US Proposes Release of Frozen Funds, Iran Insists on Strait of Hormuz Fees

By Chang SeongWon Posted : July 3, 2026, 15:04 Updated : July 3, 2026, 15:04
Cargo ships anchored near the Strait of Hormuz, Bandar Abbas, Iran [Photo: AP]


As indirect negotiations between the United States and Iran take place this week in Qatar, the US has demanded the reopening of the Strait of Hormuz in exchange for the release of frozen funds. However, Iran is maintaining its stance on collecting fees for passage through the strait, according to a report by The Wall Street Journal on July 2, citing sources.
The report states that the US negotiating delegation, led by Steve Witkoff and Jared Kushner, met with Qatari officials on July 1 to discuss the reopening of the Strait of Hormuz and the implementation of a US-Iran memorandum of understanding (MOU) regarding the Israel-Lebanon conflict.
The US has proposed to release $6 billion of Iran's $100 billion in frozen overseas funds in exchange for Iran relinquishing control over the Strait of Hormuz and its fee collection for passage. However, sources indicated that discussions fell through as Iran insisted on maintaining its control over the strait.
Kazem Garibabadi, Iran's Deputy Foreign Minister and a member of the negotiating team, stated on social media platform X that the US Central Command's discussions with 12 Middle Eastern countries regarding free navigation and security in the Strait of Hormuz are misplaced, asserting, "The Strait of Hormuz is under Iran's jurisdiction, not the US Central Command."
Consequently, Iran continues to uphold its policy of charging fees for all vessels passing through the Strait of Hormuz, as noted by the WSJ. The US is also seeking to discuss countermeasures with Oman, which manages the southern region of the strait. However, Iran, which is pursuing joint management of the strait with Oman, has reportedly opposed any plans that do not include fee collection.
Meanwhile, Gulf states have expressed skepticism about Iran's capability to manage the Strait of Hormuz effectively. Sanam Vakil, head of the Middle East and North Africa program at the British think tank Chatham House, remarked, "Iran seeks to open the Strait of Hormuz under favorable conditions for itself and is reluctant to give up its current leverage in negotiations. However, it is easier for Iran to disrupt the strait than to manage it stably."
As discussions between the US and Iran remain stalled over the Strait of Hormuz, the safety of vessels navigating through the area is uncertain. Last week, Iran attacked vessels using alternative routes established by Oman without its permission, prompting a retaliatory response from the US and escalating tensions.
According to maritime data firm Kpler, the number of vessels passing through the Strait of Hormuz as of July 1 was 43, nearly halving from 75 the previous week.



* This article has been translated by AI.

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