Key Takeaways
Iran’s current public position is that the Strait of Hormuz will remain closed until the United States meets six demands.
Iran is negotiating separately with Oman over the management of the strait.
Oil prices are up over the uncertainty of the strait’s reopening.
Iran’s six demands include reparations for damages, removal of the U.S. blockade of Iranian ports and its naval and air units around Iran, lifting of sanctions, and unfreezing Iranian assets.
Saudi Arabia signed a defense agreement with Turkey and Pakistan, and is open to other countries that are willing to uphold its principles and resolve differences through peaceful means.
Shortly after the agreement was signed, Iran-aligned Houthis attacked a refinery in Saudi Arabia and ports on the Red Sea.
Oil prices are up due to uncertainty about the reopening of the Strait of Hormuz. Brent crude oil, the international benchmark, is hovering around $85 a barrel as ship traffic through the waterway remains at extremely low levels. Tensions between Iran and the U.S. remain high, as Iran threatened to keep the Strait of Hormuz closed until the United States agrees to six demands. According to President Trump, the United States is “low-keying” its approach to negotiations with Iran, suggesting that economic pressure on Iran may be taking hold. The Iranian authorities, however, believe they can withstand greater economic pain than the United States can. Saudi Arabia, Turkey, and Pakistan signed a defense agreement, deepening ties among the world’s three largest Islamic powers. Two days later, in retaliation, Yemen’s Iran-aligned Houthis attacked Saudi Aramco’s Jazan refinery.
Iran and Oman are close to a final deal defining new shipping lanes through the Strait of Hormuz, but Iran will reportedly not reopen the strait until the United States agrees to the six conditions, including compensation and an end to sanctions and military threats. Arrangements for ships transiting the strait were “progressing smoothly and constructively” between Iran and Oman, with an agreement reached on a shipping route map, but some technical issues on a joint statement still need to be resolved. The agreement includes mechanisms for safe navigation, environmental protection, maritime services and combating crime, with fees collected for those services.
Iran’s Demands on the United States
Iran wants the United States to pay compensation for damage it caused in its attacks on Iran as well as ending further U.S. threats against Iran; halt aggression toward Iran and its Lebanese, Palestinian, Yemeni and Iraqi allies; remove a U.S. naval blockade in the Gulf and withdrawal of its naval and air forces from around Iran; lift sanctions on Iran; and release frozen Iranian assets. According to the United States, it will only lift the blockade of Iranian ports when a deal is announced to restore commercial shipping without impediments. Iran’s Islamic Revolutionary Guard Corps said that reopening the Strait of Hormuz depended on the United States accepting conditions that were separate from negotiations between Iran and Oman.
While some of these issues appeared in earlier proposals, the June interim ceasefire memorandum treated them as part of a reciprocal and phased process. The United States and Iran signed a Memorandum of Understanding on June 17, which outlined commitments aimed at ensuring the full, toll-free reopening of the Strait as part of the terms of an extended 60-day ceasefire to allow time for technical talks. The ceasefire was short-lived, and since the resumption of the Iran war, an average of 13 vessels per day are crossing the Strait, down from the 138 that typically passed through the waterway in a 24-hour period before the Iran conflict.
In response to Iran’s demands, on August 10, President Trump demanded that Iran provide financial compensation for the Americans who have been killed or wounded during the conflict, as well as to all of the families of the Iranian protestors that the regime has killed over the course of its existence. Additionally, President Trump stated that Iran should also be held liable for the deaths and destruction caused by Iranian-backed proxies in Syria, Yemen, Lebanon, and Gaza, with an emphasis placed on Iran shouldering the cost of the overall regional damages it has caused since 1979.
Iran named former Revolutionary Guards commander Mohsen Rezaei, who supports Iran having control over the Strait of Hormuz, to take over as second-in-command of the body that coordinates the country’s security and foreign policy. He will be the new secretary of the Supreme National Security Council.
Houthis Attack a Saudi Refinery
The Houthis used a drone to target a refinery in Jazan, which processes 400,000 barrels of crude oil per day in southwestern Saudi Arabia. According to the Saudi energy ministry, the Jazan refinery fire was extinguished with no injuries. The Houthis had also hit Yanbu on the Red Sea and carried out missile and drone strikes on the Yemeni Red Sea port city of Mocha, causing severe damage to the port’s infrastructure. The port, controlled by the Aden-based government, is close to the strategic Bab el-Mandeb strait, which links the southern Red Sea with the Gulf of Aden and the Indian Ocean, and which Saudi Arabia has been using as an alternative route to the Strait of Hormuz.
Conclusion
Iran has given the United States six demands for reopening the Strait of Hormuz, separate from the deal it is making with Oman to manage shipping routes through the strait. The six demands include reparations for damages, removal of the U.S. blockade of Iranian ports and its naval and air units around Iran, lifting of sanctions, and unfreezing Iranian assets. Iran views these demands as part of the ceasefire agreed in mid-June, while the United States sees some of them as part of a phased, reciprocal process. Fighting continues with Iran-aligned Houthis attacking a refinery in Saudi Arabia and ports on the Red Sea. Saudi Arabia signed a defense agreement with Turkey and Pakistan and is open to other countries willing to uphold its principles and resolve differences through peaceful means.
