US, Iran stall on Hormuz reopening as oil supplies tighten

• Iran insists it will monitor the Strait of Hormuz, disrupting oil exports and causing Brent crude prices to jump 50% since the war.
• US and China agree on opening the Strait, but progress is stalled. US sanctions Iran's oil; Trump considers lifting penalties on Chinese firms.
• Both the US and Iran agreed to postpone discussing Iran's highly enriched uranium, a major peace obstacle, until later negotiations.

WASHINGTON/TEHRAN - Iran said transit through the critical Strait of Hormuz will flow once the conflict with the US and Israel is over, but the sides are no closer to resolving their differences or finding a path to achieve it.

US President Donald Trump returned from a two-day summit with Iran’s close ally, China’s Xi Jinping, where both agreed the strait should be open but made no apparent progress towards that goal.

Iran has shown little interest in loosening its hold on the waterway, insisting it wants to maintain a degree of control even after the end of the war. Iran’s threats on ships in the Persian Gulf have brought exports from the oil-rich region to a near-standstill, sending energy prices soaring and giving Tehran significant leverage in talks with the US.

“Naturally, once the current state of insecurity is resolved, navigation conditions in the Strait of Hormuz will return to normal,” Iranian President Masoud Pezeshkian was cited as saying by the semi-official Mehr news agency.

Iran will implement effective and professional monitoring and control mechanisms in the Strait of Hormuz within the framework of international law, Mr Pezeshkian said without elaborating. He added Iran remains committed to a diplomatic resolution to the conflict.

Chinese Foreign Minister Wang Yi said on May 15 that the strait should be opened to shipping as soon as possible, according to state-run Xinhua News Agency. In response to Iran’s disruption of shipping movements, the US imposed a blockade on the Islamic Republic’s oil exports, in an effort to sever its economic lifeline and persuade its officials to agree to US terms for a peace deal. 

The statement from China came as the world’s two largest economies sought to emphasise points of agreement on the Middle East conflict during Mr Trump’s meetings with Mr Xi – even as they’re essentially on opposite sides, with China repeatedly criticising the US-Israeli attack on its Iranian ally.

On his way back from China, Mr Trump also told reporters he spoke with Mr Xi about potentially lifting sanctions on Chinese oil companies that buy Iranian crude. The Treasury Department has escalated those penalties in recent weeks as the US tries to pressure Tehran on talks. Beijing ordered its companies to ignore the sanctions.

“I’m going to make a decision over the next few days,” Mr Trump said aboard Air Force One when asked if he’d consider lifting the sanctions. “We did talk about that.”

Mr Trump said that three Chinese tankers that went through the Strait of Hormuz loaded with Iranian oil this week did so because the US allowed it, in an interview with Fox News. Iranian state TV had previously said over 30 ships were allowed passage through the strait since May 13, citing an official from the Islamic Revolutionary Guard Corps’ navy. 

The White House faces a conundrum: How to reopen the strait, lower global energy prices and wind down an increasingly unpopular conflict that has caused the biggest oil supply disruption in history ahead of midterm elections in November.

Physical crude markets have also firmed again in recent days, offering a reminder of the wider supply tightness that’s hitting the global oil industry.

Brent crude has jumped about 50 per cent since the start of the war, with traders fearing a fresh escalation in hostilities between the US and Iran after Mr Trump’s visit to China failed to yield any concrete progress on a plan to restart the Strait of Hormuz.

Pakistan’s Interior Minister Mohsin Naqvi arrived in Tehran on May 16, where he met his Iranian counterpart. The two discussed bilateral relations and the prospects for resuming US-Iran peace negotiations, for which Pakistan has been the main mediator, the semi-official Tasnim news agency reported.

A modest recovery in vessel movements seen earlier this week has faded as owners remained cautious.

“Negotiations are deadlocked, violence erupts sporadically and the economic costs of the prolonged closing of the Strait of Hormuz are rising,” Bloomberg Economics defence lead Becca Wasser wrote in a research note on May 15. “Threats to return to war continue to fly, and the status quo is becoming increasingly unsustainable. We think a return to open conflict is likely.”

The only real prospect of a short-term deal appears to be putting off talks about Tehran’s stockpile of highly enriched uranium, with both sides suggesting that issue be dealt with later – despite Mr Trump citing Iran’s nuclear programme as the main justification for the war.  

Iran said it had “come to the conclusion with the Americans” to postpone the topic until the later stages of negotiations, calling it “very complicated”, Foreign Minister Abbas Araghchi said at a press conference in India on May 15. 

Mr Trump also said aboard Air Force One that he’s willing to send US forces to remove Iran’s uranium “at the right time”, though he earlier suggested in a Fox News interview such a mission was “more for public relations than it is for anything else”.

Iran’s highly enriched uranium, which has been in an unknown location since a US and Israeli bombing campaign in June 2025, remains one of many obstacles to a peace agreement. BLOOMBERG