The most explosive element of Iran’s five-point counter-proposal to end the war is its insistence on retaining sovereign control over the Strait of Hormuz, a demand that Washington has made clear is fundamentally incompatible with any acceptable peace deal. The standoff over the world’s most strategically vital waterway encapsulates the deeper struggle at the heart of this conflict: whether Iran will emerge from the war with its regional leverage intact or stripped of its most powerful economic weapon.
The Strait of Hormuz is the narrow chokepoint through which approximately 20% of the world’s oil supply passes. Since the outbreak of hostilities, Iran has effectively used the threat of closure — and partial enforcement of it — to weaponise the global energy market. Oil prices have surged to levels not seen in decades, and the economic ripple effects have been felt from American petrol stations to European manufacturing plants to Asian import-dependent economies.
The American ceasefire proposal, conversely, made the reopening of Hormuz to international shipping a central demand. This was non-negotiable from Washington’s perspective, both for economic reasons and as a matter of strategic principle: allowing Iran to retain permanent leverage over global energy supply would fundamentally alter the balance of power in the Middle East. The Trump administration has gone so far as to consider an invasion of Kharg Island — Iran’s primary oil export terminal — as a means of forcing the issue militarily.
Iran has responded to the Kharg Island threat with an extraordinary counter-threat: that it would carpet-bomb its own territory to kill any US landing force. Parliament Speaker Mohammad Bagher Ghalibaf warned that Iran would strike the vital infrastructure of any regional country found to be assisting an invasion. An unnamed Iranian military official said Iran would open new fronts and target Red Sea shipping if a ground operation were launched. The layered deterrence is designed to make the military option prohibitively costly.
The Hormuz impasse means that any ceasefire agreement will require creative diplomatic engineering — possibly a phased arrangement in which Iran gradually reopens the waterway in exchange for verified concessions from the US. Such a formula would need to give Tehran a genuine win while restoring global energy stability. Bridging that gap, with bombs still falling and both sides’ domestic politics pulling toward confrontation, is perhaps the most difficult diplomatic challenge of the current era.