Iran's Revolutionary Guards declared on Sunday that the Strait of Hormuz will remain closed until the United States meets a series of demands, including an end to sanctions and full compensation for war damage, hardening Tehran's posture even as President Donald Trump described his approach to the standoff as "low key."

The Islamic Revolutionary Guard Corps (IRGC) has designated the strait "a theatre of war" rather than a conventional shipping route, insisting it will not reopen until all conditions are accepted in full. According to AFP, the blockade of the critical energy corridor has unsettled allies, disrupted markets, and driven prices higher. The strait typically carries roughly a fifth of global oil consumption, making any sustained closure a direct shock to worldwide energy supply chains.

Iran's Conditions

Iran's Supreme National Security Council outlined its requirements on Saturday. They include:

• An end to the war on all fronts
• Lifting the US counterblockade on Iranian ports
• Release of frozen Iranian assets
• Full compensation for wartime damage

The terms largely mirror those from the June agreement, which included a proposed $300 billion reconstruction fund for Iran. Tehran also seeks to retain control of the strait after the war and to charge tolls for passage, and has repeatedly struck vessels it accuses of attempting to bypass its preferred route. At least one tanker was hit on Saturday.

Trump: "We Are Low Keying It"

In an Axios interview, Trump said he was only "semi-negotiating" with Tehran and was content to let Iran's inflation and depleted finances force a resolution, calling the standoff "a chess game" that would eventually work out.

Iranian Foreign Minister Abbas Araghchi struck a more measured tone, stating that Tehran is merely exchanging messages with Washington through intermediaries. Meanwhile, Oman confirmed that talks on managing the strait are approaching their final stages.

(Earlier reporting: Trump: "we are low keying it" as Strait of Hormuz deal drifts)

Houthi Blockade Opens Second Maritime Front

Iran's Houthi allies in Yemen have opened a parallel blockade against Saudi ports in the Red Sea — Saudi Arabia's only other major maritime export route. The Houthis said they struck a Saudi oil facility on the Red Sea coast on Sunday. Separate strikes on the port city of Mokha killed three civilians and eight military personnel, and wounded 32 people.

The dual pressure on Gulf shipping adds a live supply disruption on top of the political standoff. With Hormuz bottled up and Houthi strikes now threatening the Red Sea corridor as well, Gulf exporters face simultaneous constraints on both of their primary maritime outlets for crude and LNG shipments. Reduced tanker traffic through the strait, combined with Saturday's tanker strike, compounds the risk to energy exports even before factoring in the Houthi blockade's effect on Saudi export flexibility.

Saudi Defence Pact

The escalation comes days after Saudi Arabia signed a joint defence pact with Turkey and Pakistan on Friday. Ankara said it expects Egypt to also join the arrangement. The pact signals an effort by Gulf and Muslim-majority states to build a collective security response to threats along vital maritime corridors, even as diplomatic channels for a Hormuz deal remain open.

Room for De-escalation

Despite the hardened rhetoric, Oman's confirmation that strait management talks are in their final stages and Araghchi's softer framing of ongoing message exchanges leave room for de-escalation if a deal is reached. A Hormuz breakthrough would remain the most significant driver of any shift in the current standoff.

Source: ForexLive / InvestingLive