Strait of Hormuz traffic near standstill

The Strait of Hormuz has become less a normal shipping lane than a negotiated risk corridor. NBC News reported on August 5 that vessel traffic remained far below the hundred-plus daily transits seen before the war, after repeated attacks, toll demands and fears that Iran may have mined the route. AP reported on August 5 that Iran said it was in the “final stage” of drafting an agreement with Oman over the waterway, even as attacks on shipping had ground traffic close to a halt. CNN reported that a senior Gulf official familiar with the talks put the odds of an Iran-Oman deal by Friday at “50-50.” (nbcnews.com) The immediate question is not only whether a deal is close. It is whether any agreement would restore predictable passage for tankers, container ships and insurers that have spent months treating the strait as an active war zone. CNBC reported on August 5 that oil prices were little changed as traders weighed fresh negotiations against continuing security threats. (apnews.com) ### Why has traffic stayed so low for so long? NBC News said traffic through the strait had been at a near-standstill for weeks, with daily counts nowhere near prewar levels. The outlet said Iran launched strikes on ships and demanded tolls from vessels transiting the waterway after the U.S.-Israeli attack on Feb. 28, effectively shuttering a route through which about 20% of the world’s oil and natural gas once passed. (cnbc.com) CNBC reported that a June 17 memorandum of understanding between the U.S. and Iran to open Hormuz collapsed after fighting resumed over the routes ships would take. The network said Tehran attacked ships sailing along Oman’s coast under U.S. military protection, and Washington responded with more than a dozen waves of airstrikes and a renewed naval blockade on Iran. (nbcnews.com) ### What is Iran and Oman trying to agree on? CNN reported on August 5 that Iran and Oman had agreed on the geographical coordinates of a proposed safe shipping route, citing Iranian Foreign Ministry spokesman Esmaeil Baghaei. Baghaei added that progress depended on “certain third parties” not obstructing the process, according to CNN’s live coverage. (cnbc.com) Reuters, as quoted by Political Wire, reported that a proposed deal would give Tehran control over ships entering the Gulf through the strait. CNBC separately reported that an interim arrangement under discussion would have inbound ships transit Iran’s territorial waters while outbound ships would sail through Oman’s waters in coordination with Tehran. (yahoo.com) ### Why are oil markets calmer than the shipping market? CNBC reported that Brent crude was up 7 cents at $79.43 a barrel on August 5, while U.S. West Texas Intermediate fell 50 cents to $75.27. The muted move followed two sessions of sharp declines as traders responded to signs that a traffic-management deal might be possible. (politicalwire.com) That relative calm in oil has not meant normal conditions for shipping. NBC News said some ships manipulate GPS trackers during transit, which can obscure exact counts, and AP said the disruption has roiled the global economy because the strait had carried roughly one-fifth of traded oil and natural gas. (cnbc.com) ### What would have to happen for traffic to recover? President Donald Trump said on August 5 that negotiations had gone on “all day long” and that “things are very good,” CNBC reported. AP reported the same day that any reopening was likely to depend on the U.S. lifting its blockade on Iran’s ports, a step that would require one side or both to retreat from positions they have defended for months. (nbcnews.com) The next marker is Friday, August 7. CNN said Gulf officials were watching for a possible Iran-Oman agreement by then, while AP reported that Iranian officials were still describing the text as being in its final drafting stage. (edition.cnn.com) (cnbc.com)