Iran is asserting control over the Strait of Hormuz following recent attacks, with Iranian authorities arguing that Article 5 of a Memorandum of Understanding (MoU) gives them the authority to manage traffic through the strait. Ebrahim Azizi, from Iran's parliament, stated, "Recognise the new and Iranian order in the Strait of Hormuz." Majid Shakeri, an adviser to Iran’s chief negotiator, further suggested that Oman must guarantee its territorial waters in the strait won't be used for military purposes against Iran, proposing Iranian inspections with Omani assistance.
In response to these developments, US President Donald Trump, speaking at a NATO summit, declared the MoU with Tehran over, calling Iranian authorities "sick" and "scum" after several ships were hit with drones in the waterway. This declaration comes after the US Treasury rescinded waivers that allowed Iran to export oil and receive revenues for 60 days, a move that was a key material benefit for Iran under the MoU. The US insists that Article 5 only requires Iran to ensure unimpeded transit, not to dictate terms.
The Strait of Hormuz, a critical waterway through which a fifth of the world's oil and gas exports flow, has been effectively blocked for over two months. Iran has refused to reopen the strait until the US lifts a naval blockade on Iranian ports, tightening its grip by expanding its claimed area of control and announcing new rules for transiting vessels. Reports also indicate Iran has begun charging tolls of up to $2 million per ship for safe passage, a practice maritime experts deem illegal.
The conflict has led to significant economic repercussions for Iran, including an estimated $144 billion in economic damage from the war and billions more in lost oil sales due to the blockade. The Iranian rial has plummeted to approximately 1.7 million to the dollar, and inflation has surged to over 88%. Iran employs asymmetric warfare tactics, using fast-attack boats, coastal missiles, mines, and drones to disrupt shipping, aiming to pressure the US without engaging in a full naval battle.
Despite the fragile ceasefire, recent attacks on commercial vessels in the Strait of Hormuz, including a Saudi oil tanker and a Qatari LNG carrier, have led to the US revoking the temporary sanctions waiver on Iranian oil exports. US Central Command (CENTCOM) retaliated by striking over 80 targets in Iran, including air defense systems and 60 small boats. Both China and Qatar have urged de-escalation, while Germany has called on Tehran to cease its provocations. Experts warn that continued US strikes are unlikely to alter Tehran's strategy and risk further escalation, pushing both sides away from a negotiated outcome.
