Iran and Oman Near Deal on Strait of Hormuz Management; US Approval Uncertain

Iran and Oman are on the verge of concluding negotiations regarding the joint management of the Strait of Hormuz, a vital waterway for global energy transport. This development follows extensive mediation efforts involving Pakistan, Oman, and Qatar, aimed at resolving disputes over the strait's control.

The proposed arrangement would see ships entering the Persian Gulf navigate through Iranian waters. Upon exiting towards the Indian Ocean, vessels would follow a more southerly route, partially traversing Omani and partially Iranian waters. Iran and Oman plan to establish a new shipping corridor approximately seven nautical miles wide, with designated entry and exit channels of two to three nautical miles each, separated by a two-mile buffer zone.

This agreement comes amidst heightened tensions and a significant disruption to maritime traffic. Before the conflict with Iran began on February 28, over 120 ships per day transited the strait, which handles a fifth of the world's oil and gas trade. Following Iran's mining of the strait and attacks on tankers, traffic has plummeted to about 15 ships daily, leading to a nearly 20 percent increase in oil prices since late February.

The US has responded with a naval blockade of Iranian ports and has been escorting an increasing number of ships through the strait, a move confirmed by analysis platforms. Despite these measures, Iran continues to target vessels, raising questions about the feasibility and acceptance of any new management plan.

A key sticking point remains the approval of the United States. While Iran and Oman are reportedly discussing transit fees ranging from three to seven percent of a ship's cargo value, the US has not yet indicated its stance on the proposed joint management or the associated charges. The interim agreement is expected to last one to two months, during which Iran and Oman will continue discussions on a permanent solution.

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Diplomatic representation remains at a low level, indicating that the US is monitoring progress on the factions’ handover of weapons.