Iran and Oman Prepare Safe Passage Through Hormuz

Iran has stated that an agreement with Oman regarding the management of shipping through the Strait of Hormuz is just days away—a move that could potentially open a safer, temporary route for tankers and commercial vessels along one of the world's most vital energy corridors. Iranian Foreign Ministry Spokesperson Esmail Baghaei said talks have entered their final stage, and the outcome will be formally documented with the International Maritime Organization.

The agreement will cover arrangements for a temporary shipping corridor through Hormuz, following months of disruption caused by the conflict between Iran and the United States. Iran and Oman had previously reached an understanding on shipping route maps, though certain operational details are still being finalized. Tehran hopes the agreement will remain free from third-party interference.

Oil prices reacted immediately to the news by paring earlier gains. Brent crude, which had touched US$97.93 per barrel, retreated to around US$96.2–96.4, while WTI hovered near US$91 per barrel. The market anticipates that a safer shipping route could boost tanker traffic and mitigate the risk of supply disruptions—factors that had previously driven oil prices to multi-week highs.

However, the Iran–Oman deal also carries the potential to spark fresh tensions with the United States. Washington seeks a return to the free flow of shipping through the Strait of Hormuz as seen prior to the conflict, whereas Iran aims to strengthen its role in regulating access to the waterway. Iran also plans to announce new restricted zones in the Gulf region and a new international shipping corridor in the coming days.

Tensions in Hormuz had previously escalated sharply after the US attacked three Iranian oil tankers, prompting retaliatory strikes by Iran against vessels deemed to be using unauthorized routes. Commodity shipping activity through the strait has dropped to an average of about 10 vessels per day over the last ten days—the lowest level since May—underscoring the persistent risk to global energy flows. The conflict, now entering its seventh month, has driven a sharp rise in the prices of oil, fuel, and natural gas, while simultaneously heightening concerns about global inflation. Although there is hope that the Iran-Oman agreement could improve shipping flows, the market remains in a wait-and-see mode regarding whether the arrangement will be accepted by the US and effectively reduce the risk of attacks on commercial vessels.

Newsmaker Analysis: News of the Iran-Oman agreement acts as a short-term bearish factor for oil, as it reduces some of the "Hormuz risk premium." However, until Washington accepts the new mechanism and US-Iran military tensions subside, any decline in oil prices is likely to remain limited. If the safe corridor successfully increases the volume of tankers passing through the Strait of Hormuz, Brent crude could shed some of its geopolitical premium. Conversely, a failure of the agreement or a US rejection could push Brent back toward the $98–$100 range—the latter being a key psychological level. (arl)

Source: Newsmaker.id