Iran Says Hormuz Deal Close But That Its Conditions Must Be Met

(Bloomberg) -- Iran said it's "very close" to a deal with Oman on a new maritime transit route in the Strait of Hormuz, after expectations grew this week that an announcement may soon be made.

Iran's Foreign Minister Abbas Araghchi said on Saturday that negotiators are closing in on temporary lanes for ships entering and exiting the Persian Gulf. He cautioned that any agreement won't result in an immediate reopening of the strait, signaling that any respite for energy supplies may be limited.

"The opening of the Strait is subject to other conditions, including the compensation for the US's violations of the Islamabad Agreement," Araghchi added, referring to the now-lapsed memorandum of understanding signed in June.

The ceasefire between the US and Iran lasted less than a month before collapsing over disagreements about control of Hormuz.

It's unclear how Washington, which Iran insists is not part of the deal for Hormuz, will respond to a final agreement. US President Donald Trump has insisted for months that navigation through Hormuz must be resumed unimpeded, threatening fresh attacks on Iran if it fails to reopen the waterway.

The US has also maintained a blockade on Iranian ports. Reuters reported that the US will lift the naval blockade once a deal between Oman and Iran to restore commercial shipping is announced, citing a US official. A deal, the official said, is expected soon.

Oil prices have swung between gains and losses this week, as traders monitored the prospects of a deal that's expected to clear the way for millions of barrels of supply from the Persian Gulf to be restored. Brent settled above $83 a barrel, notching a third straight weekly loss.

Traffic through the chokepoint has been largely blocked since the start of the war, but some ships have continued to ferry cargoes through as part of a shuttle program involving help from the US military. Many have done so turning off their transponders, making trips harder to track.

Abu Dhabi National Oil Co. said one of its vessels was targeted by missiles while transiting Strait of Hormuz early on Saturday, the United Arab Emirates's state-run WAM news agency reported. The attack caused no injuries and the situation has been brought under control, it added. Three other ships from the UAE's biggest oil producer were attacked this week.

The incident highlights the ongoing risks for shippers attempting to make the crossing during the conflict, as Iran insists on asserting control over Hormuz.

"Deals to reopen the Strait of Hormuz remain elusive, with investors teetering in the balance," said Rob Haworth, senior investment strategy director at US Bank Wealth Management. "For now, traffic remains low and the path to a durable deal remains unclear."

Any deal for the Strait of Hormuz will need to be approved by Iran's Supreme Leader Mojtaba Khamenei and Iranian officials have said that it takes time to reach him, potentially delaying any announcement. There's no indication as yet over whether Khamenei has given his assent to current plans.