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Iran Seeks Control of Strait of Hormuz in US Ceasefire Talks

Summary

Reports said Iran sought control of the Strait of Hormuz in its latest ceasefire proposal to the US.
Markets are refocusing on geopolitical risks surrounding the Strait of Hormuz, a key route in the global oil supply chain.
Investors are also watching whether control of the Strait of Hormuz emerges as one of the key variables in future US-Iran negotiations.

Iran has sought control over the Strait of Hormuz in ceasefire talks with the US, according to reports. The demand has renewed focus on geopolitical risks surrounding the waterway, a vital route for global oil supplies.

Walter Bloomberg, an overseas financial news feed, reported on May 11 that Iranian state media said Tehran's latest ceasefire proposal to Washington included demands related to sovereignty and control over the Strait of Hormuz.

The Strait of Hormuz is a key maritime corridor for crude exports from major Middle Eastern oil producers including Saudi Arabia and Kuwait. Since military clashes involving the US and Israel intensified in February, traffic through the route has effectively faced disruptions, the report said, with some oil export flows also affected.

Exclusive economic zones around the strait are partly under the jurisdiction of Iran and Oman. Under international law, however, foreign vessels have the right of innocent passage through the waterway.

Markets are closely watching whether control of the Strait of Hormuz will emerge as a key issue in future US-Iran negotiations. The passage is a strategic chokepoint that carries a significant share of global seaborne oil shipments.