Analyzing the Hidden Costs of a US-Iran Deal on the Strait of Hormuz

The United States and Iran are working toward an interim agreement to reopen the Strait of Hormuz to shipping traffic, though former National Intelligence Manager for Iran Norm Roule warns that such a deal could grant Tehran control over the waterway and undermine international sanctions. According to an interview with The Cipher Brief, Roule describes the current state of the conflict as an operational pause rather than a formal ceasefire or a core agreement.

The negotiations, which involve an Iran-Oman mechanism, aim to re-implement a ceasefire and restart talks to curb Iran’s nuclear ambitions. However, Roule states that the U.S. is currently exercising coercive restraint, limiting its military response to attacks on ships to allow diplomacy a chance to succeed.

While reports indicate up to five million barrels of oil per day are moving through the strait, Roule notes the waterway remains unreliable, with insurance rates remaining high and a blockade still in place.

Risks of Iranian Control and Transit Fees

A primary point of contention in the current negotiations is Iran’s push to implement transit fees for ships passing through the Strait of Hormuz, a mechanism that did not exist before the war. Roule argues that allowing Iran to acquire such control could collapse the international sanctions regime and provide the IRGC government with billions of dollars to fund its missile program and proxies.

Roule identified several critical unresolved questions regarding the proposed Oman-mediated deal:

• Whether the U.S. would sanction other countries for paying transit fees to Iran.
• The legality of American or American-related ships paying money to Iran under current sanctions.
• Whether Israeli or Israeli-related ships would be banned from the Gulf, following statements from the Iranian parliament that no enemy countries can transit.
• Whether the U.S. military would be banned from the Persian Gulf or require Iranian approval for passage.

Roule suggests that if a deal is reached in the Strait of Hormuz, the Houthi movement may demand similar terms for the Bab el-Mandeb strait in the Red Sea.

Economic Pressures and Iranian Domestic Stability

The diplomatic process occurs as Iran faces severe economic instability. Roule reports that Iranian inflation is approximately 70%, and unemployment has reached forty to forty-five percent in some locations. He believes these economic pressures are influencing Tehran’s decision-making process, a factor he says the White House is considering.

Gulf State Influence and Defense Capabilities

Gulf Cooperation Council (GCC) states have played a significant role in the current de-escalation. Roule credits the GCC’s engagement with the U.S. private sector for successful defenses against Iranian cyber, drone, and missile attacks. He notes that Saudi Arabia has responded to Houthi aggression with surgical strikes and has joined the U.S. in strikes on Iraq.

According to Roule, Gulf states likely influenced President Trump to avoid immediate escalation, as these partners are most exposed to the consequences of a major attack on Iran, including potential retaliatory missile and drone strikes.

Cyber Warfare and Military Readiness

Beyond the shipping lanes, Iranian cyber activity has continued. Roule points to reports of hacks against water infrastructure in Minnesota as fitting a pattern of Iranian attacks against SCADA systems in the U.S.

Regarding military capabilities, Roule states that the U.S. possesses a military edge and deep knowledge of Iran’s military architecture. He asserts that Iran possesses offensive capacity but has very little defense against U.S. attacks, as evidenced by the lack of air or port defenses during recent U.S. operations.

Roule concludes that while the U.S. has tried various diplomatic options, the administration remains justified in using force if negotiations fail, as has been the stated policy of multiple previous administrations.