Donald Trump has called a US-Iran deal to reopen the Strait of Hormuz a ‘joint venture’ as Tehran prepares to charge ships up to $1 million per vessel to pass through the world’s most critical oil artery.
Iran agreed to a two-week ceasefire and will reopen the waterway while a 10-point peace plan is negotiated by both sides, Trump announced Wednesday.
The exact terms remain unsettled, but ships must notify intermediary companies linked to the Islamic Revolutionary Guard Corps (IRGC) of their cargo, destination and owner – with tolls of at least $1 per barrel payable in Chinese yuan or cryptocurrency.
Trump welcomed the idea on Wednesday, telling ABC: ‘We’re thinking of doing it as a joint venture. It’s a way of securing it – also securing it from lots of other people.
‘It’s a beautiful thing.’
The Strait, through which a fifth of the world’s oil flows, has been dubbed the ‘Tehran Tollbooth’ by analysts and traders as IRGC patrol boats will only escort vessels once payment clears.
Some analysts believe the scheme could net Iran as much as $500 billion over five years.
Hamid Hosseini, a spokesperson for Iran’s Oil, Gas and Petrochemical Products Exporters’ Union, said that cargo checks were necessary to prevent the transport of weaponry.
‘Iran needs to monitor what goes in and out of the strait to ensure these two weeks aren’t used for transferring weapons,’ Hosseini, whose industry association has close ties to the regime, told the FT.
‘Everything can pass through, but the procedure will take time for each vessel, and Iran is not in a rush,’ he added.
Hosseini’s comments indicate that vessels must hug the northerly Iranian coast of the Strait – which will raise concerns for maritime insurers.
Tankers in the Persian Gulf on Wednesday received a radio alert warning that they would be targeted if they did not first gain transit approval from Iranian authorities.
‘If any vessels try to transit without permission, [they] will be destroyed,’ said the broadcast in English.
Western shipping giants were working frantically to establish details over whether the Strait was truly operational again.
Maersk, the world’s second biggest shipping line, said it was ‘working with urgency’ to clarify the terms.
‘The ceasefire may create transit opportunities, but it does not yet provide full maritime certainty,’ it said, adding that it was maintaining a ‘cautious approach’ and would not immediately change any routes.
If Iran keeps its grip on the Strait, it will raise explosive questions for OPEC+, the oil producers’ cartel, and redraw the balance of power in the region.
Saudi Arabia, one of the group’s most powerful members, would regard Iranian control of the waterway as intolerable. Crown Prince Mohammed bin Salman had urged Trump to crush the Iranian regime before the ceasefire.
Ali Shihabi, a commentator close to the Saudi royal court, told the FT: ‘Allowing Iran any form of control over the strait would be a red line. The priority has to be unimpeded access through the strait.’
The ten-point plan, reported by Iran’s Tasnim news agency, says that the US should accept Tehran’s continued control over the Strait, recognize its right to uranium enrichment, lift all sanctions, pay compensation, and withdraw all troops from the region.
Trump vowed that Iran will not be able to enrich uranium and that the US will coordinate with Tehran to extract ‘nuclear dust’ buried deep underground after airstrikes.
The President wrote on Truth Social on Wednesday: ‘There will be no enrichment of uranium, and the United States will, working with Iran, dig up and remove all of the deeply buried (B-2 bombers) nuclear “dust.”‘
The safety of the uranium was confirmed before an eleventh-hour deal was struck, the White House said.
‘Nothing has been touched from the date of attack,’ Trump said, claiming that the nuclear site has been watched closely since it was bombed.
It is not clear whether Trump was referring to the US bombing of Iran’s nuclear facilities in June, or to more recent strikes during the current Iran war.
Trump said that tariff and sanctions relief were being discussed as part of a peace plan with ‘many’ points already agreed.
Trump described the deal as ‘total and complete victory’ on Tuesday night.
The US and Iran will now engage in negotiations over the next two weeks, buying some time to try to reach a permanent settlement.
It is unlikely to be smooth sailing – but oil plunged below $100 per barrel for the first time in weeks and US stocks soared.
Following the confirmation of the deal, Trump hailed ‘a big day for world peace’ after agreeing to pause the attacks.
Iran has ‘had enough’ of the conflict, the US president said on Truth Social, and there will now be ‘lots of positive action.’
Israel has also agreed to halt attacks on Iran for two weeks, a senior White House official told Axios, with the ceasefire taking effect once the Strait of Hormuz is reopened.
Iran accepted the Pakistan-brokered deal after a last-minute Chinese intervention urged Tehran to show flexibility over the war’s economic fallout, three Iranian officials told the New York Times.
US crude oil prices plunged after Trump’s announcement, with West Texas Intermediate contracts falling by more than 15 percent to $95 per barrel after hitting $116 earlier Tuesday.
Trump had warned Tuesday morning that ‘a whole civilization will die tonight, never to be brought back again’ if no deal was reached by his 8pm ET deadline.
Trump said that the 10-point proposal ‘is a workable basis on which to negotiate,’ despite saying on Monday that the deal was not ‘good enough.’
Vice President JD Vance, Trump’s son-in-law Jared Kushner and Special Envoy Steve Witkoff have been leading US negotiations to end the war, launched on February 28 under the name Operation Epic Fury.
The deal came after Pakistani PM Sharif posted on X that major breakthroughs had been made between US and Iranian negotiators.
White House Press Secretary Karoline Leavitt said the announcement came with a caveat: ‘There are discussions about face-to-face meetings between the United States and Iran, but nothing is final until it is announced by the President or the White House.’
Iran proposed the 10-point counter-proposal to US negotiators via Pakistani officials on Monday after the US gave Islamabad a 15-point proposal to begin a ceasefire.
The President refused to comment on the 10-point plan earlier on Tuesday, telling Fox News: ‘I can’t comment, because right now we’re in heated negotiations.’
Sharif had called on both Trump and the Iranian regime to accept the two-week ceasefire before the President finally relented.
‘To allow diplomacy to run its course, I earnestly request President Trump to extend the deadline for two weeks. Pakistan, in all sincerity, requests the Iranian brothers to open Strait of Hormuz for a corresponding period of two weeks as a goodwill gesture,’ Sharif said on Tuesday afternoon.
‘We also urge all warring parties to observe a ceasefire everywhere for two weeks to allow diplomacy to achieve conclusive termination of war, in the interest of long-term peace and stability in the region.’
