Iran's Revolutionary Guards told the United States on Sunday it faces a choice between an "impossible" military operation and a "bad deal," hours after President Donald Trump dismissed Tehran's latest 14-point peace proposal. The ultimatum, reported by AFP, escalates a deadlock that has kept the Strait of Hormuz closed since an April 8 ceasefire, choking off global oil flows and pushing crude prices roughly 50 percent above pre-war levels.
Trump had already made his skepticism clear. "I will soon be reviewing the plan that Iran has just sent to us, but can't imagine that it would be acceptable in that they have not yet paid a big enough price for what they have done to Humanity, and the World, over the last 47 years," he posted on Truth Social, according to AFP. The proposal itself sets a one-month deadline for negotiations, Axios reported, citing two sources briefed on the document. It demands a deal to reopen the Strait of Hormuz, end the US naval blockade, and permanently halt the war in both Iran and Lebanon. "The room for US decision-making has narrowed," the Guards said in their Sunday statement.
Behind the diplomatic language lies a brutal economic reality. Treasury Secretary Scott Bessent described a suffocation strategy. "We are suffocating the regime, and they are not able to pay their soldiers. This is a real economic blockade, and it is in all parts of government – all hands on deck," he told Fox News.
That pressure is now visible on Tehran's streets. Inflation has surged past 50 percent. Oil exports are crippled.
One resident described a city living on dwindling reserves. "Everyone is trying to endure it, but... they are falling apart," 40-year-old Amir told an AFP reporter based outside the country. "We still have not seen much of the economic effects because everyone had a bit of savings. They had some gold and dollars for a rainy day. When they run out, things will change."
What this actually means for your family. The policy says one thing. The reality says another.
The economic toll extends far beyond Iran's borders. The Strait of Hormuz remains a chokepoint for roughly a fifth of the world's oil, gas, and fertilizer shipments. Its continued closure has rattled European capitals, where leaders fear prolonged economic damage.
German Foreign Minister Johann Wadephul demanded the strait reopen immediately. In a call with Iranian counterpart Abbas Araghchi, Wadephul stressed that Germany supported a negotiated solution but that "Iran must completely and verifiably renounce nuclear weapons and immediately open the Strait of Hormuz," AFP reported. That nuclear demand has become a flashpoint.
Axios reported earlier in the week that Trump's envoy Steve Witkoff had asked for Tehran's nuclear program to return to the negotiating table. Iran's UN mission fired back, accusing Washington of "hypocritical behaviour" given the massive US nuclear arsenal. The military rhetoric is intensifying in parallel.
Mohsen Rezaei, a military adviser to Supreme Leader Mojtaba Khamenei, threatened to sink US warships. "The US is the only pirate in the world that possesses aircraft carriers. Our ability to confront pirates is no less than our ability to sink warships. Prepare to face a graveyard of your carriers and forces," he posted on X.
There is no evidence Iran has sunk any US military vessels during the conflict. Both sides claim victory. Here are the numbers.
Oil prices sit roughly 50 percent above pre-war levels. Iran's parliament is drafting legislation to formalize management of the strait, with deputy speaker Ali Nikzad revealing that 30 percent of tolls collected would fund military infrastructure. The rest would go toward "economic development." His assessment was blunt: "Managing the Strait of Hormuz is more important than acquiring nuclear weapons."
Trump, speaking to reporters in West Palm Beach, Florida, on Saturday, declined to specify what could trigger new American military action. "If they misbehave, if they do something bad, but right now, we'll see," he said. "But it's a possibility that could happen, certainly."
The negotiations themselves remain fragile. Only one round of direct peace talks has occurred since the April 8 ceasefire. Iran's foreign ministry spokesman Esmaeil Baqaei confirmed that Washington had already responded to the 14-point plan through Pakistani mediators. "We are reviewing this and will take whatever response is necessary regarding it," he told state television. Why It Matters:
The Strait of Hormuz closure affects every family that buys gasoline, pays for food shipped by sea, or relies on fertilizer for agriculture. A 50 percent oil price increase translates directly into higher costs at the pump and in grocery aisles. For European economies still recovering from years of energy volatility, a prolonged blockade risks recession.
For Iran, the economic squeeze described by Bessent as "suffocation" could trigger domestic unrest once household savings run dry — a timeline Amir's testimony suggests is approaching fast. Key takeaways: - Iran's 14-point plan demands a one-month deadline to reopen the Strait of Hormuz, end the US naval blockade, and permanently stop the war. - Trump dismissed the proposal, saying Iran has not "paid a big enough price," while Treasury Secretary Bessent described a strategy to "suffocate" the regime economically. - Germany and European allies are demanding the strait reopen immediately, linking any deal to verifiable nuclear renunciation by Iran. What comes next will be determined in the coming weeks.
The one-month deadline embedded in Iran's proposal creates a pressure point. If negotiations stall, the economic damage to Europe intensifies. If Iran's savings run out, the regime faces a population "falling apart," as one resident described it.
Trump left the door open to military action without defining a red line. The Guards framed the choice in binary terms. The middle ground is vanishing.
Key Takeaways
— - Iran's 14-point plan demands a one-month deadline to reopen the Strait of Hormuz, end the US naval blockade, and permanently stop the war.
— - Trump dismissed the proposal, saying Iran has not 'paid a big enough price,' while Treasury Secretary Bessent described a strategy to 'suffocate' the regime economically.
— - Oil prices are roughly 50 percent above pre-war levels, with inflation in Iran surging past 50 percent as household savings dwindle.
— - Germany and European allies are demanding the strait reopen immediately, linking any deal to verifiable nuclear renunciation by Iran.
Source: AFP
