Iran to control inbound Hormuz shipping under proposed deal
Get the Geopolitics newsletter
Daily geopolitics — wars, elections, sanctions, the diplomatic moves that move markets. Free.
- Iran would gain control over ships entering the Gulf through the Strait of Hormuz under a proposed deal with Oman, one of the largest concessions yet to Tehran in the five-month war with the US.
- U.S. officials have repeatedly insisted they would never agree to Iran controlling access to the world's most important energy trade route, though President Trump has said a deal reopening the strait is imminent.
- Iran's Deputy Foreign Minister Kazem Gharibabadi said the arrangement is "designed in such a way that commercial ships will pass through Iranian territorial waters, both on the inbound and outbound legs of their journey."
- Iran is seeking fees of 5-7% of cargo prices from ships using the strait, while Oman is discussing around 3% and Washington wants no fees at all.
- The U.S. Army has used up nearly all of its long-range precision missiles after a two-week July strike campaign that failed to break Iran's grip on the strait.
- Trump faces voter pressure as U.S. voters oppose the conflict by two-to-one ahead of November midterm elections, with crude prices plunging after he called off fresh attacks citing talks.
- Yemen's Houthis declared a maritime embargo on Saudi ports and attacked two Saudi oil tankers off Yanbu and in the Gulf of Aden, capping crude price losses.
Why it matters: Iran would gain control of the world's most critical oil chokepoint—reversing the pre-war free-access arrangement—and extract fees on cargoes. The US, whose Army has burned through nearly all of its long-range precision missiles without breaking Iran's grip, faces a choice between accepting a major strategic concession or prolonging an unpopular war ahead of November midterms.
