Trump Demands Iran Pay Compensation as Hormuz Deal Hopes Dim

US President Donald Trump has demanded that Iran pay compensation for deaths and injuries it has caused in conflicts and protests, a new condition that threatens to derail negotiations over the Strait of Hormuz.

In a post on his Truth Social platform, Trump said he was responding to Iran's earlier call for Washington to meet conditions, including compensating Tehran for damage from US-Israeli strikes over the past five months. He said his demand would be part of all future talks and would include payments to families of protesters and victims of attacks, including the 2000 bombing of the USS Cole.

Iran had said it was close to a deal with Oman on new shipping lanes through the strait, but insisted the US must end sanctions and military threats before the waterway could reopen. The strait, which carried about a fifth of global oil and LNG before the conflict, has been effectively blocked since late February, pushing up energy prices.

Oil prices rose more than 4% and European gas prices jumped over 10% following Iran's statement, as hopes for an imminent deal faded. The US and Iran agreed to a ceasefire in June, but Washington reimposed a blockade on Iranian shipping in July, which Tehran called a violation of the truce.

Meanwhile, Iran's Yemen-based allies, the Houthis, have stepped up attacks on shipping in the Red Sea and declared a naval blockade against Saudi Arabia. Fighting in Yemen has escalated, with seven people killed in a Houthi attack on the port city of Mocha on Monday.