Iran says agreement on Strait of Hormuz shipping reached with Oman

• Negotiations between the two countries were “forward-moving”, and a deal would be struck “if certain third parties do not obstruct this process”, says Tehran.
• The deal is described as a temporary route lasting two to four months, dependent on changes in US response, and is not a full reopening.
• The ongoing conflict and negotiations impact global oil prices and US politics, with uncertainty remaining over broader peace talks and shipping safety.

TEHRAN – Iran said it reached an agreement with Oman on a proposed route for shipping through the Strait of Hormuz, a potential step toward a reopening of the critical waterway for energy supplies.

A joint statement from Tehran and Muscat is under review and in the final drafting stage, Iranian Foreign Ministry spokesman Esmail Baghaei told reporters on Aug 5.

Negotiations between the two countries were “forward-moving”, and a deal would be struck “if certain third parties do not obstruct this process”, he said.

Iran and Oman have been in discussions for several days about a management plan for the Strait of Hormuz, which has emerged as the focal point of the ongoing war between the United States and Iran.

Baghaei did not mention any role of Washington in its statement, except to say the closure of the strait was a result of attacks by the US and Israel.

The White House did not respond to a request for comment on the announcement.

US President Donald Trump said late on Aug 4 that a deal on the Strait of Hormuz is imminent. He has repeatedly claimed diplomatic breakthroughs in the past, only for a lasting agreement to prove elusive.

Oil steadied on Aug 5 amid mounting signs that the strait might be reopened, potentially restoring production of millions of barrels a day disrupted by the five-month conflict. Brent crude traded around US$79 (S$101) a barrel.

Iran’s latest announcement on Hormuz comes after months of deadlock between the US and Tehran over how to conclude the war, with control over shipping through the waterway a particular sticking point.

Tehran has demanded that vessels obtain permission to cross and pay fees to transit, and has attacked ships it deems to be in violation. The US, in turn, has blockaded Iranian ports.

The issue led to the collapse of a ceasefire and interim peace agreement in July.

While fighting between the sides has paused for now, a number of other issues remain unresolved – not least Iran’s nuclear programme – and there has not been an agreement to start formal negotiations.

Just a ‘temporary’ deal

Iranian state TV earlier played down the outcome of the Iran-Oman discussions, citing a person familiar with the matter as saying an agreement between Tehran and Muscat would not necessarily mean the strait would open immediately. That would be contingent “on a change in US behaviour”, according to the report.

Iranian Deputy Foreign Minister Kazem Gharibabadi told state-run IRNA that Iran and Oman were negotiating a “temporary route” that would remain active for two to four months, with a significant portion of traffic passing through Iran’s territorial waters.

“This understanding does not mean the full reopening of the Strait of Hormuz,” he said.

In a Fox News interview recorded on Aug 4, Trump repeated a threat that if Iran does not “make a deal, it’s going to be too bad”.

Over the weekend, he held off on attacks he said would have been the largest since World War II.

Trump told reporters in Los Angeles late on Aug 4 that talks with Iran are “moving along very nicely”, adding: “We’ll know in 48 hours.”

Iran’s stance on Hormuz has complicated Trump’s efforts to turn the page on a war – now in its sixth month – that he claimed would only take weeks.

Shipping disruptions in Hormuz raised energy prices globally and pose a particular threat to Trump and his Republican Party at home, where American voters are already feeling pinched by high costs of living ahead of November midterm elections.

While visible traffic through the strait has been limited, millions of barrels a day have continued to cross the waterway even during periods of elevated hostility in recent weeks. Middle Eastern producers have ferried cargoes out of the gulf as part of a shuttle programme put in place by several countries in the region.

Even with a deal to reopen Hormuz, it is likely that at least some shuttling will continue as shipowners weigh up whether to take the risk of sailing back into the Persian Gulf. BLOOMBERG