Iran's parliament is reviewing legislation that would formally ban ships linked to the United States, Israel, and other "hostile countries" from transiting the Strait of Hormuz, raising the stakes in a standoff that has already choked global oil markets and triggered the worst U.S.-Iran military confrontation in decades.

The proposed bill, approved by a parliamentary committee this week, would codify restrictions Iran has enforced informally since early August through naval patrols and missile strikes on vessels it accuses of violating preferred routing through Iranian territorial waters. NPR reported August 6 that the measure represents Tehran's determination to leverage control over the strategic waterway as the crisis deepens.

Hormuz Remains Closed

The strait — a narrow passage between Iran and Oman through which roughly one-fifth of global oil supplies transit — has been effectively closed to most commercial shipping since early August. Iran's Supreme National Security Council issued sweeping demands for reopening the waterway, including permanent withdrawal of U.S. military forces from the region and lifting of the naval blockade on Iranian ports.

Vice President JD Vance said Thursday that Iran told the U.S. it has "no plans" to impose tolls on Hormuz transit but acknowledged Washington is seeking Iranian commitments not to fire on commercial vessels. The apparent contradiction — no tolls but continued military threats — underscores the fragile state of indirect negotiations conducted through Omani mediators.

Oil Markets in Turmoil

The closure has sent oil prices surging and disrupted energy supplies to Asia and Europe. Tankers attempting to bypass the strait face significantly longer routes around the Arabian Peninsula, adding weeks to delivery times and driving up costs for consumers worldwide.

Iran maintains the restrictions target only vessels with ownership or cargo ties to countries it designates as hostile, but shipping companies report Iranian forces have interpreted those criteria broadly. Several attacks on UAE and Saudi-flagged ships suggest Tehran is willing to strike regional rivals as well as Western-aligned vessels.

U.S. Military Response

The U.S. has maintained a naval blockade of Iranian ports since hostilities escalated, attempting to prevent Tehran from exporting oil and military equipment. American officials characterize the blockade as a proportional response to Iran's attacks on commercial shipping, though Tehran insists lifting the blockade is a prerequisite for any Hormuz deal.

The Guardian reported that Iran's latest demands include not only an end to the U.S. military presence in the Gulf but also guarantees that Washington will "never threaten Iran again" — a condition American negotiators have dismissed as unworkable given Iran's continued support for regional proxy forces.

Oman's Mediation Effort

Oman has emerged as the key intermediary, hosting separate talks with Iranian and American officials who refuse direct negotiations. Secretary of State Marco Rubio acknowledged last week that the U.S. provides input to the Oman-Iran discussions but declined to characterize the process as formal mediation.

Al Jazeera reported Iran claims progress toward a deal on alternative shipping routes through Omani waters, though details remain vague and dependent on broader political concessions that neither side appears ready to make.

No Clear Path Forward

The parliamentary bill under review would give Iran's restrictions legal force domestically, potentially making it harder for future Iranian governments to reverse course without appearing weak. Conservative lawmakers in Tehran have pressed President Masoud Pezeshkian to maintain a hard line, warning against concessions that would undermine Iran's negotiating position.

With no breakthrough in sight and both sides doubling down on maximalist demands, the Strait of Hormuz crisis threatens to become a long-term disruption to global energy markets and a flashpoint for further military escalation.