Iran announces ‘new rules’ for Strait of Hormuz as US refuses to lift naval blockade

Earlier this week, Iran offered to reopen the Strait of Hormuz — the maritime chokepoint accounting for a fifth of global energy trade — if US lifted its blockade, while proposing that nuclear talks be deferred to a later phase, but Washington rejected the proposal.

Vessels paying tolls to Iran

Currently, ships transiting the Strait are being targeted by IRGC’s fast attack boats, forcing them to navigate through Iran’s territorial waters and pay tolls. A Lloyd’s List report last month said that ships were navigating around Iran’s Larak Island and countries were paying as much as $2 million for each vessel to pass through the Strait safely.

Earlier, Tehran demanded US recognition of Iran’s sovereignty over the Strait and proposed splitting tolls with Oman, arguing that the chokepoint lies in the territorial waters of Iran and Oman.

US Naval blockade

In reponse, while announcing the US’ naval blockade in April, President Donald Trump said that the Navy would “interdict every vessel” paying “an illegal toll.” The US President also issued a “shoot and kill” order against small Iranian boats that deploy mines to choke traffic through the Strait, forcing ships to navigate around Larak.

The US blockade of Iran ports is aimed at building pressure on Tehran as crude exports from the Strait are the lifeline for its cash-strapped economy. Trump told Axios on Thursday that the blockade was “somewhat more effective than the bombing.”

Crude prices breach $120 mark

The fragile ceasefire between Washington and Tehran remains in effect, with Iran’s nuclear programme remaining the key sticking point. Global energy markets have taken a beatdown, with prices constantly rising due to the oil supply disruptions. Brent Crude index briefly soared above $122 a barrel late Wednesday. Earlier, it had breached the $125 per barrel mark.

The Trump administration has shown its eagerness to continue the blockade by skirting the May 1 legal deadline to gain Congressional approval to continue the war. The White House has argued that the deadline cannot be applied for the war as hostilities with Iran have “terminated,” the Associated Press reported.