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Iran establishes requirements for reopening the Strait of Hormuz.

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Iran set preconditions for a reopening of the Strait of Hormuz, including compensation for war damages, complicating a potential deal to open the waterway essential to the world economy.

Tehran has imposed an effective blockade of the strait since the United States and Israel struck Iran in late February, and wants to charge tolls for passage, attacking ships it accuses of attempting to circumvent its preferred route.

Continued attacks in the strait, which was free to transit before the war, led to the collapse of an April ceasefire. Mediators have since urged both sides to return to the terms of a June memorandum.

Iranian Foreign Minister Abbas Araghchi said discussions with Oman over transit and management of the strait were “approaching the final stages”, but added the reopening of Hormuz “is subject to other conditions and compensation for the violation” of the June agreement.

Security chief Mohammad Baqer Zolqadr on Saturday laid out a list of demands for reopening the strait, including an end to the “war and aggression against Iran and its allies in Lebanon, Palestine, Yemen, and Iraq”.

He also demanded the lifting of a parallel US naval blockade of Iran, the end of sanctions, the release of frozen assets and compensation for wartime damage, according to remarks reported by Tasnim news agency.

Iran’s Revolutionary Guards, meanwhile, said Hormuz’s reopening had “nothing to do with the negotiations between Iran and Oman”, adding that the “enemy is forced to accept Iran’s conditions for the opening of the strait”.

Repeated attacks

The comments came as transit through Hormuz has dropped significantly, with Iran targeting ships it accuses of skirting its preferred route through Iranian waters.

The United Arab Emirates’ foreign ministry on Saturday condemned what it called a “hostile Iranian attack that targeted a tanker belonging to Adnoc (Abu Dhabi National Oil Company) with a missile while it was transiting the Strait of Hormuz, without causing casualties”.

Later on Saturday, the United Kingdom Maritime Trade Operations (UKMTO) said a ship was hit by a projectile off Oman in the Strait of Hormuz, causing a fire that was extinguished but no casualties. It was unclear whether they were referring to the same ship.

On Friday, Adnoc had put out a statement saying that since the start of the war, 15 of its vessels had been attacked in Hormuz, “including three vessels this week alone”.

Oman’s foreign ministry on Saturday condemned “repeated attacks on vessels transiting the Strait of Hormuz”, without naming Iran.

It also said that “ongoing negotiations regarding navigation arrangements in the Strait of Hormuz are proceeding in a positive and constructive atmosphere”, and urged against any actions that might jeopardise the progress.

The previous Iran-US deal — meant to serve as a jumping-off point for negotiations on a permanent settlement — had said Iran and Oman would hash out future arrangements for the strait in discussion with other Gulf countries and “in line with the applicable international law”.

International law generally forbids tolling in such waterways.

Security agreement

Turkish foreign minister said Saturday he expected Egypt to join a joint defence agreement between Turkiye, Saudi Arabia and Pakistan designed to stabilise the region, calling the country a “natural partner on all issues”.

“I believe that at the next stage Egypt will also be among us in the alliance. We already act toward one another as if we were alliance members,” Foreign Minister Hakan Fidan said in an interview.

A drone struck US assets at an Egyptian port on the Mediterranean last month, marking the first drone attack on Egyptian territory since the outbreak of the Iran war.

Fidan said the agreement does not target a specific country.

“There is no common threat that we have put in writing,” he said, according to the news agency.

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IHC forms larger bench to hear plea against PTI’s Sept 27 protest

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The Islamabad High Court (IHC) has issued a written decision on a petition challenging Pakistan Tehreek-e-Insaf’s (PTI) scheduled September 27 protest and long march, while creating a three-member bigger bench to consider the matter.

The larger bench will comprise IHC Chief Justice Sarfraz Dogar, Justice Azam Khan and Justice Muhammad Asif. The bench is slated to hear the case on September 10.

Chief Justice Sarfraz Dogar issued a three-page written order from the last session and directed the chief secretaries and inspectors general of police of all four provinces to come before the court in person on Thursday.

PTI finalises backup protest plan if Minar-e-Pakistan demonstration is denied permission

The court also summoned the Islamabad chief commissioner, Islamabad IG and deputy commissioner in their personal capacity. The advocate generals of all four provinces and Islamabad have also been asked to assist the court in the proceedings.

The petition was submitted by a businessman who contended that PTI’s intended demonstration could disrupt citizens and economic activity in Islamabad. His counsel informed the court that legislation governing protests in the capital already exists and highlighted concerns about the likely use of government resources during the planned mobilisation.

During the previous session, the petitioner’s lawyer also referred to PTI’s 2024 protest and brought relevant remarks and newspaper reports before the court. He suggested that protests should not be utilized to exert pressure on governmental institutions and judges.

The court remarked that the subject was of substantial importance and, in view of its sensitivity, issued a notice to the Attorney General for Pakistan for help in the case. The court then determined that the dispute should be heard by a larger bench.

The plea came after PTI organized a September 27 rally and long march towards Islamabad. The party has said the mobilisation is focused at getting access to party founder Imran Khan for his family and personal doctors, as well as raising concerns regarding his legal and prison-related affairs.

The IHC has fixed the subject for further hearing on September 10, when the summoned officials are likely to appear before the three-member bigger bench.

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Iran says it caught US underwater drone in Strait of Hormuz

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Iran’s Revolutionary Guards said on Tuesday it has captured a U.S. uncrewed submarine at the entrance to the Strait of Hormuz, offering a rare insight at how underwater drones are being ​used in military operations.

Iranian state media reported the craft was a Dive-LD, a ​large autonomous underwater vehicle made by California defense firm Anduril. The 19-foot (5.8-metre) ⁠submersible can carry out duties like mine countermeasures, seabed mapping, intelligence collection and the ​inspection of undersea infrastructure such as cables and pipelines, the business has said. “We detained one ​of the most advanced, clever and unmanned submarines of the terrorist American army near the entrance to the Strait of Hormuz. This submersible is equipped with the latest technologies,” the Revolutionary Guards Navy said ​in a statement broadcast by Iranian state media.

In response, a Pentagon spokesperson revealed a ​underwater drone had “malfunctioned more than a day ago.” “It was surveying regional seas in support of ongoing operations. ‌The ⁠defective drone was an earlier model that neither collected sensitive data nor carried any classified sonar or radar technology,” the spokesperson stated.

Anduril confirmed the loss of one of its vessels, but minimized the seriousness of the incident. “Dive-LD is an attritable autonomous system, meaning it ​is built from the ​outset to operate ⁠in perilous conditions where loss of the vehicle is a predicted possibility,” a company representative stated.

The U.S. Navy is spending extensively in ​unmanned naval systems, including undersea and surface vehicles, as it seeks ​cheaper ways ⁠to monitor broad expanses of ocean, gather intelligence and track hostile ships and submarines without putting troops at danger.

According to Anduril’s website, Dive-LD can operate for up to 10 days ⁠without returning ​to base and is meant to dive to depths ​of as much as 6,000 metres (19,700 ft). Dive-LD units cost roughly $2.5 million each, U.S. military news site DefenseScoop ​reported in 2024.

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Dollar wobbles, oil’s dash to $100 chills sentiment, Yen stands big

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The Japanese yen was pinned near its best level since February on Wednesday, leaving the dollar on the ‌defensive as traders grappled with oil prices heading toward $100 a barrel amid an expanding war in the Middle East.

Iranian-backed Houthis in Yemen attacked several Saudi cities, drawing a U.S. partner further into a battle that has dragged on for more than six months, as U.S. forces struck multiple Iranian oil tankers and Iran threatened a U.S. station in Jordan.

Brent crude futures rose by more than 1.48% to $99.37 a barrel, weighing on global markets ahead of a U.S. inflation data on Friday that will set the stage for central bank meetings next week in the U.S. and Japan.

The currency market nudged the dollar down a touch in response, though some analysts said that was due to the yen’s swift rally over the past week.

The euro held constant at $1.1631 while the pound was last bought at $1.3546. ​The dollar index, measuring the U.S. currency against a basket of six major rivals, was at 98.15, near its lowest level in nearly two weeks.

OCBC strategists said the current increase keeps Fed policy implications from higher energy prices in focus, especially after last week’s robust U.S. payrolls report reignited expectations of another rate hike. “Higher oil and rates should help limit USD fall for now but we anticipate a more dramatic move will await confirmation from the impending inflation data,” they said in a note.

The yen has been under focus after its 4% surge in September that has altered the math for the popular carry trade in which investors borrow in yen at a low cost and invest in other currencies and assets yielding better interest.

The yen was stronger at 153.65 per dollar, close to the seven-month peak of 152.89 struck on Tuesday. The surge has been broad-based with the Japanese currency strengthening against the euro and sterling as well as favorite carry-trade targets such as the Mexican peso and Turkish lira.

The increase has been fueled by expectations of quicker tightening by the Bank of Japan and the return of offshore cash by Japanese investors and pressure from Washington for a higher yen.

Traders broadly expect the BOJ to hike rates by 25 basis points at its September 17-18 meeting but the rise will rest on if Governor Kazuo Ueda delivers hawkish comments and the wild card will be the Federal Reserve.Aninda Mitra, head of Asia macro and investment strategy at BNY Investments, stated “Much will depend on how the market prices in the Fed’s path of interest rates too.We estimate the Yen’s “fair value” to be in the 140’s and a further move to that area should not be a total surprise following what has clearly been an overshoot to the side of excessive Yen weakness.”

The Australian dollar gained 0.12% to $0.7225, just below a four-month high set in the previous session, in Pacific trade. The New Zealand dollar was up 0.16% at $0.5862.

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