Trump's Hormuz claim puts 20% of global oil trade in peril

President Donald Trump posted a map on Truth Social Tuesday labeling the Strait of Hormuz "New U.S. Territory," escalating a confrontation in a waterway that carries 20 percent of global oil and gas. The post followed Trump's Friday statement that he would declare the strait a US territory once the conflict with Iran concluded.

"I want to state clearly that the Strait of Hormuz will not be opened until the American commitments stipulated in the memorandum of understanding are implemented," Mohammad Bagher Ghalibaf, Iran's parliament speaker and top negotiator, said in a speech broadcast on state television. Iran's conditions include removal of the US naval blockade, lifting of oil sanctions, and unfreezing of Iranian assets held abroad.

The same day, a foreign oil tanker was attacked while departing the strait, sustaining engine room damage and crew casualties, with remaining crew rescued by Omani coast guard, according to UK Maritime Trade Operations. Oil prices have climbed this week as markets price in supply disruption risk across both Hormuz and the Red Sea, where Houthi forces have closed Yemen's Mocha port and advanced toward the Bab el-Mandeb strait.

The 60-day diplomatic window set by the June memorandum of understanding expired Sunday, and Iran's military has announced a shift to an "offensive" posture. Qatar's foreign ministry spokesperson Majed al-Ansari said mediators are waiting for a formal Iran-Oman transit agreement before pushing Washington and Tehran to resume negotiations, according to Al Jazeera.

Trump also threatened Oman on Sunday, telling Fox News' Trey Yingst that "if Oman gets in the way, we'll bomb the shit out of them." The warning came as Iran and Oman continue separate negotiations over maritime navigation through the strait, with Tehran saying the geographical coordinates of a proposed route "have been agreed upon."

Iranian Foreign Ministry spokesman Esmaeil Baghaei said Monday that negotiations with Oman were proceeding "in all seriousness," though outside actors were attempting to influence the process. Tehran has previously described the June MoU as "practically dead," accusing Washington of repeatedly violating its terms.

Hormuz and Bab el-Mandeb under simultaneous pressure

The Strait of Hormuz is not the only shipping lane in crisis. Houthi forces have closed Yemen's strategic Mocha port and are advancing toward the Bab el-Mandeb strait, a critical route for vessels transiting between the Red Sea and the Indian Ocean. Adam Baron, a Yemen analyst at New America, called it "the most significant escalation in recent years, perhaps the most serious situation since 2020."

The dual pressure on Hormuz and Bab el-Mandeb — together handling a substantial share of global crude and LNG shipments — has pushed oil prices higher this week. The conflict began February 28 following US-Israeli attacks on Iran, and diplomatic efforts since April 8 ended the most intense bombardments, but clashes around Hormuz have continued.

Iran-Oman deal is the only path to reopening

Trump has said he is "in no hurry" to finalize a deal and claimed his administration has a backchannel to Iran's Islamic Revolutionary Guards Corps, a claim Tehran denies. On Truth Social, he reiterated his core position: "The first goal, and always the goal, is that Iran must not possess nuclear weapons in any way, shape, or form."

With the MoU window expired and Iran's military adopting a more aggressive posture, the path to reopening the strait runs through the Iran-Oman agreement. If that deal is finalized, Qatar and other mediators could push for renewed US-Iran talks. If it collapses, the risk of a new round of tit-for-tat strikes — and further disruption to global energy flows — rises sharply.

For markets, the combination of active tanker attacks, stalled diplomacy, and Trump's provocative territorial claim means the geopolitical risk premium in crude prices is unlikely to fade quickly. Investors should watch for the formal Iran-Oman announcement and any shift in Iran's military posture as the next events to move prices.

This article is for informational purposes only and does not constitute investment advice.