Iran, Oman Near Hormuz Deal as 21% of Oil Trade Hangs

Iran said negotiations with Oman over navigation through the Strait of Hormuz have advanced after two months of talks, but no final agreement has been reached, keeping the waterway that carries about 21 percent of global oil trade in focus.

"Our talks are with Oman, and the focus is on reaching an understanding regarding a route that would ensure safe maritime navigation through the Strait of Hormuz," Esmaeil Baghaei, Iran's Foreign Ministry spokesperson, said at a weekly press briefing Sunday.

Baghaei said Tehran and Muscat are working to establish a temporary corridor for safe passage, transforming the southern route through Omani waters and the northern route through Iranian waters into a middle route that respects both coastal states' sovereignty. He stressed the talks are strictly bilateral and involve no third party, and that Iran is not currently engaged in negotiations with the United States. Oil prices declined as traders weighed the diplomatic progress against the risk of renewed disruption.

The outcome matters because the Strait of Hormuz handles about 21 percent of globally traded crude and liquefied natural gas, and any disruption can ripple through energy prices, shipping costs and inflation expectations. Iran's Foreign Minister Abbas Araghchi said negotiations with Muscat were close to being finalized around a route that respects the sovereignty of both countries, though officials cautioned additional technical and political discussions remain.

Oman has proposed a regional mechanism inspired by the Strait of Malacca, while Iran has put forward a counterproposal that would give Tehran greater oversight of vessels entering and leaving the Gulf, according to reports. Baghaei said various maps and proposals have been exchanged between the two sides in recent days.

Iran rejected statements by U.S. President Donald Trump suggesting Tehran had agreed to reopen the Strait of Hormuz or requested a deal with Washington. Iran's Fars News Agency reported there is "no agreement regarding the reopening of the Strait of Hormuz," dismissing reports of a U.S.-backed Qatari proposal as false. According to the agency, the strait will remain closed under current conditions, with maritime traffic permitted only through designated routes approved by the Islamic Revolutionary Guard Corps Navy.

Baghaei also warned that Iran would respond to any country assisting future U.S. military operations against the Islamic Republic, saying Araghchi had conveyed clear warnings during recent conversations with counterparts in Pakistan and Türkiye. He said the United Kingdom, Bulgaria and Ukraine had informed Tehran they would not participate in any war against Iran.

The talks follow a June 18 understanding on the future management of the Strait of Hormuz, which Baghaei said Iran had moved to implement before the United States violated its obligations within a 30-day period. The last time the strait faced sustained disruption, energy markets repriced sharply as shipping insurers raised war-risk premiums and tanker rates climbed, a pattern traders say could repeat if negotiations stall.

For now, the diplomatic progress represents an encouraging development after months of military conflict and economic uncertainty in the region. Whether the talks yield a durable agreement remains uncertain, and officials on all sides continue to say additional negotiations are necessary before any lasting arrangement can be implemented. As discussions continue, governments, shipping companies and global energy markets will monitor every development, with even incremental progress carrying implications for regional stability, international trade and worldwide energy prices.

This article is for informational purposes only and does not constitute investment advice.