Iran has announced an agreement with Oman on the proposed sea route through the Strait of Hormuz. This could be a step towards resuming the operation of this critically important waterway for energy transportation.
A joint statement by Tehran and Muscat is in the final stage of preparation. On Wednesday, spokesman for the Ministry of Foreign Affairs of Iran Esmaeil Baghaei told reporters, citing a post on Telegram. He noted that the negotiations between the two countries are “professional” and “progressive”, and the agreement will be concluded, “if certain third parties do not interfere with this process”.
Statements from the parties and conditions for opening
Iran and Oman have been discussing a plan to manage the Strait of Hormuz for several days, which has taken center stage in the ongoing war between the USA and the Islamic Republic. Baghaei did not mention the role of the USA in his statement, only noting that the closure of the strait was a result of attacks by Washington and Israel.
US President Donald Trump stated in Los Angeles on Tuesday evening that an agreement on the Strait of Hormuz is inevitable. Meanwhile, Iranian state television downplayed the significance of the discussion results on Wednesday, citing an informed source that noted that the agreement between Tehran and Muscat does not necessarily mean the immediate opening of the strait. This will depend “on a change in US behavior”, the statement said.
Impact on the oil market and the broader context of the conflict
Oil prices stabilized on Wednesday amid reports that the Strait of Hormuz could reopen. This could potentially restore the supply of millions of barrels of oil per day, which was disrupted by the month-long conflict. The price of Brent crude was trading slightly below $79 per barrel in London.
Various reports and comments regarding the agreement on the Strait of Hormuz emerged after months of stalemate between the USA and Iran over the end of the five-month war. Although hostilities between the parties are currently suspended, a number of issues remain unresolved—not least Iran’s nuclear program—and the parties have not reached an agreement on the start of official negotiations.
Source: Bloomberg
