What are Trump's options if the Iran ceasefire collapses for good?

The United States and Iran are back towards confrontation, reviving fears over the security of one of the world's most important energy corridors.

After nearly three weeks of relative calm under an interim memorandum of understanding (MoU), military exchanges have resumed around the Strait of Hormuz, with both Washington and Tehran accusing each other of violating the agreement.

US President Donald Trump has now declared that he believes the interim ceasefire is effectively finished.

Why has the ceasefire between the US and Iran collapsed?

The interim memorandum of understanding signed in mid-June, had offered both countries an opportunity to pause military operations while discussions continued over a more permanent arrangement.

The easing of hostilities also brought welcome relief to international energy markets. Oil prices fell below their wartime highs, shipping through the Strait of Hormuz gradually resumed and fuel prices began moving lower after months of uncertainty.

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However, the respite proved short-lived. The renewed confrontation was triggered after commercial vessels navigating the Strait of Hormuz came under attack.

According to the United States, Iran was responsible for assaults on cargo ships travelling through the strategic waterway. Washington responded with another wave of military operations targeting Iranian facilities along the country's southern coastline.

US Central Command (CENTCOM), which oversees American military operations in the region, announced that fresh strikes had been launched to prevent further threats to commercial navigation.

"US Central Command forces have started conducting additional strikes against Iran to further degrade their ability to threaten freedom of navigation in the Strait of Hormuz," CENTCOM wrote on X.

"The United States is holding Iran accountable for recent unjustified aggression against commercial shipping and civilian crews freely navigating a vital international waterway."

The latest operations followed an earlier round of retaliatory strikes carried out after attacks on three commercial cargo ships transiting the strait. A US official also indicated that Wednesday's military operations would be broader than those conducted a day earlier.

Trump reinforced that message through his Truth Social account, writing, "This is in retribution for yesterday’s bombing of ships by Iran. If it happens again, it will get much worse!"

Iran rejected Washington's position and warned that future military action would invite another response.

"The US has yet to learn that bullying and breaking its commitments no longer come without a cost. Let me be clear: If you strike, you will be struck back," Iran's top negotiator, Mohammad Baqer Qalibaf, wrote on X.

"The Strait of Hormuz will be reopened only under Iranian arrangements, not through U.S. threats."

What has happened since fighting resumed?

Following the attacks on commercial vessels, American forces expanded operations across southern Iran. Several locations stretching from the Strait of Hormuz towards the Gulf of Oman reportedly came under attack.

Among the principal targets was Bandar Abbas, Iran's largest port city and home to major naval facilities belonging to both the Iranian Navy and the Islamic Revolutionary Guard Corps (IRGC). Other reported targets included Konarak and Chabahar, important coastal cities located near Iran's border with Pakistan.

Iranian media also reported that strikes disrupted electricity supplies in parts of Chabahar after infrastructure was damaged. According to Mehr news agency, power was later restored to most affected areas.

Reports further indicated that a maritime traffic control tower in Chabahar had been struck. Elsewhere, a firefighter was reportedly killed after Iranshahr airport came under attack, while another US strike reportedly hit a railway bridge near the northern town of Aqqala.

Iran also launched another round of missile and drone attacks aimed at Kuwait and Bahrain, both of which host important American military installations.

Kuwait's Defence Ministry stated that its air defence systems intercepted incoming missiles and drones before they reached their intended targets.

Neighbouring Qatar also briefly issued an "elevated security threat" alert before later informing residents that the immediate danger had passed.

The continued exchange of attacks has significantly reduced hopes that the memorandum signed in June could still evolve into a comprehensive peace agreement capable of ending a conflict that began with US-Israeli military operations against Iran on February 28.

Before the latest American strikes, Iran's Foreign Ministry had already accused Washington of violating the memorandum.

Foreign Ministry spokesperson Esmaeil Baghaei argued that the US had breached a clause that "emphasises the Islamic Republic of Iran's responsibility in determining arrangements for the safe passage of ships through the Strait of Hormuz".

Iran's mission to the United Nations also submitted a formal letter to the UN Security Council accusing the United States of committing a "blatant violation of the Charter of the United Nations and its international obligations" and argued that the latest attacks violated the memorandum agreed between the two countries.

Meanwhile, a spokesperson for Iran's parliamentary National Security Commission indicated that Tehran was considering several additional responses.

Among the options reportedly discussed were withdrawing from the Nuclear Non-Proliferation Treaty (NPT), altering Iran's nuclear doctrine and even closing the Bab-el-Mandeb Strait at the entrance to the Red Sea, another critical maritime route for global trade.

What has Donald Trump said?

Speaking before the Nato summit in Turkey on July 8, Trump was asked whether the memorandum of understanding remained alive. He replied, "It's a very interesting question. To me, I think it's over. I don't want to deal with them."

The US president also questioned whether any future agreement with Tehran could be relied upon. "If we make a deal with Iran I'm not sure that will stick."

"I found them to be very dishonourable people."

Despite those remarks, Trump simultaneously sought to reassure observers that he did not expect another prolonged regional war. "Anything that happens is going to be over very quickly ... and will only make it safer, including for oil."

Trump also acknowledged that it remained uncertain whether negotiations aimed at producing a permanent settlement would continue.

What options does Trump now have?

With the interim ceasefire appearing to have broken down, the Trump administration must now decide how to respond without triggering an even wider regional conflict or causing a prolonged disruption to global energy markets.

Broadly, the administration has three principal courses of action and then there is diplomacy.

Expand military operations

The most immediate option is to widen the ongoing military campaign against Iran. Days before the latest ceasefire collapsed, Trump had signalled that Washington would either secure a firm agreement with Tehran or "finish the job."

Now that fighting has resumed, the administration could decide to escalate operations beyond the retaliatory strikes already carried out along Iran's southern coastline.

One possibility would involve expanding attacks from coastal missile positions to a broader range of strategic military infrastructure.

Such operations could include command-and-control facilities, air defence networks and any remaining nuclear-related installations considered military targets.

Washington could also attempt to significantly weaken the naval arm of the Islamic Revolutionary Guard Corps (IRGC), particularly those assets that have been central to Tehran's ability to influence traffic through the Strait of Hormuz.

That could include targeting fast-attack craft, anti-ship missile batteries, drone-launch facilities and other coastal military infrastructure positioned along the Persian Gulf.

The United States could also deepen military coordination with Israel by resuming joint operations against Iranian military facilities as well as regional proxy networks aligned with Tehran.

The objective of such a strategy would be to reduce Iran's ability to interfere with international shipping while increasing military pressure following the collapse of the memorandum of understanding.

Tighten control over the Strait of Hormuz

Because the latest confrontation has revolved around freedom of navigation, Washington could strengthen its naval presence throughout the Gulf and move towards a strategy of maritime containment.

Such a plan could involve restoring a formal US naval blockade against major Iranian commercial ports in an effort to restrict both oil exports and the import of military supplies by sea.

Alongside that, the United States could expand convoy operations led by the US Fifth Fleet together with coalition partners.

Under this approach, American and allied naval vessels would escort commercial tankers and cargo ships travelling through the Strait of Hormuz, ensuring vessels could continue operating despite Iranian attempts to influence passage through the waterway.

The goal would be to guarantee uninterrupted movement through one of the world's busiest energy routes while signalling that Washington will continue defending international shipping.

Trump has already warned that if attacks continue, America could restore its naval blockade.

Economic pressure on Tehran

The Trump administration could also substantially increase financial pressure on Tehran by expanding sanctions enforcement. On July 7, the US Treasury Department revoked temporary waivers that had permitted limited Iranian oil exports through August.

From there, Washington could pursue a broader economic campaign by aggressively enforcing secondary sanctions against countries and companies purchasing Iranian crude.

Such measures would seek to discourage refiners and buyers — particularly those operating through Asian energy markets — from continuing trade with Tehran.

The administration could also target Iran's so-called "shadow fleet" by intercepting or impounding vessels suspected of transporting sanctioned oil through international waters.

Additional Iranian financial assets held overseas could also be frozen, while authorities could further restrict transactions processed through regional financial intermediaries.

Is diplomacy completely off the table?

Despite Trump's increasingly critical comments regarding Tehran, diplomacy has not entirely disappeared. Although the president stated that he considered further negotiations largely futile, Washington has reportedly continued allowing diplomatic channels to remain open.

According to reports, US negotiators have remained engaged alongside Pakistani mediators in an effort to preserve at least some dialogue with Iranian officials. Rather than treating diplomacy and military action as separate strategies, the administration could continue pursuing what amounts to a dual-track approach.

Under such a framework, limited military operations would continue while negotiations remain available if Iran agrees to specific conditions.

Among the issues expected to form the basis of any future discussions are an immediate halt to uranium enrichment, guarantees ensuring permanent freedom of navigation through the Strait of Hormuz and explicit restrictions on Iranian missile programmes.

Any easing of sanctions would likely come only after verifiable Iranian compliance rather than before negotiations begin.

Such an approach would allow Washington to maintain pressure while preserving the possibility of a negotiated settlement should both sides decide to return to the table.

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With inputs from agencies