Iran's new Hormuz route plan adds 2-4 months of oil uncertainty

Iran said it will activate a new Strait of Hormuz shipping route within 2-4 months, extending uncertainty over a corridor that carries roughly 20 million barrels of oil daily. The announcement, carried by the state-run IRNA news agency, comes as Tehran and Oman negotiate reopening the waterway after months of conflict that largely shut down commercial transit.

"The final results of these negotiations will be announced once concluded," Esmail Baghaei, spokesman for Iran's Foreign Ministry, said in remarks carried by IRNA. Baghaei said the bilateral talks with Oman focus on "establishing safe inbound and outbound shipping lanes" that "uphold sovereign rights while also addressing the national security considerations of both Iran and Oman."

The new route announcement follows weeks of diplomatic maneuvering. U.S. President Donald Trump said a deal on the strait could come "tomorrow or the next day," while Treasury Secretary Scott Bessent told CNBC "there is a chance we may have a deal today or tomorrow." Brent crude traded near $81 a barrel Wednesday, down about 8 percent this week on hopes of a resolution, after a fresh Houthi threat to target Saudi tankers reversed an earlier decline.

The stakes are substantial. The strait handles roughly 20 percent of global oil consumption and nearly 90 percent of Gulf exports destined for Asian markets. During the peak of Operation Epic Fury in March, commercial crossings fell to just 10 over five days versus a typical daily average of 70-80, while GPS jamming affected more than 1,650 vessels on a single day. A 2-4 month timeline for the new route means tanker operators, insurers, and energy traders must price in extended disruption risk.

The proposed agreement between Iran and Oman would split the strait into separate lanes — inbound vessels using a northern route near Iran and outbound traffic through Omani waters — with service fees for security and environmental protection, according to two regional officials who spoke to the Associated Press. Axios reported that no tolls would be charged during the transitory 60-day agreement, and Iran and Oman would work to clear mines from a middle shipping lane.

U.S. officials have pushed back on any arrangement that formalizes Iranian control. Secretary of State Marco Rubio said last month that such a deal would create a "very dangerous precedent" for other parts of the world. A U.S. official familiar with the negotiations said any temporary routes would not involve approvals by Iran or charges, and Washington remains committed to the status quo in which "no party controls the lanes."

2-4 month window keeps oil markets on edge

The activation timeline complicates the near-term outlook. The previous U.S.-Iran ceasefire lasted less than a month before collapsing over disagreements about control of Hormuz, and the current interim agreement's 60-day deadline is roughly two weeks away. Iranian state TV played down Wednesday's discussions, saying an agreement between Tehran and Muscat would not necessarily mean the strait opens immediately, contingent "on a change in U.S. behaviour."

For tanker operators, the extended timeline means continued reliance on naval escorts, elevated war-risk insurance premiums, and potential rerouting. Qatar's LNG exports — over 112 billion cubic meters in 2025 — have no alternative route to global markets, making the strait's reopening critical for natural gas supply chains as well as crude oil.

Iran has denied direct negotiations with the U.S., saying talks are only with Oman. Trump said Monday that the first phase of any deal would be the opening of the straits, followed by denuclearization. If the new route is activated as announced, it would mark a significant shift in how the world's most important energy chokepoint is managed — with Iran controlling inbound traffic and Oman managing outbound flows.

The collapse of the previous ceasefire within weeks shows how fragile any agreement remains. For global energy markets, the 2-4 month window before the new route becomes operational means oil prices, tanker charter rates, and insurance premiums will continue to reflect elevated geopolitical risk in the Gulf.

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