US President Donald Trump said a deal on the Strait of Hormuz is possible as early as Wednesday, as expectations build for an arrangement that allows for the reopening of the crucial waterway for energy markets.
“It could happen. Tomorrow or the next day,” Trump told reporters in Los Angeles on Tuesday night, when asked about reports that an announcement is imminent. Talks with Iran are “moving along very nicely,” he added. “We’ll know in 48 hours.”
The US, Iran and Oman are preparing to announce a 60-day agreement on shipping through Hormuz as soon as Wednesday, Axios reported, citing two regional sources and a US official. Under the proposal, inbound vessels would use a northern lane near Iran, while outbound traffic would travel through Omani waters in coordination with the Islamic Republic.
Quick answers to key questions
What is the current status of negotiations to reopen the Strait of Hormuz?⌵
Negotiations are reportedly moving along well, with reports suggesting a possible interim 60-day agreement involving the US, Iran, and Oman could be announced imminently.
Why is reopening the Strait of Hormuz important for global energy markets?⌵
The Strait of Hormuz is crucial as it handles around 20% of the world’s oil and liquefied natural gas shipments, making any disruption a major concern for global energy supply.
How would the proposed shipping arrangement work in the Strait of Hormuz?⌵
Under the proposed arrangement, incoming vessels would navigate through Iranian waters while outgoing vessels would travel through Omani waters, with no tolls or fees during this transitory period.
Should there be concerns about military escalation despite talks to reopen the strait?⌵
Yes, despite ongoing negotiations, there are significant risks of military escalation, as previous agreements have collapsed and recent threats from Iranian proxies remain a concern.
What might be the impact of a short-term agreement on oil prices?⌵
A short-term agreement could stabilize oil prices and alleviate fears among traders, as seen with recent fluctuations following optimism about reopening the Strait of Hormuz.
No tolls or fees would be charged during the transitory agreement, Axios said. Iran and Oman would also work to clear mines from a middle shipping lane for two-way traffic.
In a Fox News interview recorded earlier in the day, the Trump had also expressed optimism on the talks, while repeating a threat that “if they don’t make a deal, it’s going to be too bad.” Over the weekend, Trump held off on attacks he said would have been the largest since World War II.
Signs that negotiations are moving toward a resolution, including from Qatar and US officials on Tuesday, helped ease the pressure on oil prices, with the global benchmark crude contract down about 9% since the start of the week.
Brent futures traded at just over $80 a barrel on Wednesday, up 1%, erasing an earlier decline after Yemen’s Houthi militants threatened to escalate attacks on Middle East shipping.
The Iran-back group said it would target Saudi tankers diverting toward the north of the Red Sea — a key workaround route during disruption in the Strait of Hormuz.
Trump discussed efforts to de-escalate US-Iran tensions with Qatar’s Emir Sheikh Tamim Bin Hamad Al-Thani in a call Tuesday, according to the Gulf state’s government. A White House official confirmed the call, but didn’t offer additional details.
A short-term deal could help normalize commercial shipping in the strait — a crucial conduit for global energy supplies — and prevent the resumption of fighting in the Middle East. Even if an agreement is reached, there’s no guarantee it will lead to a permanent end to the war.
The previous US-Iran ceasefire lasted less than a month before collapsing over disagreements about control of Hormuz, highlighting the risk that military strikes and Iranian retaliation may resume if a new agreement unravels.
In a possible concession that could form part of an agreement, Iran is considering allowing European nations to remove mines from the strait, according to diplomats familiar with the matter, who spoke on condition of anonymity to discuss sensitive information.
That is contrary to Iran’s public stance, but in private meetings in recent weeks Tehran has softened its position. Iran’s foreign ministry didn’t immediately respond to a request for comment.
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