The Trump administration has offered to release billions of dollars in frozen Iranian funds if Tehran abandons its demand to charge ships for passage through the Strait of Hormuz, but the regime rejected the proposal and continues to insist it controls the strategic waterway, The Wall Street Journal reported Thursday.
The Journal, citing people familiar with the negotiations, reported that U.S. envoy Steve Witkoff and White House adviser Jared Kushner, President Donald Trump's son-in-law, traveled to Doha, Qatar, this week for indirect talks with Iranian representatives through Qatari mediators aimed at advancing last month's memorandum of understanding between Washington and Tehran.
According to the report, U.S. negotiators offered Iran access to part of roughly $100 billion in frozen overseas assets in exchange for the regime relinquishing its claim to control the strait and dropping plans to collect tolls from commercial shipping.
The proposal included the potential release of $6 billion held in Qatar, but the Journal reported that Iran's continued efforts to restrict passage through the strait have delayed any release of the funds.
Iranian Deputy Foreign Minister Kazem Gharibabadi, who took part in the talks, returned from Doha and declared Thursday that the Strait of Hormuz remains "under Iran's command," according to the Journal. Later in the day, Iran's military warned that any vessel traveling outside routes approved by the regime would face an "immediate and powerful" response.
The Journal reported that Iran wants to impose fees on every vessel using the waterway, arguing the payments would cover maritime security and related services. The proposal reportedly could generate as much as $40 billion annually, but it has been rejected by the United States and Gulf Arab nations.
Negotiators are also evaluating an alternative proposal from Oman, which shares jurisdiction over part of the strait. Under that plan, shipping services would be financed through a voluntary fund supported by oil producers and shipping companies rather than mandatory transit fees.
Iran has objected, the Journal reported, because the arrangement would not require vessels to pay tolls directly. U.S. officials have also expressed concerns that the proposal could still be viewed as indirectly benefiting Tehran.
"Iran is trying to open the strait on its own terms and does not want to relinquish what leverage it has gained," Sanam Vakil, director of the Middle East and North Africa program at Chatham House, a London think tank, told the Journal.
But "Tehran can disrupt the strait more easily than it can sustainably administer it," she said.
The impasse has continued to disrupt one of the world's most important maritime routes.
The Journal reported that daily vessel traffic through the Strait of Hormuz dropped to 43 ships by Wednesday, down from 75 a week earlier. Before the conflict began Feb. 28, more than 100 ships transited the strait each day, carrying roughly one-fifth of the world's oil supply.