Iran's Revolutionary Guards insisted on Sunday that they would not reopen the Strait of Hormuz until the United States complied with a list of demands, including paying compensation for war damage.

Iran's effective blockade of the crucial energy conduit has rattled allies, roiled markets and driven up prices, but US President Donald Trump on Sunday said he was "low-keying it" in his approach to Tehran, suggesting he believed he could wait them out economically.

Tehran insists on retaining control of the Hormuz after the war and wants to charge tolls for passage, repeatedly striking ships it accuses of attempting to circumvent its preferred route.

Attacks in the waterway, which was free to transit before the war, led to the collapse of an April ceasefire, and mediators have urged both sides to return to the terms of a subsequent June memorandum that set out a path for peace talks.

Iran's Supreme National Security Council laid out on Saturday a list of conditions for reopening the strait, including an end to the war on all fronts, the lifting of a US counterblockade of Iranian ports, the end of sanctions, the release of frozen assets and compensation for wartime damage, the Tasnim news agency reported.

Those conditions echoed the terms of the June agreement, which included a provision to create a US$300 billion reconstruction fund for Iran.

Iran's Revolutionary Guards said on Sunday that their strategy was to maintain their blockade "until the enemy accepts all our conditions... the strait is now actually a theatre of war for us and not just a waterway".

The closure of Hormuz has driven up prices for American voters, creating a political headache for Trump as November's midterm elections near, but the US leader was optimistic in a conversation with Axios on Sunday.

"We are low-keying it," Trump said of his approach in an interview.

"We are only semi-negotiating with them," was quoted as saying. "We are just watching Iran with its huge inflation and the fact they have no money."

"It will work out," he added. "It's like a chess game."

Iranian Foreign Minister Abbas Araghchi had said earlier on Sunday that Tehran was only "exchanging messages" with the US via intermediaries.

Traffic through Hormuz has dropped significantly amid the ongoing attacks, with at least one tanker struck on Saturday, according to the UAE.

Oman's foreign ministry condemned the repeated attacks, without naming Iran.

The June memorandum had said Tehran and Muscat would hash out future arrangements for administering the strait in discussion with other Gulf countries and "in line with the applicable international law", which generally forbids tolling in such waterways.

Oman said "negotiations regarding navigation arrangements in the Strait of Hormuz are proceeding", and warned against any actions that might jeopardise the progress.

Araghchi said that discussions with Oman on management of the strait were "approaching the final stages".

As Iran throttles traffic in Hormuz, its Houthi allies in Yemen have declared a parallel maritime blockade on Saudi ports in the Red Sea, the oil-exporting giant's only other maritime route.

The Houthis announced on Sunday that they had struck a Saudi oil facility on the country's Red Sea coast, after the Gulf kingdom said it had extinguished a fire at the site.

Saudi Arabia has long propped up Yemen's internationally recognised government in its war against the Houthis, which was paused by a UN-backed 2022 accord that has appeared to break down since the rebels declared their blockade last month.

A medical source in government-held Mokha said three civilians and eight military personnel were killed and a further 32 people wounded on Sunday, with all the civilian casualties resulting from Houthi strikes on the Yemeni city's port.

Houthi military spokesman Yahya Saree said the group had targeted "Saudi enemy" troops and equipment in the area with missiles and drones. (AFP)



Edited by Cecil Wong