Iran ties Strait of Hormuz reopening to US compensation demand

3 min read
Iran ties Strait of Hormuz reopening to US compensation demand
PrimeXBT Editorial Team
Reviewed by PrimeXBT

Iran says it will not reopen the Strait of Hormuz until the United States pays compensation for war damage, withdraws forces from the area and lifts sanctions. The hardened stance came even as Iranian diplomats said talks with Oman on a shipping arrangement were nearly finished, complicating President Trump's push to restore traffic through the waterway.

Iran said over the weekend it will not reopen the Strait of Hormuz unless the United States meets a series of conditions, including compensation for war damage. The demand complicates President Trump's push to restore shipping through the waterway before November's midterm elections.

The hardened rhetoric came days after Iranian diplomats said they were in the final stages of a provisional arrangement with Oman to manage shipping through the strait. Foreign minister Abbas Araghchi said Sunday that the Oman talks were nearly complete, but added that this would not necessarily mean the strait would reopen.

A day earlier, Mohammad Bagher Zolghadr, secretary of Iran's Supreme National Security Council, said the US should withdraw forces from the area, pay compensation for war damage and lift sanctions before the strait reopens. Any resulting deal still needs approval from the security council and supreme leader Ayatollah Mojtaba Khamenei.

Hardliners and pragmatists split in Tehran

Sanam Vakil of Chatham House said the shifting rhetoric suggests Iranian hardliners want firmer guarantees from Washington because they distrust Trump and fear he could use a pause to prepare for another round of war. She added that the tension mirrors divisions inside the US administration between officials who favor diplomacy and those pushing to escalate.

President Masoud Pezeshkian, who chairs the security council, argued Saturday that Iran's current unity makes this the best moment for an agreement. Revolutionary Guards spokesman General Hossein Mohebbi countered that reopening remains contingent on the US accepting Tehran's terms. According to Mohebbi: "For us, the Strait of Hormuz is not simply an economic waterway."

What reopening would unlock

One person briefed on the talks said that if Iran and Oman strike a deal, the US would lift its naval blockade of Iranian ports and reinstate a waiver allowing Tehran to sell oil. Diplomats hope such an agreement would revive the June memorandum of understanding that collapsed after Iran targeted ships using a route it called unauthorized near Oman's coast.

That memorandum called for the US to lift sanctions if a final settlement is reached and to remove its forces from the area within 30 days of any agreement. Before the war began in February, the strait carried about a fifth of the world's oil and gas, and Tehran now views the chokepoint as its main source of leverage, determined to retain control of it.

Source: Financial Times

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