Strait of Hormuz deal: Iran, Oman establish temporary safe passage as tanker traffic declines amid war | Today’s news
Iran and Oman are close to finalizing a deal to control shipping through the Strait of Hormuz, potentially giving Tehran more control over a key energy route and raising questions about how the US would respond, Bloomberg reported.
Iranian Foreign Ministry spokesman Esmail Baghaei said on Monday that talks with Oman have made “very good progress” and are in the final stages.
The proposed understanding would include details of a temporary safe shipping route through the Strait of Hormuz, a key transit point for global energy supplies. Baghaei said the arrangement would be documented with the International Maritime Organization (IMO).
He also expressed the hope that unnamed third parties would not interfere in the discussions.
Oil prices fall as shipping deal raises hopes
News of a potential deal briefly pared oil gains as markets bet a secure route could allow more tankers and commercial vessels to cross the strait and reduce the risk of further attacks on shipping.
Brent crude was trading near $97 a barrel at midday in London after earlier touching $97.93.
Macquarie analysts estimate that around 7 million barrels a day of oil and refined fuels currently pass through the Strait of Hormuz, compared with about 20 million barrels a day before the war.
Iran seeks greater control over Hormuz
Iran and Oman, which both border the Strait of Hormuz, are working to formalize arrangements governing traffic through the waterway. Both countries are also likely to demand service charges from vessels using the route.
The US, meanwhile, is blocking Iranian ports to limit oil exports from Tehran and wants Hormuz to return to its pre-war status as an open waterway.
Iran effectively closed the strait after US and Israeli strikes began in late February, and the disruption has significantly reduced shipping.
Tanker attacks exacerbate shipping risks
The proposed deal comes after Iran said over the weekend it had attacked three ships using an unauthorized route and three vessels linked to the US elsewhere.
The US military earlier said it struck three Iranian tankers and destroyed one of them after Iran’s Revolutionary Guards attacked two US Navy warships with ballistic missiles.
The war pushes up global energy prices
The conflict, now in its seventh month, has driven up oil, fuel and natural gas prices and raised fears of a new wave of global inflation.
The long war is also putting pressure on US President Donald Trump’s administration to find a way to end the conflict as higher fuel prices weigh on the US economy and could become a political issue ahead of November’s midterm elections.
Repeated attempts to resolve the conflict diplomatically have so far failed, and the region has found itself in a difficult stalemate marked by regular exchanges of strikes.
