Trump Hits Dead End as Iran Still Holds the Hormuz 'Trump Card'
United States President Donald Trump has again reached an impasse in his efforts to reopen the Strait of Hormuz. The initial peace deal with Iran signed last month is faltering, while attacks have resumed in one of the world’s most important energy trade routes.
Trump previously stated the agreement had met all US objectives, hoping the Gulf war would end and the Strait of Hormuz could be reopened for shipping. However, within a month, fighting erupted again and ship traffic transiting the strait dropped sharply. One trigger is the differing interpretations between the US and Iran regarding the contents of the memorandum of understanding they drafted.
On the night of 13 July 2026, Iranian missiles struck two UAE-flagged tankers transiting the Strait of Hormuz, killing one person. The US retaliated by striking military targets in Iran. Tehran responded by launching missiles and drones at several Arab nations. Since 7 July 2026, retaliatory strikes between the two sides have lasted for five nights. The latest conflict began when Iran attacked three ships in the strait.
Despite rising tensions, the US and Iran are still trying to limit their attacks. Washington is mostly targeting southern Iran, while Tehran has not yet struck civilian infrastructure in the Gulf region. Neither country appears to want a major war, but most of the previous agreement is now defunct.
Dispute over Strait of Hormuz Management
The US has already revoked sanctions waivers that allowed Iran to sell oil. On 13 July, Trump also said he would re-blockade Iranian ships. Trump had another idea: the US wanted to charge fees from ships transiting the Strait of Hormuz in return for security guarantees, but the plan was scrapped on 14 July.
Trump wants the Strait of Hormuz reopened, but there are no easy options. The dispute stems from different readings of the memorandum of understanding. The fifth paragraph states Iran will prepare arrangements for commercial ships to transit safely. The US interpreted this as Iran clearing mines and reopening the shipping lane, while Iran believes the agreement also grants it the right to manage ship traffic.
The main route in the Strait of Hormuz is the Traffic Separation Scheme, a corridor about six miles wide in the deepest part of the strait. Mines have made this route dangerous, forcing ships to find alternative paths either north through Iranian waters or south through Omani waters. In recent weeks, the US Navy has helped escort tankers using the southern route, and the United Nations encouraged shipping companies to use it.
Iran was displeased, viewing the Omani route as reducing its control over the strait. Tehran declared the route closed, while the US insists it remains usable. Ultimately, the decision lies with ship owners. As long as the risk of attack remains high, many shipping companies will avoid the area.
According to ship monitoring firm Kpler, tanker traffic in the Strait of Hormuz has fallen to its lowest level since 25 May 2026. Data from Windward shows only 11 ships crossed the strait on 12 July, a sharp drop from 36 ships the previous week. Initially, oil markets showed little reaction, but concerns have grown in recent days. Brent crude prices have surged about 20% since 6 July, trading at US$85 per barrel on Wednesday (15/7/2026) at 09:20 WIB. West Texas Intermediate crude also rose to US$80.12 per barrel.
Economic Pressure Fails to Deter Iran
When the memorandum was signed, Trump hoped sanctions relief would push Iran to reopen the Strait of Hormuz. Iran is in dire need of funds, claiming the war has caused losses of up to US$270 billion, compounding an economy already battered by years of sanctions and poor management. The need for money was a primary reason Iran agreed to the deal, but the government is now divided. Pragmatists see a deep economic crisis, while hardliners insist on maintaining control of the strait.
With the agreement stalled, the US has resumed limited military strikes. However, over 300 strikes in five nights have failed to change Tehran’s stance, and there is no guarantee further attacks will work. Iran has previously withstood much larger US and Israeli strikes for six weeks, so the current limited campaign is unlikely to alter the situation. Even if the US destroyed all of Iran’s coastal missile launchers, Tehran could still attack ships from inland positions, as many of its missiles and drones have significant range.