BY TENGKU NOOR SHAMSIAH TENGKU ABDULLAH

On Saturday, 23 May, President Donald Trump posted on Truth Social that a deal to end the Iran war and reopen the Strait of Hormuz had been “largely negotiated” and would be announced shortly. It was the most optimistic signal from Washington in nearly three months of war. Yet by Sunday, Trump was telling his negotiators not to rush, insisting that “time is on our side,” while keeping the naval blockade in place. Iran’s foreign ministry said the strait “had nothing to do with the US.” The gap between a deal being announced and a deal being implemented remains consequential. For Southeast Asia, on day 86 of the longest energy crisis the region has ever faced, the next 72 hours may be the most important of the entire conflict.

The week of 18 to 25 May has been the most diplomatically dense of the three-month war. On 20 May, Iran’s newly created Persian Gulf Strait Authority published a map on X defining a “controlled maritime zone” spanning the full width of the Strait of Hormuz, from Kuh-e Mubarak in Iran to southern Fujairah in the UAE at the eastern entrance, to Qeshm Island and Umm al-Quwain at the western entrance. Vessels wishing to transit the zone were required to coordinate with and obtain authorisation from the authority. On the same day, the IRGC announced it had coordinated safe passage for 26 cargo ships and tankers, including the first shipment of Middle East oil to South Korea since the war began. Iran was reportedly charging tolls of up to two million US dollars per ship, payable in Chinese yuan, bitcoin, or dollar-pegged stablecoins such as USDT.

The establishment of the Persian Gulf Strait Authority is not merely a bureaucratic act. It is a structural claim: that Iran intends to manage, regulate, and profit from transit through the Strait of Hormuz as a matter of permanent institutional practice, regardless of how the war ends. Its legal standing under the United Nations Convention on the Law of the Sea (UNCLOS) is disputed by much of the international community. But its practical significance is considerable. Iran is not simply closing a waterway in a time of war. It is creating the institutional architecture to govern it in peacetime. Washington’s insistence that the strait must reopen without tolls and without Iranian conditions is now directly at odds with a physical institution that Iran has formally created and named.

Against this backdrop, the pace of regional diplomacy accelerated dramatically over the past week. Pakistani Field Marshal Asim Munir flew to Tehran on 23 May and met President Masoud Pezeshkian, following his Interior Minister Mohsin Naqvi’s earlier visit, which Pakistani officials said had moved negotiations “in an important direction.” A Qatari negotiating team arrived in Tehran in coordination with Washington. Trump held Oval Office calls with the leaders of Saudi Arabia, the UAE, Qatar, Pakistan, Turkey, Egypt, Jordan, and Bahrain, as well as Israeli Prime Minister Benjamin Netanyahu, all focused on finalising terms with Iran. The scale of this diplomatic mobilisation — with eight regional states simultaneously engaged as interlocutors — is without precedent in the conflict’s diplomatic history.

“An Agreement has been largely negotiated, subject to finalization between the United States of America, the Islamic Republic of Iran, and the various other Countries. Final aspects and details of the Deal are currently being discussed, and will be announced shortly. The Strait of Hormuz will be opened.” — Donald Trump, Truth Social, 23 May 2026

The reported framework of the emerging agreement, described by a senior official to PBS, includes an official declaration of the war’s end, followed by two-month negotiations on Iran’s nuclear programme. The strait would reopen and the US naval blockade of Iranian ports would be lifted. Iran’s foreign ministry confirmed the framework involves a memorandum of understanding as a first phase, before broader talks within 30 to 60 days. Iranian state news agency Tasnim reported, however, that the strait would “not return to its pre-war status” under any agreement — a formulation consistent with Tehran’s creation of the Persian Gulf Strait Authority and its insistence that Iran alone would define the waterway’s new rules. US Secretary of State Marco Rubio, attending a NATO summit in Sweden, reiterated Washington’s criteria: no nuclear weapon, reopening of the strait without tolls, and the handover of enriched uranium. “This problem will be solved,” Rubio said, “one way or the other.”

By Sunday, 24 May, Trump’s tone had shifted subtly but significantly. Writing on Truth Social, he said negotiations were “proceeding in an orderly and constructive manner” but that he had told his negotiators “not to rush into a deal” because “time is on our side.” The US naval blockade, he confirmed, would remain in full force “until an agreement is reached, certified, and signed.” The US blockade has now redirected more than 100 commercial ships attempting to enter or leave Iranian ports, according to CENTCOM. The ceasefire, in place since 8 April, has held in the technical sense that the two sides have not directly exchanged fire since early April. Everything around it has continued.

WHAT CEBU DECIDED: ASEAN’S ENERGY RECKONING

The 48th ASEAN Leaders’ Summit, held in Cebu on 7 and 8 May under the Philippines’ chairmanship, produced some of the most substantive regional energy security commitments in ASEAN’s history — a direct product of 68 days of crisis that had stripped the agenda of everything except what mattered. President Marcos opened the summit by describing the oil crisis as “a painful lesson” for the region. The summit proceeded on a compressed two-day schedule, all preparatory meetings having been held online to conserve fuel. Myanmar attended at the level of Permanent Secretary of Foreign Affairs; all other member states sent their heads of government.

ASEAN economic ministers issued a joint statement pushing for a coordinated regional strategy to stabilise markets and strengthen resilience. The proposed measures encompassed diversifying energy sources, expanding renewable energy, reinforcing the ASEAN Power Grid and Trans-ASEAN Gas Pipeline frameworks, and strengthening food security mechanisms including the ASEAN Plus Three Emergency Rice Reserve. The summit also discussed the possibility of establishing a dedicated regional fuel reservoir, described by Cebu Daily News as a concrete response to the reality that Southeast Asia had entered the crisis with no collective buffer and no shared emergency mechanism that could be activated at speed.

The South China Sea Code of Conduct was included on the summit agenda, though officials said no binding agreement was expected at this stage. The ASEAN-EU Sustainability Summit, held in Cebu on 7 May, brought together government leaders and European business executives and centred on energy transition, green finance, circular economy development, and sustainable trade. EU-ABC Executive Director Chris Humphrey captured the mood plainly: “We’re facing energy, economic and supply chain challenges that no party can address alone. ASEAN and the EU should look to each other for a reliable, long-term partnership built on shared ambitions for sustainable economic growth.”

Analysts have observed that the Cebu outcomes represent a meaningful step toward the institutional deepening that the ISEAS State of Southeast Asia 2026 survey identified as a regional aspiration, with 55.2 percent of Southeast Asian opinion leaders calling for stronger ASEAN unity to resist major power pressure. The crisis provided the political mandate; the summit has begun to provide the institutional response. Analysts also noted that the speed at which ASEAN economic ministers moved toward a coordinated regional energy strategy in Cebu was itself a signal of how badly the region had been shaken — and how consequential the next few days’ diplomacy in the Iran talks will be for whether those commitments are followed by action or allowed to dissolve once the immediate pressure eases.

IRAN’S NEW STRAIT AUTHORITY: A PERMANENT CLAIM ON A TEMPORARY CRISIS

The creation of the Persian Gulf Strait Authority on 20 May is the single most consequential structural development of the past week, and it has received less analytical attention than it deserves. Iran has not simply been closing a waterway. It has been building the institutional and legal framework to govern it permanently. The authority requires all vessels to coordinate with it and obtain authorisation before transiting the strait. It has published formal boundary maps. It has coordinated the passage of at least 26 vessels in a single 24-hour period, including the first South Korea-bound oil shipment since the war began, demonstrating that it is operational, not merely declaratory.

The tolls Iran is reportedly charging — up to two million US dollars per vessel, payable in Chinese yuan, bitcoin, or dollar-pegged stablecoins such as USDT — are not incidental. They represent a deliberate effort to denominate a new economic relationship with the waterway in currencies that bypass the US dollar-denominated financial system. The choice of non-dollar settlement currencies is structurally significant: yuan payments route through Chinese banking networks outside Western sanctions reach, while bitcoin and stablecoins are immune to the kind of asset freezes that have hit Iran’s dollar-denominated holdings. Iran is not just controlling the strait. It is constructing an alternative financial architecture around it.

For Southeast Asian importers, the practical consequence is already visible. The IRGC’s 20 May announcement that it had coordinated passage for 26 vessels, including the first South Korea-bound oil shipment in nearly three months, suggests that Iran is selectively reopening the strait on its own terms rather than waiting for a deal. Countries and companies willing to pay the toll, route through authorised channels, and accept Iran’s new institutional framework may find oil flowing again. Those that refuse — on the grounds that the toll is illegal under UNCLOS, or that paying it would constitute recognition of Iranian sovereignty — will continue to wait. Singapore, which has consistently refused to negotiate directly with Iran on the grounds that transit passage is guaranteed under international law, faces a direct test of that principled position.

Iran’s Foreign Ministry spokesman Esmail Baqaei told state media that the Strait of Hormuz “had nothing to do with the US,” adding that Tehran was engaging with Oman, which lies across the waterway, to determine what happens there. Iranian state news agency Tasnim reported that the strait would “not return to its pre-war status” under any agreement. — 24 May 2026

DAY 86: THE ACCUMULATED COST AND THE ARITHMETIC OF RECOVERY

Eighty-six days of Hormuz disruption have produced an economic damage bill that Southeast Asia will be servicing long after the strait reopens. The IEA has described the crisis as the largest supply disruption in the history of the oil market. Before the war, up to 84 percent of crude oil and 83 percent of LNG destined for Asia passed through the Strait of Hormuz, according to the US Energy Information Administration. The US naval blockade has now redirected more than 100 commercial ships. Shipping traffic through the strait has fallen by more than 90 percent. Around 20,000 seafarers remain stranded in the waterway’s approaches.

Across ASEAN, the fiscal damage is cumulative and structural. Indonesia’s fuel subsidy budget, calibrated for USD 70 per barrel crude, has been structurally overwhelmed. Malaysia is spending RM4 billion per month maintaining the subsidised RON95 price, against a backdrop of PETRONAS having confirmed its status as a net fuel importer. Vietnam’s consumer inflation reached 4.7 percent in March and has continued to rise. The Philippines, which declared a national energy emergency on 24 March, has pivoted its import mix toward Russian crude and implemented a four-day work week. The fertiliser supply disruption — the Middle East supplies 30 to 35 percent of global urea and 20 to 30 percent of global ammonia under normal conditions — is now feeding into agricultural input costs across the region’s rice-growing heartlands, with harvest impacts that will not be visible for months.

The question that Southeast Asian finance ministries are now confronting is not simply when the strait reopens, but how quickly normal flows can be restored once it does. Qatar’s Ras Laffan LNG complex, struck on 18 and 19 March, temporarily lost an estimated 17 percent of its production capacity and faces repair timelines that could extend from three to five years. Alternative pipeline routes — including the East-West Pipeline across Saudi Arabia and the Abu Dhabi Crude Oil Pipeline — cannot absorb anywhere near the full volume that normally transits the strait. A deal this week would begin a recovery. It would not end the disruption.

THE WEEK AHEAD: DEAL OR DÉTENTE?

As this column goes to print, the situation is more fluid than at any point since the ceasefire was declared on 8 April. Trump’s “largely negotiated” announcement on 23 May has raised expectations in a conflict that has repeatedly seen optimism collapse. The memorandum of understanding framework — end the war, reopen the strait, lift the blockade, then negotiate the nuclear issue within 60 days — is the most concrete proposal either side has publicly acknowledged. Iran’s foreign ministry confirmed it is reviewing the latest US terms. Rubio said on Friday there had been “some slight progress.”

Iran’s red lines remain unchanged: no nuclear negotiations as a precondition, no pre-war status for the strait, reparations for the war, and removal of all sanctions. The Persian Gulf Strait Authority’s creation suggests that even in a deal scenario, Tehran intends to retain institutional governance of the waterway rather than simply reverting to the previous legal framework. Whether Washington can accept a deal that acknowledges Iran’s new maritime authority while insisting on toll-free transit is the central unresolved question. It is a question about sovereignty, international law, and strategic face-saving simultaneously.

For Southeast Asia, the answer matters enormously. A deal this week means an end to the immediate supply crisis, a gradual recovery of shipping volumes, and the beginning of a slow reconstruction of the energy supply chains the war has shredded. A collapse of talks means another round of military threats, a return to escalation risk, and the continuation of an economic burden that is already stretching the fiscal limits of the region’s most vulnerable economies. The Cebu summit has shown that ASEAN is capable of collective response. What it cannot do is negotiate the deal that makes that response unnecessary. That remains in other hands.

• TNS NEWS