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Oman has proposed a joint management mechanism for Strait of Hormuz shipping based on voluntary vessel contributions, a Gulf source said, as commercial traffic through the waterway fell to its lowest level in three weeks.
Iran and Oman are discussing a joint framework to manage Strait of Hormuz shipping through voluntary vessel contributions, a Gulf source said on July 28, as commercial traffic through the critical waterway fell to a three-week low amid continued uncertainty over safe passage.
"Mediators may convey messages to us from the American side, but there are no direct negotiations," Esmaeil Baghaei, spokesperson for Iran's Foreign Ministry, told reporters in Tehran on Monday, confirming indirect contacts as part of the diplomatic push.
The mechanism, disclosed by a Gulf source and unconfirmed by official sources, comes as only three commercial ships — two cargo vessels and a Chinese-owned tanker — transited the strait on Tuesday, according to CBS News tracking. Between July 13 and 19, just two vessels used the US-backed southern route hugging Oman's coast, both with their AIS tracking systems switched off, Lloyd's List analysis showed. Brent crude futures rose 3.7% to $94.33 a barrel on Wednesday after President Donald Trump threatened to destroy an Iranian bridge or power plant for every new attack on shipping, while West Texas Intermediate advanced 3.5% to $87.28.
The Strait of Hormuz handles about 21% of global oil trade, and the standoff over its governance has become the central flashpoint in the US-Iran conflict. The June 17 memorandum of understanding that paused hostilities for less than three weeks left the strait's management unresolved, with Iran asserting the right to control traffic and potentially charge fees — a claim the US says has no basis under international law. With the 60-day negotiation window now past its midpoint, mediators from Qatar, Pakistan and Egypt are working to bridge the gap before fighting resumes.
Diplomatic Track Gains Urgency as Traffic Collapses
Iran and Oman held talks Friday and Saturday on developing "mechanisms to ensure safe navigation through the Strait of Hormuz while respecting the sovereign rights and sovereignty of both coastal states," Baghaei said, stressing that the waterway remains closed. The Omani proposal, based on voluntary contributions from transiting vessels, would represent a compromise between Iran's demand for a formal management role and the US insistence on unrestricted passage.
The diplomatic push comes as both Washington and Tehran face mounting costs from the conflict. The US paused strikes on Iran after nearly two weeks of bombardments, with media reports suggesting the military may be running low on Patriot antimissile interceptors and other air defense munitions. Iran has halted its retaliatory attacks on US assets in Bahrain, Kuwait and Jordan, according to Iranian army spokesman Mohammad Akraminia.
At least 17 commercial mariners have been killed in 61 separate attacks in the Strait of Hormuz since the US and Israel launched their joint war on Iran at the end of February, according to the UN's International Maritime Organization. The US military said its naval blockade of Iranian ports "remains in full effect," with 17 commercial ships redirected, two disabled and two boarded.
Spillover Threatens Second Chokepoint
The uncertainty has spread to the Bab el-Mandeb strait at the southern entrance to the Red Sea, where Iran's Houthi allies in Yemen have threatened to block Saudi shipping. At least five commercial vessels turned around Tuesday as they approached the waterway after the Houthis announced their intention to impose a blockade on Saudi Arabia, according to shipping data.
Before the war, about 30% of global oil supplies would typically traverse the two straits every year, making the simultaneous disruption of both waterways a risk that energy markets have not fully priced. Global oil prices dropped about 4% after the US and Iran halted exchanging missiles, suggesting markets remain sensitive to any diplomatic breakthrough — or breakdown.
The last time a major shipping chokepoint faced sustained disruption, during the 2019 attacks on Saudi Aramco's Abqaiq and Khurais facilities, oil prices surged 15% in a single day. A similar shock today, with both Hormuz and Bab el-Mandeb under threat, could push Brent above $100 a barrel, analysts have warned.
This article is for informational purposes only and does not constitute investment advice.
