Trump takes Iran hard line as Hormuz tensions mark new normal

US President Donald Trump insisted that there were no talks ongoing with Iran on Aug 18, leaving the simmering conflict in the Middle East and control of the Strait of Hormuz stuck in limbo.

The memorandum of understanding that the US and Iran signed in June in an effort to buy time to negotiate a lasting peace deal – as repeatedly violated as it had been during that 60-day window – has expired. There are no plans to extend it.

“There are no talks or conversations going on, or scheduled, with the Islamic Republic of Iran,” Trump posted on his social media platform.

That leaves the status of the Strait of Hormuz in doubt, with both the US and Iran at odds about how it should be managed, little traffic flowing through the critical waterway in the meantime and no sign of any imminent resolution. 

The United Arab Emirates on Aug 18 said it was cutting off trade, commercial exchanges and financial transactions with Iran until further notice “in light of regional escalations that undermine regional and international peace and security”.

The move came after the UAE said Iran fired two ballistic missiles into its territory, the Islamic Republic’s first confirmed attack on the Gulf nation since May.

Both missiles were targeting maritime traffic, but fell into the sea and only one reached the UAE’s waters, according to the country’s Defence Ministry.

Tehran had recently launched strikes against UAE-linked ships. Esmail Baghaei, a spokesperson for Iran’s Foreign Ministry, denied that Iran launched a missile toward the UAE. 

Brent crude was above US$91 a barrel on Aug 18 as prospects dimmed for a swift reopening of Hormuz, through which a fifth of the world’s oil and gas transited before the war. 

Hormuz remains a key flashpoint. Several ships have been attacked along the route linking the Persian Gulf to the Gulf of Oman and the Arabian Sea in recent days.

Traffic is a fraction of its pre-war levels.

On Aug 18, Britain said a vessel heading out of the strait was struck by a projectile that damaged its engine room, resulting in one casualty.

Mohammad Bagher Ghalibaf, Iran’s lead negotiator with the US, told lawmakers on Aug 18 that Hormuz will not reopen before the US lifts a port blockade, releases frozen assets, removes oil sanctions and ceases all its military operations – as it agreed to do in June.

Trump, meanwhile, is demanding Iran drop efforts to toll vessels crossing the waterway, while Tehran has said it will govern traffic in conjunction with Oman.

The US President, citing the naval blockade of Iranian ports, claimed that the strait is “open and operating” despite shipping data showing otherwise.

He also asserted that “all water mines have been removed or detonated,” a claim that European officials said they are sceptical of due to the painstaking and time-consuming nature of the mine-clearing process.

A planned European mission has yet to get underway.

The Aug 18 declarations from the president marked the latest example of the mixed messages coming from the US administration about the state of the war. 

The president’s son-in-law, Jared Kushner, who has been active in diplomatic efforts, told Fox News on Aug 18 that conversations with “different areas of the Iranian government” were ongoing. 

“There’s really not a lot of trust between America and Iran after all these years of not having these relations and dialogues,” he said. “But we are having very positive and active conversations.”

According to the president, those are now over. Yet there is little sign Iran is willing to bend.

“The regime is willing to endure great hardship, they are willing to inflict great hardship on the population, in order to stay in power,” Mark Cancian, a senior adviser at the Center for Strategic and International Studies, told Bloomberg Television.

“We are in what I call an economic war of attrition to see who can endure longer, to see who can force the other side to make concessions.” 

The war erupted on Feb 28, when the US and Israel launched air strikes against Iran and sparked parallel conflicts that have embroiled much of the Middle East.

Trump has repeatedly said his primary objective is to prevent the Islamic Republic from obtaining a nuclear weapon, which the nation’s officials deny pursuing.

On Aug 17, Trump said the US retains leverage over Iran and reiterated his idea of declaring Hormuz an American territory. His insistence that the US has total control over the strait is directly at odds with the stance of Iranian officials.

Iran and Oman are negotiating a deal on how Hormuz should be managed, but the US is not part of those discussions.

In a phone interview with Fox News, Trump warned that if “Oman gets in the way we’ll bomb the s*** out of them,” without giving any further details, repeating a similar threat he made in May.

Oman is not a formal US military ally, but has served as a close security partner. 

Trump has struggled to find an off-ramp to a war that has driven up gasoline prices and grown increasingly unpopular in the US, threatening to erode support for Republicans in November’s midterm elections by keeping the war in voters’ minds. 

Trump and his officials have pledged to ratchet up economic pressure on Iran to force it to capitulate, but it is unclear what measures are under consideration. The Islamic Republic has withstood decades of sanctions. 

The war has damaged much of Iran’s industrial capacity, severely curtailed its crude exports and sent inflation skyrocketing. Ghalibaf acknowledged that Iranian citizens had legitimate economic grievances, but said they should prioritise maintaining national unity. 

Jake Sullivan, who served as national security adviser under former US president Joe Biden, said Trump only has two bad options on the table. 

One is to keep the war going, with all the economic costs that entails. “And the other is to cut a very, very bad deal,” he said on Bloomberg Television on Aug 18.

“And really Iran is just simply upping the price for that deal with each week that goes by,” Sullivan said, “adding new demands to what it would require to open the Strait of Hormuz.” BLOOMBERG