Trump extends his deadline for Iran to reopen the Strait of Hormuz to April 6

Iran and the United States appeared at an impasse Thursday, hardening their positions over ceasefire talks and setting the stage for another potential escalation in the Middle East war as thousands more U.S. troops neared the region.

Meanwhile, President Donald Trump extended his deadline for Iran to open the Strait of Hormuz to April 6, and Tehran tightened its grip on the crucial strait while Israel poured more troops into southern Lebanon to fight the Iran-backed militant group Hezbollah.

Sirens over Israel warned of barrages of incoming Iranian missiles, and Gulf nations worked to intercept fire. Heavy strikes were reported in Iran’s capital and other cities.

In a war that appears defined by who can take the most pain, the U.S. has offered shifting objectives, including ensuring Iran’s missile and nuclear programs are no longer a threat and ending Tehran’s support for armed groups in the region. Washington at one point also pushed for the overthrow of Iran’s theocracy.

While the U.S.-Israeli campaign has hit Iran’s military and government hard, killing top leaders and striking scores of targets, Iran continues to fire missiles, and there is no sign of an uprising against the government.

Surviving could be seen as victory

for Iran

For Iran’s leadership, by contrast, merely outlasting the onslaught could be seen as victory. It may be hoping to get the U.S. to back down by roiling the world economy with its stranglehold on the the strait, which has disrupted oil and natural gas shipments and raised prices worldwide for energy and other goods.

Short of a negotiated solution, the U.S. would need a dramatic escalation to end Iran’s attacks and restore the free flow of goods through the strait, where 20% of all traded oil and natural gas is transported in peacetime. Iran rejected a ceasefire proposal put forth by the U.S., while putting forth its own demands.

Trump has vowed to strike Iran’s power plants if it does not fully reopen the strait. His new deadline pulls back on his earlier threat to bombing Iran’s energy plants if Tehran did not open the critical waterway.

Iran had threatened to retaliate against the region’s vital infrastructure, like desalination facilities, if Trump followed through. Trump said he was holding off on carrying out his threat because talks aimed at ending the conflict are going “very well.”

A Gulf Arab bloc said Thursday that Iran is now exacting tolls from ships to ensure their safe passage through the waterway.

Iran seen as operating Strait of Hormuz as ‘de facto toll booth’

Iran has been blocking ships from the strait that it perceives as linked to the U.S. and Israeli war effort, while letting through a trickle of others. Trump said during a Cabinet meeting Thursday that Iran is allowing some oil tankers through as a sign of good faith for talks.

Jasem Mohamed al-Budaiwi, secretary-general of the Gulf Cooperation Council, a bloc of six Gulf Arab nations, said Iran was charging for safe passage.

Lloyd’s List Intelligence called it a “de facto ‘toll booth’ regime,” saying that at least two vessels have paid in yuan, China’s currency.

Iran’s grip on the strait and relentless attacks on Gulf energy infrastructure have sent Brent crude, the international standard, up more than 40% since the war started.

Israel said it killed the head of the Iranian Revolutionary Guard’s navy, Commodore Alireza Tangsiri, and the country’s naval intelligence chief, Behnam Rezaei. Israeli Defense Minister Israel Katz said Tangsiri was responsible for bombing operations that have blocked ships from crossing the Strait of Hormuz. Iran did not immediately acknowledge the killings.

This story was originally featured on Fortune.com