Iran's military has once again rattled the world's oil map by warning all tankers passing through the Strait of Hormuz that they must follow "routes approved by Tehran, otherwise an immediate and forceful response" by its Khatam al-Anbiya joint command will be meted out. Iran's state television broadcast of the statement on Thursday wasn't an arbitrary outburst. It came hours after the United States Central Command concluded a summit in Bahrain attended by top military officials from a dozen regional forces, including Saudi Arabia, the UAE, Qatar, and, for the first time, Syria and Lebanon, who vowed their "shared commitment to the free flow of commerce" through the strait. That was provocation enough for Tehran. Within hours, Iran's deputy foreign minister for legal affairs was on social media claiming "Hormuz is defined under Iran's command, not CENTCOM" and that the Bahrain gathering was "inability to establish legal order and security for the Persian Gulf.

That is the essence of the current US-Iranian relations, four months after Washington and Israel had begun their war on Iran and about a fortnight after Tehran and Washington signed a memorandum in Versailles to end their war. On paper there is a ceasefire. In reality, the two countries do not, and cannot, agree on who should decide on how the vessels move through one of the most valuable pieces of water on the planet, and each time third parties attempt to fill in that gap, the threat escalates again.

The immediate cause of the conflict this week seems to have been not so much military as procedural. Oman had announced the new shipping route through the strait in coordination with the International Maritime Organisation (IMO) so as to provide “facilitating” measures to solve a congestion of stuck ships and seafarers in the strait. Iran was not consulted, and its navy reacted as it did in late June when a similar controversy over the Omani-brokered route broke out: It declared it "illegitimate" and threatened to view ships using it as violators. That Omani corridor had already been successfully tested by a Liberian flagged tanker. This was followed by a British flagged ship. A cargo vessel that had been on the same route was then reported to be hit off the coast of Oman, causing the UN shipping agency to temporarily suspend its evacuation programme for about 11,000 trapped seafarers as it continues to seek new guarantees of safety. The trend of the past few weeks is now clear: whenever Iran takes a step toward restoring shipping traffic, it also asserts its exclusive authority and sometimes resorts to force to ensure that ships follow the rules.

The more telling indicator of how much to take the latest warning seriously is not its verbiage, which hasn't changed since March, but its timing in relation to two other parallel processes. The first is the funeral of Ayatollah Ali Khamenei, who was killed in the initial attacks of the war in February, whose ceremonies are starting this weekend and continue July 9. Iran's political and security elite has said it does not want that period to be marred by any sense of humiliation, and a U.S.-flagged military force patrolling waters that Tehran views as its own is just the image its hardliners can't tolerate during a period of national mourning and transfer of authority. One is the situation of the Doha talks themselves. This week, mediators from Qatar and Pakistan say "positive progress" was made on the 14-point memorandum of understanding that emerged from the Lake Lucerne summit, but both sides have assured that it will not return to the next formal round until after the funeral rites. In other words, Iran has about a week in which it incurs no immediate diplomatic penalty for saber-rattling, and plenty of reasons to remind Washington, the Gulf capitals and its own domestic audience that it has not ceded control of the strait, despite the interim agreement.

It is the interim arrangement that is a source of the current friction. The original 60-day understanding allowed for the reopening of the strait to shipping, but did not specify who will be responsible for day-to-day navigation, how the sea mines Iran is thought to have placed earlier in the war will be removed, or what will happen when the 60-day period runs out. Iran has made no secret of its desire to co-manage the corridor with Oman, but it has stated it will operate its own parallel routing system, whichever Muscat and the IMO approve. The Doha track led by Jared Kushner and Steve Witkoff has been reportedly urging Iranian officials to leave the dispute over Hormuz out of the picture and focus on the "bigger picture" of sanctions relief and frozen asset unlocking. The two delegations, meanwhile, have yet to make any headway on specifics, at least in public, with Tehran denying any agreement to free its frozen assets despite hints from Washington.

That's why markets, insurers and Asian and European governments are paying so close attention to a single naval command's press statement. The strait is the route for about one-fifth of the world's seaborne crude oil and a similar percentage of LNG (liquefied natural gas) exports, as well as an unusually high share of global fertiliser exports, with the Gulf representing about a third of the world's urea and ammonia exports. China imports nearly a third of its crude imports this way, while Japan imports about seven out of ten barrels of oil from the Gulf this way. At the time of the war's onset, in late February, prices of Brent crude spiked from around seventy one dollars per barrel to more than seventy-seven dollars in two trading days, before hitting a new record high above one hundred and sixty dollars in mid-March, when Iran declared the strait closed and began attacking ships, and Dubai crude reached a new record above one hundred and sixty six dollars, with California pump prices topping five dollars per gallon. The ensuing ceasefire and a partial restart of the corridor led to the biggest quarterly drop in Brent since 2020, with prices returning to the low seventies by late June as tanker flows resumed and both Iranian and Russian crude re-entered a market where oversupply warnings are heard. This week's warning is set to tip the delicate balance again. By the standards of this year, Brent's increase of a few bucks toward seventy-four a barrel on the news was modest, but it was enough to indicate that traders aren't taking Iranian threats for granted.

It is being said quietly by shipping insurers and maritime risk analysts but not by diplomats, that the market reaction to date has been rather measured, based on the rhetoric, and that the more important story is the restraint. Gulf transits war-risk premiums have not come close to the high levels seen in March and April despite Iran's near weekly threats. With the option of lost revenue from a decision not to go through the strait altogether or the calculated risk of transiting through the strait under an uneasy truce, tanker operators have chosen mostly to keep going, betting that the threats are designed to give Iran negotiating leverage over the eventual administration of the corridor rather than the intent to resume wholesale attacks on commercial shipping. Some are even hurrying to shift Gulf crude before the existing sixty-day fee-free window ends, said Lloyd's List Intelligence, not a sign of an industry set to shut down soon. That reading is less of a sign that war is once again flaring up than it is a negotiating ploy in a slow motion debate over who will be the de facto ruler of one of the world's most significant waterways once the battle lines have faded and the shooting ceased, a debate that will probably continue for months to come alongside the nuclear inspection wrangling and frozen-asset matters.

But don't mistake de-escalation for resolution and the structural risk remains. The Revolutionary Guard still has the means it used throughout March and April to mine, fire on tankers and blockade US and allied navies, which at times had to escort a few commercial ships with the use of destroyers and fighter jets. The mines Iran laid at that time have not been completely cleared. The IRGC's claim of sovereign rights to dictate how ships navigate through the strait, one of the world's busiest waterways, remains a matter of dispute and is not yet resolved diplomatically; in April, Russia and China vetoed a Bahrain-sponsored UN Security Council resolution that was intended to authorize force to ensure the opening of the strait, on the grounds that it attributed sole responsibility to Tehran. That veto is significant for the way this will play out in the future any future crisis in the strait is unlikely to yield the kind of international consensus that oil importing countries from Tokyo to New Delhi would like, because the fundamental row over sovereignty in the Gulf has remained the same as it has in US-Iran-Russia-China relations over the years.

For the moment, the likely answer is neither all-out war, nor a clean resolution, but more of the same a pattern that has been in evidence for weeks: a gradual easing of shipping traffic, with periodic Iranian assertions of authority, while the harder issues on nuclear inspections, frozen funds, the ultimate form of any deal on the administration of the waters of the Strait of Hormuz are deferred to another side of a funeral, a mourning period, and a fragile set of ongoing talks in Doha, neither side keen to end, nor fully committed to either.