Iran demands billions, sanctions relief to reopen Hormuz

Iran’s Revolutionary Guards said Sunday they will not reopen the Strait of Hormuz until the United States meets a list of demands. The demands include direct compensation for war damages, an end to U.S. sanctions, and a halt to American military support for regional rivals.

This escalation comes after years of rising tensions between Iran and the U.S. since Washington withdrew from the 2015 nuclear deal in 2018 and reimposed sanctions. Since then, Iran has responded with a mix of diplomatic pressure and military moves, including seizing oil tankers and attacking Saudi oil facilities. The Strait of Hormuz, through which a third of the world’s seaborne oil passes, has become a flashpoint. Iran has repeatedly threatened to close it in response to perceived aggression, though it has not yet done so.

The list of demands reads like a capitulation document, calling for billions in reparations for past conflicts—including the 1953 coup and the 1980s Iran-Iraq war. Iran also wants the U.S. to unfreeze Iranian assets, lift sanctions on its oil exports, and end military cooperation with Gulf states. Analysts say the demands are unlikely to be met in full, but they signal Iran’s willingness to use its leverage over global oil flows to pressure Washington.

What happens next depends on whether either side blinks. If Iran follows through on its threat to keep the strait closed, global oil prices could spike sharply, hurting economies already strained by inflation and energy costs. The U.S. has vowed to keep the strait open and has sent additional military assets to the region in the past. But with both sides digging in, the risk of miscalculation rises. Diplomacy has stalled, and new talks are not on the horizon. The longer this standoff lasts, the greater the chance of a costly confrontation that neither side can fully control.