Trump's Iran escalation fuels Senate clash over war powers

The report, published on Friday, followed recent remarks by Foreign Minister Abbas Araghchi, who said the US-Israeli attack that killed Khamenei and several senior military commanders did not occur during a full meeting of Iran's Defense Council. Instead, Araghchi said, a subordinate committee of the council, chaired by the council's secretary, was meeting at the time.

• 

  Araghchi interview draws fire from Iran hardliners

According to Noor News, the committee was chaired by Ali Shamkhani and was discussing the implementation of a comprehensive plan to organize resources, personnel, structures and equipment to manage future protests, while also assessing what participants believed was an imminent US-Israeli attack on Iran.

Protest response and military planning

The outlet said officials viewed the country as facing a "multi-layered threat" combining foreign military action with the prospect of domestic unrest, making preparations for both scenarios a priority.

The protest management plan, Noor News wrote, gained urgency after nationwide protests in January 2026. Khamenei, it added, rejected a proposal to transfer responsibility for the plan to the Supreme National Security Council's secretariat and instead instructed Shamkhani to oversee its implementation until its completion.

Khamenei and Shamkhani, the report added, also emphasized reducing casualties among civilians and protesters during demonstrations, leading to the development of new equipment and procedures for managing public gatherings.

The January protests were triggered by soaring prices, a collapsing currency and deep public anger toward the Islamic Republic. What began as an economic protest quickly evolved into a nationwide political crisis, prompting one of the most intense crackdowns in the Islamic Republic’s history.

• 

  100 days on: the anatomy of Iran’s January crackdown

Authorities responded with internet shutdowns, mass arrests and a violent crackdown. More than 36,500 Iranians were killed by security forces during the nationwide crackdown on January 8 and 9, according to classified government documents and other evidence reviewed by Iran International's Editorial Board.

The strike began while the committee was in session, killing Shamkhani and several senior military commanders, according to Noor News. The outlet said the meeting was intended to prepare for what participants believed would be simultaneous external military action and internal unrest.

• 

  Over 36,500 killed in Iran's deadliest massacre, documents reveal

Khamenei was killed on February 28 in the opening hours of the US-Israeli war against Iran. He died in a coordinated airstrike targeting his heavily fortified compound in Tehran as part of a broader operation aimed at decapitating Iran's military and political leadership. Satellite imagery later showed extensive destruction at the compound.

Khamenei, who had ruled Iran since 1989, was 86. The Assembly of Experts subsequently appointed his son, Mojtaba Khamenei, as Iran's new Supreme Leader.

Between March and June 2026, Iran's non-oil trade with China totaled just $830 million, down from $3.3 billion during the same period last year—a decline of roughly 75%.

Kpler shipping data reviewed by Iran International also point to a sharp decline in Iranian oil exports to China.

Average daily unloadings at Chinese ports fell from 1.74 million barrels per day in April to around 550,000 barrels per day in the first half of July.

Together, the figures suggest the Strait of Hormuz closure has dealt a severe blow to Iran's economic ties with its largest trading partner.

China remains the only major buyer of sanctioned Iranian crude and was by far Iran's most important commercial partner in 2025.

The disruption has also sharply increased transportation costs. According to the head of logistics at Iran's Trade Promotion Organization, shipping a container from China to Iran now costs $8,000–$9,000, up from $2,500–$3,500before the conflict.

Transporting goods through Central Asian rail corridors has become even more expensive.

Iran hit harder than regional rivals

Although trade between China and other Persian Gulf states also declined after the Strait closure, the contraction was far less severe than in Iran's case.

Chinese customs data show Bahrain, Iraq, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates recorded a combined $109 billion in bilateral trade with China during the first half of 2026, a 29% decline from a year earlier.

By contrast, total trade between Iran and China during the same six-month period fell 59%.

Trade between China and Oman proved even more resilient, remaining virtually unchanged at around $16 billion during the first half of the year.

The figures indicate that Iran has borne a disproportionately large share of the commercial costs associated with disrupting one of the world's most important shipping lanes.

Broader trade slowdown

The impact extends well beyond China.

Last year, Iran’s Arab neighbours accounted for roughly 51% of Iran's total non-oil trade. Since March, trade between Iran and all of those countries except Iraq has effectively come to a halt.

Iran itself has stopped publishing monthly foreign trade statistics since the regional war began, leaving customs data from trading partners among the few remaining indicators of the country's external commerce.

Data from other major economies point in the same direction.

According to Eurostat, trade between Iran and the European Union fell by more than half during the first three months of the conflict, dropping below €430 million.

India offered one notable exception. A one-month US sanctions waiver allowed Indian refiners to receive two cargoes of Iranian crude in May, lifting India's imports from Iran by more than 340% to about $950 million during the first five months of the year.

Even so, India's exports to Iran fell 17% to $470 million, reflecting weaker non-oil trade.

Official Turkish data painted a steadier picture. Despite a doubling of Iranian natural gas exports, overall trade between Iran and Turkey remained broadly unchanged at around $1.9 billion during the first half of the year.

The Chinese customs figures, shipping data and trade statistics from Europe suggest that while the Strait of Hormuz crisis has disrupted commerce across the region, Iran has so far paid a markedly higher commercial price than many of the countries it sought to pressure.

Kpler ship-tracking data showed only one vessel exited the strait on July 23, down from three the previous day, while no ships entered.

The sole crossing was the New Giant, a very large crude carrier carrying 2 million barrels of Iraqi Basrah crude bound for China's Rizhao port.

The sharp decline came as US strikes on Iran entered a 13th consecutive night and oil prices climbed back above $100 a barrel.

US President Donald Trump on Thursday expanded the confrontation beyond the battlefield, warning that Iranian funds under US control would be used to compensate victims of attacks on commercial shipping.

"Any and all damages done to Ships, Cargo, or anything related thereto, will be paid for by Iranian Money that the United States has in its possession, and controls," Trump wrote on Truth Social.

Iranian Foreign Minister Abbas Araghchi condemned the proposal, warning that once governments normalize confiscating another state's assets, "no one's assets are safe."

Calling the idea an "incendiary precedent," he said seizing another country's assets to pay for unrelated future claims would create international instability and that the resulting chaos would not be "pretty or peaceful."

Iranian leaders meanwhile continued to frame disruption to Persian Gulf shipping as part of their broader deterrence strategy.

"The equation of this war is clear: either everyone or no one," Parliament Speaker Mohammad-Bagher Ghalibaf wrote on X this week. "In a region where we cannot sell oil, no one will sell oil."

The disruption is increasingly reshaping regional shipping patterns.

The clean tanker Torm Innovation, carrying around 500,000 barrels of naphtha bound for Asia, altered course toward the Suez Canal instead of taking its usual route through the Bab el-Mandeb Strait, according to Kpler and LSEG ship-tracking data.

Regional trading sources said routing vessels to Asia via the Suez Canal rather than the Bab el-Mandeb could make voyages nearly three times longer, adding substantially to transport costs.

Saudi Aramco has also begun offering additional crude cargoes loading from Egypt's Mediterranean port of Sidi Kerir as an alternative to its Red Sea export terminals, reflecting growing efforts by producers and shippers to adapt to the disruption.

Traffic through the Bab el-Mandeb Strait nevertheless increased on Thursday.

Kpler recorded 32 commodity tanker crossings, up from 26 a day earlier. Fourteen vessels entered the Red Sea and 18 exited into the Gulf of Aden, including nine crude carriers—two of them Chinese supertankers bound for China.

Trump told Israel’s Channel 12 that he was considering a “massive attack” larger than Operation Epic Fury, though he stressed that no final decision had been made and no new military orders had been issued.

“I am close to making a decision. We are fully prepared for it,” Trump said, adding that the United States could act alone but Israel would join “within two minutes” if asked.

Trump also said Iran would ultimately bear the financial cost of attacks on commercial shipping.

In a post on Truth Social, he said that “any and all damages” to ships, cargo and related property would be paid from Iranian funds under US control.

“These damages may be very substantial but, nevertheless, this is the fair and equitable thing to do,” he wrote.

Iran has nearly $100 billion in assets frozen abroad and beyond Tehran’s control, though only part of that sum is directly held by the United States or clearly within its legal reach.

The threat added an economic dimension to Washington’s military pressure as mediation efforts showed fresh signs of collapse.

Axios, citing two regional sources involved in the talks, reported that Iran had rejected the latest proposal delivered through intermediaries. One source said Tehran was “not cooperating.”

Trump struck a similar tone at the White House, telling reporters that Iran wanted an agreement but was not prepared to accept Washington’s terms.

Iranian Foreign Minister Abbas Araghchi responded by accusing figures in the US administration of ignoring “realities on the ground” and focusing instead on the 2028 presidential election.

The diplomatic impasse unfolded alongside a widening regional confrontation.

Kuwaiti authorities said hostile drones struck the Abdali border crossing with Iraq, causing material damage but no casualties. The military later reported intercepting additional drones.

The IRGC-affiliated Tasnim News Agency attributed two attacks near the crossing to Iran-allied armed groups, saying a border terminal and command building were targeted in retaliation for a reported US strike near Iran’s Shalamcheh crossing.

Iran also sharpened its dispute with neighboring states. Foreign Ministry spokesman Esmail Baghaei said Persian Gulf countries and Jordan must formally deny a US Central Command claim that they had assisted American operations against Iran.

Baghaei argued that Tehran was entitled to strike US bases and assets on their territory in self-defense if they had participated in the campaign.

Israel, meanwhile, prepared for the possibility that a broader US operation could draw it directly back into the conflict.

Defense Minister Israel Katz said the country was ready “for every scenario” and warned that Iran would face a “crushing blow” if it attacked Israel.

In Washington, the Senate voted 49-47 against advancing a resolution that would have required congressional authorization for continued hostilities against Iran, blocking an effort to limit Trump’s war powers as he considers expanding the campaign.

The shift comes as Brent crude climbed above $100 a barrel for the first time in two months after Iran-aligned Houthi attacks expanded maritime tensions from the Strait of Hormuz to the Bab al-Mandab Strait, raising fears of broader disruption to Middle Eastern energy exports.

US President Donald Trump this week warned that the United States would destroy Iranian bridges or power plants in response to attacks on shipping in the Strait of Hormuz.

He later blamed Tehran for Houthi attacks on commercial vessels in the Red Sea, saying any further assaults would trigger an "extremely severe" US response against both the Houthis and Iran.

Amid the escalating threats, Brent crude surged 6% on Thursday, climbing back above $100 a barrel for the first time in two months.

Tehran sees leverage

Iranian officials increasingly portrayed the price rally as evidence that insecurity around the Strait of Hormuz and the Bab al-Mandab had strengthened Tehran's negotiating position.

"The equation of this war is clear: either everyone or no one," Parliament Speaker and Iran's chief negotiator Mohammad-Bagher Ghalibaf wrote on X. "In a region where we cannot sell oil, no one will sell oil. If our security is not guaranteed, no infrastructure will remain safe."

He later added: "They wanted to punish Iran. Punished themselves with triple-digit oil instead."

Mohammad Mokhber, an adviser to Supreme Leader Mojtaba Khamenei, argued that the latest rally reflected disruptions to transportation rather than production, implying prices could climb much higher if energy infrastructure itself came under attack.

"Oil at $100 is, so far, merely the result of disruptions in transportation, not production. The fire the United States is igniting in the region's oil and gas fields will eventually engulf the entire world."

Ali Akbar Velayati, another senior adviser to Mojtaba Khamenei, likewise warned that "the illusion of striking Iran at low cost" could have consequences extending well beyond the battlefield to global energy markets.

Talks lose momentum

The more confident tone in Tehran coincided with signs that diplomacy was stalling.

According to Axios, citing two regional sources familiar with mediation efforts, Iran's leadership rejected the latest proposal presented through intermediaries.

"We're trying, but the Iranians are not cooperating," one source told the outlet.

Trump also acknowledged that negotiations had made little progress, saying Tehran wanted to negotiate but had not "suffered enough yet."

Conservative Iranian media and hardline commentators argued that soaring oil prices had renewed Washington's interest in diplomacy and urged Tehran to resist returning to the negotiating table while economic pressure on the United States and its partners continued to build.

Following its announcement of attacks on US facilities in Kuwait, the Islamic Revolutionary Guard Corps (IRGC) declared that Washington "must pay the price for breaking its commitments" and vowed not to allow the United States to use "deceptive ceasefires" to replenish military supplies and strategic reserves before resuming hostilities.

The statement accused Washington of seeking negotiations only after being "defeated on the battlefield."

Hardline commentator Hamid Moghaddam similarly argued that renewed American interest in diplomacy reflected the surge in oil prices and urged Iranian negotiators to hold their position.

Another hardline commentator wrote that unless households in the West began to feel the economic consequences of the conflict, the United States and Israel "would have no hesitation in turning Iran into another Libya or Gaza."

Former Israeli intelligence officer Danny Citrinowicz questioned whether Trump's increasingly forceful warnings would alter Tehran's calculations.

"The Houthis are not going to stop attacking, just as Iran is not going to stop supporting them," he said.

"These threats are unlikely to change behavior in either Sana'a or Tehran. If anything, repeated ultimatums that are not enforced risk highlighting the limits of American deterrence."