Iran threatens to block ships in Strait of Hormuz over Trump's plan to use frozen assets for compensation payments
Iran on Tuesday (July 28) warned it could block commercial vessels linked to companies and countries using its frozen assets for compensation payments from transiting
Iran on Tuesday (July 28) warned it could block commercial vessels linked to companies and countries using its frozen assets for compensation payments from transiting the Strait of Hormuz. The warning came after US President Donald Trump said future damages to ships, cargo and related maritime assets would be paid using Iranian funds held and controlled by Washington. In a statement carried by Iranian state broadcaster Islamic Republic of Iran Broadcasting (IRIB), the spokesperson for Iran’s Khatam al-Anbiya Central Headquarters accused the United States of attempting to use Tehran’s frozen assets to compensate for damage caused during the recent conflict in West Asia. Iran described the conflict as an "imposed war" and rejected the US move as unlawful.
“The damages to vessels that were damaged during the imposed war against Islamic Iran due to the creation of insecurity by the US military and the violation of the illegal and unsafe route south of the Strait of Hormuz will be paid from Iran's frozen assets,” the statement said. The Iranian military warned that any country or company supporting such a plan could face restrictions on maritime access. “The armed forces of the Islamic Republic of Iran will not allow any of their vessels to pass through the Strait of Hormuz,” the statement said. Trump announces use of Iranian funds The warning followed a statement by Trump on his Truth Social platform, where he said Iranian money held by the United States would be used to cover future damages involving ships and cargo.
“Any and all damages done to Ships, Cargo, or anything related thereto, will be paid for by Iranian Money that the United States has in its possession, and controls,” Trump wrote. Trump said the costs could be “very substantial” but described the move as a “fair and equitable” measure. Also Read | Explained: How the Caspian Sea could bring the Ukraine and Iran wars together Iran calls US move an ‘incendiary precedent’ Iranian Foreign Minister Seyed Abbas Araghchi criticised Trump’s announcement, warning that the use of another country’s frozen assets to settle claims could undermine international financial norms. In a post on X, Araghchi said: “Seizing another nation's assets to pay for unrelated future claims is an incendiary precedent.” He warned that normalising asset confiscation could create broader instability.
“Once governments normalise confiscation, no one's assets are safe,” Araghchi said. Strait of Hormuz remains global flashpoint The latest dispute adds to tensions surrounding the Strait of Hormuz, one of the world’s most important maritime chokepoints through which a significant portion of global oil and liquefied natural gas shipments pass. Any restrictions on shipping through the waterway could disrupt energy markets and increase concerns over global trade flows.
The BriefWire