Despite Midterms, the Hurdles to an Iran Deal Remain
With the midterm bloodbath now in the rearview mirror, many people are breathing a false sigh of relief regarding the Iran War. A blanket of calm has been thrown over the American people, but the same core obstacles to any peace deal remain.
At its heart, the primary obstacle to ending the war between the U.S. and Iran is the fundamental lack of trust between the two sides. Just calling a spade a spade here, the United States bears a significant portion of that blame, especially under President Trump.
Following the June MOU that fell apart spectacularly, Iran has learned from its fatal mistake under that agreement.
In the lead-up to the June MOU, Iran repeatedly insisted on the immediate, upfront release of frozen assets as a core demand. The strategic logic was simple. The United States has no traditional military options to achieve victory in Iran and hasn't since the initial decapitation strikes failed to collapse "the regime" on the first day of the war. Consequently, the only semi-viable pathway to victory for the Trump administration was economic warfare, imposing enough pressure on Iran to force capitulation or outright regime collapse.
By securing the immediate and irreversible transfer of frozen assets to Iran, which I might mention is Iran's OWN MONEY, the economic damage imposed by Operation Epic Fury and Operation Economic Outcast would be irreversibly unwound.No conventional warfare option AND no economic warfare option? Well, then your goose is cooked. Game over.
But curiously, and foolishly, Iran stood down from that demand. The thinking was likely that the oil sanctions waivers under General License X, combined with lifting the U.S. blockade to permit exports of some 80 million barrels of oil, were sufficient incentives.Unfortunately for Iran, Trump revoked the oil waivers just weeks into their initially authorized 60-day period. Iran now has little reason to trust that the Trump administration would honor future sanctions waivers, leaving the upfront unfreezing of assets as the sole remaining concession.
Trump and his advisors understand this. Such a concession would effectively eliminate the only remotely plausible pathway to victory and cement the war's outcome. There would be no turning back.
However, Trump then faces a conundrum: What happens once I release those frozen assets to Iran? What if they take the money, say thanks, and keep the Strait of Hormuz closed?
While nothing in Iran's behavior throughout this war suggests it would renege on a promise, this remains a compelling argument for those in Trump's inner circle opposing a deal.
Iran will only trust irreversible financial concessions, requiring Trump to take it on FAITH that the Iranians will uphold their end of the bargain.
Beyond the nuclear discussion, "proxy" funding, and even Hormuz itself lies this fundamental challenge to avoiding a return to hot conflict that I do not believe either side truly wants.
Iran wants to lock in a historic victory, particularly after helping sink the rest of Trump's presidency through the midterm landslide. The United States "should" want to avoid renewed war, given the catastrophic economic consequences that would follow the rumored bombing campaign against Iranian civilian and economic infrastructure.But Treasury Secretary Scott Bessent declared yesterday that Operation Economic Outcast and the U.S. blockade would continue regardless of the midterm results, followed immediately by new Iran-related sanctions. This isn't a static environment where the time required to reach a deal is inconsequential.
As I told Politico yesterday following Bessent's comments:
"The American people delivered a devastating verdict on this war in the midterms, yet not even 24 hours later, the Trump administration is signaling that its economic warfare against Iran will continue nonetheless. Whether through renewed military strikes or escalating economic warfare, both paths risk provoking devastating Iranian retaliation and plunging us back into all-out war."
That is the problem with the current status quo. While both sides would like to reach a deal, the United States keeps pushing Iran closer to an economic pain threshold that could require an immediate Iranian response, shifting the "pain runway" toward the United States through attacks on economic infrastructure within the Gulf.The core challenge to reaching any peace deal after the midterms is the most fundamental of all: Trust.
Without President Trump taking the first and most challenging step of extending an olive branch through the release of frozen Iranian assets, the world will continue to tiptoe toward forced Iranian escalation that devastates the global economy.
This story was originally published by MeidasTouch on Nov 5, 2026, where it first appeared in the News section. Add MeidasTouch as a Preferred Source by clicking here.
