Trump folds compensation into Iran talks as 6 demands stall deal

Trump said compensation for war damages will be folded into future US-Iran negotiations, responding to Tehran's six-point demand list that includes reparations from Washington and Israel, while the US presses its own claims.

"The Iranians are more afraid of Secretary Bessent than they are of Secretary Hegseth right now," Mike Waltz, US Ambassador to the United Nations, said on Sunday. "When they're coming to the table to our negotiators, they are talking about cash, cash, cash."

Iran's National Security Council Secretary-General Mohammad Bagher Zolghadr announced the six demands on Aug 8, including lifting the US maritime blockade, troop withdrawal from regions around Iran, and war damage compensation — terms more stringent than the previous ceasefire memorandum of understanding. Iran's inflation is at its highest in 80 years, the rial has collapsed, and the Islamic Revolutionary Guard Corps controls roughly half the economy, Waltz said. Treasury Secretary Scott Bessent's "Operation Economic Fury" sanctions campaign has compounded the crisis, leaving Tehran unable to pay its soldiers, Trump said.

The Strait of Hormuz carries about 21 percent of global oil trade, making its reopening a priority for Washington. With midterm elections three months away and crude prices well above pre-war levels, the Wall Street Journal reported Trump has been laying groundwork to declare victory if Iran fully reopens the strait — even without a concluded nuclear agreement.

Trump described the negotiations as "a chess game" during a call with Axios on Aug 9, saying "We are responding in a low-key manner" and "The negotiations will be resolved well." Unlike earlier rounds, he did not express anger or issue new military threats, suggesting he intends to keep the door open for talks while observing the situation.

Iran's Foreign Minister Abbas Araghchi said there is "no possibility of resuming negotiations until the US stops violating the MOU and compensates for the violations." Mediating countries are still striving to lay the groundwork for talks, he added.

Compensation as a bargaining chip

The compensation issue cuts both ways. Trump said the US also demands compensation from Iran, framing it as a reciprocal claim rather than a concession. This mirrors the previous ceasefire MOU, which collapsed after both sides accused each other of violations.

The last time the US and Iran engaged in direct compensation negotiations was during the 2015 JCPOA framework, when Iran received access to roughly $100 billion in frozen assets in exchange for nuclear concessions. That deal unraveled after the US withdrew in 2018, and the current standoff has escalated far beyond that framework.

Economic pressure as the lever

Waltz said Iran's regime "can absorb the bombings" but cannot absorb record inflation, frozen cash, and an economic blockade. The IRGC's control of half the economy means sanctions pressure directly targets the regime's financial lifeline, he said.

The economic squeeze is already visible in market terms. Oil prices remain elevated relative to pre-war levels, and the risk premium embedded in crude reflects continued uncertainty over Strait of Hormuz transit. Defense sector equities have also traded with a geopolitical premium since the conflict began.

Trump's approach marks a shift from military escalation to economic attrition. He told aides he is willing to withdraw even if nuclear negotiations are not concluded, according to the WSJ, pointing to the destruction of three Iranian nuclear facilities last year as evidence that Iran is unlikely to resume nuclear development during his term.

A White House official said the current focus is on securing energy flow through the Strait of Hormuz. If Iran fully reopens the strait, Trump could frame that as a victory heading into the midterms — even without a comprehensive nuclear deal.

This article is for informational purposes only and does not constitute investment advice.