Iran International
Iran is doubling down on control of the Strait of Hormuz, with some in Tehran now arguing the strategic leverage it provides is more valuable than a nuclear weapon.
Tehran’s drive to turn that control into lasting economic and political leverage—through shipping routes, mine clearance and potentially revenues from passing vessels—is emerging as a major obstacle to extending its fragile memorandum with the United States, which expires Sunday.
Washington, meanwhile, increasingly claims it has broken Iran’s control of Hormuz.
The June 18 memorandum is formally due to expire on August 16. President Donald Trump pronounced it over after Iran attacked three ships in the Strait of Hormuz, ordering more strikes and the resumption of the US maritime blockade.
Neither side, however, has formally abandoned diplomacy. If no extension is announced before Sunday, the current state of neither war nor peace could continue. An explicit declaration that the arrangement has ended could increase the risk of renewed attacks.
‘More valuable than a nuke’
Pressure against concessions over the strait is also growing inside Tehran.
Parliament’s National Security and Foreign Policy Commission this week unanimously approved the broad outlines of legislation that would tighten Iran’s control over Hormuz.
The bill includes provisions for inspecting vessels in Iranian territorial waters, banning the passage of assets, equipment and vessels belonging to the United States, Israel and other countries Tehran deems hostile, and charging ships for maritime services.
If enacted, the legislation could constrain Tehran’s room for compromise, much as legislation passed during Hassan Rouhani’s presidency required his government to increase uranium enrichment and suspend implementation of the Additional Protocol unless banking and oil sanctions were lifted.
Alireza Salimi, a member of parliament’s presiding board, told the ISNA news agency Thursday that “the Strait of Hormuz is currently more valuable to Iran than an atomic bomb,” describing it as leverage for lifting sanctions and securing compensation for wartime losses.
Demands put talks in doubt
The tougher approach was also reflected in demands laid out shortly before his departure by Mohammad Bagher Zolghadr, the former secretary of the Supreme National Security Council.
Zolghadr said reopening the strait would require an end to attacks on Iran and its allies, the lifting of the blockade, the withdrawal of US forces from around Iran, sanctions relief, the release of frozen Iranian assets and compensation for damage caused by the wars.
It remains unclear whether those demands represented his personal position or that of the SNSC, and whether his successor, Mohsen Rezaei, will pursue the same approach.
Rezaei’s appointment this week, along with other changes at the top of Iran’s security establishment, has been welcomed by hardline opponents of the government’s approach to negotiations.
Former diplomat Kourosh Ahmadi wrote in the Shargh newspaper that if Tehran insisted on the conditions outlined by Zolghadr, “it is highly unlikely that there will be any serious negotiations between Tehran and Washington at all.”
Both sides claim control
The dispute is unfolding as Tehran and Washington offer directly competing accounts of who actually controls Hormuz.
Trump said Wednesday that the United States had complete control of the waterway and that the maritime blockade had deprived Iran of the ability to act.
The spokesman for Iran’s Khatam al-Anbiya Central Headquarters, the country’s wartime command center, rejected that assertion Thursday, saying the strait remained under Iranian control and that no vessel could pass safely without authorization from Iran’s armed forces.
Shipping-monitoring data show traffic remains a fraction of pre-war levels. Around 10 to 12 vessels have been crossing the strait daily in recent days, compared with roughly 130 to 140 before the war, with most currently using a route designated by Iran.
Tehran has also stressed that an agreement with Oman over shipping routes would not by itself be sufficient to reopen the strait.
Ali Gholhaki, a political activist close to parliament speaker and senior Islamabad negotiator Mohammad-Bagher Ghalibaf, said Iranian decision-makers currently had no intention of reopening the waterway and had blocked an agreement with Oman because of what they viewed as Muscat’s alignment with Washington.
Tehran and Muscat at odds
The disagreement with Oman offers perhaps the clearest illustration of what Tehran now wants from its control of Hormuz.
Iran has pushed for control over shipping routes and mine clearance and for mandatory payments from vessels using the waterway. Oman has instead favored a joint fund supported by voluntary contributions from governments and companies benefiting from shipping.
Few in Tehran expect Muscat to accept Iran’s terms. Ahad Azadikhah, a lawmaker aligned with Ghalibaf, recently told Khabar Online that if Oman did so, the Islamic Republic would have achieved “the victory of all victories.”
The dispute means Hormuz is increasingly intertwined with the fate of the wider Tehran-Washington dialogue. As Iran seeks to turn control of the strait into leverage over sanctions, compensation and any broader settlement, Washington may increasingly see that same leverage as something that must be neutralized before a deal can be reached.
Davoud Rangi, vice chair of the chamber’s Import Management Committee, said Iran receives around 400 to 500 ships carrying essential goods each year, making any attempt to replace maritime imports with overland transport impractical.
“Mobilizing this number of trucks is far-fetched for us, and even if they were mobilized, transportation costs would rise sharply,” Rangi told Eghtesad News on Thursday.
He said Iranian authorities should not count on land corridors as a substitute for the country’s southern ports because neighboring states could restrict border traffic at short notice and the routes lack the capacity to handle the necessary volume of goods.
Neighboring governments could close a border “with a single order,” he said, adding that the justification would not necessarily have to be political or military and could instead involve quarantine or veterinary restrictions of the kind Iran has faced before.
Rangi said land routes through countries such as Turkey or Pakistan might accommodate around one million tons of cargo annually, but could not come close to replacing Iran’s maritime trade.
“At a small scale, perhaps one million tons of cargo a year could be brought in through Turkey or Pakistan, but 23 million tons, or even half of that, is simply inconceivable,” he said.
The warning comes as Iran’s southern ports remain under pressure from the war. IRGC attacks on commercial vessels in the Strait of Hormuz have escalated regional tensions in recent weeks, while the United States intensified economic pressure on Tehran through a maritime blockade.
The outlook for negotiations between Tehran and Washington over reopening the Strait of Hormuz remains uncertain, with concerns also growing over a possible expansion of the regional conflict.
Negotiations seen as only viable way out
Rangi said negotiations and a reduction in military tensions were the only practical route to lifting the blockade and restoring the regular flow of essential goods into Iran.
Attempting to rely instead on overland corridors would impose heavy losses on importers, he said, because of both limited capacity and sharply higher transportation costs.
The blockade is also complicating Iranian exports, particularly containerized trade.
Rangi said vessels carrying bulk commodities could more easily be allowed to pass, while container ships pose a greater problem because individual containers cannot practically be separated from the rest of a ship’s cargo.
“We are extremely vulnerable on the southern route, in Bandar Abbas and Chabahar, but along the northern and western corridors the situation is much better for exports than for imports,” he said.
Iran’s economy has already come under mounting pressure in recent months from the continuing conflict, tighter sanctions and a sharp decline in the value of the rial.
Surging inflation and falling purchasing power have further strained household finances, making essential goods increasingly difficult to afford for a large part of the population.
The petrol was scheduled to go on sale from early Thursday at 872,000 rials ($0.47) per liter, Ahmad Salarifar, the manager of the National Iranian Oil Products Distribution Company in Kerman, said.
The suspension, he said, followed a conversation between the provincial governor and national officials and was ordered so that a program on fuel consumption management and anti-smuggling measures could be examined further. Petrol will continue to be sold at existing rates until further notice, Salarifar said.
Monthly salaries for many Iranians are commonly put at around 200 million to 250 million rials ($108 to $134). Filling a typical 50-liter tank at the proposed price of 872,000 rials per litre would have cost 43.6 million rials ($23), a sum equivalent to roughly one-fifth of a monthly wage at the upper end of that range and more than 17 times the cost at the current 50,000-rial ($0.027) station-card rate.
Iran introduced a three-tier petrol pricing system in December 2025. Private cars initially received 60 litres at 15,000 rials ($0.008) and 100 litres at 30,000 rials ($0.016) each month, with any extra volume charged at 50,000 rials on a station card. The second subsidised tranche was later cut, leaving a total national quota of 110 litres while the two lower prices remained unchanged.
Plan halted hours before launch
Provincial authorities have not said how long the review will last or whether the higher price will be introduced later.
The suspension came only hours after Ali Asghar Zakeri-Harandi, the deputy governor of Kerman for civil affairs, announced that 204 filling stations in the province were ready to sell petrol at the “full refinery cost” rate.
The plan, he said, would take effect from early Thursday under national decisions by the country’s fuel headquarters. Neither the Oil Ministry nor the government has published details of the decision or how the 872,000-rial figure was calculated.
Higher rate far exceeds current charges
The Kerman announcement came less than a month after government spokeswoman Fatemeh Mohajerani said the government had no plan to change petrol prices. She repeated on July 28 that no final decision had been taken on the station-card rate and that any change would be announced officially.
A manager of a filling station in Kerman told Iran International that the provincial oil distribution office called stations on Wednesday evening to say the higher-priced petrol would start from early Thursday at selected sites.
A second call later the same night said the plan had been cancelled following talks with the regional oil company. The manager said the reversal was linked to concern over possible public reaction, adding that security forces normally present in the province had been redeployed elsewhere and that the higher price was still expected to be introduced soon.
Sudden fuel price increases have triggered major unrest in the past. In November 2019, an overnight rise of 50 percent on the subsidized quota and up to 300 percent on volumes above it sparked protests across more than 100 cities. Rights groups documented hundreds of deaths in the subsequent crackdown, and a near-total internet shutdown was imposed for several days.
Provincial officials have not clarified whether the Kerman plan was a local pilot or part of a wider national test. Its abrupt suspension before launch has left unanswered questions about the legal basis, the method used to set the price, and the government’s longer-term approach to reducing fuel subsidies.
