Iran and Oman are close to finalizing an agreement on the joint management of the Strait of Hormuz, according to a statement by Iran's foreign ministry spokesman, Esmaeil Baghaei. The two countries are the only littoral states whose coastlines directly border the narrow waterway, through which roughly a fifth of global oil consumption transits daily.

According to Baghaei, the deal with Oman was "in the final stages," the BBC reported. Bloomberg quoted the official as saying the negotiations with Oman were "forward-moving," and that the agreement was close to finalization "if certain third parties do not obstruct this process" — a remark widely interpreted as referring to the United States. Reuters has previously reported that Washington would not allow Iran to gain control over the waterway, consistent with a longstanding U.S. policy of ensuring freedom of navigation through the chokepoint, maintained in part through a continuous American naval presence in the region.

Reuters reported on Wednesday that the Iran–Oman negotiations had included a provision under which Iran would control vessel traffic entering the Strait. Notably, the United States reportedly did not oppose such a stipulation, which would represent a major concession to Tehran. However, Reuters also quoted the Iranian side as saying the negotiations had in fact involved Iran controlling both incoming and outgoing vessel traffic through the Strait of Hormuz.

Meanwhile, U.S. President Donald Trump has threatened further military action against Iran unless an agreement is reached, even as he claimed peace talks were ongoing — an assertion Iran has denied. Earlier this week, Trump warned that Iran "will be hit very hard," while simultaneously stating, "We're having very good discussions," as quoted by the BBC.

Iran has issued its own warning in response. "The Iranian warning was unequivocal: if America targeted Iran's infrastructure, they would retaliate by striking Gulf energy facilities and other regional targets," one Gulf official told Reuters. Iran has periodically threatened to close the Strait during prior periods of escalation, underscoring the waterway's recurring role as a pressure point in regional conflicts.

Crude oil prices have been trending lower amid the developments. At the time of writing, Brent crude had dipped below $80 per barrel and was trading at $79.12 per barrel. West Texas Intermediate was changing hands at $74.79 per barrel, down 0.57%.

By Irina Slav for OilPrice.com