This X post by Esfandyar Batmanghelidj is a good analysis of Iran's thinking. Further escalation leading to the closure of the Strait and rise in the price of oil might be inevitable?

@yarbatman

Iran's latest ballistic missile attacks and the continued rejection of compromise solutions on the Strait of Hormuz might seem like indications that "hardline" thinking is dominating Iran's national security strategy. But my conversations with counterparts in Tehran suggest that something else is at play. Iranian decisionmaking is increasingly shaped by an intense pessimism about what diplomacy with the U.S. can achieve. 

Most senior figures, whether pragmatists or hardliners, simply do not believe a deal is possible. This pessimism has gotten worse since the MOU was signed. 

Part of this is about the repeated experience of U.S. escalation during the course of negotiations, but the pessimism is no longer confined to the question of "does Trump want a deal?" Increasingly the belief is that "Trump can't do a deal, even if he thinks he wants one." 

Policymakers in Tehran are looking at several things. At a technical level, the Trump administration was unable to execute even the most basic confidence building measures of the MOU. No assets were released and the oil waiver was never really operationalized. Iranian leaders are also looking to other contexts. 

Even in Venezuela, where the administration has complete political control and a full court press approach to economic reengagement, sanctions relief has floundered (eg. it took a whole month after the massive earthquake for FinCen to take proactive steps to try and provide banks comfort to support humanitarian transactions). 

At a political level, the Iranians have seen the overblown reaction to the MOU from the full range of politicians in Washington. Democrats eager to score political points attacked provisions in the MOU that would be fundamental to \*any\* viable agreement with Iran. 

The Iranians are also watching the growing rift between the Rubio and Vance camps and are concluding that the administration is inherently dysfunctional. During the Biden years, the issue was whether the president could defend his deal from political rivals in Congress. Now, the rivals are within the cabinet itself. 

At an individual level, there is also a growing sense that Trump is too erratic to stick by his own deals. Even Saudi Arabia, the country with perhaps the greatest influence in the White House after Israel, could not shield its own nuclear deal from Trump's excessive demands. 

This may be an unprecedented situation. The U.S. has started a war it does not know how to end. Meanwhile, the arguments for diplomacy in Tehran have been reduced to "this has a low chance of succeeding, but we have to still try." That's not a strong, positive case for diplomatic engagement and understandably the strategic thinking is tending towards the idea that U.S. dysfunction will continue to manifest in the form of economic pressure and kinetic action against Iran for a long time to come.

2:28 AM · Jul 29, 2026

Can the Strait be re-opened and oil markets normalized? Iran is increasingly pessimistic.