Iran unveils Hormuz navigation plan as oil traffic hits 3 ships

Iran will formulate navigation mechanisms for the Strait of Hormuz, potentially formalizing Tehran's control over a waterway carrying 20 percent of global oil, as traffic fell to three vessels Tuesday.

"There's been progress made in those talks, but not finality yet," Marco Rubio, U.S. Secretary of State, said at the State Department. "We're hoping that will happen very shortly."

Only three commodity vessels transited the Strait of Hormuz on Tuesday — the lowest daily count since early May — and no observable traffic was detected early Wednesday, according to Kpler tracking data. Brent crude futures have risen more than 25 percent this month as the conflict has escalated. Saudi Arabia had been exporting 5.9 million barrels per day from its two Red Sea terminals at Yanbu in the week ending July 17, before the Houthi blockade threat emerged.

Iran's move formalizes its intent to control a waterway that carried a fifth of the world's traded oil and gas before the U.S. and Israel attacked Iran on Feb. 28. Any formalized navigation regime could reshape global energy supply chains, pushing Asian buyers to seek alternative routes or pay higher premiums for Persian Gulf crude.

Iran-Oman talks near 60-day deadline

Iran Foreign Ministry Spokesman Baghaei made the announcement via state media IRIB on Tuesday, without specifying what the new navigation mechanisms would entail. The statement comes as Iran and Oman make progress toward a deal to reopen the strait, with ships entering through an Iranian-controlled route and exiting through a route controlled by Oman, according to two regional officials who spoke to the Associated Press on condition of anonymity.

The emerging agreement would charge service fees for providing security and preserving the maritime environment, and any deal would be linked to lifting the U.S. blockade on Iran's ports. Treasury Secretary Scott Bessent told CNBC that "there is a chance we may have a deal today or tomorrow to open the strait and move towards a more normalized position in this conflict."

The two sides reached an interim agreement in June to reopen the strait and launch 60 days of talks aimed at ending the war and resolving the dispute over Iran's nuclear program. That agreement collapsed over escalating hostilities focused on the strait, and the deadline is around two weeks away.

Red Sea tankers reverse course as Houthi threats mount

The Strait of Hormuz is not the only chokepoint under stress. Yemen's Tehran-backed Houthi militants have threatened to fully blockade all ships calling at Saudi Arabia's ports, and the Joint Maritime Information Center issued an alert warning that "the Houthis have completed preparations to attack shipping, including the deployment of missiles and drones."

The threats have prompted immediate routing changes. LPG tanker Gas King reversed course after loading at the Saudi port of Yanbu and headed north through the Suez Canal instead of continuing toward Japan. Supertanker New Explorer, carrying Saudi oil bound for Singapore, was idling in the Red Sea with its status listed as "not under command." A cargo ship also reported being hit by an unknown projectile in the strait off the coast of Oman, according to the United Kingdom Maritime Trade Operations Center.

The last time traffic through the Strait of Hormuz fell to such low levels was in early May, when the initial wave of attacks began. That episode lasted roughly a week before tankers resumed transits, but the current combination of Houthi threats against Saudi ports and Iran's formalization of navigation rules suggests a more sustained disruption.

For Asian buyers who depend on Persian Gulf crude, the stakes are immediate. Saudi Arabia's record export pace from Yanbu before the disruptions — 5.9 million barrels per day — shows how much supply flows through these routes. Any sustained drop in tanker traffic would force refiners in Japan, South Korea, and India to source from more distant suppliers at higher freight costs, feeding directly into fuel prices and inflation.

This article is for informational purposes only and does not constitute investment advice.