Iran said point 5 of the Memorandum of Understanding gave it the right to manage the strait, which it shares with U.S. ally Oman, while the U.S. rejected that interpretation. Hostilities resumed as Iran began firing on vessels it said were trying to sail through Hormuz on an unapproved route, and Trump said on July 7 that the pact was “over.”
The Iranian official told Reuters the U.S. must meet the entirety of the MoU's provisions within a few weeks as a precondition for further negotiations.
Even as Iran projects resilience in the war, its leaders are worried that a threat of more economic punishment could increase hardships, reignite unrest and further erode the Islamic Republic’s legitimacy, according to three Iranian officials.
Iran entered the war with high inflation, a weakening currency, energy shortages, sanctions and deep structural weaknesses, and must now contend with damaged infrastructure, disrupted trade, lost production and the cost of rebuilding.
Iran has separately been negotiating an agreement on managing the strait with Oman and says they are close to a deal.
Trump responded to those negotiations with a threat against the Gulf state, a longstanding U.S. security partner.
“If Oman gets in the way, we'll bomb the shit out of them,” Trump told Fox News.
Thousands of people have been killed in the conflict, mainly in Iran and Lebanon. Iran has bombed U.S. military bases and infrastructure in countries including Oman, Jordan, Kuwait, Israel, the United Arab Emirates and Saudi Arabia.
Trump warned Americans in a speech at a rally on Friday to prepare for continued high fuel prices as a result of the war.
Benchmark Brent crude oil futures have surged during the conflict, hitting a peak of $126 a barrel, roughly 75% above pre-war levels. Brent crude settled more than $2 higher on Monday to $90.87 a barrel.
For Americans who will vote in November congressional elections, gasoline prices have risen above $4 per gallon, up from less than $3 before the war, according to the automotive group AAA.
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