Iran and Oman are close to finalizing a deal to reopen the Strait of Hormuz, and the emerging agreement would hand Tehran a major geopolitical victory by recognizing its control over the critical waterway.
The proposed deal between the two countries sitting on opposite ends of the narrow strait would give Iran control over inbound traffic, according to sources who spoke to Reuters. Iran's state news outlet Fars reported that the draft plan would block US and Israeli ships from transiting the strait entirely.
Iran-Oman Deal Close to Finalized for Strait of Hormuz Reopening
Iran has said a deal with Oman to reopen the Strait of Hormuz is close to being finalized, according to The Guardian. The agreement gives Iran and Oman 60 days to negotiate the opening of the strait, but it envisions that during that time the United States and Iran will need to reach an understanding, as reported by The New York Times.
Tehran's terms are strict. Under the draft plan, US and Israeli ships would be blocked from transiting the strait, and Iran plans to issue penalties of up to 20% of the value of the cargo of those who violate those terms, according to Fars, as reported by CNBC.
US Faces Tough Choice After Military Pressure Fails
The United States and other countries in the Persian Gulf have insisted that the strait must return to its prewar status, when ships enjoyed total freedom of navigation. But months of US-Israeli bombardment failed to break Iran's ability to threaten ships attempting to cross without its authorization, keeping Hormuz effectively closed and the Gulf's oil supplies bottled up.
The US appeared to quickly reject the terms, telling CNBC that it rejects any 'impediments' to navigation. However, the reality on the ground suggests Washington may have little choice but to accept a deal that recognizes Iran's control.
"The concession has already been made." — Fortune
President Donald Trump has repeatedly balked at renewing all-out war, leaving the US with limited options. The emerging deal, as described by Fortune, recognizes Iran's control over the waterway — a significant shift from the US position of total freedom of navigation.
What the Hormuz Deal Means for Oil and Shipping
The practical impact of this deal is enormous. The Strait of Hormuz is a critical chokepoint for global oil supplies, and its closure has bottled up Gulf oil. If the deal goes through with Iran controlling inbound traffic, it changes the rules of the game for every shipping company and oil trader operating in the region.
- Iran would control which ships enter the strait, with US and Israeli vessels reportedly blocked
- Violators face penalties of up to 20% of cargo value
- The 60-day negotiation window suggests a phased reopening rather than an immediate one
- Gulf oil supplies remain bottled up until the deal is finalized
Our Take: A Deal That Rewards Iranian Leverage
To put it plainly, this deal represents a significant shift in the balance of power in the Persian Gulf. The US spent months trying to break Iran's ability to threaten shipping through military force, and it did not work. Now Washington faces a choice between accepting a deal that recognizes Iranian control or continuing a standoff that keeps oil supplies locked up.
In our view, the US may have to accept this outcome because the alternative — continued closure of the strait — hurts everyone, including American allies in the Gulf. The emerging deal is not what Washington wanted, but it may be the best option available. The key question now is whether the US can negotiate terms that protect its interests within the 60-day window, or whether it will be forced to accept Iran's terms entirely.
The concession has already been made, as Fortune put it. The question is what the US gets in return.
