Iran, Oman near Hormuz shipping deal as Brent slides to $78

Iran and Oman agreed on the geographic parameters for Strait of Hormuz shipping routes, sending Brent crude down 0.7 percent to $78.28 a barrel and gold to a record $4,250 an ounce.

"We assert that the legal regime for passage through the Strait of Hormuz must not return to its pre-war state," said Saeed Ajorlu, a member of Tehran's negotiating committee, in comments to state broadcaster IRIB.

Iran's Foreign Ministry said the two countries reached agreement on the geographical characteristics of the shipping routes and entered the "final drafting stage" of a joint statement, with talks at a professional level and advancing. The statement is in its final phase provided "certain third parties" do not intervene, the ministry said. Brent fell $0.52 a barrel within five minutes of the announcement, while spot gold rose $5.16 an ounce to $4,250.07 and New York gold climbed 4 percent intraday to $4,319.31.

The Strait of Hormuz carries about one-fifth of the world's oil in peacetime, making any reopening a major event for global energy markets. A finalized deal would compress the geopolitical risk premium that drove Brent to $92.65 on July 30, though prices remain roughly 20 percent above pre-conflict levels. If talks collapse, crude could spike back toward July highs.

Oil's Risk Premium Compresses as Hormuz Talks Advance

The agreement marks the clearest signal yet that the waterway could reopen after months of disruption. Under the emerging framework, ships entering the strait from the Indian Ocean via the Gulf of Oman would take a route through Iranian territorial waters, while vessels exiting from the Persian Gulf would pass near Oman's coast, according to The New York Times, citing Iranian and US officials. The temporary route would run for one to three months "where Iran is dominant," Ajorlu said.

US officials dispute parts of the framework. One official told the Times that Iran's description was "not accurate," insisting no tolls would be collected and Tehran would have no say over which ships traverse the strait or what route they use. Treasury Secretary Scott Bessent said Tuesday the White House might reach a deal "today or tomorrow" that opens the strait and moves toward "a more normalized position in this conflict."

The mixed signals have kept the risk premium elevated even as prices fall. Eight ships crossed the strait on Tuesday, down from 10 on Monday and 11 on Sunday, according to maritime intelligence firm Kpler, which said "maritime risk remains elevated." OPEC+ has also added supply, with seven countries agreeing to raise output quotas by about 188,000 barrels a day from September, completing the phased rollback of a 1.65 million barrel-a-day cut agreed in 2023.

Gold's Record Run Reflects Unresolved Risk

Gold's climb to a record reflects the same uncertainty capping oil's decline. Spot bullion rose $5.16 an ounce to $4,250.07 within five minutes of the announcement, while New York gold gained 4 percent intraday to $4,319.31, as investors hedged against the risk that the deal collapses. The divergence — oil falling while gold rises — shows markets are pricing a partial de-escalation rather than a full resolution.

Brent's next move hinges on whether the joint statement is finalized. If Iran and Oman sign and shipping resumes at scale, the risk premium could compress further, pushing crude toward the $75 area. If third-party interference blocks the deal or talks stall, prices could rebound toward July's $92.65 high. Gold, meanwhile, is likely to hold its safe-haven bid until the strait's reopening is confirmed by actual traffic volumes.

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