A 'rare' Gulf huddle soon over a Hormuz headache

A group of six Gulf states is considering meeting with Iranian representatives next week to discuss the ongoing situation at the Strait of Hormuz, sources close to the matter revealed. Oman is attempting to convene foreign ministers from the Gulf Cooperation Council and Iran in Salalah, a southern Omani city, on Monday, according to those familiar with the discussions.

The meeting's confirmation remains uncertain, as escalating hostilities between Saudi-backed forces and the Houthis, an Iran-backed group from neighboring Yemen, could pose complications. If the talks occur, it is unclear whether all participating states, including Saudi Arabia, the United Arab Emirates, and Qatar, will attend, sources noted.

Iran has reportedly initiated talks with Gulf nations, including Iraq, to address the aftermath of the recent conflict. Oman's foreign ministry has yet to comment on the matter. The Financial Times was the first outlet to report on the potential meeting. The Houthis are advancing toward the Red Sea coastal regions bordering the Bab el-Mandeb Strait, heightening concerns that they may tighten their control over the key maritime trade route.

The disruption of shipping and oil markets in the past has made the Bab el-Mandeb chokepoint particularly sensitive for oil markets, particularly following the closure of the Strait of Hormuz, which prompted Saudi Arabia to redirect oil flows to its export terminals in the west. A significant disturbance in Red Sea shipping could intensify pressure on the world's largest oil producer.

The Houthis' ground advance in Yemen continues, with the group launching missile and drone attacks on Saudi Arabia's southwestern towns, damaging energy infrastructure. This development escalates the risk of Saudi Arabia becoming further embroiled in the conflict and strains its relationship with Iran. Tehran has maintained its stance on retaining control over Hormuz and has been engaged in discussions with Oman for several weeks regarding a framework for managing maritime traffic, which would likely involve paying fees.

The US and Gulf states strongly oppose such a temporary agreement that would facilitate increased traffic.

Oil prices have surged this week, with diesel prices in the US surpassing $6 per gallon for the first time, raising concerns about further energy-driven inflation ahead of November's midterm elections. The conflict between the US and Iran appears to have reached a stalemate, with sporadic and low-intensity strikes between the two sides.

Both Tehran and Washington are preparing for the situation to persist for months, if not longer, with neither party willing to make concessions that could lead to the resumption of peace negotiations. The Strait of Hormuz, a crucial conduit for global oil, natural gas, and other commodity supplies, was effectively closed after a US-Israeli bombing campaign in late February.

While US military operations are causing economic strain on Iran, with the rial rapidly weakening and inflation accelerating to nearly 90%, the country's leadership remains steadfast in its refusal to relent on the strait or return to negotiations until the blockade is lifted.