A Deal to Reopen a Key Oil Route Could Be Coming Soon — But It's Not Done Yet

President Donald Trump said a deal with Iran over the Strait of Hormuz "could be soon." Vice-President JD Vance was more cautious, telling Fox News: "We're really in the middle of the game here" and "This thing is not over" (BBC).

The Strait of Hormuz is a narrow strip of water between Iran and Oman. About a fifth of the world's oil passes through it. If the route is blocked or disrupted, oil prices can rise sharply around the world.

Iran and Oman have finished writing a draft agreement to reopen the Strait. They are now waiting for Iran's top leader, Supreme Leader Ayatollah Ali Khamenei, to approve it (AP). Iran, Oman, and the United States were reported to be "close" to a deal that could restore shipping through the waterway and possibly open the door to broader peace talks between Tehran and Washington (Al Jazeera).

Vance described a multi-track US approach, saying Washington is "applying diplomatic, economic and military tools to get the best outcome for the American people." He also said the US is working to set up a system to guide ships safely through the Strait. He claimed that the same amount of oil will flow from the Gulf as before the US military operation that began on 28 February, though he did not explain how that would be guaranteed (BBC).

One major disagreement is whether Iran wants to charge ships a fee to pass through. Reuters, citing an Iranian official, reported that Tehran was seeking fees of between 5% and 7% of the value of the cargo on board. Vance played down those reports, saying: "The Iranians have told us they have no plans to toll the Strait of Hormuz" (BBC).

That contradiction between the Reuters report and Vance's response gets at why the deal is so fragile. The proposed arrangement would give Iran control over ships entering the Strait, a structure that sources described to Reuters as a major concession to Tehran (Reuters). The European Union has also spoken up, with an EU official saying the Strait must stay open under international law and urging Iran to drop any plan to charge fees. Iran called that appeal "peak hypocrisy" (IRNA).

The talks have been guided by Oman. Iran and Oman agreed on the exact route coordinates for a new shipping path through the Strait, and both sides called the discussions positive. Oman described the navigation talks that way, while Iran said its talks with Oman to reopen the route were progressing "positively" (Al Jazeera; The Guardian). The two countries are finalizing a draft deal to jointly manage the waterway (The Guardian). Qatar has separately said mediators have made progress in efforts to end the US-Iran war (Reuters).

Iran has been more combative at the International Maritime Organization, the UN agency that oversees global shipping rules. Iran's delegation rejected a draft proposal about the Strait and defended its own legal position, saying traffic through the waterway has not stopped and continues under "appropriate supervisory and coordination measures" (IRNA). That echoes earlier Iranian statements: in April, an Iranian official said Iran was developing a protocol for safe passage in the Strait (IRNA), and in May, the IRGC Navy, a branch of Iran's military, said transits proceed under its coordination (IRNA).

The situation on the water remains dangerous. The UAE said on 7 August that Iran had targeted a tanker tied to Adnoc, the UAE's state-owned oil company, as it passed through the Strait. The UAE foreign ministry called it a "hostile Iranian attack" involving a missile strike, though no one was hurt (BBC). Separately, a UK maritime agency reported a ship struck by an unknown projectile off the coast of Oman, causing a fire that was put out, also with no casualties. It is unclear whether the UK and UAE reports describe the same vessel (BBC).

The broader picture is one of tension between diplomatic progress and real-world danger. The draft deal awaiting Khamenei's approval would be the first concrete plan for reopening the Strait since the US military operation began in late February. But the structure being discussed, especially the reported plan to give Iran control of inbound traffic, raises questions about whether shipping companies and insurers would willingly go along, particularly when tankers are being hit even as talks continue.

Vance's phrase, "the middle of the game," captures where things stand. The technical work on the shipping route is done. The political decision now belongs to Iran's leadership. Whether the Supreme Leader approves the deal, and whether the terms hold up under pressure from Gulf countries whose ships have been attacked, will decide whether Trump's "could be soon" turns into a finished agreement or falls apart.