Trump’s Iran Accord Cedes Control of Hormuz Strait, Triggering Renewed Shipping Crisis

For two months, under a discreet arrangement with the U.S. Navy, commercial tankers disabled their transponders to evade Iranian detection while transiting the volatile Strait of Hormuz to transport oil and gas to global markets.

The military provided limited air cover against potential Iranian attacks, while naval officers directed vessels via radio to stay close to Oman’s coastline, opposite Iran’s shore. This tactic facilitated a steady rise in traffic through the strait from May to June, coinciding with a tentative cease-fire.

However, a framework agreement President Trump signed with Iran last month precipitated the collapse of that effort. Critics argue the deal’s language granted Iran official authority over the strait and contained critical ambiguities.

Mr. Trump hailed the June 14 accord as the reopening of the waterway. “Ships of the World, start your engines,” he posted on social media. “Let the oil flow!”

Critics contend the agreement merely formalized a reality Iranian officials had enforced throughout the conflict: Tehran now controls the strait.

Iranian missile and drone strikes on commercial vessels effectively shut down the strait shortly after the U.S. and Israel initiated hostilities. Weeks after the U.S. and Iran entered an informal cease-fire in early April, some tankers began using a southern route farther from the Iranian coast.

By striking in that southern zone last week, Iran attempted to compel ships into the northern corridor—through Iranian territorial waters—where Tehran can demand tolls or fees.

Iranian forces attacked three ships along the southern route on Tuesday, the U.S. military reported. Mr. Trump responded by ordering airstrikes inside Iran. Tensions escalated further when Iran’s Navy announced it had fired on another vessel and was closing the waterway “until the end of U.S. interference in the region.”

U.S. Central Command said it struck roughly 140 Iranian military targets in retaliation, bringing the total to 310 American strikes over the past week.

With Mr. Trump declaring the June agreement “over,” global energy prices are surging again alongside fears of a return to full-scale war. Before the conflict, a fifth of the world’s oil and liquefied natural gas transited the strait from Middle Eastern producers.

The latest crisis was an entirely predictable consequence of the June agreement, former American officials and analysts say.

Facing political pressure over high fuel prices and inflation, Mr. Trump was keen to reopen the strait and ease strain on the global economy. Among other concessions, he agreed to lift a U.S. military blockade of Iranian ports and permit Tehran to resume oil sales for 60 days in exchange for reopening the waterway.

The June memorandum of understanding also launched further negotiations aimed at a broader, more durable peace plan.

While many U.S. and foreign officials welcomed the cease-fire, critics warned the agreement was dangerously vague—particularly a clause stating Iran would “make arrangements using its best efforts for the safe passage of commercial vessels” through the Strait of Hormuz.

“No one should be surprised that Iran views that as explicitly giving them an enduring role controlling passage through Hormuz,” said Michael Ratney, a retired career diplomat and former U.S. ambassador to Saudi Arabia.

“Iran’s control obviously gives them powerful leverage,” he added, “and they appear willing to risk a resumption of conflict, perhaps even a collapse of the cease-fire, to maintain that leverage.”

At a June 18 news conference, Vice President JD Vance insisted Mr. Trump’s demands regarding the strait would be enshrined in a future deal. “We have all the cards,” he said.

The struggle for control of the strait presents a dilemma for shipping companies: transit the southern corridor near Oman and risk Iranian attack, or take the northern Iranian corridor, pay high fees, and legitimize Tehran’s claims of authority.

A Fraught Document

For nearly 60 years, commercial ships traversed the Strait of Hormuz along a route established by the United Nations.

Iran supported the route’s creation in 1968 and did not attempt to control it, even though it passed through Iranian territorial waters.

The leaders of the 1979 Islamic Revolution declared they were not bound by that U.N. agreement, though Tehran only occasionally challenged shipping in the strait over subsequent decades.

That changed after U.S. and Israeli forces attacked Iran on February 28.

Iran’s military swiftly began striking commercial ships and laying mines, halting traffic. Only vessels willing to pay substantial sums to Iran were granted safe passage along its coast.

Critics argue Mr. Trump conceded this new status quo in the June agreement. At Iranian negotiators’ insistence, the 14-point document acknowledges Iran’s authority in the strait.

It prohibits tolls or fees, but only for 60 days while negotiations continue. (Mr. Trump has suggested the U.S. could impose its own tolls.) The memorandum also lacks an ironclad guarantee that ships may safely sail any portion of the strait.

Iranian officials and diplomatic experts say the final clause formally ceded Iran a central role in managing the waterway: “The Islamic Republic of Iran will conduct dialogue with the Sultanate of Oman to define the future administration and maritime services in the Strait of Hormuz, in discussion with other Persian Gulf littoral states, in line with applicable international law and the sovereign rights of coastal states of the Strait of Hormuz.”

At the time, Mr. Trump praised the agreement as a return to free navigation. Iranian officials soon cited it as grounds for dictating where ships must sail—specifically, along a route near Iran’s coastline.

Dennis Ross, a longtime Middle East negotiator for presidents of both parties, said Iran’s interpretation was clear.

“You were opening the strait—but only on the condition that Iran was completely in control and that any other routes are not acceptable,” Mr. Ross said.

Hussein Ibish, a scholar at the Arab Gulf States Institute, said “all of international law goes in one direction, and the M.O.U. goes in the other.”

Asked for comment, the White House referred to a background briefing arranged for reporters on Friday. A U.S. official involved in the negotiations said Iran knew during talks that ships were using the Oman coastal route and had even fired drones at some of them. Therefore, the official argued, Iran’s pledge of “best efforts” for safe passage implicitly committed it not to attack that corridor.

Naval Guidance

Iranian negotiators recognized their leverage over the Americans during talks in early summer.

On May 4, the U.S. military launched Operation Project Freedom to begin reopening the strait by escorting stranded commercial ships.

Mr. Trump abandoned the effort in under 48 hours after Saudi Arabia’s crown prince, fearing Iranian retaliation, refused to allow the use of Saudi airspace.

The Pentagon then pursued a subtler approach centered on radio guidance.

Since early May, U.S. forces have provided routing guidance along Oman’s coast to more than 800 commercial vessels carrying 400 million barrels of crude oil, said Capt. Tim Hawkins, a spokesman for U.S. Central Command.

The ships followed a route designated by the International Maritime Organization, a London-based U.N. agency that regulates global shipping. The organization established the route in consultation with Oman to evacuate roughly 600 long-stranded vessels.

The informal cease-fire solidified into a formal one with the June agreement. In the seven days starting June 20, nearly 400 ships transited the strait, according to maritime data firm Kpler—the highest weekly volume since the war began.

But on Thursday, following Iran’s attacks, just 22 ships passed through.

More than a dozen U.S. Navy warships, including two aircraft carriers, and scores of carrier- and land-based attack and surveillance aircraft remain in the broader Arabian Sea. The U.S. military is also conducting mine-detection missions in the strait using autonomous sea craft.

“U.S. forces have held Iran accountable for its unwarranted aggression toward commercial shipping while still facilitating passage through the strait,” Captain Hawkins said.

However, he added, there is “no guarantee” that American military guidance will protect commercial ships transiting the waterway.

The Iranian Passage

At the height of the war, some shipping operators chose to sail closer to Iran, relying on the Iranian military’s guarantee of safe passage. Iran demanded up to $2 million per ship.

Iran has declared that any vessel transiting the strait must follow that northern route and obtain permission from the Persian Gulf Strait Authority, a body Tehran created in May.

Until it paused the practice under the June cease-fire terms, Iran insisted the fees covered safety and environmental services. Some experts call this a contrived attempt to appear compliant with the U.N. Convention on the Law of the Sea, which permits such fees under specific conditions.

In reality, they say, Iran is establishing de facto tolls, which the convention prohibits. Iran signed but never ratified the convention, so it argues the terms do not apply. The United States has also never ratified the convention.

The U.S. and several other countries rejected Iran’s demand that ships use the northern route. In response, the U.S. military established the southern corridor along Oman’s coast in May.

After signing the agreement last month, Mr. Trump declared that route “totally safe, secure, and pristine.”

But as Iran and the United States vie for leverage primarily through military means, risks to shipping companies could increase, said Dan Alamariu, chief geopolitical strategist at investment research firm Alpine Macro.

Iran has absorbed economic pain but may tolerate more. Mr. Trump last week reinstated a U.S. ban on Iranian oil sales that he had temporarily waived. However, he has not yet reimposed a naval blockade of Iran’s ports.

Mr. Alamariu said, “The question is which cracks first: the Iranian economy or the global economy?”

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