Trump demands compensation from Iran as Hormuz talks stall and oil prices surge

Trump and Iran traded compensation demands Monday as hopes for a deal to reopen the Strait of Hormuz fade and oil prices climb. Photo by Graeme Sloan /Bloomberg

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U.S. President Donald Trump lashed out on Monday against Iran’s demands for war compensation as part of talks to wind down the conflict, dimming hopes of a quick deal that would reopen the vital Strait of Hormuz and pushing up oil prices.

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“I am likewise demanding compensation from Iran, for all of the people that they have killed and gravely wounded with their roadside bombs and many conflicts,” Trump wrote on social media. “Additionally, compensation should be paid to the families of the hundreds of thousands of innocent protestors that Iran has killed over the last 50 years.”

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The sweeping new demands from Trump, which he said will be put “firmly into any, and all, future negotiations,” are almost certain to be rejected by Iran, and come after Tehran reiterated assertive requests for reparations over the weekend and on Monday.

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The hardening on both sides makes it unlikely that Washington or Tehran will be able to agree to any immediate pact on Hormuz that could help end the war. Trump and other U.S. officials have recently suggested a deal with Tehran was getting closer, with both Iran and Oman in parallel discussions about potentially free up shipping in Hormuz.

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On Monday, Iranian officials made the new demands over Hormuz clear.

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“As long as hostile actions continue, the conditions for ensuring the safety of this waterway are not in place,” Iran’s foreign ministry spokesman Esmail Baghaei told reporters. “Its reopening is contingent on the U.S. ceasing its illegal actions, lifting the siege and compensating for damages.”

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Brent crude rose more than four per cent on Monday to over US$87 a barrel, extending a rally of more than five per cent over the previous three sessions. European diesel futures surged more than 10 per cent as refineries in Saudi Arabia and Russia also came under attack, further tightening the market for the fuel considered the workhorse of the global economy.

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Iran’s Foreign Minister Abbas Araghchi said on Saturday that negotiators are closing in on temporary lanes for ships entering and exiting the Persian Gulf. (Bloomberg)

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Trump had earlier signalled on Sunday that he was prepared to let economic pressure on Iran build, rather than launch fresh military strikes to force a reopening of the crucial waterway for oil and gas flows. “We are just
watching Iran with its huge inflation and the fact they have no money,” Trump told Axios in an interview on Sunday, saying that a U.S. naval blockade of the country was deepening its financial woes. “We are low-keying it.”

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The president’s comments had marked a shift from his repeated threats to escalate the bombing campaign against Iran and come amid lingering talks between Tehran and Oman to reopen Hormuz.

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Iran had reemphasized its determination to continue wielding control over Hormuz in the face of U.S. opposition by naming hard-line former Islamic Revolutionary Guard Corps commander Mohsen Rezaee to its top security post over the weekend.

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An advocate for full Iranian control over the waterway, he served as military adviser to Iranian Supreme Leader Mojtaba Khamenei and will now head the Supreme National Security Council, which coordinates decisions on the war and negotiations to end it.