Trump demands compensation from Iran over deaths and protests

US President Donald Trump on Monday demanded Iran pay compensation for the deaths of people he said it had killed in wars, attacks and protests, raising the rhetorical stakes with Tehran as hopes faded for an imminent deal to reopen the Strait of Hormuz.

Trump said he was responding to Iran’s earlier call for Washington to meet conditions, including recompensing Tehran for the damage caused in the more than five months since the US and Israel launched strikes on its territory. The abrupt new US demand was not mentioned in any previous talks. Trump wrote on his Truth Social service that he would include the compensation claims in all future negotiations with Iran. He also suggested Iran should compensate the families of those killed on the USS Cole, a reference to the October 12, 2000, attack on that naval vessel in Yemen which killed 17 US sailors and has been blamed on al Qaeda, not Iran.

Market reaction to the escalation

Oil prices jumped 3 percent after the statement from Iranian Foreign Ministry spokesman Esmaeil Baghaei, as initial optimism about a potential deal over the strait was tempered by Iran’s talk of conditions. Brent crude extended gains to trade up 4.25 percent at 1720 GMT. Dutch and British front-month gas prices rose more than 10 percent. The Strait of Hormuz, through which about a fifth of global oil and liquefied natural gas flowed prior to the conflict, has been effectively blocked since the US-Israeli attacks on Iran on February 28. The blockade has pushed up oil prices and inflation.

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For the average consumer, the economic impact of these supply disruptions is immediate and tangible, often manifesting in higher prices at the pump and increased household energy costs that persist even after diplomatic tensions ease. Summer price hikes typically accompany such disruptions.

Washington and Tehran agreed to a ceasefire in June, but the US reimposed a blockade on Iranian shipping in the Gulf in July, a move that Tehran said violated the truce, which by then had already broken down. Iranian strikes on Strait of Hormuz shipping have been coupled with increased attacks by its Yemen-based allies, the Houthi rebels. The Houthis also declared a naval blockade against Saudi Arabia in the Red Sea last month in response to what they said was a Saudi siege on them in Yemen, an allegation denied by Riyadh, which backs Yemen’s internationally recognised government.