Iran has threatened to target U.S. energy assets in the Persian Gulf if the United States launches further strikes, escalating tensions in the strategically vital waterway. Iranian Parliament Speaker Mohammad Bagher Ghalibaf stated that "American oil and gas companies across these waters and facilities share that exposure" to Iranian retaliation.
"Strike our assets and you get struck," Ghalibaf added, referencing past actions. Mohsen Rezaei, Iran’s Supreme National Security Council Secretary, announced plans for a new "exclusion zone" in the Persian Gulf and Gulf of Oman. This zone would extend through the Strait of Hormuz, and vessels entering it would face Iranian sanctions.
The recent escalation began Saturday with an attack by Iran's Islamic Revolutionary Guard Corps (IRGC) on U.S. warships. The U.S. responded by striking three Iranian oil tankers, including one near Kharg Island, Iran's primary oil export hub. These exchanges have ended a brief pause in hostilities, contributing to oil prices reaching near six-week highs on Monday as commercial traffic through the Strait of Hormuz, a key route for global energy shipments, has significantly decreased.
Renewed Hostilities and Stalled Negotiations
The current cycle of attacks followed an incident in late June when a commercial vessel was struck in the Strait. The U.S. retaliated with strikes on Iranian missile storage and radar sites, prompting Iranian responses against U.S. military installations. Intermittent exchanges continued through July and resumed in late August.
The U.S. is reportedly investigating a strike last week on a compound in southern Iran where a wedding was taking place, which Iranian state media reported resulted in at least five deaths and over 60 wounded.
Formal negotiations between the U.S. and Iran remain at a standstill. The Memorandum of Understanding's (MOU) 60-day deadline expired on August 17 without a new agreement. Despite some Iranian officials, including President Masoud Pezeshkian, expressing a willingness to resume talks, significant disagreements persist. The U.S. demands restrictions on Iran's nuclear program and guarantees for commercial passage through the Strait of Hormuz. Iran seeks broad sanctions relief, access to frozen assets, an end to the U.S. naval blockade of its ports, and a role in managing the Strait.
Hossein Taeb, head of the IRGC’s Basij paramilitary force, stated Monday that "The Iranian nation accepts neither threats nor coercion, nor negotiations whose outcome would be the weakening of the country’s rights." He emphasized that negotiations should secure national rights, not lead to surrender.
President Trump faces domestic pressure to lower gas prices and avoid prolonged conflict ahead of the midterm elections, while also appearing determined to secure a demonstrable victory. "I'm not trying to force Iran to the bargaining table," Trump posted on Truth Social last week. "I like our position now much better, with almost total control of the Hormuz Strait, and their economy totally collapsing. They are just playing out the inevitable."
Iran's Economic Challenges
Iran is reportedly implementing new tactics, including the planned restricted zone, to increase economic pressure and push for an end to the U.S. naval blockade. Meanwhile, Iran and Oman have agreed on a temporary shipping corridor through the Strait of Hormuz, with ongoing discussions about its future management, which could formalize Iran's involvement in controlling the waterway despite U.S. opposition.
However, Ghalibaf acknowledged Iran's economic difficulties, including high inflation, a depreciating rial, and significant unemployment. The U.S. economic pressure campaign, encompassing sanctions and the threat of secondary sanctions on trading partners, has strained Tehran's economy. The International Monetary Fund estimates Iran's inflation rate is approaching 70%.