the nuclear program.
Having made preventing an Iranian nuclear weapon central to his justification for the war, securing something on the nuclear program - such as restored International Atomic Energy Agency inspections - could provide Trump the offramp he needs to conclude the war. Tehran, however, has insisted on proof of concrete economic benefits up front, including usable access to frozen assets, the ability to sell oil and receive payment, and relief from the blockade. The Memorandum of Understanding provided a framework that could deliver each, albeit with scant details on forthcoming nuclear negotiations.
Qatari mediation preserves an opportunity to explore these arrangements. But that opening remains fragile while Washington expects economic attrition to deliver greater concessions and influential voices in Tehran expect global energy pressure to do the same. Breaking the deadlock requires turning existing pressure into enforceable reciprocal commitments before the pursuit of additional bargaining power expands the war.