Over the past week (March 30 – April 6) intensive diplomacy centered on reopening the Strait of Hormuz, which Iran closed in retaliation for the U.S.-Israeli strikes launched on February 28.
Key events include a UK-led April 2 meeting of around 40 states on Hormuz navigation and security, Pakistan-facilitated talks with regional powers on March 29, and April 4 Oman-Iran talks (at the Undersecretary level) on ensuring “smooth transit.”
Washington, driven by U.S. President Donald Trump’s oft-extended ultimatum to Iran, has pressed for the Hormuz Strait reopening along with a definitive termination of all Iranian nuclear enrichment and a drastic curtailment of its missile programs, while Iran is demanding a permanent ceasefire/final peace deal as well as several largely unacceptable economic concessions such as full sanctions relief and U.S. reparations for war damage.
The Gulf states (Oman, United Arab Emirates, Saudi Arabia) and others (the European Union, China, Japan, India) have called for negotiated solutions. Last week, the UN Security Council debated a Bahrain-drafted resolution to protect shipping (with China/Russia opposing authorization of the use of force). Meanwhile, Iran has started allowing selective passage through Hormuz (for a small number of neutral or previously pre-cleared ships) as goodwill gestures to certain countries, mostly Asian.
Emerging compromise plans (the so-called “Islamabad Accord”) propose an immediate ceasefire in exchange for the reopening of the Hormuz Strait, followed by a 15 to 20-day negotiation on nuclear and sanctions issues. Verification would likely involve oversight by the United Nations and the International Atomic Energy Agency (IAEA) of any nuclear freeze.
Militarily, NATO and a 22-nation coalition that met in London last week are preparing maritime patrols and mine-clearance (as UK and U.S. announced “military planners” meetings this week) to reopen the Hormuz Strait.
Internally, hardliners in Iran and the U.S. war coalition are spoilers (e.g., the IRGC’s new “Gulf order” rhetoric, Trump’s mid-term election pressures/gasoline prices), while emergency U.S. economic steps to provide shipping insurance are still taking shape.
Tuesday April 7 is Trump’s latest deadline, which could be extended yet again as he claims his team is negotiating with “serious people” who have emerged after the war produced a form of “regime change” in Tehran. Pakistan’s ceasefire plan may be further refined and offered to Iran; the U.S. has warned in explicit terms of “broad strikes” against critical Iranian infrastructure if no deal is reached.
China has strongly backed Pakistan’s mediation efforts, emphasizing diplomacy and protection of civilians and infrastructure. China has strategic interests in Gulf stability and ensuring its oil flows; it has resisted “transit fees” in the past and will oppose any move that legitimizes new Iranian attempts to impose tolls.
In New York, the UN vote on the draft Bahrain Security Council resolution regarding re-opening the strait had been postponed to April 7. The Security Council resolution sought to authorize “all necessary means” to protect Hormuz shipping, but major powers balked, so intense negotiations on the resolution language followed for days.
China, Russia and France had raised objections, forcing the negotiators to delete binding enforcement language. The revised draft still authorized “all defensive means necessary,” but consensus even on that milder formulation was not reached in the end as some countries argued that language could still provide a rationale for military action. Ultimately, Russia and China, as permanent members of the Security Council with veto power, blocked passage of the resolution. As far as the April 7 vote went, a total of 11 permanent and non-permanent Security Council members voted in favor of the resolution, while China and Russia voted against it. Two other countries, including Pakistan, abstained.
U.S. Maritime reinsurance facility steadily expanding
On the commercial front, daily headlines continue to grab attention with fearsome predictions of upcoming multi-sectoral supply chain disruptions as long as Hormuz remains closed, considering the last ships to depart the Persian Gulf before the war have been reaching their destinations in recent days.
The U.S. International Development Finance Corporation (DFC) and insurer Chubb announced on April 3 six additional American reinsurance partners were joining the U.S. International Development Finance Corporation (DFC) program rolled out in early March, expanding their maritime reinsurance facility to $40 billion in rolling coverage for vessels operating through the Hormuz area amid the ongoing conflict with Iran. The new partners — Travelers, Liberty Mutual Insurance, Berkshire Hathaway, AIG, Starr, and CNA — will contribute $20 billion in combined coverage alongside Chubb, matching DFC’s existing $20 billion commitment.
DFC stated the opening of its application portal is expected shortly.
Meeting in Islamabad
Both sides met to start formal negotiations over April 11-12 in Islamabad but no agreement was reached. The Strait did not reopen. Washington later imposed a naval blockade on Iran.