‘That’s a good idea’: U.S. and Iran trade reparation demands as Hormuz deal hopes fade

President Donald Trump said Monday that Iran should pay reparations for what he labeled “the damage they’ve done” over the past half a century.

“They asked for reparations, you might say, or they asked for money for the damage that we’ve done, and I said that’s a good idea, well we’re going to ask for money for the damage they’ve done over a 50-year period,” Trump told reporters in the Oval Office.

He added that compensation could be applied to pay damages for U.S. personnel killed or wounded in the Middle East, as well as to the families of protesters killed in a crackdown on mass unrest by the Iranian regime this year.

“If there’s damages to be paid, I think Iran should pay those damages,” he said.

Oil prices jumped on Tuesday, with global benchmark Brent crude oil futures adding 2.5% to trade at $89.89 per barrel, while U.S. West Texas Intermediate crude futures were last seen 2.9% higher at $84.49.

Separately, the president said in a Truth Social post on Monday that he was “demanding compensation from Iran.”

“It is an interesting idea because now I am likewise demanding compensation from Iran,” he said, pointing to civilian and military deaths and casualties. “I have instructed my representatives to put this firmly into any, and all, future negotiations.”

Trump’s reparations demand has introduced a new sticking point after Iran laid out its own conditions for reopening the Strait of Hormuz on Saturday, a vital waterway that carried roughly a fifth of the world’s oil before the war.

Mohammad Bagher Zolghadr, secretary of Iran’s Supreme National Security Council, said Saturday the strait won’t reopen until Washington lifts its naval blockade and sanctions, withdraws American forces from the region, pays war reparations and releases frozen Iranian assets. The council also called for an end to U.S. attacks on Iran’s regional allies.

Iran’s foreign ministry on Tuesday pushed back on the economic front. The spokesman Esmaeil Baqaei responded to the U.S. Treasury Secretary Scott Bessent’s claims that U.S. sanctions were “suffocating” Iran.

He said that Washington opts for sanctions whenever diplomacy fails and escalates them when they don’t work — a pattern he said has become less a “policy” than a “compulsive addiction.”

Trump also said Monday that the U.S. Navy had swept the Strait of Hormuz clear of mines and now holds “100%” control of the waterway, with reparations emerging as the latest flashpoint between Washington and Tehran.

“It’s open now,” he told reporters at the White House, adding that the U.S. was “the only one that has control of the Strait of Hormuz right now.”

On Tuesday morning, the U.K. Maritime Trade Operations Centre (UKMTO) said it had received a report of an incident involving a tanker and military forces in the Gulf of Oman, near the Strait of Hormuz.

“Vessels are advised to consider the latest maritime security information and maintain awareness of the evolving operational environment,” the maritime security body said. “Authorities are aware and relevant investigations remain ongoing.”

Iranian officials have insisted that the Strait of Hormuz would remain closed until the U.S. agrees to its demands including lifting their naval blockade, while its discussions with Oman over a shipping arrangement would not lead to the waterway being fully reopened.

Trump has signaled that he was prepared to let the mounting economic distress take its toll on Iran rather than launch further military strikes.

The impasse leaves Washington treating its naval presence as a permanent fixture guaranteeing access, while Tehran treats that same presence as the primary obstacle to normalizing traffic. Iran has insisted that it would not reopen the Strait of Hormuz as long as the U.S. continues to blockade its ports.

Energy supply disruptions remain a key market concern, with tanker traffic through the strait still subdued, said Lloyd Chan, senior currency analyst at MUFG Bank in Singapore, noting that Brent prices remain way above above pre-conflict levels.

While periodic flare-ups remain possible, a full-blown regional war is still not the base case, Chan added.