Believing it holds the upper hand, Iran has presented an extensive set of maximalist conditions for reopening the Strait of Hormuz, even as officials in Tehran voice mounting alarm over the country's deteriorating economy.

The strait is one of the world's most critical energy chokepoints, normally carrying roughly a fifth of global oil consumption. Its extended closure has sent shockwaves through energy markets and raised urgent questions about how long both Tehran and Washington can sustain the current confrontation.

Although Iran and Oman have held discussions on managing traffic through the narrow waterway, any agreement would not automatically restore passage. Oman has long served as a discreet intermediary between Iran and Western governments, and its involvement underscores the absence of any direct U.S.-Iran diplomatic channel. Iran insists that the United States must first meet several demands.

On Saturday, Iran's Supreme National Security Council called on the U.S. to lift its naval blockade, end all sanctions, withdraw military forces from the region, pay war reparations, unfreeze Iranian assets, cease attacks on Iranian proxies, and stop threatening the country.

Some of these demands may be intended to establish a negotiating position or to appease Iranian hardliners who oppose any agreement with Washington. Nevertheless, the uncompromising opening stance has dampened expectations that normal shipping traffic through the strait will resume in the near term or that the U.S. will ease economic pressure on Tehran.

Behind the public bravado from senior officials, anxiety over the economy remains acute. High inflation and a currency crash previously triggered nationwide protests that were suppressed through a violent crackdown in January.

Regime moderates have grown increasingly concerned that the recently reimposed U.S. naval blockade is pushing Iran's economy to the brink of collapse, sources told the Wall Street Journal. This aligns with earlier reports that Iran's president and central bank chief had warned Supreme Leader Ayatollah Mojtaba Khamenei that the initial blockade was crippling the economy.

However, moderates — including the president and others who favor negotiating with the U.S. — have faced fierce criticism from hardliners. These tensions frequently surface in public, including in state-run media.

On Wednesday, Iran's deputy foreign minister, who also serves as a top negotiator, said the economy desperately requires the sanctions relief that a deal with the U.S. could deliver, according to the Journal.

"When I read some of the opposition to negotiations, I honestly wonder what world these people are living in," Kazem Gharibabadi told IRIB, Iran's state broadcaster.

Last month, President Masoud Pezeshkian warned that intensifying economic pressure could stoke public discontent.

Experts have cautioned that Iran's authoritarian regime is unlikely to be moved by the suffering of ordinary citizens and is prepared to endure economic hardship longer than the American public can tolerate elevated gasoline prices. Yet Iran, like its Gulf neighbors, relies on the Strait of Hormuz to export its oil, meaning the blockade is also strangling the regime's primary source of revenue.

On Saturday, U.S. Central Command reported that as part of its renewed blockade enforcement it has redirected 53 commercial vessels, disabled two, and boarded two. Shipping and satellite data indicate that no tankers have loaded at Kharg Island — which handles nine out of every ten barrels of Iranian oil exports — for at least a week.

Iran's inflation continues to worsen. Official data shows it accelerated to an annual rate of 88.6% in late June, with southern provinces that experienced the heaviest bombardment approaching or exceeding 100%. Unemployment has climbed to 9.1%, and GDP is projected to contract by 5.4% this year. Despite its vast energy reserves, the government has urged Iranians to ration electricity during extreme heat.

"The Islamic Republic crushed a nationwide uprising in January, has an economy in free fall, and is fighting a war with America. Its most dangerous front may prove to be the domestic one," Hamidreza Azizi, an Iran expert at the Clingendael think tank, wrote in Time last week.

Bijan Khajehpour, another Iran expert and managing partner at the consulting firm Eurasian Nexus Partners, takes a different view, arguing that Iran's economy is not on the verge of immediate collapse. In a note published Friday, he explained that Iranian households have acted as "shock absorbers" by cutting consumption, deferring investment, taking second jobs, relying on extended family networks, drawing down savings, selling assets, and receiving remittances from relatives abroad. Businesses, similarly, tend to scale back rather than disappear entirely.

However, Khajehpour cautioned that Iran's economic resilience does not equate to sustainability, as the country's infrastructure and human capital continue to deteriorate. The agricultural sector, for instance, has grown more dynamic during the war because the economy has shifted toward subsistence and away from higher-productivity activities.

"A generation that postpones careers, emigrates or permanently disconnects from productive employment weakens a nation's future capacity to innovate, invest and recover," Khajehpour wrote. "The post-war labor market therefore provides perhaps the clearest evidence yet that the economy's resilience is masking a gradual erosion of the very capacities required for future growth."