Strait

Iran has reasserted its control over the Strait of Hormuz, warning that foreign commercial and military vessels will be targeted, if they do not comply with regulations governing passage through the strategic waterway.

The announcement on Saturday came after the United States signalled that President Donald Trump was close to a decision on a potential deal with Iran, but Tehran denied an agreement had been reached.

“The management of the Strait of Hormuz is exercised with full authority by the Armed Forces of the Islamic Republic of Iran,” the operational headquarters of Iran’s armed forces, Khatam al-Anbiya Central Headquarters, said in a statement reported by Iranian media on Saturday.

“All ships, commercial vessels, and tankers are only required to travel through the designated routes and obtain permission from the Islamic Revolutionary Guard Corps [IRGC] Navy. Any violation of these regulations will seriously jeopardise the security of their traffic,” it added.

Iran also issued a warning to foreign military forces operating in the area, saying any attempt to interfere with maritime management or shipping movements would trigger a response.

On Friday, Trump met with advisers in the White House Situation Room and said a “final determination” on a possible deal with Iran would soon be made. But no statement followed the meeting.

US sources had told the AFP news agency the deal was waiting on Trump’s sign-off, but he made no decision after Friday’s meeting.

Iran’s Foreign Ministry spokesperson, Esmaeil Baghaei, said on Friday that while messages continue to be exchanged “no final agreement has been reached” on a deal with the US.

US ‘more than capable’ of restarting war

While attending a defence summit in Singapore on Saturday, Pentagon chief Pete Hegseth said that Washington was “more than capable” of restarting the war if a satisfactory deal is not reached.

US Central Command (CENTCOM) posted on social media that American forces “remain present and vigilant across the region”.

The efforts to reach a deal were thrown into question this week by US strikes on the Iranian port of Bandar Abbas, countered by retaliatory Iranian fire.

Iran’s IRNA state news agency said air defences shot down a drone “belonging to the US-Zionist aggressor enemy” on Saturday, citing a statement from the army.

Trump said his priorities in any deal include Iran agreeing to never develop nuclear weapons, and the reopening of the blockaded Strait of Hormuz.

“President Trump will only make a deal that is good for America and satisfies his red lines,” a White House official told AFP, adding: “Iran can never possess a nuclear weapon.”

Trump ‘betraying diplomacy’

Also on Saturday, Mohsen Rezaei, an adviser ⁠to Iran’s Supreme ⁠Leader, Mojtaba Khamenei, said in a social media post that Trump was “betraying diplomacy for ⁠the third time” by ⁠continuing the US naval blockade in the strait, and making what he described ‌as “excessive demands ‌in ‌negotiations”.

In a social media post on Friday, Trump said Tehran would remove mines from the strait and end its closure of the waterway with “no tolls”, while the US would lift its blockade.

Both countries would coordinate on removing and destroying Iran’s enriched uranium, he said, adding that “no money will be exchanged, until further notice”.

Iran’s Fars news agency, however, cited sources as saying Tehran was demanding “the immediate release of $12bn” in frozen assets before moving to the next phase of negotiations.

On the toll-free reopening of Hormuz, the sources said “no such clause appears in the text of the agreement”, while Trump’s comment on destroying Iran’s nuclear material “is fundamentally baseless”.

Iran’s ISNA news agency cited legislator Alireza Salimi as saying a plan “to implement Iran’s management and sovereignty over the Strait of Hormuz will soon be approved by parliament”.

Iran’s Tasnim news agency said the US blockade remains in place, and its ships “are receiving warnings from CENTCOM to stop and not cross the blockade line”.

The US and Iran have agreed in principle to a deal that would reopen the Strait of Hormuz, in exchange for Tehran’s commitment to dispose of its highly enriched uranium, a US official said, according to a report by The New York Times on Sunday.

The official said that the agreement has not yet been signed and remains subject to final approval by US President Donald Trump and Iran’s Supreme Leader Mojtaba Khamenei, a process that could take several days, noting that the method for disposing of Iran’s highly enriched uranium is still being negotiated.

The proposed deal does not address Iran’s missile stockpile nor include a moratorium on uranium enrichment, the official said, adding that these issues are expected to be handled in future rounds of talks.

According to a Fox News report on Sunday, the official suggested that the US could consider “significant accommodations” on sanctions relief if Iran agrees to make similar concessions regarding its enriched uranium stockpile.

READ: Iran ready to reassure world it is not pursuing nuclear weapons, president says

“Our plan is to deal with all of their stockpile of the enriched material,” the official said, adding that Washington sees Tehran making “serious accommodations” not previously seen in earlier negotiations, according to the report.

The official also rejected the idea of any “tolling” mechanism for the Strait of Hormuz, saying such an arrangement would not be acceptable and had not been proposed by either side, the report noted.

According to a separate CBS News report, the official said the administration views the emerging agreement as stronger than the 2015 nuclear deal reached under former US President Barack Obama, which allowed uranium enrichment up to certain levels.

As part of the agreement, the US would lift its blockade on vessels entering and leaving Iranian ports. The official said the US Central Command and Gulf partners would coordinate to ensure safe passage, stressing this should not be viewed as a toll system.

The official also said US Vice President JD Vance, Middle East Envoy Steve Witkoff, and Trump’s son-in-law Jared Kushner have been involved in the talks, adding that Washington is seeking to include all regional allies in the process, the report added.

READ: Trump says Iran talks ‘constructive’ but blockade will remain until final deal is reached

WASHINGTON — A framework agreement to end the U.S. war with Iran is all but settled, pending sign-off from the presidents of the two warring sides, President Trump said Friday, projecting optimism that a deal could finally be at hand.

Yet doubt cast a shadow over the diplomatic process entering the weekend as Trump faced a politically fraught decision to enter an agreement that would invariably require significant concessions to Tehran.

The negotiations have faced severe headwinds in recent days, with both sides accusing the other of violating a fragile ceasefire that has largely stopped the fighting since April.

On his Truth Social site, Trump said he had summoned his top aides to the White House Situation Room to decide on the deal.

The agreement would see an end to the U.S. naval blockade on Iranian ports and the removal of Iranian mines from the Strait of Hormuz, an international waterway through which 20% of the world’s energy supply passes each day. The strait, Trump wrote, will reopen with “no tolls” for “unrestricted shipping traffic, in both directions.”

And “Iran must agree that they will never have a Nuclear Weapon or Bomb,” Trump wrote, noting that Iran’s stockpile of highly enriched uranium, the key ingredient for nuclear weapons, “will be unearthed by the United States (which, it is agreed, is the only Country, along with China, with the mechanical capability of doing so!), in close coordination and conjunction with the Islamic Republic of Iran, plus the International Atomic Energy Agency, and DESTROYED.”

“No money will be exchanged, until further notice,” he added.

Treasury Secretary Scott Bessent also said the deal would require Iran to disavow the continuation of its domestic nuclear program — a diplomatic feat never before achieved throughout a quarter century of international negotiations over Iran’s nuclear work.

It is unclear whether Tehran would go that far. And Iran’s negotiators expressed defiance on Friday, stating that there was “no trust in guarantees or words” from the American side.

“No step will be taken before the other side acts first,” said Mohammad Bagher Ghalibaf, the speaker of Iran’s Parliament. “We do not gain concessions through dialogue, but through missiles.”

It remains unclear when the Trump administration would ease sanctions on Iran, how extensive that relief would be, or what form it would take — questions that fueled Republican criticism of the Obama-era nuclear deal more than a decade ago.

The working diplomatic document would formally extend the existing ceasefire for 60 days, allowing for a more detailed negotiation to take place over Iran’s nuclear program. But the truce as it currently stands is on perilous ground. Iran launched a ballistic missile on Thursday at Kuwait, a close U.S. ally, after American forces took “defensive” actions against Iranian missile launchers and mine laying boats it had launched in the strait.

The war has proven historically unpopular with the American public, and has seen oil prices soar since the U.S. military, in partnership with Israel, launched its first strikes against Iran in February.

Bessent said he is hopeful that oil prices would drop quickly once an agreement is signed. But industry analysts say the effects of the war on the oil market could last for months, if not years, with the stability of traffic through the Strait of Hormuz now in question for commercial shippers.

While oil has dropped to under $100 a barrel, markets appeared skittish on Friday over the prospects for a deal, with mixed messages appearing to emerge out of the region.

It is also unclear whether a U.S. agreement with Iran would in any way bind Israel’s hands in its military operations, either in Iran or in Lebanon, where an Iranian proxy militia, Hezbollah, has vowed to keep up the fight.

Israel has ramped up strikes against Hezbollah targets in recent days, jeopardizing a delicate ceasefire negotiated with the Lebanese government, a deal encouraged by the Trump administration in order to grease the wheels for its talks with Tehran.

Trump has been uncharacteristically silent on the prospects of an agreement in recent days, expressing cautious optimism in limited exchanges with reporters.

“It’s hard to say exactly when or if the president’s going to sign,” Vice President JD Vance, who has led the U.S. diplomatic team, told reporters, noting that “the nuclear stuff” is still subject to negotiation. “We’re going back and forth on a couple of language points.”

“I do think that we’ve made a lot of progress here,” Vance added. “Hopefully we’ll continue to make progress, and the president will be in a position where he can endorse the agreement. But obviously, that’s still TBD.”

A top US official says Oman should know that Washington ‘will aggressively target’ actors that facilitate tolls in waterway.

The United States has warned that it would “aggressively” impose sanctions on Oman if it helps Iran establish a tolling system in the Strait of Hormuz, intensifying President Donald Trump’s threats against the Gulf ally.

US Treasury Secretary Scott Bessent said on Thursday that Washington will “not tolerate” either country imposing fees on commercial ships in the strategic waterway.

“Oman, in particular, should know that the US Treasury will aggressively target any actors involved — directly or indirectly — in facilitating tolls for the Strait and any willing partners will be penalized,” Bessent said in a social media post.

“All nations should reject outright any efforts by Iran to disrupt the free flow of commerce. Tehran’s days of terrorizing the region and the world are over.”

The statement comes less than 24 hours after President Trump threatened to bomb Oman, a key US ally known for its neutrality and mediation efforts in regional crises, including the war between the US and Iran.

While Iran has suggested that the governments in Tehran and Muscat could jointly manage the Hormuz Strait, Oman has not said that it is seeking control over the waterway, parts of which flow through its territory.

It is not clear what is driving Washington’s recent posture toward Oman. It is highly unusual for the US to threaten sanctions and military action against a close security and economic partner.

Since the US and Israel started bombing Iran without direct provocation on February 28, Iran has closed the strait and claimed sovereignty over it.

Around 20 percent of the world’s oil flowed through Hormuz before the conflict, so the Iranian blockade has put a major strain on energy supplies, sending prices soaring.

The US and Iran have been indirectly negotiating to reach an agreement for a comprehensive end to the war, and control over the Hormuz Strait has emerged as a major point of disagreement.

Trump has stressed that the strait must be a free passageway.

When asked whether he would accept joint Iranian-Omani control over the strait in the short term, the US president told reporters on Wednesday: “Nobody is going to control it. It’s international waters, and Oman will behave just like everybody else, or we will have to blow them up.”

Ali Bagheri, deputy secretary of Iran’s Supreme National Security Council, said on Thursday that Tehran will not allow Hormuz to be a source of insecurity for the country.

“The powers that have used this passage against Iran’s security must be held accountable,” he was quoted as saying by Iran’s public television.

Bagheri added that Iran seeks to “establish a just order that negates hegemony and domination and strengthens trust and cooperation” in the region.

May 28 (UPI) — The U.S. Treasury announced late Wednesday that it has sanctioned an Iranian entity, newly created to oversee and manage the Strait of Hormuz, as the Trump administration seeks to force Tehran to relinquish control over the vital energy trade route.

The strait has been an issue of contention between the United States and Iran, which are locked in negotiations to end the war.

Iran restricted navigation of the strait after the United States and Israel attacked the country in late February, igniting the war. Washington responded by imposing a military blockade of Iran’s ports, cutting it off from maritime trade.

Since imposing the restrictions, Iran has been adamant about maintaining control of the route, through which about one-fifth of the world’s energy trade flows. The Trump administration has repeatedly threatened that there will be free navigation of the strait again, one way or another.

Earlier this month, Iran launched the Persian Gulf Strait Authority to manage the strait.

The Treasury sanctioned the PGSA on Wednesday, accusing it of being an attempt by Iran’s Islamic Revolutionary Guard Corps to monetize the international waterway.

Treasury Secretary Scott Bessent described the mechanism in a statement as the Iranian military’s “latest attempt to extort global maritime trade.”

Bessent said the Wednesday blacklisting was part of Economic Fury, the Treasury’s rebranding of President Donald Trump‘s maximum pressure campaign of sanctions and other trade measures from his first administration seeking to coerce a new nuclear weapons deal from Iran.

The United States has been tightening its financial vise on Iran since 2018 when Trump first imposed sanctions on Tehran after unilaterally withdrawing the United States from a multinational Obama-era nuclear accord aimed at preventing Iran from securing a nuclear weapon.

Trump reimposed the campaign following his return to the White House in early 2025. It was renamed following the start of the military operation Epic Fury that began Feb. 28.

Treasury officials said Wednesday that through the maximum pressure campaign, the Trump administration has denied Iran access to tens of billions of dollars’ worth of revenue.

The sanctions generally prohibit those named from accessing the U.S. financial system and bar U.S. persons and companies from doing business with them. They also expose foreign financial institutions that knowingly facilitate significant transactions for those sanctioned to potential secondary sanctions.

Sen. Tom Cotton, a Republican from Arkansas, had over the weekend called on Bessent to sanction the PGSA, stating the United States “must ensure every actor enabling the terrorist Iranian regime is held accountable.”

“I support the use of existing authorities to impose sanctions on the PGSA, its officers and any foreign entity that pays, processes or facilitates tolls to Iran for passage through the Strait of Hormuz,” he said in a statement.

Iran has rejected the notion that it is running a toll. Iranian Foreign Ministry Spokesperson Esmaeil Baqaei has said that Iran charges fees to cover costs associated with navigational services and environmental protection measures.

WASHINGTON — Precarious talks to end the war with Iran appeared close to collapse on Tuesday as renewed fighting across the region threatened to derail fragile progress toward a comprehensive settlement.

U.S. strikes against targets in southern Iran — the first since a ceasefire was declared in the war seven weeks ago — coupled with escalating attacks by Israel in Lebanon have undermined optimism that an agreement was within reach.

The attacks occurred just hours after U.S. and Iranian diplomats arrived in Qatar for peace talks. Iran’s top negotiators left Doha on Tuesday without comment. News of the strikes, and threats of retaliation by Tehran, sent global oil prices soaring back to more than $100 a barrel.

U.S. Central Command described Monday’s actions as “self-defense strikes” that were restrained and modest in scope, targeting missile launch sites and Iranian boats “attempting to emplace mines” in the Strait of Hormuz.

But the attack came as President Trump and Secretary of State Marco Rubio had been projecting confidence that a framework agreement to end the war could be reached within days. Under the proposed deal, Iran would restore the strait to its prewar status as a free and open international waterway, while both sides entered 60 days of negotiations over the removal of Iran’s nuclear stockpile.

Laying mines in the strait in the 11th hour of the negotiations could signal to the Trump administration that Iran is not serious about reopening traffic there. But the Iranians said Tuesday that renewed U.S. strikes suggest it is Washington that is unprepared to commit to peace.

Iran’s Foreign Mministry condemned what it called “aggressive actions” by the United States, describing them in a statement as a violation of the ceasefire agreement.

“The commission of these aggressive acts — occurring concurrently with the ongoing diplomatic track mediated by Pakistan — has once again exposed the hostile nature and perfidy of the ruling establishment in the United States,” the statement said.

Iran “will not leave any hostile act unanswered,” the ministry added.

Mojtaba Khamenei, Iran’s elusive supreme leader, declared in a scheduled speech that U.S. allies throughout the Middle East “will no longer serve as a shield” for the American military, suggesting retaliatory strikes against U.S. assets in the region could be imminent.

Prospects for a diplomatic breakthrough were already dim. Over the last week, U.S. and Iranian officials projected optimism while outlining seemingly incompatible visions of a deal.

Trump has repeatedly said Iran would not receive any sanctions relief until its stockpile of fissile material is removed and destroyed. But Iranian officials reiterated Tuesday that unfreezing the country’s overseas assets remains a precondition for continued negotiations.

And it is unclear whether Iran would agree to a peace deal with the United States that does not also restrict the actions of Israel, whose leader, Prime Minister Benjamin Netanyahu, has expressed deep skepticism about the diplomatic process.

Netanyahu said in recent days that Israel would not be bound by any nuclear pact, and that his government would continue military action against targets throughout the region — including in Lebanon — as it views necessary.

Israel’s continued assault on Lebanon nearly jeopardized the ceasefire between Iran and the United States before Trump brokered a separate, temporary halt to the fighting there. Since then, however, Israeli strikes have resumed, and Netanyahu vowed to intensify his campaign against Hezbollah, the Lebanese Shiite militant group.

“We are not removing our foot from the pedal,” Netanyahu said in a video address Monday. “On the contrary, I said to step on the pedal even more.”

Israel’s military ramped up its operations Tuesday, attacking what it said were more than 100 Hezbollah sites across southern and eastern Lebanon, while extending ground incursions deeper into Lebanese territory.

The overnight strikes struck weapons storage facilities, command centers, observation posts and infrastructure sites, according to an Israeli military statement.

Israeli media also reported that Israeli troops were operating beyond a 6.2-mile zone they occupy in southern Lebanon, in what many fear may be a prelude to a wider invasion.

Those fears were further stoked Tuesday by fresh Israeli evacuation orders for the entirety of Nabatiyeh, southern Lebanon’s second-largest city.

Hezbollah upped its campaign as well, peppering Israeli troops in southern Lebanon and areas of northern Israel with drones and rocket attacks, according to statements from the group. Hezbollah-affiliated media reported the group’s fighters clashing with Israeli troops to prevent their advance.

In recent weeks, Hezbollah has increasingly relied on fiber-optic drones — which are both low-cost and impervious to jamming — to harass Israeli positions.

On Sunday, an Israeli soldier was killed and another wounded when a Hezbollah kamikaze drone hit their armored personnel carrier, according to the Israeli military; 23 Israeli soldiers and a civilian defense contractor have been killed in the current conflagration between Israel and Hezbollah, Israel’s military says.

The latest bout of hostilities between Hezbollah and Israel began March 2, when the Iran-backed group launched attacks on Israel to avenge the killing of Iran’s ayatollah, Ali Khamenei.

So far, Israeli strikes have killed 3,213 people, wounded more than triple that number, and left more than a million displaced, according to Lebanese health authorities.

A ceasefire signed April 17 sidelined the capital, Beirut, from strikes but has done little to stop the fighting otherwise, with Hezbollah and Israel continuing attacks despite unprecedented direct negotiations taking place between the Israeli and Lebanese governments.

It was unclear whether Netanyahu’s warning meant Beirut would be targeted once more. Israeli drones buzzed throughout the day over the capital and the Hezbollah-dominated southern suburbs Tuesday.

Hezbollah opposes direct negotiations and insists it will keep fighting until Israel withdraws from Lebanon and stops attacks. Israel has demanded the Lebanese government do more to disarm Hezbollah and to move toward a peace deal.

Bulos reported from Beirut.

May 25 (UPI) — Secretary of State Marco Rubio tamped down expectations Monday for progress toward reopening the Strait of Hormuz after signaling a day earlier that he might have “good news” within hours.

Speaking to reporters at India’s Palam Air Base in New Delhi on Monday, the United States’ top diplomat said an agreement was “still a work in progress.”

“We thought we might have some news last night, maybe today,” he said, adding the holdup is that it takes time to hear back from the Iranians.

“I’m very confident — we should all be very confident — that we’re either going to have a good agreement or we’re going to have to deal with it another way. We’d prefer to have a good agreement.”

The United States is seeking to have Iran restore shipping traffic through the Strait of Hormuz before negotiations enter a subsequent phase focused on Iran’s nuclear program.

Rubio said what is on the table for opening the strait is “pretty solid,” but there is “a very real, significant time limit” to negotiations on the nuclear issue.

“Hopefully, we can pull it off,” he said.

Rubio is in India until Tuesday to discuss energy security, trade and defense cooperation with senior Indian officials. Meanwhile, U.S.-Iran negotiations have been ongoing through Pakistani and Qatari mediators.

After reporters that negotiations were edging toward completion, an Iranian Foreign Ministry spokesperson later Monday said that talks were focused on ending the war, with no discussions yet on its nuclear enrichment program, the semi-official Tasnim news agency reported.

The spokesperson also voiced skepticism over U.S. reliability, stating there is no guarantee Washington will hold up its end of the agreement once one is reached.

Speaking alongside Indian External Affairs Minister Subrahmanyam Jaishankar at a joint press conference on Sunday, Rubio said that he believed more news about the agreement would come from President Donald Trump.

“But I do think perhaps there is the possibility that over the next few hours the world will get some good news, at least with regards to the straits,” he said.

The on-again, off-again negotiations have been conducted amid a fragile cease-fire called in April in the war that began in late February.

Trump has sought a new agreement to prevent Iran from securing a nuclear weapon since 2018, when during his first administration he unilaterally withdrew the United States from a landmark Obama-era multinational nuclear accord called the Joint Comprehensive Plan of Action.

Calling it “defective at its core,” Trump has criticized several aspects of the JCPOA, including its sunset provisions easing restrictions on Iran’s nuclear program.

Critics have rebutted his accusations, saying that not all aspects of the JCPOA were to expire and that the expiring provisions afforded time were intended to afford time for further diplomacy.

The crisis caused by the US-Israel war on Iran has affected the member states of the Gulf Cooperation Council (GCC) at different levels.

Oman has barely felt any shock as its ports and terminals continue operating as usual. Saudi Arabia and the United Arab Emirates have been able to reroute some oil exports through terminals in Yanbu and Fujairah, respectively, to bypass the Strait of Hormuz. Kuwait, Bahrain and Qatar, on the other hand, have been practically cut off from the global market and are facing the prospect of economic contraction.

Under these circumstances, the GCC states more than ever need to demonstrate unity and address the crisis through collective action. The issue of solidarity is not about showing benevolence to neighbours. It is about setting up mechanisms now that can diminish the consequences and value of any future threat of closure. It is about the survival of the whole idea of GCC unity and the leverage it has on the global scene.

Collective action, common interest

Even if some sort of agreement is reached between the warring sides today, the GCC will continue to suffer under the shadow of the nearly three-month closure. States face the risk of losing clients due to the risk of not fulfilling their obligations or being perceived as a risky supplier. Only a joint effort can stop a free fall.

So far, self-interested approaches are winning over collective action. For instance, the UAE’s exit from OPEC was largely driven by the perception of the Emirati leadership that the Strait of Hormuz crisis was an opportunity to grab greater oil market share.

If this trend of unilateral crisis response continues, it would have grave economic consequences for the whole GCC and threaten its existence. With no burden-sharing mechanism, Gulf countries would end up competing against each other in a zero-sum game. This would reduce the influence the GCC has as a regional bloc and diminish its ability to sway energy markets.

Up until now, there have been some demonstrations of solidarity in rhetoric. During the GCC consultative meeting in Jeddah on April 28, Gulf leaders attempted to show unity and discuss possible ways out of the crisis. The meeting led to discussions about what the GCC states could do in practical terms, yet there are still no signs that these discussions have moved beyond the expert level.

Nevertheless, there are practical steps the GCC can take now that could help address the present crisis and ensure stability in the face of future risks. One of them could be the introduction of swap arrangements.

Swap as an instrument of solidarity

There are three relevant swap mechanisms that the GCC could consider: physical, contractual and quality swap deals. Physical and contractual swap deals allow one party to deliver an equivalent commodity to fulfil a contract on behalf of another.

A quality swap, on the other hand, exchanges one grade or product for another to align the feedstock needs of refineries or optimise transport costs.

Thus, instead of Kuwaiti, Qatari or Bahraini cargo physically passing through the Strait of Hormuz, a buyer can receive an acceptable substitute at Yanbu, Fujairah, Duqm, Ras Markaz, Sohar, Qalhat, Singapore, India, Korea, Japan or Europe, while the parties involved settle the accounts through future delivery, cash compensation, product exchange, or a retained-volume fee.

The swap does not require the trapped commodity to move immediately. It requires a transparent title, valuation and reconciliation, so that a substitute commodity can be delivered to the end user.

The strongest swap deals, therefore, resemble clearing systems. They are most reliable when they are established before the crisis, but they can also be assembled during a crisis if the parties already have pre-existing experience of trading, a trusted customer base or alternative physical infrastructure to be utilised.

In fact, the swap deals are not something completely unfamiliar to the GCC member states. In 2013, when Egypt failed to fulfil its contractual gas obligations, Qatar agreed to export its own liquefied natural gas (LNG) directly to the customers that Egypt otherwise could not serve while it channelled its gas for domestic needs.

In 2021, the UAE’s Emirates National Oil Company (ENOC) won a tender to swap 84,000 tonnes of Iraqi fuel oil for 30,000 tonnes of Grade B fuel oil and 33,000 tonnes of gas oil to supply to Lebanon. In 2024, the state-owned Oman LNG conducted about two swap tenders per month, with Atlantic cargoes originating from the United States delivered to Spain, while the company delivered its LNG to clients in Asia.

All of these examples show that Gulf countries and their national energy companies have the required expertise to carry out intra-GCC swaps.

The most practical way to implement such deals now would be to establish an energy swap facility through a coordinated clearing mechanism among national oil companies, major regional refiners, selected traders, insurers, banks and key Asian and European buyers.

Its function would be to match blocked obligations with delivery alternatives and to reconcile the value later.

Insurance for the future

The implementation of any swap arrangement would require substantive effort to operationalise, not to mention a high level of political will, trust and mutual determination. Moreover, at present, there are physical limitations before any arrangement, as the GCC infrastructure does not have the capacity to reroute export volumes that pass through the Strait of Hormuz completely.

In the immediate term, swap arrangements imply that one group of countries – Saudi Arabia, Oman and the UAE – would sacrifice a bit of income and market share to the advantage of the others, namely Qatar, Bahrain and Kuwait, by allocating part of their current export, storage or transport capacities. But in the longer term, all would benefit.

The critical call is on Saudi Arabia, which has the largest options to bypass Hormuz and provide the largest pool of deliverable crude. Its command of customer credibility, global familiarity with Saudi oil grades, Red Sea export infrastructure and Aramco’s trading capacity make it the main pillar of any future swap system.

Complementing its role as market regulator within OPEC/OPEC+ with the leadership within the GCC, Riyadh can help stabilise the market by covering priority cargoes for strategic buyers.

The UAE can also play a major role by utilising its export capacity through Fujairah, and so can Oman, which has crude storage capacity at Ras Markaz, refining capacity at Duqm, LNG experience and ports that can receive and dispatch cargoes without having to cross the Strait of Hormuz.

If such swap deals are implemented, they can strengthen the GCC unity and help the members avoid internal economic rivalry in the future. More importantly, they can encourage the launch of a larger regional infrastructure drive that would lessen dependence on the Strait of Hormuz and diminish its value as a geopolitical tool to be used against the Gulf.

If there are a well-functioning swap mechanism and infrastructure in place that can be used whenever a threat of closure is made, then clients would feel more confident in continuing their relationships with all Gulf suppliers. In the longer term, this could serve as the GCC’s insurance against any new turbulence in the region.

The views expressed in this article are the authors’ own and do not necessarily reflect Al Jazeera’s editorial stance.

WASHINGTON — President Trump said Saturday that the United States and Iran have agreed on the basic terms of an agreement to end the two countries’ nearly three-month-long war and reopen the Strait of Hormuz.

“An Agreement has been largely negotiated,” Trump wrote in a social media post. “Final aspects and details of the Deal are currently being discussed, and will be announced shortly. In addition to many other elements of the Agreement, the Strait of Hormuz will be opened.”

Iran’s state television network quoted Foreign Ministry spokesman Esmail Baghaei as saying the draft pact will be a “framework agreement” that defers talks toward limiting Iran’s nuclear program until later. Trump did not mention the nuclear issue in his statement.

If that is the form the deal takes, it would represent at least a short-term concession from the president, who initially demanded a definitive end to Iran’s nuclear program as the price of peace.

Trump has also relaxed an earlier U.S. demand that Iran give up its right to enrich uranium and says he would be satisfied with a deal to “suspend” enrichment for 20 years.

Those signs of U.S. flexibility have raised alarm from Iran hawks, reportedly including Israeli Prime Minister Benjamin Netanyahu. They say they fear Trump is so intent on restoring the flow of oil from the gulf that he might agree to a deal that falls far short of U.S. goals.

Mark Dubowitz, a leading critic of past agreements with Iran, said he worries that Trump might settle for “a foolish agreement” to reopen the Strait of Hormuz.

“I’m concerned that the administration is looking to cut some ‘Phase One’ deal” in which Iran is given “significant sanctions relief in exchange for agreement to reopen the strait,” he said in an interview Friday. “I think that would be a foolish agreement. Iran would get real money, but they could continue to close the strait any time they wanted simply by making threats.”

Robert Kagan, a conservative foreign policy scholar at the Brookings Institution, wrote that a deal to reopen the strait while deferring the nuclear issue would amount to a U.S. “surrender.”

“On the present trajectory, Iran will emerge from the conflict many times stronger and more influential than it was before the war,” Kagan wrote in the Atlantic.

When the war began in February, Trump said he wanted not only to end Iran’s nuclear activities and destroy its ballistic missile program, but bring about regime change as well.

Instead, the nuclear talks have focused on narrower, more achievable goals: a “suspension” of nuclear enrichment for 20 years or less and removal or destruction of Iran’s highly enriched uranium, the essential ingredient for a nuclear weapon.

“A basic agreement shouldn’t be impossible to achieve,” said John W. Limbert, who worked on Iran policy at the State Department for three decades, and was one of the American hostages seized by Iranian militants in 1979. “The deal would be some kind of verifiable limits on the nuclear program in return for economic relief.”

“The fact that we’re talking about a suspension of all enrichment, and the question is whether it will be five years, 20 years or halfway in between — that’s important,” said Nate Swanson, an Iran expert who worked at the National Security Council under President Biden and Trump. “That sounds like you really have the basis for an agreement. … But don’t fool yourself to think that completely addresses the situation.”

Swanson said other issues, including Iran’s nuclear research and its advanced ballistic missiles, haven’t been addressed.

Despite signs of progress toward an agreement, the gaps between the two countries remain large.

Part of the problem is that both sides appear to believe they have won the war, said Danny Citrinowicz, a former Iran analyst at Israel’s defense intelligence agency.

Trump and other U.S. officials frequently assert that the United States has gained the upper hand by destroying Iran’s navy, air force and many of its missiles.

But the Iranians use a different scoring system, Citrinowicz said.

“Iran does not measure success the same way Washington often does,” he wrote in an email. “From Tehran’s perspective, simply holding firm in the face of American pressure can be framed as a win.”

“Tehran believes time is working against Trump politically and strategically,” he added. “Iran is prepared for prolonged confrontation; the United States, far less so.”

And even if a negotiated agreement is reached, the deals under discussion now won’t resolve all the conflicts between the two countries.

“An interim deal to buy time [is] probably where we end up,” Swanson said. “Buying time is not a bad thing. Ending a war is not a bad thing. But it’s not a comprehensive solution.”

Iran is reportedly working to solidify its control over the Strait of Hormuz despite U.S. objections by seeking a joint deal to impose fees on ships transiting the strategic waterway with Oman. The move comes amid increasing hopes of a peace deal to end the war that began Feb. 28 and highlights just how difficult it will be to reach such an agreement. Iran’s closure of the Strait has created severe global economic impacts and spurred the Trump administration to stand up Project Freedom, a short-lived effort to provide military protection for ships stuck in the Persian Gulf and trying to get out.

Though U.S. President Donald Trump has insisted the Strait remain open and free of any tolls, Iran is in discussions with Oman, a U.S. ally, to impose financial burdens on vessels passing through the critical chokepoint, The New York Times reported. Together, the countries border both sides of the Gulf of Oman, through which any ship must pass to get into or out of the Strait.

Two people familiar with the discussions over management of the waterway said that “Iran was not planning a toll system, which would charge simply for transit,” according to the Times. Instead, the talks with Oman have “explored a proposal to charge vessels fees for services.”

“Oman had initially rejected a joint partnership with Iran on the strait but is now in discussion over a share of the revenues,” the newspaper stated, citing two Iranian officials familiar with the talks. “The officials said Oman told the Iranians that it was willing to use its influence with neighbors in the Gulf, including Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates, and with the United States to push the plan, having realized the potential economic benefits of a fee system.”

Iran and Oman “appear to be emphasizing that the proposed system would involve fees, not tolls, a legally significant distinction,” the Times posited. “A tolling system that simply charges ships to pass through the waterway would be illegal under international law, but charging fees for actual services rendered to vessels, such as waste disposal at a port, is allowed under certain circumstances.”

On Wednesday, Iran’s newly created Persian Gulf Strait Authority declared on X that it has “defined the boundaries of the Strait of Hormuz management supervision area” as the “line connecting Kuh Mobarak in Iran and the south of Fujairah in the UAE in the east of the strait to the line connecting the end of Qeshm Island in Iran and Umm al-Qaiwain in the UAE in the west of the strait.”

Iran’s claimed area of control includes the coastal waters of the United Arab Emirates (UAE) and Oman in addition to its own.

In the face of Iran’s insistence on controlling the Strait, Rubio on Friday reiterated that the Trump administration rejects any form of Iranian tolling on the Strait.

“That’s just not acceptable. It can’t happen,” Rubio said of any Iranian effort to impose payment for the safe passage of vessels. “If that were to happen in the Straits of Hormuz, it will happen in five other places around the world.” 

Rubio added that NATO allies are beginning to think through a worst-case scenario if Iran refuses to open the Strait of Hormuz.

“We all would love to see an agreement with Iran in which the Straits are open and they abandon their nuclear ambitions and so forth,” he told reporters. “We also have to have a plan B…We have to start thinking about what do we do if, a few weeks from now, Iran decides ‘We don’t care, we’re going to keep the Straits closed. We’re going to sink any ship that doesn’t listen to us or doesn’t pay us.’ Then someone’s going to have to do something about it.”

Since implementing the blockade on Iranian ports on April 13, “U.S. forces have redirected 97 commercial vessels and disabled 4 since the start of the blockade,” CENTCOM claimed on X.

Regardless of the blockade, Japan is anticipating the arrival of the first tanker full of oil that transited the Strait of Hormuz since the war began.

The Idemitsu Maru, a very large crude carrier that passed through the waterway in late April, could dock as soon as Monday, according to the trade ministry. Hauling two million barrels of Saudi crude, the vessel is on track to arrive at Idemitsu Kosan Co.’s Aichi refinery, the Ministry of Economy, Trade and Industry said in a briefing document on Friday, according to Bloomberg News.

The announcement highlights the difficult choices many nations now have as a result of the war. Japan is a key U.S. ally and risks running afoul of Trump, who maintains opposition to Iranian control of the vital waterway, including tolls on shipping levied by Iran, something Trump vehemently opposes. But Japan is also one of the world’s importers of Middle Eastern oil and the inability to get what it needs as a result of the Iranian Strait closure is having dramatic economic effects.

Most of the ships passing through the Strait under the new Iranian system “were linked to Southeast Asian nations that maintain friendly relations with Iran,” the official state broadcaster IRIB claimed on Friday in a post on X.

There has been a large increase in the number of Iranian-trading tankers at anchor off the country’s main oil export port of Kharg Island in the past week, according to the Windward maritime intelligence firm’s multi-source intelligence (MSI) analysis.

“MSI images show 27 tankers off Kharg Island as of May 21, including 18 assessed as very large crude carriers (VLCC),” Windward reported. “This has expanded from 14 tankers a week ago on May 14, a 93% increase. All were ‘dark’ and not broadcasting their position via AIS.”

Windward “assesses the majority of VLCCs at anchor off Kharg Island are being used for floating storage. About two-thirds of Iranian-trading tankers are now constrained in the Gulf of Oman or Arabian Gulf by the U.S. blockade. The remaining third are either waiting at ports off China or at anchor off the Riau archipelago, in Malaysia’s EEZ.”

UPDATE: 5:25 PM EDT –

Trump convened a meeting with his senior national security team on the war with Iran on Friday morning, Axios reported Friday evening, citing two U.S. officials.

The president “is seriously considering launching new strikes against Iran barring a last-minute breakthrough in negotiations, sources who have spoken directly with the president say,” the news outlet stated.

Vice President JD Vance, Secretary of Defense Pete Hegseth, CIA Director John Ratcliffe, White House chief of staff Susie Wiles and other officials attended the meeting along with Trump, the sources told Axios.

Hours later, Trump issued his cryptic message on Truth Social about not attending his son’s wedding due to “circumstances pertaining to Government.”

Iran insists it is ready with new tactics, weapons and a threat to extend the conflict beyond the region should a new round of fighting break out.

UPDATES

There are growing indications that the U.S. and Iran could be moving closer to a deal to end the war. However, both sides are poised to resume fighting as major sticking points remain over Iran’s nuclear ambitions, its control over the Strait of Hormuz and the future of its ballistic missile arsenal as well as U.S. sanctions.

In a sign that progress has been made in talks to reach a deal, Pakistani and Qatari negotiators are now in Tehran.

“Field Marshal Asim Munir, is traveling to Tehran on Friday in an effort to reach a deal under which the U.S. and Iran would agree to end the war and launch negotiations for a broader agreement,” Axios reported on Friday, citing a Pakistani security source.

The European Commission on Thursday cut its 2026 growth forecast for the European economy, as the ongoing conflict in the Middle East drives energy prices sharply higher.

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The EU economy is now expected to grow by just 1.1% in 2026, down from the 1.4% projected in the Commission’s autumn forecast. The eurozone outlook was revised down further to 0.9%.

In its report, the Commission warned that disruption to global energy markets — caused by escalating tensions around the Strait of Hormuz, one of the world’s key oil and gas shipping routes — has significantly worsened Europe’s economic outlook.

“Before the end of February 2026, the EU economy was expected to continue expanding at a moderate pace, alongside a further decline in inflation,” the report said. “However, the outlook has changed substantially since the outbreak of the conflict.”

Inflation is also expected to rise sharply due to the disruption around Hormuz.

EU inflation is forecast to reach 3.1% this year — a full percentage point higher than previously expected — driven mainly by soaring energy costs after oil and gas prices surged amid fears of supply disruptions in the Gulf.

For EU officials, the shock recalls 2022, when Russia’s invasion of Ukraine triggered Europe’s worst energy crisis in decades.

The Commission described the latest turmoil as “the second such shock in less than five years”, warning that Europe’s dependence on imported fossil fuels leaves it highly vulnerable whenever geopolitical tensions threaten global energy supplies.

Consumer confidence has already fallen to a 40-month low, according to the forecast, as households prepare for higher heating and fuel bills while businesses face rising operating costs and weaker demand.

Investment is also expected to slow as companies confront tighter financing conditions and growing uncertainty. Export growth is weakening as global demand softens.

Despite the deteriorating outlook, Brussels said the bloc is better prepared than during the Ukraine-related energy crisis, thanks to years of investment in renewable energy, lower gas consumption and efforts to diversify away from Russian supplies.

“The push towards supply diversification, decarbonisation and lower energy consumption has left the EU economy better placed to absorb today’s shock,” the Commission said.

However, EU officials acknowledged that risks remain heavily skewed to the downside.

The report warned that prolonged disruption in the Strait of Hormuz or across wider Middle Eastern supply chains could drive energy prices even higher, derail the expected easing of inflation in 2027 and potentially stall Europe’s recovery altogether.

The Commission also cautioned that shortages of refined oil products, fertilisers and other industrial inputs could spread through global supply chains, increasing food and manufacturing costs across Europe.

Meanwhile, European governments are preparing for growing fiscal pressure. Public deficits across the EU are expected to widen as governments increase spending to protect households from rising energy bills while also boosting defence expenditure amid mounting geopolitical instability.

Italian Prime Minister Giorgia Meloni has recently urged the European Commission to relax fiscal rules for households and industries struggling with soaring energy costs, arguing that energy security should be treated with the same urgency as defence spending.

At the centre of Rome’s request is the EU’s national escape clause, adopted on 8 July, which allows member states temporary fiscal flexibility to increase defence spending under exceptional circumstances.

Meloni said Brussels had already shown a willingness to loosen budget rules in response to Russia’s war in Ukraine and growing concerns about Europe’s military preparedness. Italy is now seeking similar flexibility for emergency energy measures.

Nearly three months after the United States and Israel launched their large-scale bombing campaign against Iran and about six weeks since the April 8 ceasefire took effect, President Trump faces an inflection point. Does he return to war? Maintain the ceasefire and U.S. blockade on Iranian ports in the hope of cutting a deal on American terms? Or drop his maximalist negotiating stance?

Sen. Lindsey Graham (R-S.C.), an informal foreign policy advisor for the White House, continues to press for more aggressive U.S. military action. Trump’s political advisors would prefer that the war end as soon as possible to minimize political repercussions against the Republican Party in a midterm election year.

Trump seems conflicted. Despite weeks of U.S. bombardment and an ongoing naval blockade, Tehran is as protective of its nuclear program today as it was before the war began. “For Iran, the Clock is Ticking, and they better get moving, FAST, or there won’t be anything left of them,” Trump wrote on Truth Social over the weekend. A day later, Trump took to the social media platform again to announce he suspended planned U.S. attacks on Iran to give talks more time.

Unfortunately for Trump, he’s proved to be his own worst enemy on this subject. Iran’s stockpile of highly enriched uranium and Tehran’s effective control of the Strait of Hormuz, the regime’s two biggest cards, are a byproduct of Trump’s own policy decisions.

The first is a clear indictment of Trump’s first-term order to withdraw the United States from the Obama-era Joint Comprehensive Plan of Action, a highly technical accord that put Iran’s nuclear work in a box by restricting the number and quality of centrifuges it could use, capped the amount of enriched uranium it could produce and compelled Tehran to ship 97% of its stockpile out of the country. When the Trump administration scrapped that hard-won deal, Iran responded by enriching more nuclear material at a faster pace and accumulating the very stockpile the Trump administration is now seeking to neutralize.

The Strait of Hormuz, Iran’s second card, would not even be an issue today if the Trump administration had refrained from going to war in the first place. On Feb. 27, the day before the conflict began, more than 150 tankers and vessels traveled through the strait. The international waterway was open for business.

Not so today. On Thursday, a grand total of three crossings were registered in the waterway. This collapse of commerce is a consequence of Iran’s ability to harass civilian tankers so much that shipping companies no longer view the journey as worth the cost. As Adm. Brad Cooper, the top U.S. commander in the Middle East, testified to the Senate Armed Services Committee on Thursday: “The Iranian capability to stop commerce has been dramatically depleted through the strait, but their voice is very loud. And those threats are clearly heard by the merchant industry and insurance industry.”

By virtue of his own actions, Trump is now left with a series of policy options that range from least bad to terrible. None of them are ideal, and all of them carry some risk.

For starters, Trump could resume the war. Any renewed U.S. bombing campaign would probably expand the U.S. military’s original set of targets to include a portion of Iran’s energy infrastructure, which Trump has threatened repeatedly to hit. A U.S. invasion of Kharg Island, where 90% of Iran’s oil processing takes place, might also be up for discussion. The aim would be to destroy Iran’s remaining military capabilities and further squeeze its oil revenue until Tehran’s strategic calculus on the war shifts to Washington’s liking.

Yet there are no guarantees that doubling down on military force will work. Trump’s entire strategy has relied on a baseline assumption: The more punitive the United States is, the more likely Tehran will be to cave. Yet that simply hasn’t occurred. If anything, Iran is more dug in now than it was in the opening days of the conflict. For the regime, capitulating to Trump is as dangerous as losing the war. Why would more bombing succeed where previous bombing failed?

The risks of additional U.S. military action are considerable as well. Before the ceasefire, Iran was launching ballistic missiles and attack drones across multiple gulf Arab states, hitting Qatar’s largest natural gas processing facility, Saudi Arabia’s east-west oil pipeline and Dubai’s luxurious high-rises. As the Iranians have stated, such attacks will not only resume if Trump orders a resumption of the war but will expand to new targets, including desalination facilities and nuclear power plants. Such strikes would raise global oil and gas prices to even more absurd levels, adding to the extra $40 billion the American people are already paying for fuel since the war began.

What about continuing the status quo? While this contingency would be less costly than another round of bombing or a U.S. ground invasion, it’s unclear whether it would help or hurt negotiations toward a settlement. There’s a possibility that extending the U.S. blockade of Iranian ports could merely reaffirm the regime’s earlier decision to preserve its own shutdown of the strait. Iran is now urging Washington to end its blockade before talks on the nuclear file can be held. And it’s a mystery whether Trump’s blockade is working anyway; the U.S. intelligence community assesses that Iran could withstand this pressure point for three to four more months, which may be too long for Trump to sustain given the oil disruptions that are bound to get worse.

Striking an agreement to end the war, return the strait to open traffic and restrict Iran’s nuclear program would be the most beneficial policy for the United States with the least amount of cost attached — not quite undoing the harm from Trump’s first-term decision to scrap the nuclear deal and his second-term decision to start a war. U.S. and Iranian negotiators are passing proposals back and forth as we speak. But as of now, Trump can’t stomach agreeing to a deal that covers some of Iran’s terms, including but not limited to a shorter suspension of enriched uranium and some kind of Iranian role in the management of the strait. Even if Trump did reassess his position, he would be forced to confront the hawks in his political coalition who would consider anything short of Iran’s total surrender a failure.

In short, Trump is in an unenviable position. He’s got nobody to blame but himself.

Daniel R. DePetris is a fellow at Defense Priorities and a syndicated foreign affairs columnist.

The Islamic Revolutionary Guard Corps (IRGC) Navy claims it has greatly expanded how it defines the Strait of Hormuz, which it has closed to most shipping since the start of the now-paused war. The move comes as that closure has wide-ranging impacts on the global economy and with U.S. President Donald Trump mulling new military actions against Tehran amid deadlocked peace negotiations and a tenuous ceasefire barely holding.

Under its new definition, the IRGC claimed a tenfold expansion “forming a complete crescent” of “about 20 to 30 miles to one now over 200 to 300 miles,” Political Deputy of IRGC Navy Mohammad Akbarzadeh said in a TV interview, according to the official Iranian FARS news agency.

“The Strait is no longer viewed as a narrow stretch around a handful of islands but instead has been greatly ​enlarged in scope and military significance,” Akbarzadeh noted. “In the past, the Strait of Hormuz was defined as a limited area ​around islands such as Hormuz and Hengam, but today this view has changed. The Strait is now defined as a strategic zone stretching from ‌the ⁠city of Jask in the east to Siri Island in the west.”

We asked the White House and CENTCOM for reactions to the IRGC Navy announcement. The White House dismissed it.

“During Operation Epic Fury, Iran was crushed militarily – their ballistic missiles are destroyed, their production facilities are dismantled, their navy is sunk, and their proxies are weakened. Now, they are being strangled economically by Operation Economic Fury and losing $500 million per day thanks to the United States military’s successful blockade of Iranian ports,” White House Deputy Press Secretary Anna Kelly told us. “The Iranian regime knows full well their current reality is not sustainable, and President Trump holds all the cards as negotiators work to make a deal.”

CENTCOM has not responded to our query.

The reported expansion is the second announced by Iran since the start of its conflict with the U.S. and Israel.

The IRGC did not specify what actions it would take under its expanded definition. However, while the vast majority of Iran’s naval forces have been destroyed during Epic Fury, it has been attacking ships in the region with cruise missiles, drones and its fleet of small attack boats that remains largely intact. In addition, Iran has reportedly continued mining the Strait even after the April 7 ceasefire.

Both U.S. Central Command (CENTCOM) and Iran say the IRGC launched strikes against U.S. Navy warships and commercial vessels they were helping to protect during the short-lived Project Freedom on May 4. That was an effort, created by Trump, to help guide ships through the Strait that was paused after about 36 hours. CENTCOM forces responded with strikes on attacking ships. Days later, another exchange of fire took place, with CENTCOM saying it bombed Iranian targets after destroyers came under fire transiting the Strait to the Gulf of Oman.

Meanwhile, the Navy has disabled four Iranian vessels trying to run the ongoing blockade.

The IRGC said the new definition was created in response to yesterday’s statements by President Donald Trump repeating that Iran’s Navy has been destroyed by U.S. attacks during the now-paused Operation Epic Fury.

“This very design and implementation of the new plan shows that this force is present on the scene with authority,” Akbarzadeh proffered.

As we noted yesterday, frustrated by the pace of negotiations, Trump threatened new military action against Iran ranging from resuming Project Freedom to new airstrikes against Iranian targets and perhaps even a ground incursion to retrieve Iran’s highly enriched uranium.

The closure of the Strait is having a direct impact in the U.S., spurring Trump to consider pausing the federal gas tax as a form of relief for American consumers as energy prices soar, The Washington Post noted. The move — which requires congressional approval to pass — would mark the latest in a string of government interventions to address fallout from the war.

“Since the war began in late February, the price of a barrel of Brent crude oil, an international benchmark, has skyrocketed from about $70 to more than $107. U.S. gas prices — now an average of $4.50 a gallon — have reached levels not seen since 2022 and contributed to Trump’s falling approval ratings ahead of the November midterms,” the Post stated.

The impacts of the closure are even greater in Asia, which relies more heavily on oil that normally transits the Strait. For instance, Indian Prime Minister Narendra Modi asked his nation’s 1.4 billion people to spend less on fuel, fertilizer, and travel, The New York Times reported. 

Modi “made these sweeping recommendations in a national address on Sunday after securing a big win for his party in recent state elections,” the newspaper added. “With that victory in hand, he no longer has to worry that voters might punish his candidates for higher prices of fuel, food and transport, which are tightly controlled by India’s government. Instead of subsidizing the losses and running huge budget deficits, India’s leader appears emboldened to ask its people to bear the burden.”

Heavy ship traffic and rising regional tensions fuel fears of a wider confrontation over one of the world’s most critical energy routes. Al Jazeera’s Tohid Asadi gets exclusive access to report from the Strait of Hormuz.

BEIJING — The Trump administration has repeatedly framed the war in Iran as a quick, winnable fight, vowing to defeat the Islamic Republic “totally and decisively” — incomparable to the “dumb” wars in Iraq and Afghanistan.

But from China’s perspective, the parallels are clear.

“You can blow everything up — destroy it all,” one Chinese official told The Times, describing the Americans, “but you don’t have a strategy.”

President Trump arrives in Beijing this week for talks with a Chinese government that is confident as ever in its ascendance on the world stage, taking stock of its leverage and still baffled the U.S. administration chose yet another costly war in the Middle East.

China has watched as the United States, over seven weeks of fighting an outmatched enemy, has depleted nearly half of its stockpiles of high-end munitions — including its THAAD and Patriot batteries — and fired its Army chief of staff, among other Pentagon leaders, who had warned of critical shortages.

Marco Rubio, Trump’s national security advisor and secretary of State, has said the military operation that started the war known as Operation Epic Fury “is over.”

But the Strait of Hormuz, one of the world’s most vital commercial waterways, remains effectively shuttered. Iranian attacks in the region continue. And talks between Washington and Tehran have failed to reach a diplomatic agreement to bring a definitive end to the conflict.

“The Chinese have high regard for the operational proficiency of U.S. forces, but they recognize that, thus far at least, the Trump administration has not achieved its core objectives in going to war with Iran,” said David Ochmanek, a former deputy assistant secretary of Defense now with the Rand Corp.

The war has given Beijing an opportunity, Ochmanek said, “to double down on the claim they have made for the past year and a half that the [People’s Republic of China], not the U.S., is a force for global stability.”

The war has allowed China to demonstrate some diplomatic prowess. An initial ceasefire reached between the United States and Iran last month was only clinched after Beijing pressured Tehran to agree. And China’s advocacy for an open strait — rejecting Iranian attempts to impose a toll system — while opposing the U.S. war itself has allowed Beijing to maintain leverage with both sides.

It has also inflicted costs. Allies of Beijing noticed when the government did not leap to the defense of Tehran at the start of the war. And China has its own vested interest in a free and open waterway, where nearly 50% of the country’s crude oil imports pass through each day.

Building up to the start of the war and throughout its initial weeks, Washington diverted significant military assets from Asia — where Trump’s own national security strategy says they are needed most — to the Middle East.

The USS Abraham Lincoln was redirected from the South China Sea, along with scores of advanced missile interceptors from South Korea and Japan and nearly the entire U.S. inventory of long-range air-to-surface missiles in the Pacific.

Policy experts at the Pentagon were brought in to discuss a potential invasion of Kharg Island, the jewel of Iran’s oil industry, to draw lessons from planning a defense of Taiwan, according to a Defense official, who was granted anonymity to speak candidly. A Marine expeditionary unit was sent from Okinawa to the region for the potential operation.

Chinese officials and analysts have been candid in their assessments of U.S. hard power, impressed by a military they acknowledge remains the best in the world.

But Beijing sees a persistent flaw in U.S. strategy: the belief that military strength alone can reshape political realities, a view further weakened by the pressures on a democratic government whose public grows impatient with wars that drag on beyond days or weeks.

China’s autocracy is free from accountability to the public — and anyway has confidence that Chinese public opinion would be on its side if it were to launch a major military operation against its main target, Taiwan.

But there are lessons of caution to be learned from the Americans, as well.

Over the last year, the Taiwanese Navy has been practicing the rapid deployment of cheap and domestically produced smart mines for the sea — a potential bulwark against enemy blockades of ports and hostile invasion forces.

It is the type of asymmetric warfare that has so far frustrated the U.S. military in the Strait of Hormuz, protracting a war that Trump vowed would last a month or less.

Taiwan, too, would confront Beijing with political realities that military force cannot erase. Nearly 90% of the Taiwanese people oppose a Chinese takeover, and about 60% say they would resist it at all costs.

“Chinese analysts see two things at once,” said Craig Singleton, senior director of the China program at the Foundation for Defense of Democracies. “They are impressed by U.S. military reach, precision and operational capability, but they also see a familiar pattern of American power struggling to translate battlefield success into a durable political outcome.”

That matters for Taiwan, Singleton said, “because China’s own military modernization has borrowed heavily from the American model, relying heavily on joint operations, high-tech precision strikes, decapitation concepts and information dominance.

“If the world’s most experienced military can still struggle to convert military pressure into political success,” he added, “Beijing has to ask whether the [People’s Liberation Army] could do better in a far more complex Taiwan scenario.”

The Strait of Hormuz has become the central strategic battleground in the ongoing confrontation involving Iran, the United States, and regional Gulf powers. What initially appeared to be a military conflict is increasingly evolving into a struggle over maritime control, energy security, and geopolitical influence.

Since the outbreak of hostilities following the joint United States and Israeli strikes on Iran in February, Tehran’s near closure of the Strait of Hormuz and Washington’s retaliatory naval blockade have severely disrupted global energy markets. The conflict has reduced the movement of oil and liquefied natural gas through one of the world’s most critical maritime chokepoints, creating economic instability far beyond the Middle East.

Recent tanker movements coordinated through informal understandings with Tehran suggest that Iran may now be shifting from blocking Hormuz entirely to selectively controlling access. This emerging dynamic could fundamentally reshape Gulf security and international energy politics.

Hormuz Is No Longer Just a Trade Route

The Strait of Hormuz is one of the most strategically important waterways in the global economy. Before the conflict, roughly one fifth of global oil and liquefied natural gas shipments passed through the narrow corridor each day.

Its disruption has exposed the vulnerability of global energy markets to geopolitical conflict. Asian economies have been particularly affected because of their heavy dependence on Gulf energy exports. Oil supply disruptions and rising transportation risks have intensified inflationary pressure, energy insecurity, and market volatility across multiple regions.

The recent passage of a limited number of oil and gas tankers with apparent Iranian approval demonstrates that Tehran may now be exercising selective authority over maritime transit rather than enforcing a complete blockade.

This distinction is critical because it suggests Iran is attempting to transform military leverage into long term political and economic influence.

Iran’s Emerging Strategy of Selective Access

The limited reopening of shipping lanes indicates that Tehran may be developing a new model of strategic control. Rather than permanently shutting down the strait, Iran appears to be determining which countries, companies, or shipments can safely transit through the waterway.

This selective access system gives Tehran several advantages.

First, it allows Iran to maintain pressure on global energy markets without fully halting trade flows that could trigger overwhelming international military intervention.

Second, it creates potential economic benefits through informal transit arrangements, leverage over energy dependent states, and indirect influence on oil pricing.

Third, it positions Iran as a gatekeeper within one of the world’s most important strategic corridors, expanding its geopolitical relevance despite sanctions and military pressure.

The reported coordination involving Pakistan and Qatar also demonstrates how regional diplomacy is becoming intertwined with energy security and conflict management.

Gulf States and the United States Face Strategic Risks

For Gulf Arab states such as Saudi Arabia, United Arab Emirates, and Qatar, any arrangement that allows Iran to regulate maritime access poses a direct strategic threat.

Their economies depend heavily on uninterrupted hydrocarbon exports, and Iranian control over transit patterns would increase Tehran’s regional influence at their expense.

Asian importers are equally vulnerable because selective access introduces political uncertainty into global energy supply chains. Countries dependent on Gulf oil and gas would become increasingly exposed to Iranian political calculations.

For the United States, accepting Iranian dominance over Hormuz would undermine Washington’s broader strategic objectives in the region. The Trump administration has repeatedly emphasized restoring unrestricted freedom of navigation as a core war aim.

Allowing Iran to effectively manage maritime access would signal a major geopolitical shift and weaken perceptions of American regional dominance.

Why the Current Situation May Become More Dangerous

The most concerning aspect of the emerging situation is that temporary wartime arrangements could solidify into a long term strategic reality. Even if a ceasefire is eventually reached, Iran may resist fully restoring unrestricted navigation because Hormuz now represents its strongest source of leverage against the United States and regional rivals.

This creates the conditions for a prolonged state of instability rather than genuine conflict resolution.

A system based on selective transit rights would likely produce repeated confrontations as regional powers, Western navies, shipping companies, and energy importers challenge or negotiate the limits of Iranian control.

Such a situation would institutionalize uncertainty in global energy markets and increase the likelihood of future military escalation.

Analysis

The battle over the Strait of Hormuz reflects a broader transformation in modern geopolitical conflict where control over trade routes and economic chokepoints can become more strategically valuable than territorial conquest.

Iran appears to recognize that its greatest strength lies not in conventional military superiority but in its ability to disrupt the global economy through maritime leverage. By controlling the flow of energy through Hormuz, Tehran can influence oil prices, inflation, international diplomacy, and political stability in rival states.

This gives Iran asymmetric power against economically stronger adversaries.

The United States faces a difficult strategic dilemma. Military escalation aimed at fully reopening Hormuz could deepen regional conflict and further destabilize global markets. However, tolerating selective Iranian control risks weakening American credibility and altering the regional balance of power in Tehran’s favor.

The current situation also exposes the limits of military power in resolving structural geopolitical disputes. Even if active fighting declines, the underlying contest over maritime control, energy security, and regional influence will likely persist.

Ultimately, the future of the Gulf may increasingly depend not on battlefield victories, but on who shapes the rules governing the movement of energy through the Strait of Hormuz. If selective Iranian control becomes normalized, the region could enter a prolonged era of economic coercion, strategic competition, and recurring confrontation.

With information from Reuters.

A former Philippine Navy warship was sent to the bottom today by the combined effects of maritime strike drills launched by Japanese, Philippine, and U.S. forces in the Luzon Strait, one of the world’s most strategic and tense bodies of water. The maneuvers, which reportedly involved a variety of anti-ship missiles and rocket artillery, were part of the broader Balikatan exercise, which is especially important in the context of rising tensions in the Indo-Pacific.

Located roughly 50 miles offshore, the target vessel for a live-fire sinking exercise (SINKEX) campaign was the decommissioned Philippine Navy Rizal class patrol corvette, the former BRP Quezon. The ship was originally completed for the U.S. Navy as an Auk class minesweeper during World War II, serving as the USS Vigilance before being transferred to the Philippines and serving in a new role in the late 1960s. The BRP Quezon, which had a standard displacement of 890 tons, was decommissioned in 2021.

The maritime strike (MARSTRIKE) drills were conducted on the island of Luzon, which sits at the northern end of the Philippines, and is the country’s largest and most populous island. Specifically, the live-fire drills took place around the Paoay Sand Dunes, in the coastal region of Ilocos Norte.

The drills began around 10:00 a.m. local time with a U.S. Army M30/31 Guided Multiple-Launch Rocket System (GMLRS) fired as a “probing round,” with the location of the target vessel being confirmed around 10:15 a.m.

The GMLRS artillery rocket is a highly precise, rapid-strike weapon that can attack targets to a distance of around 50 miles, which would put it right at the limit of its range. It is fired from the M142 High Mobility Artillery Rocket System (HIMARS) that can launch six guided or unguided 227mm artillery rockets or a single Army Tactical Missile System (ATACMS) missile without reloading. GMLRS is not capable of engaging moving targets, so it has limited application in the traditional anti-ship mission set.

In a combined strike, anti-ship missiles were reportedly then launched from a U.S. Marine Corps Navy-Marine Expeditionary Ship Interdiction System (NMESIS) and from a Philippine Navy C-Star system.

Of these, NMESIS employs an uncrewed variant of the 4×4 Joint Light Tactical Vehicle (JLTV), also known as the Remotely Operated Ground Unit Expeditionary-Fires (ROGUE-Fires), on which is mounted a launcher with two ready-to-fire Naval Strike Missiles (NSM). These have a range of around 130 miles and have low-observable features, making them harder for enemy air defenses to detect and engage.

NMESIS is meant to be rapidly deployable and capable of highly dispersed operations in austere areas. As an uncrewed vehicle-launcher combo, small teams of Marines monitor multiple launchers dispersed around an area and move them regularly to keep them from being targeted by the enemy. The system was first deployed in a Balikatan exercise last year, as you can read about here.

While Philippine media reports that the NMESIS, operated by the Hawaii-based 3rd Marine Littoral Regiment, fired a missile during today’s drill, this is refuted by a report from Stars and Stripes. The 3rd MLR is notable in itself, being expressly designed to fight within an enemy’s own littorals, with all the challenges that brings.

Meanwhile, the C-Star is the Philippine Navy’s primary anti-ship missile. Produced by South Korea’s LIG Nex1, a version of this missile is used by the Republic of Korea Navy as the Haeseong. The Philippines uses the C-Star to arm its two Miguel Malvar class and two Jose Rizal class frigates, which are also made in South Korea. Similar to the U.S.-made Harpoon, the C-Star is a turbojet-powered, sea-skimming missile with a range of around 90 miles.

In the drill, the C-Star was likely fired from the Philippine Navy frigates BRP Miguel Malvar and Antonio Luna, both of which are known to be taking part in Balikatan.

These were followed by two rounds fired from a Japanese land-based Type 88 anti-ship missile system, fired for the first time during a Balikatan exercise, and for the first time anywhere outside Japan. The Japanese missiles reportedly struck the hull of the target ship around 10:30 a.m.

JSDF Type 88 missiles fire for the first time in Balikatan 2026 | GMA News

Developed by Mitsubishi Heavy Industries in the 1980s, the Type 88 (also known as the SSM-1) is the primary coastal anti-ship missile system of the Japan Self-Defense Forces, with a range of around 100 miles, although more capable and further-reaching weapons are now in development, as you can read about here.

Interestingly, in a video released of the live-fire event in Ilocos Norte, close protection was being provided to the truck-mounted Type 88 launcher by a Marine Air Defense Integrated System (MADIS), also from the 3rd Marine Littoral Regiment. MADIS utilizes the JTLV and distributes different sensors and effectors between individual JLTVs, as you can read more about here. In this kind of scenario, it would be tasked with protecting the coastal missile battery against kamikaze drones and other aerial threats at short ranges.

The vessel sank rapidly, meaning that the Philippine Air Force wasn’t able to deliver more munitions onto the target. FA-50 light combat aircraft and A-29 Super Tucano turboprop close support aircraft had both been prepared to strike the same ship, but were stood down.

Other air assets taking part included a U.S. Navy P-8 Poseidon maritime patrol aircraft and an MQ-9 drone.

With the ship sunk or sinking, a coup de grace was provided by a U.S. HIMARS, which fired onto the same coordinates.

Also involved in Balikatan is the Royal Canadian Navy frigate HMCS Charlottetown, although it appears that it didn’t take part in the live-fire event.

According to a Philippine military spokesperson, another round of live-fire drills will take place tomorrow as part of Balikatan, utilizing a stand-by target vessel. This will also allow Philippine Air Force aircraft to take part.

The live-fire drills, conducted under the Balikatan exercise, signaled a notable expansion of Japan’s military role in the region as Tokyo strengthens security partnerships with its allies amid growing tensions with Beijing.

Overall, the live-fire exercise is highly significant due to its proximity to the Chinese mainland and the long range of some of the missiles that have been employed.

The Luzon Strait, into which the various missiles and rockets were fired, sits between Taiwan and the Philippines, spanning about 220 miles at its narrowest point. It serves as a vital shipping route and a highly strategic military corridor, particularly for China’s rapidly expanding naval forces. From this passage, assets stationed in the South China Sea can move into the Philippine Sea and the wider Pacific, and back again. This includes China’s growing fleet of nuclear-powered submarines, some of which underpin its second-strike nuclear deterrent.

The strait is also a crucial gateway for the U.S. Navy entering the South China Sea and would likely be a central battleground in any major conflict over Taiwan. Because of its importance, the area is closely monitored for activity both above and below the surface. In the event of war, it would quickly turn into a dense anti-ship missile engagement zone (SMEZ). The live-fire campaign today gave just a small taster of that kind of contingency.

Earlier this week, the U.S. Army test-fired a Tomahawk cruise missile from a Typhon launcher in the central Philippines, successfully hitting a target around 370 miles away in Nueva Ecija.

On this occasion, the Tomahawk missile was supporting ground troops in a night land maneuver exercise led by the 25th Infantry Division in Fort Magsaysay, part of the Balikatan exercise.

The Typhon ground-based missile system can also fire SM-6 multi-purpose missiles, which are used in this application in a quasi-ballistic missile land-attack mode. As for the Tomahawk cruise missile, this provided land attack and anti-ship capabilities. 

As we have discussed before, Typhon’s arrival in the Philippines in 2025 sent a clear signal to Beijing and throughout the region. It is a glimpse of what’s to come as the service works through plans to permanently base these systems in China’s backyard.

Compared to the longer-range Typhon, which is deployed further from the Luzon Strait, for the Balikatan exercise, the shorter-range NMESIS and Type 88 anti-ship missiles are pushed much closer to the zone in which their likely wartime targets would be found. As we have explored in the past, anti-ship missiles of this kind, and especially NMESIS, can also be deployed deeper into the strait, making use of smaller Philippine islands, like the Batanes island chain, although that ratchets up their exposure to counterstrikes considerably.

For both these kinds of missiles, their survival would rely upon the dispersal of launchers and other vehicles, as well as regularly moving them around to help prevent them from being targeted by the enemy. Of course, with the uncrewed NMESIS, this is designed from the ground up to not put personnel in harm’s way. All of this kind of doctrine is central to the Marines’ Expeditionary Advanced Base Operations (EABO) strategy, which is now a core tenet of how it would fight in the Pacific.

Already, China has voiced its displeasure at the deployment of the U.S. Army’s Typhon system to the Philippines. What is now becoming a regular appearance of NMESIS, backed up by other highly mobile strike systems, including allied anti-ship missiles, within reach of the Luzon Strait, will undoubtedly trigger similar concerns in Beijing. However, the live-fire sinking exercise today underscores how critical this waterway is to the U.S. military and its allies in the region, just as it is to China. Having more varied and more mobile anti-shipping assets in the northern Philippines complicates targeting for China, while extending the capabilities of the anti-access strategy of the U.S. military and its allies in the Luzon Strait, should a conflict break out.

Contact the author: thomas@thewarzone.com

Brent crude rises amid clashes in critical waterway.

Oil prices have jumped after clashes between United States and Iran in the Strait of Hormuz pushed their tenuous ceasefire to the brink.

Futures for Brent crude rose as much as 7.5 percent during a volatile trading session on Thursday, before easing as Asia’s markets opened on Friday morning.

The international benchmark stood at $101.12 per barrel as of 03:00 GMT, down from the day’s high of $103.70.

The latest rise came after the US and Iran exchanged fire in the critical strait, a conduit for about one-fifth of global oil and natural gas supplies, despite the truce announced between the sides on April 7.

US Central Command (CENTCOM) said it launched strikes on Iran after three US Navy guided-missile destroyers came under attack from Iranian missiles, drones and small boats in the strait.

Iran’s Khatam al-Anbiya Central Headquarters earlier accused the US of violating the ceasefire by attacking an Iranian oil tanker and another vessel in the vicinity of the waterway.

The Iranian military headquarters also accused the US of targeting civilian areas, including Qeshm Island.

US President Donald Trump on Thursday appeared to downplay the clashes, saying the ceasefire remained in effect, while Iran’s state-run Press TV said the situation had gone “back to normal”.

Shipping in the strait has been at a near standstill since late February amid the threat of Iranian attacks on the massive oil tankers that usually transport much of the world’s energy supplies.

Brent prices are up about 40 percent compared with before the war amid an estimated shortfall in daily production of 14.5 million barrels.

Asian stock markets opened lower on Friday amid the heightened tensions, with Japan’s benchmark Nikkei 225, South Korea’s KOSPI and Hong Kong’s Hang Seng Index each falling more than 1 percent.

On Wall Street, the benchmark S&P 500 fell about 0.4 percent overnight after hitting an all-time high the previous day.

Iranian media outlets are reporting that a port on Iran’s largest island in the Strait of Hormuz came under attack. However, details are scant at the moment and no images have emerged to support the claims. We have reached out to U.S. Central Command for more information. The reports come as negotiations between the U.S. and Iran to end the war have been ongoing during a fragile ceasefire that would be further imperiled by a new round of fighting.

This story has been updated with new information from CENTCOM that it attacked Iranian targets in response to U.S. Navy destroyers being fired on by Iran.

“FARS investigations in Bandar Abbas show that during the exchange of fire between the Iranian armed forces and the enemy, parts of the commercial area of Bahman Qeshm pier were targeted,” the official Iranian FARS news outlet reported on Telegram.