Escalating Tensions in the Strait of Hormuz: Iran Strikes Commercial Vessels Amidst Failed Diplomatic Framework

For two months, a discreet arrangement with the U.S. Navy allowed commercial tankers to navigate the perilous Strait of Hormuz by disabling their transponders to avoid detection by Iran. During this period, the U.S. military provided air cover, while naval officers used radio guidance to direct vessels toward Oman’s coast, away from Iranian shores. This strategy facilitated a significant increase in maritime traffic between May and June during a tentative ceasefire.

However, the stability provided by that arrangement collapsed following a framework agreement signed by President Trump last month. Critics argue the deal’s vague terminology effectively granted Iran official authority over the strait.

President Trump previously celebrated the June 14 agreement as a victory for global commerce, stating on social media, “Ships of the World, start your engines. Let the oil flow!”

Conversely, observers contend the agreement formalized a reality Iranian officials have asserted throughout the conflict: their control over the strategic waterway.

Iranian missile and drone strikes on commercial vessels effectively paralyzed the strait shortly after the commencement of hostilities involving the United States and Israel. Following an informal ceasefire in early April, some tankers attempted to mitigate risk by utilizing a southern route further from the Iranian coast.

By striking in that southern sector last week, Iran appears to be attempting to force shipping into its territorial waters on the northern side of the strait, potentially to justify the imposition of tolls or fees.

The U.S. military reported that Iranian units attacked three ships on Tuesday along the southern route. In response, President Trump ordered airstrikes against Iranian targets. Tensions escalated further this weekend after Iran’s Navy announced it had fired upon another vessel and declared the waterway closed “until the end of U.S. interference in the region.”

U.S. Central Command confirmed it struck approximately 140 Iranian military targets, bringing the total to 310 American strikes over the past week.

With President Trump suggesting the June agreement is now defunct, global energy prices are surging alongside fears of a full-scale war. Before the current conflict, one-fifth of the world’s oil and liquefied natural gas passed through this vital strait.

Analysts suggest the current crisis was a predictable outcome of the June agreement.

Seeking to alleviate domestic pressure from high gas prices and inflation, Mr. Trump sought to reopen the strait. As part of the deal, he agreed to end the U.S. military blockade of Iranian ports and allow Tehran to resume oil sales for 60 days to facilitate the reopening.

The June memorandum of understanding also served as a precursor to broader negotiations intended to establish a long-term peace plan.

While the ceasefire was welcomed by many international officials, critics warned of dangerous ambiguities in the text—specifically a clause stating Iran would “make arrangements using its best efforts for the safe passage of commercial vessels” through the Strait of Hormuz.

“It is hardly surprising that Iran interprets this as an explicit grant of enduring control over passage through Hormuz,” said Michael Ratney, a retired U.S. ambassador to Saudi Arabia.

“Iran’s control provides them immense leverage,” Ratney added, noting their willingness to risk a total collapse of the ceasefire to maintain that advantage.

During a June 18 press conference, Vice President JD Vance asserted that U.S. demands regarding the strait would be integrated into any future agreements, stating, “We have all the cards.”

The competition for control creates a significant dilemma for shipping companies: navigating the southern corridor near Oman at the risk of Iranian attack, or utilizing the northern Iranian corridor and paying high fees that reinforce Tehran’s authority.

A Fraught Document

For nearly six decades, commercial vessels have navigated the Strait of Hormuz following routes established by the United Nations.

The Iranian government supported the 1968 route and historically did not attempt to control it, despite it passing through Iranian territorial waters.

Following the 1979 Islamic Revolution, Iranian leaders claimed they were not bound by the U.N. agreement, though they only occasionally challenged shipping in the region over the following years.

This dynamic shifted following U.S. and Israeli strikes on Iran on February 28.

The Iranian military immediately began striking commercial vessels and deploying mines, halting traffic. Safe passage along the Iranian coast was effectively only granted to those willing to pay substantial sums.

Critics argue that the June agreement conceded this new status quo. At the demand of Iranian negotiators, the 14-point document acknowledges Iranian influence in the strait.

While it prohibits tolls for a 60-day period during ongoing negotiations, the memorandum lacks an ironclad guarantee of safe passage throughout the entire strait. (Notably, President Trump has suggested the U.S. could implement its own tolls.)

Diplomatic experts suggest the final language formally ceded central management to Iran: “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 the applicable international law and the sovereign rights of coastal states of the Strait of Hormuz.”

Despite Trump’s initial praise of the agreement as a return to free navigation, Iranian officials soon used it to justify dictating shipping routes along their coastline.

Dennis Ross, a former long-time Middle East negotiator, noted that 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,” Ross said.

Hussein Ibish, a scholar at the Arab Gulf States Institute, remarked that while international law moves in one direction, the Memorandum of Understanding moves in the opposite.

In response to queries, the White House referred to a recent briefing. An American official involved in negotiations noted that Iran was aware ships were using the route near Oman—despite having targeted them with drones—suggesting that Iran’s “best efforts” for safe passage were undermined by their own actions.

Naval Guidance

Iranian negotiators appeared to recognize their leverage during the summer negotiations.

On May 4, the U.S. military launched “Project Freedom” to reopen the strait by escorting stranded commercial vessels.

President Trump halted the operation within 48 hours after the Saudi Arabian crown prince declined to allow the U.S. to use Saudi airspace for the mission.

The Pentagon subsequently pivoted to a more subtle approach involving radio guidance.

According to Capt. Tim Hawkins of U.S. Central Command, U.S. forces have provided route guidance along Oman to more than 800 commercial vessels carrying 400 million barrels of crude oil since early May.

These ships follow routes designated by the International Maritime Organization (IMO), which established the path in consultation with Oman to facilitate the movement of roughly 600 stranded vessels.

The informal ceasefire transitioned into a formal one with the June agreement. Between June 20 and June 27, nearly 400 ships transited the strait—the highest weekly volume since the conflict began.

However, following the recent Iranian attacks, only 22 ships transited the waterway on Thursday.

Currently, over a dozen U.S. Navy warships, including two aircraft carriers, and numerous surveillance aircraft are operating in the Arabian Sea. The U.S. is also utilizing autonomous sea craft for mine-detection missions in the strait.

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

He added, however, that there is “no guarantee” that American military guidance can fully protect commercial vessels.

The Iranian Passage

During the conflict’s peak, some operators chose to sail closer to Iran, relying on Iranian military guarantees of safe passage in exchange for fees of up to $2 million per ship.

Iran has asserted that all transiting ships must follow a specific route and seek permission from the Persian Gulf Strait Authority, a body Tehran established in May.

While Iran previously claimed these fees were for safety and environmental services, experts suggest this is a maneuver to appear compliant with the United Nations Convention on the Law of the Sea, which allows such fees under specific conditions.

In reality, many argue Iran is establishing de facto tolls, which are prohibited by the convention. Iran has signed but not ratified the convention, and the United States has also never ratified it.

The United States and other nations rejected Iran’s demand for the northern route, leading the U.S. to establish the southern route near Oman in May.

After the agreement was signed last month, President Trump described the route as “totally safe, secure, and pristine.”

However, as the U.S. and Iran compete for leverage through military means, risks to shipping companies are likely to rise, according to Dan Alamariu, chief geopolitical strategist at Alpine Macro.

While Iran has faced economic hardship, it may be prepared to endure more. President Trump recently reinstated a U.S. ban on Iranian oil sales that had been temporarily waived, though he has not yet reimposed a naval blockade on Iranian ports.

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

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