Iran, Oman, US ‘close’ to Hormuz deal: What do they all want?

The United States, Iran and Oman appear to be edging closer to an interim agreement that could reopen the Strait of Hormuz, raising hopes of easing a crisis in one of the most dangerous flashpoints in the Middle East.

The proposed agreement, which has been under negotiation for several weeks, is intended to restore the June 17 ceasefire between Washington and Tehran; resolve disputes over shipping through the strategic waterway, through which one-fifth of the world’s oil supplies had been shipped in peacetime; and create space for broader negotiations on Iran’s nuclear programme and other issues.

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US President Donald Trump struck an optimistic tone on Tuesday evening, telling reporters negotiations with Iran were “moving along very nicely”.

“We’ll find out. We’ll know in 48 hours,” he said when asked whether a deal was imminent. “The strait is going to be open very soon, or they’re going to get hit very hard, and then the strait is going to be open.”

Trump made the comments after he reportedly decided over the weekend not to carry out what he had described as the biggest US military attack since World War II, in line with his now familiar pattern of repeatedly threatening to strike Iran before advocating at the last minute for diplomatic solutions instead.

Iran, meanwhile, continues to deny holding direct talks with Washington. Its officials have insisted that discussions are taking place with Oman over how to manage the Strait of Hormuz. Oman, whose territorial waters the strait also flows through, has long acted as a mediator between the two countries.

Iranian Ministry of Foreign Affairs spokesman Esmaeil Baghaei said the Oman talks have been “positive” and were continuing although Iran’s Sepah News quoted an official as saying US military threats remained the main obstacle to reaching an agreement.

The diplomatic push comes as tensions spike in and around the Strait of Hormuz. On Tuesday, the United Kingdom Maritime Trade Operations (UKMTO) agency reported a cargo ship had been struck by an unidentified projectile off Oman.

Commercial traffic through the waterway also remains heavily disrupted. Only eight vessels transited the strait on Monday, compared with roughly 130 ships per day before the US-Israel war on Iran erupted on February 28. The situation has raised concerns that prolonged disruptions could send oil prices sharply higher.

Against that backdrop, mediators are racing to secure at least a temporary agreement over the waterway before trying to revive a broader memorandum of understanding (MoU) signed by Iran and the US in June, which was intended to lay the groundwork for wider negotiations. Here’s what we know:

(Al Jazeera)

What is being negotiated?

The negotiations centre on two questions: who controls the Strait of Hormuz and whether Iran should be allowed to impose fees on commercial vessels to pass through it.

The dispute over the waterway began after the US and Israel launched their war on Iran. Tehran responded by closing the strait, disrupting one of the world’s busiest shipping routes and causing global energy prices to spike.

When Iran later reopened parts of the waterway, it ordered commercial ships to use a northern shipping lane passing through Iranian waters around Larak Island. The US later imposed a naval blockade on Iranian ports in an effort to increase economic pressure on Tehran, which was still managing to export its own oil via the strait.

After a ceasefire in April, Washington proposed that ships instead use a southern route along Oman’s coast. Iran rejected the proposal, arguing eventually that it violated the US-Iran MoU and targeting several ships that had followed the Oman route.

Mediators are now trying to broker a compromise that would allow commercial shipping to resume while addressing the security concerns of both Iran and Oman.

Below is the route map that Iran issued to ships it gave permission to pass during the war.

(Al Jazeera)

What does Iran want?

The Iranian Foreign Ministry spokesman has said the talks with Oman are focused on “establishing safe inbound and outbound shipping lanes” that “uphold sovereign rights while also addressing the national security considerations of both Iran and Oman”.

Baghaei said the discussions have been assessed positively at both the political and technical levels although differences remain over how shipping through the strait would operate.

Iranian officials said outstanding issues include the mechanism for reopening the waterway, maritime service fees and broader security arrangements.

Tehran also continues to insist it is negotiating only with Oman, not directly with Washington, and maintains that Iran and Oman should jointly manage the strait according to their respective territorial waters and they should retain control of navigation there.

Furthermore, Iran has intimated that it plans to introduce some form of fee system for ships. Under international maritime law, tolls for passage cannot be levied on international straits such as Hormuz but coastal states may charge for services they provide, such as navigational assistance, pilotage and environmental protection.

What does the US want?

US officials said the Trump administration wants total freedom of commercial navigation through the waterway without Iranian tolls or any arrangement requiring ships to obtain Tehran’s approval before transiting the strait.

A US official familiar with the negotiations told The Associated Press news agency that any temporary arrangement would not involve Iranian approval for ships to transit or charges for using the waterway. The official said Washington remained committed to restoring the previous system in which “no party controls the lanes or the ability to transit through them”.

Speaking to reporters on Monday, Trump rejected any suggestion that Iran should be allowed to charge vessels using the strait.

“I’m not going to let them charge,” he said. “Anybody’s going to charge, we’ll charge.”

US Secretary of State Marco Rubio has also suggested the Hormuz negotiations are separate from wider diplomacy over Iran’s nuclear programme. “There’s the big deal, which is the one that has to do with their nuclear ambitions,” Rubio said.

“The immediate deal and the one that you’ve seen a lot of focus on is the straits.”

What is on the table?

Despite the Trump administration’s hardline public rhetoric, US media reports suggested negotiators are moving towards a more conciliatory position.

Under the proposal, according to the news website Axios, to which Trump has spoken directly during the conflict, ships entering the Gulf would use a northern shipping lane through Iranian waters while vessels leaving the Gulf would travel through a southern lane in Omani waters coordinated with Iran.

The arrangement would initially last 60 days, during which no transit fees would be charged, Axios reported.

The Associated Press, quoting two regional officials, reported that discussions also include possible service fees linked to maritime security and environmental protection as well as a broader agreement tied to lifting the US blockade on Iranian ports. It remained unclear if the US would be willing to accept this.

One proposal put forward earlier by Oman is reportedly based on operations in the Strait of Malacca, which connects the Indian and Pacific Oceans. There, Indonesia, Malaysia and Singapore ask ships that use the strait to voluntarily help fund navigation, environmental protection, and ‌search and rescue operations.

Negotiators are also discussing the clearance of naval mines from the centre of the strait before seeking a longer-term agreement on how the waterway should operate, Axios reported.

The Reuters news agency, quoting a senior Iranian source involved in the negotiations, reported that Tehran has already dropped its original demand for full control over shipping in both directions but is “unlikely to change its position” further.

Iranian state media have outlined a slightly different proposal. Press TV reported that negotiations had entered “a new phase” with a “bilateral understanding within reach”.

Quoting a senior Iranian official, the broadcaster said the talks aim to establish a new “middle corridor” through the Strait of Hormuz that would eventually replace the existing northern and southern routes while ensuring safe navigation and protecting what it described as “Iran’s rights as a coastal state”.

What are the main sticking points?

Much of the reported framework for these talks appears to build on the MoU signed by Iran and the US on June 17 rather than fully replacing it.

Under Article 5 of that agreement, Iran agreed to allow commercial vessels to pass through the Strait of Hormuz without charge for 60 days. However, vague wording in the agreement gave rise to disagreements about who ultimately had control over the strait and which routes ships could use.

That temporary arrangement was designed to create time for wider peace negotiations. The latest proposals, therefore, appear to focus less on whether ships should be allowed through immediately and more on what happens after the initial 60-day period expires.

The reported framework also closely resembles a proposal outlined by Iranian Deputy Foreign Minister Kazem Gharibabadi last month when he said that “the inbound shipping lane must be entirely under Iran’s control while part of the outbound lane may remain under Oman’s control”.

The remaining disagreements now appear to centre on who should administer the waterway over the longer term and whether Iran would be allowed to eventually collect fees for maritime services.

However, even if Iran and the US reach an agreement, experts said another obstacle could remain.

If Iran is given responsibility for managing some of the shipping lanes, international shipping companies may need to coordinate with Iranian authorities. But US sanctions could prevent many companies from doing so unless Washington grants an exemption.

Esfandyar Batmanghelidj, founder and chief executive of the Bourse & Bazaar Foundation, a think tank focusing on economic development and diplomacy in West and Central Asia, said this may work in Iran’s favour.

“Iran can also take advantage of the fact that US sanctions may prohibit coordination or payments with the Iranian authorities.

“A large portion of vessel owners will not engage the channel unless expressly authorised by the Trump administration, putting the ball back in Trump’s court to effectively endorse” a proposal, he said.

Why might the US agree to Iranian demands now?

The negotiations are being conducted as Washington faces growing military and economic pressure to avoid another escalation.

US media have reported that concerns over dwindling defensive munitions have contributed to Trump’s decision not to carry out his threatened large-scale strikes against Iran.

Keeping the Strait of Hormuz mostly closed also risks pushing up global energy prices, and, therefore, domestic petrol prices, which would prove unpopular as the November midterm elections in the US approach.

Meanwhile, oil analysts warned that if the Strait of Hormuz disruptions continue, many nations could deplete their oil stockpiles at record rates, which could further push up energy prices to unprecedented levels.

With time running out, a temporary agreement may now be preferable for the US, experts said.

Trita Parsi, executive vice president of the Quincy Institute for Responsible Statecraft, said this means Washington’s priority should be ensuring ships can pass safely rather than preventing Iran from playing any role in administering the strait.

“The Trump administration has increasingly framed the objective as preventing Iran from ‘controlling’ the strait. Yet the central American interest in strategic waterways has historically been less about who administers them than about whether ships can pass through them freely, predictably and without discrimination,” he said.

“Preventing a hostile state from acquiring coercive leverage has generally been a means of preserving passage, not an end that supersedes passage itself.”

If reopening the strait requires acknowledging that Iran possesses some capacity to regulate traffic in waters along its coast, therefore, Washington “should not reject an agreement merely because it fails to preserve the appearance of unqualified American dominance”, he said.

David Des Roches, a former director of Arabian Peninsula affairs in the US Department of Defense, said “what’s really needed here is some sort of agreement that leads to Iran formally announcing that it will cease to attack neutral civilian shipping whether in Omani waters or in international waters.”

He told Al Jazeera that any eventual agreement was, therefore, likely to reflect the reality that Iran cannot simply be excluded from managing a waterway on its coast.

“I think that the rough outlines of a deal are that Iran would deny free international passage in areas of its territorial waters,” Des Roches said. “I think that’s probably about the best that can be reached at this point in time.”

Could a Hormuz agreement end the crisis in the Middle East?

Not immediately, no. While a deal to reopen the Strait of Hormuz would ease one of the most immediate sources of tension between Iran and the US, experts warned it would not resolve their wider disagreements.

If shipping resumes, negotiators would still need to revive the broader memorandum of understanding and eventually return to talks on Iran’s nuclear programme.

Other regional flashpoints also remain unresolved, including the conflict between Israel and Hezbollah in Lebanon, attacks by Iran-aligned groups within the region and continued disruptions to shipping in the Red Sea, caused by the Iran-backed Houthis in Yemen, and also Trump’s unpredictability and predisposition towards threatening military action.

Abas Aslani, a senior research fellow at the Center for Middle East Strategic Studies, told Al Jazeera the rapid swings between military escalation and diplomacy have left the region in a state of deep uncertainty.

“I think the region feels like a high-speed roller-coaster as a couple of days ago. Everybody was bracing for a massive escalation,” Aslani told Al Jazeera.

While an agreement over Hormuz would be “a good start, … it will not magically solve all the issues”, he said. Rather, it could allow both sides to return to implementing the June MoU before working towards “a final agreement on the nuclear issue”.