Hopes for Hormuz deal fade as Trump demands Iranian reparations
US President Donald Trump complicates peace talks by demanding Iran pay compensation for 50 years of damages
US President Donald Trump complicates peace talks by demanding Iran pay compensation for 50 years of damages
Iran said on Sunday that a deal with Oman establishing new shipping lanes through the Strait of Hormuz has entered its final stages, though Tehran maintained the critical waterway will remain closed until Washington satisfies a broader set of conditions tied to the ongoing standoff between the two countries. A US official told Reuters on Friday that an agreement between Iran and Oman appeared close and could soon lead to the reopening of the strait, a passage that carried roughly a fifth of global oil and liquefied natural gas shipments before Iran shut it down in response to American and Israeli military strikes earlier this year. Iranian Foreign Minister Abbas Araqchi confirmed on Sunday that negotiations over the strait, which sits between Iran and Oman, had reached their final stages. However, he repeated comments made a day earlier stressing that the waterway would not reopen unless additional conditions set by Tehran were met first. Iran’s Mehr news agency quoted Araqchi as saying the emerging agreement would establish the new shipping lanes to be used once the United States fulfils those conditions and the strait formally reopens. Araqchi said Iran and the United States are not currently engaged in direct talks and that Tehran has no plans to begin them as long as Washington continues to breach an interim agreement the two countries signed in June. He added that messages between the two sides are being exchanged through intermediaries rather than direct contact. Iran demands compensation and sanctions relief The United States launched air strikes against Iran in late February, saying the campaign aimed to prevent the Islamic Republic from acquiring nuclear weapons or using missiles and regional proxy forces to threaten the wider Middle East. Washington and Tehran agreed to a ceasefire in June, but the United States reimposed a blockade on Iranian shipping in the Gulf in July, a move Iran characterised as a violation of a truce that had already shown signs of collapse. A US official, speaking to Reuters on condition of anonymity, said the blockade on Iranian ports would lift once a deal restoring unimpeded commercial shipping is formally announced. The official added that any American actions would remain directly tied to Iran fulfilling its own commitments under the emerging agreement, pointing to a carefully sequenced approach that both sides appear to be navigating cautiously. The arrangement under discussion appeared, according to sources who previously spoke to Reuters, to grant Tehran a degree of control over vessels entering the Gulf through the strait, an arrangement that shipping industry sources have said would be difficult to implement in practice. The precise current status of the agreement remained unclear on Sunday, and Iran’s latest statements suggested several additional factors could still complicate its finalisation. Araqchi said the strait’s reopening would depend in part on the United States providing compensation to Iran for what Tehran describes as widespread attacks on its territory and interests. Mohammad Baqer Zolqadr, secretary of Iran’s top national security body, outlined a broader list of demands, including an end to US threats against Iran, a halt to what Tehran calls aggression against its allies in Lebanon, the Palestinian territories, Yemen and Iraq, the lifting of the shipping blockade and broader sanctions, and the release of frozen Iranian financial assets. Supreme Leader’s condition remains unclear Ultimate decision making authority in Iran rests with Supreme Leader Mojtaba Khamenei, who has not appeared in public since an air strike killed his father and predecessor on February 28, the first day of the joint US and Israeli air campaign against Iran. State media reported on Sunday that Iranian President Masoud Pezeshkian met with Khamenei in late July, and a paramilitary leader promised that footage of the supreme leader would soon be released publicly. Khamenei was reportedly injured in the same strike that killed his father, according to earlier reporting. Separately, the United Arab Emirates said on Saturday that Iran had attacked a vessel affiliated with its state oil company. Iran did not immediately respond to the allegation. The country’s powerful Revolutionary Guards have attacked commercial vessels in the past, arguing that ships transiting the strait without coordinating their passage with Iranian authorities are not protected from such action. Houthi attacks widen regional shipping crisis Iran’s strikes on shipping in the Strait of Hormuz have coincided with intensified attacks from its Yemen based allies, the Houthis, who have targeted vessels at a separate chokepoint located between the Red Sea and the Gulf of Aden on the opposite side of the Arabian Peninsula. The Houthis declared a naval blockade against Saudi Arabia in the Red Sea last month, framing the move as retaliation for what they described as a Saudi imposed siege in Yemen, an accusation the Saudi government has firmly denied. Riyadh continues to back Yemen’s internationally recognised government in the country’s ongoing conflict. The group claimed responsibility for an attack on Saudi Aramco’s Jazan refinery on Sunday, coming just two days after the kingdom signed a defence pact with fellow Sunni Muslim majority nations Turkey and Pakistan amid growing concern over regional instability stemming from the US and Israeli military campaign against Shiite led Iran. Saudi Arabia’s energy ministry confirmed that a fire broke out at the refinery following the attack but was later extinguished without causing any injuries, and that authorities were continuing to manage the aftermath of the incident. The ministry did not specify a cause for the blaze. Houthi military spokesperson Yahya Saree said on social media platform X that the group used a drone to strike the facility. The Houthis have targeted Aramco sites in Jazan before, a refinery that processes approximately 400,000 barrels of crude oil daily in southwestern Saudi Arabia. It remains unclear whether or to what extent Pakistan or Turkey would participate in any Saudi response to the latest attack. Turkish Foreign Minister Hakan Fidan said the newly formed alliance between the three countries was not directed against Iran or any other nation, describing it instead as a general commitment to
Agreement between Iran and Oman over the strait, which separates the two countries, is seen as vital to a wider deal to end the war
Iran has launched an intensive diplomatic campaign targeting Gulf states, warning them directly that Tehran will strike their oil, power and water facilities unless they persuade President Donald Trump to halt US military action and pursue a negotiated end to the war instead. According to a senior Iranian official, the warning covers potential attacks on energy facilities, oil fields, refineries, electricity grids, water systems, transport networks and other strategic infrastructure belonging to Washington’s closest Arab partners in the region. The message formed part of a wider Iranian strategy to discourage further American military action by raising the specter of significant economic damage across the Gulf. Sources familiar with the matter said the warning traveled through a wave of high level diplomatic contacts following Trump’s July 28 threat to strike Iran’s energy network and broader infrastructure. Two senior Iranian officials, two Gulf sources and a senior regional diplomat, all speaking on condition of anonymity given the sensitivity of the discussions, said Iranian Foreign Minister Abbas Araqchi held conversations with his Saudi, Turkish and Qatari counterparts as well as Pakistan’s army chief. The senior diplomat said Araqchi pressed Washington’s Gulf allies to use their influence with Trump to head off renewed strikes, cautioning that any attack on Iran would trigger retaliation against American assets and critical infrastructure throughout the Gulf. The diplomat said Araqchi delivered a consistent message in each conversation, expressing readiness to retaliate while stressing that a diplomatic solution offers the best chance of avoiding wider regional destruction. One Gulf source described the Iranian position as unambiguous, saying Tehran made clear that any American strike on Iranian infrastructure would draw retaliation against Gulf energy facilities and other regional targets. The campaign illustrates how Iran is attempting to convert Gulf vulnerability into diplomatic leverage, presenting regional governments with the prospect that a renewed confrontation between Washington and Tehran could put the infrastructure their economies depend on directly at risk. Saudi Crown Prince Mohammed bin Salman subsequently spoke with Trump directly, urging him to hold off on military action, return to the negotiating table, pursue a ceasefire and seek a diplomatic resolution, according to the senior diplomat and Gulf sources. Another Gulf source said the warning was meant for every Gulf state but traveled primarily through Saudi Arabia and Qatar, both of which have rebuilt ties with Iran in recent years after a long period of regional rivalry. Qatar, Oman and Saudi Arabia have each urged Washington to resume talks with Tehran and prevent a fresh round of conflict, with Iran cautioning that further strikes could turn the region into what one Iranian official called a fireball. On August 2, Trump said he had agreed to call off a planned attack on Iran, provided a deal could be reached quickly. Concerns over wider escalation A Gulf source said Saudi Arabia believes additional escalation would only cause further destruction, explaining why Riyadh pushed Trump to give diplomacy more room to work. At the same time, Saudi officials made clear the kingdom would defend itself if directly threatened, with a second Gulf source saying Riyadh warned that any strike on Saudi territory would draw a military response of its own. Ali Shihabi, a Saudi analyst with ties to the royal court, said the kingdom’s assessment holds that further escalation is unlikely to produce the outcome Washington wants. He said Saudi officials believe a mix of proportionate military responses combined with sustained pressure on Iran around the Strait of Hormuz offers the most realistic route toward a workable diplomatic settlement. Iran’s clerical leadership has repeatedly called for the closure of US military bases across the Gulf and urged Gulf Arab states to stop sharing intelligence with Washington, which Tehran believes has enabled strikes against Iranian targets. Shihabi noted that memories of the September 2019 drone and missile strikes on Saudi Arabia’s Abqaiq and Khurais oil facilities still shape regional thinking, since that attack temporarily cut more than half the kingdom’s crude output and exposed how vulnerable Gulf energy infrastructure remains. A separate Iranian official reiterated that any damage inflicted on Iran would be met with far greater retaliation, again citing power grids and refineries among potential targets. From Tehran’s perspective, the senior Iranian official said, Trump now confronts two difficult options: escalate a conflict that risks engulfing the wider Gulf and disrupting global energy markets, or accept a negotiated settlement that falls short of the decisive win Washington has sought. The senior regional diplomat identified Washington’s reluctance to let Tehran claim any form of victory as one of the central obstacles blocking an agreement, noting that American officials want tangible proof they prevailed in the conflict.
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