Fees on safe passage are the heart of the matter.
It’s All About Fees
Trump believes the MOU allows safe passage to all vessels. Iran has disputed that idea all along.
Iran insists it will collect fees and Trump says no.
When Iran struck at ships trying to pass without paying fees, Trump cancelled Iran’s ability for safe passage.
The result is a two-way blockade again, with military escalations on both sides.
U.S. Launches Strikes on Iran
The Wall Street Journal reports U.S. Launches Strikes on Iran in Response to Ship Attacks in Hormuz
The Trump administration pounded sites along Iran’s coast in fresh airstrikes and blocked its ability to sell oil legally on Tuesday in a fierce response to Tehran’s recent attacks on ships near the Strait of Hormuz. The twin moves threatened to unravel an interim peace that took weeks to negotiate and drive up oil prices.
Tehran’s targeting of the vessels in the international waterway through which 20% of the world’s oil used to flow “was unwarranted, dangerous, and a clear violation of the ceasefire,” according to a Centcom statement.
Explosions were reported in Sirik, Qeshm and Bandar Abbas, sites in or near the strait, according to Iranian media. The strikes targeted air defense, coastal surveillance, surface-to-air and antiship cruise-missile sites, as well as drone-launch sites and port facilities, according to a senior U.S. official. Abu Musa island and the Tums islands in the strait were also struck, the person said.
The strikes came shortly after the Trump administration revoked a license allowing Iran to sell oil on the open market, eliminating the primary economic benefit for Tehran as part of an interim peace deal with the U.S. and threatening to unravel the agreement after days of skirmishes in the Strait of Hormuz.
The Treasury Department said the June 21 temporary license granted to Iran after several months of war would no longer apply, a reprimand coming hours after the Islamic Revolutionary Guard Corps fired missiles and drones at ships near the strategic waterway Tuesday. The Treasury allowed for a grace period until July 17 for transactions already authorized under the license.
The revocation is a clear sign that Washington is willing to push back on Iranian military action and won’t offer new concessions to Tehran as part of the interim deal.
It also underscores how many issues the interim deal left open—or open to different interpretation by the two sides. That includes the critical question of who should control the strait and the passage of vessels through it in the coming months.
Meanwhile, people close to the talks say there has been no substantive progress made yet by the U.S. and Iranian teams on a final nuclear agreement, with technical talks on the issue barely commencing. Negotiations are currently on hold for the funeral of Khamenei.
Michael Singh, a former National Security Council director for the Middle East under President George W. Bush, said that Iran’s military attacks in the strait suggested Tehran was angling to get more early benefits from the interim deal than Washington had agreed to. The Treasury Department move is an effort to push back on that.
“So it seems that this construct where we hoped that Iran might yield control of the strait for a series of upfront concessions has only whetted the Iranian appetite for more,” Singh said.
He said all of this bodes ill for the prospect of a final nuclear deal. “I think the chances of getting that are quite slim.”
MOU Ends
War Begins
Trump Broke the Deal
A Friendly Reminder
What Part of This Does Trump Not Understand?
My question is a much to tankers as to Trump. Do any of these tankers think they wont get hit?
“When Iran struck at ships trying to pass without paying fees”
That’s not the reason. Iran was shutting down the U.S.-orchestrated transit of vessels on Oman’s side of the Strait which was an attempt to circumvent Iranian protocol/control.
Aside from practical realities who controls the Strait, this control was implied in the MOU itself:
“Upon the signing of this MoU, the Islamic Republic of Iran will make arrangements using its best efforts for the safe passage of commercial vessels with no charge for 60 days only from the Persian Gulf to the Sea of Oman and vice versa.” No other country is granted rights/responsibility for Strait coordination during the 60 day window (afterwards, expect fees and Iran/Oman coordination, protocol to be determined).
It’s like watching “The Guns of August – WW3 Edition.”
Just stupidity on top of stupidity squared.
I keep thinking we will be at a whole new level when one of these tanker’s CARGO catches fire. Particularily compressed LNG cargos. I can not fathom how massive that explosion would be.
Therefore, I think their insurance carriers will scream “STOP!!”. As the claim and risks are expoential.
What is Trump planning on doing when he can no longer draw down the SPR come about mid-August?
Blame the godless communists?
Oil prices jump 5 percent after U.S. revokes Iran oil sanctions waiver
https://thehill.com/business/5957965-oil-prices-jump-5-percent-after-u-s-revokes-iran-oil-sanctions-waiver/
On this Blog, people determined that Fees were not Tolls. To continue the silly semantics game the US is not dropping bombs, but instead let’s call them “Dice”.
And the 168 murdered 12 year old girls in Minab were an “accident”.
I’m still hung up on the idea that wookies live on Endor…
Has taco gone off script? Whatever happened to taco Tuesday? Is he doing what he can to drive stocks down so his buddies can buy cheaper and make another quick $billion or so?
Well the world economy will suffer dearly now (oil inventories anyone), but that was always the plan (destroy the other economically) – from both sides.
Agreed, the inflation risks – and range bound 10-yr – are about to breakout.
I’ve been a PM of plenty of money. (>$1.2 Bil.). If you were running a bond fund woul yu increase duration &/or take down more long bonds? Hell no! Your first objective is “live to fight another day” and screw that undefinable/volatile inflation risk. Which is how these things become “reflexive” (as Soros calls it), or self-fullfiling. When your – and others – choices of allocating capital change so to does the market-clearing price. For bonds that’d be the interest rate.
Trump is finding out the hard way that short of a massive ground invasion requiring a minimum of several hundred thousand troops to fight in an environment that would make Afghanistan look a picnic, there is no military solution to this conflict. He will have to make serious and genuine concessions to Iran of the Strait will remain closed. The fact that he murdered the entire old guard “moderate” leadership make things even more difficult for him.
The JCPOA came to be in the first place because the US leadership at the time concluded that there was no viable military solution to the Iran issue, so they opted for the least terrible alternative possible. Today the military reality of the Gulf situation has not changed, but thanks to the current administration, the JCPOA is but toilet paper now and Iran will not agree to return to the status quo. The only realistic solution is a political settlement a lot less favorable to the US than the JCPOA was, which includes Iran’s ownership of the Strait.
It did not have to be this way, but the US electorate, US Supreme court and US congress through apathy, ineptitude and sheer negligence, allowed this shit show to happen, so now they will have to deal with the consequences.
This is America’s “Suez Canal” moment.
Maybe that’s why Leavitt was saying that Gen z and younger are lazy shiftless bums and should go to Iran or Cuba. Draft is probably going to be the suggestion for all the unemployed youths.