Weeks after the U.S.-Iran memorandum of understanding fell apart, both Washington and Tehran have been shoring up their strategic positions ahead of any potential resumption of negotiations. The two sides have adopted starkly different posturing: the U.S., led by President Donald Trump, has issued open threats and floated the possibility of expanded bombing strikes against key Iranian infrastructure, while Iran has deliberately cut maritime traffic to a trickle through the strategically critical Strait of Hormuz, the chokepoint that the Islamic Revolutionary Guard Corps (IRGC) has repeatedly proven it can close at will.
Official statements from both capitals remain deeply contradictory. Trump has repeatedly claimed Iran is desperate to restart talks, but Iranian officials have consistently denied any active negotiations are underway. Even amid this dissonance, both sides acknowledge that any future agreement will revolve entirely around control and access to the strait, which borders Iran and Oman. The two adjacent countries have floated a series of framework proposals for managing traffic through the waterway, and while no final deal has been reached, it is already clear Iran will hold far more sway over shipping than it did before the U.S. preventive war began in February.
A core sticking point in ongoing discussions over a regional framework is whether Iran will be permitted to charge tolls or fees for commercial vessels passing through the strait. The Trump administration has taken an uncompromising stance against any such arrangement, arguing that it would deliver much-needed new revenue to Tehran and serve as undeniable public proof that its preventive war was a catastrophic strategic error. Secretary of State Marco Rubio reiterated this position in July, warning that allowing a nation-state to unilaterally control an international waterway and charge passage fees would set a dangerous global precedent that could be replicated in other strategic waterways around the world.
Before the outbreak of war, the strait operated as a free, open international shipping route, with 120 to 150 commercial vessels traversing the waterway daily to move energy and goods to global markets. The U.S. has pushed for a full return to this pre-war status quo, but Iran has zero interest in rolling back its new leverage—a reality that reflects the shifting power dynamics created by the war itself. Trump’s decision to launch conflict gave Tehran a unique opportunity to leverage its geographic position, and Iranian leaders moved quickly to capitalize on it.
Initially, Iran’s decision to restrict strait access was designed to raise the cost of the war for the U.S. and push regional U.S. partners to pressure Washington into ending hostilities. Over time, however, control over the strait evolved into a far more valuable strategic asset: a bargaining chip Iran can deploy whenever the U.S. threatens to escalate military operations. Today, reopening the strait to full traffic is a higher priority for the U.S. than containing Iran’s nuclear program, but Washington has yet to find a viable path to achieve that goal.
Trump first turned to military force to break the impasse, betting that heavy U.S. airstrikes would degrade the IRGC’s capacity to target shipping and force Tehran to back down. That strategy failed on two counts: it overestimated the ability of U.S. military power to force a change in Iran’s core strategic calculations, and it drastically underestimated Iran’s capacity to mass-produce and deploy low-cost drones and missiles against shipping. Every U.S. strike only reinforced Tehran’s belief that the war threatened the existence of the Iranian state, and instead of capitulating, Iran escalated: it targeted vessels using the alternative route along Oman’s southern coast and made clear that expanded U.S. bombing would trigger wider attacks on Gulf energy infrastructure.
All U.S. military efforts to restore the pre-war status quo have failed, and there is little reason to expect future attempts to succeed. Foreign policy analyst Daniel R. DePetris argues that if the Trump administration wants to extract itself from an open-ended unwinnable conflict, its best available option is to accept an Iranian toll and fee structure for strait passage.
Admittedly, this would face fierce domestic pushback: Capitol Hill hawks would almost certainly condemn the move, and many of Trump’s own political allies would struggle to justify the concession to voters. But when framed as a choice between accepting passage fees or remaining mired in endless conflict, accepting fees is the far more pragmatic option. The Trump administration’s original decision to launch war created the current crisis, and bad policy choices inevitably generate unforeseen negative outcomes that must be managed.
Critics who warn that an Iranian fee structure would be unprecedented are mistaken. There is already a working model for this kind of arrangement at another critical global trade chokepoint: the Strait of Malacca in Southeast Asia, where shipping companies contribute to a voluntary fund managed by Malaysia, Indonesia, and Singapore that covers navigational support, maritime safety, environmental protection, and search and rescue operations. A similar voluntary system in the Strait of Hormuz would not break new ground, and in fact, shipping firms and their insurance providers may even view predictable fees as a net benefit, if they reduce the risk of far costlier disruptions or attacks.
It would be disingenuous to ignore the downsides of such a deal: U.S. acceptance of Iranian tolls would be an embarrassing acknowledgment that Tehran is now the primary power broker for the strait, and reports that Iran is demanding fees equal to 7% of a vessel’s cargo value mean Tehran would gain substantial new revenue it did not control before the war. Even so, this scenario is far less catastrophic than many U.S. policymakers claim. Over time, Iran’s new leverage will gradually erode, as Gulf Arab states have already begun adapting to the new status quo by expanding alternative energy export routes that bypass the strait entirely, reducing their vulnerability to Iranian pressure.
Saudi Arabia has ramped up crude exports through its cross-country east-west pipeline, which delivers oil to Red Sea ports for global shipment. While this route remains vulnerable to attacks from the Iran-aligned Houthi movement in Yemen and cannot fully replace the volume of traffic that previously moved through the Strait of Hormuz, it has still allowed Saudi Arabia to avoid a full shutdown of oil production. The United Arab Emirates has followed a similar path, increasing exports through the Fujairah terminal located outside the strait; by July, Fujairah accounted for 66% of all UAE crude exports, up from 51% just one month earlier. Iran’s aggressive actions during the war have only accelerated these diversification efforts, which will over time reduce Tehran’s ability to disrupt global energy flows by holding the strait hostage.
Negotiations over the future of the Strait of Hormuz remain ongoing. If an agreement requiring passage fees becomes unavoidable, DePetris argues U.S. policymakers should set aside political posturing and accept the deal. Ceding ground on the fee question is the most efficient way for the U.S. to exit a foolish, unnecessary conflict at the lowest possible long-term cost.
This analysis is by Daniel R. DePetris, a fellow at Defense Priorities, a Washington D.C.-based think tank that promotes realism and restraint in U.S. foreign policy, and a columnist for multiple major U.S. publications. It was originally published by Responsible Statecraft and republished with permission.
