Qatar, Pakistan and Oman are mediating talks between the US and Iran, but Doha has signaled that an agreement over the strait of Hormuz is not as imminent as President Donald Trump's administration claims.
Oil markets appear to be taking seriously US assurances of an imminent deal with Iran and reopening of Hormuz. WTI crude futures were down by more than 5pc in midday trading on Tuesday after treasury secretary Scott Bessent told CNBC that "there is a chance we may have a deal today or tomorrow to open the strait." That followed a 5pc decline in September Nymex WTI on Monday, after Trump said that negotiations on a deal with Iran were so advanced that Hormuz could fully reopen as early as Tuesday.
The drop in oil prices was certainly welcome news for the White House. Trump in recent days has been expressing unease about elevated energy prices, accusing the nation's top oil producers on Monday of not doing enough to bring down fuel prices after they posted bumper second-quarter profits.
Qatar, Pakistan and Oman have been facilitating diplomatic exchanges between the US and Iran, Qatar's foreign ministry said on Tuesday. But there is no specific timeline for a deal, and the mediators are working to create "the appropriate conditions for the resumption of direct dialogue", Qatar's foreign ministry said. "The minimum demands at the current stage are to return to the previous status of the strait, in line with international law and in coordination with all littoral and concerned nations," it said.
Bessent, in turn, said that a prospective deal with Iran would involve "freedom of movement" in Hormuz.
Iran has made it clear it would not accept a return to pre-war free transit terms in the strait of Hormuz. Tehran is demanding major concessions for allowing ships to transit Hormuz, through a northern route dictated by Iran's military.
The US and Iran have signed two interim deals since April that purported to address the status of Hormuz, but both eventually fell apart over Tehran's insistence on controlling the transit of vessels through the strait.
US naval vessels, positioned in the Gulf of Oman, are enforcing a blockade on Iranian trade. The US military has been facilitating vessel transits through a southern route through Hormuz, which skirts the Omani coast, but indiscriminate Iranian drone and missile attacks have deterred most ships from taking advantage of that route.
The US administration claims that the route it has opened through Hormuz remains in high demand. "Even though things are still a little dicey there, over the past few days, we've seen quite a few ships coming out even now," Bessent said on Tuesday.
"US-assisted" strait of Hormuz transits reached 30 vessels on 2-3 August, according to data provided by the US Navy's Middle East headquarters. But that figure is contradicted by vessel tracking services and could not be independently verified.
Hormuz vessel traffic totaled 22 transits on Monday, split between 10 inbound transits and 12 outbound transits, data from maritime security firm Windward shows. Only four vessels took the southern US-supported traffic lane that runs along the Omani coastline, while the rest took the northern Iranian-favored route.
The only new element in diplomatic discussions in recent weeks involves a potential Iran-Omani understanding over a designated safe shipping route through Hormuz. Omani-Iranian negotiations in late July focused on oversight of the routes through the strait of Hormuz, with Iran insisting on its full control over ships entering the Mideast Gulf and at least partial oversight of the exit routes through the waterway, Iran's foreign ministry said last week.
Any Hormuz transit arrangements have to be acceptable to all Mideast Gulf states and ensure an uninterrupted flow of trade and freedom of navigation, the Qatari foreign ministry said.
