US President Donald Trump on August 10 announced that the United States will demand compensation from Iran in all future negotiations, responding to Tehran’s recent demands for reparations over damage from US and Israeli strikes. Trump framed Iran’s request for compensation as a novel idea he was willing to adopt, while expanding his own demands to include payments for victims of Iranian-backed attacks and domestic repression.
Iran had earlier said it was nearing a final pact with Oman to define new shipping lanes through the Strait of Hormuz but reiterated that the US must meet conditions, including compensation and an end to sanctions, before the key waterway is reopened. The strait, through which about a fifth of global oil and liquefied natural gas flowed prior to recent conflicts, has been effectively blocked since US-Israeli attacks on Iran in late February.
Trump’s Compensation Demands
In a series of posts on Truth Social, Trump stated that Iran should compensate the families of victims of attacks he attributed to Iranian-backed groups, including the 17 US sailors killed in the 2000 USS Cole bombing in Yemen, which the FBI has linked to al Qaeda. He also demanded payments for the families of thousands of others killed in conflicts involving Iranian proxies, as well as compensation for the families of Iranian protesters killed by regime forces over the past 50 years, citing figures of up to 52,000 deaths in the last five months alone.
Trump further broadened his demands to include compensation for damages and deaths in Lebanon, Syria, Yemen, and Gaza, which he attributed to Iranian actions. He instructed US representatives to incorporate these demands into all future negotiations with Iran.
Iran’s Conditions for Reopening the Strait
Iranian Foreign Ministry spokesman Esmaeil Baghaei said on August 10 that talks with Oman on new shipping routes through the Strait of Hormuz were progressing, with an agreement reached on a shipping route map. However, he noted that some technical issues on a joint statement remained unresolved. Baghaei emphasized that discussions also covered mechanisms for safe navigation, environmental protection, and combating crime, which Iran suggested would normally entail receiving payment in return.
Iran’s conditions for fully reopening the Strait include compensation for damages incurred during recent conflicts, an end to US sanctions, and a halt to military threats. Iranian officials have repeatedly stated that these conditions must be met before the waterway, a critical global oil transit route, can be fully reopened.
International Response and Oil Market Impact
The US has repeatedly stated it would not accept any deal under which Iran controlled or charged fees for access to the Strait of Hormuz. The ongoing tensions have contributed to rising oil prices and inflation, as the strait has been effectively blocked since the US-Israeli attacks in late February. Rights groups report that the Iranian government has continued to crack down on opponents during the conflict.
Trump’s announcement comes amid domestic political pressure, with midterm elections in November looming. His administration has framed the US-Israeli strikes as efforts to prevent Iran from developing nuclear weapons and to degrade its regional influence. However, the tit-for-tat demands for compensation have added a new layer of complexity to already strained negotiations.
Background: The Strait of Hormuz and Recent Conflicts
The Strait of Hormuz is a strategically vital waterway through which approximately 20% of the world’s oil and liquefied natural gas passes. Recent conflicts between the US, Israel, and Iran have led to disruptions in shipping, with both sides accusing the other of escalating tensions. Iran has denied responsibility for attacks on commercial vessels in the region, while the US and its allies have blamed Iranian-backed militias for several incidents.
The US and Israeli strikes in late February were framed as responses to Iranian threats, including its nuclear program and regional aggression. Iran has consistently denied pursuing nuclear weapons, asserting that its nuclear activities are for peaceful purposes. The latest round of negotiations with Oman reflects Iran’s efforts to secure a deal that would reopen the Strait while addressing its own demands for compensation and sanctions relief.