Trump threatens to bomb Oman as Hormuz deal expires

By Margaret Hale · 2026-08-18

The clock runs out

On 16 August 2026, the Islamabad Memorandum of Understanding between the United States and Iran expired, taking with it the only formal guarantee of toll-free commercial passage through the Strait of Hormuz, a waterway carrying roughly one-fifth of the world's traded oil. The agreement, signed by President Trump and Iranian President Masoud Pezeshkian on 17 June 2026, had provided for 60 days of unimpeded commercial traffic and a staged lifting of the US naval blockade.^[3] No successor agreement has been announced.

The lapse did not arrive without warning. The Islamabad MoU was always a ceasefire's scaffolding, not the structure itself, a temporary arrangement designed to buy space for a fuller settlement that has yet to materialise. What has materialised instead is a sharp deterioration in language from both capitals, and a threat directed at a country that had, until recently, been regarded as the indispensable back channel between them.

A threat with a name on it

Oman is the target. The sultanate has long served as a quiet intermediary between Tehran and Washington, hosting back-channel talks and leveraging its position at the northern mouth of the Strait of Hormuz to facilitate negotiations neither side was prepared to conduct openly.^[1] That role has now drawn a direct warning from the president of the United States.

Trump said: "Oman will behave just like everybody else or we'll have to blow them up."^[1] The remark is notable not merely for its bluntness but for its target. Threatening a Gulf monarchy that has maintained diplomatic relations with both Tehran and Washington for decades, and that has no said intention of closing or tolling the strait, pushes the president's rhetorical perimeter well beyond Iran itself.

Treasury Secretary Scott Bessent had said, only weeks earlier, that the Omani ambassador had personally assured the United States there were no plans to toll the Strait of Hormuz.^[4] Bessent's statement had been offered as reassurance to markets rattled by uncertainty over the waterway's commercial status. Trump's subsequent threat sat in direct tension with the diplomatic signal his own administration had transmitted.

Iran's posture shifts

Iran's response to the MoU's expiry has been to harden its position in public and in military terms. Iranian armed forces announced they had decided to shift from a defensive to a fully offensive posture in the Strait of Hormuz, threatening to break any blockade by force if diplomacy with the United States fails.^[2] The announcement came the day after the MoU's expiry, its timing making clear that Tehran regarded the lapse as a trigger for a change in operational stance rather than a reason to wait.

Brigadier General Mohammad Akraminia, an Iranian army spokesman, said that if US President Donald Trump carried out his threat to attack Iran's infrastructure, Iran's armed forces would strike all remaining infrastructure across the region, and the response would be more severe, wider in scope and more destructive than previous attacks.^[6] The language was not new in kind, but its pairing with the formal declaration of an offensive posture gives it operational weight it lacked when offered as rhetoric alone.

The distinction between defensive and offensive posture in the strait is not merely semantic. A defensive posture means Iranian forces react to what they perceive as incoming threats. An offensive posture means they are authorised to initiate action against shipping, military assets or infrastructure they identify as hostile, without waiting to absorb a blow first. In a waterway as physically constrained as the Strait of Hormuz, that distinction changes the calculus for every vessel transiting the passage.

Why Oman sits at the centre

Oman's geographic and diplomatic position makes Trump's threat particularly consequential. The sultanate sits at the northern mouth of the strait, the narrow point through which tankers must pass to enter and exit the Persian Gulf. Its coastline forms one side of the chokepoint; Iran's forms the other. Any negotiated arrangement for commercial traffic through the strait necessarily involves Muscat, whether Washington wishes to acknowledge that or not.

Oman has historically maintained its neutrality with care, refusing to join the Saudi-led coalition against Yemen and sustaining its embassy in Tehran through periods when most Gulf states broke off relations. That positioning made it the natural host for the indirect talks that preceded the Islamabad agreement. The June 2026 agreement emerged from a diplomatic process in which Oman played a facilitating role, and its passage provisions were understood to rely partly on Omani cooperation in monitoring and managing commercial traffic at the strait's mouth.^[3]

Threatening that partner with military force is also threatening the mechanism of any future negotiation. Quiet diplomacy is difficult to conduct through a country your president has just promised to bomb.

What the markets have already priced

The commercial consequences of Hormuz's instability have been accumulating since the conflict between Washington and Tehran began in February 2026. The US-Iran war that started that month effectively closed the strait, as Washington imposed a naval blockade and Tehran responded by sealing the waterway to commercial traffic. The Islamabad agreement had been intended to arrest that closure; its expiry without a successor arrangement means the legal and military limbo the MoU was meant to resolve is simply reinstated.

Oil prices rose more than 4 per cent on 13 July 2026 after Trump announced the United States was reinstating its naval blockade on Iran, a move that raised fresh concerns over shipments through the strait.^[5] Shipping operators had already been adjusting their risk assessments for months, routing vessels away from the Gulf or demanding higher war-risk premiums for those that transit it.

The strait remains one of the least substitutable chokepoints in global energy supply. No pipeline network of sufficient capacity exists to route around it at scale. The countries whose oil exports depend on it, Saudi Arabia, the UAE, Kuwait, Iraq and Iran itself, have limited alternatives. Iran's declaration of an offensive posture on 17 August 2026 is the most direct statement yet that Tehran intends to treat the waterway as a military instrument rather than a shared commercial passage.

Margaret Hale

Margaret Hale writes about politics, policy and the culture of business. She is drawn to the people behind decisions and to the moments when a political story turns out to be a human one.