Trump Claims U.S. Controls Strait of Hormuz Amid Iran Tensions

President Donald Trump announced plans to declare the Strait of Hormuz as U.S. territory once the ongoing war with Iran concludes, according to multiple reports. Speaking at a political rally in Garden City, New York on Friday, Trump stated that after defeating Iran, he would declare ownership of the waterway between Oman and Iran.

The announcement drew immediate defiance from Iranian officials. According to UPI, Iran's deputy foreign minister Kazem Gharibabadi called Trump's remarks 'fanciful delusions' and asserted that the Strait of Hormuz has been and will remain under Iranian control. The strait, through which 20% of the world's oil typically passes, has seen a significant reduction in traffic since the war began on February 28.

Both Trump and Iranian officials claim to have control over the strait. According to The Hill, as reported by UPI, only six ships traveled through the strait last weekend, compared to the usual 140 ships that would pass in a single day before the conflict. Iran's foreign minister Abbas Araqchi stated that Washington must meet conditions on the strait for shipping to resume.

Trump urged Americans to accept slightly higher gasoline prices while the conflict continues, stating that paying 'a tiny little bit more' is worth ensuring Iran does not obtain nuclear weapons. According to Reuters, the average U.S. price of a gallon of gasoline was about $4.08 on Friday, up 29% from a year earlier.

The situation around the Strait of Hormuz may be entering a new phase after Iran and the U.S. both made competing claims over who controls the vital waterway within hours of each other. One day after Trump declared that the United States had 'total control' of the Strait, the new head of Iran's Basij Paramilitary unit announced that the Strait is 'under the management and control of the Islamic Republic,' as reported by Reuters.

Iran has been holding talks with Oman to reach a settlement on managing maritime traffic in the strait. Foreign Minister Abbas Araghchi indicated that negotiations between Tehran and Muscat may conclude soon, but reopening the waterway depends on Washington adhering to promises made in the June memorandum of understanding, including removing sanctions and lifting the naval blockade.

Shipping through the Strait of Hormuz slowed to a halt over the weekend ahead of the expiry date of the 60-day ceasefire between the U.S. and Iran on Monday, with no official negotiations or deal in sight. Only five cargo ships passed through the critical oil passage on Saturday, according to data from Kpler cited by Reuters, while no ships were registered to pass through the passage on Sunday. This is compared with 31 vessels the previous weekend.

Shipping traffic had already hit a three-month low last week, with a five-day average of 13 vessel transits on Tuesday reflecting the lowest level since May 12, according to CNBC analysis of Kpler data. Overall, shipping is down 90% since before the war started on February 28.

Legal experts have weighed in on Trump's announcement, stating that sovereignty does not exchange hands over a mere unilateral presidential proclamation. Bruce Fein, associate deputy attorney general under President Ronald Reagan, noted that a treaty ratified by the Senate or statute is constitutionally required to annex territory. If Trump proceeds with annexation, it would constitute the crime of aggressive war under international law.

Trump also threatened to bomb Oman if it 'gets in the way' of his efforts to end the war and control the Strait of Hormuz, according to The Guardian. This is the second time Trump has directed such a threat at the longtime U.S. strategic partner. The threat came as oil prices rose again after the two-month window to negotiate a peace deal expired on Monday with no end to the conflict in sight.

Brent crude rose above $90 a barrel for the first time since July 30, and was trading at $91.63 on Tuesday morning, according to The Guardian. A cargo ship was attacked while traveling through the strait early on Tuesday, according to the UK Maritime Trade Operations agency.

Analysts at Deutsche Bank wrote on Tuesday that the rising oil prices were a sign of investors pricing in 'a more extended closure' of the strait. Trump made the threat against Oman as he struggles to draw the conflict to a close almost six months after it began, according to UPI.

A cargo vessel was struck by a projectile while transiting the Strait of Hormuz, causing damage to the engine room and resulting in a crew casualty, according to CNBC. The incident came after an Iranian military official repeated threats that the Islamic state won't back down over the Strait of Hormuz.