Iran said Thursday that a deal with Oman on shipping through the Strait of Hormuz is agreed in principle. Tehran calls it one of the final steps toward reopening the critical waterway. But Iran’s deputy foreign minister cautioned that a bilateral deal with Oman does not mean the strait is fully reopening. The agreement still needs approval from Iran’s Supreme Leader, who has stayed out of public view since being wounded early in the war. Markets are not waiting for a final signature. Oil has fallen most of this week, gold sits near a seven-week high, and traders have pulled back bets on more Fed rate hikes.
Iran-Oman Hormuz Deal: Key Takeaways
- Deal “agreed in principle”: Iran’s Deputy Foreign Minister Kazem Gharibabadi said Tehran and Oman now share an understanding on nearly every open point, including the shipping route map.
- Not a full reopening: Iran says a bilateral deal with Oman does not mean the Strait of Hormuz is fully open again, since the U.S. is not part of the agreement.
- Supreme Leader sign-off pending: Any deal needs approval from Iran’s Supreme Leader Mojtaba Khamenei, who has stayed out of public view since being wounded in February.
- Oil sliding: Brent crude has traded mostly lower this week, hovering near $79 to $80 a barrel as the odds of a prolonged closure fade.
- Gold near a 7-week high: Gold futures opened above $4,300 an ounce on Thursday, up sharply as traders price in fewer Fed rate hikes this year.
- The Fed isn’t fully on board: Fed Governor Lisa Cook signaled this week that she still favors a rate hike if inflation stays high.
- Other flashpoints remain: Yemen’s Houthis attacked a Saudi oil tanker in the Red Sea and another vessel in the Gulf of Aden this week.
What Did Iran Say About the Hormuz Deal?
Iran’s Deputy Foreign Minister Kazem Gharibabadi made the announcement to state media on Wednesday. He said the two sides now share an understanding on nearly every open point, including the new shipping-route map.
“Agreed in principle” is a common diplomatic term. It means both sides accept the main terms of a deal, but haven’t yet signed a final, binding version. Think of it as a handshake agreement before the paperwork is done.
Gharibabadi added an important caveat. He said a bilateral deal with Oman “does not mean the full reopening of the Strait of Hormuz.” Iran has said Washington is not part of the Oman agreement. Tehran also says normal shipping through the strait depends on the U.S. lifting its naval blockade of Iranian ports.
Any final deal still needs sign-off from Iran’s Supreme Leader, Mojtaba Khamenei. He has stayed out of public view since being wounded in the opening strikes of the war in February. Iranian President Masoud Pezeshkian said this week that reaching Khamenei for guidance has become difficult.
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Why Hasn’t the Strait of Hormuz Reopened Already?
The Strait of Hormuz sits between Iran and Oman and links the Persian Gulf to open ocean. About one-fifth of the world’s oil normally flows through it. Iran shut the strait to most shipping after the U.S. and Israel struck Iranian targets in late February. The passage has stayed disrupted ever since.
According to Reuters, the emerging deal would give Tehran more control over ships entering the Gulf. That is one of the biggest concessions the U.S. has made since the war began. Washington has previously said it would not accept any arrangement that leaves Iran in charge of the strait.
Regional risk goes beyond Hormuz. Yemen’s Houthis attacked a Saudi oil tanker in the Red Sea and another vessel in the Gulf of Aden this week. Attacks like these can spook oil markets even if the Hormuz talks succeed.
How Have Oil and Gold Reacted to the News?
Oil prices have been choppy but mostly lower this week. Brent crude traded near $79 to $80 a barrel on Thursday, while U.S. crude traded in the mid-$70s. Both benchmarks sit well off the highs seen earlier in the conflict.
Traders call the extra cost baked into oil prices during a crisis a “risk premium.” As the odds of a lasting Hormuz disruption fall, that premium shrinks. Prices come down even before real supply changes. That is the main story behind this week’s move.
Gold futures opened above $4,300 an ounce on Thursday, its best level since mid-June. Gold has climbed for four straight sessions as the Hormuz progress eased inflation worries. Lower expected inflation means less pressure on the Fed to raise rates, which helps gold since it pays no interest.
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What Does This Mean for Forex Traders?
The dollar has lost some of its safe-haven bid this week as war fears ease. A calmer Middle East usually means less demand for the U.S. dollar, the Japanese yen, and the Swiss franc as pure crisis hedges.
Watch the commodity-linked currencies too. The Canadian dollar and Norwegian krone often move with oil prices, since both countries export a lot of crude. A sustained drop in oil can weigh on these currencies even as broader risk appetite improves.
This story is not finished. Iran has walked back diplomatic progress before, and President Trump has made similar promises in the past that did not hold up. Traders should expect more headline swings until Iran’s Supreme Leader signs off and ships start moving again.
Frequently Asked Questions About the Iran-Oman Hormuz Deal
What is the Strait of Hormuz, and why does it matter for traders?
The Strait of Hormuz is a narrow waterway between Iran and Oman that connects the Persian Gulf to open ocean. About one-fifth of the world’s oil normally passes through it, so any disruption can push oil prices higher and shake currency markets.
What did Iran and Oman agree to?
Iran says the two countries share an understanding in principle on a shipping route through the strait. That includes the map for entry and exit lanes. The agreement still needs a final joint statement and approval from Iran’s Supreme Leader.
Does this mean the Strait of Hormuz is fully reopening?
Not yet. Iran’s own foreign ministry has said a deal with Oman does not mean the strait is fully open again. The United States is not part of the Iran-Oman agreement, and Iran says normal shipping still depends on Washington lifting its blockade.
How have oil and gold prices reacted?
Oil has traded mostly lower this week, with Brent crude near $79 to $80 a barrel. Gold has rallied to its best level since mid-June, opening above $4,300 an ounce on Thursday, as traders price in fewer Fed rate hikes.
What should traders watch next?
Watch for the actual joint statement from Iran and Oman, and any sign that Iran’s Supreme Leader has approved it. Also watch oil prices and Fed commentary, since both will likely be drivers for the dollar, the yen, and other safe havens.
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