For decades, Iran warned that a major attack on its territory would put transit through the Strait of Hormuz at risk. Eight months into the U.S.-Israeli war against Iran, Tehran has not only made good on that threat by severely restricting traffic through the waterway. It is also reshaping how the Strait will be managed after the fighting ends. Through mines, missiles, drones, attacks on vessels traveling without its permission, and new efforts to regulate transit, Iran has turned Hormuz from a wartime pressure point into a potential source of lasting regional power.
The question is no longer simply whether Iran can keep the Strait closed against the U.S. military’s best efforts to reopen it, but what Tehran intends to do with that power. Does it want an arrangement that provides lasting deterrence against future aggression, or does it seek permanent, exclusive authority over who enters the Gulf and under what conditions? The latter would give Iran unprecedented leverage over neighboring states whose economies and security relationships depend on unrestricted access to the waterway.
That distinction makes negotiations over Hormuz’s future a stark test of Tehran’s regional ambitions, while feeding into decades of tension and distrust between Iran and its neighbors.
It has also let conflict dynamics take on a life of their own, as regional actors increasingly try to shape the terms of a new regional order. With Washington unable to impose a settlement, and its military activities curtailed by domestic politics, Iran and its regional allies continue to press their military advantage to strengthen their bargaining position. The Gulf states, on the other hand, are boxed in, desperate to avoid a return to war but fearful of letting Iran institutionalize its wartime gains.
Nowhere is that contest more pronounced than over the Strait of Hormuz, where both the conflict and the June memorandum of understanding (MoU) designed to end it have created conditions for a new regional balance of power.
Point 5 of the MoU, which directly addresses Hormuz, tasks Iran and Oman with defining “the future administration and maritime services in the Strait,” while the other Gulf states are merely to be consulted. Any arrangement need only be “in line with” international law and coastal-state sovereignty—language that, according to legal experts consulted for this article, has limited binding force and imposes no strict legal obligations.
That is a hard pill to swallow. Before February 28, commercial vessels passed through Hormuz without seeking Iranian authorization, while the U.S. underwrote freedom of navigation through its military presence in the Gulf.
Although negotiations are ongoing, Iran did not even wait for them to begin before taking steps to formalize its control. On May 5, Tehran established the Persian Gulf Strait Authority to regulate maritime transit, requiring vessels to comply with Iranian rules and obtain permission before passage. The authority has since blacklisted vessels accused of violating those rules and threatened fines, detention, and confiscation.
The prospect that Tehran could now convert that wartime leverage into a lasting role over access to the Strait would represent the clearest strategic failure of the war for Washington. For the Arab Gulf states, it could potentially be more disastrous than the conflict itself. Gulf ports have become central nodes in global trade and logistics on the basis of their geostrategic location and open access to immense natural resources. If Iran can determine which vessels enter the waterway and under what conditions, it gains a powerful instrument of control and global clout extending far beyond maritime affairs.
While it is clear that the Arab states of the Gulf strongly oppose replacing the prewar system of largely unrestricted maritime access with Iranian discretionary authority, it is difficult to discern where each Arab government now stands on negotiations. Differences likely exist over how much Iranian control they are prepared to tolerate and over how aggressively they want Muscat or Washington to resist Tehran’s demands—balanced against the pressing need to bring the war to a decisive end.
For Tehran, relinquishing leverage is hardly straightforward. Iran has paid heavily for a war it did not start. Its military capabilities and civilian infrastructure have been severely damaged and thousands of people killed. Washington continues to apply intense economic pressure while retaining the threat of renewed military action, with widespread expectations that fighting could resume now that the U.S. midterm elections are over.
Iranian officials can reasonably ask why Tehran should surrender what now constitutes its most important strategic asset and a potent form of deterrence—one arguably more effective than nuclear weapons. As long as Iran remains engaged in what it considers an existential struggle, control over Hormuz provides both protection against renewed attack and leverage over the terms of any settlement.
That logic helps explain the difficulty of negotiations with Oman. Muscat initially proposed a joint regional mechanism for managing Hormuz, reportedly backed by several regional states and financed through voluntary transit fees, but Tehran rejected arrangements that would deny it exclusive control. Iran also rejected an Omani proposal to divide the route evenly, countering with one that would place inbound and some outbound traffic within Iranian territorial waters. Deputy Foreign Minister Kazem Gharibabadi has said Tehran intends to ensure that Hormuz “never returns to its pre-war state.”
Subsequent talks explored a temporary seven-mile-wide maritime corridor and revenue-sharing, but divides persisted over which vessels would be permitted passage, and over Tehran’s insistence on surveillance and prior approval. Fees could provide badly needed revenue for Iran’s war-damaged economy, but a system in which Tehran approves passage and collects payments would also underpin an enduring claim of authority and set a dangerous precedent for other maritime chokepoints.
Even that diplomatic process has now stalled as the contest over the regional order has expanded beyond Hormuz. A September meeting in Salalah, Oman had intended to bring Iran and the Gulf states into discussions over the Strait, but it was postponed, with Muscat citing the need for greater regional consensus. Perhaps not coincidentally, the Yemen-based Ansar Allah, widely known as the Houthis, launched a military offensive along Yemen’s Red Sea coast and began attacking Saudi Arabia with missiles and drones.
These developments underscore the broader struggle over leverage unfolding during the lull in the U.S.-Iran confrontation. As Iran seeks to institutionalize its advantage over Hormuz, an Iranian ally has strengthened its position around the approaches to the similarly vital waterway of Bab al-Mandeb, offering complementary levers of pressure. Saudi Arabia cannot easily separate negotiations over one chokepoint from a conflict that threatens its alternative export routes through another, and Arab Gulf states increasingly confront insecurity at both maritime gateways to the Arabian Peninsula.
As such, distinguishing between Tehran’s possible economic, security-based, and hegemonic motivations is key, with Hormuz acting as an important indicator. Across the Arab Gulf, a persistent fear is that Iran does not simply seek protection from a hostile region, including the U.S. and its military bases, but aspires to a privileged position in which smaller neighbors must accommodate Iranian interests at their expense.
The origins of this anxiety predate the Islamic Republic. Iran’s size, population, geography, and military potential have always created a structural imbalance between it and the Arab states along the Gulf. Under the Shah, Iran explicitly pursued regional primacy, fueling fears of expansionism. The Islamic Republic added an ideological-interventionist dimension through its revolutionary rhetoric and military support for Shia minorities across the Arab world.
In response to the underlying power imbalance, Gulf rulers have long sought protection from external powers, first Britain and later the U.S. From Tehran’s perspective, however, the resulting American military presence is itself a source of insecurity, compounded by U.S. support for Israel’s military predominance. Two wars on Iran within a year are now ample evidence that Tehran has legitimate security reasons to want American power in the Gulf reduced, and—given the effectiveness its blockade has had on resisting the U.S.—to regard Hormuz as a critical deterrent.
But therein lies a strategic contradiction. If Iran responds to its insecurity by claiming permanent discretionary authority over its neighbors’ maritime access—or by using its allies’ military power to increase pressure elsewhere—it risks reinforcing the security architecture it wants dismantled. Gulf states that fear Iranian domination would have stronger incentives to preserve an American military presence or cultivate other outside powers capable of balancing Tehran.
If Tehran pursues protection against renewed attacks while accepting an arrangement that guarantees predictable, non-discriminatory access for everyone, it would strengthen the argument that security remains its primary concern. Establishing a coordination body that shares authority and revenues could go even further in demonstrating that Tehran seeks compensation and deterrence rather than primacy.
By contrast, if Iran insists on exclusive authority over who can enter the Gulf, using that power to extract concessions from its neighbors, the outlook will be far more negative. The same holds if it uses military gains by its allies elsewhere to impose a broader regional settlement. At some point, the pursuit of security through accumulating asymmetric leverage becomes indistinguishable to neighboring states from a bid for hegemony.
In the meantime, Iran is very unlikely to surrender its leverage while it remains at war with the U.S. But looking forward, Tehran also needs regional stability, commercial relationships, investment and economic recovery, which give its Arab neighbors plenty of leverage of their own. A prolonged struggle over Hormuz, particularly alongside renewed conflict around Bab al-Mandab, would frustrate those goals while deepening Gulf Arab dependence on outside powers.
A negotiated arrangement therefore remains possible, and serves the interests of every state surrounding the Gulf. But the terms Iran is willing to accept will matter as much as whether or not an agreement is reached. Tehran now possesses an extraordinary ability to exert direct leverage over its neighbors. What it chooses to do with that power may reveal more about its regional ambitions than decades of rhetoric ever could.
