Iran and Oman reach Hormuz deal, but reopening hinges on US compliance

Iran and Oman have settled on their respective shares of the Strait of Hormuz and its revenues, according to Iran's Revolutionary Guards. However, the crucial waterway will remain closed if the US does not accede to their conditions, the Guards asserted on Wednesday. The two nations have been in intermittent discussions for weeks regarding the management of the strait, which once facilitated one-fifth of global oil and liquefied natural gas flows before the February conflict erupted.

Since then, shipping has largely ceased, causing global energy prices to surge as Tehran and Washington attempted to exert control over the channel by imposing separate blockades. The Guards' spokesman, Hossein Mohebbi, announced in state media that both sides had agreed on the distribution of water and revenue shares in the negotiations, which lasted about a month.

The Guards attributed the delay in reaching the deal to US obstruction and warned that the strait would not reopen without US compliance. Despite the recent easing of hostilities between the US and Iran, diplomatic efforts to achieve a peace agreement have stalled, and ongoing attacks on ships have kept the Strait of Hormuz perilous for passage.

Iran recently published a blacklist of 45 ships in an attempt to halt ship-to-ship transfers used by Gulf energy producers to circumvent the Iranian blockade. Some firms plan to stop using vessels on the blacklist. The US has threatened to penalize countries that continue to engage in trade with Iran, though it has not imposed sanctions immediately.

The threats were accompanied by a lack of Chinese financial institutions supposedly aiding oil exports from Iran, which the US blockade has cut off. Iran denounced the US move to isolate its economy as "gross lawlessness," maintaining confidence that other nations would not join the pressure campaign. Oil prices dipped for a third consecutive day, falling over US$2 per barrel to a two-week low following indications of renewed attempts to mediate an end to the war that began on February 28 with US and Israeli strikes on Iran.