U.S. Says "Hormuz Passage Deal Imminent"... International Oil Prices Plunge to $70 Range (Comprehensive)
U.S. Treasury Secretary: "Agreement Possible Within Today or Tomorrow"
"Iran and Oman Likely to Jointly Manage the Strait of Hormuz"
High-ranking officials in the U.S. government have stated that an agreement to reopen the Strait of Hormuz with Iran is expected to be reached soon, significantly easing military tensions in the Middle East. If the agreement is concluded, both sides are expected to restore the ceasefire and resume nuclear negotiations. Amid expectations that pressure on global oil supply will be alleviated, international oil prices have also fallen back to the $70 level.
U.S. Treasury Secretary: "Deal with Iran Within a Day or Two"... Plunge in International Oil Prices
According to CNN on the 4th (local time), U.S. Secretary of State Marco Rubio stated at a press conference that negotiations with Iran on reopening the Strait of Hormuz are making progress. He said, "While we are engaged in long-term negotiations on denuclearization, there are ongoing talks between Oman and Iran on ways to allow more ships to safely pass through the strait in the short term," adding, "The ultimate goal is Iran's denuclearization, but the most urgent and prominent issue at present is the Strait of Hormuz." He continued, "There has been progress in the negotiations, but a final agreement has not yet been reached," emphasizing, "We expect a deal to be made very soon."
Scott Bessent, U.S. Treasury Secretary, also said in an interview with CNBC, "We are currently negotiating with Iran, and I believe there is a possibility of reaching an agreement within today or tomorrow," explaining that "energy prices will stabilize again, which would be a positive development for the world."
Earlier that day, as reports emerged that U.S. President Donald Trump and Sheikh Tamim bin Hamad Al Thani, the Emir of Qatar, had held a phone conversation to discuss U.S.-Iran negotiations, expectations grew for the reopening of the Strait of Hormuz between the two sides. Following the call, the Qatari government released the details, saying, "On this call, Emir Al Thani and President Trump agreed that the United States and Iran would resolve their differences and build a foundation for a sustainable agreement." The Qatari government also added, "Emir Al Thani emphasized the immediate halt of military actions and compliance with the memorandum of understanding (MOU) previously concluded between the United States and Iran."
As expectations for an agreement grew, international oil prices plunged. Brent crude for October delivery, the global oil price benchmark, fell 5.26 percent from the previous session, closing at $79.36 per barrel. West Texas Intermediate (WTI) for October also dropped 5.69 percent to close at $75.77 per barrel.
Iran: "Positive Talks with Oman"... Control over Hormuz at Stake
Iran has also stated that there are positive developments in its negotiations with Oman. Esmail Baghaei, spokesperson for Iran's Ministry of Foreign Affairs, said in an interview with state-run IRIB, "Discussions continue between the two littoral states of the Strait of Hormuz," and explained, "The focus of the negotiations is on designating inbound and outbound routes that will enable ships to pass through the strait safely." He added, "These routes will reflect both the sovereign rights of Iran and Oman as well as national security considerations," and evaluated, "Talks held so far have produced positive outcomes on both technical and political fronts."
The current plan to reopen the Strait of Hormuz, being facilitated by Oman's mediation, involves Iran and Oman jointly managing separate routes within the strait. According to the New York Times, citing sources familiar with the negotiations, "The plan includes having inbound ships use routes overseen by Iran, while outbound vessels would pass through corridors near Oman." If this plan is finalized, observers note that Iran, in effect, will control the inbound routes to the strait and may leverage the Strait of Hormuz as a strategic bargaining chip in future nuclear and sanctions negotiations with the United States.
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Experts believe that if an agreement on freedom of navigation through the Strait of Hormuz is reached, it could serve as a starting point for restoring the memorandum of understanding (MOU) between the United States and Iran. Abbas Aslani, a senior researcher at the Middle East Strategic Studies Center, told Al Jazeera, "Just a few days ago, everyone was bracing for a major escalation, but now there is talk of a possible deal on the Strait of Hormuz," adding, "While this agreement may not resolve all issues at once, it could be the beginning of reviving and effectively implementing the previous MOU between the U.S. and Iran, leading toward a final settlement on subsequent issues."
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