Iran says trust in US is 0 as Hormuz tensions escalate

Iran’s top diplomat said trust in the US is at “zero” even as messages are passed between the two countries, hardening Tehran’s stance as military posturing intensifies around the critical Strait of Hormuz waterway.

"And as always, I have received Mr. Witkoff's messages directly, but this does not mean that we are negotiating," Foreign Minister Araghchi told Al Jazeera in an interview broadcast March 31, referring to the US presidential envoy. A spokesperson for the foreign ministry, Esmail Baghaei, added on April 1 that past experience shows "the United States is not serious about diplomacy" and that such talks often come with "deceptive intent."

The comments follow statements from US Defense Secretary Hegseth that the US is prepared for "negotiating in the bombing" to end the conflict and reopen the strait. The deep-seated mistrust is rooted in the 2018 US withdrawal from the 2015 nuclear accord, a deal Tehran says Washington has already violated twice during negotiations since President Trump returned to office. In a defiant response to reports of a potential US ground offensive, Araghchi said, "We are waiting for them."

The escalating rhetoric threatens global trade flows that depend on the Strait of Hormuz, a narrow channel that handles about 25 percent of global seaborne oil trade and 19 percent of liquefied natural gas, according to the International Energy Agency. Roughly one-third of global seaborne fertilizer trade also moves through the strait. The conflict has already seen daily ship transits plummet from an average of 129 in February to just four by March 7, according to UNCTAD data.

Insurance Costs Surge

The risk has sent the cost of insuring vessels through the waterway soaring. War risk insurance premiums, which were less than one percent of a ship's value before the conflict, have jumped dramatically. David Smith, head of marine at insurance broker McGill, estimated the cost for a single trip is now "anywhere between three and-a-half and 10 percent" of the vessel's hull value. For a new LNG carrier valued at $250 million with a cargo of similar worth, the premium could run into the tens of millions.

This has led to a near-total collapse in demand for passage. One underwriter reported less than a one percent uptake for Hormuz-related policies, according to Smith. Executives in the London insurance market insist that safety concerns for crews, not the availability of insurance, are what is keeping ships away from the perilous route.

A Test of State Power

The standoff is becoming a broader test of whether governments can enforce decisions that collide with Iran's interests. In Lebanon, Tehran's ambassador has remained in Beirut despite an expulsion order, a move supported by the Iran-backed group Hezbollah. The refusal to leave has become a test of the Lebanese state's ability to enforce its own orders against Iranian influence.

This dynamic reflects a more assertive Iranian posture across the region, where it has used proxy forces and direct military action to project power. The attempted long-range missile strike on the Diego Garcia military base on March 20, while unsuccessful, demonstrated a capability to reach targets 4,000 km away, far beyond its previously declared range. The conflict is creating an escalation trap, where the high economic costs of disruption pressure leaders to expand military operations rather than de-escalate, creating sustained volatility for energy and financial markets.

This article is for informational purposes only and does not constitute investment advice.