Iran, Oman reach agreement on Hormuz shipping route, revenues: What we know

Iran and Oman have reached an agreement over their respective shares of the Strait of Hormuz and revenues from the strategic waterway, but the passage will remain closed unless the US accepts the deal, Iran's Islamic Revolutionary Guard Corps (IRGC) announced on Wednesday. Both sides have held intermittent talks for weeks over the management of traffic through the Strait of Hormuz and the interests of both countries in the waterway.

"The Strait of Hormuz belongs to Iran and the country of Oman... We have been in negotiations with Oman for about a month, and we have reached results that are acceptable to both sides," Islamic Revolutionary Guard Corps spokesman Hossein Mohebbi said in comments published by Iranian state media.

Mohebbi said the negotiations covered both the division of the waters and the revenue generated from the strategic route.

"In these negotiations, agreements have been reached regarding the share of each country in the waters of the Strait and the share of Iran and Oman in its revenues," Mohebbi added. The announcement indicates Tehran and Muscat have managed to find common ground on how the waterway should be administered after weeks of negotiations.

The IRGC's announcement puts a potential agreement at the centre of a standoff that has severely disrupted shipping through the energy chokepoint. Before the war began in February, roughly one-fifth of the world's oil and liquefied natural gas shipments passed through the Strait of Hormuz. Most commercial traffic has since been halted, pushing energy markets higher and turning the strait into a major point of confrontation between Tehran and Washington, both of which have imposed separate blockades.

TEHRAN WARNS US OVER REOPENING HORMUZ

The agreement with Oman does not, however, mean an immediate return to normal shipping. The IRGC accused the US of attempting to obstruct the Iran-Oman negotiations and said that interference had delayed the agreement. Tehran has now made US acceptance of the arrangement a condition for reopening the waterway.

"If the United States stops obstructing and returns to the agreement, we can open the Strait of Hormuz within the framework of the agreement reached... If the United States does not accept our conditions, the Strait of Hormuz will not be opened under any circumstances," Mohebbi said.

The warning leaves the future of the strait tied to the wider confrontation between Tehran and Washington. While direct hostilities have eased in recent weeks, efforts to negotiate a lasting peace agreement have stalled.

SHIPPING RISKS REMAIN HIGH

Commercial vessels continue to face risks in the waterway amid attacks on shipping and competing efforts by Iran and the US to exert control over the passage. Iran announced a blacklist of 45 ships on Sunday, apparently targeting ship-to-ship transfers used by Gulf energy producers to get around the Iranian blockade.

The US has also moved to intensify economic pressure on Tehran. Washington on Monday unveiled what Treasury Secretary Scott Bessent called an "economic D-Day", warning countries and companies that continue doing business with Iran that they could face secondary sanctions after a defined period to wind down the activities.

The warning was followed by concrete action against India-based businesses also. The US sanctioned four Indian companies and three Indian nationals over alleged involvement in Iranian petroleum and petrochemical trade. The targeted firms are Portease Partners LLP, Sadashiva Overseas Ltd, PP Softtech Pvt Ltd and Prakrutees Infra Impex Pvt Ltd.

The measures are part of Operation Economic Outcast, a broader US campaign to cut Iran off from financial networks and revenue sources.

Iran has rejected the US pressure campaign, calling Washington's attempt to isolate its economy an act of "gross lawlessness". Tehran has also expressed confidence that many countries would refuse to join the US effort.

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With inputs from agencies