Iran, US set new conditions during Hormuz talks: What does this mean?

EXPLAINEROil prices surge as talks stall over competing demands, hampering prospects for reopening crucial strait.Oil tankers pass through the Strait of Hormuz [File: Hamad I Mohammed/Reuters]Published On 11 Aug 2026The United States and Iran have exchanged new demands during negotiations for the reopening of the Strait of Hormuz, raising new doubts about prospects for a wider deal to end their five-month war.While the US has said it is involved directly in the talks, Iran has said it is talking directly only with Oman, with which it proposes sharing future management of the critical waterway, through which one-fifth of the world’s oil and liquefied natural gas supplies were shipped before the Iran" class="entity-link entity-event" data-entity-id="38678" data-entity-type="event">US-Israel war on Iran began at the end of February.Recommended Stories list of 3 itemslist 1 of 3Oil prices, stocks surge as Hormuz closure drags onlist 2 of 3Iran hierarchy consolidation as IRGC veteran tapped for key security rolelist 3 of 3Trump demands compensation from Iran as talks on Strait of Hormuz continueend of listOn Monday, US President Donald Trump said he would demand compensation from Iran for deaths and injuries linked to conflicts and attacks over several decades after Iran last week issued new demands for reparations for the war and said it would not reopen the strait until Washington meets its political and economic conditions.Experts said broader peace negotiations between the two countries are unlikely to restart until the issue of the Strait of Hormuz is resolved.“The two sides are further apart,” Al Jazeera’s Tohid Asadi reported from Tehran. “They are getting more and more distant when it comes to the possibility of any diplomatic settlement.”The latest developments threaten to further complicate the talks between Tehran and Oman on future management of the strait despite both Iran and the US previously indicating they want an agreement to end the fighting.Here is what we know:What has Trump said about ‘compensation’?Trump said Iran should pay compensation for people killed or seriously wounded through Iranian actions.“We’re going ⁠⁠to ask for money for the damage they’ve done over a 50-year period,” Trump told reporters at the White House. “So if there’s damages to be paid, I think Iran should pay those damages.”Then in a post on his Truth Social platform, the US leader said Iran should compensate families of the 17 US sailors killed in an October 2000 attack in Yemen on the naval vessel USS Cole, which was blamed on al-Qaeda not Iran.He also demanded compensation for the families of Iranian protesters killed during antigovernment unrest in January.“Also, with respect to the Iran negotiations, Iran should be responsible for the damages and death caused to the people of Lebanon, Syria, Yemen, and Gaza!” Trump wrote.Trump’s demands came after Iran said the US should compensate Tehran for damage caused by US and Israeli attacks during this year’s war.The escalatory rhetoric from the US president appeared to conflict with comments made by his vice president, JD Vance, who on Saturday said he was confident about reaching a deal with Iran and the agreement would be good for the American public.Vance also said Iran had told the US that it has “no plans” to impose tolls on the Strait of Hormuz – one of the points of friction between the two sides.However, oil prices jumped more than 5 percent on Monday after Trump’s new demands while prices rose again on Tuesday as hopes for a deal faded.What are Iran’s new demands?Iran says reopening Hormuz, which it essentially closed to shipping shortly after the start of the war, depends on Washington taking several steps, including agreeing to a set of new demands.Six new conditions announced by Iran’s Supreme National Security Council on Saturday were: An end to US threats and insults against Iran A permanent end to attacks against Iran and its allies in Lebanon, Palestine, Yemen and Iraq The lifting of the US naval blockade on Iranian ports and the withdrawal of US naval and air forces from around Iran Compensation for damage from what it called two “imposed wars”, referring to the war begun on February 28 and the 12-day war with Israel in June 2025, which the US also joined The lifting of sanctions The unconditional release of frozen Iranian assets At the same time, Tehran said negotiations with Oman over a new shipping arrangement in the Strait of Hormuz, in which they are to define new shipping ⁠⁠⁠⁠lanes, have made progress and are in their “final stages”, according to Foreign Minister Abbas Araghchi.On Sunday, Araghchi reiterated the Iranian position that there are no direct talks with the US, but messages are understood to be being exchanged through intermediaries.What does this mean for peace talks?US-Iran negotiating positions over the Strait of Hormuz appear to be hardening, raising doubts over the prospects for a diplomatic breakthrough for a broader peace deal, according to analyst Negar Mortazavi. Experts said it is unlikely that talks for this larger agreement could restart until the issue of the Strait of Hormuz and how it will be managed is settled.“Both sides appear to be putting forward maximalist demands ahead of serious negotiations,” Mortazavi, senior fellow at the Centre for International Policy, told Al Jazeera.Mortazavi said the latest US stance is especially sensitive.“Trump’s new demands are particularly problematic because they introduce issues that go beyond ending the current conflict. If compensation over protests and other past events becomes a genuine US condition for an agreement, rather than simply a negotiating position, it could make a deal extremely difficult for Tehran to accept,” she added.In turn, Tehran, she said, is also seeking significant guarantees, not only for an end to the fighting but also “assurances that the conflict will not simply restart later, as well as economic relief after the war”.Tehran has previously indicated that it has lost trust in US negotiators because the US has commenced attacks three times on Iran while previous talks had been going on.According to Tehran-based political analyst Hossein Royvaran, how the Strait of Hormuz standoff ends will come down to which party has the greatest endurance.“This equation now exists: closure vs blockade. But the question is, who cries out first?” he told Al Jazeera.“Right now, America is suffering: in petrol prices, in inflation, in the rising cost of living at home. There is deep discontent inside America over this war and its consequences for society there,” Royvaran told Al Jazeera.“The same is true in Iran, though in Iran there are justifications society finds acceptable: that this war was imposed on Iran and Iran had no choice but to defend itself.”