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President Donald Trump has said the US is reinstating a naval blockade of Iranian ports and will impose a 20% charge on all cargo shipped through the Strait of Hormuz, following days of escalating strikes between the two countries.
He said this would stop "Iran's ships or customers" from entering or leaving the key oil shipping route, but "all other countries will have fair and open use of the Strait". The blockade will be in effect from 16:00 Eastern Time (20:00 GMT) on Tuesday.
Iran's foreign minister responded by saying that Tehran would remain the strait's "GUARDIAN" - using Trump's word.
The US military later said it "began launching the third consecutive night of strikes against Iran".
US Central Command (Centcom) said the strikes were launched at 16:45 Eastern Time (20:45 GMT) on Monday at "the Commander in Chief's direction".
"These strikes will continue imposing a heavy cost on Iranian forces and degrade their ability to attack innocent civilians and commercial shipping in the Strait of Hormuz," Centcom said.
Iran's army said it had targeted US military assets in Kuwait, Iranian state media reported.
The United Arab Emirates later said that Iranian cruise missiles targeted two national tankers in the Strait, killing an Indian crew member and wounding eight others, four of which were serious. Six of those injured were Indian, while two were Ukrainian, the UAE Ministry of Defence said in a statement on X.
"The Ministry of Defense condemns this brazen attack, which constitutes a serious violation and a clear breach of international law, threatening the security and stability of the region," it said.
Tehran and Washington clashed over the strait's control on Monday after exchanging strikes in the region over Sunday night.
In Trump's Truth Social post on Monday, he insisted the strait "will remain OPEN, with or without Iran".
"The U.S.A. will be, from this point forward, known as "THE GUARDIAN OF THE HORMUZ STRAIT," but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World," he wrote.
The US president added that "the process and formation will begin immediately".
His comments came shortly after he told Fox News the US would "probably run" the Strait of Hormuz, claiming that Iran "broke" a deal that was made with the US.
"We are taking over the strait," he said.
Later on Monday, US Central Command (Centcom) said its forces "will resume blockading maritime traffic entering and exiting Iranian ports" on 14 July.
"The US military continues to support traffic flow through regional waters for all vessels not violating the blockade," a Centcom statement said.
Last Friday, Trump notified Congress in a letter, seen by the BBC, that the US had resumed military action in Iran on 7 July.
Federal law requires congressional approval to continue military actions for more than 60 days. The White House can also extend the deadline for another 30 days, citing national security.
Responding to Trump's Strait of Hormuz announcement, Iranian Foreign Minister Abbas Araghchi wrote in a post on X: "POTUS is absolutely right. Whoever provides secure and safe passage of commercial vessels through the Strait of Hormuz should be compensated for this service."
He continued: "Iran has always been the GUARDIAN of the Strait and will remain so FOREVER."
"20% is of course too much. We will be fair," Araghchi added.
