Iran and Gulf Cooperation Council (GCC) states are set to convene in Salalah, Oman, on Monday to negotiate a temporary agreement regarding commercial shipping through the Strait of Hormuz. This meeting comes after months of private discussions concerning a complex legal framework to reopen the strait, which has seen depressed shipping traffic since the start of the Middle East war. While President Donald Trump insists the current state of the waterway, with the US military escorting oil tankers, is acceptable, regional countries are unwilling to accept this as the new normal. The US will not be attending these discussions.
Oil prices have surged past $100 a barrel due to the ongoing blockade, more than six months into the conflict. Before the war, transit through the strait was free, but Iran now mandates permission for vessels and is considering imposing service fees. Ships that fail to comply are frequently targeted by Iranian strikes, while the United States periodically conducts bombings on the Iranian coastline to challenge the Islamic republic's control over the strait. Iran has indicated that the waterway would only fully reopen if the US terminates its blockade.
Only Iraq has publicly confirmed its attendance at the meeting. Bahrain has stated it will not participate due to a lack of diplomatic relations with Tehran. A senior Iranian official, speaking anonymously, indicated that a signed agreement is unlikely to emerge from Monday's meeting, even though Iran and Oman have been negotiating for months on arrangements for shipping. Iran's proposal to collect fees from ships using the waterway is a point of contention, as Oman opposes this idea.
US Energy Secretary Chris Wright expressed skepticism regarding a breakthrough on the Strait of Hormuz, advising oil traders against expecting a consensual agreement with Iran. He estimated that current transit workarounds are still supplying 10 million barrels a day of crude and oil products, and markets will need to continue relying on these alternatives. Despite the US stance, Oman hopes that a regional agreement will pressure the Trump administration to acknowledge that the future of the strait should be decided by countries in the region.
