San Diego, Calif. — August 7, 2026
Iran’s parliament is reviewing legislation that would ban vessels linked to the United States, Israel, and other countries Tehran considers hostile from transiting the Strait of Hormuz, according to Iranian state media. The Trump administration has already rejected the proposal.
The bill, still under committee review, would condition passage through the strait on compensation for war damages Iran says it suffered during its conflict with the U.S. and Israel earlier this year. Under the plan, commercial vessels that comply with Iran’s terms would face a toll of up to 7% of cargo value, while ships found in violation of Tehran’s conditions could be fined as much as 20% of their cargo’s worth.
The strait, which carries roughly a fifth of the world’s daily oil shipments under normal conditions, nearly ground to a halt when Iran asserted control over the waterway at the outset of its war with the U.S. and Israel. Since then, Tehran has been negotiating a joint venture with Oman, a U.S. ally on the strait’s opposite shore, to help reopen the corridor to commercial traffic. Iranian officials said this week they were finalizing a shipping-route agreement with Muscat that would route compliant vessels through a corridor near the Iranian coast.
The proposal lands amid a broader realignment of Middle East security arrangements. On Friday, Saudi Arabia, Turkey, and Pakistan signed what officials are calling the Mecca Joint Defence Agreement, a mutual-defense pact that regional analysts describe as one of the most consequential shifts in the region’s security architecture in years.
Tension has also been building in the Red Sea, where Yemen’s Houthi rebels have targeted Saudi-aligned oil vessels in recent weeks, retaliating for Saudi strikes on Sanaa’s airport. Saudi Arabia has increasingly relied on the Red Sea route to export oil since the Hormuz blockade began, a workaround now itself under threat.
For global energy markets, the stakes are considerable. Any formal restriction on U.S.- or Israeli-linked shipping through Hormuz — even a partial or contested one — would add a fresh layer of uncertainty to a market already pricing in elevated geopolitical risk from the broader regional conflict.