Iran expels US from Hormuz as traffic falls to 2 ships

Iran's army commander-in-chief declared US forces expelled from the Persian Gulf and Strait of Hormuz, deepening a standoff that has cut daily transits to two vessels.

Iran's army commander-in-chief declared US forces expelled from the Persian Gulf and Strait of Hormuz on Sunday, deepening a blockade that has cut daily transits to two vessels from more than 130 before the war.

"US bases in the region can never return to their previous status, and Iran will never allow such a situation," Khatami, Iran's army commander-in-chief, said, according to CCTV International. The declaration came hours after President Donald Trump said he may soon declare the strategic waterway "a territory of the United States."

The competing claims over the waterway came as actual traffic through it fell to extremely low levels. Kpler data showed only two vessels passed through the Strait of Hormuz on Friday, with no crude oil shipments visible. Nine vessels crossed Thursday and five Wednesday, compared with an August average of 12. Brent crude gained 0.7 percent to $87.68 a barrel, while US crude rose 0.3 percent to $81.49.

The standoff carries outsized stakes for global energy markets. About one-fifth of the world's traded oil and natural gas passed through the waterway at the mouth of the Persian Gulf before the war began Feb. 28 with US and Israeli strikes. The virtual closure has pushed the US national average gasoline price to about $4.08 a gallon, up 29 percent from $3.16 a year earlier, and handed Democrats a rare opening on the economy ahead of November's midterm elections.

A blockade both sides call their own

Iran's Khatam al-Anbiya Central Headquarters said Thursday that no commercial ship or oil tanker could safely pass through the waterway without Tehran's permission and oversight. The United States, meanwhile, says its blockade remains in force. CENTCOM said that as of Wednesday, US forces had redirected 59 commercial vessels, disabled three and boarded two others while enforcing what it calls its "steel wall blockade" against Iran.

Secretary of War Pete Hegseth said Thursday that rotating ships would allow the US Navy to maintain the blockade "indefinitely." The USS George Washington is expected to replace the USS Abraham Lincoln, which has now spent more than 260 days deployed. Iran's Deputy Foreign Minister Kazem Gharibabadi responded that Iran would decide when the strait opened or closed. "The Strait of Hormuz has been Iranian, is Iranian, and will remain Iranian," Gharibabadi wrote on X, adding that the waterway would be "closed and opened under Iran's command."

The military standoff is bleeding into Tehran's domestic politics. Hardline lawmakers have challenged a proposed role for Oman and Pakistan in monitoring shipping through the waterway, arguing that sharing vessel-tracking responsibilities would undermine the IRGC Navy's authority over screening in the Persian Gulf. Reformist outlets Shargh and Etemad have countered that regional verification would provide Tehran a diplomatic shield by reducing pressure for direct US or NATO naval escorts inside the strait's traffic lanes.

Oil risk premium builds as talks stall

Diplomatic contacts have continued despite the military buildup. Foreign Minister Abbas Araghchi said Friday that no decision had been made to resume talks with Washington, semi-official ISNA reported. He said Qatar and Pakistan were continuing to exchange messages but stressed that this "does not mean negotiations."

The economic toll is spreading beyond oil. US farmers spent $1.4 billion more on diesel during the spring planting season than a year earlier, according to Rep. Andrea Salinas of Oregon. A Reuters/Ipsos poll released this month found 37 percent of registered voters preferred Democrats' approach to the economy, compared with 36 percent who favored Republicans — the first Democratic advantage on the issue in roughly a decade.

The standoff shows no sign of resolution. Iran's military is preparing for "worst-case" war scenarios, with senior military official Rasoul Sanaei-Rad saying "our fighters have their fingers on the trigger." With a deadline to fully reopen the strait only days away and hardline lawmakers resisting any easing, the risk premium embedded in crude prices is likely to persist. If the blockade extends into the US midterm campaign, the political fallout could reshape Washington's approach to the conflict.

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