Tehran denied holding direct negotiations with Washington but confirmed progress with Oman on a temporary shipping route through the Strait of Hormuz, sending oil prices lower despite unresolved questions over control, inspections and transit fees.
MARKET INSIDER — Iran said the United States appeared ready to return to previous commitments as Tehran and Oman moved closer to an interim arrangement for commercial shipping through the Strait of Hormuz. However, Iranian officials denied that direct negotiations with Washington were taking place, contradicting President Donald Trump’s assertion that talks were underway and a deal was near.
The conflicting accounts suggest diplomacy is advancing through Oman but has not yet produced a final agreement. Critical issues remain unresolved, including Iran’s authority over inbound vessels, possible transit charges, inspection procedures and the lifting of US restrictions on Iranian shipping.
Key Highlights
- Iran says Washington is prepared to return to earlier commitments but denies that direct US-Iran negotiations are underway.
- Iran and Oman have agreed on the coordinates of a proposed shipping route, though a final joint statement is still being drafted.
- The parties remain divided over Iranian control, inspection rights and whether vessels should pay transit fees.
- Brent crude slipped toward $79 as diplomatic progress raised hopes of improved energy flows through Hormuz.
Iran points to Oman-mediated diplomacy
Iranian Deputy Foreign Minister Kazem Gharibabadi said in an interview with state broadcaster IRNA that the United States was prepared to “return to commitments,” without specifying precisely which obligations he meant.
His remarks appeared to refer to the memorandum of understanding signed by Washington and Tehran in June. That temporary framework was intended to halt hostilities, restore freedom of navigation through Hormuz and create a 60-day period for further negotiations.
However, Gharibabadi rejected Trump’s characterization of the latest diplomatic activity as direct US-Iran talks.
“The path of understanding is between Iran and Oman, and no negotiations with the US have taken place during this period,” he said.
Iranian Foreign Ministry spokesperson Esmaeil Baghaei separately confirmed that Tehran and Muscat had reached an understanding on the geographic coordinates of a shipping route. He said a joint statement was in the final stages of review and drafting, provided that unspecified third parties did not obstruct the process.
The distinction matters. Iran may be using Oman to transmit proposals and responses without formally returning to direct engagement with Washington. Such indirect diplomacy allows both governments to pursue an agreement while preserving their public positions.
Tehran can claim it has not negotiated directly with the United States, while Washington can argue that substantive discussions are occurring through intermediaries.
Trump says talks are happening
Trump has offered a more optimistic—and more direct—account.
The US president said negotiations were underway regardless of whether Iran publicly acknowledged them. Earlier, he accused Iranian leaders of being “duplicitous” about the diplomatic process and suggested an agreement could be announced soon.
US Treasury Secretary Scott Bessent also said Washington and Tehran might reach a deal within days to reopen the Strait of Hormuz.
The White House had not publicly confirmed the detailed terms of any new agreement at the time of reporting. That leaves a significant gap between political signals and an enforceable maritime arrangement.
Iranian and regional sources told Reuters that several central provisions remained under discussion, despite Trump’s assertion that a deal was close. Those issues include which country controls the shipping route, whether Iran can inspect vessels and whether commercial operators must pay for passage, according to Reuters
The disagreement does not necessarily mean diplomacy has stalled. Negotiating parties frequently present progress differently to domestic audiences. It does mean investors should distinguish between an anticipated announcement and a completed agreement capable of restoring normal commercial traffic.
Proposed route could expand Iran’s authority
The proposed arrangement goes beyond identifying a safe channel for vessels.
Iran and Oman have reportedly agreed on the coordinates of a temporary route through Hormuz. However, the allocation of authority along that route could give Tehran greater control over ships entering the Persian Gulf.
That would represent a significant concession because the United States has consistently maintained that Hormuz is an international waterway in which commercial vessels should enjoy free passage.
According to officials familiar with the discussions, Iran has sought the right to inspect inbound vessels and collect transit charges. Tehran has reportedly proposed fees equivalent to between 5% and 7% of cargo value, while Oman has discussed a lower figure of approximately 3%. Washington opposes such charges and continues to demand free navigation.
A temporary no-fee route has also been considered, potentially allowing traffic to resume while the parties negotiate a longer-term framework.
Iran and Oman’s agreement on geographic coordinates is therefore meaningful but insufficient on its own. A navigable route does not determine who can inspect ships, what cargoes are permitted, how vessels will be protected or what happens if one party alleges a violation.
Those operational details will determine whether major shipping companies, charterers and insurers are willing to use the corridor.
June agreement provides a fragile foundation
The current diplomacy is an attempt to revive elements of the June memorandum, which was presented as a temporary framework for de-escalation and reopening Hormuz.
Under that understanding, Iran was expected to facilitate commercial passage through the strait during a 60-day period. Washington was expected to ease its blockade of Iranian ports and vessels, while the parties pursued broader negotiations addressing security and Iran’s nuclear program.
The arrangement failed to normalize traffic fully. Washington subsequently accused Iran of attacking commercial vessels and violating the spirit of the memorandum, while Tehran argued that US restrictions and military pressure prevented the agreement from being implemented as promised.
Gharibabadi’s reference to returning to “commitments” therefore suggests Tehran wants Washington to restore concessions associated with the June framework before Iran provides broader guarantees over shipping.
The United States is likely to seek the reverse sequence: verifiable freedom of navigation before lifting restrictions on Iranian maritime activity.
That sequencing problem is one of the largest obstacles to an agreement. Both sides want the other to act first, while neither trusts that concessions will be reciprocated.
CENTCOM says a southern route remains open
US Central Command has challenged suggestions that Hormuz is completely inaccessible.
CENTCOM said the southern route through Omani territorial waters remained “free and open” to commercial vessels seeking to transit the international waterway.
That claim is compatible with limited physical passage, but it does not mean shipping conditions have returned to normal. A route can technically remain open while security risks, insurance costs, naval restrictions and operators’ internal safety policies sharply reduce traffic.
Some commercial ships may also be unable or unwilling to use the southern route because of their destination, cargo, draft, flag, ownership or exposure to sanctions.
The practical measure of reopening will therefore be the restoration of routine tanker and cargo movements—not simply a political declaration that one channel is available.
Investors should watch vessel-tracking data, tanker bookings, Gulf export volumes and maritime insurance premiums for evidence that the improvement is real.
Maritime incidents underscore continuing risks
The diplomatic progress comes amid further reports of explosions near commercial vessels.
UK Maritime Trade Operations said a tanker approximately 95 nautical miles southeast of Aden reported hearing a loud explosion nearby on Wednesday. The crew was safe and no environmental damage was reported, while authorities investigated the incident. UKMTO
Separate incidents have recently been reported near Oman and the entrance to the Strait of Hormuz. In one case, a tanker was struck by an unidentified projectile near Oman’s Musandam Peninsula, damaging its engine room. Another vessel reported a nearby explosion without sustaining damage. Reuters
The incidents have not all been conclusively attributed, and reports of an explosion do not by themselves establish an attack or identify a perpetrator.
Nevertheless, they demonstrate why a political understanding must be accompanied by credible maritime-security arrangements. Shipping companies will need confidence that vessels will not be targeted by Iran, regional proxy forces or other armed groups operating around the Arabian Peninsula.
Risks in the Gulf of Aden and Red Sea also cannot be resolved solely by reopening Hormuz. The routes form separate but connected parts of the energy and commercial shipping network between Asia, the Middle East and Europe.
Oil falls, but risk premium remains
Oil prices declined on Thursday as traders responded to signs of progress between Iran and Oman.
Brent crude fell approximately 0.5% to $79.08 a barrel, while West Texas Intermediate declined about 0.7% to $74.69. The move followed a sharper decline earlier in the week as expectations of a diplomatic breakthrough reduced fears of a prolonged disruption to Gulf exports, the Reuters reported.
The price response reflects the Strait of Hormuz’s importance to global energy markets. In normal conditions, the waterway handles roughly one-fifth of global petroleum consumption and is particularly important for exports from Saudi Arabia, Iraq, the United Arab Emirates, Kuwait and Qatar.
A reliable reopening could reduce freight and insurance expenses, release delayed cargoes and improve confidence in Gulf supply. It could also ease inflation pressure in energy-importing economies.
However, oil remains vulnerable to abrupt reversals. A failed announcement, new maritime attack or disagreement over inspections could restore the geopolitical premium quickly.
The current decline therefore reflects a reduced probability of severe disruption—not proof that the risk has disappeared.
Asia has the greatest economic exposure
A durable Hormuz agreement would be especially significant for Asian markets.
China, India, Japan and South Korea are among the largest customers for Gulf energy. Southeast Asian economies also remain exposed through direct petroleum imports, liquefied natural gas purchases, shipping expenses and international fuel prices.
Lower crude prices would support trade balances and currencies in large energy-importing economies. They could also reduce production and transportation costs, giving central banks more flexibility if inflation begins to moderate.
Japan and South Korea have additional exposure through LNG and industrial supply chains. Qatar’s gas exports rely heavily on passage through Hormuz, making reliable navigation important for electricity costs and energy security across Northeast Asia.
Vietnam is less directly dependent on the strait than some regional peers because it produces part of its own oil and gas. However, domestic fuel prices, transport expenses, petrochemical costs and inflation expectations remain sensitive to global energy benchmarks.
A reopening would therefore generally benefit Asian importers, airlines, logistics companies and energy-intensive manufacturers. It could reduce earnings momentum for oil producers and refiners that benefited from elevated prices, depending on margins and inventory positions.
What investors should watch next
The first test is whether Iran and Oman publish their joint statement and whether the United States publicly accepts its terms.
The second is whether the agreement specifies control of inbound and outbound traffic, inspection authority and transit costs. A document that leaves those questions unresolved may calm markets temporarily without persuading commercial operators to return.
Implementation will matter more than the announcement. Investors should monitor actual tanker movements, export volumes from Gulf producers and changes in war-risk insurance premiums.
The US blockade of Iranian maritime activity is another key indicator. If Washington begins lifting restrictions after receiving verifiable shipping guarantees, that would support Gharibabadi’s statement that the United States is returning to its commitments.
Finally, isolated maritime incidents must be watched closely. Even if Iran and the United States reach an understanding, attacks by other regional actors could prevent a full normalization of shipping.
The diplomatic signals are more constructive than they were several days ago, but the parties are not yet describing the same process or committing publicly to the same terms. For markets, that means a Hormuz deal may be closer—but it should not be treated as complete until ships, insurers and energy exporters begin acting as if the waterway is genuinely safe.
