Iran Rejects US Billions and Threatens Strait of Hormuz Shipping Routes
Iran has refused a US proposal to release billions of dollars in frozen assets in exchange for relinquishing control over the Strait of Hormuz, escalating tensions over this critical maritime passage. The US and Oman have been negotiating to resolve Iran's insistence on charging fees to ships passing through the strait, but Tehran has so far rejected all plans. The US offered to unfreeze part of $100 billion in Iranian funds held abroad, including $6 billion in Qatar, as leverage to end Iran's blockade and fee demands. However, Iran's military leaders responded with new threats to target any vessels not following their approved routes.
American envoys Jared Kushner and Steve Witkoff held urgent talks in Doha with Qatari mediators to prevent a shutdown of the strait, a vital artery for global oil and goods shipments. Iran insists the strait is under its control and demands up to $40 billion annually in fees for security services, a demand rejected by the US and Gulf neighbors. Oman proposed an alternative voluntary fund to pay for maritime services, but Iran opposed it since it excluded direct payments to Tehran. Gulf states also doubt Iran's capacity to manage the strait effectively.
The ongoing standoff has severely disrupted shipping traffic, with daily vessel passages dropping from over 100 before the war to just 43 recently, according to Kpler data. This decline threatens global supply chains and energy prices. Last week, Iran resumed attacks on ships after Oman established an alternative route without Tehran's consent, prompting US retaliatory strikes and a temporary ceasefire to resume talks. The situation remains tense as diplomatic efforts continue to find a resolution.
Summary: Iran has rejected a US offer to release billions of frozen funds in exchange for control over the Strait of Hormuz, threatening to disrupt vital shipping lanes. Despite US and Omani mediation, Iran insists on charging fees for passage and has escalated military threats, causing a sharp decline in maritime traffic and raising global energy concerns.
