Hopes of an agreement to reopen the Strait of Hormuz weakened on Monday after United States President Donald Trump responded to Iran's conditions for a peace deal by demanding compensation from Tehran for people killed in wars, attacks and protests.
Trump's demand, which had not previously been raised, came after Iran called for compensation and an end to sanctions as part of its conditions for a deal. Tehran's demands were largely consistent with the terms of a preliminary peace agreement signed in June that has since collapsed.
Since the war began in February, Trump has repeatedly shifted between threats of escalation and claims that a peace agreement was close.
"We're going to ask for money for the damage they've done over a 50-year period," Trump reportedly said at the White House, saying payments would cover deaths among both civilian demonstrators and U.S. forces in the region.
"So if there's damages to be paid, I think Iran should pay those damages," Trump said.
Oil prices settled around 5% higher on Monday as Trump's demands reduced expectations of an agreement to reopen the Strait.
"I see that Representatives of the Islamic Republic of Iran are asking for compensation for the damage done to them during the last five month Military Conflict (started because, THEY WILL NOT HAVE A NUCLEAR WEAPON), even though it was never mentioned in any of our negotiations or meetings!
"But it is an interesting idea because now I am likewise demanding compensation from Iran, for all of the people that they have killed and gravely wounded with their roadside bombs and many conflicts, for which they are famous, as led initially by General Soleimani, including the families of those killed on the USS Cole, and thousands of others killed in combat.
"Additionally, compensation should be paid to the families of the hundreds of thousands of innocent protestors that Iran has killed over the last 50 years, not to mention the 52,000 that have been killed in the last five months.
"I have instructed my representatives to put this firmly into any, and all, future negotiations." Trump said in a post on Truth Social.
"Also, with respect to the Iran negotiations, Iran should be responsible for the damages and death caused to the people of Lebanon, Syria, Yemen, and Gaza!" Trump wrote in a separate Truth Social post.
Iran earlier said it was nearing a final agreement with Oman to establish new shipping lanes between the countries through the Strait of Hormuz. However, Tehran reiterated that Washington must meet conditions including compensation, an end to sanctions and an end to military threats before the strategic waterway can be reopened.
The Strait of Hormuz, through which about one-fifth of global oil and liquefied natural gas flowed before the conflict, has been effectively blocked since the war began, putting upward pressure on oil prices and inflation.
Earlier on Monday, Iranian Foreign Ministry spokesman Esmaeil Baghaei was quoted by Reuters as saying talks with Oman were "progressing smoothly and constructively", with an agreement reached on a shipping route map while some technical issues remained unresolved.
Baghaei said the discussions also covered services that would normally involve payment, including safe navigation, environmental protection, maritime services and combating crime.
