The Trump administration is weighing an Iranian offer on the Strait of Hormuz as constrained shipping keeps pressure on oil and gas prices.
The Trump administration is weighing an Iranian proposal that would ease restrictions around the Strait of Hormuz while putting off nuclear talks, leaving one of the world’s most important shipping chokepoints in limbo as energy prices climb.
CBS News reported Tuesday that the proposal under discussion would have the U.S. and Iran drop restrictions on the strait but delay negotiations over Iran’s nuclear program. There was no clear sign of an imminent resolution to the war, which has sharply constrained shipping traffic through the waterway.
The uncertainty is already showing up in markets. International benchmark Brent crude topped $112 a barrel Tuesday, and AAA said the average U.S. price for a gallon of gasoline reached $4.18, the highest level since the Middle East war began. Gas prices have risen $1.20 a gallon since Feb. 28 and climbed nearly 7 cents overnight, according to AAA.
President Trump added to the confusion Tuesday when he wrote on social media, without further explanation, that Iran had informed the U.S. it was in a “State of Collapse.” A CBS News producer in Tehran said that, from what he could see on the ground, Iran’s government remained in control and the country was not in a state of collapse “by any standards at all,” though he noted shortages, high inflation and supply problems.
Washington also kept economic and military pressure on Tehran. The Treasury Department announced sanctions on 35 people and entities accused of operating parts of Iran’s covert financial network, which officials say helps sanctioned Iranian institutions move money through foreign banks and shell companies.
Treasury Secretary Scott Bessent said Iran’s shadow banking system acts as a “critical financial lifeline” for its armed forces and warned that financial institutions engaging with the networks could face “severe consequences.”
Separately, U.S. Central Command said Marines boarded the commercial vessel M/V Blue Star III in the Arabian Sea on suspicion that it was heading toward Iran in violation of the U.S. blockade of Iranian ports. The military said the ship was released after a search found its voyage would not include an Iranian port call. Central Command said 39 vessels have been redirected to ensure compliance with the blockade.
The regional fallout continued beyond the strait. Gulf leaders met in Saudi Arabia to discuss the crisis, while fighting between Israel and Iranian-backed Hezbollah in Lebanon remained a major obstacle to a broader peace deal. In a separate diplomatic ripple, Britain’s ambassador to the U.S., Sir Christian Turner, was reported by the Financial Times to have said earlier this year that Israel was probably the only country with a “special relationship” with Washington; CBS News said it had not reviewed the audio, though the British government had not denied the remarks’ authenticity.
The next test is whether Washington and Tehran move from considering the Hormuz proposal to changing conditions at sea. Until then, shipping traffic, oil prices and the stalled nuclear track remain tied to a negotiation whose outcome is still unclear.
Comments (0)