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Donald Trump’s attempt to make peace with Iran has led into a strategic dead end. Washington offered unusually generous terms: Iran could regain hundreds of billions of dollars in trade and investment if it reopened the Strait of Hormuz and abandoned any ambition to build a nuclear bomb. Yet renewed fighting suggests that Iran’s hardliners value power, revenge and regional leverage more than economic relief.

A deal built on incompatible assumptions

The memorandum of understanding signed a month earlier created a 60-day window for peace. Its wording, however, concealed a basic disagreement. Iran read the promise to ensure safe commercial passage through the Strait of Hormuz as recognition of its authority over the waterway. America understood it as a requirement that Iran stop interfering with shipping.

That ambiguity has become a source of conflict rather than a bridge to settlement. Both sides have exchanged missile and drone strikes, commercial tankers remain reluctant to sail even under American protection, and oil prices have started rising again. Negotiations over uranium enrichment and Iran’s nuclear materials have made no progress.

The missed opportunity is especially stark because America was honoring its part of the bargain by allowing Iranian oil back onto international markets. Iranian moderates reportedly understood how favorable the offer was. They lost the argument. The country’s unseen new supreme leader, Mojtaba Khamenei, has adopted a hard line, either because he shares the confrontationists’ aims or because he cannot control them.

Every path carries a high price

Trump has responded without a coherent strategy. He briefly proposed charging ships to pass through the strait before advisers persuaded him to retreat. He has also threatened Iranian bridges and energy facilities and hinted at seizing Kharg island, the terminal through which almost all Iranian oil exports flow.

None of those ideas offers a convincing solution. A return to full-scale war could strengthen the same hardliners it is meant to defeat, as earlier fighting did. Occupying Kharg would place American troops within easy range of Iranian missiles and drones. But giving Iran what it wants would be dangerous too: it would legitimize coercive control over international waters, expose Gulf allies to greater pressure and leave Iran’s nuclear program without adequate international monitoring.

The least bad course, in the article’s view, is sustained pressure. America must show that it can enforce an embargo on Iranian oil and answer Iranian attacks even if the resulting rise in petrol prices hurts politically before the November midterm elections. That approach is costly and uncertain, but retreat would reward escalation.

The larger lesson is that generous economic incentives cannot resolve a confrontation when the other side’s leaders prize strategic dominance over prosperity. Trump made the original mistake by starting the war; now the failure of his peace offer has left him with little room to maneuver and no painless way out.