Iran keeps Strait of Hormuz shut as Trump bets on economic pressure

Iran has doubled down on its blockade of the Strait of Hormuz, insisting the crucial oil artery will remain closed until the United States meets a sweeping set of demands that include an end to sanctions, the release of frozen assets and compensation for wartime damage.

The Islamic Revolutionary Guard Corps declared on Sunday that its forces would maintain control of the strait "until the enemy accepts all our conditions", describing the waterway as "a theatre of war" rather than a commercial route. The stance mirrors conditions laid out by Iran's Supreme National Security Council a day earlier, which also called for a halt to fighting on all fronts and the lifting of a US counter-blockade of Iranian ports.

Trump's waiting game

In an interview with Axios on Sunday, Trump described his approach as "low-keying it" and said the US was "only semi-negotiating" with Tehran. "We are just watching Iran with its huge inflation and the fact they have no money," he said. "It will work out. It's like a chess game."

"We are only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact they have no money."

Iranian Foreign Minister Abbas Araghchi confirmed that contact between the two sides remains indirect, telling reporters that Tehran was merely "exchanging messages" with Washington via intermediaries.

Parallel pressure in the Red Sea

The Hormuz blockade has been matched by a separate maritime campaign from Iran's Houthi allies in Yemen. On Sunday the rebels declared a blockade of Saudi ports on the Red Sea, the kingdom's only other oil export route, and claimed a missile and drone strike on a Saudi oil facility. Riyadh said it had extinguished a fire at the site.

A medical source in government-held Mokha reported three civilians and eight military personnel killed, with 32 wounded, all civilian casualties resulting from Houthi strikes on the Yemeni city's port. The escalation threatens to unravel a UN-backed 2022 accord that had paused the Yemen conflict.

Gulf security realignment

The crisis has accelerated a shift in regional defence architecture. On Friday Saudi Arabia signed a joint defence agreement with Turkey and Pakistan that includes a NATO-style collective defence clause. Turkish Foreign Minister Hakan Fidan said he expected Egypt to join, describing it as a "natural partner on all issues" and noting the three countries already "act toward one another as if we were alliance members". Both Ankara and Islamabad insisted the pact was not directed at any specific country but aimed at strengthening collective deterrence.

Meanwhile Oman, which has mediated past talks, said negotiations over future administration of the strait were "proceeding" and warned against actions that could jeopardise progress. The June memorandum had envisioned Tehran and Muscat working out arrangements with other Gulf states "in line with applicable international law", a framework that generally prohibits tolls on international waterways.

With tanker traffic through Hormuz already down sharply and at least one vessel struck on Saturday, according to the UAE, the standoff shows no sign of breaking. The June agreement had also envisaged a $300 billion reconstruction fund for Iran, a figure that now looks distant as both sides dig in.