Iran rejects Trump frozen funds plan, warns ships of Hormuz transit ban

What the report says

Al Jazeera reported on July 28, 2026, that Iran has rejected a plan described by US President Donald Trump under which ships damaged by Iran in the Gulf would be compensated using frozen Iranian funds. The report said Tehran dismissed Trump’s claim and signaled opposition to any use of Iranian assets for such payments.

According to Al Jazeera, Islamic Revolutionary Guard Corps spokesperson Ebrahim Zolfaghari also issued a warning tied to the proposal. He said any vessel that accepts compensation from frozen Iranian funds would be barred from transiting the Strait of Hormuz, the narrow waterway linking the Gulf with the Gulf of Oman and wider international shipping routes.

The report did not provide further details on which ships were allegedly damaged, how the compensation mechanism would operate, or what legal authority Washington would rely on to distribute frozen Iranian funds. It also did not include a response from affected ship operators or from US officials beyond Trump’s stated claim.

The development matters because the Strait of Hormuz is one of the world’s most strategically sensitive maritime chokepoints, particularly for energy shipments. Any threat to restrict passage can raise concerns for shipping companies, insurers, energy markets and governments with interests in Gulf security. Based on the information reported, the dispute adds another point of friction between Washington and Tehran over frozen assets, maritime security and control of Gulf transit.