Iran continues to insist on imposing an illegal toll scheme in the Strait of Hormuz despite Omani opposition to mandatory fees. Iran reportedly rejected an Omani proposal to create a fund for “maritime services” that would be financed by voluntary donations from shipping and energy companies, according to people familiar with the discussions speaking to the Wall Street Journal on July 2.[1] The New York Times, citing an Iranian official, similarly reported on June 30 that Iran seeks to impose mandatory fees on vessels that transit through the strait.[2] A regional diplomat told the New York Times that Oman suggested making the fees voluntary, in contrast.[3] The US-Iran memorandum of understanding (MoU) requires Iran to engage with Oman to determine the “future administration” of the strait, but these reports indicate that Iran and Oman have different visions for the future management of the waterway.[4] Other Gulf states, with which Iran is also required to engage under the MoU, have similarly expressed opposition to Iranian control of the strait.[5] Iranian Parliament Speaker Mohammad Bagher Ghalibaf separately claimed that Iran and Oman's management of the strait is “in accordance with international law,” but any Iranian management of the strait in which Iran charged tolls would violate the United Nations Convention on the Law of the Sea (UNCLOS), which forbids states bordering international waterways from restricting transit passage or imposing transit charges.[6]
Iranian officials also appear to be trying to rally support for Iranian management of the strait by touting the alleged economic and security benefits of such management for regional countries. Iranian management of the strait would be detrimental to global commercial interests by enabling Iran to disrupt global trade and energy flows at will, however. Ghalibaf told his Uzbek counterpart on July 3 that Iranian control over the strait will bring “better opportunities” for the “development of transit cooperation” between Iran and Uzbekistan and reduce US interference in the region.[7] Ghalibaf’s comment comes as Iranian officials have recently called on regional countries to support a new “regional security mechanism” that Iran likely envisions would include Iranian control over the Strait of Hormuz and the removal of US forces from the Middle East.[8]
Iranian Supreme Leader Mojtaba Khamenei did not make a public appearance at the opening ceremony for the funeral of former Supreme Leader Ali Khamenei in Tehran on July 3, despite the attendance of most of Iran's senior leadership and many foreign dignitaries.[9] Mojtaba has not been seen publicly since the war began and is reportedly recovering from injuries sustained in the strike that killed his father.[10] Key decision-maker and Islamic Revolutionary Guards Corps (IRGC) Commander Major General Ahmad Vahidi also made his first public appearance since the US-Israel-Iran War at the ceremony.[11]
Iran continues to exploit the ceasefire and memorandum of understanding (MoU) to try to replenish its economic resources and rebuild its defense capabilities in preparation for potential future conflict with the United States and Israel. Iran has begun talks with Japanese companies to buy Iranian oil, according to Iranian and Western sources speaking to Reuters on July 3.[12] The US-Iran MoU includes a 60-day oil sanctions waiver and states that the United States will lift all sanctions on Iran upon the signing of a final agreement. Japan was previously a large importer of Iranian oil prior to the imposition of US maximum pressure sanctions on Iran in 2018.[13] Iran's talks with Japan suggest that Iran is attempting to use the sanctions waiver to rebuild its oil sales network with former economic partners. Iran separately appears to be using this period to fortify tunnel entrances at nuclear sites against potential future airstrikes or ground operations targeting these sites.[14] Iranian construction vehicles have been operating at the western tunnel entrances of the Kolang Gaz La Mountain site, according to the Institute for Science and International Security's July 2 analysis of commercially available satellite imagery between June 21 and 30.[15] Iranian officials, including Qom Friday Prayer Leader Mohammad Saeedi, have also explicitly stated that Iran is using this period to reconstitute its defense capabilities.[16] Saeedi also expressed doubts about the US-Iran negotiations and stated that Iran will not compromise on its demands.[17] This recent Iranian activity is consistent with ISW-CTP’s ongoing assessment that the status quo–in which Iran is benefiting from economic relief from the MoU but has not had to make concessions on its nuclear program–is favorable for Iran. Iran's acquisition of economic relief also strips the United States of leverage in later negotiations about Iran's nuclear program.[18]
The Israel Defense Forces (IDF) and Hezbollah continued to engage each other in southern Lebanon on July 1 and 2.[19] The IDF reported that a Hezbollah fighter injured three IDF reservists in a small arms engagement in Bint Jbeil, Nabatieh Governorate, on July 1.[20] The IDF reported that it struck 10 Hezbollah sites near the towns of Bint Jbeil, Beit Yahoun, Kounin, and Baraachit in Nabatieh Governorate in response on July 2.[21] The IDF also reported on July 2 that it struck a Hezbollah vehicle that Hezbollah fighters were using to transport weapons and explosives near the IDF’s security zone in southern Lebanon.[22] The IDF stated that the strike detonated the explosives inside the vehicle, causing a secondary blast.[23] Lebanese media reported on July 2 that the IDF also struck an unspecified target near Seddiqine, South Governorate.[24]
IRGC Quds Force-affiliated Mahan Air has resumed direct flights between Tehran and Houthi-controlled Sanaa, Yemen, for the first time in over 10 years, according to commercially available flight data.[25] Commercially available flight data shows that a Mahan Air plane flew from Tehran to Sanaa on July 3 and returned to Tehran a few hours later.[26] An Israeli military correspondent reported on July 3 that the flight was transporting senior Houthi officials to former Iranian Supreme Leader Ali Khamenei’s funeral ceremony in Tehran.[27] Iranian media and a US-based Yemen analyst reported on July 3 that the Mahan Air flight was the first direct flight between Iran and Yemen in over 10 years.[28] Mahan Air is a US-sanctioned Iranian airline that has frequently transported Quds Force funds, weapons, and operatives to support Iranian regional activities.[29] Houthi military spokesperson Yahya Sarea claimed that Saudi aircraft attempted to prevent the Mahan Air flight from landing in Sanaa, but that Houthi air defenses forced the Saudi aircraft to withdraw.[30] ISW-CTP has not observed any evidence that this incident took place at the time of this writing. Sarea warned Saudi Arabia that the Houthis would retaliate against any future Saudi “airspace violations” with strikes on Saudi airports and other “vital interests on land and sea.”[31]
https://understandingwar.org/research/middle-east/iran-update-special-report-july-3-2026/
Updated link https://www.iranintl.com/en/liveblog/202607049017
Iran continues to use threats and force to compel commercial vessels to transit through its illegal traffic separation scheme in the Strait of Hormuz. Bloomberg reported that at least eight vessels attempted to exit the strait along the Omani coast between July 2 and 3 before reversing course.[1] Some of the vessels later resumed transit through Iran's traffic separation scheme, almost certainly after Iranian authorities threatened to attack the vessels. Iran has previously threatened and attacked vessels that attempted to transit through the strait via alternative routes.[2] Iran attacked a vessel on June 25 that was using the International Maritime Organization-Oman route, for example.[3] Iranian Deputy Foreign Affairs Minister for Legal and International Affairs Kazem Gharibabadi also warned the United Kingdom and France against engaging in any military activity in the strait in a statement on July 4 after both countries announced that they had agreed to work with Oman to ensure safe navigation for vessels through Omani territorial waters.[4] Alternative transit routes such as the route along Oman's coast undermine Iran's efforts to establish complete control over the Strait of Hormuz. Iran likely calculates that threats and continued attacks on vessels will deter countries and international organizations from facilitating such alternative transit routes.
Senior Iranian officials continue to portray the strait as Iran's primary source of leverage against the United States. Supreme Leader Military Affairs Adviser Major General Yahya Rahim Safavi warned on July 4 that Iran could use both the strait and the Bab al Mandeb as leverage if the United States violates the US-Iran memorandum of understanding (MoU).[5] Iranian Parliamentarian Malek Shariati similarly emphasized on July 3 the importance of Iranian control over the strait because of its important role for global energy markets.[6] Iran has repeatedly used force and the threat of force since April 2026 to control transit through the waterway to raise global oil prices and thus increase pressure on the United States and the broader international community to meet Iranian demands.[7] Iran announced the closure of the strait on June 20 to try to compel the United States to pressure Israel to halt operations against Hezbollah, for example.[8] Long-term Iranian control over the strait would enable Iran to close the waterway at any time and for any reason in order to make its adversaries meet Iranian demands and deter its adversaries from taking action against Iran.
Senior Iranian regime officials appear to be trying to contain growing factional disputes over Supreme Leader Mojtaba Khamenei’s position on the US-Iran MoU. Supreme Leader Representative to the Islamic Revolutionary Guards Corps (IRGC) Abdollah Haji Sadeghi told IRGC and Basij commanders and members in a letter on July 4 that Mojtaba’s recent message on the MoU is the regime's final basis for action.[9] Mojtaba stated on June 18 that he had authorized the MoU but emphasized that he had “a different opinion in principle.”[10] Haji Sadeghi stated that debates over whether officials imposed the MoU on Mojtaba, acted negligently, or betrayed Mojtaba damage regime unity and do not align with Mojtaba’s message.[11] Haji Sadeghi’s statement follows recent public divisions among members of the Assembly of Experts — an 88-member clerical body that is responsible for appointing and supervising the Supreme Leader — and parliamentarians over the MoU and negotiations with the United States.[12] Sixty Assembly of Experts members issued a statement on June 28 warning negotiators not to violate Mojtaba’s red lines.[13] The Assembly of Experts Secretariat later clarified that the statement did not represent the Assembly's official position.[14] A group of at least 84 parliamentarians, many of whom are aligned with the ultra-hardline Paydari (Stability) Front, endorsed the June 28 Assembly statement.[15] Haji Sadeghi’s directive to IRGC and Basij commanders suggests that senior regime officials close to the supreme leader and the IRGC are trying to prevent ultra-hardline factions from framing support for the MoU as disloyalty to Mojtaba.
The Iranian regime appears to be reshuffling some senior military positions after the US-Israel-Iran war. Armed Forces General Staff (AFGS)-run media Defa Press reported that Rear Admiral Ali Ozmaei replaced Rear Admiral Alireza Tangsiri as the IRGC Navy commander.[16] The Israel Defense Forces (IDF) killed Tangsiri in an airstrike targeting Bandar Abbas, Hormozgan Province, on March 26.[17] Ozmaei previously commanded the IRGC Navy 5th Imam Mohammad Bagher Region in Hormozgan Province, which oversees IRGC Navy operations in the southern Persian Gulf near the northern entrance of the Strait of Hormuz.[18] The United States sanctioned Ozmaei in June 2019 for acting on behalf of the IRGC and facilitating “destabilizing and provocative” actions around the strait.[19] The US sanctions against Ozmaei came after Iran conducted several attacks against commercial vessels in the Strait of Hormuz, including two tankers in early June 2019.[20] Iran's maritime escalation around the strait in 2019 was a response to US President Donald Trump's imposition of maximum pressure sanctions on Iran.[21] Some Iranian media outlets have also begun to publicly describe Major General Ahmad Vahidi as the IRGC commander instead of the IRGC deputy commander.[22] ISW-CTP assesses that Vahidi has been serving as the IRGC commander since the US-Israeli combined force killed the former commander on February 28.[23]
Defa Press separately referred to Khatam ol Anbia Central Headquarters Inspection Deputy Brigadier General Mohammad Jafar Asadi as the “former” inspection deputy on July 4.[24] Iranian media identified Asadi as the inspection deputy as recently as June 14.[25] It remains unclear whether Asadi was removed, reassigned, or promoted, however. This report comes after Defa Press described Major General Ali Abdollahi Aliabadi as the AFGS deputy chief, suggesting that Aliabadi may simultaneously serve as the AFGS deputy chief and Khatam ol Anbia Central Headquarters commander.[26] The new characterizations of Asadi and Aliabadi in Iranian media follow unconfirmed reports in December 2025 that former Supreme Leader Ali Khamenei was considering merging the AFGS and Khatam ol Anbia Central Headquarters.
Israeli Prime Minister Benjamin Netanyahu is reportedly seeking approval from US President Donald Trump before initiating an Israel Defense Forces (IDF) operation to seize remaining Hezbollah infrastructure in Ali al Taher, Nabatieh District, southeastern Lebanon, according to Israeli media on July 3.[27] The IDF reportedly postponed a planned operation to seize Hezbollah infrastructure in Ali al Taher on June 21 in order not to disrupt US-Iran negotiations.[28] An Israeli military correspondent reported on July 2 that approximately 30 Hezbollah fighters remain at an underground facility in Ali al Taher.[29] The IDF has continued to engage Hezbollah fighters who have emerged from the facility or have attempted to approach IDF positions surrounding Ali al Taher in recent days.[30] Ali al Taher contains one of Hezbollah's largest underground command and control facilities and serves as a key reconnaissance position and launch site for Hezbollah attacks into northern Israel.[31] Ali al Taher also contains the headquarters of Hezbollah's Badr Unit, which is one of Hezbollah's geographic units that is responsible for the area north of the Litani River, particularly around Nabatieh District and the southern Bekaa Valley, and one of the main Hezbollah units that has engaged Israeli forces in southern Lebanon.[32]
The Houthis sent a senior fundraising official to Tehran as part of its delegation to former Supreme Leader Ali Khamenei’s funeral, potentially to try to obtain funds from the Iranian regime. Houthi Endowments Authority Chairman Abdulmaged bin Abdulrahman bin al Hassan bin al Hussein al Houthi gave a speech at an event in Tehran on July 4 on the sidelines of Ali Khamenei’s funeral.[33] The Houthi Endowments Authority is one of the Houthis’ primary institutions for generating revenue, according to a Washington-based Yemen analyst.[34] Abdulmaged's visit follows reports that Iran intends to use part of the economic relief it gains from the US-Iran MoU to provide funding to Hezbollah.[35] Iran may consider using economic relief to support other regional proxies and partners, including the Houthis. Iranian officials have recently emphasized the value of the Houthis in the Axis of Resistance, particularly the Houthis’ ability to disrupt shipping in the Red Sea in support of Iranian objectives. Iranian officials, including IRGC Quds Force Commander Brigadier General Esmail Ghaani and Supreme Leader Military Affairs Adviser Major General Yahya Rahim Safavi, continue to threaten that Iran and the Houthis could disrupt traffic through the Bab el Mandeb Strait alongside Iran's efforts to control shipping in the Strait of Hormuz.[36]
https://understandingwar.org/research/middle-east/iran-update-special-report-july-4-2026/