Iran Vows to Halt MoU Commitments as U.S. Reinstates Hormuz Blockade

Amid escalating Iran tensions, Iran has warned it will stop fulfilling commitments under a recent bilateral memorandum of understanding with the United States if Washington continues violating its obligations, as tensions escalate with the U.S. reinstating a naval blockade on Iranian shipping in the Strait of Hormuz, announcing a 20 percent fee on transiting cargo, and conducting further strikes.

Iran Warns of Suspending MoU Commitments

Iranian Foreign Ministry spokesman Esmaeil Baghaei stated the MoU has entered a "crisis phase" due to continuous U.S. violations, while Iran adheres to "commitment for commitment." [1] Iran will stop fulfilling its obligations if Washington continues violating commitments under last month's bilateral memorandum of understanding, Baghaei said. [1] The MoU has undoubtedly entered a "crisis phase," while Iran has never been the party to violate commitments under the deal first, he added at a weekly press conference in Tehran. [1] He accused the United States of having continuously violated its obligations and mutilated the MoU's paragraphs and components over the past weeks. [1] Iran adheres to the principle of "commitment for commitment" in implementing the MoU's provisions. [1] When the other side remains committed to its obligations, "we will also implement our commitments," Baghaei said. [1] Asked whether diplomacy remains open following the latest developments, Baghaei said diplomacy, as a tool and lever, never stops. [1] Whenever deemed necessary, Iran uses all tools and methods to defend national interests and security, he added. [1]

Trump Announces National Address and Blockade Reinstatement

U.S. President Donald Trump announced a primetime "Speech to the Nation" on Thursday evening amid the flare-up, following his declaration of reinstating the naval blockade and imposing a 20 percent fee on ships through the Strait of Hormuz. [2] Trump said he would make a primetime address to the nation on Thursday, in an announcement that comes amid a major flare-up of hostilities with Iran. [2] "President Trump will be making a Speech to the Nation on Thursday evening, at 9 P.M. Eastern (0100 GMT Friday)," Trump said on his Truth Social network. [2] Trump did not reveal the subject of the speech. [2] The announcement comes hours after he declared that he would reimpose a U.S. naval blockade on Iran, and that Washington will institute a 20 percent fee on ships transiting the Strait of Hormuz. [2] President Donald Trump said on Monday the United States was reinstating its blockade of Iranian shipping in the Gulf and would ensure the Strait of Hormuz stays open — for a fee. [4] "The Hormuz Strait is OPEN, and will remain OPEN, with or without Iran. We are reinstating THE IRANIAN BLOCKADE," Trump said on Truth Social, adding that the U.S. would collect a 20% toll on all cargo shipped through the strategic strait "as a matter of FAIRNESS." [4]

U.S. Military Strikes Continue for Third Night

U.S. Central Command announced the reinstatement of the blockade effective late Tuesday local time, with forces enforcing it against vessels to or from Iranian ports while facilitating traffic for compliant ships. [3] CENTCOM forces will enforce the blockade against vessels that are on their way to or from Iranian ports and coastal areas, the command wrote in a post on social media. [3] The military said at the same time that it will continue to facilitate ship traffic through the region's waters for all vessels that do not violate the blockade. [3] CENTCOM reported launching a third consecutive night of strikes on Iran ordered by Trump, aimed at imposing costs on Iranian forces and weakening their ability to attack civilian and commercial shipping. [3] U.S. forces at 4:45 p.m. U.S. time started a third night in a row of attacks against Iran, on orders from the commander-in-chief, President Donald Trump. [3] "These attacks will continue to impose a heavy cost on Iranian forces and weaken their ability to attack innocent civilians and commercial shipping in the Strait of Hormuz," CENTCOM wrote. [3]

Missile Attack on Tankers in Strait of Hormuz

Iranian cruise missiles struck two UAE tankers in the Strait of Hormuz, killing one Indian crew member and injuring eight others, prompting UAE condemnation as a violation of international law. [3] The United Arab Emirates reported a dramatic attack in the Strait of Hormuz. [3] According to a statement from the country's defense ministry, the national tankers "Mombasa" and "Bahia" were hit by two Iranian cruise missiles in the southern passage of the strait, in Omani territorial waters. [3] One crew member on board "Mombasa," an Indian citizen, was killed. [3] Eight others were injured, of which four were seriously injured. [3] Six of the injured are Indian citizens, and two are Ukrainian citizens, the ministry stated. [3] The attack also caused material damage and fires on board both tankers. [3] The fires are said to have been extinguished. [3] The defense ministry in the United Arab Emirates condemns what it calls a "brazen attack" that constitutes a "serious violation of international law," and emphasizes that the country reserves the full right to respond to the escalation. [3]

Oil Prices Surge on Escalating Tensions

Oil prices surged, with Brent crude rising 9 percent to $83 per barrel, driven by the hostilities and the proposed 20 percent fee, which shipping experts called excessive. [3] The price of a barrel of Brent crude oil rose 9 percent to 83 dollars on Monday, 12 percent higher than before the war. [3] West Texas Intermediate futures jumped 9.4% to settle near $78 a barrel, the highest in nearly a month, while Brent closed above $83. [5] Prices extended gains in post-settlement trading after Trump said the U.S. will strike Iran "very hard" overnight Monday and on Tuesday. [5] Brent was over 10% higher than Friday’s closing price. [5] Rico Luman, senior economist specializing in logistics at ING Research, said to the New York Times that shipping companies charge around 10 dollars per barrel to transport oil from the Persian Gulf to Europe. [3] With an oil price of around 80 dollars, Trump's fee could add a further 16 dollars per barrel. [3] For a large tanker with two million barrels of oil, the fee could mean over 30 million dollars in increased costs. [3] Parts of the bill will probably end up with consumers, the newspaper writes. [3] In an interview with CNBC, CEO Herbjørn Hansson of Nordic American Tankers said he has no faith in a 20 percent toll on the transport of goods through the Strait of Hormuz. [3] "Whether they will fight for a week or two or three, I don't know. But they have to agree. Because Iran is suffering, the USA is suffering, and 192 countries outside the Strait of Hormuz are suffering," Hansson said. [3] Two shipping companies described the fee as "unaffordable" and told the newspaper that it would exceed what they themselves charge for freight through the strait. [3]

Background on Strait of Hormuz Dispute

The struggle for the Strait of Hormuz, where a fifth of the world's oil was transported before the war between the United States and Iran broke out, is now dramatically intensifying. [3] Trump announced Monday that the United States will take control of the strait and impose a 20 percent fee on all cargo passing through the strategically important waters. [3] Trump has not explained exactly how the 20 percent fee is to be calculated. [3] Iranian Foreign Minister Abbas Araghchi commented on Trump's proposal on X on Monday: "20 percent is of course too much. We are going to be fair." [3] The United States has previously opposed Iranian attempts to collect such fees. [3] Foreign Minister Marco Rubio stated at the end of June that "no country is allowed to charge tolls or fees on an international waterway," referring to applicable international law. [3] The United States has in recent weeks led ships through the strait along routes near Oman. [3] Iran has protested this and says that they will control the traffic. [3] In recent days, the Revolutionary Guard's attacks on vessels along the route have led to American retaliatory attacks against Iran. [3]

What to watch next: President Trump is scheduled to deliver a primetime Speech to the Nation on Thursday evening at 9 P.M. Eastern, while CENTCOM has indicated that attacks on Iran will continue in the coming hours.