Iran Establishes New Authority to Control Strait of Hormuz

New Persian Gulf Strait Authority signals tighter grip amid escalating tensions

Tehran moved to formalize its control over one of the world's most critical shipping routes on Monday, announcing the formation of a dedicated body to manage the Strait of Hormuz as diplomatic efforts to end the regional conflict remained fragile.

Iran's Supreme National Security Council established the Persian Gulf Strait Authority (PGSA), marking an escalation in Tehran's efforts to assert dominance over the waterway through which roughly a third of global maritime oil trade flows. The announcement came as the Iranian government simultaneously signalled it had responded to the latest American proposal aimed at ending the conflict that began on February 28.

The move underscores the deepening impasse between Washington and Tehran, even as both sides continue exchanging proposals through Pakistan as a mediator. Diplomats from both countries have submitted their respective comments on Tehran's recent proposal, according to Iran's Foreign Ministry spokesperson, though international observers described the tenor of negotiations as strained.

Hormuz becomes flashpoint as military posturing intensifies

Iran has effectively closed the Strait of Hormuz to commercial vessels and indicated it plans to charge ships for passage. Military control of the waterway, long a sensitive geopolitical flashpoint, now rests with the Islamic Revolutionary Guard Corps (IRGC), which has warned that military vessels will not be permitted transit while ships from "friendly countries" may be allowed selective passage.

Earlier this morning, officials said all vessels passing through the strategic shipping route must now coordinate directly with Iranian military forces. The blockade itself, imposed on April 13, remains in place as US President Donald Trump has conditioned its removal on Iran accepting a peace deal on Washington's terms.

The tightening of control over the strait coincides with a surge in military activity across the region. Israel placed its armed forces on high alert following a phone call between Trump and Prime Minister Benjamin Netanyahu, with Israeli media reports suggesting the country would join any new American strikes against Iran and potentially target Iranian energy infrastructure.

Trump's warning intensifies pressure as oil prices climb

Oil markets reacted swiftly to escalating tensions. Brent crude rose nearly 2 percent on Monday following Trump's warning that "the clock is ticking" on reaching a peace agreement with Iran, climbing to $110.72 a barrel by late trading—representing a more than 50 percent surge since hostilities intensified.

The economic toll of the conflict has already become apparent. A Reuters analysis found that companies worldwide have suffered losses exceeding $25 billion since the conflict began, with firms spanning American, European, and Asian headquarters reporting significant impacts through supply chain disruptions and elevated operating costs.

Iran's military posture has hardened visibly in recent days. The country showcased civilian weapons training, with videos and images circulating on social media showing young Iranians being trained to assemble and disassemble AK-47 rifles as part of state-backed preparedness exercises. IRGC trainers demonstrated firearms handling to civilians on state television, signalling broad-based civilian mobilization.

Senior Iranian official warns of military escalation

Mohsen Rezaei, a former IRGC commander and member of Tehran's Expediency Council, issued a sharp warning to the United States during a television address, telling American military forces to end the naval blockade of Iranian ports or face devastating consequences. "We advise the US military to end the siege before the Sea of Oman becomes your graveyard," Rezaei said, characterizing the blockade as an act of war.

The official also cautioned that prolonging the naval siege would inflict widening damage on countries globally, particularly those dependent on stable energy supplies and shipping routes through the Persian Gulf region.

India joins international calls for restraint

New Delhi weighed in on Monday's developments, expressing grave concern over a reported drone attack targeting the Barakah Nuclear Power Plant in the United Arab Emirates. India's Ministry of External Affairs called the strike a "dangerous escalation" and urged all parties to exercise restraint and return to dialogue.

The attack on the UAE's nuclear facility, which authorities blamed on Iran or its proxies, sparked widespread regional condemnation. The fire broke out just outside the plant's perimeter and triggered no radiation alerts, though the incident reinforced fears of nuclear infrastructure becoming a target in the broader conflict.

Pakistan has emerged as a key diplomatic channel, serving as mediator as Washington and Tehran continue swapping proposals. Despite media reports in Iran characterizing American demands as excessive, both sides acknowledged exchanges were continuing, though the pace and substance of negotiations remained unclear.

The single round of formal talks held between the two nations occurred amid a fragile ceasefire arrangement that took effect on April 8, now more than a month old. Observers noted the gap between public rhetoric and private negotiations, with Iran maintaining militarized postures while simultaneously engaging in diplomatic back-channels.

Regional instability spreads economic ripples

The escalating tensions are reverberating across global markets and supply chains. Europe's largest airline by passenger numbers, Ryanair, warned that growing concerns over the conflict could undermine summer travel profits, with bookings for the July-September peak season trending flat rather than showing expected growth. Airlines have cited lingering traveller anxieties over potential fuel shortages and inflation tied to the conflict.

The United Nations' International Labour Organization warned separately that the West Asia conflict was already threatening millions of jobs globally, predicting that the crisis could erode real wages in 2026 and 2027. Migrant workers, who send remittances back to home countries, faced particular risk, the agency said.

Multiple countries bordering the conflict zone voiced alarm. Saudi Arabia reported intercepting drone attacks launched from Iraqi airspace, with Kuwait and Qatar condemning the strikes as violations of sovereignty and UN Security Council resolutions. Russia, meanwhile, suggested Iran consider appointing a special envoy to Moscow, signalling deepening ties between the two nations amid the conflict.