diff --git a/src/agents/cli-output.test.ts b/src/agents/cli-output.test.ts
index de875579b0c..2eed0fb02eb 100644
--- a/src/agents/cli-output.test.ts
+++ b/src/agents/cli-output.test.ts
@@ -1,5 +1,5 @@
 import { describe, expect, it } from "vitest";
-import { parseCliJson, parseCliJsonl } from "./cli-output.js";
+import { extractCliErrorMessage, parseCliJson, parseCliJsonl } from "./cli-output.js";
 
 describe("parseCliJson", () => {
   it("recovers mixed-output Claude session metadata from embedded JSON objects", () => {
@@ -246,4 +246,41 @@ describe("parseCliJsonl", () => {
       usage: undefined,
     });
   });
+
+  it("extracts nested Claude API errors from failed stream-json output", () => {
+    const message =
+      "Third-party apps now draw from your extra usage, not your plan limits. We've added a $200 credit to get you started. Claim it at claude.ai/settings/usage and keep going.";
+    const apiError = `API Error: 400 ${JSON.stringify({
+      type: "error",
+      error: {
+        type: "invalid_request_error",
+        message,
+      },
+      request_id: "req_011CZqHuXhFetYCnr8325DQc",
+    })}`;
+    const result = extractCliErrorMessage(
+      [
+        JSON.stringify({ type: "system", subtype: "init", session_id: "session-api-error" }),
+        JSON.stringify({
+          type: "assistant",
+          message: {
+            model: "<synthetic>",
+            role: "assistant",
+            content: [{ type: "text", text: apiError }],
+          },
+          session_id: "session-api-error",
+          error: "unknown",
+        }),
+        JSON.stringify({
+          type: "result",
+          subtype: "success",
+          is_error: true,
+          result: apiError,
+          session_id: "session-api-error",
+        }),
+      ].join("\n"),
+    );
+
+    expect(result).toBe(message);
+  });
 });
diff --git a/src/agents/cli-output.ts b/src/agents/cli-output.ts
index 61d56586a48..16a344521e2 100644
--- a/src/agents/cli-output.ts
+++ b/src/agents/cli-output.ts
@@ -103,6 +103,42 @@ function parseJsonRecordCandidates(raw: string): Record<string, unknown>[] {
   return parsedRecords;
 }
 
+function readNestedErrorMessage(parsed: Record<string, unknown>): string | undefined {
+  if (isRecord(parsed.error)) {
+    const errorMessage = readNestedErrorMessage(parsed.error);
+    if (errorMessage) {
+      return errorMessage;
+    }
+  }
+  if (typeof parsed.message === "string") {
+    const trimmed = parsed.message.trim();
+    if (trimmed) {
+      return trimmed;
+    }
+  }
+  if (typeof parsed.error === "string") {
+    const trimmed = parsed.error.trim();
+    if (trimmed) {
+      return trimmed;
+    }
+  }
+  return undefined;
+}
+
+function unwrapCliErrorText(raw: string): string {
+  const trimmed = raw.trim();
+  if (!trimmed) {
+    return "";
+  }
+  for (const parsed of parseJsonRecordCandidates(trimmed)) {
+    const nested = readNestedErrorMessage(parsed);
+    if (nested) {
+      return nested;
+    }
+  }
+  return trimmed;
+}
+
 function toCliUsage(raw: Record<string, unknown>): CliUsage | undefined {
   const pick = (key: string) =>
     typeof raw[key] === "number" && raw[key] > 0 ? raw[key] : undefined;
@@ -174,6 +210,35 @@ function collectCliText(value: unknown): string {
   return "";
 }
 
+function collectExplicitCliErrorText(parsed: Record<string, unknown>): string {
+  const nested = readNestedErrorMessage(parsed);
+  if (nested) {
+    return unwrapCliErrorText(nested);
+  }
+
+  if (parsed.is_error === true && typeof parsed.result === "string") {
+    return unwrapCliErrorText(parsed.result);
+  }
+
+  if (parsed.type === "assistant") {
+    const text = collectCliText(parsed.message);
+    if (/^\s*API Error:/i.test(text)) {
+      return unwrapCliErrorText(text);
+    }
+  }
+
+  if (parsed.type === "error") {
+    const text =
+      collectCliText(parsed.message) ||
+      collectCliText(parsed.content) ||
+      collectCliText(parsed.result) ||
+      collectCliText(parsed);
+    return unwrapCliErrorText(text);
+  }
+
+  return "";
+}
+
 function pickCliSessionId(
   parsed: Record<string, unknown>,
   backend: CliBackendConfig,
@@ -438,3 +503,20 @@ export function parseCliOutput(params: {
     }
   );
 }
+
+export function extractCliErrorMessage(raw: string): string | null {
+  const parsedRecords = parseJsonRecordCandidates(raw);
+  if (parsedRecords.length === 0) {
+    return null;
+  }
+
+  let errorText = "";
+  for (const parsed of parsedRecords) {
+    const next = collectExplicitCliErrorText(parsed);
+    if (next) {
+      errorText = next;
+    }
+  }
+
+  return errorText || null;
+}
diff --git a/src/agents/cli-runner.spawn.test.ts b/src/agents/cli-runner.spawn.test.ts
index 00aa6ec1867..9dfbabb1f30 100644
--- a/src/agents/cli-runner.spawn.test.ts
+++ b/src/agents/cli-runner.spawn.test.ts
@@ -355,6 +355,66 @@ describe("runCliAgent spawn path", () => {
     }
   });
 
+  it("surfaces nested Claude stream-json API errors instead of raw event output", async () => {
+    const message =
+      "Third-party apps now draw from your extra usage, not your plan limits. We've added a $200 credit to get you started. Claim it at claude.ai/settings/usage and keep going.";
+    const apiError = `API Error: 400 ${JSON.stringify({
+      type: "error",
+      error: {
+        type: "invalid_request_error",
+        message,
+      },
+      request_id: "req_011CZqHuXhFetYCnr8325DQc",
+    })}`;
+
+    supervisorSpawnMock.mockResolvedValueOnce(
+      createManagedRun({
+        reason: "exit",
+        exitCode: 1,
+        exitSignal: null,
+        durationMs: 50,
+        stdout: [
+          JSON.stringify({ type: "system", subtype: "init", session_id: "session-api-error" }),
+          JSON.stringify({
+            type: "assistant",
+            message: {
+              model: "<synthetic>",
+              role: "assistant",
+              content: [{ type: "text", text: apiError }],
+            },
+            session_id: "session-api-error",
+            error: "unknown",
+          }),
+          JSON.stringify({
+            type: "result",
+            subtype: "success",
+            is_error: true,
+            result: apiError,
+            session_id: "session-api-error",
+          }),
+        ].join("\n"),
+        stderr: "",
+        timedOut: false,
+        noOutputTimedOut: false,
+      }),
+    );
+
+    const run = executePreparedCliRun(
+      buildPreparedCliRunContext({
+        provider: "claude-cli",
+        model: "sonnet",
+        runId: "run-claude-api-error",
+      }),
+    );
+
+    await expect(run).rejects.toMatchObject({
+      name: "FailoverError",
+      message,
+      reason: "billing",
+      status: 402,
+    });
+  });
+
   it("sanitizes dangerous backend env overrides before spawn", async () => {
     mockSuccessfulCliRun();
     await executePreparedCliRun(
diff --git a/src/agents/cli-runner/execute.ts b/src/agents/cli-runner/execute.ts
index 988f6d31ae5..96b74ad4b7e 100644
--- a/src/agents/cli-runner/execute.ts
+++ b/src/agents/cli-runner/execute.ts
@@ -7,7 +7,12 @@ import { enqueueSystemEvent as enqueueSystemEventImpl } from "../../infra/system
 import { getProcessSupervisor as getProcessSupervisorImpl } from "../../process/supervisor/index.js";
 import { scopedHeartbeatWakeOptions } from "../../routing/session-key.js";
 import { prependBootstrapPromptWarning } from "../bootstrap-budget.js";
-import { createCliJsonlStreamingParser, parseCliOutput, type CliOutput } from "../cli-output.js";
+import {
+  createCliJsonlStreamingParser,
+  extractCliErrorMessage,
+  parseCliOutput,
+  type CliOutput,
+} from "../cli-output.js";
 import { FailoverError, resolveFailoverStatus } from "../failover-error.js";
 import { classifyFailoverReason } from "../pi-embedded-helpers.js";
 import {
@@ -321,7 +326,11 @@ export async function executePreparedCliRun(
             status: resolveFailoverStatus("timeout"),
           });
         }
-        const err = stderr || stdout || "CLI failed.";
+        const primaryErrorText = stderr || stdout;
+        const structuredError =
+          extractCliErrorMessage(primaryErrorText) ??
+          (stderr ? extractCliErrorMessage(stdout) : null);
+        const err = structuredError || primaryErrorText || "CLI failed.";
         const reason = classifyFailoverReason(err, { provider: params.provider }) ?? "unknown";
         const status = resolveFailoverStatus(reason);
         throw new FailoverError(err, {
diff --git a/src/agents/pi-embedded-helpers.isbillingerrormessage.test.ts b/src/agents/pi-embedded-helpers.isbillingerrormessage.test.ts
index 28cc46cf013..098fbc9e2bd 100644
--- a/src/agents/pi-embedded-helpers.isbillingerrormessage.test.ts
+++ b/src/agents/pi-embedded-helpers.isbillingerrormessage.test.ts
@@ -222,6 +222,7 @@ describe("isBillingErrorMessage", () => {
     const samples = [
       "You're out of extra usage. Add more at claude.ai/settings/usage and keep going.",
       "Extra usage is required for long context requests.",
+      "Third-party apps now draw from your extra usage, not your plan limits. We've added a $200 credit to get you started. Claim it at claude.ai/settings/usage and keep going.",
       '{"type":"error","error":{"type":"invalid_request_error","message":"You\'re out of extra usage. Add more at claude.ai/settings/usage and keep going."}}',
       '{"type":"error","error":{"type":"invalid_request_error","message":"Extra usage is required for long context requests."}}',
     ];
diff --git a/src/agents/pi-embedded-helpers/failover-matches.ts b/src/agents/pi-embedded-helpers/failover-matches.ts
index d2cb54f9898..ea1c377e3f5 100644
--- a/src/agents/pi-embedded-helpers/failover-matches.ts
+++ b/src/agents/pi-embedded-helpers/failover-matches.ts
@@ -123,6 +123,7 @@ const ERROR_PATTERNS = {
     "insufficient usd or diem balance",
     /requires?\s+more\s+credits/i,
     /out of extra usage/i,
+    /draw from your extra usage/i,
     /extra usage is required(?: for long context requests)?/i,
   ],
   authPermanent: HIGH_CONFIDENCE_AUTH_PERMANENT_PATTERNS,