(Bloomberg) — Iran and Oman appear to be edging closer to a deal on how the Strait of Hormuz should be managed, agreeing on routes through the key waterway that’s proved a major stumbling block in efforts to end almost six months of war between the Islamic Republic and the US.
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The finalization of a “shipping map” forms part of a broader accord to govern traffic through the strait and constitutes an independent arrangement between the two states that will uphold their sovereignty and ensure the safe transit of vessels, Defa Press cited Iranian Foreign Ministry spokesman Esmail Baghaei as saying. The state-run news agency didn’t spell out whether ships will be charged transit fees or what security arrangements would be made for them, saying another phase of talks would be held.
The move follows a series of attacks in Hormuz, through which a fifth of the world’s oil and gas transited before the war. The US wasn’t party to its negotiation and is unlikely to agree to terms that don’t restore free passage along the route linking the Persian Gulf to the Gulf of Oman and the Arabian Sea.
The price of Brent crude, the global benchmark, rose almost 6% this week as hopes faded of a quick resolution to a deadlock that’s disrupted the flow of oil and other key commodities to global markets. There had been some 65 confirmed incidents involving vessels in Hormuz and the broader Middle East during the conflict and 17 seafarers had died as of Aug. 11, according to the International Maritime Organization.
Attacks have continued since then, with the UK Maritime Trade Operations saying on Saturday that it had been notified of a projectile striking the hull of a bulk carrier. And two Abu Dhabi National Oil Co. vessels were struck while transiting Hormuz on Thursday and another was hit on Friday evening, according to reports from the United Arab Emirates’ state-run WAM news.
Meanwhile, the US is readying new economic measures to force Tehran to capitulate in the war, which began when America and Israel launched air strikes against the Islamic Republic on Feb. 28 and has claimed thousands of lives — most of them in Iran.
President Donald Trump told Fox News on Friday that the US plans to hit Iran’s economy hard and he didn’t care if the conflict ends before the November US midterm elections, which will hinge on voter perceptions of the economy.
In a speech on Long Island Friday, Trump said a US blockade of Iranian ports was a “wall of steel” that enabled Washington to effectively govern Hormuz. “Pretty soon I’ll be declaring the Hormuz strait a territory of the United States,” he said.
Iranian Foreign Minister Abbas Araghchi said an agreement with Oman wouldn’t translate into the strait’s reopening.
That “is a separate issue. It depends on fulfilling other conditions that the US must abide by for it to take place,” he said on his Telegram channel on Saturday. While Iran is in contact with mediators from Qatar and Pakistan, who are passing messages between Tehran and Washington, “this does not constitute negotiation. We have not yet made a decision to resume negotiations with the US,” he added.
Trump has struggled to find an off-ramp to the war and his push for renewed economic pressure on Iran comes as the US faces a shortfall of key munitions and mounting domestic opposition to an expanded military campaign.
Iran’s economy has already taken a major hit, with much of its industrial capacity damaged and crude exports severely curtailed by the US blockade, but waves of sanctions have failed to force it to bend on its nuclear program or relinquish control over the strait.
It’s unclear exactly what meaningful additional measures the US could implement without resorting to secondary sanctions on buyers of Iranian oil, such as China. That would likely spark retaliatory action from Beijing and spark more global energy price uncertainty.
Volatility in the Middle East extends beyond the US-Iran conflict. Israel continues to clash with Hezbollah in southern Lebanon and Hamas operatives in Gaza, while the Houthis have attacked ships in the Red Sea. All three groups are backed by Iran.
Lebanese Prime Minister Nawaf Salam said the Israeli military staged a series of attacks on his country on Saturday, including intensive airstrikes and shelling, that claimed the lives of at least nine people and injured 11. The situation was “of utmost gravity” and undermines efforts for stabilization, he said in a post on X.
The Israel Defense Forces earlier said it had hit Hezbollah infrastructure in the Nabatieh and Ansar areas in southern Lebanon in response to action by the militia, and that it would continue operations to counter threats against its soldiers and nationals.
“Responsibility for dealing with any military structures, if they exist on Lebanese territory, lies exclusively with the Lebanese state,” Salam said, adding that those who had been killed couldn’t be considered military targets.
The latest upsurge in violence threatens to derail a US-brokered ceasefire between the Israeli and Lebanese governments that provides for Hezbollah’s disarmament. It also envisions the IDF eventually withdrawing from territory it has occupied and that the Lebanese army will step in to maintain security.
–With assistance from Dan Williams and Yi Wei Wong.
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