The near standstill in Strait of Hormuz shipping keeps a geopolitical risk premium embedded in oil prices, with traders likely to stay cautious heading into Monday’s sanctions announcement from Washington. Iran’s parliament advancing a bill to charge navigation, environmental, fueling, insurance and safety fees on transiting vessels suggests Tehran is moving toward formalised, monetised control of the waterway rather than a purely war-linked disruption, raising the odds this becomes a semi-permanent cost layered onto Gulf shipping rather than something that unwinds once the conflict does. Any sign that China, the largest buyer of Iranian crude, moves to comply with US pressure would be read as a potential supply-side shift, though Beijing’s public preference for diplomacy points to limited near-term appetite to do so. Freight and insurance costs for tankers transiting Hormuz are likely to stay elevated regardless of Monday’s sanctions outcome. Markets will also watch Pakistan’s mediation efforts for any sign of a diplomatic off-ramp that could ease the risk premium.
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This from Friday is going to make any afreement difficult:
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Tehran calls Washington’s sanctions threat a desperate rerun, while moving to formalise fees on Hormuz transit even as the strait stays effectively closed to unauthorized tankers.
Summary:
- US Treasury Secretary Scott Bessent is expected to announce new sanctions on Iran Monday, calling them the toughest in history.
- Iranian Foreign Minister Abbas Araqchi dismissed the move as a sign of US desperation and said it would fail like previous measures.
- Shipping through the Strait of Hormuz remains at a virtual standstill, with Iran barring unauthorized oil tankers from transiting the waterway.
- Iran’s Persian Gulf Strait Authority has warned vessels violating its declared transit arrangements face fines, seizure or confiscation.
- Iran’s parliamentary National Security and Foreign Policy Commission has approved Article 3 of a Hormuz bill, allowing fees on navigation, environmental, fueling, insurance and safety services for transiting vessels.
- Pakistan’s army chief, Asim Munir, is set to visit Tehran as part of mediation efforts in the six-month conflict.
- Trump has warned of economic consequences for any country offering Iran a “lifeline,” with China buying over 80% of Iran’s exported oil.
Iran’s foreign minister dismissed the threat of new US sanctions as a sign of Washington’s desperation on Sunday, saying the measures expected to be unveiled this week would fail to bring Tehran to heel, according to Reuters. US Treasury Secretary Scott Bessent is due to hold a press conference Monday afternoon, having pledged what he described as the “toughest sanctions in history” against the Islamic Republic.
The renewed pressure campaign comes with Iran’s economy already strained by existing sanctions and by nearly six months of war that began when the US and Israel launched strikes on the country in late February. Despite the toll, Tehran has held its position in the Strait of Hormuz, bringing tanker traffic through the vital oil corridor to a near standstill by refusing passage to unauthorized vessels. That effective blockade has been a significant factor pushing global oil prices higher. Enforcement is now being paired with monetisation: Iran’s Persian Gulf Strait Authority has warned that ships violating its transit rules face fines, seizure or confiscation, with vessels aiding blacklisted tankers via ship-to-ship transfers also facing blacklisting, while Iran’s parliament has separately approved Article 3 of a bill on the strait that would allow the state to charge fees for navigation, environmental, fueling, insurance and safety services on vessels passing through. Taken together, the measures point to Tehran positioning itself as a formal gatekeeper of Hormuz traffic rather than simply obstructing it.
Foreign Minister Abbas Araqchi framed the looming sanctions as a rerun of failed tactics, arguing that Washington’s pivot away from military action back toward economic pressure exposed weakness rather than strength. He called for the US to engage Iran on more equal terms, saying Tehran has not been moved by blockades or military pressure and does not expect this latest measure to change that calculus.
President Trump has warned that any country offering Iran an economic lifeline will face consequences, a message aimed in part at China, which purchased more than 80 percent of Iran’s exported oil in 2025, according to analytics firm Kpler. Beijing has instead called for a diplomatic resolution. Pakistan has taken on a mediating role in the conflict, and its army chief, Asim Munir, is due in Tehran to discuss recent developments, including the sanctions threat.
Iranian officials have offered mixed signals on the path forward. Parliament speaker Mohammad Baqer Qalibaf pointed to interest from neighbouring states in new regional security and economic arrangements, while accusing Washington of prioritising Israel’s security over that of its own regional allies. President Masoud Pezeshkian, by contrast, has continued to call for a diplomatic solution, arguing Iran is negotiating from a position of strength rather than weakness. With sanctions due Monday, a transit fee regime advancing through parliament, and Pakistan’s mediation effort still in motion, the coming days are likely to determine whether economic pressure, formalised control of the strait, or diplomacy sets the next phase of the standoff.
This article was written by Eamonn Sheridan at investinglive.com.