Trump Takes Iran Hard Line as Hormuz Tensions Set New Normal

By Jennifer A. Dlouhy and Patrick Sykes

Aug 18, 2026 (Bloomberg) –US President Donald Trump insisted Tuesday that there were no talks ongoing with Iran, leaving the simmering conflict in the Middle East and control of the Strait of Hormuz stuck in limbo.

The memorandum of understanding that the US and Iran signed in June in an effort to buy time to negotiate a lasting peace deal — as repeatedly violated as it had been during that 60-day window — has expired. There are no plans to extend it.

“There are no talks or conversations going on, or scheduled, with the Islamic Republic of Iran,” Trump posted on his social media platform. That leaves the status of Hormuz unresolved, with little traffic and Washington and Tehran still at odds over how the waterway should be managed.

The United Arab Emirates said it was cutting off trade, commercial exchanges and financial transactions with Iran until further notice “in light of regional escalations that undermine regional and international peace and security.”

The move came after the UAE said Iran fired two ballistic missiles toward its territory, the Islamic Republic’s first confirmed attack on the Gulf nation since May. Both missiles were targeting maritime traffic, but fell into the sea and only one reached the UAE’s waters, according to the country’s Defense Ministry. Tehran had recently launched strikes against UAE-linked ships. Esmail Baghaei, a spokesperson for Iran’s Foreign Ministry, denied that Iran launched a missile toward the UAE. 

Brent crude was above $91 a barrel as prospects dimmed for a swift reopening of Hormuz, through which a fifth of the world’s oil and liquefied natural gas transited before the war. 

Traffic through Hormuz remains well below prewar levels amid repeated attacks on ships. The UK said Tuesday that a vessel leaving the strait was hit by a projectile that damaged its engine room and caused one casualty. Secretary of State Marco Rubio discussed freedom of navigation with the UAE’s national security adviser.

Mohammad Bagher Ghalibaf, Iran’s lead negotiator with the US, told lawmakers that Hormuz won’t reopen until Washington lifts its port blockade, releases frozen assets, removes oil sanctions and ends military operations, as agreed in June.

Trump, meanwhile, is demanding Iran drop efforts to charge tolls on vessels crossing the waterway, while Tehran has said it will govern traffic in conjunction with Oman. The US president, citing the naval blockade of Iranian ports, claimed that the strait is “open and operating” despite shipping data showing otherwise.

Trump also asserted that “all water mines have been removed or detonated,” though European officials are skeptical given the time-consuming nature of mine clearing. A planned European mission has yet to begin.

Tuesday’s declarations from the president marked the latest example of the mixed messages coming from the administration. 

The president’s son-in-law, Jared Kushner, who has been active in diplomatic efforts, told Fox News on Tuesday that conversations with “different areas of the Iranian government” were ongoing. 

“There’s really not a lot of trust between America and Iran after all these years of not having these relations and dialogues,” he said. “But we are having very positive and active conversations.”

According to the president, those are now over. Yet there’s little sign Iran is willing to bend.

“We are in what I call an economic war of attrition to see who can endure longer, to see who can force the other side to make concessions,” Mark Cancian, a senior adviser at the Center for Strategic and International Studies, told Bloomberg Television. 

The war began Feb. 28 with US-Israeli airstrikes on Iran and spread across the region. Trump says his primary objective is to prevent Tehran from obtaining a nuclear weapon, which Iranian officials deny pursuing.

Trump has also reiterated his idea of declaring Hormuz an American territory, while insisting the US has total control over the strait, a position directly at odds with Iran’s stance.

Iran and Oman are negotiating a deal on managing Hormuz, without US participation. Trump told Fox News that if “Oman gets in the way, we’ll bomb the s—— out of them,” repeating a similar threat from May. Oman isn’t a formal US ally but is a close security partner.

Trump has struggled to find an off-ramp to a war that’s driven up gasoline prices and grown increasingly unpopular in the US, threatening Republican support ahead of November’s midterm elections.

Trump and his officials have pledged more economic pressure on Iran, though Tehran has withstood decades of sanctions. The war has damaged industrial capacity, curtailed crude exports and driven inflation sharply higher. Ghalibaf acknowledged legitimate economic grievances but urged Iranians to prioritize national unity.

Jake Sullivan, who served as national security adviser under former President Joe Biden, told Bloomberg Television that Trump faces two bad options: continue the war and absorb the economic costs, or strike “a very, very bad deal” as Iran raises the price of reopening Hormuz with new demands.

© 2026 Bloomberg L.P.

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This article contains reporting from Bloomberg, published under license.

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