Full Breakdown
U.S. Sanctions Target Iran’s Persian Gulf Strait Authority Amid Strait of Hormuz Tensions
5/28/2026, 8:20:48 PM
Sanctioning the Persian Gulf Strait Authority
On 27 May 2026 the U.S. Treasury’s Office of Foreign Assets Control (OFAC) designated Iran’s newly created Persian Gulf Strait Authority (PGSA) under Executive Order 13224. The designation blocks all property of the PGSA and any entity owned >= 50 % by blocked persons, and prohibits U.S. persons from transacting with the authority or its affiliates. Secondary sanctions may apply to foreign financial institutions that facilitate prohibited transactions.
Background: Iran’s toll scheme in the Strait of Hormuz
Iran announced the PGSA on 5 May 2026, claiming jurisdiction over vessel passage through the Strait of Hormuz—a chokepoint that carries roughly 20 % of global oil and liquefied natural gas. The authority demands “illegitimate tolls”—reports cite fees up to $2 million per vessel—and requires ships to submit sensitive operational data and follow IRGC-navy-designated routes. The U.S. argues the scheme funnels revenue to the Islamic Revolutionary Guard Corps (IRGC), a designated Foreign Terrorist Organization.
Key Actors
- Treasury Secretary Scott Bessent – architect of the “Economic Fury” sanctions campaign.
- President Donald Trump – reiterated that the strait must remain open and warned Oman against any toll-sharing arrangement.
- Islamic Revolutionary Guard Corps (IRGC) – alleged partner of the PGSA and beneficiary of toll revenues.
- Sultanate of Oman – cited by the U.S. as a potential facilitator of tolls; Oman has denied any such cooperation.
Timeline of recent developments
- 28 Feb 2026 – U.S. and Israel launch military operations against Iran (Operation Epic Fury).
- 5 May 2026 – Iran establishes the PGSA.
- 27 May 2026 – Treasury announces PGSA sanctions.
- 28 May 2026 – Bessent posts a warning to Oman on X; Trump threatens “blow them up” if Oman cooperates.
- 28 May 2026 – U.S. forces strike a missile site and drones near Bandar Abbas; Iranian media report no casualties.
Economic stakes
The strait’s closure has lifted Brent crude to $94.72 per barrel and WTI to $91.13 per barrel, up roughly 2.7 % in one day. Treasury reports that “Economic Fury” has already disrupted tens of billions of dollars of Iranian revenue and frozen nearly $0.5 billion in regime-linked cryptocurrency.
Official U.S. statements
Bessent framed the PGSA as an “extortion arm” of the IRGC and said the sanctions “deprive the Iranian regime of revenue for its weapons programs, terrorist proxies, and nuclear ambitions.” The Treasury warned that any cooperation with the PGSA exposes entities to sanctions risk, including secondary penalties for foreign banks. Trump emphasized that the strait is international waters and that the United States will not tolerate any toll-imposing arrangement.
Opposition and criticism
IRGC officials maintain that only the Iranian-designated corridor guarantees safe passage and warn ships that deviate will face attacks. Deputy Secretary of Iran’s Supreme National Security Council Ali Bagheri Kani asserted that “the powers that have used this passage against Iran’s security must be held accountable.” Oman’s government has publicly denied negotiations to share toll revenues. Analyst Zineb Riboua (Hudson Institute) warned that Iran’s economy is “already collapsing” and that sanctions have deepened the crisis.
On-the-ground military activity
U.S. Central Command reported defensive strikes on missile launch sites and drones near Bandar Abbas on 28 May. Iranian state media said the explosions caused no casualties or damage, while the United States described the actions as necessary to protect the ceasefire.
Conflicting reports & gaps
- Oman’s alleged involvement remains unverified; the government has neither confirmed nor denied talks with Iran.
- Iran has not publicly confirmed senior leadership approval of the ceasefire memorandum.
- Exact toll amounts collected and the proportion of total Iranian oil revenue remain unclear.
Verbatim quotes
- “The Iranian military’s latest attempt to extort global maritime trade is proof that Economic Fury has left the regime desperate for cash.” — Scott Bessent, Treasury Secretary
- “Oman, in particular, should know that the U.S. Treasury will aggressively target any actors involved — directly or indirectly — in facilitating tolls for the Strait and any willing partners will be penalized.” — Scott Bessent, Treasury Secretary (X post)
- “Nobody is going to control it. It’s international waters and Oman will behave just like everybody else, or we’ll have to blow them up.” — Donald Trump, President of the United States
- “The powers that have used this passage against Iran’s security must be held accountable.” — Ali Bagheri Kani, Deputy Secretary of Iran’s Supreme National Security Council
- “Only a satisfactory outcome in negotiations will end the downward spiral.” — Scott Bessent, Treasury Secretary
- “The only safe route for transit through the critical waterway is through the corridor it has designated.” — IRGC spokesperson, Tehran
Outlook
U.S. officials signal that secondary sanctions against any foreign entity facilitating PGSA tolls are forthcoming. Simultaneously, diplomatic channels are pursuing a 60-day memorandum to extend the ceasefire and restart nuclear talks. The resolution of the toll dispute and the reopening of the Strait of Hormuz remain pivotal to global energy stability.
