Iran’s Foreign Minister Abbas Araghchi said on Sunday that the Strait of Hormuz is still open, but ships are staying away because of the ongoing conflict. Araghchi was responding to a 48-hour ultimatum issued by Donald Trump, saying Tehran would not be pressured by threats.

In a post on X, Araghchi made it clear that Iran was not backing down. “No insurer—and no Iranian—will be swayed by more threats. Try respect,” he wrote.

Strait ‘not closed’, but ships staying away

Addressing the State media, Araghchi said, “Strait of Hormuz is not closed. Ships hesitate because insurers fear the war of choice you initiated—not Iran.” Linking the issue to global trade, he added, “Freedom of Navigation cannot exist without Freedom of Trade. Respect both, or expect neither.”

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Iran’s Foreign Ministry also repeated that the Strait is “not blocked.” But it made it clear that not all ships would be treated the same. It said vessels linked to “aggressor parties” would not be seen as normal or neutral.

Such ships “cannot be considered as normal and non-hostile passage, and will be dealt with in accordance with the legal framework arising from the conflict,” the ministry said, adding that decisions would be taken by Iranian authorities.

Even though Iran says the route is open, the situation on the ground looks very different.

Since early March, the Strait has been effectively shut for most ships. This narrow passage usually carries about 20 million barrels of oil a day and around 20% of the global liquefied natural gas trade. Because of the conflict, shipping and insurance costs have gone up. Oil prices have also risen.

Iran imposes $2 million fee on ships

In the middle of the ongoing conflict, Iran has started asking some ships to pay as much as $2 million to cross the Strait of Hormuz safely. Iran says this fee is part of the “cost of war” and a way to show its control over the area.

A senior Iranian lawmaker, Alaeddin Boroujerdi, confirmed the move on state television. “Collecting $2 million as transit fees from some vessels crossing the strait reflects Iran’s strength,” he said.

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The rules are not the same for everyone. Reports suggest that countries seen as “friendly,” including India, Pakistan and China, are being allowed to pass through a controlled route near Larak Island.

Some Indian ships carrying gas have reportedly crossed without paying after talks between governments. Meanwhile, insurance costs have also shot up. For large oil tankers, the extra “war-risk” charges can now reach between $3.6 million and $6 million for a single trip.

For some companies, paying Iran’s $2 million fee is now being seen as the safer and cheaper option.

Saudi factor may be slowing things down

There are indications that some attacks at sea have slowed in recent days. One reason could be concern about how Saudi Arabia might respond. Riyadh has already warned that its patience is “not unlimited” after several energy sites in the Gulf were targeted. 

Despite this, just hours before Araghchi’s statement, Iran’s military command, Khatam Al-Anbiya, issued a much stricter warning. It said that if the United States goes ahead with strikes on Iran’s power plants, Tehran would completely shut the Strait. “If the United States’ threats regarding Iran’s power plants are carried out… the Strait of Hormuz will be completely closed, and it will not be reopened until our destroyed power plants are rebuilt,” the command said in a statement carried by state television.’

Iran’s Parliament Speaker Mohammad Baqer Qalibaf said that if Iran’s infrastructure is targeted, key facilities across the region could be “irreversibly destroyed.” Iranian military officials also signalled that they could hit energy, technology and water infrastructure linked to the US in Gulf countries, raising fears that the conflict could spread further.

Oil prices have climbed sharply, with Brent crude touching around $119 a barrel. At the same time, ship traffic through the Strait has dropped heavily, with reports suggesting a fall of nearly 95%.