U.S. officials believe sanctions could hurt Iran more than bombs

President Trump's economic assault on Iran has drawn a fraction of the attention devoted to his bombing campaign, even as senior U.S. officials believe it may ultimately do more damage to the regime in Tehran.

Why it matters: U.S. intelligence and open-source media reports point to a deepening economic crisis inside Iran, including gasoline shortages in one of the world's most oil-rich countries.

• "The Iranians want to stop being bombed and they want money," a senior administration official said. "But that's almost in reverse order. They really want the money first."

Driving the news: Trump, who paused U.S. strikes against Iran over the weekend after 13 consecutive days of attacks, said Monday that Tehran had requested a meeting to discuss a deal.

• Iranian Foreign Ministry spokesperson Esmaeil Baghaei denied that claim.
• Both sides are talking to mediators, led by Oman, Qatar and Pakistan, who are seeking to convert the pause in fighting into a durable new ceasefire.

Zoom in: A major focus of the talks is a proposal that would give Iran and Oman a measure of authority — and potential revenue — in managing traffic through the Strait of Hormuz.

• The arrangement would draw elements from the cooperative framework used by Malaysia, Singapore and Indonesia in the Straits of Malacca and Singapore.
• "Some of the Iranians want this. Others don't. That's part of the issue," the senior administration official said.

Iran wants assurances it won't be attacked again by the United States.

• It also wants money — both unfrozen assets and freedom U.S. sanctions.
• Trump is wary of rewarding Iran for disrupting traffic through the strait and is demanding that Tehran surrender its remaining nuclear material.

Zoom out: A second U.S. official acknowledged that sanctions and the U.S. naval blockade will take longer to force Tehran to the table than a full-scale bombing campaign, which Trump has so far declined to authorize.

• That prolonged timeline could deepen Republicans' political exposure, leaving them to defend an unpopular war and elevated gas prices through the midterm campaign.
• "I have a lot of patience," Trump told reporters Monday.

Between the lines: "Intelligence is picking up that the Iranians are complaining they can't pay their fighters," that official said. "Why? Because of the financial pressures. Because of Treasury. Because of what [Treasury Secretary] Scott Bessent is doing."

• "They're in danger of runs on banks. There are gasoline shortages in this giant oil-rich country," the official added. "They're more scared of Treasury than the War Department."

Inside the room: In prior talks with U.S. negotiators Jared Kushner and Steve Witkoff, the Iranians made clear that gaining access to money was a central priority, according to U.S. officials.

• "They're begging Steve and Jared for cash. They're desperate for it," one of the officials claimed.
• The Trump administration has imposed sanctions on more than 1,000 people, vessels and aircraft under its revived maximum-pressure campaign, targeting Iran's oil trade, shadow banking system, weapons procurement and shipping networks.

The intrigue: Trump has said he paused the bombing to give diplomacy a chance. His decision also followed a warning from Joint Chiefs Chair Gen. Dan Caine about pressure on U.S. weapons stockpiles in Central Command, especially supplies of air-defense interceptors, sources told Axios.

• The senior U.S. official described Caine's warning as standard military procedure.
• "The overall stockpiles aren't depleted or at zero," the official said. "When you have to consider pulling from stockpiles around the world, that comes with risks, and you have to present that to the commander in chief. He decides. He's the decider."

Yes, but: Critics of Trump's war efforts say the president has few attractive options and question whether either military strikes or economic pressure will force Iran to accept his terms.

• Iran generated an estimated $23 billion in oil revenue during the first half of the year — exceeding its budget projections — according to Brett Erickson, an analyst with Obsidian Risk Advisors.
• "Economic warfare is a fundamentally broken approach to the Iran War," Erickson wrote Monday on X.

What they're saying: White House press secretary Karoline Leavitt told Axios that Trump "prefers a diplomatic solution, but he continues to retain all options if Iran continues terrorist activities in the Strait of Hormuz or against allies."

• "Combined with successful sanctions that have crippled Iran's economy and 13 straight days of strikes against military targets in response to their repeated aggression, it would be wise for Iran to work toward a negotiated deal," she said. "Otherwise, they know what will happen."
• Said another U.S. official: "The president has a win-win optionality. The U.S. is capable to prosecuting this militarily to the fullest extent. And the U.S. is capable to exerting economic sanctions that cripple Iran."