Iranian state media agency FARS reported Wednesday that Iran is closing the Strait of Hormuz, less than one day after U.S. President Donald Trump announced a cease-fire agreement with Iran.
FARS reported that tanker traffic would come to a "complete stop" as "Israel violated the terms of the ceasefire and attacked Lebanon." Israel said it would continue attacks on Lebanon.
Two ships were permitted to pass through the Strait of Hormuz before Iran reversed course. Earlier on Wednesday, Gen. Dan Caine said he believes the Strait of Hormuz was open.
While U.S. officials have largely described the military offensive against Iran as a success, Iran’s control over the Strait of Hormuz has become a point of frustration for the Trump administration. The country’s ability to keep oil tankers from passing through the strait pushed global oil prices higher. Gas and diesel prices in the United States and abroad rose in response.
About one-fifth of the world’s oil production passes through the Strait of Hormuz.
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As markets opened Wednesday, the Dow Jones Industrial Average jumped 1,300 points in the first half-hour. That came after oil prices dropped more than 15% overnight Tuesday. Despite reports of the strait's closure, oil prices remained lower compared to Tuesday, and the stock markets were sligthly higher.
Oil prices remain higher than before the war, up more than 25% since the start of the bombing campaign. The Dow Jones Industrial Average is still down about 4% compared with six weeks ago.
Questions remain about the future of the strait and the broader conflict.
Before the latest closure of the strait, officials told The Associated Press that Iran and Oman plan to charge a toll for tankers passing through the Strait of Hormuz. Previously, the waterway was considered international and not subject to tolls.
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Caine said U.S. troops will remain in the region.
“We hope Iran chooses a lasting peace, but as Secretary Hegseth said, let us be clear: a cease-fire is a pause, and the joint force remains ready, if ordered, to resume combat operations with the same speed and precision we’ve demonstrated over the last 38 days. We hope that is not the case,” Caine said.
If the cease-fire holds, there are questions about how much stronger Iran could become as it collects tolls.
The U.S. has said the agreement means Iran will not be able to enrich uranium for a nuclear weapon. But allies in the region remain concerned about Iran’s conventional weapons and drone capabilities.
