Iran's Supreme National Security Council has announced that the Strait of Hormuz will remain closed until the United States "corrects its behaviour," issuing a broad set of demands that include ending all threats, lifting the naval blockade, withdrawing US forces, and removing sanctions. This escalation follows the collapse of a June ceasefire agreement, the Islamabad Memorandum, which failed to prevent Iran from targeting vessels using a new shipping route. The closure has severely impacted commercial traffic, and Iran appears to be strategically leveraging the situation to influence upcoming US midterm elections by potentially driving up energy prices. While Oman is engaged in mediation, any reopening of the strait ultimately depends on a political resolution between Iran and the United States, complicated by internal Iranian politics and hardliner pressure.

Iran's Supreme National Security Council has announced that the Strait of Hormuz will remain closed until the United States "corrects its behaviour," issuing a broad set of demands that include ending all threats, lifting the naval blockade, withdrawing US forces, and removing sanctions. This escalation follows the collapse of a June ceasefire agreement, the Islamabad Memorandum, which failed to prevent Iran from targeting vessels using a new shipping route. The closure has severely impacted commercial traffic, and Iran appears to be strategically leveraging the situation to influence upcoming US midterm elections by potentially driving up energy prices. While Oman is engaged in mediation, any reopening of the strait ultimately depends on a political resolution between Iran and the United States, complicated by internal Iranian politics and hardliner pressure.

Iran's Supreme National Security Council has announced that the Strait of Hormuz will remain closed until the United States "corrects its behaviour," issuing a broad set of demands that include ending all threats, lifting the naval blockade, withdrawing US forces, and removing sanctions. This escalation follows the collapse of a June ceasefire agreement, the Islamabad Memorandum, which failed to prevent Iran from targeting vessels using a new shipping route. The closure has severely impacted commercial traffic, and Iran appears to be strategically leveraging the situation to influence upcoming US midterm elections by potentially driving up energy prices. While Oman is engaged in mediation, any reopening of the strait ultimately depends on a political resolution between Iran and the United States, complicated by internal Iranian politics and hardliner pressure.

Iran's Supreme National Security Council declared yesterday that the Strait of Hormuz would remain shut until the United States "corrects its behaviour," a threat vague enough to reopen every question the two sides had appeared to settle in June. Mohammad Bagher Zolghadr, the council's secretary, spelt out what correction would mean in practice: an end to all threats against Tehran, a permanent conclusion to hostilities with Iran and its regional allies, the lifting of the American naval blockade on Iranian ports, withdrawal of US forces from the area, full compensation for war damage, the removal of sanctions and the unconditional release of frozen assets. It is a maximalist list, and it marks a considerable challenge for Washington, which had tied sanctions relief to a final nuclear settlement and made frozen funds conditional on Iran giving up its stock of highly enriched uranium.

The roots of this impasse lie in the collapse of the Islamabad Memorandum, the ceasefire brokered in June that was supposed to reopen the strait and suspend oil sanctions temporarily. Its language proved too vague to last. Washington tried to route shipping along a new southern corridor hugging Oman's coast, calculating that it could bypass Iranian waters altogether. Tehran felt it was an attempt to strip away its leverage and struck vessels using the route, prompting the Americans to reinstate their blockade and bringing the ceasefire down entirely. The consequences for commercial traffic have been stark: a strait that once carried some 130 ships a day now sees barely a dozen, many of them running dark with transponders switched off to avoid being targeted. Iran has kept up the pressure on shipping, most recently hitting a tanker belonging to the Emirati state oil company Adnoc.

Iran seems to be making a calculated bet. It believes that Washington is eager to end the standoff, but remains short of options that would actually force capitulation. A full-scale campaign would likely demand a ground war few in Washington want, while striking Iran's energy infrastructure risks a response that could send global energy markets into disarray. Iran has demonstrated that it could strike Gulf energy targets at will. With November's midterms approaching, a closed strait and the threat of higher energy prices give Iran a way to inflict damage that could hurt President Trump and the Republican Party at the ballot box. Washington is left weighing capitulation against an expensive escalation with no assurance of success. 

Oman, meanwhile, continues mediation, and Iranian officials, including Foreign Minister Abbas Araghchi, say Tehran and Muscat are close to agreement on a transit arrangement. However, a technical deal with Oman cannot reopen the strait on its own. Any reopening depends on Washington meeting Iran's broader demands, including compensation for what Tehran regards as American violations of the original memorandum. Without a clear political deal with the United States, an arrangement with Oman amounts to little more than words on paper.

Iran's own internal politics adds another layer of complication. President Masoud Pezeshkian, seen as relatively moderate, appears to judge the moment ripe for a deal, but he operates under considerable pressure from hardliners who believe Tehran conceded too readily in agreeing to the June memorandum and would rather prolong the talks to inflict maximum economic pain on Washington. Some analysts go further, suggesting the entire Iranian establishment, not merely its hardline wing, may be content to drag out negotiations, using talk of internal division or shifting American goalposts as a convenient cover for a strategy of further delay.

Zolghadr's demands probably describe Iran's ultimate ambitions rather than the actual terms it expects for an agreement to manage Hormuz. But Tehran has succeeded in muddying an already difficult negotiation and further roiling the global energy market.